Ranvir's Portfolio

[ranvir]

**IRCTC - **

Q1 FY 25 concall and results highlights -

Revenues - 1120 vs 1002 cr
EBITDA - 375 vs 343 cr, up 9.3 pc YoY ( margins @ 33 vs 34 pc )
PAT - 308 vs 232 cr ( LY had an exceptional loss of 52 cr in Q1 )

Cash and Cash Equivalents @ 2908 cr

Quarterly breakdown of revenues -

Internet Ticketing - 329 cr, up 14 pc YoY ( through own website and mobile app ). www.irctc.co.in is the most transacted website across Asia - Pacific region ( > 3.5 cr transactions / month ). Has a dominant mkt share of 84 pc in reserved rail tickets. Segmental EBITDA margins @ 82.76 pc

Catering - 559 cr, up 17 pc YoY ( includes mobile catering services through onboard Pantry and static catering services at Jan Aahar, Cell Kitchens, food courts ). Segmental EBITDA margins @ 13.94 vs 14.61 pc YoY

Travel and Tourism - 124 cr, down 12 pc YoY ( offer domestic and international tour packages, car rentals, air ticketing, educational tours, cruise packages ). De-growth in the segment is primarily attributed to temporary cessation of operations of State Teertha trains and Bharat Gaurav trains in Q1 due general elections

Packaged drinking water - 107 cr, up 17 pc YoY ( have 15 operational plants across India. All are fully automated with zero manual interventions ). Segmental EBITDA @ 12.65 pc vs 13.17 pc YoY

Out of total caring revenues, 12 pc came from Vande Bharat trains. Railways are introducing more Vande Bharat + other premium trains. These trains provide them better revenues in the catering segment

At present, total number of trains that IRCTC ( their total addressed mkt ) is 1259 trains. IRCTC doesn’t cater to short distance trains

Out of 329 cr earned through ticketing breakdown of convenience fee and non-convenience fee @ 224 cr ( vs 198 cr ) and 105 cr ( vs 92 cr )

Number of tickets sold in Q1 FY 25 @ 11.81 cr vs 10.43 cr ( in Q1 FY 24 )

Capacity utilisation of Rail Neer business stood @ 86 pc. Q1 was very good for Rail Neer business aided by harsh summers. Company’s total capacity to produce bottled drinking water is 17.68 lakh bottles / day. In Q1, company produced an avg of 14 lakh bottles / day. Company is in the process of commissioning another plant with capacity of 0.72 lakh bottles / day @ Vijaywada by Oct 24

For the catering business, company’s EBITDA margins generally fluctuate between 12-15 pc depending on the mix of trains being catered

Company aims to grow its revenues @ > 15 pc and PAT @ > 20 pc for FY 25 vs FY 24

Company has also ventured into E-Catering business where they have aggregators like Zomato, Swiggy and others on their platform. This business grew by 35 pc YoY in Q1

The last price hike taken by the company in the catering business was in 2019. Price hikes have to be approved by the railway board - ministry of railways. ( this can be a potential positive trigger - as and when it materialises )

The breakdown of 1259 trains that the company is catering to is as follows - 117 pre-paid trains ( like Shatabdi, Rajdhani, Vande Bharat etc ), 440 mail express with pantry and 702 mail express where they run PSP

No plans of increasing the price of Rail Neer bottles - basically to keep competition away ( it’s priced @ Rs 15/lit vs Rs 20/lit for most other brands ). They want to improve their efficiencies, capacity utilisation to further improve the margins in this segment

Disc: not holding, not SEBI registered. May buy if the stock price corrects from hereon

[ranvir]

Lumax Auto Technologies -

Company profile -

A leading auto-ancillary company generating annual revenues > 2800 cr with last 3 yr revenues CAGR @ 37 pc. Currently operating via its 26 manufacturing facilities located in 6 states across India. Has 1 R&D and 2 engineering centers employing 350 engineers. Company has established long term relations with 20+ prominent clients in the auto Industry. At present company has 9 global JVs for various products. Company is a leader in gear shifter systems and Interior control systems

Company’s Products portfolio -

Advance Plastics -

Cockpit ( Dashboards ) and Consoles
Door pannels
Fuel Tanks
Heaplamps
Taillamps
Headliners

FY 24 revenues from this segment was 1613 cr. This segment has grown @ 60 pc CAGR in last 3 yrs. Breakdown of segmental revenues between 2W/3W, 4W, CVs stand at 23 pc, 69 pc and 8 pc respectively. Key customers include - Bajaj, M&M, Tata, MG, Toyota, VW, HMSI, Skoda, Renault, Nissan, Hero

Mechatronics -

Power window switches
Shark fin antenna
LF antenna
O2 sensor
Telematics control Unit

FY 24 segmental revenues were @ 64 cr, growing @ 115 pc CAGR in last 3 yrs ( although on a small base ). 2W/3W, 4W, CV revenue split stands @ 4 pc, 86 pc, 10 pc. Key customers include - MSIL, Honda, Toyota, Daimler

Structures and control systems -

Gear shifters
Control housings
Swing arms
Monostable E shifter

FY 24 revenues from this segment stood @ 643 cr, growing @ 12 pc CAGR in last 3 yrs. 2W/3W, 4W, CV revenue split stands @ 31 pc, 60 pc, 9 pc. Major customers include - MSIL, M&M, Toyota, Tata, Honda, Daimler, Bajaj, Piaggio

