Ranvir's Portfolio

Q&A: Questions & Answers Portfolio Q&A
770

Mayur Uniquoters Q3 concall highlights -

Revenues - 178 vs 180 cr

EBITDA- 34 vs 38 cr, margins at 19 vs 21 pc yoy vs 17 pc qoq

PAT- 27 vs 26 cr

De-growth in footwear segment. Expect to see an uptick go fwd. No firm signs on ground though

Gross margin has expanded due RM correction and price hikes taken by the company (previously). Expect same trend in GM for Q4 also

PU business currently going slow. Expect to pick up next year. Have appointed a distributor in South India for the same

The distributor is already supplying speciality chemicals to Adidas, Nike, Louis Vitton etc. Initial feedback has been good

Current supply rate to Mercedes at 30-35k Mtrs. To BMW at 4-5k Mtrs. Expect BMW business to scale upto Mercedes levels by next FY

Current total sales volume at around 70-75 lakh Mtrs/Qtr

Export OEM volumes may double next yr. Should go up by another 50 pc next to next yr. Here, the profitability is also higher, selling price is also higher

Have got orders for a new variety of PU from Chrysler

Have started making 3-4 different types of PU. Have started retailing them through various retailers. Current retailer count at 270. Aim to take it to 1000 by Dec 23. Domestic furnishing was one area where company didn’t sell anything till date. Its a new focus area and big mkt

Aim to hit revenues of 1100-1200 cr by end of FY 25(that is a big claim considering a current revenue base of aprox 750 cr)

Handing over more and more responsibilities to professionals (vs family). They are doing a great job

Margins to go up for next two yrs towards historical levels as the percentage of export Auto OEM sales increase

Chip shortage was a headwind for exports in the last 2 yrs. Now, has been resolved. Export business has higher margins

Company to stick to its policy of supplying to car models priced > 10 lakhs (in domestic mkt) where margins are better

Management assured investors of good growth for next 2 yrs in its closing comments

First 9M export sales at 135 cr vs 106 cr LY

Disc: invested, biased

2 Likes
771

Kajaria ceramics Q3 concall highlights -

Slow demand in Oct due festivals and extended holidays. Resurgence in demand seen in Nov, Dec

Sales at 1091 vs 1068 cr

EBITDA at 133 vs 180 cr, Margins down 500 bps, at 12 pc

NP at 74 vs 125 cr

Started using alternate fuel wet Dec 23

This should result in significant savings in power and fuel cost

Bathware, Plywood revenues (included in Consolidated revenues) at 79 vs 82 cr and 19 vs 25 cr

EBITDA contraction due disruption in gas supply, very high gas prices

WC days at 66 vs 62 due increased inventory

Blended fuel prices ( Gas + Alternate ) for the company are down almost 14 pc in Q4 - company resorting to dealer level discounts to stimulate demand

Jan demand has been tepid

Nepal plant (new one) to be ready by Mar 24. Its coal fired, Margins likely to be higher

Expect to achieve 14 pc+ EBITDA margins in Q4

FY 23 capex at 90 cr. Next year should be 300 cr+

Current capacity utilisation at 90-93 pc

Bathware brand ( Kerovit ) making descent progress

Sustainability of alternate fuel (bio fuel) is not an issue. Avlb in abundance

Divesting their stake in Vinar plant (to receive divestment proceeds ie 18 cr in Apr 23). Aim to fulfil supply shortage by sourcing from Morbi based manufacturers

Composition of alternate fuels at 35 pc of the total (30 pc biofuels and 5 pc Lpg). Rest remains natural gas

Current industry size at 52k cr. Domestic at 40k cr. Rest is exports

Supply of bio fuels is not a constraint round the year. Even bio fuels prices likely to moderate till May 23

Planning to set up a JV in Dubai Mkt. To mainly concentrate on exports in Gulf and North Africa

Large slab tiles seeing good traction in India. Plus the price realisation and margins here are much better

For 9M, plywood and laminates business is up 20 pc. Should reach good scale in 3-4 yrs

Morbi players did 1500 cr exports each in Nov,Dec

Shows buoyancy in export mkts. Kajaria can this exploit going fwd

Aim to add 400 dealers in next 3 yrs. Added 125 dealers in last 9 months, 35 of which were exclusive Kajaria. Total dealer count at 1825 now

Disc: invested, biased

772

UPL Ltd Q3 concall highlights -

Revenues at 13679cr, up 21 pc. Price, Forex, Volume contribution at 13pc,7pc,1pc each

EBITDA at 3035 cr, up 14 pc

NP - 1087 cr, up 16 pc

Region wise revenue, growth -

LATAM- 5974 cr, 28 pc
North America - 2745 cr, 30 pc
Europe - 1444cr, 3 pc

India - 1075 cr, 19 pc RoW - 2441 cr, 12 pc

Gross Debt at 32803 cr Cash and equivalents at 5275 cr

Cash flow from Ops in Q3 at 5070 cr

Advanta’s ( seeds business ) contribution ( included in consolidated numbers above )-

