Ranvir's Portfolio

Broad brush criteria is - relative valuations. Nothing more than that

2 Likes

Karur Vysya Bank -

Q3 concall highlights -

Advances up 17 pc @ 72.6k cr

Deposits up 13 pc @ 85.6k cr

CASA up 5 pc @ 27k cr

NIMs @ 4.2 pc, up 9 bps YoY

GNPAs - 1.58 pc ( down 112 bps !!! )

NNPAs - 0.42 pc ( down 48 bps !!! )

PCR - 95 pc, up 394 bps !!!

RoA @ 1.65 vs 1.32 pc

RoE @ 17.2 vs 14.1 pc

NII - 1001 vs 890 cr, up 13 pc

Other income - 358 vs 317 cr, up 13 pc

Op Profit - 676 vs 690 cr ( down 2 pc )

Provisions - 149 vs 364 cr ( down sharply )

Net Profit @ 412 vs 290 cr ( up 42 pc !!! )

Segment wise growth in advances -

Retail up 21 pc @ 17k cr

Commercial up 20 pc @ 24k cr

Agri up 19 pc @ 17k cr

Corporate up 6 pc @ 14k cr ( deliberate strategy by the bank to keep low margin business’s growth at moderate levels )

Fresh slippages @ 197 cr ( well within limits )

Bank is holding total provisions of 822 cr against Net NPAs of 305 cr !!!

Total bank branches @ 831 vs 790 LY. To open 8 new branches in Q4

Expecting to maintain NIMs of > 4 pc in Q4 as well

Confident of keeping the slippage ratios under 1 pc

Std restructured book @ 1.09 pc of advances. Holding 28 pc provisions against the std restructured book

Bank has a BNPL arrangement with Amazon. The book is growing well and credit costs are low

Demand from MSMEs continues to be very strong. Seeing good demand in Q4 as well. MSME book is now 33 pc of bank’s total book

Bank is going slow wrt loan disbursements to large corporates as the yields there r low and the bank believes that they can get better yields elsewhere

If the textile industry picks up, it should be positive for the bank as TN has a vibrant textile industry. Signing of UK, Switzerland FTA should also be a positive

Banking is going to increase its focus on retail home loans and builder loans over the next 2-3 yrs. This has been identified as a core growth area for the future

Going to expand slowly into the MFI segment as well (by tying up with various partners)

Disc : holding, not SEBI registered, biased

2 Likes

Indoco Remedies

Q3 FY 24 concall highlights -

Sales - 459 vs 399 cr
EBITDA - 63 vs 62 cr ( margins @ 14 vs 16 pc - unexpected compression )
PAT - 16 vs 28 cr ( big miss ). Company incurred an exceptional cost of 8 cr towards provisioning for VRS at one of its Goa Site

Goa plant - 1 received EIR from US FDA in Q3

Segment wise revenue break up -

Domestic formulations - 216 cr, up 4 pc

International formulations - 197 cr, up 4 pc
(sharp growth in US and emerging mkts, sharp de-growth in EU, Australia, NZL)

API sales - 33 cr vs 16 cr

Indoco analytical services - 8 vs 4 cr

Company’s Goa plant - 2 ( for sterile products ) was given OAI status in Feb 23. Expect increased level of remediation costs to continue for some more time before the plant is again cleared by US FDA

Drop in EU sales primarily due to drop in PCM sales due overstocking by a particular customer

Company is trying hard to mitigate the effect of disturbances in Red Sea. The situation remains unpredictable

India business had a significant component of institutional sales in the base Qtr. Adjusted for that, India business would have grown at far higher rates

Higher depreciation incurred in Q3 due expanded manufacturing facilities

Overstocking issues in EU should be a thing of the past - after Mar 24. Apr 24 onwards, EU sales should pick up nicely

New introductions have done very well in Q3 vs flattish growth for legacy brands in India. Company is also withdrawing from a lot of smaller products/brands in the India business. That also had an adverse impact on Q3 India sales

Deficient rains in India in Q3 had an adverse impact on the sales of anti-infective where company has a strong presence

