Ranvir's Portfolio

[ranvir]

Eveready Industries -

Q2 FY 25 results and concall highlights -

Revenues - 363 vs 365 cr
EBITDA - 48 vs 46 cr, up 5 pc
PAT - 30 vs 25 cr ( due lower interest costs )

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. This will be the first alkaline battery manufacturing unit in the country

Alkaline batteries grew 62 pc in Q2 - a very promising trend

Flashlights de-grew in single digits in Q2 ( vs FY 24 where the de-growth was I double digits ). However the rechargeable flash lights continue to grow

Lighting business continues to witness price erosion despite descent volume growth

H1 is always stronger for the company vs H2 and that trend is likely to continue in this FY as well. However, company does expect a much better H2 vs last FY

Company had embarked on a revamp of ’ route to market’ exercise 5-6 Qtrs ago ( basically a full revamp of their distribution model ). The same has now been completed. They believe, it ll start to show good results wef Q3

Company believes they r under invested in the lighting business and have a lot of ground to cover wrt expanding distribution, marketing and advertisement efforts etc

Segment wise revenues, EBITDA margins for H1 -

Batteries - 456 cr, EBITDA margins @ 17.5 pc
Flashlights - 108 cr, EBITDA margins @ 11.5 pc
Lighting - 166 cr, EBITDA margins @ 2.5 pc

Alkaline Batteries form only 10 pc of battery mkt in India. However, global avg is aprox 40 pc for the Alkaline batteries. One great advantage that the company has is that their Zn-Carbon batteries are available in aprox 50 lakh outlets vs Duracell’s alkaline batteries which are only available in aprox 5 lakh outlets. So, as the per capita income increases, company can quickly catch up vs the mkt leader in the Alkaline segment purely on the back of far stronger distribution reach

Mkt size of Carbon-Zinc batteries is 300 cr batteries @ Rs 10 each - amounting to Rs 3000 cr. For alkaline batteries, the size would be around 30 cr batteries @ Rs 20 each ( Rs 15 for value alkaline batteries and Rs 50 for premium alkaline batteries ) - amounting to Rs 600 cr ( aprox )

Currently, Carbon-Zinc battery mkt is largely stable. The Alkaline battery mkt is growing rapidly @ 20 pc CAGR

Top 3 players in the Carbon - Zinc mkt are - Eveready, Nippo and Panasonic with Eveready @ 56 pc mkt share

In the Alkaline battery segment, Duracel is the mkt leader with 85 pc mkt share. Eveready is a distant no 2 with 10 pc mkt share

Company’s flashlights business is roughly split 50:50 between rechargeable and non-rechargeable flashlights

Company expects their alkaline battery plant to be operational by Q4 FY 26

Once the company’s alkaline battery plant comes up, they will also be open to do contract manufacturing for other players

Rs 400 cr business / yr is the scale that the company aspires to achieve in their lighting business ( in the short term ). Beyond this number, the profitability should start to see a meaningful improvement

Disc: I keep trading in/out of this stock, not SEBI registered, not a buy/sell recommendation, I’m biased

[ranvir]

Emami Ltd -

Q2 FY 25 results and concall highlights -

Revenues - 891 cr, up 3 pc
Gross Margins @ 70.7 vs 70.1 pc
EBITDA - 250 cr, up 7 pc ( margins @ 28.1 vs 27.0 pc )
PAT - 213 cr, up 19 pc

Company acquired an additional stake of 48 pc in the ‘Man Company’ to hike it from 50 to 98 pc

Organised channels like Modern trade, E-Comm, Institutional and Quick commerce sales now account for 27 pc of company’s sales ( vs 25 pc in H1 LY )

Have re-launched Kesh King and Fair & Handsome in Q3 - should refresh the brands and boost sales

Domestic sales grew 3 pc (led by 1.5 pc volume growth)
Intl sales grew by 6 pc (ex-Bangladesh, grew by 12 pc)

Brand wise performance -

Cooling oils - Navratna + Dermi Cool grew by 10 pc
Zandu Healthcare range grew by 11 pc
Boroplus range grew by 2 pc
Pain Management range grew by 5 pc
Male grooming (HE + Fair & Handsome brand of products) de-grew by 13 pc
Kesh King range de-grew by 9 pc
7 in 1 Oils de-grew by 3 pc

Kesh King and Male grooming brands ( HE + Fair & Handsome ) have been struggling for growth for quite some time now. Company has engaged BCG ( in Aug ) to revive these brands.BCG will also be working on the Boroplus brand. Expect some benefits to start flowing through wef FY 26

Company is spending disproportionately behind Kesh King Oil and shampoo as they believe this brand can have a great future

Loading of channels for winter months will happen only in Q3

Company strongly believes - as the rural markets bounce back, Emami shall be the biggest beneficiary as they have invested a lot in the rural channels

If the Winters are strong, Boroplus brand should end up doing well ( specially now with so many brand extensions of Boroplus being available in the mkt ). 75 pc of Boroplus sales come from the Anti-Septic cream and the rest come from - body lotion + soap + face wash + talcum powder. 5 yrs back, 90 pc of sales used to come from the anti-septic cream

The ‘Man Company’ is undergoing ownership transition. Should get over by Nov. Expect growth here to pick up wef Q4

Pain management did see some pickup in Oct. Should see handsome numbers in Q3 wrt Pain Management sales

Hair fall category ( company has its brand - Kesh King in this space ) is facing a lot of competition from new start-ups like Traya etc

The Man Company is currently doing sales of 180 cr/yr. Company expects to take it to > 350 cr in next 3-4 yrs. Most of the sales for The Man Company come from E-Comm. Will be launching it in other channels as well

Tax rates for full FY should remain in the 9-10 pc band

Emami Ltd also holds 26 pc stake in Axiom Ayurveda ( maker of AloFrut branded fruit juices )

Disc : hold a small tracking position, will add only if key brands turn around, biased, not a buy/sell recommendation, not SEBI registered

[ranvir]

Cholamandalam Investment and Finance company

Q2 FY 25 results and concall highlights -

Q2 Disbursements @ 24.3k cr, up 13 pc YoY
Loan book @ 1.64 lk cr, up 33 pc YoY
NII - 3055 vs 2205 cr, up 39 pc
PAT - 963 vs 762 cr, up 26 pc
NIMs @ 7.5 vs 7.4 pc
Expense ratio @ 3.0 vs 3.0 pc
Losses and Provisions @ 1.4 vs 1.3 pc
RoA @ 2.2 vs 2.4 pc
**Gross NPAs @ 3.78 vs 4.07 pc **
**Net NPAs @ 2.48 vs 2.59 pc **
RoE @ 18.24 pc ( healthy levels )

Segmental performance -

Vehicle Finance -

Company has a well diversified VF portfolio financing CVs, 2Ws, PVs, Tractors and Construction equipment from their wide network of 1461 branches

Disbursements @ 12.3k cr, up 5 pc YoY ( account for almost 50 pc of company’s disbursements )

PBT @ 631 cr, up 26 pc

LAP -

Lending to SME customers against the security of their immovable properties from 779 branches. 78 pc of the lending book in this segment is against self occupied residential properties

Disbursements @ 4.3k cr, up 35 pc YoY

PBT @ 295 cr, up 26 pc

Home Loans -

Providing Home Loans in the affordable segments from 697 branches

Disbursements @ 1.8k cr, up 16 pc

PBT @ 171, up 79 pc

SME Loans -

Providing SME loans for financing of Supply chain materials, term loans for Capex, LAS, funding against equipment and machinery from 88 branches

Disbursements @ 1.9k cr, up 1 pc
PBT - 27 cr, up 30 pc

CSEL ( consumer and small enterprises loans ) -

Providing personal loans, professional loans, business loans to salaried, self employed and small businesses through 482 branches. In this segment, company does tie up with fintech’s, partners like Samsung Finance ( for Samsung products ) etc

