Ranvir's Portfolio

Q&A: Questions & Answers Portfolio Q&A
1177

Shakti Pumps -

Q1 FY 25 concall highlights -

Shakti pumps is a leading integrated player manufacturing - fabrication technology based solar / electricity operated submersible pumps in India

One of the few players to make solar + submersible pumps and motors in house

One of the biggest beneficiary of PM KUSUM scheme and holds 25 pc Mkt share

Exporting to 100 + countries

Company has 03 integrated manufacturing facilities - all located at Pithampur, MP -

Unit -1 - ( main unit spread across 16 acres ) -
Capacity to manufacture 3.5 lakh pumps / yr ( including both submersible and industrial pumps )
4’‘, 6’‘, 8’’ & 10’’ motor manufacturing plant
Capacity to make - solar structures

Unit - 2 - export oriented unit ( 3.15 acres ) -
Capacity to make 1.5 lakh pumps / yr ( all stainless steel submersible pumps )

Unit -3 -
Capacity to make 2 lakh Variable frequency drives and solar inverters / yr

Customer / Revenue Mix -

State Govts - Via PM KUSUM - 69 pc
Export customers - 21 pc
Other customers - 10 pc

FY 24 revenue break up -

Govt projects - 945 cr
Exports - 286 cr ( export segment has the highest margins )
Others ( including Industrial, OEM, Retail ) - 139 cr

New opportunities -

Incorporated a fully owned subsidiary - Shakti EV mobility - to manufacture EV motors, charging stations, BMS, electric control panels , VFDs and other items. Have sanctioned an investment of 115 cr for the same

PM KUSUM -

Total mkt size of solar pumps under PM KUSUM scheme ( @ Rs 3 lakh / pump ) = 1.47 lakh cr ( for installation of 49 lakh solar pumps )

Out of these, 4 lakh pumps have already been installed. So the remaining opportunity is for 45 lakh pumps to be executed over the next few years

Q1 outcomes -

Revenues - 568 vs 113 cr

EBITDA - 136 vs 8 cr ( margins @ 24 vs 7 pc ). Margin expansion due operating leverage and reduced RM prices

PAT - 93 vs 1 cr

Likely to execute orders worth Rs 2000 cr ( orders in hand ) in next 5 Qtrs

Guiding for a topline of 1700 cr + for FY 25 ( this despite the upcoming state elections in Maharashtra and Haryana - 02 major states where the company is currently supplying )

Company expects the orders Under component C of PM KUSUM scheme to start flowing in about 6 months time

Avg lifecycle to these solar pumps is about 10 yrs

According to the management, the opportunities in the Industry give them hope of being able to grow @ around 25 pc CAGR for next 2-3 yrs as well

Long term EBITDA margin guidance given by the company is in the band of 15-16 pc ( 20 pc plus margins seen in last 2 Qtrs may not be sustainable )

Company continues to spend aggressively on R&D - management believes, this is their company’s lifeline

Company’s existing capacity can generate a max revenue of 2500 cr. Company can keep de-bottlenecking this capacity to meet business requirements. In addition, company has raised 200 cr via QIP to be used to fund doubling of existing facility. The same shall materialise by FY 27

Disc: holding, biased, not SEBI registered

6 Likes
1178

Alembic Pharma -

Q1 FY 25 results and concall highlights -

Revenues - 1562 vs 1486 cr, up 5 pc
EBITDA - 237 vs 199 cr, up 14 pc (margins @ 15 vs 13 pc)
PAT - 135 vs 121 pc, up 12 pc

R&D expenses @ 114 cr

Gross borrowings - 589 cr
Cash on books - 147 cr

Segment Wise revenues -

India branded - 572 cr, up 9 pc ( 37 pc of sales )
US generics - 461 cr, up 18 pc ( 29 pc of sales )
RoW formulations - 271 cr, up 2 pc ( 17 pc of sales )
APIs - 259 cr, down 15 pc ( 17 pc of sales )

Breakdown of India business -

Acute - 23 pc
Veterinary - 17 pc
Chronic and Semi Chronic - 60 pc

Launched 02 products in US mkts in FY 25. Aim to launch 10 more products in Q2. Cumulatively now have 149 products in US

Have started sales operations in Chile and UAE. RoW growth to be driven by expansion into new territories and new launches