Company is making concerted efforts to reduce the overall cost structure of the company

In the medium term, the company aspires to go back to 22-23 pc kind of EBITDA margins ( this can potentially super-charge the company’s bottomline ). My take - The proof of the pudding shall however be in the eating

Company has a total of 2300 MRs on its payroll for India business

Capex guidance for next yr - 120-150 cr. Capex for FY 24 should be around 150 cr ( basically, the company is sitting on a lot of operating leverage … only if they realise it )

Company can more than double its sales with the current capacities

Company expects Goa- plant 2 to be cleared by end of Q2 next FY - at the earliest. It may take more time

Disc: hold a tracking position, biased, not SEBI registered

IMHO - the company has a lot of potential. Execution has been below par in the last 12 odd months. For the time being, I am ready to be patient and give them a lose rope for another 2 Qtrs - minimum

2 Likes

Cipla Q3 FY 24 -

Concall highlights -

Sales @ 6604 cr, up 14 pc
EBITDA @ 1748, up 24 pc (margins @ 26 vs 24 pc)
PAT @ 1068 vs 808 cr
R&D spends @ 6.1 pc of sales, up 10 pc YoY

Region wise performance -

India sales @ 2859 cr, up 12 pc, fuelled by chronic therapies and big brands ( 44 pc of total sales )

North America sales @ $ 230 million, up 18 pc ( 29 pc of total sales )

South Africa sales @ ZAR 1355 million, up 15 pc
( 1 ZAR = Rs 4.4 )

Other international Mkt sales @ $ 90 million ( 11 pc of total sales )

API and others represent 4 pc of sales

Company’s cash holdings @ 7200 cr ( I hope they r used to acquire speciality, branded portfolios )

Forecort Inhaler - became the No 1 Indian brand in Q3

Filed gSymbicort and one more product in US mkts

Awaiting approval for one peptide product launch

Therapy wise rank of Cipla India -

Respiratory - 01
Urology - 02
Cardiac - 07

Overall rank in India - 03
Rank in chronic therapies - 02

Company has 10 brands in top 100, 06 brands in top 50 and 03 brands in top 25 in IPM. Company has 20 brands with sales > 100 cr/yr

Cipla’s popular Indian OTC brands - Omnigel, Nicotex, Cofsils, Cipladine, Prolyte ORS solution

Acquired Actor Pharma in RSA for $ 49 million in Q3. Integration process is on

Q4 is a seasonally weak Qtr - both in India, US

Company’s Goa plant is scheduled for a re-inspection by USFDA in Q1 FY 24. It was last inspected in Aug 22 and was given a warning letter. Similar is the case with their Pithampur plant which was also given OAI status in Feb 23. OAIs at these 2 plants are hampering the new product launches in US

One Peptide product should get launched by Q1 FY 25. Cipla should be the first company to launch it. Mkt size for the product is descent ( they did not quantify )

Company is hopeful for an approval for the launch of Advair in US by end of FY 25. Current price of the generic Inhaler is around $ 30 / inhaler

Cipla has about 20 pc mkt share for lanreotide 505(b)(2) product in US. Hope to keep gaining incremental Mkt share in the coming Qtrs

Going fwd ( 3-5 yrs ), Respiratory and Peptide assets shall continue to be company’s two largest segments in the US mkt

Cash on books to be used for bolt-on acquisitions. Can go for larger assets in India, relatively smaller assets in Intl Mkts

Disc : holding, biased, not SEBI registered

2 Likes

Disc:

Trimmed / Exited my positions in - KVB, ICICI BANK

Added small cap hotels / Restaurant stocks -

UP Hotels - present in fast growing UP Mkt with 04 hotels - Clarks brand. Debt free balance sheet in a fast growing UP mkt with not so expensive valuations

Kamat Hotels - have finally sorted out their Debt problems. Operate Hotels under the ORCHID, IRA and Lotus Resorts brands + a few boutique hotels. Currently have a room capacity of 1500 hotels, expected to go up to 2200 by Mar 25 - that’s almost a 50 pc jump !!!