Disbursements @ 3.6k cr
PBT - 100 cr, up 118 pc

SBPL ( secured business and personal loans ) -

Provide Secure business and personal loans against self occupied residential properties through 414 branches

Disbursements @ 312 cr, up 27 pc
PBT - 35 vs 2 cr

Company is currently serving aprox 43 lakh customers from a total of 1508 branches ( most business segments mentioned above operate from same branches except for a few )

Branch Network -

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

Cost of funds in Q2 was @ 7.1 pc

Collection efficiency in Q2 was hit by prolonged monsoons which led to a delay in harvests which eventually reduces the money in the hands of the consumers. This should reverse in Q3

Slippages for Q2 @ 930 cr ( that’s an annualised slippage ratio of aprox 2.3 pc )

Second half is always better vs H1 on collections and recoveries because of the harvest of Kharif crops and release of a lot of payments from GoI

Company has added aprox 7k new employees in Q2. Employees have been added across all segments and the company believes they have a good opportunity to ramp up all their business verticals ( almost half of these employees have been added on the collections side of the business )

CV business should pick up as the Govt capex picks up. Seeing descent demand revival in PVs an 2Ws in Oct. Overall, disbursements in Q3 are always much better than Q2. Same trend is expected to continue for this FY as well

Aprox 25-30 pc of company’s work force is employed in the collections division

Company aims to grow the CSEL business but still keep it below 10 pc of overall business as its the only unsecured business that they are operating

Asset quality trends for the company in used vs new CVs are very similar

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

[ranvir]

Jash Engineering -

Q2 FY 25 concall and results highlights -

Revenues - 140 vs 95 cr, up 46 pc
EBITDA - 25 vs 14 cr, up 78 pc ( margins @ 18 vs 15 pc )
PAT - 16 vs 9 cr up 78 pc

Company profile -

An engineering company making critical products for Fresh water and Sea water intake systems, fresh water and waste water pumping stations, de-salination plants, storm water pumping stations, hydro-power generation and also for manufacturing industries like - Steel, cement, Paper & Pulp, Petrochemicals, Fertilizers and other process plants

Product Portfolio includes -

Water Intake systems - Like - Penstock gates, Open channel gates, Downward opening Weir gates, Flap gates, Stop Logs

Heavy fabricated gates - Bulkhead slide gates, Roller gates, butterfly gates, Crest gates, Radial / Tainter gates, Bonneted gates

Coarse screening equipment - Trash rack, MMR screen, MultiRake screen, suspended trash racks

Fine Screening equipment - Screenmat step screen, Rotoclean rotary drum screen, Rotobrush Rotary screen, Mahr Perscalator screen, Travelling band screen

Gate Valves
Solid Bulk handling Valves
Special purpose Valves

Process equipments like -

Water clarifiers
Detritors
Slow speed floating aerators
Slow speed fixed aerators

Hydropower Screw generator
Screw Pumps
Filtering equipment

Secondary treatment Equipment like -

Diffuser aeration
Mixing and Aeration equipment
Decanting equipment
Turbo Blower

Segment wise revenue contribution for H1 FY 25 -

Water Control Gates - 59 pc
Screening equipment - 22 pc
Valves - 10 pc
Hydropower & Pumping, Process Eqpt and Others - 9 pc

Geography wise revenues in H1 -

US - 87 cr
EU + Africa - 23 cr
ME - 1 cr
SE Asia - 46 cr
India - 97 cr

Order Book of company and its subsidiaries -

Jash Engineering + Shivpad Engineering - 460 cr
Rodney Hunt ( Jash USA ) - 280 cr
Waterfront Fluid Controls ( Jash UK ) - 40 cr

Guidance for FY 25 -

Revenues - 675 cr vs 516 cr LY
EBITDA margins in 21-23 pc band vs 19 pc LY
PAT margins in 12 - 14 pc band vs 13 pc LY

Rodney Hunt ( Jash USA ) has done H1 revenues of 89 cr and has reported a net loss of 9 cr for H1. Company expects Rodney Hunt to report a revenue of 275 cr for full FY 25 with significantly positive PAT

Capex - currently working on a new manufacturing plant @ Shivpad ( Chennai ) and brownfield expansion @ SEZ Unit 4 in Pithampur. Both these plants should get commissioned in FY 26. These plants should help them achieve their revenue tgt of Rs 1000 cr by FY 28 ( a conservative tgt - company’s admission )

Company - at present operates via its 6 manufacturing locations - 04 in India, 01 each in UK and US. Current employee strength @ slightly above 1000. Company is approved by most municipal authorities in India and Abroad. These approvals are extremely critical in the company’s line of business

Overtime - company has made 04 major acquisitions - Rodney Hunt ( US ) , Waterfront ( UK ), Shivpad ( India ) and Mahr Maschinenbau ( in Europe )

Shivpad was acquired to help in treatment process equipment

Mahr Meashinenbeu was acquired to get bet screens technology in the world

Rodney Hunt was acquired for their brand value in US

Waterfront was acquired for their penetration in the UK mkts

Company has a technical collaboration with Invent ( Germany ) to make Disc Filters and have already started manufacturing the same

Equipment like - diffusers, Mixing and Aeration equipment, Decanting equipment, Turbo Blowers are recent additions to company’s products portfolio

Company executed some legacy orders from its Rodney Hunt subsidiary in Q1. These had thin margins. Future pipeline of Rodney Hunt has much better profitability

As the company’s turnover keeps rising, even Q1,Q2 will start to report descent profits from FY 26 onwards

Most of the manufacturing is done by the company - in-house, as the products made by them are custom made on order to suit the customer requirements. This also increases the number of SKUs and is a natural entry barrier

Expect Q3 to be the turn-around qtr for Rodney Hunt ( their US subsidiary )

Order book as on 01 Nov has risen to 873 cr. In Oct alone, have generated revenues of 75 cr alone from US

Re-focussing on ME markets - to accelerate business growth in that area

At present, 231 employees hold ESOPs in the company

Company has a JV with Invent ( Germany ) to make and sell diffusers, blowers and Decanters. However, the products made by Invent are on the costlier side ( but have the best quality ). The total mkt in India for these products is currently @ 300-400 cr

Expect to get orders worth aprox 450 cr in next 4 months Ie Dec, Jan, Feb, Mar

Company commands a mkt share of aprox 65 pc in India in Water control gates business. Total mkt size in India is about 250 cr

In US, the size of mkt in water gates segment is about 1700 cr. In UK + Canada + ME + SE Asia - the combined mkt size should be around 700 cr

As per BABA act in US ( Build in America, Build for America ), 65 of products being sold in US have to be built in US and by 2029 this must go upto 95 pc. This Act only applies to projects being funded by US govt. Since company have their manufacturing facilities in US ( via Rodney Hunt ), they should be benefitted. Plus they intend to put up another facility in US in FY 27

Rodney Hunt had to execute some legacy orders which are low margin in nature. Only 50 cr worth of these low margin orders are pending out of an order book of > 300 cr in US

Rodney Hunt did revenues of aprox 220 cr in FY 24. Should do revenues of aprox 275 cr in FY 25 - naturally, the EBITDA margins should get a boost as most fixed costs remain constant

Most of company’s clients are EPC players - hydro power projects, waste water treatment, implementing flood prevention projects, sea water ingress management kind of spaces

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

[ranvir]

Elin Electronics

Q2 FY 25 results and concall highlights -

Q2 financial outcomes -

Revenues - 305 vs 273 cr, up 11 pc
EBITDA - 11.3 vs 9.9 cr, up 14 pc ( margins @ 3.7 vs 3.6 pc )
PAT - 4.8 vs 3.9 cr, up 22 pc