Filed 01 DMF in US in Q1. Cumulatively, have filed 133 DMFs in US. Slowdown in API business was due to lower off take by a particular client - is transitional in nature. Future capex is on track. Supplying APIs to 60 + countries, globally

Animal healthcare business grew by 23 pc in Q1

Guiding for a 10 - 15 pc growth in the US business for full FY 25

Expect RoW business to pick up in H2. In H1, company is facing supply bottlenecks. Should take 1-2 Qtrs to resolve them

As the capacity utilisation of newer facilities improves, company expects their EBITDA margins to reach the 18-20 pc band in 2-3 yrs. Also for FY 25, company expects to improve their margins vs FY 24

Expecting strong growth to continue in the Animal health business IE > 25 pc for FY 25 as well

Company witnessed double digit price erosion in the US business in Q1

India sales force @ 5500. Yield / month @ 3.8 lakh / sales person

Aim to keep the Gross Margins in the 70-74 pc band

Disc : not SEBI registered, not a buy/sell recommendation

2 Likes
1179

I think, u r on the right track. Once u r done with basic investment books by the likes of Lynch, Buffett, Fischer etc … the only thing that needs one to do is to keep following company’s concalls and investor presentations. Most of them are self explanatory and don’t need much of hand holding

U Tube channels run by the likes of Ishmohit Arora, Sahil Bhadvia etc are helpful - Yes

On technical sectors like pharma, hospitals, diagnostics - I would recommend u to go through Youtube videos of Sajal Kapoor and Aditya Khemka

10 Likes
1180

Thank you sir for guiding new investors like -me.Sir through your concall analysis i found many good companies.Thanks for doing such a great work.

2 Likes
1181

Hey Ranvir,
Have been following your posts for quite long now. Just want your views on CMS Infosystems.
India’s largest cash management services company.
Management is guiding for 2700cr. revenue by next year + valuations are okish. The business is not cyclical and margins are stable.
Are you studying this business?

1182

Eveready Industries -

Q1 FY 25 concall and results updates -

Revenues - 349 vs 364 cr
EBITDA - 50 vs 44 cr, up 14 pc ( margins @ 14 vs 12 pc )
PAT - 29 vs 25 cr, up 18 pc

EBITDA from batteries - 39 pc
EBITDA from flashlights - 9 cr
EBITDA from LED lights - 2 cr

Company continues to hold 53 pc Mkt share in the overall batteries segment. 90 pc of the mkt still comprises of Zn-Carbon batteries which continued to face headwinds / weakish demand scenario in Q1

However, the alkaline batteries grew strongly @ 67 pc YoY in Q1 in value terms on the back of 52 pc growth in FY 24 ( although the base is smaller )

61 pc of company’s turnover and 85 pc of company’s profitability comes from the batteries segment

Battery operated flashlights de-grew by 3 pc in Q1 vs 15 pc de-growth in last FY. However due to normal monsoon, good demand from rural channels is expected for flashlights wef Q2. However the rechargeable flashlights are growing

**LED bulbs grew by 6 pc, emergency bulbs grew by 66 pc, LED tube lights grew by 12 pc, professional luminaries grew by 50 pc - all in volume terms. However, due to steep fall in prices, revenue growth in LED lights segment was limited to 2 pc only. EBITDA in this segment was 3.1 pc vs break-even EBITDA in last FY **

Sustained A&P costs at 9 pc - as a necessary brand building exercise

Have approved an investment of 180 cr to set up an Alkaline battery plant with a capacity to make 36 cr batteries / yr. This plant should get commissioned by end of FY 26. Alkaline batteries are growing at rates much higher than Zinc - Carbon batteries. This is almost equal to the current size of entire alkaline batteries mkt in India

Even in alkaline batteries, there r 2 segments - value and premium. Even in value segment, the company is likely to be benefitted by at least 10 pc ( in price terms ) by making the batteries in-house vs importing them

The gross margins in the premium alkaline batteries are 5-6 pc higher than the value end of alkaline batteries ( which intern are similar to Carbon - Zinc margins )

The current share of premium vs value in alkaline batteries is about 30:70

Total size of batteries mkt is around 300 cr units / 3000 cr in value terms. Out of this, the value size of alkaline battery mkt is around 300 cr ( or 10 pc in volume terms ). Alkaline mkt is growing in high double digits ( around 20 pc or so ) vs flattish growth in Carbon-Zinc segment. Even in middle income countries, alkaline batteries command a mkt share of 40-50 pc vs 10 pc in India. A similar trend may play out in India over the next decade