SAMHI Ltd - this is a turnaround bet where I am betting on management being able to use IPO proceeds and operating cash to retire debt. This one is a little risky kind of bet. However, the brands that they operate - Hyatt, Marriot , Holiday INN etc - give me the confidence to look fwd for a turnaround. Q2 and Q3 results point towards the fructification of a successful turnaround

Speciality restaurants - finally getting their act and unit economics right - specially the Mainland China, Oh Calcutta, Sweet Bengal brands

Already holding -

Taj GVK
EIH
EIH Associated
Royal Orchid
Benares Hotels

The commentary from travel / tourism sector sounds really bullish. These small caps are avlb at sub 25 times kind of valuations. Plus the growth can be high for next 1-2-3 yrs. Plus most of these guys are sitting on valuable real estate assets

Disc: biased, not SEBI registered

12 Likes

Kamat Hotels India Ltd -

Company overview -

Current portfolio of hotels -

Orchid Brand ( 960 Keys ) -

Pune, Mumbai, Shimla, Manali, Lonavala, Jamnagar

IRA by Orchid brand ( 340 Keys ) -

Bhubaneshwar, Mumbai, Shambhajinagar, Nashik

Lotus Resorts ( 120 Keys ) -

Goa, Murund, Konark,

Others ( 33 + 58 Keys ) -

Mahodadhi Palace at Puri, Fort Jadavgarh Fort at Pune

Owned Property - The Orchid Mumbai (372 Keys) - near Mumbai Airport

Managed Property - The Orchid Lonavala ( 36 Keys )

All others are leased properties - 11 of them

Properties slated to open in near future -

Orchid Noida - 62 Keys - Mar 24
IRA Ayodhya - 50 Keys - Feb 24
Orchid Toyam (near Pune) - 21 keys - Mar 24
Orchid Dehradun - 68 Keys - Sep 24
Orchid Chandigarh - 123 Keys - Sep 24
Orchid Bhavnagar - 61 Keys - Sep 24

Basically - a total of 460 rooms are expected to go on stream in next 3-9 months. This will take the room capacity from around 1540 to 2000 rooms. This would be a 33 pc Jump !!!

Plan for March 25 -

No of properties @ 25 from 13 currently
No of Keys @ 2200 from 1500 currently
ARRs should be around 7.5k vs 6.5k currently
Revenues @ 400 vs 300 cr currently
Debt @ 175 vs 300 cr currently

Disc: initiated a tracking position @ Rs 320, biased, not SEBI registered, not a buy/sell rec

2 Likes

Somany Ceramics Q3 FY 24 highlights -

Sales - 612 vs 622 cr

EBITDA - 59 vs 41 cr ( Margins @ 10 vs 7 pc - sharp margin recovery despite sub-optimal capacity utilisation - down from 91 to 82 pc )

PAT - 23 vs 11 cr ( jump in PAT is due to due margin recovery )

Company successfully commissioned a large format tiles / slab plant in Q3

Looking ahead - company is confident of demand recovery as Tiles are consumed towards the end of any project’s construction cycle. A lot of projects went live wef 2022, 23 - should now be nearing completion

Sanitary and Bathware sales @ 65 vs 60 cr. Adhesives sales @ 15 vs 9 cr

For 9M ending Dec 23, Sanitary and Bathware sales @ 187 vs 170 cr. Adhesives sales @ 41 vs 22 cr

Invested aprox 4 cr to set up a solar power plant at the Haryana facility to bring down the power costs in the long run

Spending 70-80 cr/ yr on advertising. Added 300 new dealers this yr

Aim to grow at rates 5-6 pc higher than Industry levels in FY 25

Capex for next yr only at 15-20 cr for Nepal plant

Company’s exports are aprox 3 pc of sales

Company has expanded its total capacity by aprox 25 pc in last 24 odd months vs under 20 pc capacity expansion for the Industry leader ( Kajaria ). Somany shall announce further capex only after 12-18 months from now

In Jan, the company has grown in mid single digits (unlike Q3). Same or better trend should continue in Q4. Margins are likely to be at or above 10 pc at EBITDA levels in Q4 as well

Disc: holding, inclined to add more at CMP, biased, not SEBI registered

Somany Ceramics:
Technical View: Seems to be trading in a range (weekly chart), we can see a big breakout above 760.