After market products -

Wiper blades
Filters
Gear Knobs
Mirrors
Engine Oils, Lubricants
Horns

FY 24 segmental revenues stood @ 397 cr, growing @ 16 pc CAGR in last 3 yrs. Company operates via a wide dealer network of 575 dealers selling across 27k retail touchpoints

Company’s manufacturing plants -

Mehsana ( Gujarat ) - 1 plant
Pune, Nashsik, Walunj ( Maharashtra ) - 10 plants
Manesar and Gurugram ( Haryana ) - 8 plants
Pantnagar ( Uttarakhand ) - 3 plants
Bhiwadi ( Rajasthan ) - 1 plant
Bengaluru ( Karnataka ) - 3 plants

R&D center @ Manesar, Engineering centers in Pune

Q1 FY 25 updates -

Revenues - 756 vs 632 cr, up 20 pc
EBITDA - 105 vs 88 cr, up 20 pc ( margins flat @ 14 vs 14 pc YoY )
PAT - 32 vs 22 cr, up 43 pc ( PAT margins @ 4.2 vs 3.5 pc YOY )

Segment wise revenue breakdown -

Advanced Plastics - 420 vs 371 cr, up 13 pc
Mechatronics - 28 vs 11 cr, up 160 pc
Structures and Control systems - 165 vs 147 cr, up 12 pc
Aftermarket - 84 vs 83 cr, up 1 pc
Others - 59 vs 19 cr, up 215 cr

Customer wise sales breakup -

M&M - 25 pc
Bajaj - 16 pc
Maruti Suzuki - 8 pc
After Mkt - 13 pc
Honda 2W - 5 pc
Tata - 5 pc
All others - 28 pc

Personal observation - - company’s 2 largest customers - Bajaj Auto and M&M are witnessing continued strong sales momentum in Q2 as well

There was no Capex in Q1. Capex outlay planned for rest of FY 25 stands @ 120-140 cr. Current cash on books stands @ 416 cr which is greater than their long term debt of 391 cr

Company had acquired 75 pc stake in IAC international’s India business in Q4 FY 23. IAC is a major supplier of interior and exterior systems and components like - Instrument panels, Cockpits, Consoles, doors and trim systems to M&M, Maruti Suzuki, VW India and Volvo-Eicher CVs

Out of the total capex outlay, 50 pc is likely to be spent on expanding IAC’s facilities

In the aftermarket segment, the OEMs are becoming more aggressive to garner a larger share of pie in the sales of spares ( through their own service networks ). However, the company still believes that it should be able to clock double digit growth in Aftermarket segment in FY 25

Company is guiding for a full year consolidated sales growth of 15-20 pc. A lot of company’s growth is coming from new product ( cars ) launches by OEMs. Should be able to sustain EBITDA margins in the 13-14 pc band for full FY ( like they did in Q1 )

Company has seen a huge growth in content per vehicle @ 4X over the last 5 yrs. They believe, there is still enough headroom for growth. However, next leg of growth now should come from selling to more OEMs / broader set of car/2W models

Mechatronics is one area which should keep growing strongly ( although on a smaller base )

Total debt ( long term + short term ) as on 30 Jun stands @ 660 cr

Rough break down of planned Capex this yr - IAC- 60 to 70 cr, Structure and Control systems - 30 cr, Mechatronics - 30 cr

Disc: initiated a tracking position, looks promising, not SEBI registered, biased, not a buy/sell recommendation

[ranvir]

SAMHI Hotels -

Q1 FY 25 results and concall highlights -

Company profile - Operate a total of 31 Hotels, 4800 rooms in 13 cities under 8 brand names

Upscale Hotel rooms - 1074. These include properties like -

Hyatt @ Gurugram and Pune
Sheraton @ Hyderabad
Renaissance @ Ahemdabad
Courtyard @ Bengaluru

Total - 5 hotels

Upper Midscale Hotel rooms - 2163. These include properties like -

Four Points @ Pune, Vizag, Jaipur, Chennai
Fairfield by Marriot @ Bengaluru (03 hotels), Coimbatore, Chennai (02 hotels), Hyderabad, Goa, Ahmedabad
Caspia @ Delhi

Total - 14 hotels

Midscale hotel rooms - 1564. These include properties like -

Holiday Inn Express @ Pune (02 hotels), Ahmedabad, Bengaluru, Nasik, Hyderabad ( 02 Hotels ), Gurugram, Chennai, Nahsik
Caspia Pro @ Noida

Total - 12 hotels

Q1 FY 25 outcomes -

Revenues - 256 vs 191 cr, up 33 pc YoY
EBITDA - 89 vs 47 cr ( margins @ 35 vs 25 pc - huge margin expansion, ESOP costs fell from 11 cr to 4.5 cr YoY )
PAT - 4 vs (-) 83 cr ( finance costs fell from 107 cr to 55 cr YoY )

Net Debt stands @ 1862 as on 30 Jun 24 vs 2938 cr as on 30 Jun 24. Cost of debt @ 9.7 pc vs 13 pc YoY - basically a massive improvement on this particular aspect

