Ranvir's Portfolio

[ranvir]

Goodluck India -

Q3 FY 25 results and concall highlights -

Revenues - 942 vs 878 cr, up 7 pc
EBITDA - 82 vs 75 cr ( margins @ 8.76 vs 8.62 pc )
PAT - 41 vs 32 cr, up 26 pc ( PAT margins @ 4.24 vs 3.61 pc )

Key Business segments -

Engineering structures and precision fabrications ( capacity @ 85k MTPA )
Forging products ( capacity @ 30k MTPA )
Precision Pipes ( capacity @ 120k MTPA )
CR Coils, Pipes and Tubes ( capacity @ 215k MTPA )

Manufacturing plants -

05 plants near Delhi
01 plant in Kutchh ( Gujarat )
05 major warehouses located @ Faridabad, Rudrapur, Ludhiana, Nahsik and Aurangabad

Domestic : Export break up of sales @ 74 : 26 ( vs 70 : 30 in PY )

Company’s key clients -

Auto tubes - BMW, VW, Skoda, Audi, Mercedes, GM, Renault, Toyota, Mahindra Electric, Tata Motors, Bajaj Auto, TVS, Ashok Leyland, Talbros, Gabriel, Suzuki

Forgings - L&T, RIL, IOL, Toshiba, Mitsubishi, BHEL, GE, Allied Group, Saint Gobain, Bharat Petroleum

Engineering Structures - GMR, ABB, L&T, RIL, Toshiba, TRF ( Tata group ), Power Grid

CR Coils and ERW Tubes - various Public and private sector EPC players involved in infra build up in the country, state Govts, NHAI, Railways

Segment wise revenues for 9M FY 25 -

CR sheets and pipes - 36 pc
Precision Pipes and Tubes - 26 pc
Forgings - 15 pc
Engineering structure - 26 pc

Future growth areas - Defence and Aerospace - company has inaugurated a new Hydraulic tubes manufacturing Unit with an installed capacity of 50k MT. These are highly specialised import substitution products for the defence ( aerospace ) industry. This plant has completed trial runs and has commenced production wef Jan. This plant has the capacity to generate revenues of upto 300 cr / yr by FY 27

Company’s business mainly caters to sectors like - Automobiles, Construction, Railway bridges, oil and gas, Solar and other renewable energy forms with Defence as the latest addition

Total capacity stands @ 4.5 lakh MT, slated to go upto 5 lakh MT in Q4

In the Auto sector, company mainly caters to Car body tubes, 2W and PV - shocker tubes ( Tesla is also a customer )

Aim to do yearly revenues of 4500 cr by FY 26

Company is slated to supply 155mm Arty Gun shells to IA. They were earlier imported. Company intends to supply 1.5 lakh shells - to begin with. That should have a revenue potential of aprox 300-350 cr. The supplies are expected to begin wef Q2 FY 26

Company expects a major ramp up of their LDP ( large diameter plant for Auto Tubes ) wef Q1 next FY - this plant also have a revenue potential of aprox 500 cr per year ( can be achieved wef FY 27 ). This plant was commissioned in Jan and has added 50k MT to company’s total capacity ( taking it upto 5 lakh MT )

In the 9M FY 25, company has achieved a volume growth of 13 pc. Topline growth is lower because of fall in steel prices

Most of the growth that company is seeing and hopes for in the future is coming from / or is going to come from Infra, Auto, Defence, Oil & Gas sectors. Not expecting any substantial growth from ERW tubes / CR coils

The CR coils and sheets business is a steady volume ( no growth ), low margins business for the company. They have committed clients for their products. They have been doing this for 25 yrs. Aim to continue to do the same. But this is not a growth area

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

[Hemal000]

Are you tracking DOMS? Asking because you track Cello closely.

