Hey,
Your stock analyses are an absolute gold mine. But could you elaborate on this point about the lack of demand from EMs for US bonds? Why is that a bad thing? Or is it just that it is a change in the order of things from how it has been before and hence people are choosing more safer assets?
I was reviewing your investment in Godrej Agrovet from May 2020. It has delivered approximately 123% returns, considering the lowest point in May 2020 to its all-time high, translating to a CAGR of around 19.51% approx. Do you still plan to hold it?
I noticed the company has achieved its highest sales and operating profit margin, though its Debt-to-Equity ratio is over 0.8. There’s also a flag pattern forming on the charts. Even though my mind suggests selling, my heart leans toward holding it! 
Hi …
I m holding onto Agrovet.
Reasons -
Expecting a turnaround in Astec Life ( very likely wef Q3 )
Expecting GoI to take steps to boost domestic consumption in the upcoming budget ( It the need of the hour but its just a hope - so take it with a pinch of salt )
I m more sanguine on domestic facing sectors going Fwd - that’s just my opinion / bias
Ur guess is as good as mine
My guess is as follows -
Trump is gonna cut direct taxes and raise tariffs ( both inflationary ). Plus the US govt is running wide deficits which are only growing
Bond markets are reacting badly - IE - increasing bond yields + falling bond prices ( despite Fed cutting rates !!! )
Gold / Silver mkts are buoyant - IE - safe heaven buying ( despite such strength in DXY - this truly is unprecedented )
Central banks across India, Brazil, China, Russia - are buying Gold, more than ever and buying lesser US treasuries ( than ever before )
Something has to break. This can’t continue for ever
What will eventually happen - I don’t know
I m just taking precautions to align my portfolio inwards + buying defensive sectors like select FMCG, Pharma, Hospitals, Gold ETFs, Silver ETFs + reducing high PE stocks from my portfolio etc etc
Popular Vehicles and Services Ltd ( the stock has had a real bashing post Q2 results, looks attractive to me at CMP ) -
H1 FY 25 outcomes -
Revenues - 2804 vs 2835 cr, down 1 pc
EBITDA - 112 vs 144 cr, down 23 pc ( margins @ 3.9 vs 5.1 pc )
PAT - 13 vs 40 cr
Segmental performance for H1 -
Sale of new Vehicles - 2057 vs 2095 cr ( volumes sold 22.56 k vs 23.99 k vehicles, ASP @ 9.11 vs 8.73 lakh )
Sale of pre-owned vehicles - 182 vs 188 cr, ( volumes sold @ 5.26k vs 5.61k vehicles, ASP @ 3.45 vs 3.35 lakh )
Services and Repairs - 443 vs 423 cr ( avg service cost per vehicle @ 8.57k vs 8.02k, no of vehicles serviced @ 5.16 vs 5.27 lakh )
No of showrooms currently operated by the company -
Maruti Suzuki - 20
Honda - 8
JLR - 2
Tata Motors - 13
Bharat Benz - 8
Piaggio 3W - 7
Ather 2W - 4
Service Centers -
Maruti Suzuki - 74
Honda - 10
JLR - 3
Tata Motors - 27
Bharat Benz - 19
Piaggio 3W - 7
Ather 2W - 3
Distribution of spare parts ( in Kerala + Karnataka ) -
Retail outlets - 46
Warehouses - 24
In addition, company operates 32 pre-owned car showrooms. 29 of them - dedicated to Maruti Suzuki
Company also Indulges in sale and distribution of Insurance policies. Sales for FY 24 for this segment stood @ 73 cr
Company also runs 7 driving schools in Kerala
State wise revenue breakup -
Kerala - 62 pc
Karnataka - 8 pc
TN - 26 pc
Maharashtra - 4 pc
As a plan to de-risk its business model, they plan to reduce their revenue dependence on Kerala to below 50 pc inside next 2-3 yrs
As a plan to de-risk its business model, they plan to reduce their revenue dependence on Kerala to below 50 pc inside next 2-3 yrs
Suzuki’s small car portfolio has been struggling for quite some time now. The launch of new Dezire - should help them re-coup some of the losses. Electric Vitara is scheduled for a launch in Q4 - another positive