The company expects its new alkaline battery unit to hit an asset turnover of 1 by the third year of its operation

Company’s alkaline battery factory is going to be the first one in the country

Company is likely to launch newer products in the adjacent categories. Company did not announce the names due competitive reasons

Company intends to make its LED lighting division cross the 400 cr topline mark this yr. Company aims to hit high single digit / low double digit EBITDA levels in this segment in about 2-3 yrs

In the alkaline battery space, Duracel is the No 1 player with Eveready being a distant no2. Eveready sells about 6 cr alkaline batteries / yr vs 25 cr + kind of sales for Duracel

Current debt on books @ around 260 cr @ 8.7 pc interest rate

Company intends to clock > 11 pc EBITDA margins for full FY 25

Company has launched a new product - electric mosquito killing rackets in Q1. Priced @ Rs 499, 599 and 799

Disc: holding from lower levels, biased, not SEBI registered, not a buy / sell recommendation

1 Like
1183

Electronics Mart India ltd -

Q1 FY 25 concall and results highlights -

Revenues - 1975 vs 1684 cr, up 17 pc
EBITDA - 154 vs 130 cr, up 18 pc ( margin @ 8 vs 8 pc ) Q1 margins for Aditya Vision are 10 pc
PAT - 72 vs 60 cr, up 20 pc

Product wise sales mix -

Mobile phones - 35 pc
Large durables - 53 pc
Small durables, IT eqpt - 12 pc

Total no of stores @ 170, out of which 13 are owned No of stores added in Q1 @ 10 stores

Avg bill value @ 24.19k vs 23.95k YoY

Same store sales growth @ 8.6 pc

Cash on books @ 95 cr

Geographical breakdown of stores -

Telangana - 101 stores
Andhra Pradesh - 44 stores
Delhi NCR - 23 stores
Kerala - 01 store

Telangana + AP + Kerala stores operating @ 8.3 pc EBITDA margins

Delhi NCR stores operating at 2.6 pc operating margins. Operations in Delhi NCR started in Aug 22. Company expects Delhi NCR stores to reach Southern State’s level of profitability in future

Total number of EBOs @ 12. Rest 158 are MBOs

Aim to open another 25 stores in the remaining 9 months and grow in strong double digits in FY 25 in terms of topline

The receivables present on company’s Balance sheet are the monies to be received from Banks / NBFCs for EMI / Credit card sales - generally it takes 3-4 days for the company to receive the money

Company’s stores in Delhi NCR are spread across high street and not not so well penetrated areas like - Burari, Najafgarh etc ( these r almost like tier 2,3 towns )

Despite the heat wave and accelerated sales of compression products in Q1, the gross margins for the company only expanded by just 30 Bps. The same is due to the fact that the heat wave was particularly severe in North India and not in AP-Telangana

Along with NCR, Telangana and AP - tier -2,3 towns are also a key focus areas for the company wrt new store openings ( areas like Nellore, Guntur, Vizag, Vijaywada etc )

Due to PLIs and greater manufacturing and assembly in India, prices of consumer durables are actually not rising. Therefore, price growth is generally remaining muted for the company. Growth is only coming from volumes

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

2 Likes
1184

Sorry … I am not tracking this business

Pre-Elections, I did have a look. But then dropped out as I thought a Govt with Brute majority ( as was widely expected then ) can even ban the Rs 500 note ( maybe it was an irrational fear, but it was there on my mind :grimacing: :grimacing: :grimacing: ). Hence dropped the idea

Have not studied it after that

2 Likes
1185

Innova Captab -

Q2 FY 25 concall and results highlights -

Revenues - 294 vs 233 cr
EBITDA - 44 vs 32 cr, up 36 pc ( margins @ 16 vs 14 pc )
PAT - 29 vs 17 cr, up 67 pc

Breakup of sales in Q1 FY 25 vs Q1 FY 24 -

CMO - 57 vs 71 pc
Domestic branded sales - 17 vs 18 pc
International branded sales - 11 vs 11 pc
Sharon Bio’s sales - 15 pc vs NIL

14 out of top 15 domestic Pharma companies are company’s clients

Company’s manufacturing units -

02 @ Baddi - can make - tablets, capsules, ointments, syrups, dry powder injections, liquid orals. Capacity utilisation @ 50 pc

