Lets look at Adani group as a whole.
They make ( roughly ) an yearly EBITDA of 45-47,000 cr or thereabouts.
Total debt - roughly around 1.7-1.8 lakh cr, nett of cash.
Annual debt servicing - say about 15000 cr.
So …u arrive at an EBDTA ( the ‘I’ is missing ) of roughly 30,000 cr or so.
Therefore, I see little problems in the whole situation except astronomical and unjustified valuations of Adani Gas, Transmission, Green, Enterprises etc.
Wrt insurers, can buy the likes of AB Capital where the current life and general insurance ( if u combine their results ), are growing very fast. ( Both JVs between Aditya Birla Group and Sunlife Group )
Plus, their combined contribution to bottomline is not meaningful as they r in hyper growth and expansion stage where OPEX is generally very high.
At company level, bottomline is generated by NBFC, HFC and AMC business.
NBFC and HFC 's clean up at AB Capital is happening rapidly.
At consolidated level - great top and bottomline growth.
Or -
Just wait for Dips on Bajaj Finserv ( holds 74 pc stake in Bajaj Allianz life and general insurance )… But… only on dips.
AB Capital is ripe at CMP.
Monday’s shopping list shortlisted. Candidates are -
Laurus labs ( buying after exiting at 380 levels 18 or so months back )
Stovecraft ( has outperformed industry leader - TTK on both toppling and bottomline growth parameters )
Adani Wilmar ( group’s fast growing FMCG business )
CG consumer’s margins are down due to aggressive spends by company in branding, owned retail stores. Gross margins back at highs. Sales were also hit due new energy efficiency regulations by GoI due to which company could not stock up the channel as old inventories had to be cleared
V Guard seeing Gross Margin decline as company was holding high cost inventory
In case of Both -
Had high base in Q3 ( due pent up demand LY )
Likely to see sales pick up YoY in Q4
Guiding for better Q4, Q1
Disc- holding both, may add both
Neuland Labs Q3 concall highlights -
Massive EBITDA margin improvement YoY due better product mix and greater contribution from commercial CMS operations
Retired debt worth 111 cr in past 9 Months
Recent business momentum likely to sustain over medium to long term
Gross margins in Q3 even higher than Divis’s gross margins despite lower contribution from CDMOs. Management believes, these margins are sustainable
Current RM procurement percentage from China at 25 pc
Capacity utilisation at Unit-1,2 at 80-85 pc. Unit 3 at 60-65 pc.
Unit 3 adding more capacities
Commercial contribution from CMS business at all time high. Likely to be higher going fwd
Current balance sheet,cash flow position at all time high
Company seeing higher enquiries in CDMO space
Quality of CDMO pipeline is healthy
Capex for next year - roughly 100 cr ( maint + expansion )
Company looking to expand R&D facilities in about a couple of years
Disc: invested, biased
Disc: bought small quantities of - Laurus labs, CG Consumer, Monte Carlo Fashions today.
Not a buy / sell recc. Just a disclosure.
Hii, hope you’re doing well.
Are you adding laurus with a long term horizon? because most likely FY24 will be a consolidation year and growth can start from FY25 onwards. I don’t see significant upside till then so price will mostly likely consolidate or fall further as the impact of one off earning is not fully seen yet. So will appreciate your views on this. Thanks.
Hi…
Adding Laurus for long term. Yes.
Actually I held Laurus from May 2020 to Oct 21 or so. Made good money.
I exited because of widespread news of HIV vaccines being successful and ARVs being the highest contributors to Laurus’s revenues.
In Q3 results, their CDMO and non ARV API contribution has hit an all time high. That to me sounds like music. Markets know that real kicks will come in FY 25. But we never know when will these things get priced in. Mkt may not wait till next year to start pricing it in.
Another good qtr by CDMO business and the perception may change any day.
So…just being proactive. Started with a small position. Will add if business momentum sustains.
Disc: mild trimming in Syngene.
Small buying in Piramal Pharma.
Heard the Q3 concall of Piramal Pharma. They r planning a fundraise of 1050 cr. The stock price is at a rock bottom.
The fund raise completion tgt is Q2 FY 24.
Question - Are they reasonably confident of a good Q4, Q1 which bumps their stock price before their fund raise. Can’t think of any other scenario where in the company wants to do a fund raise at depressed valuations 
Its just a conjecture. Is it a valid one… time will tell.
Lets hope for the best !!!
Disc : invested, biased.