Sales at 912 cr, up 31 pc

GM at 61 pc, up 300 bps

EBITDA at 275 cr @ 30.1 pc, up 460 bps

UPL to receive Rs 1600 cr for 9.1 pc stake sale in UPL’s SAS ( sustainable agri solutions ) business

UPL received Rs 2400 cr ( aprox ) for 13.3 pc stake sale in Advanta to KKR

Stake sales are aimed to reducing UPL’s gross debt

Speciality chemicals business scaling up rapidly. Now clocking 1500 cr annual revenues vs 600 cr four yrs back. Aim to grow this vertical at 25 pc CAGR for next 3-4 yrs

UPL confident of good growth in Q4 as well on back of strong demand from India, North America

Aim to reduce net debt by 4000 cr by end of FY 23. Avg cost of debt in dollar terms is 7.1 pc

Industry witnessing tightening of working capital cycles due higher rates. Good for bigger players like UPL

Expect strong volume growth in Q4

Also expect to reduce inventory days

Agri commodity prices remaining strong. That’s keeping demand for agri inputs at good levels

As EBITDA contribution from Speciality chemicals business grows, will start reporting it separately

Finance cost in Q3 should be the peak number due debt reduction going fwd

Company better positioned vs peers as most others piled inventory onto the distributors due Covid and War related disruptions, while UPL didn’t

Disc: holding, biased

3 Likes
773

IndusInd Bank Q3 concall -

Advances-2.72 lakh cr, up 19 pc yoy
Deposits-3.25 lakh cr, up 14 pc yoy
CASA-1.36 lakh cr, up 14 pc yoy (encouraging)
NII-4495 cr, up 18 pc yoy
Fee Income- 2077 cr, up 11 pc yoy
Operating Profit - 3686 cr, up 11 pc yoy
NP- 1964 cr, up 58 pc yoy
NIMs-4.27 pc
RoA-1.87 pc
RoE-15.23 pc
Cost/Income-43.91,down 232 bps
Gross NPAs-2.06 pc,down 42 bps
Net NPAs-0.62 pc,down 9 bps
Restructured assets -1.25pc,down 205 bps

Loan book composition-

Large corporates-27 pc
Mid Corporates-16 pc
Small Corporates-4 pc
Consumer bank-53 pc

Consumer banking breakdown - Vehicle Finance - 26 pc ( Bank’s Niche )
Micro Finance - 11 pc ( MF percentage is high as Bharat Finance was acquired by bank 5 yrs ago )
Non Vehicle Finance - 16 pc ( includes LAP,Credit cards, Business banking, Personal Loans etc )

Vehicle Finance book at 71k cr, up 18 pc yoy

Micro Finance book at 29k cr, up 8 pc yoy ( avg ticket size of Rs 30k )

Corporate Loan book at 1.27 lakh cr, up 20 pc yoy

Yield on Assets- 8.65 pc
Yield on Advances - 11.51 pc ( corporate yield at 8.2 pc, retail yield at 14.3 pc…due contribution from MFI book)
Cost of Deposits - 5.10 pc
Cost of Funds - 4.41 pc
NIMs - 4.27 pc

Gross slippages in Q3-1467 cr (which is about 2 pc annualised, fairly ok)
Non Vehicle Finance book at 44k cr ( Credit card, LAP disbursement up 46 pc, 10 pc yoy )

Total Provisions at 130 pc of Gross NPAs

Total Branches at 2384 vs 2103 yoy

Bharat Finance branches at 792 vs 825 yoy

Micro finance lending picking up pace wen Dec 22

Started disbursing Home loans for the first time in Q3. Disbursed 200 cr during the Qtr

Went live on Income Tax portal in Q3

Share of top 20 customers in deposits down at 15 pc vs 17 pc, qoq pointing to increased granualrisation of deposit base

Aim to close the year at 2450-2500 branches

Mobile app user base up 26 pc yoy

Hired 1800 employees in Q3 while maintaining healthy cost/income ratio

SMA1 and SMA2 books at 8bps and 24bps ( very healthy levels )

CRAR at 18.1 pc ( including 9M profits )

Guiding for a loan growth of 20-22 pc in Q4

Restructured book trending down QoQ at rapid rates

Bulk of Corporate book is floating book. Bank reprices it every Qtr

Exposure to Idea-Vodafone at 1700 cr. 900 cr out of this has already been provided for

Carrying surplus liquidity to the tune of 45k cr. Aprox 25k cr out of this is held as G-Secs

Aim to keep carrying 20-25k surplus at all times as a matter of prudence

Current yield on newly introduced housing loans at 8.95 pc

Disc : Holding, Invested

1 Like
774

Karur Vysya Bank Q3 concall highlights -

Current branch count at 780. Mostly concentrated in TN, Karnataka, AP, Telangana, Kerala, Maharashtra, Gujarat and WB

Key Data-
Advances -64,500cr,up 16 pc yoy
Deposits -76,175,up 14 pc yoy
CASA-up 7pc at 25800 cr ( needs improvement )

CASA ratio at 33 pc
NII -889 cr, up 30 pc yoy
NP -289 cr, up 56 pc yoy
RoA -1.32 vs 0.93 pc
RoE -14.04 pc
NIM -4.32 pc
GNPA -2.66, down 431 bps yoy (massive improvement)
NNPA -0.89 pc, down 166 bps yoy (massive improvement)
PCR -90.87 pc, up 1206 bps yoy (massive improvement)