H1 financial outcomes -

Revenues - 598 vs 527 cr, up 13 pc
EBITDA - 24.6 vs 19.6 cr, up 25 pc ( margins @ 4.1 vs 3.7 cr )
PAT - 10.7 vs 7.7 cr, up 28 pc

Cash on books @ 98 cr

H1 breakdown of segment wise revenues -

Fans, Lighting, Switches - 156 vs 162 cr ( lighting @ 129 vs 139 cr, Switches @ 4.7 vs 6 cr, Fans @ 17 vs 16 cr )
Small appliances - 146 vs 121 cr ( Kitchen + Personal care )
Motors - 139 vs 109 cr
Other EMS - 25 vs 18 cr
Precision components - 126 vs 113 cr
Medical cartridges - 4 vs 1.5 cr

Lighting business continues to be under pressure because of price erosions. As of Apr 24, company is now out of exclusivity with Signify India ( selling PHILIPS brand ) for a basket of products. The balance products are also expected to come out of exclusivity in next few Qtrs. Company has initiated talks with potential new customers for these products in order to support their volume growth

Personal care small appliances grew by 45 pc ( led by hair dryers + trimmers ), Kitchen and home care small appliances grew by 8 pc. However, the capacity utilisations continue to remain muted in the Kitchen appliance categories

Motors that company sells find applications in Chimneys, Mixer grinders, Hand blenders

Capex undertaken in H1 @ 19 cr - Land and building @ 10 cr, Plant and Machinery @ 4 cr, Tools, Dyes, Moulds @ 3 cr, Rest - 2 cr

New product launches lined up in FY 25 - Electric Kettles, OTG. Launches scheduled in FY 26 - Chimneys

Company is slated to add one of the top 5 Fan’s player in India to their customer list for their TPW fans ( wef Dec 24 ). Volumes for ceiling fans should also start to improve wef Q3

Once the lighting segment turns around, it can propel company’s growth in revenues and EBITDA margins to a more respectable territory ( same is the case with companies like - CG Consumer, Surya Roshni, IKIO lighting etc - just an obervation )

Most of company’s product categories are operating at sub-optimal capacity utilisation levels of around 55-60 pc on a single shift basis except for the lighting division which is operating @ around 75 pc utilisation levels

Full yr revenue guidance @ 1165 to 1200 cr with margins continuing to remain under pressure

Company is now in touch with 4-5 new customers for their lighting products, at various stages of negotiation. Company expects to add at least 2 more customers by Jan 25

If the RM prices remain stable, company aims to clock 5 pc kind of EBITDA margins for full FY. Volatite RM prices may cause margins to be under pressure like in Q2

Capex lined up for H2 @ 15-20 cr

Company expects pricing pressures in the lighting to continue for another 1-2 Qtrs. Margins are better in designer + outdoor lighting - that’s where company is focussing to protect its margins

Company has a good demand outlook on AC motors ( launched LY by the company ). Likely to add 2-3 more customers for the same

Expect OTGs and Kettles to reach 50 cr / yr kind of business in FY 27. Trimmers and OFR heaters should do 50 cr / yr kind of business wef FY 26
Chimneys should do 50 cr / yr from the date of launch

For next FY, company expects to do sales of 1350 cr. They firmly believe that they should be able to achieve this tgt

Disc: hold a small tracking position, will add only when margins / topline buoyancy improves, not a buy/sell recommendation, not SEBI registered

[ranvir]

Rainbow Children’s Hospital

Q2 FY 25 results and concall highlights -

Company’s portfolio of hospitals -

Hyderabad - 8 hospitals, 1 clinic
Bengaluru - 4 hospitals, 1 clinic
Chennai - 3 hospitals
Vijaywada - 1 hospital, 1 clinic
Vishakhapatnam - 1 hospital, 1 clinic
Delhi - 2 hospitals

Total - 19 Hospitals, 4 clinics

Doctors team @ 835 full time doctors
Bed Capacity @ 1935 beds

Q2 financial outcomes -

Revenues - 415 vs 332 cr, up 25 pc
EBIDTA - 147 vs 117 cr, up 25 pc ( margins stable @ 35.2 pc )
PAT - 79 vs 63 cr, up 25 pc

Mature Hospitals ( > 5 yrs of operations ) -

No of beds @ 1237 beds, up 4 pc YoY
Occupancy @ 68.6 vs 57.9 pc, up 18 pc YoY ( a massive jump )
ARPOB @ 51.4k vs 55.2 k, down 7 pc YoY

Newer Hospitals ( < 5 yrs of operations ) -

No of Beds @ 698 vs 468 beds , up 49 pc YoY
Occupancy @ 43.2 vs 32.9 pc, up 31 pc ( a massive jump )
ARPOB @ 44.7 vs 50.9 k, down 12 pc

Payor Mix - Cash : Insurance @ 47:53

New capacity addition pipeline -

Rajahmundry ( AP ) - 100 beds - current FY
Bengaluru ( 2 locations ) - 60 +90 beds - next FY
Coimbatore - 130 beds - next FY
Gurugram - 100 beds - FY 27
Gurugram - 300 beds - FY 28

Company’s IVF segment has attained significant growth momentum. Company expects the same to continue going forward

Company launched ‘Butterfly Essentials’ brand of products for Mothers and New Borns early in CY 24. Products like - Wet Wipes, Soft toys, Body oils, Lotions, Aloe Vera gels etc. Initially, company shall only sell these products via stores inside their existing hospitals

Company’s Rajahmundry hospital is slated to open in Mar 25

The two new hospitals in Bengaluru should go live in Q2 and Q3 FY 26

International patients currently constitute 2 pc of company’s total business

Company’s financial position remains strong with cash on books @ 580 cr as on 30 Sep. Should be able to complete all the above mentioned capex from the cash in hand and internal accruals

Company is coming up with a new Child development center at Hyderabad, spread across 8k Sq Ft. Should go live in Nov 24. Will be addressing issues like ADHD, Autism Spectrum disorders and other early childhood psychological issues. These issues have become quite common these days, hence the need of specialised care

Q1 is generally their weakest Qtr and Q2 is generally their strongest Qtr of the year. Avg EBITDA margin for H1 was 31 pc. Company believes, the can sustain such margins for the foreseeable future ( within +/- 1 pc band )

In paediatric field, customers are generally more loyal to the Hospital brand and eco-system vs in other specialities where star doctors generally call the shots. This is an inherent advantage with the company

For their new hospital to break even ( in paediatrics space ), it takes about 30-35 pc occupancy

Company’s broad business split between Gynae + Obstetrics : Paediatrics stands @ 30 : 70

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

[ranvir]

Lumax Auto Technologies -

Q2 FY 25 results and concall highlights -

Q2 results -

Revenues - 842 vs 700 cr, up 20 pc
EBITDA - 118 vs 99 cr, up 18 pc ( margins @ 14 vs 14.2 )
PAT - 43 vs 28 cr, up 56 pc

H1 results -

Revenues - 1598 vs 1332 cr, up 20 pc
EBITDA - 223 vs 187 cr, up 19 pc ( margins @ 14 vs 14.1 pc )
PAT - 74 vs 50 cr, up 51 pc

Product wise revenue breakdown for H1 -

Advanced Plastics - 907 vs 775 cr, up 17 pc
Mechatronics - 46 vs 26 cr, up 76 pc
Structures and Systems - 338 vs 306 cr, 11 pc
Aftermarket - 187 vs 183 cr, up 2 pc
Others - 119 vs 41 cr, up 191 pc
Total - 1598 vs 1332 cr, up 20 pc

Segmental revenue breakdown for H1 -

2+3 Wheelers - 25 pc
PVs - 50 pc
After Mkt - 12 pc
CVs - 9 pc
Others - 4 pc

Customer Wise breakdown of revenues for H1 -

Mahindra & Mahindra - 26 pc
Bajaj Auto - 15 pc
After Mkt - 12 pc
Maruti Suzuki - 8 pc
Honda 2Ws - 5 pc
LIL - 8 pc
Tata Motors - 4 pc
Others - 22 pc ( Daimler, Toyota, VW, Fiat, MG )