Carysil Q3 concall -
High channel inventory during past months reducing, reaching optimum levels
Demand from US,UK improving. Europe - not so much due inflation
Started supplying to reputed builders locally
Acquired 60000 sq mtr land near own factory for expansion
Steel sinks capacity enhanced - almost doubled. To go live by Mar 23
Exporting PVD sinks to UK,France,Germany. Seeing strong demand. They have excellent aesthetic value
Faucets assembly line to go commercial by Q1 FY 24
Started ordering machines to make built in appliances - basically hobs and chimneys
Margins here likely to be similar to consolidated business
Launched green sinks ( made from waste materials ). Receiving good customer feedback
Q4 outlook looks good
Q3 EBITDA margins at 18 pc. Margins to improve as volumes pick up going fwd, which is very likely
Carysil Surface business doing better than initial expectations
Very bullish on Kitchen hoods and hobs category. Hiring entire new teams including IITians
Robust demand seen in Q4 in domestic mkt. Company building separate B2B team to tap builders and architects
Very hopeful of increased orders from Ikea and other global giants as the manufacturing costs in Europe soar. Ikea team visited, went away with positive feedback
Domestic mkt sales expected to grow at 30 pc + CAGR for next 3-4 yrs
Aim to hit 1000 cr revenues in FY 24 - this to me sounded like a bit too much!!! But, if achieved, can propel the stock to a different trajectory.
Overall - very bullish commentary.
Disc: invested, biased.
Monte Carlo fashions Q3 concall -
Indian apparel mkt growing at 10 pc CAGR with shift towards branded apparels
Revenues up 12 pc at 520 vs 462 cr , Ebitda at 130 vs 114 cr, PAT at 86 vs 77 cr
9M revenues up 19 pc, EBITDA up 18 pc, PAT up 12 pc
Company net debt free
Current cash balance of 265 cr
Total EBOs at 347 stores. Aim to open 50-60 stores next year
Company follows no credit policy for Franchise owned EBOs and most other channels. Have never had bad debts in company’s history
Guidance for FY 24 can only be shared post Q4 results
Seeing the sales trend in Jan,Feb… the inventory levels should be at or below last yr’s levels
To continue with 3-4 pc of revenues being spent towards advertising
Home textiles, Kids wear likely to hit 30 pc growth for full FY 23
Jan 23 demand was robust
Cotton, Wool prices trending down. To benefit the company. Not going to cut prices
Planning to onboard celebs for ads
20 pc of new store openings to be in South and West India
Current contribution from South + West is at 6 pc
Aim to touch 15 pc in 3-4 yrs
Capex guidance for next yr -125 cr, mainly towards Greenfield blanket manufacturing facility in Jammu
Famous investor - Vikas Khemani was also present on the call
Disc : invested, biased
Royal Orchid Hotels Q3 concall highlights -
Sales at 72 vs 52 cr yoy, mainly due to increase in ARR, occupancies and higher F&B sales
EBITDA at 27 vs 19 cr yoy
PAT at 15 vs 6 cr yoy
ARR at Rs 5900 vs Rs 4400 yoy
Aim to be operating 100 - 120 hotels end of FY 24
Board has approval to raise 200 cr NCD. Not going for it right now as the current fund position is comfortable
Growth in next few Qtrs to be as healthy as in the last few Qtrs - According to chairman
Current room capacity at 4600. Aim to add 1000 rooms by Sep23
Expect 15-20 pc of additional rooms via leased model, rest via managed model
Expect a topline of aprox 70 cr for Q4
Expect to close FY 23 with an EBITDA of 95 cr
FY 24 tgts - 375 to 400 cr sales, EBITDA around 120 cr
Disc: holding, biased, not a buy/sell recommendation
Prince pipes Q3 22 concall highlights -
Some tailwinds-
PM Jai Jeevan’s budgetary allocation up 27 pc
PM Awaas’s budgetary allocation up 65 pc
Budgetary allocation for infra spending up 33 pc
PVC prices corrected by unprecedented Rs 66/kg from Apr-Nov. Prices now firming up
Firming up of prices leading to positive sentiment in sales channels and eventually causing re-stocking
Prince Pipes volume growth for Q3 at 35 pc, revenues up 6 pc yoy
Rebound in margins from Q2 ( depressed ) levels. Likely to go up in Q4
Company- long term debt free
Net working capital days down at 44 days from 68 days qoq
Bathware ground work done (finalising designs, cost structures, sales teams, outsourcing teams)
To be launched by Apr 23
Plumbing and Agri restocking nearing completion by Dec end due massive 35 pc volume growth
Expect normalised volume growth going fwd
Water tanks being made in house. Good product acceptability. Expect significant contribution in 3-5 yrs
Inventory loss in Dec Qtr was around 27 cr in Dec Qtr due falling prices / holding of high cost inventory
Continuously introducing newer value added products. They ll improve brand image and margins in long term
All the high cost inventory has now been consumed
Agri supplies is 30 pc of company’s revenues. Demand now picking up here
Telangana plant’s ( new one ) capacity ramp up on track - on expected lines
66 pc of business from RE sector. 3-4 pc from infra sector
No major capex plan in foreseeable future. A lot of heavy capex in Jaipur and Telangana is behind
CPVC contribution to revenues at 20 pc. This is highest margin contributor
Bullish on growth in next 2-3 yrs due real estate up cycle
Revenue split between Retail:Projects at 75:25
CPVC volume growth in double digits in 9M FY 22
Disc: invested, biased
Devyani International Q3 concall highlights -
Added 81 new stores in Q3. Store count now at 1177. Store count in Mar 20 was 600.
