Q1 is generally their weakest Qtr. If u look at full year results for them, EBITDA margins should be around 5 pc and PAT margins should be around 2 pc
This is the nature of this business ( Automotive - Dealerships )
Critical thing to look for in such businesses is RoE / RoCE. If they are around the 15 pc mark, then its a investment worthy candidate ( imo )
Adani Ports and Special Economic zones -
Q1 FY 25 results and concall highlights -
Company’s portfolio of ports with annual cargo handling capacities -
Western Coast - 355 MMT -
Mundra - 264MMT
Dahej - 16 MMT
Hazira - 30 MMT
Dighi - 8MMT
Morumgao - 5 MMT
Vizhinjam - 18 MMT
Eastern coast - 272 MMT -
Haldia - 4 MMT
Dhamra - 50 MMT
Gopalpur - 20 MMT
Gangavaram - 64 MMT
Krishnapatnam - 75 MMT
Kattupalli - 25 MMT
Ennore - 12 MMT
Karaikal - 22 MMT
International ports -
Haifa ( Israel )
Dar-es-Salaam ( Tanzania )
Company has got a Operations and Maintenance contract for a port in North Australia at Abbot Point
Company is building a container terminal in Colombo, Sri Lanka
Special Economic Zones -
Mundra ( 12.5k hectares + ) - has air ( 1.9 km long air-strip ), rail, road ( via state highway ) connectivity
Dhamra ( 2k hectares + ) - has rail, road connectivity ( via NH )
Gangavaram ( 1k hectares + ) - has rail, road connectivity ( via expressway )
Krishnapatnam ( 2.7k hectares + ) - has rail, road connectivity ( 4 lane road connecting to NH )
Logistical infra - current capacity - target for 2029-
Marine flotillas - 114 - 140
Rail tracks - 690 km - 2000 km
Trains - 131 - 300
MultiModal Logistics parks - 12 - 20
Grain Silos - 1.2 MMT - 10 MMT
Warehouses - 2.9 M Sq Ft - 20 M Sq Ft
Trucking - 937 - 5000
APSEZ’s current mkt share of All India cargo handling @ a whopping 27 pc. It was 10 pc in 2013
Over the last 10 yrs, EBITDA for the domestic ports business has increased @ 22 pc CAGR from 2060 to 14907 cr !!! Company’s EBITDA margins in this business segment are at a whopping 71 pc
Company’s logistics business has reported an EBITDA CAGR of 43 pc over last 5 yrs with EBITDA growing from 90 cr to 540 cr. EBITDA margins in this business segment are 26 pc ( @ very healthy levels )
Q1 Financial highlights -
Revenues - 7560 vs 6248 cr, up 21 pc
EBITDA - 4848 vs 3754, up 29 pc ( margins @ 64 vs 60 pc )
PAT - 3107 vs 2119 cr, up 47 pc
Cargo handled - 109 vs 101 MMT, up 8 pc
But for a temporary disturbance at Gangavaram port ( now fully resolved ), cargo handling would have been 115 MMT
Coast wise cargo handled -
East coast - 43 pc
West coast - 57 pc
In Q1, company received LOI for Operations and Maintenance of Syama Prasad Mookerjee port in Kolkata and DeenDayal Port in Gujarat
Segment wise cargo handled -
Container - 39 pc
Dry coal - 37 pc
Dry ( except coal ) - 13 pc
Liquids ( except crude ) - 2 pc
Crude - 6 pc
Gas - 2 pc
Segment wise breakdown of revenues -
Indian Ports cargo handling - 5536 cr, EBITDA @ 72 pc
Intl. Ports cargo handling - 825 cr, EBITDA @ 11 pc
Logistics - 571 cr, EBITDA @ 25 pc
Guidance for FY 25 -
Cargo handling - 460-480 MMT
Revenues - 29000 - 31000 cr
EBITDA - 17000 - 18000 cr
Capex @ around 11000 cr
Projected breakup of capex for FY 25 -
Ports business - 7300 cr
Marine business -400 cr
Logistics - 2300 cr
Renewables business - 1500 cr
Current state of leverage in the company in terms of Debt/EBITDA is @ 2.1. They intend to maintain it below 2.5. Which means there is a descent headroom for inorganic opportunities - if they come company’s way
Company intends to have a good presence on international trade routes in India’s near vicinity like - North and East Africa, Middle East and SE Asia. That’s why they r operating in Tanzania, Haifa, SriLanka. Now they intend to expand their presence to SE Asia - to be specific - in Vietnam
Company has been growing far quicker vs the industry and the competition over the last few Yrs. Company believes, the same is because they don’t operate their ports in isolation. They operate as a part of the ecosystem and this ecosystem is connected to the customers using multi-modal ways. Plus - there is razor sharp focus on efficiency
Company is expected to spend aprox 600 cr on the DeenDayal port - for which it has got operations and maint. contract. It’s a long term lease. Should add aprox 1.2 MMT of capacity
Whenever the company ventures into an international project, its aim is to meet its minimum RoCE tgt of 16 pc in rupee terms
Disc: holding, biased, not SEBI registered, not a buy/sell recommendation
CIPLA -
Q1 FY 25 concall and results highlights -
Revenues - 6694 vs 6329 cr, up 5 pc