Q2 demand was subdued due lower govt spending, prolonged monsoons, entire ‘shradh’ period falling in Q2. Oct onwards, the auto Industry is witnessing better demand trends and lowering of dealer level inventory levels

2Ws continue to do better. Expecting a recovery in CV cycle led by increased Govt Capex in H2

Company is focusing on areas like ADAS, Electronics Integration, Software Integration and HMIs as future growth areas

Increasing premiumisation in the 4W industry augurs well for the company’s advanced plastics division ( their biggest division ). This division draws 70 pc of its sales form 4Ws

Mechatronics division saw huge growth acceleration in revenues which grew by 76 pc in H1 ( @ 46 vs 26 cr ). Order book for this division stands @ 175 cr

Aftermkt sales are showing signs of sales pick up wef H2

Company’s total overbook ( across all divisions ) stands @ 1050 cr ( across all divisions ) with EVs contributing 40 pc to the order book

H2 prospects look bright with several new model launches that are lined up by OEMs

Capex lined planned for FY 25 stands @ 130-140 cr out of which 30 odd cr have been spent in H1

Company had acquired IAC India’s Operations from their parent in Feb 23. IAC is a tier -1 supplier of Interior and Exterior systems for companies like - Maruti Suzuki, VW, M&M etc. IAC’s facilities current capacity utilisation stands @ 85 pc or so and are doing 17 pc kind of EBITDA margins

Lumax Auto acquired 60 pc stake in Greenfuel Energy systems in Nov 24. Greenfuel specializes in high-pressure CNG and hydrogen systems as well as fire and smoke detection systems for the automotive industry. The company’s strong relationships with OEMs and established technology partnerships have made it a trusted name in the industry

Greenfuel is expected to clock 300-350 cr of topline for full FY 26. Greenfuel’s results will start to get reflected in Lumax’s books wef Q3

Expect to double the revenues of Mechatronis division this year and expecting another doubling in FY 26

Company has some exiting product launches lined up for H2 in the aftermarket space. This should help propel this Segment’s sales

Good growth shown by Honda 2Ws is helping the company. Their Honda 2W business grew by 21 pc in H1

Company has won full service supplier award for some of Tata models wef next FY ( via IAC India ) for plastic interior products and interior lighting. They are also in continuous dialogue with Maruti Suzuki, Honda 4Ws, VW, Skoda for increasing their wallet share per car + winning new business for new cars

Looking to do 50 cr kind of revenues from the window switches, window raising sensors, throttle position sensors and in vehicle infotainment systems ( for 2Ws ) for FY 25 ( which is 50 pc higher than LY ). In FY 26, looking to cross 100 cr revenues from these segments

Mechatronics is another area where company expects rapid growth, albeit on a lower base ( expect to grow 70-80 pc in current FY in this segment ). Next yr again, they expect to double revenues in this segment to 200 cr

Greenfuel Energy should help the company win substantial business with Maruti Suzuki for their CNG models

Company’s JV ( Lumax JOPP ) has won substantial per whiter towers business with Maruti Suzuki. Revenues should start to flow in FY 26. The JV is also pursuing to make the electronic shifters to become a supplier to VW and JLR. This JV should have strong business potential over next 3-5 yrs. Management will give more clarity about its future roadmap in Q3 ending concall

Company expects EBITDA margins to improve in H2 vs H1. They expect EBITDA margins to be closer to 15 pc in H2

Disc: holding, inclined to add more, not SEBI registered, biased, not a buy/sell recommendation

[ranvir]

SG Mart -

Q2 FY 25 results and concall highlights -

Q2 financial outcomes -

Revenues - 1820 vs 506 cr, up 259 pc
EBITDA - 15 vs 11 cr, up 33 pc ( margins @ 0.8 vs 2.3 pc YoY, due steep correction in steel prices in Q2 which led to inventory loses to the tune of 17-18 cr )
PAT - 16 vs 9 cr

H1 financial outcomes -

Revenues - 2960 cr, up 350 pc
EBITDA - 40 cr ( margins @ 1.3 vs 2.3 pc )
PAT - 42 vs 10 cr

Cash on books @ 1080 cr

Total active customers at the end of H2 @ 535 vs 315 at the end of Q2 LY

No of active suppliers @ 75 vs 21 YoY

SG Mart offers a wide range of products, now encompassing more than 27 product categories, and more than 2,500 SKUs. These categories include construction steel products like TMT Rebars, HR Sheet, Welding rod, Binding wire, mesh net, tapping screw and barbed wire, among others. Additionally, in response to the increasing demand, the Company has introduced tiles, cement, bath fittings, laminates and paints

Company did volumes of 3.5 lakh tons in Q2. For current FY, company aims to maintain an avg of 1.2 lakh tons / month. Next yr, they aim to take it to 1.6 lakh tons / month followed by 2.5 lakh tons / month for FY 27

Steel price volatility + Weak construction activity in Q2 did hurt company’s business in Q2

Company indulged in steel trading while procuring steel not only from local manufacturers but also the imported steel

Currently, company is operating 3 steel processing service centers @ Ghaziabad, Pune and Raipur. By Q3 ending, 2 more service centers should be live @ Pune and Dubai. These r relatively higher margin businesses

Aim to start making Solar panel frames at their service centers wef Q4. This is an area with strong tailwinds, huge demand and no presence of any organised players

One more service they intend to add at their service center is to start making Purlins ( steel structures used to add strength to roof structures )

Company has identified more places where they will open their service centers over next 1 yr. These are - Chennai, Jaipur, Indore, Siliguri, Hyderabad and Ahemdabad. Similarly for FY 27, they ll identify places and operationalise more service centers across India

Capex lined up in current FY to open new service centers @ 100 cr. Have earmarked 300-400 cr for next FY to open even more number of service centers.

Avg inventory days for Q2 were 8 days. As the service center business ramps up in 1-2 yrs, this is slated to increase

Company maintains its guidance of 17000 - 18000 cr of topline by FY 27 with EBITDA margins of 2.5 pc. Also expect margins to recover to > 2 pc in Q3, Q4 FY 25

A 15 pc crash in steel prices is once in a decade kind of event and still the company could come out with 1 pc kind of margins. This should give some confidence to investors in their guidance of 2.5 pc for the long term

Sticking to their full yr guidance of Rs 6500 cr in revenues

Company does maintain a strong quality control team as company procures from different sources and labelling a lot of products under their own brand name

Company has also started testing waters with Zinc procurement and distribution. Company is going very slow in this segment. They will only scale up once they have sufficient experience and confidence in this relatively new area of operation

By FY 27, company expects 40- 50 pc of their revenues to come from service center businesses. Currently their contribution is around 20 pc

The cash that the company is sitting on ( aprox 1050 cr ) will all be used to finance the Capex ie - Opening new service centers + to service the company’s inventory requirements

Disc: holding, biased, not SEBI registered, not a buy / sell recommendation, looking out for EBITDA margins recovery before adding more

[ashish_agnihotri]

Thanks for summarising the concall succinctly.