PPOP -689 cr, up 72pc
Cost of Deposits-4.26 pc
Cost of Funds - 4.29 pc
Yield on advances - 9.04
Yield on funds - 7.92
NIMs- 4.32 pc
Spread - 3.63 pc
Cost/Income - 42.9 pc vs 54.47 (massive improvement)

Breakup of advances-

Commercial (< 25 cr) - 32 pc
Retail - 23 pc
Agri - 23 pc
Corporate - 22 pc

Expect to maintain NIM > 4 pc, RoA at 1.35 pc by Q4 end

Front loaded the provisions book as a matter of prudence, Tax planning and to improve PCR

Credit cost for 9M period at 1.02pc. Likely to be lower next year due front loading of provisions

Gross slippages in Q3 at 162 cr (very healthy) SMA 30+ book at less than 1 pc 86 pc of loan book linked to MCLR, EBLR CRAR at 17.86 ( 9M profits not included ), Liquidity coverage at 200 pc Rating profile of corporate loan book - 30 pc below BB. LY it was 45 pc

Current unsecured book at aprox 500 cr. Hence, bank now tied up with a few TN based micro finance institutions to enter this space. TN is a stable MF mkt. Bank intends to go slow here and build the book gradually

Likely to grow advances by 15 pc plus for Q4. For next yr, will provide guidance in Mar 23

This Qtr’s recovery from written off accounts at 85 cr

Aim to maintain cost/income ratio at 45-47 going fwd. Aim to open 25 new branches next yr ( a modest tgt )

Also hiring a dedicated sales team to mobilise liabilities so that they can keep pace with asset growth. This is a completely new initiative. The team shall also cross sell retail products

Net slippages for last 6 Qtrs have been negative

That’s how asset quality has shown massive improvement

Net slippages likely to remain negative for next 2-3 Qtrs as well !!!

Disc: invested , biased

775

Narayen Hrudayalya Q3 concall highlights -

Current capacity -

Northern region - 4 hospitals, 1140 beds

Western region - 2 hospitals, 355 beds

South region - 6 hospitals, 2100 beds

Eastern region - 8 hospitals, 2050 beds

Cayman Islands - 1 hospital, 110 beds

Revenues at 1128 cr vs 960 cr yoy,up 17 pc

EBITDA - 254 cr vs 173 cr yoy,margins at 23 pc

Gross borrowings - 780 cr

Cash and cash equivalents - 560 cr

Enough space to fund massive capex lined up for next 2 yrs through a mix of borrowings, cash on books and internal accruals

Intend to spend Rs 1000 cr each on capex in FY 23,24 respectively. Rs 680 cr already spent in FY 23

Out of this, green field capex for FY 23,24 at Rs 200 cr each. Rest is brownfield andmaint. Capex earmarked for Cayman Islands at Rs 800 cr ( aprox )

03 hospitals ( Mumbai, Gurugram, Dharamshala ) are of recent vintage. These generated a revenue of Rs 110 cr, up 17 pc yoy, EBITDA at 9.3 pc. Gurugram, Dharamshala to reach 15 pc kind of EBITDA in 2-3 Qtrs

Most of Cayman capex towards new Oncology block and a new Hospital

New Onco block at Cayman Island to go live by Q1 FY 24. Expect to ramp up quickly as there is no radio based Onco therapy at Cayman

New capex of Rs 2000 ( over FY 23,24 ) will double the gross block

Gross margins improving continuously from Q1 to Q2 to Q3

Company believes, Q3 gross margins are sustainable

Govt scheme patients are about 20-22 pc of total Mix. Have been making representations to revise Govt rates as current rates were last revised long time back and are currently kind of unviable

Expect gradual increase in ARPOB in India business. Don’t expect big jumps

Cayman Islands continues to be a tax free zone. So, no tax for new facility as well

Had Acquired an Ortho hospital in Bangalore for 200 cr in Oct last Yr. Already generating a EBITDA margin of 30 pc

Expect new Cayman hospital to be commissioned by Mid CY 24

Cayman EBITDA margins currently at 40 pc!!! Don’t expect any margin dilution once radio Onco block kicks off in Apr 23

Disc: holding, biased

4 Likes
776

Aster DM Q3 concall updates -

Revenues 3192 vs 2650 cr, up 20 pc

EBITDA at 449 vs 397 cr, up 13 pc, margins at 14 vs 15 pc

NP - 160 vs 168 cr due higher interest and depreciation costs

Aster India business growth at 25 pc with revenues at 771 cr, EBITDA at 115 cr, up 13 pc