Costa coffee stores at 103. KFC, Pizza Hut store count at 512 and 487 respectively
Milk and cheese inflation still high
Sales at 791 vs 624 cr
EBITDA at 174 cr, margin at 22 pc
Gross margins lower at 69 pc due inflationary pressures
Costa Coffee added 15 new stores. ADS at 37k
Same store growth for KFC, Pizza Hut at +3 pc and -6 pc. SSG for Pizza Hut de grew because of higher competition and new intro of lower priced fun flavoured pizzas
Aim to open 250-300 stores in FY 24 with bias towards KFC
PAT at 71 vs 57 cr yoy
KFC added 38 new stores. Avg daily sales at 1.16lakh
Pizza Hut added 17 new stores. ADS at 43k
Going fwd, KFC stores to be bigger with expanded menu
Costa Coffee’s same store growth at 20 pc, largely volume driven (that’s super cool!!!). Company focusing on small format Costa stores with a few exceptions
Aim to open stores in 20 new cities in next FY
Disc : invested, biased
Akzo Nobel India Q3 concall highlights -
Oct business was slow. Business picked up in Nov, Dec. Projects business doing really well due uptick in real estate business
Urban mkts grew faster than rural.Rural grew because of distribution gains.
No price hikes taken in paints
Very strong growth in coatings business vis a vis paints business
Sales at 986 cr, up 8 pc yoy
GMs at 39 pc, up 60 bps
PAT up 16 pc at 98 cr
Aim is to hit 1000cr revenues/qtr. May take 1-2 Qtrs to reach there
New Product pipeline is strong for next 2-3 yrs
Increased A&P spends. Advertised during IPL, T-20 WC, also focussing on Digital channels
On entry of Grasim and JSW group’s entry into paints - management is aware about potential disruption. It ll all depend on the size of their pockets and how deep they want to take the battle
Will also depend on whether they want to make it a price or brand war. Initially, its likely to be a price war
Not keen to put up additional capacities right now. They are working on a 2 shift basis from many factories. Can take it upto 3 shifts. ROE is paramount for them
Not planning backward integration as the Parent company’s size and scale assures them of no major supply side crunches/disruptions
Currently paints are more profitable than coatings. Coatings profitability is slowly improving
Full impact of RM price moderation is yet to come. May help margins going fwd if there are no adverse events in foreseeable future
Disc : invested, biased
Page Industries Q3 concall ( Jockey + Speedo ) -
Q3 sales at 1223 cr, up 3 pc yoy
Volumes down 11 pc yoy
Margins also down. Compression due high cost RM purchased previously
Also, lower absorption of fixed costs due volume de-growth led to higher percentage of Op-expenses
Resumed normal A&P spends
Current EBOs - 1228, MBOs - 1.2 lakh, 2900 LFS (like-Central,Lifestyle etc)
Secondary sales were better than primaries in Q3
EBITDA at 193 cr, de-grew by 23 pc
PAT at 123 cr, de-grew by 29 pc
Q4 demand still not back with full force
Expect recovery in Q1 FY 24
Effect of lower cost inventory should start flowing in from Q4
Company continues to be aggressive on EBO/MBO distribution expansion. Strongly believe that slowdown is a short term phenomenon
Kids products growing as per plan
In house vs Outsourced production at aprox 67:33
Focussing on Middle East mkts for exports. Not going after Sri Lanka and Nepal at the moment due macro turbulence
Current number of rural only distributors at 150… double vs last few years. Rural expansion drive to continue
Slowdown in Q3 was more in athleisure, out of home categories. Men and Women undergarments continued to grow in single digits
High cost inventory almost consumed fully as we speak. However, capacity utilisations need to improve for meaningful margin recovery
A&P spends at 4 pc
Disc: not invested. Planning to take up a tracking position
Eris Lifesciences Q3 concall highlights -
Acquired 09 Dermatology brands from Glennmark Pharma
Had acquired Oaket Pharma ( a Derma company ) in May 22
Latest acquisition helps them consolidate their position in Derma Mkt, specially in anti fungal and anti psoriasis mkt
03 of Glenmark’s acquired brands are No1 in their respective segment. 03 others are among top 03
These 09 brands have a revenue base of 85 cr, Acquired for 340 cr, funded via borrowings @ 8pc
Post deal derma contribution for Eris will rise to 13 pc from 07 pc currently
Derma mkt rank to improve to No 6 from No 12 Oaknet’s
Q3 revenues at 60 cr, EBITDA at 27 pc up from 10 pc, pre acquisition
Oakent to clock yearly EBITDA > 50 cr, 1 yr ahead of expectations
Cardio-Metabolic share of revenues for Eris at 54 pc, grew by 15 pc
Eris’s biggest anti-diabetic brands are Zomelis and Gluxit
Derma+CNS+Women’s health - The emerging portfolio for Eris has grown by 15 pc. All three combined form 25 pc of Eris’s revenues
VMN (Vit-Minerals-Neutraceuticals) account for 17 pc of Eris’s revenues. Grew by 19 pc
Added 200 Medical Reps in FY 23
Launched various new and innovative products specially in Cardio-Metabolic space
These led to some compression in Gross Margins
Consolidated sales at 424 cr, up 27 pc
EBITDA at 132 cr, up 12 pc
PAT at 100 cr @ 24 pc net margins!!!