Only thing is Pune is appearing in both existing and proposed for Q3 service centre. I think Pune was existing and planned for q3 was Bangalore or chennai and dubai

[ranvir]

Dabur India -

Q2 FY 25 results and concall highlights -

Sales - 3029 vs 3204 cr, down 5 pc
EBITDA - 553 vs 661 cr, down 16 pc ( margins @ 18 vs 21 pc )
PAT - 418 vs 507 cr, down 17 pc

Company took up a one time exercise to rationalise General Trade’s inventory to improve the channel’s RoI. Domestic business’s primary sales declined 7.6 pc vs a 2 pc growth in secondary sales. International business reported a 13 pc constant currency sales

Segment wise sales distribution in domestic mkt -

Home and personal care - 1035 cr, down 8 pc ( secondary sales were up 6 pc )

Healthcare - 598 cr, down 10 pc ( secondary sales were up 4 pc )

Foods and Beverages - 317 cr, down 20 pc ( secondary sales were down 11 pc )

International business - 847 cr, 13 pc constant currency sales growth { Intl sales contribute 28 pc to overall sales pie - led by Egypt ( 73 pc of Intl sales ) and Sub Saharan Africa ( 26 pc of intl sales ) }

Home and personal care - Sub Segmental value growth ( secondary ) -

Oral Care - 5 pc
Hair Oils - 4 pc
Shampoos - 3 pc
Home Care - 9 pc
Skin Care - flat

Healthcare - Sub Segmental value growth ( secondary ) -

Health supplements - 3 pc
Digestives - 6 pc
OTC and Ethicals - flat

Hajmola’s Jeera drink showed good traction
Health Juices + Shilajit and Baby care range grew in strong double digits ( @ 20 and 30 pc respectively )
Honitus grew strongly and gained Mkt share

Foods and Beverages - Sub Segmental value growth ( secondary ) -

Foods - 20 pc
Beverages - (-) 11 pc

Heavy and prolonged monsoons adversely impacted the Beverage sales

Foods business grew strongly with Edible Oils and Ghee growing by 70 pc

Dabur Homemade portfolio and Badshah masalas also grew strongly ( @ 15 pc YoY )

Future Growth levers -

Ramping up growth in Oralcare Gels, Meswak and Clove portfolios

Expanding distribution into Morocco, Algeria, Eastern Europe, CIS countries

Ramping up Odomos liquid vaporisers, Expanding the Odonil portfolio

Scale up of premium range of Ghee and Cold pressed oils

Launch of premium Condiments and Ayurvedic hair oils

Company entered premium Hair oils category in Q3 by acquiring 51 pc stake Sesa Care Pvt ltd in Oct 24. Sesa has a consolidated turnover of 133 cr and gives Dabur an entry into the 1400 cr premium ayurvedic hair oils category

Company is witnessing tailwinds in their oral care portfolio towards Ayurvedic categories. Even in the International mkts like Egypt and Sub Sharan Africa, company has almost run out of capacities for Oral care and Hair care products

With the price war in Colas category ( due launch of Campa Cola ), the Juices are now priced at a 2.7X premium to Colas which earlier used to be 2.1X. Hence the company is slated to introduce lower price packs to counter this. Company did feel some consumer preferences shift away from juices towards fizzy / cola drinks because of this

Company believes, they can have lower priced packs and still maintain their margins as they r also launching a lot of premium priced drinks to offset the margins impact

Company is seeing good rural demand and gave out commentary that they expect the urban slowdown to have bottomed out in Q2

The inventory correction that the company undertook in Q2 is completely over and will have no impact on Q3

Company launched their cooling oil brand - Cool King LY. Already doing yearly business of around 25 cr which is encouraging

Company’s hair oils business makes 44 pc gross margins vs 57 pc gross margins for the acquired portfolio of Sesa hair oils

Company expects to clock mid to high single digit growth for H2

Quick commerce is having a meaningful impact on both GT and Modern trade channels. Its evident from the pressures being felt by the likes of DMart, Reliance Retail etc

Company intends to expand its product wise distribution in the GT in rural India. At the same time, they intend to consolidate their distributors in Urban areas because of competition from new age channels

The bulk of pressure on the beverages portfolio for the company came from Eastern India which saw a lot of flooding and the wettest monsoon in recent history. Except for Eastern India, company’s beverages portfolio comprising of Coconut Water, Real juices, Real Active juices and the fizzy / carbonated drinks did reasonably well. Real Active is the premium part of the portfolio and has the highest margins. All components of company’s beverages business ( like Real Active, Fizzy drinks, Coconut water ) did extremely well except the Real Juices which declined by 12 pc led by the lower off takes in Eastern India

Company used to supply to quick commerce players via their GT stockists. But now, they supply directly to the quick commerce players - directly to their dark stores

Company’s margins are about 1 -2 pc higher in Quick Commerce vs E-Comm / Modern Trade / GT

Now even Tatas, Flipkart, Amazon are entering the quick commerce space. This augurs well for the company as with so many players, the shift in bargaining power from FMCG companies to platforms is unlikely to happen

Disc: initiated a contrarian trading position, expecting / hoping for a demand recovery in H2, not a buy/sell recommendation, biased, not SEBI registered

[ranvir]

Dr Lal Pathlabs -

Q2 FY 25 results and concall highlights -

Revenues - 660 vs 601 cr, up 10 pc
EBITDA - 202 vs 178 cr, up 14 pc ( margins @ 30.7 vs 29.6 pc )
PAT - 131 vs 111 cr, up 18 pc

No of samples tested @ 2.3 vs 2.1 cr
No of patients tested @ 78 vs 75 lakh

Revenue per patient stood @ 844, up 6 pc YoY

Company’s subsidiary - Suburban Diagnostics ( acquired in FY 22 ) - saw its revenue grow by 11.5 pc while clocking an EBITDA margin of 20 pc ( a big improvement as their margins in Q1 were @ 14 pc )

On track to open another 10-15 labs, 800 collection centers in current FY. No of Labs as on 31 Mar stood @ 280, No of collection centers stood @ 11,600

Company’s portfolio of SwasthFit ( preventive check ups ) now contributes to 24 pc of company’s revenues

Major thrust area for company’s organic expansion continues to be Tier - 3 and beyond towns. Plus they are evaluating ways ( including inorganic ) to improve their presence in South India

Company is strong in North and East India. Is growing rapidly ( ie @ > company growth rates ) in West. Western India now contributes 15 pc of company’s revenues. This is a result of both - organic efforts + the growth in SubUrban brand ( acquired a few years ago )

Realization @ Rs 844 / patient doesn’t have any element of price hikes. Its happened because of better product mix

Cash on books @ 1095 cr

Company is enjoying negative working capital cycle. The board has declared an interim Dividend of Rs 6 / share

Factors leading to better margins @ Suburban include - use of technology, back end efficiencies, productivity enhancements, better operating leverage

Company’s thrust into Tier-3 and beyond geographies is currently restricted to their core geographies of North and East. Margins in these geographies are not dilutive vs the overall business margins

A lot of new age startups in the Diagnostics space have stopped deep discounting in the market. Hence there is reasonable pricing discipline in the market

Capex for full FY 25 should be in the range of 50-60 cr ( this should suffice for the targeted opening of 15-20 new labs )

Company is always on the lookout for organic expansions. Because that’s the only way they can use the cash on books to trigger future growth. Their organic growth requirements continue to remain modest - that’s the nature of their business, its capital light

Continue to maintain a revenue growth guidance of 10-11 pc for full FY 25. In H1, they have achieved a revenue growth of 10.5 pc. The company doesn’t want to take a price hike to drive revenue growth. They want to do more and more business in tier 3 and beyond cities which are a little more price sensitive. Expanding business should take care of both revenues and margins

At present, company has aprox 29-30 collection centers per lab. They ll aim to maintain it that way

Aim to clock slightly better margins than FY 24 for full FY 25

Q2 is always their best Qtr. Same is true for their subsidiary - SubUrban. For full FY 25, they intend to do a margins of around 17-18 pc for SubUrban

Over and above opening of new labs, other operating expenses that the company needs to continuously ramp up include investments in Technology, IT systems, A&P etc

Delhi NCR continues to contribute to 31 pc of company revenues

Company believes, there is still headroom for SwasthFit revenues to grow as a total percentage of company’s revenues

Disc: initiated a tracking position, stock price looks set for a bounce, biased, not SEBI registered