India business PAT at 30 cr vs 27 cr YoY

GCC revenues grew 19 pc 2420 cr

GCC EBITDA at 334 cr, up 13 pc

Current capacity -

30 hospitals, 15 each in GCC and India
Beds - 5536, GCC- 1441, India - 4095

Clinics - 113 in GCC, 12 in India

Pharmacies - 257 in GCC, 239 in India

India Hospitals distribution -

Kerala -6
AP- 4
Karnataka- 3
Maharashtra - 01
Telangana- 01

GCC Hospitals split -
UAE -09
Oman -04
Qatar -01
Saudi -01

Revenue split-

Region wise - GCC-70 pc, India -30 pc

Channel wise - Hospitals - 61pc, Pharmacies -17 pc, Clinics - 22 pc

Hospitals pipeline-

India-

04 in Kerala under construction with bed capacity at 750
03 in Karnataka under construction total bed capacity at 875
02 in AP are in pre operational stage with bed capacity at 200

GCC-

01 Hospital each in Doha, Dubai,Saudi. Total - 245 beds

Some highlights -

COMPANY ACTIVELY LOOKING TO SELL GCC BUSINESS

HAS APPOINTED MERCHANT BANKERS FOR THE MERCHANT BANKERS FOR THE SAME

HAS STARTED RECEIVING GOOD INVESTOR INTEREST FOR THE SAME

BINDING BIDS LIKELY TO BE RECEIVED BY Q1 FY 24

Current number of Pharmacies in India at 240.
Looking to add 120-150 pharmacies in India every year

Most of India hospital expansion to be via operate and manage model vs owning model. So the margins may be a little lower, but ROCE would be very high.

Aim to add 500 beds/year for next 4-5 yrs under this Operate and Manage model

Aiming to sell own labeled medicines in the Pharmacy business to boost profitability

Aim to spend 250-300 cr per year for India expansion. Aim to keep Debt/EBITDA ratio under 2

Currently, the AP,Telangana mkts underperforming for the company. Aim to go back to 15 pc EBITDA from these mkts by next FY and grow from there

GCC pharmacy sales were very strong in GCC due same store growth and greater share of private label medicines

MyAster app in GCC and home deliveries in GCC also boosted pharmacies profitability

India occupancies-overall at 68 pc

Kerala-80 pc
Karnataka-60 pc
AP, Telangana-50 pc (had stopped treating govt scheme patients. Restarting now)

India can go upto a peak occupancies of 85 pc

AP, Telangana EBITDA margins currently at 8-9 pc. Likely to go upto 15 odd pc in a steady and progressive manner

Disc: planning to take up a tracking position

1 Like
777

Crompton Greaves Consumer Electricals Q3 concall -

Sales - 1516 cr vs 1411 cr ( including revenues from Butterfly acquisition )
EBITDA - 152 vs 202 cr, Margins at 10 vs 14 pc
Net Profit - 88 vs 148 cr

New BEE energy norms being implemented for fans wef 01 Jan

Company didn’t load the channel with old / lower cost inventory by producing more of non compliant fans

Hence fans category degrew in Q3

Have started loading channel with BEE compliant fans web early Jan

Wrt Pumps, have taken price cuts to be competitively placed in the Mkt

Also, revamped entire range of pumps

Small appliances business growing robustly. Having an yearly run rate of 1000 cr. Has achieved significant scale. This,without counting Butterfly business

Making aggressive investments in R&D, marketing, training and large appliance business

Higher interest cost ( against borrowings for Butterfly acquisition ) also hitting P&L

Have revamped 400 retail stores wrt touch and feel iro Crompton products. Will do the same for another 1100 stores next yr

Rural and E-commerce grew strongly even in this weak qtr

Butterfly sales grew marginally in Q4 when most kitchen appliance players have shown de-growth. Butterfly integration progressing well

As the topline starts to grow, Margins likely to bounce back to historical levels

Lighting business also had a tough Qtr

B2C part of lighting business likely to bounce back faster than B2B part. Have underachieved in the lighting space in last 3 yrs. Management taking steps to correct the same

Kitchen appliance with Butterfly integration should be a high growth area for the company

Crompton + Butterfly is now one of the largest player in Kitchen appliance space @ 2000cr annual sales ( only behind TTK prestige …imo )

Large appliances currently have a small base in Crompton’s business. But this can be a fast growing large category over long term

Real Estate mkt picking up. But the fans are one of the last things to be installed. So there is a gap of about 48 months or so before RE pick up and surge in Fans demand. That makes company optimistic going fwd

Disc: holding, biased

1 Like
778

TTK Prestige Q3 concall highlights -

Sales - 695 vs 765 cr
EBITDA - 80 vs 129 cr, Margins down at 12 pc vs 17 pc
PAT - 58 vs 91 cr

Travel and hospitality grabbed greater share of wallet post covid ( in Q2,Q3 FY 23 ) vs FY 22 when the situation was almost opposite

Good growth in RE industry should have a positive rub off on TTK prestige. However, the positive rub off should come with a lag as small appliances are the last thing that are bought in a new house

Gross margins likely to improve going fwd as RM prices moderate

Aim to keep hitting 8-10 pc volume and 4-5 pc price growth over long term

Volume growth in last 9 months has been robust in appliances. Cookware and gas stoves have shown de-growth

High cost RM inventory has hit Gross Margins in Q3

Prestige is a marginal player in chimneys at present. See this as a very promising and high growth category going fwd. Have lined up a lot of exciting products

Aim to tgt 14-16 pc EBITDA range over long term

Hope to end FY 23 at 42 pc GM which was the same as FY 22

Had acquired majority stake Ultrafresh Modular Kitchen stores chain LY.Have added 35 stores this year over a base of 88 stores. Likely to turn out to be a high growth category

Management likely to focus a little more on the lower priced Judge brand as demand is good at lower end

Management on the prowl for inorganic acquisitions. Have a cash on books of aprox 800 cr. Hope to close a deal by Q2 FY 24

Disc : holding. Planning to add more on dips.