Company’s JLR volumes increased by a whopping 40 pc in H1, sales revenues increased by 18 pc ( because of lowering of sales price because of greater component of local manufacturing wrt JLR )
Honda sales volumes did witness a significant slowdown in Q2 ( down 10 pc ) - likely to reverse as new Honda Amaze is rolled out wef 04 Dec
As I write this - Suzuki sales have done well in Q3 and there is a visible pickup in Honda’s sales post the launch of new Amaze
Company also expects sales volumes to pick up in Maharashtra post the elections. Company’s Bharat Benz business is already doing well in Maharashtra and TN - led by distribution expansion
Tata CV sales were weak in Q3. Company expects the same to pick up in Q3/Q4 as Govt capex starts to ramp up for FY 25
Ather sales did very very well in Q2 - growing by 60 pc over Q1 due to the launch of their new model - Rizta ( YoY increase was @ 28 pc )
Company is still hopeful of groing its repairs and service business by 10-15 pc for current FY despite a weak H1
Company did witness strong sales in Oct
Company keeps its organic expansion strategies in place. They r also open to inorganic acquisitions - provided the valuations are favourable and the high dealer inventory gets resolved
The sharpest slowdown in sales ( out of CVs, PVs, 2Ws, pre owned cars ) was witnessed in the CV segment which showed a 16 pc decline in sales @ 454 vs 541 cr YoY ( in Q2 ) - this also coincides with longer than normal monsoons + reduced intensity of Govt Spendings
In Q2, the overall demand trends witnessed by the company were below its expectations. Hence they resorted to selling vehicles with added discounts so as to not get into any trouble wrt liquidity. Their inventory levels on 30 Sep 24 stood @ 50 days vs 52 days on 30 Sep 24
In Oct - inventory levels are trending down even further. However, the company intends to bring it down further and hence may continue with discounts in line with Q2 ( in Q3 as well ). By end of Q4, they intend to bring it down to 30-32 days. That’s the ultimate goal
Company intends to start its operations in min 2, max 3 more states by Jun 25
Company expects margins to be much stronger in Q4 as the effects of discounts would have weaned by then
However, H2 should see descent recovery in company’s sales and services business ( expecting a 12-15 pc revenue growth )
Because of elevated inventory levels across the Industry, a lot of dealers are already making losses. This is expected to throw up some interesting inorganic opportunities for inorganic acquisitions for the company in H2 and next FY
As the share of service and repairs keeps growing in company’s overall revenue pie - their EBITDA margins should keep trending upwards. OEM sales is a 14-15 pc gross margins business whereas service and repairs is a 50 pc gross margins business
In H2 this year, company is slated to open 07 service centers ( 06 for PVs and 01 for CVs ). Not planning to open any new showrooms in H2
Company has no immediate plans to on-board any new OEMs
Company’s aimed IRR from service centers is around 35 pc with gross margins @ around 50 pc
Disc: holding from higher levels, added recently ( averaging - basically ), biased, not SEBI registered, not a buy/sell recommendation, posted only for educational purposes
Highlights from Axis Bank’s Concall - Q3 FY 25 -
Deposits - 10.66 lakh cr up 13 pc YoY ( Term deposits up 19 pc, CA deposits up 11 pc, SA deposits down 1 pc YoY )
Advances - 10.14 lakh cr, up 9 pc YoY ( Retail advances up 11 pc, SME advances up 15 pc, Corporate advances up 3 pc YoY )
NII - 13606 cr, up 9 pc
Non Interest Income - 5972 cr, up 8 pc