Q1 RevPar @ Rs 4276 vs Rs 3662, up 13 pc YoY

Breakdown of revenues ( segment wise ) -

Upscale - 43 pc ( RevPar growth @ 21 pc, Occupancy @ 79 vs 74 pc, 32 pc of revenues from F&B )

Upper Midscale - 43 pc ( Rev Par growth @ 9 pc, Occupancy @ 72 vs 72 pc, 23 pc of revenues from F&B )

Midscale - 14 pc ( Rev Par growth @ 4 pc, occupancy @ 74 vs 72 pc, 9 pc of revenues from F&B )

Schedule to be operationalised by Q3 FY 25 ( a total of 302 additional rooms with an annual revenue potential of 25-30 cr ) -

Opening of Holiday Inn express - Kolkata ( will add 110 rooms )
Addition of rooms in Holiday Inn express - Bengaluru ( will add 54 rooms )
Renovation and rebranding of Caspia Pro greater Noida to Holiday Inn Express ( will add 137 rooms )
Addition of 22 rooms @ Hayatt regency Pune
Addition of 12 rooms @ Sheraton Hyderabad

Company believes their EBITDA margins have a material scope for improvement as Q1 is generally the weakest Qtr ( seasonally )

Rapid expansion of Office spaces and Aviation Industry augurs well for the company ( as they primarily run Business hotels in Tier-1,2 cities )

India added 9 million Sq Ft of office space in Q1 out of which, 67 pc came up in Hyderabad, Pune, Bengaluru and Delhi NCR - which are all company’s core markets

Expect EBITDA margins to go to 40 pc levels in Q3, Q4

Expect the cost of debt to fall further to 9.5 pc in next 6-9 months

Not seeing speedy supply build up in the markets like - Hyderabad, Pune, Delhi NCR - should augur well for company’s ARRs and occupancies. Only significant supply addition ( ie new hotels ) that’s happening right now is at Gurugram - Aerocity area

In any case, supply addition in the Industry is unlikely to be > 4-5 pc ( avg across all major markets ) where as the demand growth is much higher than this

Over and above the 302 new rooms that the company intends to operationalise by Q3, they also intend to add another 200-300 rooms via inorganic route. They ll announce the same when they strike a deal. They aim to keep adding inventory @ 10-15 CAGR for foreseeable future

Confident of generating 225 - 250 cr of free cash in current FY. Plus they are holding a cash surplus of Rs 300 cr. So - the liquidity position going forward should be comfortable to fund inorganic growth and deleveraging the balance sheet at the same time

Total capex expected for FY 24 @ 140 cr

Seeing improved occupancies in July, Aug vs Q1. Also expecting a further ramp up in F&B sales wef Q2 as Q1 was muted wrt Conferences, Meetings, Seminars etc because of general elections

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

[ranvir]

The broader market witnessed a deep correction today. Plus the mkt in general has been correcting for the last few sessions. I thought, it was a good opportunity to make some changes at portfolio level to take advantage of steep price cuts in stocks that I always wanted to buy. Hence resorted to some chopping / changing today - As follows -

Completely sold -

RPG Lifesciences ( I thought, its valuations were now rich )

Marathon Next Gen Realty ( I made descent money in this despite having limited knowledge and conviction about the RE sector. Hence I thought - lets book profits here )

Together, these 2 stocks comprised about 5 pc of my portfolio. Utilised the cash to buy -

Fresh Entry -

Cholamandalam Investment and Finance ( always wanted to buy it. I thought - the recent dip may be a good entry point )

Incremental additions in -

Federal Bank
Karur Vysya Bank
Kopran
SAMHI Hotels
Bajaj Finserv
Cera Sanitaryware
Neuland Labs
Laurus Labs
Lumax Auto Technologies

[abhishek_yadav2]

hi bro i like the way make your portfolio and how you select the share please help to know its right time to buy BLS international ?

[ranvir]

Cholamandalam Investment and Finance company -

Company overview + Q1 results and concall summary -

A leading NBFC operating across 26 states and 7 union territories in India. Total AUM @ 1.7 lakh cr. Mainly operating in segments like - Vehicle finance, Loan against property, Home loans, Consumer loans, personal loans, SME loans, Stock broking and distribution of financial products

Current branch network @ 1438 branches

Q1 FY 25 financial outcomes -

Closing AUM on 30 Jun @ 1.68 vs 1.22 lakh cr ( up 38 pc YoY )

Disbursements in Q1 @ 24.33k cr vs 20.01k cr YoY

Net Interest Income - 3033 vs 2127 cr ( up 43 pc )
Expenses - 1183 vs 787 cr ( up 50 pc )
Credit losses - 581 vs 372 cr ( up 56 pc )
PBT - 1268 vs 968 cr ( up 31 pc )
PAT - 942 vs 726 cr ( up 30 pc )

NIMs @ 7.0 vs 6.9 pc
RoA @ 2.4 vs 2.5 pc

Gross Stage 3 assets ( ie pending for > 90 days, basically Gross NPAs ) @ 4123 vs 3546 cr ( corresponds to 2.4 vs 2.9 pc of loans )