2 Likes
779

Century Ply Q3 concall highlights -

Sales - 877 vs 849 cr

Gross Profit - 280 vs 297 cr ( due higher RM prices - basically timber and chemicals prices )

EBITDA - 131 vs 157 cr, Margins at 15 pc vs 18.6 pc

PAT - 81 vs 82 cr ( due lower tax outgo )

Volume, Sales growth iro various segments -

Plywood - 7pc vol, 12pc sales
DecoPly - (-) 2pc vol, 0.5pc sales
Laminates - (-) 3pc vol, 5.6pc sales
MDF - (-)14 pc vol, (-) 8pc sales
Particle board - (-)19 pc vol, (-)8 pc sales
Logistics business - (-)10 pc vol, (-)4 pc sales

Segment wise Sales, EBITDA and EBITDA margins -

Plywood (including decoply )- 482 cr, 59 cr, 11 vs 14 pc
Laminates - 157 cr, 22 cr, 14 vs 12pc
MDF - 165 cr, 37 cr, 22 vs 30 pc
Particle board - 38 cr, 8 cr, 20 vs 27 pc
Logistics business - 19 cr, 6 cr, 29 vs 31 pc

As is evident, steep EBITDA margin contraction seen in MDF and particle board segment

Company net cash positive with a net cash balance of 210 cr

Have taken price hikes in Jan in plywood and price cuts in particle board

Hoshiarpur MDF brownfield facility expected to commence production in Mar 23

South India MDF capex continuing. Likely to commence production by second half of FY 24

Greenfield laminate expansion in AP likely to come on stream in 2 phases. First phase to come up by Q2 FY 24

Greenfield capex in Hoshiarpur planned for Plywood. Land has been acquired

Approved large Greenfield particleboard capacity in Chennai. Investment outlay here is expected to be 550 cr

MDF, Particle boards facing competition from Imports, hence margins are getting hit

Plywood, Laminates are not imported. Hence not affected as much

Company believes, they can still generate 15-20 pc ROCE from the new MDF, Particle board capex even at these ( kind of depressed ) prices

The only advantage that Century has vs others when setting up new MDF, Particle board capacities is that most of Century’s capex are funded by internal accruals hence the risk and return profile are better

Overall demand in Jan has been better than Q3 demand trends

Timber prices continue to remain firm. Likely to come down only after 2 yrs or so. The chemical prices are coming down

Expect slight margin expansion in Q4

Century’s MDF business is concentrated in North, away from costal belt. Hence, impact of MDF imports is lesser vs peers

Timber prices continue to remain firm. Likely to come down only after 2 yrs or so. The chemical prices are coming down

Expect slight margin expansion in Q4

Century’s MDF business is concentrated in North, away from costal belt. Hence, impact of MDF imports is lesser vs peers

If China demand picks up, MDF and Particle board dumping in India may reduce

Century’s cost structure is one of the best in the world wrt manufacturing MDF, Ply, Particle Board. So, import dumping is not such a big challenge. However, it does reduce the margins

Disc: invested, biased

1 Like
780

Adani ports Q3 -

Network of 13 Ports across India’s coastline. No concentration risk

India’s largest player. Rail,warehouses connecting ports to consumer gates

Huge land banks which can be developed into SEZs

Covers entire gamut - dredging to evacuation, 70 pc port margins

Has diversified from bulk and liquid cargo into LNG

Acquisitive and turnaround strategy has ensured quick upscaling of new ports to company level EBITDAs

Net Debt/EBITDA at 3.2 - manageable

Aim to be carbon neutral by 2025

Port capacities including warehouses & Agri Silos -
( grown from 01 to 13 ports in 20 Yrs )

West Coast -

Mundra - 264 MMT ( India’s largest )
Dahej - 16 MMT
Tuna - 14 MMT
Hazaria - 30 MMT
Dighi - 8 MMT
Mormugao - 5 MMT
Vizhinjam - 18 MMT

East Coast -

Haldia - 4 MMT
Dhamra - 45 MMT
Gangavaram - 64 MMT
Krishnapatnam - 75 MMT
Kattupalli - 25 MMT
Encore - 12 MMT

Inland logistics parks -

01 at Nagpur
02 in Punjab
01 in Haryana
01 in Karnataka
01 in Rajasthan
02 in Maharashtra

Logistics infra - 87 trains ( to take it to 200 trains by 2026 )

Currently owned railway track at 620 Km ( to take it to 2000 km by FY 26 to become the largest track owner )

Last 9 months acquisitions - Hafia port in Israel ( largest port there )

Indian Oil Tanking Ltd ( largest operator of liquid storage facilities in India )

Gangavaram Port ( India’s third largest private sector Port )