[ranvir]

Krsnaa Diagnostics -

Q2 FY 25 results and concall highlights -

Q2 outcomes -

Revenues - 186 vs 155 cr, up 20 pc
EBITDA - 51 vs 32 cr, up 58 pc ( margins @ 27 vs 20.5 pc )
PAT - 19.6 vs 10.5 cr, up 87 pc

H1 outcomes -

Revenues - 356 vs 295 cr, up 21 pc
EBITDA - 95 vs 64 cr, up 48 pc ( margins @ 27 vs 22 pc )
PAT - 37.5 vs 25.1 cr, up 50 pc

H1 Revenue and EBITDA breakdown -

Revenues -

Mature Centers - 183 cr
New Centers - 173 cr

EBITDA -

Mature centers - 66 cr
New centers - 29 cr

Krsnaa Diagnostics picked up 24 pc stake in Apulki Healthcare which operates hospitals ( Cardiac and Cancer care ) under PPP model. Due to this deal, Krsnaa will get to provide diagnostics services to Apulki Healthcare facilities for next 30 yrs. Currently, Apulki is in process of setting up 2 cancer and cardiac care hospitals in Pune + Mumbai. They eventually aim to set up 10 hospitals

Company’s current facilities -

178 - Radiology centers offering MRI + CT scans + X Ray tests ( doing aprox 1.5 lakh CT+ MRI scans / month + 6 lakh X Rays / month )

121 - Pathology processing labs with 3139 collection centers

These facilities are spread across 150 districts in India across 18 states and UTs

Company has recently won major contracts in Jharkhand, Assam, Maharashtra, MP and Odhisa. With these wins, company shall operationalise an additional 45 radiological centers, 01 Pathlab and 731 collection centers to fulfil the demand from these new order wins

Company has entered into a strategic partnership with United Imaging and Medikaa Bazaar. This collaboration represents a 300 + cr investment targeting the establishment of our 30 plus cutting edge imaging and pathology centers across Tier 1, Tier 2 and Tier 3 cities in India. This partnership, one of the largest and the most innovative in the Indian diagnostics space brings together the best of technology and health care expertise, significantly enhancing patient care and accessibility

United Imaging, known for its state-of-the-art MRI-CT, PET-CT and other advanced imaging solutions, along with Medikabazaar, extensive distribution capabilities have recognised Krsnaa Diagnostics as a pivotal partner due to our expansive reach and established reputation for delivering high-quality affordable diagnostic services

Company is debt free with cash on books @ 220 cr

Current receivables @ 243 cr. Out of these, 125 cr are due from 02 states and the rest 118 cr are from the rest 16 states. The two states mentioned above have agreed to release their dues ( late payments were primarily due to budgetary constraints ). All the company’s projects are backed by NHM and the company is confident of recovering all its dues

Capex in H1 stood @ 86 cr. Total capex for FY 25 is budgeted @ 170 cr

Company has started test marketing and soft launches of their B2C operations in a few cities. Seeing very encouraging response. Will go in for hard launches in a few cities ( 2-3 cities ) in a few months time ( by Dec 24 )

The award of Rajasthan tender for the company is still subjudice. Despite that, company believes that the growth path shall continue

Company believes it can sustain the strong H1 EBITDA margins in H2 as well

For company, their Radiology margins are higher than their Pathology margins

At the beginning of the year, company had guided for 25 pc kind of EBITDA margins. But now they r likely to sustain H1 type of margins in H2 as well which are around 27 pc. As more centers ramp up, margins tend to inch up due operating leverage

Because of company’s good work in Odisha, the state govt has asked them to set up an additional 600 centers - a clear validation for company ( and its shareholders … hopefully )

Company did a topline growth of 21 pc in H1. However, they are confident of maintaining full year revenue growth guidance of 25 pc !!! ( that simply means that H2 may be exceptionally strong )

Company has never written off any receivables from any state Govt throughout their history. So, the receivables stuck with 2 state Govt ( as history suggests ) should get recovered in not so distant future

The first 2 hospitals of Apulki Healthcare should get operationalised in FY 26 ( early FY 26 )

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

[ranvir]

Tata Consumer Products -

Q2 FY 25 results and concall highlights -

Revenues - 4214 vs 3734 cr, up 13 pc
EBITDA - 629 vs 569 cr, up 11 pc ( margins @ 14.9 vs 15.3 pc YoY )
PAT - 367 vs 364 cr ( due steep jump in amortisation costs, lesser interest income - due acquisition of Capital Foods and Organic India in Jan 24 )

Cash on books @ 332 cr

Company had acquired capital foods ( having brands like - Ching’s Secrets and Smith and Jones ) for 5100 cr + Organic India for 1900 cr respectively in Jan 24

Have launched new products in the recent past like - Soulful branded - Rusks, Muesli, Corn Flakes, Premium + Healthy biscuits, Tetley branded - Kombucha, Tata Grand branded - cold coffee ( ready to drink ), Ching’s branded - green and red chilli sauces, Tata Sampann branded - Dates, Anjeer, Hing, Cumin seeds, coriander seeds, funnel seeds, Tata Tea - Chakra Gold

Segment wise performance -

India business -

Organic India + Capital foods - clocked revenues of 102 + 206 cr in Q2 ( combined growth of 31 pc on a QoQ basis ). Both these businesses are margin accretive for the company

Tata salt - grew 2 pc YoY with flat volume growth

Tata Sampann - recorded 26 pc YoY growth

Tata Tea - recorded 3 pc YoY decline with 4 pc decline in volumes

Ready to drink portfolio - de-grew by 11 pc and recorded sales of 154 cr. Tata Copper however grew by 6 pc

Non - Branded business - grew by 19 pc due exceptionally strong coffee prices

Tata Starbucks JV - revenues grew by 2 pc. Added 19 new stores in Q2 taking the total store count to 457

UK business - grew by 7 pc. UK business witnessed strong margin improvement driven by structural interventions, topline growth

US business - grew by 3 pc. Tea and Coffee business in US grew by 2 pc and 6 pc respectively

Canada business - de-grew by 2 pc

Erratic weather patterns caused extreme input cost inflation in tea and Salt businesses ( due excessive rains at Mithapur which resulted in company resorting to buy brine from third party sources ). Coffee business also continues to face headwinds due record high coffee prices

Company has taken some prices in the Tea portfolio but have not passed on the entire hikes

Category wise breakdown of revenues -

India foods business - 1368 cr, up 29 pc ( organic growth was 9 pc )

India beverages - 1380 cr, up 3 pc
International business - 1000 cr, up 7 pc

Unbranded - 500 cr, up 19 pc due strong Tea and Coffee prices

Company finished its rights issue in Q2 and became Debt free by end of Q2

Company has automated the replenishment systems at the distributor level where in the fresh orders are calculated as - system generated forecast minus the current inventory with the distributors

GT continues to see softness. Modern trade grew by 17 pc and E-Comm grew by 50 pc in Q2

Company has started to roll out its products in the HoReCa and Pharma channels wef Q2

A&P spends in Q2 stood @ 7.5 pc ( healthy levels )

Some brands in the base business that showed strong YoY growth in Q2 were - Sampan ( up 26 pc ), Rock Salt ( up 25 pc )

The reach of Capital foods at the time of acquisition was 2.5 lakh outlets. Tata Consumer has expanded that to 5 lakh outlets now

Tetley is now the No 2 branded Tea player in UK

Company believes they have enough space to build brands above and below the standard Tata Salt. They are working on and getting good response from the market wrt their premium offerings like - Rock Salt, Iron fortified Salt, Zinc fortified Salt ( Immuno ), Panch Tatva. In South India, they ve launched Tata Suddh which is also seeing good traction

Brands that the company is trying to pitch @ the HoReCa channel include - Tata Salt, Sampann Pulses, Ching’s sauces + planning to launch Mayonnaise