Operating expenses - 9044 cr, up 1 pc YoY
Operating profits - 10534 cr, up 15 pc YoY
NIMs @ 3.93 vs 4.01 pc YoY ( vs 3.99 pc in Q2 FY 25 )
Cost of funds @ 5.46 vs 5.35 pc YoY ( vs 5.45 pc in Q2 FY 25 )
Retail + SME loans as a total percentage of loan book @ 71 pc vs 64 pc, 4 yrs back
CASA ratio @ 39.6
Gross NPAs @ 1.46 vs 1.58 pc YoY
Asset Quality -
Net NPAs @ 0.35 vs 0.36 pc YoY
Gross slippages @ 2.13 vs 1.62 pc YoY
Net slippages @ 1.40 vs 0.50 pc YoY
Net Credit cost @ 0.80 vs 0.28 pc YoY
Provisions @ 2185 vs 691 cr YoY ( vs 1441 cr in Q2 ) - massive jump in provisions to maintain the asset quality
Segment wise Advances / Loan book growth -
Retail Book - 6.05 lakh cr, grew 11 pc YoY
Retail Growth was mainly led by -
Rural loans, up 17 pc
Personal Loans, up 17 pc
LAP, up 19 pc
Underperforming segments included -
Home loans, up 3 pc
Auto loans, up 1 pc
Credit Cards, up 8 pc
Total bank branches now stand @ 5706 vs 5377 in Mar 24
Corporate and Commercial banking loans @ 2.94 lakh cr, up 3 pc YoY ( basically muted growth )
SME loans grew by 15 pc
SBB loans grew by 20 pc
Mid Corporate loans grew by 16 pc
SME, SBB, MC - combined contribute to 22 pc of bank’s loan book currently and these 3 are among the bank’s key focus areas + the retail loans
Annualised RoA @ 1.71 pc
Annualised RoE @ 15.8 pc
Axis bank’s credit card business’s mkt share stands @ a healthy 14 pc
Bank is carrying provisions worth 151 pc of Gross NPAs
Performance of subsidiaries -
Axis Finance - AUM @ 36.9 k cr, Net NPAs @ 0.25, 9M FY 25 PAT @ 509 vs 425 cr
Axis AMC - AUM @ 3.26 lakh cr, Equity AUM @ 1.93 lakh cr, 9M PAT @ 378 vs 297 cr
Axis Capital - 9M revenues @ 592 vs 387 cr, PAT @ 148 vs 108 cr
Axis Securities - has become the third largest Bank based brokerage service with a customer base of 60 lakh clients, 9M revenues @ 1314 vs 757 cr, 9M PAT @ 368 vs 198 cr
Axis Bank’s Q3 consolidated PAT @ 6779 vs 6520 cr, EPS @ 21.78 vs 21.05 pc YoY
Most of the provisions have been made towards the retail unsecured portfolio ( PL + Credit Cards )
Gross Slippages @ 5432 cr. Out of these retail slippages are @ 4323 cr ( mainly from agri + unsecured portfolios ), CBG/SME @ 215 cr, Corporate @ 294 cr. Company maintained that Net slippages is a better matrix to look at because accounts keep slipping and keep getting upgraded all the time
Growth in Advances in Q3 is muted @ 9 pc as the bank has deliberately gone slow wrt lending in areas that are seeing greater stress. For the full year, this growth in advances should certainly be much better
Q3 and Q1 generally see greater slippages vs Q2 and Q4 because of the agri cycle. That’s also a reason that slippages are elevated in Q3 vs Q2 ( where as Q2 slippages were lower than Q1 ) - so, logically - Q4 should be better wrt slippages
Bank is still seeing increased indebtedness at the retail level. The stress has not yet eased
Company’s MFI book is around 6k cr which translates to aprox 0.6 pc of Bank’s total loan book
Disc: hold a small tracking position, will wait for improvement in asset quality before adding, not in a hurry to sell as the credit cycle may improve in next 1-2 Qtrs, not SEBI registered, not a buy/sell recommendation
Disc:
I ve trimmed even my Pharma Holdings by substantial amounts over last 3 days ( after all they r also exporters and showing a lot of weakness despite a falling rupee )
Reduced / Sold - Neuland, Laurus, Glenmark Pharma, Ajanta Pharma, Wockhardt ( did make descent money on all of them except Ajanta )
Added - Gold ETFs, Silver ETFs, Dabur, Marico, Britannia, Jyothy labs, Electronics mart, Taj GVK, Indraprastha hospitals, Rainbow Medicare, EIH, SAMHI hotels, Eimco Elecon, Krsnaa Diagnostics, Popular Vehicles, KVB, Federal Bank - basically - all defensive + domestic / inward looking themes