1 Like

Speciality Restaurants -

Company’s brands - Revenue contribution

Mainland China/Asia Kitchen ( 24 units ) - 42 pc

Oh Calcutta ( 9 units ) - 13 pc

Sweet Bengal ( 42 units ) - 10 pc

Cloud Kitchens ( 14 units ) - 14 pc

Sigree Global Grill ( 03 units ) - 7 pc

Haka ( 4 units ) - 5 pc

Rest is contributed by smaller brands like - Cafe Mezzuna, Hoppipola ( Both - Italian / Continental ) etc

Q3 FY 24 results -

Revenues - 122 vs 105 cr
EBITDA - 29 vs 27 cr
PAT - 13 vs 15 cr

Dine-in sales @ 78 vs 75 pc YoY
Delivery sales @ 22 vs 25 pc YoY

Compression in margins due opening of new Restaurants and the resultant increase in costs

Company opened 04 new stores in Q3. Intend to open 02 more stores in Q4

Company raised 127 cr in Q1 this yr. Intend to renovate / reinvigorate old stores and for acquisitions ( profitable Chinese restaurant chain - already identified ). Company should announce it anytime soon

Disc: hold a tracking position, biased, not SEBI registered

View : if the company can get to a base PAT of say 50 cr/yr and grow from there, it would be a very nice re-rating candidate with current Mkt Cap at 1250 cr

6 Likes

Alembic Pharma -

Company overview & Q3 FY 24 highlights -

Company’s manufacturing base -

Formulation facilities -

F1 @ Panelav - General oral solids

F2 @ Panelav - Oncology oral solids, Injectables

F3 @ Kharkhadi - General injectables, Ophthalmic products

F4 @ Jarod - General Oral solids

F5 @ Kharkhadi - Various Derma product forms

API facilities -

02 facilities at Panelav

01 facility at Kharkhadi

Company is ranked @ 20th position in the IPM

Supplying APIs to 60+ countries

Division wise sales mix for Q3 -

India formulations - 36 pc - 596 cr, up 9 pc

US formulations - 28 pc - 474 cr, up 9 pc

RoW formulations - 17 pc - 272 cr, up 32 pc

APIs - 19 pc, 326 cr, down 11 pc

India sales breakup -

Acute - 30 pc

Vet - 16 pc ( operating in Livestock and Poultry market )

Speciality - 54 pc

In India, 04 of company’s brands clock sales > 100 cr / yr

03 of company’s Veterinary brands clock sales > 30 cr / yr

No large capex is lined up for the US business in the foreaeable future

RoW growth driven by various partnerships that the company got into. Key RoW mkts include - EU, Canada, Australia, Brazil, RSA. Commenced ops from Chile. Aiming to expand to Mexico, ME and North Africa in near future

Company has been spending > 12 pc of their topline on R&D for last 5 yrs !!!

Veterinary and RoW businesses grew by 32 pc each in Q3

Company is sitting on a lot of operating leverage as its US facilities are under-utilised. As their utilisation goes up, return ratios, margins should get a good bump

Fall in API sales is due to slower off take by a few customers. Should correct in 2-3 Qtrs

Aim to launch 05 new products in US in Q4 followed by 10-15 launches in FY 25. These launches should help take the plant utilisation to higher levels

Company’s R&D focus these days is greater on Injectables vs Oral solids, Derma products

Company is working on GLP-1 products. These are complex generics. Launches are some time away

Company feels it has $ 230 million/yr kind of base business in US ( unless there r some major disruptions ). The Mkt is looking better now vs the last few yrs. The US business is already profitable

Disc: planning to take up a tracking position, biased, not SEBI registered

1 Like

An interesting observation -

Ppl or Mkts keep taking about the shift from unorganised to organised players in various sectors due various factors- known to all of us

There r 2 sectors where the unorganised sector is rolling out red carpet for the organised sector- hotels / hospitals