Provisions @ 45.5 vs 45.4 pc of gross NPAs

Breakdown of Q1 loan disbursements and segmental profitability -

Vehicle finance - 53 pc of total disbursements -

Disbursements - 12.27 k cr, up 13 pc YoY
PBT - 620 cr, up 24 pc

Breakdown of company’s vehicle finance business -

Construction Eqpt - 6 pc
2W + 3W - 8 pc
Used vehicles - 27 pc
Tractors - 6 pc
Mini LCVs - 3 pc
Cars + MUVs ( mainly for commercial use ) - 22 pc
LCVs - 20 pc
HCVs - 7 pc

Segmental NIMs @ 7.9 pc, RoA @ 2.9 pc, Loss provisions @ 1.9 pc

LAP ( focussing on SME customers, giving them business loans against security of their immovable properties ) - 16 pc of total disbursements -

Disbursements - 3.8 k cr, up 45 pc YoY
PBT - 292 cr, up 31 pc

Continue to increase their focus on this segment - specially in rural and semi urban areas. This is a high growth, lower margin, lower risk, lower credit cost business

Segmental NIMs @ 5.7 pc, RoA @ 3.8 pc, Loss provisions @ 0.1 pc

Home Loans ( company operates in the affordable segment ) - 7 pc of all disbursements -

Disbursements - 1.77 k cr, up 22 pc
PBT - 163 cr, up 88 pc

Company focussing on untapped rural areas

Segmental NIMs @ 8.8 pc, RoA @ 4.7 pc, Loss provisions @ 0.3 pc

Newer business segments -

SME loans ( focussing on supply chain financing, loan against shares, loans against machinery etc ) - 9 pc of all disbursements -

Disbursements - 2.16 k cr, up 6 pc
PBT - 24 cr, up 57 pc

CSEL - Consumer and Small Enterprise loans - ( Offer personal loans and business loans to salaried , self employed professionals without collateral ) - 14 pc of all disbursements -

Disbursements - 3.48 k cr, up 48 pc
PBT - 101 cr, up 93 pc

SBPL - Secured business and Personal loans ( offer secured personal loans against self occupied immovable property ) - 1 pc of all disbursements -

Disbursements - 268 cr, up 48 pc
PBT - 30 vs 1 cr YoY !!!

Company conducts its business through an extensive branch network of 1438 branches. The geographical breakdown of branches is as follows -

South - 29 pc
North - 23 pc
West - 23 pc
East - 25 pc

The rural : semi urban : urban spit of branches stands @ 83 : 12 : 5

Company has aggressively expanded its home loan business ( and also branches offering home loans ) over the last 2 yrs. Now they will concentrate on consolidating their gains and on driving greater productivity before commencing further expansion in next FY

A lot of aggressive investments in new branches and spike in operating expenses should now be behind. Going forward, company expects operating expanses to gradually keep coming down year after year ( even as they gradually keep adding more branches )

Unlikely to raise equity capital for next 2-3 yrs

Confident of maintaining growth rates in the 25 - 30 pc band ( with an upward bias )

Over the medium term ( FY 26 and beyond ), company expects their credit costs to settle in the 1-1.2 pc zone ( primarily because the LAP and HL portfolios have structurally lower credit costs )

Currently - the newer businesses ( SME + SBPL + CSEL ) comprise of 13 pc of company’s loan book. Company aims to take this to 15 pc and stabilise there. Out of this, the unsecured portion should settle at around 8 pc

Company expects a further pick up in disbursements wef Q2 ( because Q1 witnessed some kind of dampening in credit demand due elections )

Management believes, this 25+ kind of growth rates are achievable for next 3-5 yrs. They don’t see any macro headwinds that may hamper / prevent them from not achieving these high growth rates. They also aspire to hit the 4 pc RoA mark in next 5 yrs !!!

Expected to add another 200 branches in the current FY

Chola is one of the largest player in India in the used vehicle finance space

In the business loan segment, 83 pc of company’s customers have a credit score > 725, 13 pc customers have a credit score > 700

Disc : have bought recently, biased, not a buy/sell recommendation, not SEBI registered

[ranvir]

Updater Services Ltd -

Q1 FY 25 financial outcomes -

Revenues - 658 vs 579 cr, up 14 pc
EBITDA - 47.4 vs 35.6 cr, up 33 pc ( margins @ 7.2 vs 6.1 pc )
PAT - 25.6 vs 12.4 cr, up 107 pc !!!
RoCE - 24.2 vs 20.7 pc
Company is net Debt free ( ie debt on books < cash on books )
Company’s business model -

Company offers services under two broad business segments -

IFMS ( Integrated Facility Management Services ) - this segment includes services like -

Housekeeping and cleaning services
Disinfecting and Sanitising services
Pest Control services
Horticulture services
Facade cleaning services
Washroom Hygiene

Material handling
Warehouse management services
Inward and Outbound logistics management
Equipment maintenance services
Mechanical, Electrical and Plumbing repairs
Ventilation and Air Conditioning

Catering services to corporates, educational institutes and industrial facilities

Staffing services - where trained field staff are provided to customers for deployment in various roles

IFMS - currently comprise of 65 pc of company’s revenues and 51 pc to company’s EBITDA

BSS ( Business support services ) -

Sales enablement services to various kinds of companies via BPOs operating out of India, Singapore, UK, Malaysia

Audit and Assurance services - including audit of supply chains, distributor audits, depot audits, retail point audits

Channel partner claim processing services

Employee background checks, address verifications, educational qualification verifications, employment history verifications, legal cases history etc