GOLD/SILVER rally - in the face of rising dollar
Firming bond yield - despite strength in dollar
Weakness in Export oriented stocks - despite a falling rupee
I ve never seen this combo in my life 
Maybe the mkt knows something that we don’t ( and I may be completely wrong )
I am just being cautious, protecting my gains to be able to fight another day
These r just my thoughts. Its my duty to disclose, even at the cost of going wrong ( that’s always a possibility )
Liquidated all my FMCG stocks today ( they were bought as insurance against a mkt fall ). They served me well 
Started buying domestic themes -
RPG Lifesciences
Indraprastha Medical
Rainbow Childcare
Aditya Vision
Electronics mart
Eimco Elecon
HBL
Ceinsys
Heritage Foods
Godrej Agrovet
Exiting fmcg So your view must have changed on the correction. Have we bottomed?
The price action yesterday was typical of a mkt bottom. Severe selling ( almost capitulation in Mid - Small caps ) followed by unexpectedly strong buying
Yes … it looks, as if the worst may be behind
However, I ll keep my skeptical stance on exporters to US, EU ( ie not buying any of those businesses )
Today most, if not all indices are trading in green but the FMCG one. Looks like many are following your footsteps
Hi Ranvir,
Whats your thesis on Eimco Elecon.
Does the recent order reduction from JMS mines to a meagre 9 crore ( reduction of 60% , and looks like its pertaining to continuous miner) and subsequent promotor selling in December’ 24 doesnt bother you.
Last three months there were no new registration in the Vaahan website. Also the company doesnt do concalls.
Do you feel the story is intact?
TIA
I ll post a detailed reply in 2-3 days
Disc: holding, added recently
Going by the hints that the GoI is dropping, I am expecting some significant tax cuts ( other consumption boosting measures ) tomorrow
If that be the case, domestic focussed companies - both discretionary, non-discretionary, Banks, NBFCs, Autos - may just be back in fashion wef tomorrow
Fingers crossed
Disc: I ve already trimmed a lot of exporters from my portfolio, have added a lot of inward looking stocks. Let’s see - if this plays out or not. I m betting, that it should ( I can be wrong, please due ur own due diligence )
What are the plays you are looking at in consumer sector or lets say discretionary sector
Typical hospitality names like -
Eih ltd
Taj GVK
SAMHI Hotels
EIH associated hotels
Domestic healthcare names like -
Indraprastha medical
RPG life sciences
Mankind Pharma
Rainbow Children’s medicare
Yatharth Hospitals
Eris Lifesciences
Not so expensive FMCG names like -
Jyothy Labs
Emami ltd
Retailers like -
Senco Gold
Electronics mart ltd
Others -
Cello World
Cera sanitaryware
Action Construction
HBL Engineering
Disc: holding all 
Yatharth Hospitals -
Q3 FY 25 results and concall highlights -
Revenues - 219 vs 167 cr, up 31 pc, led by operationalisation of Greater Faridabad hospital
EBITDA - 55 vs 47 cr ( margins @ 25 vs 28 pc ). Employee expenses were up at 42 vs 30 cr YoY. Other expenses were up @ 79 vs 58 cr YoY
Depreciation @ 17 vs 8 cr YoY
PAT - 30 vs 29 cr
Most of the additional costs relate to operationalisation of a new hospital ( greater Faridabad ) and the losses incurred thereof
Occupancy @ 60 vs 52 pc
ARPOB @ Rs 30.6k vs Rs 29.3k
Hospital wise revenue contribution, percentage contribution to total revenues -
Greater Noida - 66 vs 58 cr, 30 vs 35 pc YoY
Noida Extension - 79 vs 55 cr, 36 vs 33 pc YoY
Noida - 44 vs 43 cr, 20 vs 26 pc YoY
Jhansi - 18 vs 9 cr, 9 vs 6 pc YoY
Faridabad - 11 vs NIL cr, 5 vs NIL pc YoY
Top contributors ( therapy wise ) -
Oncology - 21 pc
Cardio - 12 pc
Nephro and Urology - 10 pc
Internal Medicine - 10 pc
Neuro - 9 pc