A lot of standalone hotels / hospitals are willingly handing over their operations to organised chains like - royal orchid, kamat hotels, taj group etc

Similar things are beginning to happen in Hospitals - like with Shalby, KIMS

I m sure - the trend is only gonna accelerate

The organised players either get into a management contract or take up the assets on lease

Its a win win for all

I wonder - what will be the size of these hospital / hotel chains after 5-6 yrs

They can simply keep adding to their profits without capex and without creating any new capacity too ( hence the supply may also remain limited :laughing: :joy: )

Possible Goldilocks Scenario

Disc: biased, invested in a lot of Hotel and Hospital companies

7 Likes

Another interesting observation -

Dependence on plain vanilla US generics ( even for larger players like - sun, cipla, dr reddy ) …… is falling with every subsequent qtr

Share of profits from branded mkts are increasing with every passing qtr

Bigger guys like - Sun, Cipla, Dr Reddy are sitting on cash like 5-6-7 k cr ( company to company ) and are now spending these on either niche / specialty or limited competition complex generics. Plus they r generating tons of Cash every year

Eg - Sun’s specialty portfolio is doing very well. With increased R&D dollars, it should only get better

The pain caused by heavy dependence on plain vanilla generics may not get repeated easily ( all companies seem to be aware of this and are acting accordingly )

May lead to a structural re-rating of the sector

1 Like

Just playing devils’ advocate here :slight_smile:
If its so straight forward, why are smaller(unorganized) leaving their well established business? possible reason could be that due to equity boom, listed players having deep pockets can buyout smaller players at high prices, but then lets also remember that Airbnb culture is gaining popularity and many ppl are preferring that over hefty hotel tarrifs…

Good question …

Actually it’s not so simple. Services industry requires a very high degree of consistent and quality service standards that run deep in an organisation and can only be expected ( in general ) from organised players. Their systems, quality control measures look like science. But - in reality, they r an art

Most unorganised players don’t do it well. Hence the urge to lease out to bigger players. The unorganised guys get lease proceeds / profit share - as agreed between the two parties. It’s a win win for all. Hence the phenomenon

On Air BnB - Quality control is still a big issue. The really good Air BnB properties ( eg - in Goa ) also charge hefty rates

Even if u disregard this, this hospitality boom is driven by top 2 pc of India ( say 3 cr Indians ). This may expand to top 4 pc in 4-5 yrs. That means a cohort of 6-7 cr ppl willing to spend at will on experiences / good service / good locations / great properties

Air BnB can cater to the next 14 odd pc of our populace

5 Likes

Steel strip wheels -

Q3 FY 24 concall highlights -

Sales - 1110 vs 938 cr ( export sales @ 174 cr, up 180 pc from 60 cr )
EBITDA - 117 vs 108 cr ( margins @ 11 vs 12 pc, down 100 bps YoY )
PAT - 60 vs 44 cr ( due lower tax outgo )

Current manufacturing capacity -

Steel wheels - 20 million to go upto 27 million wef Jan- Feb 24
Alloy wheels - 3 million to go upto 4.8 million in a phased manner - capex is in progress

No of plants @ 5

Tata steel holds 6.9 pc stake in the company

Nippon Steel and Sumitomo Metals together hold 5.4 pc stake in the company

Mkt share in domestic mkts -

PV - 42 pc
MHCV - 61 pc
Tractor / OTR - 42 / 70 pc
2-3 wheelers - 30 pc

Export sales for first 9 months @ 505 cr, up 130 pc from 220 cr LY

Export destinations -

US - 70 pc
EU - 26 pc
RoW - 4 pc

Steel wheels demand expected to grow at 8 pc CAGR for next 5 yrs vs 12 pc for alloy wheels

Alloy wheel contribution -

By volume - 15 pc
By value - 28 pc

Some popular models getting their alloys exclusively from the company - Carnival, Salvia, Creta, Verna, Aura, XUV 700, Magnite, Punch, Tigor, Kiger. Company enjoys 50 pc share wrt Sonnet, Venue, Nexon