Gross Margins @ 67.2 pc - up 226 bps YoY
EBITDA - 1716 vs 1494 cr, up 4 pc ( margins @ 25.5 vs 24 pc )
PAT - 1175 vs 998 cr, up 17 pc
Geography wise sales breakup -
India - 2898 cr, up 5 pc ( trade generics were adversely impacted in Q1 due change in distribution model. Business to be back on growth path wef Q2. Branded prescriptions grew @ a healthy 10 pc - led by respiratory, cardiac and urology therapies )
North America - 2075 cr, up 13 pc ( highest ever Qtly sales ) - Lanreotide 505(b)(2) mkt share @ 20 pc, Albuterol Mkt share @ 17 pc
South Africa branded - 494 cr, up 11 pc ( ranked no-1 in South Africa prescription mkt and no 3 in the OTC mkt ) - launched 8 new products across multiple therapies in Q1
South Africa tender business - 157 vs 101 cr
EM and EU - 846 cr, up 7 pc
APIs - 100 vs 141 cr
R&D expenses @ 354 cr, @ 5.3 pc of sales
Gross Debt @ 547 cr
Cash on Books @ 8996 cr
India - chronic prescription business now @ 61 pc of India sales ( up 100 bps YoY )
Company 24 brands clock sales > 100 cr / yr
Company’s brand - Foracort ( inhaler ) - is ranked no-1 brand in India ( clocking annual sales of 900 cr )
Other mega brands ( sales > 400 cr / yr ) include - URIMAX ( for relief from symptoms of enlarged prostate ) and DYTOR ( diuretic )
Company is also ranked No 1 in trade generics in IPM
Company popular OTC brands in India include - Omnigel, Nicotex, Prolyte, Cofsils, Cipladine
USFDA inspected their facilities at Patalganga and Kurkumbh - and awarded them VAI status. This is good news after successful US FDA inspections at their overseas facilities at China and InnvaGen facility in US
If there was no change in distribution model in the trade generics, India business would have grown by around 9 pc
Company’s India OTC brands are operating at operating 15-16 pc kind of EBITDA margins. Margins should improve as these brands scale up further
Company’s Goa plant was inspected by USFDA in Q1 and was issued with four 483 observations. Its official classification is awaited
Company is working hard on the ramping up of recently acquired Astaberry product portfolio
Revlimid sales were slightly better on a QoQ basis
Resolution of USFDA issue wrt their Goa facility remains a key concern
Seeing an uptick in R&D expenses in next 3 Qtrs of FY 25. For full yr, R&D expenses should settle at 6 pc of sales
Company has lined up launch of 02 peptide products. Same should materialise by Q3/Q4 this yr. In addition, launch of Advair from InvaGen’s manufacturing facility in US should also happen by end of H1 next yr
For the rest of FY, company expects US business’s run rate to be around $ 235-240 million / Qtr
Company is actively looking at both small and big opportunities in the branded generics space in India - for acquisitions - in order to utilise the cash they have on the books. Outside India, they may look at Sterile Injectables or 505(b)(2) product acquisitions in US
Post the launch of 02 peptide products in H2 this yr, company has lined up 03 more peptide product launches for FY 26
Capex guidance / yr @ 1200-1500 cr for next 2-3 yrs
Disc: holding, biased, not SEBI registered, not a buy / sell recommendation
IKIO Lighting -
Q1 FY 25 concall and results highlights -
Sales - 127 vs 108 cr
EBITDA - 17 vs 23 cr ( margins @ 13 vs 21 pc )
PAT - 12 vs 14 cr
Completed Block -1 of Greenfield expansion of 2 lakh sq ft in Q4 FY 24. Commercialised the same in May 24. Expected to complete Block - 2 of another 2 lakh sq ft by Mar 25. Have started construction for block -3 of another 1 lakh sq ft. Combined capex spend for all three blocks is around 200 cr with a total yearly revenue potential of 1000 cr ( incremental. It may take 3-4 yrs to reach optimum capacity utilisation for all 3 blocks )
ODM Listing segment grew both on YoY and QoQ basis. Performance in domestic mkt was flat. Export sales were aided by exports to Gulf region, inventory reduction in US for company’s RV products
EBITDA margins impacted due to front loading of expenses like higher employee expenses ( up 40 pc YoY ) due completion of new Greenfield Capex. Expect significant contribution from this facility in H2. This facility is also producing 2 new products - earphones of various kinds and smart watches
In addition to RV business in US, have started supplying Industrial and Solar products to energy service companies in US
Gross margins were stable Ex-US operations. As US operations stabilise, expect gross margins to normalise going fwd
Company maintains FY 25 guidance of 20-25 pc revenue growth for FY 25 with EBITDA margins ranging between 20-22 pc !!!