Ocean Sparkle (India’s leading third party marine service provider)

Additionally-Adani Ports is the highest bidder for Karaikal port

Adani Agri Logistics - won contracts in 8 states for Grain storage silos ( at 70 locations ). Will take their Silos capacity from 2.8 MMT to 4 MMT

Cargo handling breakdown -

Containers -37 pc
Coal -38 pc
Dry cargo (non coal) -15 pc
Crude -6 pc
Other liquids -3 pc
Gas -1 pc

Financials (Consol)-

Sales -5334 vs 4576 cr
EBITDA -3328 vs 2889 cr
PAT -1426 vs 1658 cr(Q3 FY 23 PAT includes 320 cr forex hit)

Revenue contribution, standalone-

Ports -3936 vs 3431 cr @ 70 pc EBITDA
Logistics -490 vs 300 cr @ 29 pc EBITDA
SEZ -169 vs 124 cr @ 64 pc EBITDA

Gross Debt at aprox 45500 cr Net Debt at aprox 39300 cr

Net Debt/EBITDA at 3.2

Strong internal accruals supporting organic and inorganic growth

Avg Debt maturity profile at 6 yrs Aprox 75 pc debt is foreign currency denominated ( mostly USD )

Disc: holding, biased

1 Like
781

Galaxy Surfactants Q3 Highlights -

RM, Freight costs decline significantly aiding margins. Fatty Alcohols down almost 45 pc

Macro headwinds continue in Gulf, Turkey, Africa but a sequential volume recovery points to some recovery. Another stable Qtr will establish the trend

Pricing, Product Mix, forex gain led to EBITDA/Ton shooting beyond guided range

Demand in developed mkts still slack. Demand from India is good

Q3 numbers -
Sales - 1084 vs 931 cr, up 16 pc
EBITDA - 158 vs 78 cr, up 102 pc
PAT - 106 vs 46 cr, up 133 pc

9M FY 23 numbers -

Sales - 3474 vs 2644 cr, up 31 pc
EBITDA - 437 vs 267 cr, up 63 pc
PAT - 291 vs 164 cr, up 77 pc

Q3 volumes almost flat due de growth in Developed and ME,Africa, Turkey mkts countered by good growth in India

Product wise sales breakdown -

Performance surfactants- 683 vs 570 cr
Speciality Care products- 401 vs 361 cr

Company is a India’s largest manufacturer of Oleochemical based surfactants and speciality products for home and personal care Industry selling over 205 product types

Fully vertically integrated

07 manufacturing facilities ( 5 in India, 1 each in US, Egypt ), 01 R&D center

Preferred supplier to leading MNCs across the world and local FMCG brands

Industries served - Oral care, Hair care, Cosmetics, Skin care, Toiletries, Home care

Last 6 yrs -

Sales CAGR at 13 pc
EBITDA CAGR at 10 pc
PAT CAGR at 17 pc
Volume CAGR at 7 pc

ROCE, ROE- continiously above 20 pc ( except FY 22 where they were slightly below 20 pc mark )

Debt to Equity down to 0.2 vs 0.9, 6 yrs back

The trends in volume growth going fwd is the key considering other headwinds seem to be over

China re-opening should aid volumes in Q4

Company booked 20 cr of export benefits to Egypt in Q3. These incentives were for last 36 months. So, the bottomline got additional push

Company hoping for an overall FMCG industry level volume growths coming back in FY24 after a tough past 02 yrs

Expect some inventory correction in US in Q4. In other markets - no inventory corrections are expected

Some more impact of reduced RM prices will be seen in Q4

Guiding for aprox 150 cr / annum capex for next 2-3 yrs - combo of maint and growth capex

Currently India sales at aprox 30-33 pc of total sales. Rest are exports

Current capacity utilisation at around 67 pc

Disc: invested, biased

3 Likes
782

Stylam Industries Q3 results highlights -

One of the fastest growing companies in high end decorative laminates and allied products category

First company in India to introduce PU+Lacquer coating process for laminates

Operate Asia’s largest laminate manufacturing plant

Added facilities for lamination of MDF boards

Aprox 66 pc of revenues from exports

Current laminate capacity at 14.3 million sheets/year

Q3 financials -

Sales - 234 cr vs 177 cr
EBITDA - 39 vs 33 cr, Margins at 17 pc vs 19 pc
PAT - 24 vs 16 cr, Margins at 10 vs 9 pc

Last 5 yrs sales data -

338 vs 460 vs 462 vs 480 vs 660 cr ( no major dips despite COVID disruptions )

Last 9M sales at - 716 cr

Last 5 yrs EBITDA margins -

14 pc vs 17 pc vs 17 pc vs 21 pc vs 16 pc vs 16 pc ( for last 9 months )

Debt down at 71 cr vs 183 cr in Mar 18

India’s first company to set up manufacturing facility for Solid Acrylic surfaces - a higher margin product

Q3 sales were lesser by 2-3 pc due logistics issues faced for supplies to Russia, Uzbekistan

Company clocking 80-82 cr sales in India for last 3 Qtrs

Hopeful of clocking 325-350 cr domestic sales by Mar 23

Acrylic panels clocked 7-8 cr of domestic sales. Its an import substitute, new product. Company hopeful that this number should grow manifold in medium to long term