Company enjoys > 50 pc mkt share wrt EV models of Mahindra and Tata Motors

Company expects alloy wheels, steel wheels sales to grow at 20 pc, 4 pc CAGR for next 2 yrs

At present, the company is doing an EBITDA of Rs 256/wheel. As the contribution from alloy wheels increases, this EBITDA/wheel should only go up from here on

Expecting to clock 4800-5000 cr of topline in FY 25. This yr, company should do 4400-4500 cr on the topline

Company completed infusion of Rs 138 cr into AMW auto components ltd via NCLT process. AMW is also involved in the manufacturing of steel/alloy wheels

Low tax rate for Q3 due company shifting to newer tax regime. Henceforth - yearly tax rates to be at 25 pc/yr

Seeing some slowdown in exports due to the Red Sea issue. At present, company is at max doing Rs 50cr /month of exports ( ie wef Jan 24 )

Company to undertake debt reduction wef FY 25 as a lot of capex is behind them

Expect alloy wheel production at 3.5-3.6 million wheels for next FY

Disc: hold a tracking position, biased, not SEBI registered

1 Like

Kamat Hotels -

Q3 concall highlights -

Revenues - 86 vs 84 cr
EBITDA - 26 vs 33 cr ( due higher lease and employee cost due hiring for Jamnagar, Sambhajinagar, Noida and Ayodhya properties )
PAT - 42 vs 28 cr ( due exceptional gain of 35 cr )

Entered into a JV to develop a 5 star property at Puri ( near the Jagannath temple ). The partner investor will infuse equity so that Kamat Hotels doesn’t have to take on any debt for the said development. Hotels at Ayodhya and Noida to go live in Q4

Opened Orchid - Jamnagar and IRA hotel in Sambhajinagar in Q3

Company’s debt is down from 298 to 172 cr QoQ

Company is guiding for flattish topline for FY 24. Expecting the growth kick to come in from FY 25 onwards as the a/m new hotels scale up. Plus, the company is also gonna open a few more Hotels in the near future @ Chandigarh, Bhavnagar, Dehradun ( all three by the brand name - Orchid )

Company is still confident of achieving an EBITDA of 100 cr for FY 24

Finance costs to fall from 13 cr / Qtr to around 6-7 cr / Qtr from Q4 onwards

Ayodhya is seeing a tourist influx of aprox 5 lakh / day against an expectation of 1 lakh / day. Whatever capacity is being put up in Ayodhya, is likely to get consumed ASAP. Company is targeting 2 more hotels in Ayodhya in medium term - both likely to be on leased model

WRT further / future expansions - company is extremely careful before selecting the locations that they intend to expand into. A lot of thought has gone into expanding to Dehradun, Jamnagar, Chandigarh, Ayodhya, Noida etc. Company could have expanded at a much higher rate. But they r being extremely selective wrt locations and leverage ( ie avoiding it and only getting into lease / management models )

For FY 25, company is targeting a topline of Rs 400 cr and an EBITDA of Rs 150 cr !!!

Kamat family has a long history of operating several Restaurants ( not under the Kamat hotels - entity ). They do place a lot of attention to their in-hotel restaurants and consider them as integral to the overall success of their Hotels business

Intend to be net debt free by Mar 25 as the current and future cash flows are expected to be strong !!!

Disc: holding, intend to add more, biased, not SEBI registered

Looks like a tree hit to me

4 Likes

**Ajanta Pharma - **

Q3 concall highlights -

Revenues @ 1105 vs 972 cr, up 14 pc
EBITDA @ 314 vs 170 cr, up 85 pc !!!
PAT @ 210 vs 135 cr, up 56 pc !!!

Geography wise sales performance -

India branded - 308 cr, up 5 pc ( led by strong growth in Ophthalmology segment @ 15, Cardiology segment growth at 6 pc. Launched 14 new products in India in FY 24 including 4 new to Mkt products ). India business operates in 4 main areas - Cardio, Derma, Opthal, Pain management

Asia branded - 292 cr, up 28 pc ( launched 15 new products in FY 24 in Asia AoR )

Africa branded - 155 cr, up 7 pc ( launched 5 new products in FY 24 in Africa AoR )

US Generics - 252 cr, down 5 pc ( launched 4 new products in US in FY 24 )

Africa institutional generics - 86 cr, up 180 pc ( basically anti-malarial products )

Money spent on R&D @ 86 cr for Q3 @ 5 pc of sales

Expect logistics costs to go up in Q4 due ongoing red-sea issues

EBITDA margin guidance for full FY 24 @ 27 +/- 1 pc. Margins should inch up further for next 2-3 yrs !!!