Airport ground handling services

Mailroom and asset movement management

BSS - currently contribute to 35 pc of company’s sales and 49 pc to company’s EBITDA

Company has slowly exitied non-viable businesses in the IFM space over the last 3 Qtrs. Going forward, they should have a clean slate. Hence the growth from here on should be of better quality and margin accretive (the same has started to be incrementally visible in Q1 itself)

The total addressable mkt in the IFMS space in India is around 40k cr and is expected to double inside next 4-5 yrs ( that’s a very high rate of projected growth at the Industry level - should end up being a key positive for the company )

Outsourcing is a key trend picking up pace as companies increasingly want to focus on their key competencies. Company is confident of growing @ high growth rates in the IFMS space

In Q1, IFMS grew by 5 pc ( as the company was exiting non-viable business ). BSS grew @ 34 pc YoY

Despite the high growth witnessed in BSS segment, company witnessed a significant slowdown in Employee Background Verification services from the IT sector clients. Hence the company is diversifying its revenue pool away from them and towards - retail and BFSI segments

The BSS segment EBITDA margins stood at 9.9 pc in Q1 vs 9 pc in Q1 LY. For the IFMS segment, EBITDA margins stood at 5.7 pc in Q1 vs 4.9 pc in Q1 LY

The airport ground handling business has turned EBITDA positive for the first time in Q1. Company is currently operating across 22 airports

Company has aprox 900 clients in its BSS division. Key clients include - Microsoft, P&G, TCS, Hershey, Aditya Birla group, Tata Comm. 75 pc of BSS segment’s revenues comes from top 50 customers. Company intends to go for strategic acquisitions in the BSS space - both to improve growth rates and margins

Biggest opportunities in the BSS segment lie in the Employee verification, sales enablement, audit and assurance spaces. All these are asset light businesses

Company’s aspiration is to grow at rates 3X the nominal GDP growth rates !!! ( I ll personally wait for such promise / projection to play out )

Some key competitive advantages for the company include - scale of operations, ability to handle complex and large scale contracts

Employee count in IFMS segment @ 51.8k employees, in BSS segment @ 14.3k employees

Company believes, the BSS segment’s revenue contribution should reach around 40 pc in about 2 yrs time ( vs 34-35 pc currently )

The 22 airport - ground handling contracts that the company has got have a life of 10 yrs. Company expects this business to start becoming profitable wef H2 this FY as the initial investment / gestation period of 1-2 yrs is ending for most of the airports that they are serving

In the IFMS space, company is guiding for 13-14 pc topline growth ( despite a slow Q1 )

India is adding office space at a brisk pace. Hence the volume growth for the company should not be a problem going forward. Margins shall continue to improve - albeit gradually

Company has about 1500 clients in the IFMS segment. Top 10 customers contribute to 31 pc of sales, top 50 customers contribute to 65 pc of sales

Clearly, the company has a long tail of clients in both IFMS and BSS segments. As a long term strategy - company intends to grow volumes / business with the higher volume customers and exit lower volume customers over a period of time

Company should be able to sustain EBITDA margins > 4.5 pc in the IFMS space

For the company and Industry as a whole, H2 is always better than H1 - as the festive season improves the demand situations across hospitality, travel and tourism sectors

Company’s revenues in the IFMS segment is almost 100 pc from the private sector. Company is likely to remain choosy wrt Govt business going fwd - as it generally involves long payment cycles

Six - main segments ( largest contributors ) for the company in the IFMS segment include - Cleaning services, engineering services, production support services, Institutional catering, warehouse management and washroom hygiene services

Disc: business looks interesting, planning to invest, not a buy/sell recommendation, biased, not SEBI registered

[saurabhgupta]

Sir the way you present concall summary is just amazing.

[saurabhgupta]

It has fixed rate loan book, so when RBI starts cutting interest rates then it will be additional benefit for the company, am i getting it right sir?

[saurabhgupta]

Risk related to this industry-

Credit- SOIC

[ranvir]

V Guard Industries -

Company overview and Q1 FY 25 results and concall highlights -

Company’s product overview -

Electronics -

Stabilizers
Digital UPS+ Battery

Electricals -

Home wires and cables
Fans
Switchgears
Modular Switches

Consumer Durables ( CD ) -
Water Heaters
Solar Water Heaters
Air Coolers
Kitchen Appliances

Sunflame range of products ( mainly Kitchen appliances ) - acquired in Dec 23

Financial outcomes -

Revenues - 1477 vs 1214 cr, up 21 pc
Gross Margins - 36 vs 32 pc
EBITDA - 155 vs 104 cr, up 48 pc ( margins @ 10.5 vs 8.6 pc )
PAT - 99 vs 64 cr ( up 54 pc )

Advertisement and promotion expenses @ 2.8 pc of sales vs 2.2 pc in Q1 LY

Gross Debt @ 217 cr
Cash on Books @ 351 cr

Segmental - Sales, EBITDA break up -

Electronics sales - 513 cr, EBITDA - 103 cr, margins @ 20.2 pc

Electricals sales - 487 cr, EBITDA - 49 cr, margins @ 10.1 pc

CD sales - 417 cr, EBITDA - 22 cr, margins @ 5.2 pc

Sunflame sales - 59 cr, EBITDA - 3 cr, margins @ 4.7 pc

Segment wise sales growth in Q1 -

Electronics - grew by 41 pc

Electricals - grew by 7 pc ( adversely affected by de-stocking in wires - which is their largest product category - due falling copper prices in Q1 )