Consolidated EBITDA margins at 32 pc despite Oaknet integration, commissioning of new mfg plant in Gujarat and various new brand launch related investments
Margins to improve next FY onwards
All this growth despite base Qtr having an aprox sale of 10 cr of Covid drugs
Started selling ( new launch ) Insulin this yr. Aim to hit 22-24 cr sales this yr, 50 cr next yr
Currently having aprox 3000MRs. Oaknet may add a few more next yr
Next yr onwards, EBITDA growth to be better than top line growth as most investments are behind
Aim to launch Glargine by Q3 - Q4 next yr
Current consolidated yield of MRs at Rs 5lakh/month
May go for more inorganic opportunities next year as well
No of products going off patent and are likely to be launched next yr in India are quite high in the diabetes space
Disc : holding, biased
V Guard industries Q3 concall highlights -
Revenues 981 pc, up 1pc.
South mkts degrew 5 pc, NonSouth mkts grew 10 pc yoy
NonSouth Mat’s contribution at 45 pc vs 41 pc LY
Consumer durables grew nicely. Have achieved descent scale. To contribute more to bottomline going fwd
High cost inventory levels going down. As it runs down, EBITDA margins likely to go back to pre Covid levels of 10-11 pc vs 6-7 pc currently
Completed acquisition of Sunflame electricals in Jan. Integration process to start soon. New management to be in place by March or so
Some areas where Sunflame can show immediate improvements - South Mkts where they r under-represented, Online and Organised channels, Direct go to mkt (as they were only going through distributors)
Sunflame business largely flat for 9M FY 23
Sunflame acquisition cost at 640 cr
Sunflame has large incremental (unutilized) capacities, doesn’t requrire capex. V Guard to continue with yearly capex rate of 50-70 cr
Own:Outscourced manufacturing for combined entity to be in the range of 70:30. To inch higher towards own mfg with every passing year
Cash balance + current investments of about 400cr to be used towards funding the a/m acquisition. Plus a debt of about 250 cr to be raised. Sunflame’s revenues to be added to V-Guard’s from Jan onwards
Sunflame’s margins are higher than V Guard standalone
Disc : holding a tracking position, biased
Dodla dairy q3 concall highlights -
Revenues up 17 pc to 675 cr, due rise in milk prices, vol growth and higher share of value added products
Value added products sale at 153 cr. VAP share at 23 pc
Expanding in North Karnataka, Goa
Domestic business at 618 cr, up 16 pc
Intl business up 32 pc at 57 cr !!
EBITDA at 54 vs 52 cr
PAT at 35 vs 27 cr
Avg milk procurement at 12.8 vs 12.4 lakh lit/day
Procuring almost all the milk directly from farmers, saving costs
Also selling high quality feed to them, a mutually beneficial arrangement
Company has 3rd largest mkt presence across 04 states, supported by 3rd largest procurement network
Gross margin down by 400bps due higher procurement costs
YTD avg procurement rate per litre at Rs 36 vs 31.5 LY
YTD avg selling price moved up to Rs 52 vs Rs 49 LY
Company’s new Feed plant to go live in Apr 23
Company has aprox 600 cr in cash, bonds and MFs
Actively looking for acquisitions at right price
Cow:Buffalo mix at 95:05
Sales mix state wise - AP- 34 pc , Karnataka- 40 pc, Telangana- 10 pc, TN- 16 pc
Daily procurement per farmer at aprox 10 lit
Current farmer count supplying to Dodla at 1.21 lakh
20k farmers buying feed from Dodla. This no. may go up substantially once the new feed plant goes live in Apr 23
Curd is a fast growing product for the company
Planning to organically/inorganically enter Maharashtra, Orissa Mkts
Expect some price correction in milk procurement in the upcoming flush season. Not going to cut the selling prices
Historical top line growth - 10 pc volume, 5 pc price. This yr, price contribution was at 8 pc
Disc: holding, biased