01 @ Dehradun - tablets, capsules
01 @ Taloja - APIs
Both Dehradun and Taloja units are acquired units of Sharon Bio. Capacity utilisation at both these units is around 60 pc

New Greenfield unit coming up at Jammu - Multiple products. Likely to go live in Q2 FY 25. Full capacities to ramp up over a period of 2-3 yrs. Its a formulations plant mainly focussed on - Cephalosporins, Penicillin, Carbapenems product families. To make dosage forms like - tablets, capsules, dry powder injectables, dry syrup and respiratory respuels

Jammu facility has a peak revenue potential of > 1500 cr / yr. Likely to be achieved within 5 yrs. Expect to do > 300 cr sales from this plant in FY 26. Should be able to ramp up sales to 900 cr from this plant by FY 28

Company has 01 R&D center at Baddi. Setting up another one @ Panchkula

API prices continue to be soft - both for acute and chronic APIs. At present, company is procuring 70-80 pc of its API requirements from domestic sources. As PLI schemes for the API sector show full effects, company’s domestic sourcing may even go higher going fwd

Company’s margins in domestic + international branded business are > CMO business. However, company has no plans to dramatically change its business mix. They aim to keep growing all their businesses at healthy rates

As the Jammu plant ramps up, company expects to double its revenues and profits in next 3 yrs

Company’s domestic branded formulations are sold under the brand umbrella - " Univentis Medicare "

As the GoI keeps imposing / being strict on implementation of GMP guidelines iro various Pharma manufacturing units, the organised + compliant players stand to benefit. Its a natural tailwind for the company

In FY 26, if Jammu plant clocks 300 cr sales and company’s base business grows by early teens ( say 13 - 15 pc )- as guided by the management, the total business may grow by > 35 pc !!!

For FY 25, growth should be > 15 pc with similar margins as last FY

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

6 Likes
1186

Royal Orchid Hotels -

Q1 Concall and results highlights -

Revenues - 78 vs 73 cr
EBITDA - 21 vs 23 cr
PAT - 9 vs 11 cr

Breakup of revenues -

Room rentals - 41 vs 40 cr
F&B - 27 vs 27 cr
Other services - 2.5 vs 2.6 cr
Management fee ( received from management contracts ) - 8.6 vs 6.8 cr

Property wise breakup of revenues -

Owned - 26 vs 20 cr
Leased - 30 vs 28 cr
JV / Associates - 13 vs 21 cr
Managed - 8.6 vs 6.8 cr

Segment wise distribution of rooms ( owned, leased, managed, in JV with Royal Orchid ) -

Owned - 268 + 130 ( 5 star + 4 star ) = 398

Leased - 396 + 67 + 142 + 83 ( 4 star + service apartment + Resort + 3 star ) = 688

JV - 139 + 54 ( 5 star + Heritage ) = 193

Managed / Franchise - 2547 + 71 + 803 + 1715 ( 4 Star + service apartments + heritage / resort + 3 star ) = 5116

Grand total = 6395 rooms / keys

Upcoming hotels - 24 + with 1900 + rooms / keys. Out of these, 02 hotels in Gurugram and Mumbai are leased. All others are managed. The Gurugram hotel is going to be a 124 room hotel with 02 Banquet halls

Q1 was a difficult Qtr as the business got affected due to heat waves and elections across India

Company’s 300 room Mumbai hotel ( leased ) is expected to open by Q1 FY 26 ( currently under construction ). Company expects the ADRR @ 9.5-10.5k for this property

Company is seeing a descent pick up in business in Q2 after a subdued Q1.( aprox a 6-8 pc increase in ARRs across the board )

Guiding for a topline of 378-380 cr, 500 cr for FY 25, 26 with a PAT of aprox 55 cr and 70 cr respectively

Company expects the Mumbai hotel to do revenues of aprox 100 cr for its first year of operation ( ie FY 26 ). This hotel is near T-2, has 300 rooms, 02 Banquet halls, multiple F&B outlets. This should also improve the brand visibility of the company because of its prominent location

Company expects to derive revenues of > 100 cr alone from managed properties in next 3-4 yrs. EBITDA margins in managed properties are around 45 pc

The upcoming Gurugram hotel has a revenue potential of 25-30 cr

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

3 Likes
1187

Deepak Fertilizers and Petrochemicals Corporation ltd -

Company Profile -

Largest producer of - Nitric Acid, Iso Propyl Alcohol, Bentonite Sulphur, water soluble fertilisers in India