Seeing very strong demands for some of the Organic India’s products like - Organic Jaggery, Organic Ghee and Organic Rock Salt

Because of launch of Campa Cola at a disruptive price point, company’s Tata Gluco + ( avlb in 4 flavours ) did come under some stress. Company has taken the necessary pricing actions to counter the same. They did admit that they were slow to react. In addition, they have revamped the packaging, taste, format, flavour of the Tata Gluco+ range wef late Oct

Because of sharp hikes in Tea prices, the unorganised players should start to feel the heat ( sooner rather than later ) and should result in mkt share gains for organised players

The annual amortisation figure for FY 25 for the company ( because of 2 large acquisitions ) should be around 200 cr

Tata Starbucks did see tepid performance in Q2 - in line with tepid performance for the entire QSR industry. However, beginning Oct, festive season had started. That should be a positive factor the Starbucks business and help in the recovery

Company doesn’t disclose segment wise margin. However, they did concede that Sampan’s margins have trended up YoY in Q2 ( Sampan’s margins are about to reach double digits and company feels there is no reason for them to not trend higher )

Tata Copper + and Nourish Co are clocking annual sales of aprox 340 cr and 510 cr respectively

Company believes, they have a long way to go when it comes to company level margins ( of around 14-15 pc ). They r at the lower end of FMCG industry and intend to keep moving higher - YoY

Disc : initiated a tracking position, I expect a mean reversion in overall demand scenario in the country which may cause a rebound in stock price, biased, not SEBI registered

[Sudhakar_Subramanian]

@ranvir , Does both Dr. Lal path labs and Krsnaa diagnostics need a place in the portfolio? Comparing the revenue, OPM and meet profit growths, can’t we play the healthcare space with just one of these, say Dr. Lal path which has better Margin?

[ranvir]

ADF Foods -

Q2 FY 25 concall and results highlights -

Revenues - 161 vs 125 cr, up 27 pc
EBITDA - 28 vs 22 cr, up 27 pc (margins @ 17 vs 17 pc)
PAT - 20 vs 15 cr, up 33 pc

Segmental performance -

Processed foods revenues @ 130 vs 107 cr, EBITDA @ 29 vs 24 cr, up 20 pc

Distribution revenues @ 31 vs 18 cr, EBITDA @ 5 vs 1.1 cr, up by 5X

Company has 02 manufacturing facilities - both in Maharashtra. Exports its products to 55 countries. US, Canada, EU and Gulf region are their primary markets. Current annual food processing capacity @ 28k MT. Company is setting up a new facility ( Greenfield expansion ) at Surat which is expected to go live in Sep 25

Ashoka is a key brand for the company - FY 24 sales @ 254 cr, growing at 29 pc CAGR for last 4 years. Company sells - Pickles, Chutneys, Sauces, Ready to eat curries, Frozen Indian food under this brand

Other brands include - Camel, Aeroplane, Truly Indian, SOUL

Camel and Aeroplane brands are Middle East focussed - mainly selling Pastes, Sauces and meal accompaniments and pickles. Camel is more a premium brand while Aeroplane is positioned in the economy segment

SOUL ( relatively newer brand ) is focussed on Indian domestic mkt. Currently selling premium Pickles and Chutneys. More product launches are planned in future. Aim to generate 100 cr sales from this brand in 3-4 years

Truly Indian brand primarily offers ready to eat meals, pastes and sauces. Has strong presence in Germany. Now launched in USA. Working hard on increasing the distribution reach of this brand in US

Company also has a distribution business of select Unilever brands like - Lipton, Taj Mahal, Red Label and Knorr ( in US )

Company’s Truly Indian brand got listed on Amazon, Whole Foods, Stop and Shop and Raley’s in US - which is a nice stepping stone In all, Truly Indian branded products will now be avlb in over 1300 stores across US ( all these r fresh listings )

Distribution of Unilever brands in US helps the company push its own ASHOKA brand into various stores. Both these businesses compliment each other

The brand Ashoka targets NRIs. The brand Truly Indian is targeted at foreigners where in the spice levels etc are toned down. Plus the Truly Indian brand is positioned at a premium vs the Ashoka brand

Soul Brand in India has made quick in-roads into various E-Comm platforms. Company is preparing for a strategic push of this brand into the Modern Trade in H2

Continue to invest aggressively behind Truly Indian and Soul brands. Should pay off in medium to long term

Company maintains its guidance of 1000 cr topline by FY 27 with high teens EBITDA margins

H1 Capex stood @ 15 cr

Cash on books @ 138 cr

A lot of logistical issues and issues related to high freight charges that the company faced in Q1 got resolved in July 24. Freight rates have also been softer in Q2 vs Q1 and are softening further in Oct

Soul brand is currently being sold in India only via E Comm and Quick Comm. Has started clocking 1.2 cr / month kind of sales

The Greenfield capacity in Surat should be able to generate an annual sales of about 250 - 300 cr / yr @ peak utilisations

Brand promotion expenses in Q2 stood at 7 pc of sales

Long term margins for the distribution business should be around 10 pc. However for current FY, they should be around 12-13 pc as the company has received some incremental incentives from Unilever

Employee expenses in Q2 are up YoY due to senior level hirings to build the Soul + Truly Indian business segments

Surat Greenfield expansion ( Phase -1 ) should take company’s capacity from 28kMT to 36kMT / yr

Truly Indian brand is expected to clock topline of around 8 cr for current FY in US. Should multiply in FY 26

Company has got 6 cr of PLI income from GoI in H1. They expect to get a higher amount in H2. H2 is always better for them vs H1

Planning to launch new products like - Dips and a few Frozen items under the Soul brand in late Q3 / early Q4

Company’s brand - Ashoka caters to all mkts in the gulf except Bahrain. Bahrain market is catered to by the Aeroplane brand

Disc : holding from lower levels, business momentum continues to be good, planning to keep holding for sometime, biased, not SEBI registered, not a buy/sell recommendation

[ranvir]

If I were to choose between the two ( Dr Lal vs Krsnaa ), I would go with Krsnaa Diagnostics - because of faster growth rates, clear intent from central Govt to improve the healthcare facilities available to the citizens which ( imho ) should only improve going forward, cheaper valuations

[Sudhakar_Subramanian]

However, business with govt has inherent issues like delayed payments, bribing, kickbacks, commissions, govt change, capping of price, etc.

[ranvir]

U r right. That - in a way is compensated by paying lower valuations. so that’s one. Secondly, payments do get delayed sometimes but are always honoured ( the company has never had bad debts from any state Govt in the entire history of their operations )

Pricing is compensated by higher volumes

Govt change at the Center is a big issue ( IMHO ). The current Govt has an excellent track record of paying the vendors ( and mostly on time ). Plus the business they run with the state Govts is backed by Center’s NHS. So … as long as the current Govt continues, I am broadly comfortable

[ranvir]

Britannia Ltd -

Q2 FY 25 concall and results highlights -

Revenues - 4668 vs 4433 cr, up 4 pc ( volume growth was 8 pc )
EBITDA - 780 vs 871 cr, down 12 pc ( margins @ 17 vs 20 pc )
PAT - 532 vs 586 cr , down 10 pc

Food inflation witnessed in Q2 was at 9.2 pc

Till the time the CPI inflation remains elevated, company intends to remain very cautious of taking price hikes ( as it may hurt their volumes and mkt share )

India has imposed import duties on Palm Oil. That is further causing the company’s inflation basket to rise meaningfully

Company intends to take 4-5 pc kind of price hikes over Q3 and Q4 and they it take it carefully and strategically in packs where they did not hike prices earlier

Some innovative product launches over last 2 Qtrs include - Tiger Coconut flavour, 50-50 Golmal variant, Leyered cakes, Milk Bikis wafer rolls