[ranvir]

No … Not tracking DOMS

[ranvir]

Polycab India -

Q3 FY 25 results and concall highlights -

Revenues - 5226 cr, up 20 pc YoY
Gross margins @ 25.7 vs 27 pc YoY
EBITDA - 719 cr, up 26 pc YoY ( margins @ 13.8 vs 13.1 pc YoY - due improvement in margins in the FMEG space )
PAT - 464 cr, up 11 pc ( margins @ 8.9 vs 9.6 pc ). Margin compression at PAT level due lower other income, higher finance costs and depreciation

Segmental revenues -

Wires and Cables - 4606 cr, up 12 pc YoY, EBITDA margins @ 13.5 vs 14 pc YoY ( contribution from International business @ 8.3 pc of total segmental revenues. International sales grew 62 pc YoY )

Pick up in Govt spending, momentum in RE, commodity price inflation are the key monitorables in this space

Townward trend in copper prices combined with high channel inventory led to some slowdown in this segment in Q3. Should rebound going forward

FMEG - 416 vs 288 cr, up 45 pc YoY, margins @ (-) 3 vs (-) 12.7 pc YoY - massive margin improvement on a YoY basis. FMEG segment’s margins in Q2 were @ (-) 6.5 pc

Healthy growth seen across Fans, LED lights, Switchgears. Gross margin expansion and strong volume growth helped lift EBITDA margins

EPC business - 457 vs 216 cr, up 110 pc YoY, EBITDA margins @ 11.3 vs 17.4 pc YoY. Sustainable EBITDA margins in this segment should settle at high single digits - over medium to long term

Company recorded record revenues in Q3 despite a widespread slowdown in Industrial activity in India owing to delay in pickup in Govt Capex. Industrial activity in Q3 FY 25 slowed down to 6.2 pc YoY growth vs 9.5 pc YoY growth in Q3 FY 24. As the Govt capex picks up, this slowdown should be a thing of the past

Company has rolled out project spring for next 5 yrs. Aim objectives of this project include -

1. Solidifying Market Leadership in the B2B business
2. Propelling Expansion of B2C business
3. Ramping up the International Business
4. Innovation and Automation - Led Holistic Development
5. Nurturing talent and capabilities
6. Growing ESG integration

Cash on books @ 1710 cr

WC stood @ 51 days - within company’s comfort zone of 50-60 days

Capex for 9M FY 25 stood @ 830 cr. Full yr ( FY 25 ) capex should end up between 1000 - 1200 cr

With reduced channel inventory + increasing copper prices in Q3, expecting a stronger show in the Wires and Cables segment in Q4

Company’s export order book remains buoyant. Company is currently exporting to 81 countries

Company continues to expand its distribution channel aggressively, when it come to its FMEG business - leading to consistent and fast paced gains in this segment

Expect EPC business to keep clocking 450-500 cr kind of Qtly topline run rate for next 24 months

Expected growth rate for the domestic Wires and Cables segment for next 6-7 yrs stands @ 7.5 pc CAGR. Company should be able to do better than this ( aim to grow @ 1.5 X the Industry growth, while maintaining EBITDA margins @ 11 - 13 pc )

Increased investments in renewable energy sector, data centers, EV adoption, increased urbanisation, increased pace of Infra development - are some of the factors expected to keep the demand of this sector at healthy levels

Increased investments in renewable energy sector, data centers, EV adoption, increased urbanisation, increased pace of Infra development - are some of the factors expected to keep the demand of this sector at healthy levels

Company intends to invest 6000 - 8000 cr in Capex over next 5 yrs and aim to generate asset turns of 4-5X on the said investment - this gives us an idea of what kind of demand does the company expect to come up over next 5-10 yrs

Expect the FMEG sector to continue to grow @ 8-10 pc in medium to long term. Here too, the company aims to keep growing @ 1.5-2X the mkt growth rates. Aim to reach 8-10 pc EBITDA margins in the FMEG space by FY 30

In the B2B - Wires and Cables segment, company has divide its business into 5 verticals. Company has set up dedicated business teams for all 5 verticals

Aim to make export sales hit the 10 pc mark ( on the topline )

By Dec 24, RE sector recorded highest number of project launches when compared to last 12 yrs ( full 12 months ). This gives us an idea of upcoming and strong demand coming from the B2C sector

Bulk of Capex over next 4-5 yrs shall happen in the wires and cables segment

In Q3, 30 pc of company’s export sales came from North America ( primarily US ) - this is a key risk, given the imposition of tariffs - IMHO

Industry is adding capacity - in line with the domestic and International demand ( International demand is something that we should monitor closely as the tariff wars intensify globally - IMHO )

Company is spending 600-700 cr on the EHV cables project - should be ready by end of FY 26. Over and above this, company is adding capacities across segments - ie - OFCs, LT cables, HT cables, Solar cables etc

Seeing very good demand for Solar cables from last 2-3 Qtrs because of Govt initiatives and push towards rooftop solar installations. It also drives demand for company’s other products like - switchgears