Only manufacturer of - Prilled Technical ammonium nitrate solids, Nitrogen:Phoshporous Prill 24:24:0 fertilisers, crop specific NPK micronutrients with nutrient unlock technology

A leading manufacturer of - Liquid CO2 and Methanol in India

Own and operate the largest home furnishing and furniture retailing mall in India - Creaticity Pune

Q1 FY 25 results and concall highlights -

Revenues - 2281 vs 2313 cr
EBITDA - 464 vs 281 cr ( margins @ 20 vs 12 pc - a steep jump )
PAT - 200 vs 114 cr

Application of company’s products -

Ammonium Nitrate - Mining and Infra explosives - account for 44 pc of company’s revenues

Industrial chemicals like - Varieties of Nitric acid ( diluted, concentrated ), Isopropyl alcohol, liquid CO2, Methanol etc are used in sectors like - Pharma, Nitroaromatics, consumer care, chemical derivatives - account for 18 pc of company’s revenues

Crop Nutrition - NP Prill 24:24:0 and NPK fertilizers, Bentonite Sulphur crop nutrients, speciality and water soluble fertilisers - account for 43 pc of company’s revenues

Product wise breakup of revenues -

Mining chemicals - 644 vs 541 cr
TAN - 137 vs 111 KMT

Industrial Chemicals - 405 vs 519 cr
Concentrated Nitric acid - 44 vs 51 KMT
Diluted Nitric acid - 21 vs 22 KMT
IsoPropyl Alcohol - 14 vs 16 KMT

Crop Nutrition - 977 vs 1069 cr
BenSulf - 10 vs 7 KMT
Traded products - 43 vs 72 KMT
NP + NPK fertilizers - 174 vs 156 KMT

Update on capex -

TAN project - Gopalpur - Greenfield project for production of 376 KTPA of TAN. Project cost - 2200 cr. Expected to be completed in H2 FY 26. Post commissioning, company will become third largest producer of TAN in the world

Nitric Acid - Dahej - expansion of Nitric Acid manufacturing capacity by 450 KTPA. Expected to be to completed by H2 FY 26. Post commissioning, company will become Asia’s largest producer of Nitric Acid

Good demand for Coal, Steel and Infra build up augurs well for company’s TAN business

Lower volumes in Nitric acid business due to ongoing repairs at company’s Taloja plant. IPA volumes were lower due to a planned shutdown

Good monsoons likely to augur well for company’s crop nutrients business going into Q2

Company’s captive ammonia plant running at 98 pc capacity ( started LY in Q2, 86 pc of the plant’s output is being used for captive purposes ). Having captive supply of this RM is a big risk mitigating factor for this company. The capacity of this plant is 500KMT

Out of an EBITDA of 464 cr, aprox 50 pc comes from TAN / Industrial or Mining Explosives business

Once the Gopalpur plant comes up, company may again have to buy ammonia from outside as it won’t be logistically possible to use captive Ammonia to make TAN at Gopalpur

Compny’s mining consultancy services is in niche stages. Once it becomes a material part of the business, company will start reporting its performance separately

At present, about 35 pc of country’s TAN requirements are met via imports ( mostly from Russia ). RCF and Chambal fertilizers are coming up with capacities to make TAN. Even after this, India won’t be self sufficient in TAN and there would still be residual need for imports

Capex lined up @ around 750 cr ( Gopalpur expansion ) + 750 cr ( Dahej expansion )

At present - no one else in India has a backward integrated ( making their own ammonia ) TAN business. That should be a key advantage for the business

Because of extensive mining and infra demands in India for next 5-10 yrs , this business has very good demand drivers

Disc: fresh entry, tracking position, not SEBI registered, not a buy/sell recommendation, biased

5 Likes
1188

Sir what metrics do you use to value Hotel sector , as it is a cyclical sector i use P/S to value them, please correct me if i am wrong.

My understanding of Hotel sector- capex done by many big players like- Chalet, Indian Hotel, Lemon Tree, Praveg etc and all going to be live soon in FY25 end or from FY26,so there is a growth ahead in Hotel industry,my concern here is of over-capacity, how do you think of it?

1 Like
1189

Sir,
Please guide us on how can one understand an industry or sector well.
Where any sector which is new to you and you want to build some edge how will you make it happen?!