Consumer Durables - grew by 27 pc

Sunflame - de-grew by 7 pc

EBITDA margins shrinkage in Sunflame business was due to aggressive advertisements and sales promotions + new hirings. Kitchen appliance category has been soft - overall

In Q2, company is seeing firming up of RM prices. They ll take price hikes - where ever necessary

Company doesn’t give out product wise breakdown within a category. All they can say is that the Fans category did well. Copper and Aluminium prices continue to trend upwards - hence the company is taking further price hikes

Company is putting up a new factory to manufacture fans. Should be able to complete the work in about 18 months

Capex planned for current FY @ 100-120 cr. Expect a similar run rate for next 2 yrs as well

Company expects the stabiliser business to sustain a 7-8 pc CAGR growth in the long term ( ie for next 8-10 yrs )

In the electronics segment, company has entered the solar - rooftop product solutions. This category is helping / driving the growth of digital UPS and battery segment ( over and above the organic demand coming from power back up category ). Solar roof top solutions is a very fast growing category - although the base is small

In the electricals space, company’s focus is mainly on the retail segment. They do not focus on the projects side of the business as that business has lower margins

Company has completely moved the Inverter manufacturing in house. This has helped them improve the margins in this segment. However, the margins in the battery segment continue to be under pressure. Company is setting up its own facility to make inverter batteries - should be operational by next FY. That should improve the margins in the battery segment as well

Company intends to repay the entire loan it had taken for the sun flame acquisition by end of this FY

In the Kitchen appliance space, company has put up a new factory at Vapi for in-house manufacturing. Expect full scale commercialisation of this facility by Nov this yr. This should help them improve their productivity in the market. This should help drive their kitchen appliance business in a meaningful way

Similarly, company has now been able to integrate the Sunflame business completely. Should see better performance from the Sunflame part of the business as well

The Kitchen appliances category has been under stress for last 1.5 - 2 yrs ( industry wide phenomenon ) . Company hopes to see some revival - this festive season

Company is guiding for 13-15 pc topline growth and EBITDA margins between 9-10 pc for current FY

Company is continuously looking to enter new categories. But would refrain to talk about them in Public

Most of the output of the upcoming Vapi factory is concentrated towards - mixers, grinders, food processors. They ll also sell these under the Sunflame brand

Sunflame’s Kitchen appliances business is expected to do 325-350 cr sales this yr. V Guard’s Kitchen appliance’s sale should be in the range of 200 cr for current FY. Both combined - that’s a significant business. In the medium term, company will integrate the back end for both the brands and maintain different front ends for both

Company’s main focus in last 2-3 yrs has been to bring as much manufacturing in-house as possible. This gives them far better control over product quality and gives them the flexibility to do quick / speedy product refreshes

Company admits - that in non-South markets, company’s brand lacks top of mind recall ( like a Havells would have ). However, the company does have a descent - aided recall ( ie - customers recognise it when assisted / prompted ). Company’s journey into non-South mkt is 8-10 yrs old ( on an avg ), and they do a sales of about 2500 cr / yr from Non-South mkts. This is already good progress. Company believes that their brand recall would improve substantially in another 4-5 yrs

In next 2-3 yrs, company intends to reach their tgt of 75 pc in-house manufacturing vs 65 pc currently

Disc : not holding, may buy on corrections, not SEBI registered, not a buy / sell recommendation

[SeerOfTomorrowWealth]

Hi Saurabh,
When the RBI cuts interest rates, a variable or floating interest rate loan can be more beneficial. Here’s why:

1. Lower Payments: With a variable rate, your interest payments will decrease as the RBI cuts rates, leading to lower overall borrowing costs.
2. Flexibility: Variable rate loans often adjust in line with market conditions, so you can benefit from any future rate cuts.
3. Cost Efficiency: If you plan to hold the loan for a shorter period, variable rates can be cheaper, especially in a declining interest rate environment.

In contrast, fixed-rate loans won’t decrease in interest costs during rate cuts, but they provide stability against rising rates. So, if you’re anticipating falling rates, a variable rate loan would be more advantageous.

Pleasure! Please correct me if I am wrong.

[ranvir]

HDFC AMC -

Q2 FY 25 Concall and results highlights -

MF Industry Data -

MF Industry’s closing AUM on 30 Sep 24 @ 67.1 lakh cr vs 46.6 lakh cr on 30 Sep 23 ( up 44 pc !!! )

Out of this, Equity AUM @ 39.9 lakh cr vs 24.8 lakh cr ( percentage of Equity AUM vs Total Industry AUM @ 59 vs 53 pc - again, massive growth )

Retail AUM @ 43 lakh cr vs 29 lakh cr

Institutional AUM @ 26 lakh cr vs 20 lakh cr

T-30 ( Top 30 cities ) AUM @ 56 vs 40 lakh cr
B-30 ( Beyond top 30 cities ) AUM @ 13 vs 9 lakh cr

Sep 24 SIP flows @ 24.5k cr vs 16.1k cr in Sep 23 ( again - massive YoY growth ). HDFC AMC’s SIP book in Sep 24 @ 3.6k cr vs 2.24k cr in Sep 23