Company witnessed 31 cr of MTM losses in Q3 due steep rupee depreciation

Other export destinations from where the company is seeing strong export demand include ME,Australia, EU. Company is striving to enter new export destinations, specially in Asia

Company expects to get further orders for their EPC business ( which already has a strong order book ) - from the new EHV segment and BharatNet project

Management was not oblivious to the fact the import tariffs can also be imposed on India ( by USA ) - a key positive - IMHO

Company has started the E-Beam technology for manufacturing wires and cables in India. Products made from this technology are obviously of superior quality. Some builders have already started showing interest in procuring these products

Mix of sales between Cables:Wires in Q3 stood at 75:25

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

[Lotus]

Thanks for the detailed post. The valuation seems to be reasonable. However, the cash conversions seems to be poor. what could be the reason?

[ranvir]

For a small cap company in growth phase, I guess one can’t be too strict with their assessment on cash flows

If it doesn’t improve in next 1-2 yrs, then one may certainly be worried

[ranvir]

Prince Pipes -

Q3 FY 25 highlights -

Falling PVC prices led to channel de-stocking in Q3. Company believes PVC prices have bottomed out - this should result in better sales and margins in Q4

Witnessed a 3 pc volume de-growth with falling RM and end product prices in Q3

Falling RM prices led to 30 cr of Inventory losses for the company - which led the company to report PAT losses

Aim to bring EBITDA @ 10- 12 pc levels by Q1 next FY 26

Q4 should see much better volumes and improved margins ( but not in double digits )

Sales in bath ware segment in Q3 @ 8 cr vs 5 cr in Q2

Aim to keep growing @ 2-3 pc higher than Industry growth. Intend to bring margins upto 12 pc at EBITDA levels in medium term

Guiding for mid-high single digit volume growth for full FY 25 and double digit volume growth for FY 26

Bihar plant to go live in Q1 next FY

Capex for entire FY 25 cr expected to be at around 250 cr. For FY 26, capex figure should settle @ 80-90 cr

Industry expected an anti-dumping duty on PVC to come in at the beginning of Q3. Still hasn’t happened. When it happens, should be a positive trigger for the entire Industry

In the absence of anti-dumping duty, there is a lot of anxiety in the entire channel. Hence the channel inventory is also very low

9M volume growth @ 4.5 pc - inline with Astral and Supreme Industries

Inventory loss for 9M has been @ 50 cr + 15 cr pf losses incurred in the new bath ware division

Avg capacity utilisation across all plants @ 50 pc

Likely to witness a small inventory loss in Q4 as well

Margins in the pipes and fittings Industry have been under pressure for last 2 yrs because of wild swings in PVC prices + increased aggression from Supreme Industries

As volume growth picks up, company hopes that the increased aggression from Supreme Industries should reduce going forward

Intend to go slow on advertising costs in short run to safeguard margins going forward

Disc: hold a small position, not SEBI registered, not a buy / sell recommendation

[ranvir]

Sandhar Technologies -

Q3 FY 25 results and concall highlights -

Revenues - 974 cr, up 9 pc
EBITDA - 96 cr, up 5 pc ( margins @ 9.8 vs 10.2 pc YoY )
PAT - 30 cr, up 18 pc YoY

Geographical breakdown of revenues -

Stanadalone - 76 pc
Indian Subsidiaries - 13 pc
Overseas Subsidiaries - 11 pc

Category wise sales breakup -

2Ws - 61 pc
PVs - 16 pc
OffRoad Vehicles - 15 pc
CVs - 2 pc
Others - 5 pc

Product wise sales breakup -

Cabins and Fabrications - 15 pc
Sheet metal parts - 14 pc
Aluminium Dye Castings exports - 11 pc
Aluminium Dye Castings domestic - 13 pc
Assemblies - 11 pc
Others - 11 pc
Locking systems - 19 pc
Vision systems - 6 pc

EV parts under development with tentative timelines for commencement of production -

Motor controllers for 2Ws and 3Ws - Apr 25
Battery chargers - Feb 25
AC-DC converters - Apr 25

All of company’s JVs are now PAT positive ( both for Q3 and 9M FY 25 ). All the JVs have reported an income of 270 cr with avg EBITDA of 12.5 pc

Company’s Overseas business have been a drag in 9M FY 25 - sustaining losses ( due slowdown in EU )