GI - 7 pc
Ortho - 6 pc
General Surgery - 6 pc
Gynae - 6 pc
Pulmonology - 6 pc
Paediatrics and Others - 7 pc
Company raised 625 cr in Q3 via QIP. Utilisation of QIP funds is as follows -
Debt repayment - 96 cr
Funding of recent acquisitions - 151 cr
Purchase of Medical Equipment - 217 cr
General corporate expenses - 140 cr
Total - 604 cr
Anchor investors in the QIP included - Kotak MF, SBI Life, Bandhan MF, Carnelian PMS, Taurus MF, Canara HSBC Life, Universal Sompo General
Update on acquisitions -
Acquired 60 pc stake in a 400 bedded hospital in Faridabad. Built in 2 acres, Muti speciality, located in Sec 20. Operations to commence in Q1 FY 26
Acquired 300 bedded hospital in Model Town ( 100 pc stake ), New Delhi. Located in a high per capita income colony, has a large catchment of residential and institutional clients. Operations to commence in Q1 FY 26
Once the new Faridabad and Model Town hospital goes live ( in Q1 Next FY ), Yatharth will become the 3rd largest hospital chain in NCR after Appolo and Fortis. At no 4,5 shall be Medanta, Paras Health
Occupancy levels @ current hospitals -
Greater Noida - 400 beds, occupancy @ 65 pc
Noida - 250 beds, occupancy @ 80 pc
Noida Extension - 450 beds, occupancy @ 60 pc
Jhansi - 305 beds, occupancy @ 50 pc
Greater Faridabad - 200 beds, occupancy @ 31 pc
Model Town, 2nd Faridabad hospital to go live in Q1 FY 26. Post their operationalisation, the total bed capacity will reach 2300 beds. Company aims to take this upto 3000 beds by end of FY 28 - via organic + inorganic routes
Company has appointed Deloitte as their Internal auditor - to manage risks, strengthening financial management
IT raids conducted on the company in 2023 and the IT department had frozen certain amount of money pending resolution of the case. However, company is allowed to use that money after obtaining permissions from the IT department. The company has been doing so and is being allowed to do so in recent past. Company does not fore see any significant losses / impairment from these events and is confident of a favourable resolution
Company expects this provisional attachment of Rs 60 cr with the IT department to get released in near future
A new hospital generally takes about 18 - 24 months to break even. Expect the same from the two new Faridabad and one new Model Town hospital
Greater Faridabad hospital is picking up momentum and is doing well in Q4 as well
It generally takes 2 yrs kind of time to complete an IT case in India. This case has been on for > 14 months now. Company expects a full resolution in next FY
Remaining cash on books will be used for brownfield expansions @ Greater Noida, Noida hospitals
As the new hospitals on online in Q1 next FY, expect further increase in Employees cost + Depreciation etc. However, at the same time - benefits from the Greater Faridabad hospital should start to flow in by that time
Qtly Depreciation rate for next FY should be around 20 cr wef next FY
In next 2 yrs, company expects to bring down the Govt business to less than 25 pc of the total business vs 35 pc currently. This should also help the company to accelerate their ARPOB growth
The new hospitals that the company is starting have a very low share of Govt business ( < 15 pc ) - should be ARPOB, margin accretive
Company expects to keep growing topline @ 25-30 pc rate for FY 26 as well
The new Faridabad and New Delhi hospital are expected to have ARPOBs > 35k
Business in Jan 25 was buoyant. Q4 is generally the strongest Qtr for hospitals in North India
Disc: holding, biased, not a buy/sell recommendation, not SEBI registered. IMO - once the IT hangover is over, the stock may be in for a re-rating
Why there is significant jump in Receivables? High WC cycle!