1 Like
1190

Senco Gold -

Q1 FY 25 concall and results highlights -

Current breakdown of number of showrooms -

Company operated - 97
Franchise showrooms - 68
Total - 165 ( spread across 109 towns and cities and 01 in Dubai )
Added a total of 06 new stores in Q1

Q1 financial outcomes -

Revenues - 1403 vs 1305 cr, 7.5 pc
EBITDA - 108 vs 67 cr, up 62 pc
PAT - 51 vs 27 cr, up 85 pc

Same Store sales growth @ 4 pc
Avg Ticket value @ Rs 73.9k vs Rs 63.7k for FY 24
Q1 Stud ratio @ 9.9 pc vs 11 pc for FY 24
( diamond sales were down by 3-4 pc in Q1 - due rising gold prices )

**Sale of recycled gold stood at 35 pc of total sales ( ie customers exchanging old gold ornaments for new ones ) **

Have launched lab grown diamonds under the Sennes brand

Aim to add about 12-14 more stores in FY 25

Aim to add about 12-14 more stores in FY 25

About 95 pc of company’s gold stocks are hedged. Due to the sharp duty cut on Gold imports announced by the GoI ( recently ), there will be an adverse financial impact of about 50 cr for the company for the remaining 9Ms this FY. However, the duty cuts have also stimulated the demand for gold and gold jewellery which should help the company offset this impact

Aim to grow topline by 18-20 pc for FY 25 vs FY 24

Depreciation charges in Q1 are 18 vs 12 cr ( up 50 pc YoY ) - mainly because of aggressive store opening in FY 24

Confident of touching a stud ratio of 12 pc for full FY 25

Growth in Q2 ( as on the date of Concall ) has been a whopping 25 pc ( triggered by duty cuts ). Hence the confidence to guide for a 18-20 pc topline growth for full FY ( with same store growth guidance @ 11-13 pc )

Also seeing healthy growth in Franchise stores in Tier -2,3 towns - probably an indication of improvement in rural economy and normal monsoons

Elevated levels of other expenses in Q1 are unlikely to continue wef Q2. The same were elevated as the company was spending a lot on brand promotion / marketing etc as the Mkt was showing weakness wef late May / Jun

Company is confident of making up for a large part ( if not for the full part ) of inventory losses of around 50 cr in the next 3 Qtrs - due increased sales, lesser discounting etc

To be on safer side, company is guiding for 15-18 pc bottomline growth for FY 25

Disc: holding, biased, not SEBI registered, not a buy sell/recommendation

2 Likes
1191

JB Chemicals -

Q1 FY 25 concall and results highlights -

Revenues - 1004 vs 896 cr, up 12 pc
Gross Margins @ 66 vs 65 pc
EBITDA - 280 vs 232 cr, up 20 pc ( margins @ 29 vs 27 pc )
PAT - 177 vs 142 cr, up 24 pc

India formulations registered a strong 22 pc YoY growth to clock revenues of 595 vs 489 cr ( excluding the opthal portfolio, the growth was 13 pc - out of this volume growth was @ 4 pc. Othal portfolio was acquired LY from Novartis )

International business was largely flat at 409 vs 407 cr YoY - however, the order book remains strong for the CDMO business and should show strong growth in H2

Gross Debt as on 30 Jun 24 stood @ 108 cr, down by 250 cr from 358 cr on 31 Mar 24

Cash on Books @ 421 cr

Five of company’s brands are now in top 150 brands in the IPM. These are - Cilacar, Rantac, Metrogyl, Cilacar-T, Nicardia. In addition, Sporolac sales have crossed 100 cr ( annually ) - growing @ 32 pc CAGR over last 3 yrs. Azmarda is also clocking sales run rate of > 70 cr / yr

Company has been deliberately letting go some of their low margin, tender based SA business. The growth in Russia + RoW business is holding up well

Guiding for a full year operating margin guidance of 26-28 pc ( this looks like a conservative guidance since the H2 generally sees good pickup in CMO business - personal opinion )

The Opthal portfolio is likely to clock annualised sales of around 180 cr this FY. Have taken the MR count in the Opthal business up by 50 pc from 70 to 105. Seeing good traction for the acquired Opthal brands

Company continues to evaluate deals ( potential acquisitions ) in the domestic mkt in order to best utilise cash on books

Company expects their Azmarda brand to keep growing in healthy double digits going fwd