Rural mkts continue to do better than Urban mkts. Rural areas are clocking high single digit growth rates. The rising cost of housing, soaring rentals and relatively weaker wage growth is what seems to be hurting the Urban consumer sentiment

Company is experimenting with Route To Mkt in top 25 cities where they are serving the top 10 pc of the outlets in a preferential manner. These outlets contribute to > 40 pc of company’s business in top 25 cities. Company is giving them preferential treatment, better service, pushing higher value and newer products through these outlets. They r receiving very encouraging response from this exercise. Once completed, they ll expand this to more areas / cities etc

These kind of high inflationary scenarios are bad for smaller players. Currently, they r having a tough time navigating these tough times. Augurs well for companies like Britannia in the long run

Disc: looks like a contrarian buy - because of the sharp correction in the stock price post Q2, initiated a tracking position, biased, not SEBI registered

[ranvir]

Antony Waste Handling Ltd -

Q2 results and concall highlights -

Revenues - 227 vs 230 cr, down 1 pc
EBITDA - 49 vs 56 cr, down 14 pc ( margins @ 21 vs 25 pc )
PAT - 15 vs 32 cr ( due sharp jump in interest and depreciation costs )

Company is the second largest SWM ( Solid waste management ) player in India with > 20 yrs of experience in this space. Currently working on 24 projects across India. Company only targets municipalities with strong financials to reduce / minimise the counter party risks

Company operates the largest single location ( @ Kanjurmarg ) waste processing plant in Asia for Greater Mumbai Municipal Corporation. The project tenure is 2010-36 ( 26 yrs ). It handles 5800 MT of waste / day. It has a capacity to handle upto 7500 MT of waste / day

The Kanjurmarg facility has the capacity to produce RDF ( reusable derived fuel - from waste ) with a gross calorific value of 4k cal/gm. Company sells this RDF to cement and steel companies

The Kanjurmarg facility also produces and sells compost. Company sold a record 4k MT of compost made at this facility in Q2 FY 25

Company also operates Maharashtra’s first Integrated Waste to Energy project @ Pimpri Chinchwad. The project involves pre-composting, composting, power generation and landfill management. The tenure of this project is from 2019 to 2040. It processes 1000 MT of solid waste / day. Company also has an agreement to sell energy @ Rs 5/unit with Pimpri-Chinchwad municipal corporation ( upto 14 MW ). The land for this project ( 30 acres ) was provided by the PCMC

Currently operational projects ( a total of 24 projects ) include -

Collection and Transportation Projects for - Greater Noida, JP International Sports complex, Jhansi, Mumbai, Borivali, Dhalsar, Nagpur, Nashik, Nai Mumbai, Noida, North Delhi, Panvel, Pimpri - Chinchwad, Thane and Varanasi

Mechanised Sweeping projects for - Greater Noida, Nagpur, Navi Mumbai, Pimpri Chinchwad

Construction and Demolition waste management project for - Mumbai

Breakup of FY 24 revenues -

Collection and Transportation of MSW - 62 pc. Involves door to door collection via primary collection vehicles, transportation to landfill sites. Currently, 16 of such projects are ongoing. Avg age of these contracts is 7.7 yrs

MSW processing - 23 pc. Currently 4 of these contracts are ongoing. Avg age of these contracts is 23 yrs

Contracts and Others - 15 pc. Contract revenues are realised arising from IND-AS treatment of Capex incurrent @ DEBOOT projects. Currently, 2 DEBOOT and 5 mechanical sweeping projects are on. Others - include revenues from sale of scrap etc

Current fleet of vehicles operated by the company @ 2300 vehicles. These include - Small tippers, Compactors, Dumpers, Power Sweeping machines, Big Tippers, Drain Stilt machines and Hook Loaders

Municipal Solid Waste Management ( MSWM ) industry in India is expected to double in next 5 yrs

Company’s construction and demolition waste management site has commenced operations in Q2. Company’s bio-mining project ( awarded by CIDCO - City and Industrial development corporation of Maharashtra ) near Taloja is also showing steady ramp up

Company’s waste to energy project is now operating @ 71 pc load factor vs Industry avg of 60 pc. By next year, company expects the load factor to improve to 75 pc for this project

In Q2, company handled - 1.19 million MT of solid waste, up 3 pc YoY, Sold 30.5k MT of RDF, up 5 pc and sold 4k MT of compost, up 82 pc YoY

Softer performance in Q2 is partially due to extended monsoons because of which company could not operate their construction and demolition waste management business optimally. This business should ramp up in H2

The jump in interest and depreciation costs is because of commercial launch of waste to energy plant and demolition waste projects

Gross Debt @ 397 cr, Cash on Books @ 82 cr resulting in net Debt of 315 cr. Avg cost of debt @ 9.6 pc

In H1, Panvel MC contract contributed to 17 cr of revenues, PCMC waste to energy added 23 cr and 5 cr were added by PCMC power sweeping

From next yr onwards, company will start to get revenues from NMMC C&T contract. The CIDCO bio-mining ramp-up should happen in H2 this FY. The CIDCO contract should give them revenues of aprox Rs 4 cr / month

The C&D waste revenue has started flowing to the company only in the month of Aug 24. A ramp up is expected in H2. The C&D waste management revenue should be around 3 cr / month

Looking to clock 15-16 pc growth in Topline in H2 - to
be driven by - Bio Mining ramp-up, ramp up in water to energy project, ramp up in C&D waste management revenues and also sale of some of the recycled material from the C&D division

Future growth drivers ( for next 1-2 yrs ) -

Company is looking @ couple of waste to energy and couple of C&T projects in the Western region

Company is looking to set up another large waste to energy project at their existing Kanjurmarg facility. Have been in discussion with BMC for this hand have submitted their proposals

Have identified land parcel near Mumbai to set up vehicles scrapping facility. Land is expected to be allowed to the post the Maharashtra elections ( they intend to buy this land )

In order to de-risk their business, company is now focussing on the Vehicles Scrapage and waste to energy businesses. However wrt Geographical diversification, company is currently going to maintain its focus on Western India + Delhi NCR

For full FY 25, company is guiding for an EBITDA margin of 22-23 pc. That means, they should be clocking > 25 pc EBITDA margins in H2 on an accelerated revenue ( as guided earlier )

Capex guidance for FY 25, 26, 27 @ 80 cr, 25 cr and 25 cr respectively ( this includes the award of new C&T projects, waste to energy plant at Kanjurmarg )

Taking into account the capex planned over the next few years and the cash flow that the company generates, they intend to be debt free in next 5 yrs

The waste to energy project that the company is looking to set up @ Kanjurmarg is expected to have capacity of 4X that of PCMC project

Company is guiding for a revenue CAGR of 25 pc for next 3-4 yrs ( on the back of ramp up in PCMC project and C&D waste management projects ) with an EBITDA margin profile of around 23 pc !!! ( sounds like aggressive guidance to me. Lets see if they can achieve this )

Current debtor days stand @ 72 days. Company believes that their debtor days should continue to sustain in this broad range of 70-80 days

E-Waste management is another area that company may foray into ( in future ) after the Vehicle scrapping

Company has just come out of a capex heavy phase. They expect their RoE and RoCE to start showing meaningful improvements as these projects ramp up

Company exited Q2 with an oder book in hand of Rs 8300 cr spread over next 12-14 yrs. This order book doesn’t include the escalation clauses. Plus there will be added revenues from C&D waste management. This gives them the confidence to give out an aggressive growth guidance

The C&T part of the business is asset light, has higher return ratios at present. But it can potentially invite a lot of competition and competitive price bidding. The waste processing required more upfront capital and technological prowess + the returns are a little back ended. This keeps the competition on the lower side

Disc: hold a small tracking position, evaluating further, will be monitoring company’s progress, not SEBI registered, biased, not a buy/sell recommendation