ELIN Electronics ( contract manufacturer of LED Lighting, Fans, Small Kitchen appliances, Motors etc ) -
Q2 FY 25 results and Concall highlights -
Revenues - 307 vs 275 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 23 pc
Cash on Books @ 98 vs 82 cr ( strong liquidity position )
WC days @ 58 vs 63 days
Segmental revenues -
Lighting, Fans and Switches - 67 vs 79 cr
Small appliances ( like mixer grinders, Irons, Straighteners, Dryers, Trimmers ) - 83 vs 69 cr
FHP motors - 74 vs 56 cr
Other EMS - 11 vs 9 cr
Precision components - 66 vs 59 cr
Medical cartridges - 4 vs 1 cr
Lighting revenues declined 22 pc YoY - led by both price erosions and volume declines. Company is now out of exclusivity for Signify ( Philips India ) for certain category of lights. Have initiated discussions with other customers
Witnessed small growth each in Flashlights and Fans. Switches category witnessed minor declines
Kitchen appliances and Personal care appliances witnessed strong YoY growth ( capacity utilisation still remains sub-optimal )
FHP motors witnessed strong growth led by Chimney and Mixer-Grinder motors
Capex in Q2 @ 18 cr - mainly on account of building and machinery at Ghaziabad for setting up manufacturing of - OFR heaters, OTGs and TPW fans
Recently launched products -
New series of Trimmers - in Q2
OFRs - in Q2
Upcoming launches ( in next 1-3 Qtrs ) -
Chimneys
OTGs
Electric Kettles
In Q2, gross margins were down by 100 bps YoY and 160 bps on a QoQ basis on the back of higher and more volatile RM prices - mainly - Copper and Aluminium
EBITDA margins expanded because of better capacity utilisations and absorption of fixed costs
In Q3, company will start producing fans for an OEM who is among top 5 in India in the Fans category. That should help this segment report better results in Q3
If not for extreme weakness in LED lighting business, Q3 would have been much better
Because of the sluggish demand for FMEG products, there is heightened pricing completion among brands - basically a double hit - both on volumes and prices for contract manufacturers like ELIN
Most of company’s lines ( for different products ) are running at sub-optimal capacity utilisations ( 55-60 pc type )
Guiding for - full FY revenues of 1200 cr - contingent on overall demand scenario for FMEG products
Company is in talks with 4-5 different customers for contract manufacturing of LED lights. They r expecting to finalise contracts with at least 2 of them by Q4
Company aims to achieve EBITDA margins of around 5.0-5.5 pc in the near term, provided the RM prices remain stable
Capex spends in H1 were @ 21 cr. Aim to do another 15 cr kind of Capex in H2
Company is strictly guided by non disclosure norms - hence can not disclose the names of most of its customers
Company expects pricing pressures to continue in plain vanilla LED lighting category in Q3, Q4 as well. Some specialised categories - like designer lights, outdoor lights, facade lighting etc are doing much better and offer much better margins too
Company is expected to get good orders from its primary customer for its - AC outdoor unit motors. They are also on the verge of adding another major customer for the same. The next summer season should see good demand for company’s AC-ODU motors business
On the new products that the company has launched recently and the ones that they r going to launch shortly - like - Chimneys, some new models of Trimmers, OFRs, OTGs etc, they expect to start doing Rs 50 cr each kind of business in all these categories by FY 27
For FY 26, company is guiding for a topline of 1350 cr
Disc : not holding, studying, not SEBI registered, may be a turnaround candidate - specially post the tax cuts announced in the Union Budget
SAMHI Hotels -
Q3 FY 25 results and concall highlights -
Revenues - 298 vs 273 cr
EBITDA - 114 vs 90 cr