Hopeful of sustaining 12-14 pc organic growth in FY 25 in IPM

Hope to clock good growth wef H2 in their Lozenges -CMO business. They make and supply immunity boosting, wellness, melatonin based and pain relief lozenges - and this business is expected to ramp up going fwd

Q2 onwards, international business should also grow in double digits

Since company has a strong presence in Cardio and Probiotics therapies, company generally ends up beating the IPM growth by 200-300 bps as these are fast growing therapies

Disc: holding, biased, not a buy / sell recommendation, not SEBI registered

2 Likes
1192

Windlas Bio -

Q1 FY 25 concall and results updates -

Revenues - 175 vs 145 cr, up 21 pc
EBITDA - 21 vs 17 cr, up 21 pc ( margins @ 12 vs 12 pc )
PAT - 13.5 vs 12 cr, up 12 pc

In Q1, company had to bear additional operating costs and depreciation associated with their Injectables facilities as well as increase in minimum wages across facilities ( an increase of 25 pc in minimum wages )

Expecting the revenues from Injectables to start flowing in from middle of Q3 FY 25

Segment wise revenues -

Generic formulation CMO - 136 vs 110 cr, up 23 pc
Trade generics and institutional - 35 vs 30 cr, up 14 pc
Exports - 4.1 vs 3.8 cr, up 10 pc

Have acquired a basket of market authorisations in Europe in Q1 - should help in the export business

Company supplies generic formulations to 7 out of the top 10 generic companies in India

Share of Chronic + Sub Chronic + Complex Generics @ 65 pc of sales

Manufacturing facilities - A total of 5 manufacturing facilities - all in Dehradun

The Injectables business of the company should generate EBITDA margins of 15-17 pc ( at peak utilisation ) vs company’s existing avg of 12-13 pc

GoI’s schemes like Jan Aushadhi and Aysuhman Bharat are structural tailwinds for company’s trade generics business

Company is following an accelerated depreciation method for their new Injectables plant, hence the bigger hit on PAT. This should moderate going fwd

Excluding the Injectables plant, company’s capacity utilisation is around 65 pc

The peak revenue potential of the Injectables facility is aprox 85-90 cr

Company’s management did sound extremely bullish about the prospects of their Trade Generics business going fwd

The injectables plant shall initially be used for domestic CMO business. Over a period of time, the company however intends to use it for exports - where the margins profile is much better than 15-17 pc band

Have shortlisted a manufacturing facility for acquisition. If everything goes smoothly, should be able to acquire and manufacture from that facility by Q1 FY 26

Govt intends to triple the Jan - Aushadhi Kendras from 8k to 24k inside next 2 yrs

The Injectables facility that the company has built is easily expandable. Company will exercise that option whenever required

Aim to clock revenues of 1000 cr for FY 26

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

2 Likes
1193

EIH Ltd -

Q1 FY 25 results and concall highlights -

Revenues - 560 vs 523 cr ( out of this, revenues from flight catering service @ 107 vs 88 cr )
EBITDA - 168 vs 180 cr ( EBITDA from flight catering service @ 39 vs 29 cr )
PAT - 97 vs 106 cr

Cash on Books @ 818 cr

Qtly occupancy @ 70 vs 70 pc ( flat YoY )
ARRs @ Rs 13,771 vs Rs 13,350
RevPAR @ Rs 10,800 vs Rs 10,260

Current portfolio of Hotels ( including managed ) -

Oberoi - Domestic - 12
Trident - Domestic - 10
Oberoi - International - 07

The month of May was quite weak due - elections, heat wave

The cash on books to be utilised for new Greenfield + Brownfield projects

Seeing descent uptick in the business wef July - continuing into Aug

Two of company’s new hotels @ Bandhavgarh ( managed hotel ) and Rajgarh ( owned hotel ) are slated to open in current FY

Company aims to open ( managed + Owned ) 50 more hotels before 2030. Out of these, 07 are already in various stages of construction ( 03 owned + 04 managed )

According to the management, the seasonality in Indian hospitality industry has drastically reduced over last 10 yrs ( mostly due corporate + business travel and rising per capita incomes )

Capex required / new room for Trident hotels is around 1.4 cr / room and for Oberoi Hotels is around 2.5-3 cr / room

The new Oberoi hotel ( under construction ) near Hebbal lake, Bengaluru shall also have around 55k sq ft of retail and 700k sq ft of office space. The land here is already owned by the company

Post the Hebbel lake project, company is inclined to do more mixed use development projects in future