Margins likely to improve in Q4 due reduced RM prices

Hopeful of getting to 20 pc + EBITDA margins by Q1 FY 24 due reduced RM prices

Current capacity utilisation at 80 pc. Maint, Automation and Modernisation capex planned for Rs 30-40 cr ( @ 10 cr/year for next 3-4 yrs ). Should improve capacities by 30 - 40 pc

Depreciation and Interest expenses reduced in Q3 due reduction in debt and completion of depreciation of some assets

60 pc of exports are branded sales. Rest are to OEMs like Thyssenkrupp who use company’s products in their elevators

Company seeing growth in exports despite economic slowdown due Mkt share gains and greater acceptability of Made in India products

Confident of clocking 15-20 pc toppling growth next year as well !!!

Hopeful of selling Rs 14-15 cr of Acrylic panels in Q4 vs Rs 7-8 cr in Q3

Company’s Acrylic boards have a sale potential of Rs 300-400 cr in next 2-3 yrs. This yr sales are likely to be around 30-32 cr. The growth in this segment can be huge

Expect Q4 to be better than Q3

Disc: holding, biased.

Company’s shares are also held by Sunil Singhania in his Small Cap PMS portfolio

2 Likes
783

HDFC Bank Q3 concall highlights-

Industry Mkt share in Advances at 11 pc, in Deposits at 10 pc

Customer base at 8.3 cr

Total branches at 7821 (opened an avg of 04 branches per day in FY 23 !!)

52 pc branches in rural and semi urban areas

Credit card Mkt share at 28 pc !!

NII - 24940 vs 20350 cr, up 23 pc
Non Interest income - 9610 vs 8380 cr, up 15 pc
Operating expenses - 14590 vs 11010 cr, up 33 pc (due massive branch expansion)
PPOP- 19960 vs 17720 cr, up 14 pc
Provisions- 2680 vs 3320 cr, down 21 pc
PAT (consol)- 12590 vs 10440 cr, up 21 pc

Total Advances at Rs 16,14,200 cr, up 17 pc
Total Deposits at 18,83,400 cr, up 21 pc (big achievement)
Cost/Income at 42 pc- despite massive branch expansion
NIMs at 4.1 pc vs 4.0 pc
RoA at 2.2 pc
Capital Adequacy at 19.3 pc, Tier-1 at 17.1 pc
Retail:Wholesale deposits at 83:17

Retail:Wholesale Loans at 47:53
10 yr Advances CAGR at 21 pc
10 yr Deposits CAGR at 20 pc
10 yr PAT CAGR at 21 pc

Asset quality-

Gross NPAs - 1.1 vs 1.2 pc
Net NPAs - 0.27 vs 0.33 pc

Bank’s POS machines currently operational at 39 lakh, up by 30 over previous FY end

Bank’s merchant App- Vypaar added 75,000 merchants per month in FY 23

Branches offering wealth management, now over 900 vs around 700 LY

Branches offering gold loan at 4182, up by 3X vs Mar 22 (bad news for gold loan companies)

Added 1.06 cr new liability customers in FY 23!!

Employee addition in FY at 31600 !!

CASA ratio stands at 44 pc

Q4 loan growth breakup -

Retail loans up 21 pc
MSME and priority sector loans grew by 29 pc
Wholesale loans grew by 12 pc

Express car loans gaining tremendous traction, now constitute 20 pc of all car loans

Slippage ratio for Q4 was 28 bps (this is too good)
Recoveries and upgrades in Q4 were 22 bps (awesome)

PCR at 76 pc. But if u add contingent, general and other provisions, this jumps to 176 pc of GNPAs (eye- popping)

HDB Fin Services (subsidiary) reported improvements across loan growth, PAT and asset quality. Its full year PAT almost doubled to 1950 cr !!!

HDFC Securities revenues and PAT de-grew slightly in Q4. Full yr PAT was 777 vs 984 cr LY

CV portfolio of the bank grew 11 pc QoQ (V Strong growth)

Benign credit cost cycle allowing the bank to go full throttle on branch expansion without worrying too much about expenses

43-44 pc loans are fixed rates loans with avg tenure of 2.5 yrs

Retail loan book : Wholesale book to grow because of aggressive branch expansion

Branch addition speed ( which is already hyper ) to continue in FY 24 as well, subject to Qtly evaluation

Full benefits of this hyper addition in branches to be visible in 2-3 yrs as new branches and new customer relation start to mature

Merger may get completed by July

My take -

Exceptional performance wrt deposit mobilisation, asset quality, slippages, provision coverage, acceleration in retail loans

No discussion on Bank’s planned all new Website / user interface was a disappointment

Performance on most operational metrics - Superb

Disc: holding, biased

1 Like
784

ICICI SEC Q4 highlights -

Cash broking revenue at 20 pc of total,this used to be 50 pc plus for ICICI SEC a few yrs back (this fall is in line with industry trends as discount brokers don’t charge here)

Derivatives revenue at 15 pc of total, up continuously for 7 straight Qtrs

Distribution revenues at 22 pc of total (very healthy, mostly insurance, loans distribution- industry leading matrix this one)

MTF revenues at 26 pc of total (again Mkt leading)

Segment wise Mkt share -

Retail Cash - 11 pc, up yoy- AVG
Retail Derivative - 3.6 pc, up yoy - AVG

Commodity- 6.1 pc,up yoy, AVG
MTF- 22.3 pc, up yoy, Exceptional
MF distribution- 1.7 pc,flat yoy, AVG

Company is the leader in Insurance, Loan distribution vs peers - big positive

Wealth management AUM - 3.2 lakh cr vs 2.9 lakh cr, industry leading . Avg yields here are 0.32

Derivative broking revenue at 117 vs 85 cr yoy !!