Company has already started backward integrating the wearables and hearables segments. Company is also looking at the design aspects in these segments. Aim is to keep the RoCE high, even if there is some margin dilution
Seeing descent pickup in the LED lighting industry in FY 25 after a difficult FY 24
Company believes that they are an electronics manufacturing and design company at heart. Lighting is the biggest chunk of their business - that’s a different matter. It’s their electronics manufacturing and design DNA that makes them confident of venturing into wearables and hearables. Anything to do with - plastics + metals + electronics - they r good at it and they r capable of doing it in-house
Disc: hold a small tracking position, biased, not SEBI registered, not a buy/sell recommendation
Jyothy labs -
Q1 FY 25 results and concall highlights -
Sales - 742 vs 687 cr, up 8 pc - led by volume growth of 11 pc !!!
Gross margins @ 52 vs 48 pc
EBITDA - 133 vs 117 cr, up 13 pc ( margins @ 18 vs 17 pc )
PAT - 102 vs 96 cr, up 6 pc ( LY, there was an exceptional gain of 9 cr due sale of a one off property )
A&P spends @ 61 cr ( 8.3 pc of sales ) vs 50 cr ( 7.3 pc of sales )
Cash on books @ 650 cr
Company expects demand momentum to continue because of normal monsoons
Category wise growth rates -
Fabric Care - grew 8.8 pc YoY ( form 43 pc of company’s revenues )
Dish Wash - grew 7.1 pc YoY ( form 33 pc of company’s revenues )
Personal Care - grew 11 pc YoY ( form 13 pc of company’s sales )
Household Insecticides - grew 2 pc YoY ( form 7 pc of company’s sales ) - impacted by heat wave in Q1. Should do better in Q2
**Should be able to clock double digit sales growth with EBITDA > 16 pc for full FY **
Company has launched liquid detergents @ disruptive price point of Rs 70/lit in MT outlets- under the Moonlight brand. Have received encouraging response
Company has reduced its dividend payout in FY 24. Aim is to build onto their cash positions for inorganic opportunities
Exo - did very well in East India in Q1. Exo - is already very strong in the South Mkts
A lot of volume growth for the company is being driven by expansion in distribution
Most of the variants of Margo launched over the last couple of years continue to do well
Rural mkts were slow previously, but are picking up now for the last few months. With further pickup in rural demand, company should be a beneficiary
Capex for the year should be around 50-60 cr
Modern Trade + E-Comm now constitute 15 pc of company’s sales. This figure was around 10 pc, about 3 yrs back
In the Household insecticides space, company has gained mkt share by 300 BPS (YoY)- mainly on the back of Liquid Vaporisers - this is a big achievement - IMHO. Because of this, HI category’s EBIT losses have also come down. As the scale and mix of HI business improves, it should show up on company level margins in next 2-3 yrs
Similarly as the personal care business expands, it should favourably impact company level margins as its a high margin segment
Company sales mix continues to remain at 40:60 in terms of South:Rest of India ( this mix has been largely the same over last 3-4 yrs )
Company intends its personal care portfolio to contribute to a minimum of 15 pc of sales vs 13 pc currently. Company is open to inorganic route to achieve that
Company is working on organic new product development as well. Will announce it when they r ready to launch
Disc: hold a small position, not SEBI registered, not a buy/sell recommendation, biased
Marathon NextGen Realty -
Q1 FY 25 concall and results highlights -