Disc: holding, biased, not SEBI registered, not a buy / sell recommendation

2 Likes
1194

Nothing except reading about the Industry, reading concalls, listening to management interviews, taking help from some YouTube podcasts

That’s about it. This is generally enough

1 Like
1195

One has to compare the total organised existing capacity and then add all the capex announced by the major players

My guess is ( because I don’t remember the exact numbers ), it won’t be more than 7-9 pc of capacity addition / yr - going fwd. But the demand growth is generally > 10 pc

Supply - Demand demand dynamics look favourable for hotel sector for the medium term ( next 2-3 yrs ). I think u can easily get this data. If u can post this here, it ll be of great help

2 Likes
1196

Surya Roshni -

Q1 FY 25 concall and results highlights -

Revenues - 1893 vs 1875 cr ( despite slowdown due to elections, price erosion in Steel Pipes and Lighting divisions )

Gross Margins @ 24 pc

EBITDA - 151 vs 114 cr, up 36 pc ( margins @ 8 vs 6 pc )

PAT - 92 vs 59 cr, up 56 pc

EBITDA uptick led by sharp uptick in EBITDA / Ton in the steel pipes business and steady margin improvement in lighting and consumer durables segment

Company is debt free. Cash on books @ 156 cr

Segment wise results -

Lighting and consumer durables -

Revenues - 385 vs 374 cr ( despite 9 pc price erosion in LED lighting segment )
EBITDA - 35 vs 33 cr
Margins @ 9 vs 8.8 pc
PBT - 26 vs 26 cr

Steel pipes and Strips -

Revenues - 1509 vs 1503 cr ( volumes up 7 pc despite slowdown in Govt spending in Q1 )
EBITDA - 124 vs 83 cr
EBITDA / Ton @ Rs 6065 vs Rs 4388 ( on account of better product mix. Value added pipes - Galvanised, API and Spiral accounted for 46 pc of revenues )
PBT - 97 vs 55 cr

Steel Pipes manufacturing facilities -

Bahadurgarh, 53 acres
Anjar, 96 acres
Gwalior, 51 acres
Hindupur, 17 acres

Lighting manufacturing facilities -

Kashipur, 46 acres
Gwalior, 44 acres

Company is largest manufacturer and exporter of ERW pipes. Company is also No-2 lighting brand in India - mainly focussed on rural / semi urban areas

Company is the leading player in Large Diameter pipes, API pipes in India. Their products in these segments command a premium pricing of 6-8 pc over its peers - which is a very big deal in the pipes business. The company has earned this through 40 years to hard work

Fans business showed a 43 pc volume growth

Appliances business showed a 15 pc volume growth

Have launched - residential pumps in Q1

Aim to grow the consumer durables and lighting business by 10-12 pc in FY 25

Expecting 12-15 pc volume growth in steel pipes segment in FY 25

Gross margins improved in Q1 due company’s greater focus on value added products - both in Steel pipes and Lighting segments

Gross margins should further improve wef Q2

Additional capacities of 50k MT ( CR pipes and 8" pipes ) should come online in Q3. Additional capacities of spiral pipes ( additional 60k MT ) should also come on stream in Q3

Company has lined up a capex of 250 cr and 200 cr respectively for this FY and next FY - for steel pipes division. Post this capex, company’s capacities will increase from 12 lakh MT / yr to 19 lakh MT / yr

Not likely to add any more capacities in Lighting and CD segment for next 1 - 1.5 yrs ( as they have adequate capacities )

Likely to maintain EBITDA / Ton > 6000 for FY 25

Aim to generate an EBITDA of 675 - 700 cr for FY 25

Company believes, there is a strong case for de-merger of both the businesses. The board will finalise the same

Company has good brand equity in the FMEG space. Hence the new launches in recent years ( like fans, pumps ). Company can leverage the same going forward. At present Fans + Consumer Durables account for 18 pc of this division’s sales

Lighting business had a rough past 2-3 yrs due steep price erosions. Going fwd, things should improve as a lot of unorganised and non-core competition is likely to abate. This should augur well for the company

Company is hopeful that lighting division’s EBITDA margins should improve to 12 pc levels in 1-2 yrs. In Steel pipes division also, EBITDA / Ton should improve to > Rs 7000 / Ton due greater focus on value added products ( this should structurally improve the margins trajectory of the company )

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation

2 Likes