Capex for entire FY 24 expected @ 125 cr ( including maintenance capex, Rs 80 cr already spent )

Company expanded its number of MRs for its Asia, Africa branded business over the last few Qtrs. Hope to see increased MR productivity and mid to low teen top line growth in these geographies over next 2 yrs

Company is open for inorganic growth in the domestic mkts as they r generating healthy cash flows

If they r not able to identify acquisition tgts, they ll keep paying hefty dividends

Price erosion in US Mkts is abating, general mkt conditions turning favourable

On malarial vaccines having an impact on their Africa institutional business - vaccine efficacy isn’t very good. Plus the roll outs have been very slow. Don’t see a major impact on their business in next 3-5 yrs

Likely to file 8-12 ANDAs in US in next FY vs 6-8 ANDAs this FY. Hence the R&D costs should be higher

Company’s rank in the covered Mkts -

Opthal - 02

Cardio - 10

Derma - 05

Pain Management - 10

Company aspires to grow by 15 pc on topline in Q4

Disc : hold a tracking position, biased, not SEBI registered

1 Like

Neuland Labs

Q3 FY 24 concall highlights -

Sales - 394 vs 270 cr, up 46 pc

EBITDA - 122 vs 55 cr, up 124 pc

PAT - 80 vs 30 cr, up 165 pc

Segment wise sales break up -

Prime APIs - 25 pc

Speciality APIs - 20 pc

CDMO - 49 pc

Others - 6 pc

Segment wise contribution from top 5 products -

Prime APIs - 80 pc

Speciality APIs - 67 pc

CDMO - 91 pc

For 9M FY24, Breakup of CDMO sales -

Development - 221 vs 96 cr YoY

Manufacturing - 362 vs 165 cr YoY

No of molecules in various phases of development / manufacturing ( APIs + Intermediates ) -

Phase 1 - 19

Phase 2 - 20

Phase 3 - 7

Pre Commercial - 14

Commercial - 18

Company is Net Debt free

Capex for 9M FY 24 @ 68 cr

Expect a 20 pc kind of CAGR for the company over next 4-5 yrs ( although the journey won’t be linear )

FY 25 may be a moderate growth year. Expect growth to pick up post FY 25 as more molecules (as expected) go commercial

When a biotech customer of their’s gets acquired by a Pharma major ( as was the case with the acquisition of Karuna Therapeutics by BMS ), it opens up several new business opportunities for the company

Since Neuland works with a lot of small Biotech partners, a prolonged funding winter for these Biotech companies may be a risk wrt new business for Neuland

Current capacity utilisation of Unit-3 is 57 pc. Company has still bought land adjacent to Unit-3 for further expansion

Company has 03 generic molecules in its pipeline. Will file DMF for one of them in this calendar yr, in the next CY for the other two. Both these are lucrative molecules

Company has 02 peptide molecules in their CDMO pipeline which are nearing commercialisation. However, company is not the primary supplier for these molecules

Company owns a commercial property which should end up being liquidated in next FY. Expecting an exceptional income of aprox 100 cr from that property

Capex lined up for next 2-3 yrs @ 100 to 120 cr/yr - in that range

Disc : its a major portfolio holding for me, biased, not SEBI registered

4 Likes

Royal Orchid Hotels -

Q3 Concall highlights -

Revenues - 87 vs 76 cr

EBITDA - 29 vs 28 cr

PAT - 15.7 vs 15.2 cr

Revenue break up ( segment wise ) -

Room rent - 46 vs 43 cr

F&B - 33 vs 28 cr

Other services - 3.6 vs 2.8 cr

Management fees - 8 vs 6 cr

Revenue break up ( model wise ) -

Owned hotels - 30 vs 24 cr

Leased / revenue share hotels - 34 vs 27 cr

JVs / Associates - 18 vs 23 cr

Management fees - 8 vs 6 cr

Added 05 hotels with 210 rooms in Q3. Added 20 hotels with 1030 rooms in 9M FY 24