Industry wide SIP AUMs @ 13.8 vs 8.7 lakh cr YoY

HDFC AMC’s AUM on 30 Sep @ 7.6 lakh cr vs 5.3 lakh cr on Sep 23 ( up 47 pc !!! ). Their mkt share @ 11.5 vs 11.2 pc

HDFC AMC is not a big player in the ETFs segment. Minus the ETFs, their mkt share is 12.9 pc vs 12.6 pc YoY

HDFC AMC’s equity AUM @ 4.87 lakh cr - mkt share @ 12.7 pc ( AUM up 62 pc YoY )

HDFC AMC’s Debt AUM @ 1.53 lakh cr - mkt share @ 13.4 pc ( AUM up 15 pc YoY )

HDFC AMC’s Liquid AUM @ 0.65 lakh cr - mkt share @ 13 pc ( AUM up 18 pc YoY )

Company’s Retail AUM @ 71.4 pc vs 61.9 pc for the Industry

Number of retail accounts with the company @ 2.06 cr vs 1.34 cr in Sep 23

Company’s mkt share in retail segment is 13.2 pc - highest in the Industry. No2,3,4 players mkt share stands @ 12.9 pc, 12.7 pc and 8.1 pc respectively

Q1 FY 25 financial outcomes -

Revenues - 877 vs 643 cr, up 38 pc
EBITDA - 704 vs 482 cr, up 46 pc ( margins @ 79 vs 75 pc )
Other Income - 171 vs 122 cr
PAT - 577 vs 438 cr, up 31 pc ( due increased tax rate )

89 pc of company’s investors have registered their SIPs for > 5 yrs

Company has set up a fully owned subsidiary at GIFT city - dedicated to attract NRI investments into India ( launching a total of 4 products under this subsidiary - to start with )

SEBI has given a green signal to new a new asset class that sits between a MF and PMS with a min ticket size of 10 lakhs. It ll have more flexibility wrt use of derivatives, limits on single stock ownerships, selection across mkt caps etc. This augurs well for the company as it opens up new opportunities

Company’s mkt share in the incremental fund flows is higher than their mkt share on their existing book - a key positive

Yeild on Equity, Debt, Liquid funds stands @ 68 bps, 28 bps and 13 bps respectively

B-30 cities are showing increased growth rates vs T-30 cities wrt new SIP creations, addition of new investor folios

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

[saurabhgupta]

sir i guess you don’t got my point, i was saying that for Cholamandalam they have loan book at fixed rate so when interest rate decline then their cost of borrowing will decline (as they will offer lower interest on FDs and if they source fund from banks then it also be at less interest rate),but their interest income cost won’t decline because they have fixed cost loan book, so eventually their NIM will improve,that is was i was trying to convey.
Although what you are saying is absolutely right from customer’s point of view.Hope you will get it now.

[saurabhgupta]

Sir their cash on book is around 35cr, debt is 356cr and you mentioned cash-351cr and debt-217cr, am i missing something?

[ranvir]

I am quoting from their Q1 concall. Would like to know, where did u get ur numbers from

Thanks

[hardik_shah1]

Checked the AR. Only 35 Cr of cash.

Saurabh is right.

[saurabhgupta]

screener and it took data from AR

[ranvir]

Karur Vysya Bank -
Q2 FY 25 results and concall highlights -

Advances / Loans @ 80.2k cr, up 14 pc YoY
Deposits @ 95.8k cr, up 15 pc YoY
CASA deposits @ 28.3k cr, up 5 pc YoY

NII - 1060 vs 915 cr, up 16 pc
Other income - 472 vs 339 cr, up 39 pc
Operating expenses - 716 vs 616 cr, up 16 pc
Operating profits - 816 vs 638 cr, up 28 pc
Provisions - 180 vs 127 cr, up 42 pc
PBT - 636 vs 511 cr, up 24 pc
PAT - 473 vs 378 cr, up 25 pc

RoA @ 1.72 vs 1.57 pc
RoE @ 17.3 vs 16.5 pc
NIMs @ 4.11 vs 4.07 pc
Spreads @ 3.33 vs 3.32 pc
Cost/Income @ 46.72 vs 49.14 pc

Gross NPAs @ 1.10 pc, down 63 bps
Net NPAs @ 0.28 pc, down 19 bps
PCR @ 96 pc

Breakup of loan book -

Retail - 19.6k cr, up 21 pc YoY

Agri ( more than 90 pc are against gold ) - 18.8k cr, up 16 pc YoY

Corporate ( loans > 25 cr ) - 13.1k cr, down 9 pc YoY

Commercial ( loans < 25 cr ) - 28.7k cr, up 22 pc YoY

Avg ticket size of commercial loans is around 50 lakh. 38 pc of commercial loans are > 5 cr

Avg ticket size of corporate loans around 36 cr. 86 pc of corporate loans are < 150 cr

Slippages for Q2 @ 181 cr vs 155 cr YoY ( well within control )

Recoveries for Q2 @ 100 cr vs 115 cr YoY

Total number of branches @ 841 on 30 Sep 24 vs 799 on 30 Sep 23

Retail loan book growth was primarily driven by mortgages

Deposits growth remains a key priority for the bank. Expecting a 10 bps rise in rate of deposits in Q3