Revenues - 162 vs 210 cr
EBITDA - 53 vs 61 cr ( margins @ 33 vs 29 pc )
PAT - 38 vs 43 cr ( interest expenses have fallen sharply from 25 cr to 19 cr )
Area sold @ 72.9k Sq Ft
Debt on books @ 750 vs 783 cr on 31 Mar
Ongoing projects at ( MNRL’s share ) -
Panvel - Nextzone ( 91 pc )
Bhandup - NeoHomes ( 100 pc )
Byculla - Monte South ( 40 pc )
Mulund - Millennium ( 100 pc )
Lower Parel - Futurex ( 100 pc )
Total homes in pipeline - 15k+
Land under development - 40 lakh Sq ft
Premium - Monte South project continues to progress at a rapid pace reflecting company’s commitment to delivering premium and high quality development on time
In commercial segment, Futurex project is garnering significant traction - this project has high value inventory. Likely to result in robust sales in coming Qtrs
Panvel project has got a boost due development of Mumbai - Trans harbour link. Post the commercialisation of the link - seeing increased demand
Millenium project in Mulund with its small ticket commercial offerings is performing exceptionally well
Bhandup - is a nice location for luxury projects. Company being present there for over 6 yrs with their NeoHomes project is a dominant player in Bhandup market
Bhandup area is witnessing a lot of Infra development. Hence the prices are going up. It’s also attracting a lot of other players to Bhandup. Goregaon - Mulund Link Road is also adding a lot of value to the Bhandup area. Company believes, their Bhandup real estate is a gold mine. Company has been hiking prices @ 5 pc for past few years without hampering sales in this area
Company is guiding for a 20 pc + CAGR growth in booking value for next 2-3 yrs
Board has approved an enabling resolution to raise 500 cr via QIP. Aim is to reduce debt and acquire some new assets
Launch pipeline for next 4-5 qtrs should be around 1300 cr. This will comprise of - 1.5 lakh Sq Ft @ Bhandup, 2 Lakh Sq Ft @ Byculla, 2.5 lakh Sq Ft @ Panvel
For any RE company, festive Qtr is when bulk of the sales happen. In other times, sales are generally slower
Company’s Panvel land parcel is located close to the new International airport - that should go live in 9-12 months. So- that’s an added advantage
Company is also looking at merging some of the assets of unlisted entity within the listed entity. The process is on. Should materialise with the materialisation of the QIP
Disc: holding, biased, not SEBI registered, not a buy/sell recommendation
Zydus Wellness -
Q1 FY 25 concall and results highlights -
Revenues - 839 vs 699 cr, up 20 pc ( volume growth @ 17 pc )
Gross margins - 55.5 vs 52.4 pc
EBITDA - 155 vs 116 cr, up 33 pc ( margins @ 18 vs 17 pc ). Other expenses were up 27 pc because of hiring of strategy consultant. Without this, other expenses would have only risen by 6 pc
PAT - 147 vs 110 cr, up 34 pc
Have repaid all their Debts. Company is now net cash cash positive
Company’s brands with their Mkt rank -
Sugarfree - No 1 - with 96 pc mkt share in sugar substitutes
Glucon D - No 1 - with 60 pc mkt share
Complan - No 5 - with 5 pc mkt share
ImLite - NA - new product category ( a unique blend of sugar + stevia )
Nycil - No 1 - with 35 pc mkt share in prickly heat powder
Everyouth - No 1 - in peel off masks and scrubs. No 5 in face wash
Nutralite - NA - has no organised peer in Fat spread category
Harsh summers in Q1 helped in the growth of seasonal products like - Glucon D and Nycil
Seeing a pickup in rural demand - lowering the rural - urban consumption gap
The personal care portfolio ( Everyouth + Nycil ) of the company saw a massive growth of 42 pc YoY !!!