Company held 51 pc stake in a 130 room hotel in Bangalore. Acquired additional 49 pc stake by paying 34 cr in Q3. The money was paid via internal cash generation

Out of a total of 100 hotels that the company is operating, around 80 odd hotels are just being managed by the company. Here, the company gets a management fees of around 3 pc of the property’s revenue. For Q3, total revenue received by the company from management contracts is 8 cr for managing 80 hotels. That amounts to roughly 3.5 lakh / month / hotel. Company makes an EBITDA of around 50 pc on these properties

Expecting to do a topline of 340 cr this yr and 390 cr for next FY ( both - including the Jaipur hotel ). Expecting an EBITDA of 120 cr for next FY

Company intends to add 38-40 more hotels in next FY - adding the room inventory by around 2500 rooms. Out of these, 03 hotels will be on the lease / revenue share model - which gives a bigger kick to the top/bottom line

ARRs for Q3 at Rs 5600

Post Mar 25, company shall focus on larger hotels on revenue share models. Company’s aim was to expand aggressively in FY23-25 period so as to establish its brand name. Once that is done, company can get hold of a lot more leased / revenue share hotels ( otherwise, ppl were not taking them as seriously )

Hotel industry is undergoing a boom similar to 2003-08. Bank financing rates have also fallen while extending loans to Hotel industry

Company intends to re-work their branding architecture so as to clearly differentiate between their 5 star vs 3 star offerings

Expecting an ARR hike of 6-8 pc for next FY

Company is expanding the room capacity at their owned hotels at Goa ( adding 44 rooms ), Bengaluru ( adding 28 rooms )

Company is expanding the room capacity at their owned hotels at Goa ( adding 44 rooms ), Bengaluru ( adding 28 rooms )

At present, company is not planning to open up at Ayodhya or Lakshadweep as the company doesn’t want to do any Greenfield capex right now

Disc: holding, biased, not SEBI registered

1 Like

Jyothy Laboratories -

Q3 FY 24 concall highlights -

Sales - 678 vs 613 cr ( up 10 pc- all volume led despite overall sluggish demand trends for FMCG industry )
EBITDA - 119 vs 84 cr ( margins @ 18 vs 14 pc - due fall in RM prices )
PAT - 91 vs 67 cr ( up 35 pc )

Fabric Care sales - up 11 pc ( includes wash and post wash categories ). Liquid detergents growing at a fast clip - both Henko, Ujwala liquids

Dishwasher sales - up 7 pc

Household Insecticides sales - up 5 pc ( category facing headwinds for quite some time now ). Company focussed on selling Maxo - liquids. Onboarded - new brand ambassador - Kareena Kapoor for the brand

Personal care sales - up 22 pc !!! ( Margo - new variants did very well )

Have been investing aggressively in expanding distribution depth and alternate distribution channels

Company is aiming to do a topline of 5000 cr in 4-5 yrs

Not focussed on M&A activity at the moment - at the same time, not averse to it ( primary focus is on organic growth )

Henko - liquids growing at rates much higher than category growth

Have slowly started taking - Ujala, Moonlight, Mr White detergents to more and more states

Company was distributing to 11 lakh retail outlets in Mar 23. Aim to hit 12 lakh outlets by Mar 24. This should help volume growth going forward

E-Commerce sales as a percentage of company’s sales at 6 odd pc

Company has worked a lot on the Margo brand, have innovated and launched new variants. Still lot of scope for this brand to grow. Likely to launch new products under the Margo brand name

Have under-levered brands like - ‘Fa’ in their portfolio. May re-launch them at some point in time

Since Liquid detergents, personal care categories are doing well, the gross margins are improving

Disc: hold a tracking position, biased, not SEBI registered

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