PAT - 23 vs (-) 7 cr
Q3 Rev Par @ Rs 5088 vs Rs 4248 ( up 15 pc YoY )
Segment wise RevPar growth ( except the ACIC portfolio - where the integration process continues ) -
Upper upscale - 16 pc
Upper Midscale - 18 pc
Midscale - 10 pc
Contribution to room revenues from -
Indian bookings - 66 vs 57 pc YoY
International bookings - 43 vs 34 pc YoY
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
Growth Capex schedule to be operationalised over next 2-3 yrs -
Opening of Holiday Inn express - Kolkata ( will add 110 rooms ) - should open in Q4
Addition of rooms in Holiday Inn express - Bengaluru ( will add 54 rooms ) - should open in Q4
Renovation and rebranding of Caspia Pro greater Noida to Holiday Inn Express ( will add 137 rooms ) - started operations in Dec 24
Addition of 22 rooms @ Hayatt regency Pune - should go live in next FY, H1
Addition of 54 rooms @ Sheraton Hyderabad - should go live in next FY
Caspia Delhi - conversion to Fairfield by Marriot + addition of 142 rooms - scheduled to go live in FY 27
Four Points by Sheraton, Jaipur - conversion to Tribute by Marriot + addition of 114 rooms - scheduled to go live in FY 28
Fairfield by Marriot, Chennai - expansion of rooms by another 86 rooms - scheduled to go live in FY 28
Conversion of newly acquired office building to a 5 star hotel near Hitech City Hyderabad - 170 rooms - scheduled to go live in FY 27
Westin and Tribute portfolio - Bengaluru - 360 rooms - scheduled to go live in FY 29
Capex required to fully operationalise all the newly acquired assets in Bengaluru and Hyderabad should be - 80 cr to rebrand the existing Bengaluru hotel + 270 cr to add 200 to 220 rooms at the Bengaluru site + 180 cr of Capex at the Hyderabad site to convert the Office building into an Upper Upscale hotel. So this amounts to a total of 480 cr of Capex to be incurred over next 2 yrs. This should also take care of growth for next 3 yrs
Net Debt @ 2060 @ 9.4 pc
Net Debt / EBITDA @ 4.3 X. Aim to bring this down to 3.5 X by end of FY 26
Q4 is generally the best Qtr for the company. Should remain that way in current FY as well. Should easily report double digit revenue growth in Q4
The ACIC portfolio reported a 300 bps margin expansion on the EBITDA level. However, the revenue growth was flat for the ACIC portfolio. This is because the company deliberately focussed on premium / high margin end of the business and let go the low margin business. Revenue growth should start kicking in wef Q4 for ACIC part of the portfolio as well
Capex lined up of 200 cr for FY 26, 150 cr each for FY 27,28
Company believes their Consol EBITDA levels should inch upto > 40 pc in medium to long term
Current rate of Cash generation is > Capex + Interest expenses. So this surplus cash will keep flowing towards reduction of Gross Debt. Plus company can also go in for some asset re-cycling / hiving off non core assets - which can also be used to reduce Debt
Over medium term, company aims to maintain net debt of 1700-1800 cr of net Debt on the balance sheet ( on an expanded EBITDA )
City wise RevPar growth -
Hyderabad - 24 pc
Bengaluru - 20 pc
Pune - 17 pc
Even if there is no Rev Par growth for next 3 yrs, company is still expected to report 35 pc growth in topline because of all the capex that’s expected to go live in next 3 yrs ( as listed above ). If they r able to get 5-6 pc Rev Par growth, the total topline growth in next 3 yrs may well exceed 50 pc . The growth in EBITDA may be much higher because of the operating leverage
Interest cost should come down wef Q4 ( to aprox 50 cr vs 55 cr in Q3 ) as the overall cost of borrowing has reduced
Expect some asset recycling from the company in near future. Negotiations are in advanced stages - this can be a potential re-rating trigger
Disc: holding, biased, added recently, not SEBI registered, not a buy/sell recommendation