Food and nutrition ( Sugarfree + Nutralite + Complan + Glucon D ) also grew strongly @ 15 pc YoY. Nutralite portfolio grew in single digits
Launched the following product extensions in Q1 -
Complan ImmunoGro - in select states
Everyouth Pink Clay, Charcoal infused anti pollution facewash, scrub and facewash
Nutralite - Tandoori Mayo spread
Nutralite - carrot and cucumber sandwich spread
Nycil soap with 4 variants in International Mkts. The 4 variants are - Aqua Mint, Neem and Aloe Vera, Lime and Sandal
Have lined up four more launches in the coming Qtrs
Company increased their A&P spends by 19 pc in Q1 ( to plough back some of the GM expansion gains )
Everyouth face scrub grew by 14 pc in Q1 and maintained its leadership position with 46 pc mkt share vs 43 pc YoY
Everyouth Peel off grew by 21 pc in Q1 and maintained its leadership position with 78 pc mkt share vs 76 pc YoY
Nycil prickly heat powder grew by 20 pc - led by harsh summers and continuous brand advertisements
Company intends to go back to 17-18 pc kind of EBITDA margins on a full year basis over the next 2-3 yrs
E-Comm now constitutes aprox 10 pc of company’s sales
Company has changed the formulation of SugarFree gold from Aspartame to Sucralose + Chromium. Chromium is known to reduce the blood sugar levels. This should help the company overcome the negative perception around Aspartame
Q2 and Q3 are generally slow for the company. 1/3rd of company revenues comes from these Qtrs. 2/3rd comes from Q1 and Q4. This causes loss of operating leverage in Q2+Q3 and hence the margins correct. However over the medium term, company is sticking to their 17-18 pc kind of EBITDA margins guidance for full FY
Company is confident of achieving double digit growth in topline for FY 25
Disc: initiated a tracking position, monitoring, biased, not SEBI registered, not a buy / sell recommendation
RACL Geartech -
Q1 FY 25 concall and results highlights -
Company’s product profile includes transmission gears and shafts, sub assemblies, precision machined parts, chassis parts and Industrial gears
Company has 02 manufacturing facilities in India (Gajraula and Noida) and 03 warehouses in Europe
Company has 22 active customers for its products ( globally )
Company has been awarded Tier - 1 supplier status by a premium German car manufacturer for manufacture and supply of parking lock mechanisms. Mass production for this is expected to start in Feb 26
Company has strong relationship with ZF group. In coming years, revenues from supplies to ZF group should contribute Double digit revenues for the company
Q1 Financial outcomes -
Revenues - 109 vs 88 cr
EBITDA - 20 vs 22 cr ( margins @ 18 vs 25 pc )
PAT - 4 vs 9 cr ( due higher depreciation and interest outgo )
Exports:Domestic sales @ 68:32
Company had budgeted for a Q1 sales of aprox 125 cr. Could not achieve the same due to last minute inventory rationalisation by some clients in Europe resulting in order cancellations. Company had produced the finished products but did not ship them. Hence the tooling costs, costs related to Third party vendors are all booked in Q1 but the sales are not booked. Hence the operating deleverage and resultant compression in margins
Also, the growth in India business in Q1 was strong. India business has lower margins. All this has contributed to EBITDA margin compression
Their customers in Europe ( catering to EV space ) are facing a demand slowdown and hence their projections / demand forecasts are going haywire. This is resulting in order cancellations for RACL from their EV focussed customers
Customers in Europe that were focussing heavily on EV, have again started working on ICE and Hybrids. Overall - the auto industry in Europe is in a state of flux
Company is hopeful of a demand revival in H2 ( more so in the domestic mkt, where the demand is as such holding up ). Their earlier guidance of 550 cr of sales in FY 25 is not going to materialise - because of the disruptions mentioned above
Company has tightened its belt ( earlier they were quite liberal as the company was growing rapidly ) wrt various operational costs to tide over this demand uncertainty
Have operationalised 4MW (off-site) + 1.3 MW (on-site) of solar power plants - should result in energy cost savings
NEW BUSINESS PROSPECTS -
(a) Company is in advanced discussions with a European PV maker for new business related to their new EV/Hybrid/ICE platform - likely to be a big ticket order ( incase the company gets it )
(b) In advanced discussions with a Tier 1 European customer for Pedal - Assist - E Cargo vehicle ( discussion in final stages )
(c) Have received new business from a German customer for additional parts for their E-Bikes ( will be made at Noida plant )
(d) In advanced talks with 2 Indian OEMs for their Sub 400 cc motorcycle gearbox - again, likely to be a fairly large order
(e) Have received orders from Tier-1 clutch suppliers namely - FCC India, Alder Italy for supplies to US/Italian 2W OEMs
(f) In final stage negotiations with on of the domestic OEM for award of substantial business. The business is for a component which is identical / very similar to the component they were supplying to a European customer. The result of negotiation / final ward of business should happen by end of Q3
Company has again started to focus on the agri-segment ( due to the disruptions mentioned above in the export - PV segment )
Company continues to be upbeat on the China + 1 story. The Europeans are increasingly being more stringent wrt imports from China and are increasingly imposing higher import duties. This augurs well for Indian manufacturers
Escorts - Kubota is a big domestic customer for the company. As Escorts - Kubota becomes more aggressive wrt their India business ( which they are becoming ), this again is a good news for RACL
Disc: hold a small position, will add more only if I see a business recovery, not SEBI registered, not a buy/sell recommendation