Bank is able to sustain NIMs > 4 pc due better growth in retail, agri segments vs low margin corporate segment

Expecting NIMs in Q3 to be around 4 pc mark ( vs 4.11 pc in Q2 due expectation of moderate increase in rate of deposits and no increase in yield on advances )

Confident of sustaining RoAs @ > 1.65 pc levels for rest of FY

Confident of maintaining the gross slippage ratio below 1 pc for full FY ( in Q2, it was 0.23 pc - not annualised )

Total unsecured book stands @ 2.4 pc ( being very cautious in growing the MFI book )

Bank is de-focussing on the corporate segment because of lower yeilds vs the funds they r raising via term deposits. Once CASA growth comes back, they ll re-focus on their corporate loan book

26 pc of bank’s book consists of Gold Loans ( under Agri + Retail segments )

Textile sector ( in the MSME segment ) in TN area is doing well vs last year

Yeild on Loan against property is around 9.5 pc. Company’s LAP portfolio is majorly concentrated in South India ( TN + Karnataka + AP + Telangana )

Spending aggressively on IT + Cyber Security + New branches. Aim to open 100 branches in current FY

Aim to keep growing the Retail + Agri + MSME book at rates > 18 pc. Achieving this is absolutely critical for the bank as the corporate book is expected to continue to de-grow for some time

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

[ranvir]

Axis Bank -

Q2 FY 25 results and concall updates -

Deposits @ 10.37 lakh cr, up 14 pc YoY ( CASA deposits grew by 5 pc, CASA ratio of 41 pc )
Advances @ 10.00 lakh cr, up 11 pc YoY

NII @ 13.48k cr, up 9 pc YoY
Non interest income @ 6.72k cr, up 34 pc YoY
Operating expenses @ 9.5k cr, up 9 pc YoY
Operating profits @ 10.7k cr, up 24 pc YoY
PAT @ 6.91k cr, up 15 pc YoY

Consol RoA @ 1.92 vs 1.83
Consol RoE @ 18.08 vs 18.67 pc

Gross NPAs @ 1.44 vs 1.73
Net NPAs @ 0.34 vs 0.36
Total provisions ( specific + standard + additional + contingent ) stand at 153 pc of Gross NPAs

NIMs @ 3.99 vs 4.11 pc YoY
Cost of Funds @ 5.45 vs 5.17 pc YoY

Total Branches @ 5577 on 30 Sep 25 vs 5377 on 31 Mar 24 (opened 150 branches in Q2 and 50 branches in Q1)

Breakdown of loan book -

Retail loans - 5.98 lakh cr, up 15 pc YoY
SME loans - 1.10 lakh cr, up 16 pc YoY
Corporate loans - 2.90 lakh cr, up 3 pc YoY

Gross slippages ( annualised ) @ 1.78 pc vs 1.97 pc QoQ vs 1.49 pc YoY

Net slippages ( annualised ) @ 0.96 vs 1.37 pc QoQ vs 0.59 pc YoY

Net credit cost @ 0.54 pc down from 0.97 pc in Q1

Fall in Gross and Net slippages on a QoQ and YoY basis is a key positive

Integration of Citi Bank’s entire portfolio with Axis bank completed in Jul 24. Behaviour of customers ( in terms of banking transactions post acquisition ) is satisfying

Cost / Income @ 47.29 pc, down 207 bps YoY

Bank’s head count has increased by around 4000 employees vs Sep 23 - due opening of new branches and hiring related to improve the bank’s IT infrastructure

Aim to open a total of 500 branches in the current FY

Most of the slippages are originating from the unsecured retail lending part of the book. Bank is monitoring the same and taking actions as deemed fit

Breakup of the retail loan book -

Home loans - 1.67 lakh cr, up 5 pc
Rural loans - 89.6k cr, up 20 pc
Personal loans - 75.4k cr, up 23 pc
Auto loans - 58.7k cr, up 6 pc
LAP - 67.2k cr, up 25 pc
SBB - 61.9k cr, up 23 pc
Credit Cards - 43.7k cr, up 22 pc
Commercial Equipment loans - 11.6k cr, up 4 pc
Others - 22.7k cr, up 26 pc
Total - 5.99 lakh cr, up 15 pc

71 pc of the retail book is secured, 29 pc is unsecured

Bank aims to accelerate the secured part of retail lending and calibrate the unsecured part of it - so as to best manage

Bank is maintaining its discipline on deposit rates. They intend to maintain this discipline going forward as well ( provided the mkt players behave responsibly )

In Q2, operating expenses went up by 9 pc. Bank expects this kind of moderate growth in costs to continue going forward as well

Expect the growth rates in home loans to remain moderate as the risk adjusted returns in this segment are on the lower side ( due lower yield on home loans ) - hence is Bank is going slow on them

The bank is not in a position to give a guidance weather the stress in unsecured - retail slippages has peaked or not

Small and Mid corporate book has been growing smartly for the Bank for last 5 yrs. In all likelihood, the same is likely to continue in the future as well. According to the management, MSME should turn out to be the best banking area for the next decade !!!

Bank believes that it can keep growing its loan book at rates 3-4 pc above the systemic credit growth. That should mean a loan growth in the vicinity of 14-16 pc. Q2 is an aberration. They believe that they can achieve these numbers for the full FY

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