Loans disbursed at 1250 cr vs 660 cr yoy. Partnership with TATA capital went live. With many others to go live shortly

Life insurance premium collected at 432 vs 295 cr. Has 12 insurance partnerships via open archietecture

Increase in Qtly cost due - increase in interest rates to provide funds for MTF trading, enhanced technology investments MTF book

NIM at 3.0 vs 4.8 pc- company absorbing cost to gain mkt share

Wealth management customers (> 1 cr aum )at 78k vs 68k yoy

Revenue from wealth management clients crossed 1000 cr vs 3416 cr revenues for the entire company - A huge positive …IMO. 66 pc of this income is recurring, 34 pc is transactional

Revenue from insurance ( both life and non life ) distribution at 102 cr, up 45 pc yoy !!!

ISEC PMS AUM at 1400 cr vs 720 cr LY, a big positive as this is one of the highest yielding product

Company earning 65 bps commission on overall loan sourcing book. When personal loans kick in, this yield should head higher !!!

NIMs on MTF book should be around 3.5 pc for FY 24

Company to press harder for greater mkt share in F&O segment

MTF book at 6.5k cr vs 4.5k cr LY despite weak mkt conditions

Expect FY 24 to be investment heavy yr, wrt investments in Tech, Feet on ground

Added 10k customers in wealth management space in this FY. Aim to accelerate these customer additions

Disc: holding Angel One. Planning to take up a small position in ICICISEC

1 Like
785

Short Highlights from ICICI bank’s Q4 results -

Core Operating profits up 36 pc at 13,866 cr

Q4 Provisions at 1619 vs 1069 cr

FY 23 provisions at 6666 cr vs 8641 cr

Loan growth at 20.5 pc yoy

Deposit growth at 9.3 pc yoy ( CASA up 7.5 pc, Term Deposits up 17.1 pc )

Net NPAs at 0.48 pc vs 0.76 pc - huge improvement

Gross NPAs at 2.81 pc vs 3.6 pc - huge improvement

PCR at 82.8 vs 79.2 pc

Net additions to Gross NPAs in Q4 at 14 cr !!

Most of the provisions in Q4 were contingency provisions

Total Contingency prov at 13100 cr !!

NII at 17,667 cr vs 12,605 cr

Non Interest income at 5127 vs 4608 cr

Dividend income at 4830 vs 4366 cr

PAT at 9122 vs 7019 cr NIMs at 4.9 vs 4.0 pc

Cost/Income at 39.2 vs 40.6 RoA at 2.37 vs 2.11

Loan growth - Retail- 23 pc Rural- 14 pc Business Bank- 35 pc

SME- 19 pc
Corporates- 22 pc

Total provisions held as a percentage of Advances - 2.2 pc vs 2.1 pc in Mar 22 ( heading the HDFC way )

Loans outstanding break up -

Retail - 54 pc
Rural - 8 pc
Business banking - 7 pc
Corporate - 22 pc
SME - 5 pc
Overseas - 4 pc

Disc : holding

Results, IMO are very good

786

How are they bullish on growth when there is “no major capex in foreseeable period”, in an industry where all the major players are doing capex. I know that cpvc prices make come under control but volume growth and capacity expansion is also important in this industry. What do u think?
I’m open for constructive criticism.

787

Any thoughts regarding CG consumer, I am planning to add more, but not sure where is the bottom? Please guide. Thank you.

788

WRT …Prince Pipes -

That’s because they were on a capex overdrive for last 3-4 yrs ( where in fixed assets almost doubled from FY 18 to now ), which is now coming to an end and capex intensity is likely to be low for next 1-2 yrs.

Expect some operating leverage to kick in. That’s my thesis.

3 Likes
789

WRT… CG consumer products -

Sudden exit of CEO is generally never a good sign, but can’t be taken for granted as a bad thing. I suspect the softness in business in Q3 may continue in Q4 as well. That is being reflected in the stock price …IMO.

However, one should avoid knee jerk selling in such cases. 1-2 Qtrs of pain is par for the course in any company provided the portfolio is well diversified. ( and I think 1-2 companies always end up underperforming / taking a beating in a well diversified portfolio… its a kind of certificate of good diversification )

Will be eager to listen to management commentary post Q4 results and their assessment of on ground situation wrt consumer electricals. Had CG consumer not acquired Butterfly, they may have got even more bashing on their Mkt Cap. That acquisition may be a saviour.

These are only my thoughts. Lets wait for Q4 results.

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