Have commenced commercial production of battery chargers in Q4

Off Road vehicles - Cabins and Dye Casting’s additional facilities at Pune should go live by end of Q4

Net Debt stands @ < 700 cr

Have started smart lock supplies to two major 2W OEMs. These r far higher margin + higher value products vs regular 2W locking systems

Committed to 25 pc CAGR kind of growth going forward for next 2-3 yrs. Slight slowdown in Q3 is due to generalised economic slowdown in India. Company expects to be back on high growth path ASAP

9M FY 25 capex @ 173 cr. Capex intensity should start to come down wef next FY. Hence the debt on books should start to reduce @ 100 cr / yr wef next FY

Should achieve a turnover of 4500 cr for next FY with 0.5 pc improvement in EBITDA margins

Going by the demand trends in Q4, company is projecting a revenue of 4000 cr for FY 25

Have started supplies of smart locks. Should ramp up to @ 20k/ month locks wef Mar 25. These r margin and revenue accretive products

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation, posted for educational purposes

[ranvir]

EIH Ltd -

Q3 FY 25 results and concall highlights -

Revenues - 831 vs 770 cr, up 8 pc
EBITDA - 388 vs 353 cr, up 10 pc ( margins @ 46 vs 45 pc )
PAT - 279 vs 230 cr, up 21 pc ( LY there was an exceptional loss of 24 cr vs 2 cr in current FY )

Cash on books - 790 cr

Next 5 yrs Capex pipeline -

Oberoi - The Oberoi Rajgarh, 66 rooms, Owned, India - 2025
Oberoi - The Oberoi Vindhyavilas, 21 rooms, Managed, India - 2025
Oberoi - The Oberoi Dahabiya, 17 rooms, Managed, International - 2025
Oberoi - The Oberoi Dahabiya, 27 rooms, Managed, International - 2025

Oberoi - The Oberoi Goa, Bogmallo, 20 rooms, Managed, India - 2026
Oberoi - The Oberoi Nile Cruiser, 25 rooms, Managed, International - 2026
Oberoi - The Oberoi Bardia, Nepal , 18 rooms, Managed, International - 2026
Oberoi - The Oberoi Diriyah, 60 rooms, Managed, International - 2026

Trident - Trident Visakhapatnam, 150 rooms, Associate, India - 2027
Trident - Trident Tirupati, 124 rooms, Subsidiary, India - 2027
Oberoi - The Oberoi Kathmandu, 60 rooms, Managed, International 2027

Oberoi - The Oberoi Goa, Cavelossim, 90 rooms, Owned India 2028
Oberoi - The Oberoi Diriyah, Saudi Arabia (Nature), 60 rooms, Managed, International - 2028
Oberoi - The Oberoi London, 21 rooms, Owned, International - 2028
Oberoi - The Oberoi Paro, 30 rooms, Managed, International - 2028
Oberoi - The Oberoi Jawai, 15 rooms, Managed, India - 2028

Oberoi - The Oberoi Gandikota, 20 rooms, Subsidiary, India - 2029
Oberoi - The Oberoi Hebbal + Mix use development, 120 rooms, Owned, India - 2029
Trident - Trident Hebbal + Mix use development, 250 rooms, Owned - India

Total pipeline of rooms expected to come up in next 5 yrs-

131 rooms in FY 26
123 rooms in FY 27
334 rooms in FY 28
216 rooms in FY 29
390 rooms in FY 30

Grand total @ 1194 rooms

Current - no of Oberoi Hotels @ 7 International + 12 Domestic + 9 Trident Hotels Domestic

**Qtly occupancy @ 82 vs 83 pc YoY **
Qtly Avg room rent @ Rs 23.6k vs Rs 20.4k

Air Traffic was up 9 pc YoY in Q3

RevPar growth led by - Hyderabad, Bengaluru, Delhi NCR and Agra

Company maintains - going forward there is a significant room to drive ADRs even further. Management believes, their Hotels are significantly underpriced for the Quality of Hotels that they operate ( when compared globally )

Oberoi - The Grand at Kolkata was closed for renovation in Q3 FY 25. Adjusted for that, Revenue and EBITDA growth would have been 11 and 14 pc respectively. Additionally, 5 floors at Trident Narinam point were under renovation. That also had a negative impact on overall EBITDA and Revenues

Management believes - top end luxury hotels have the potential to command rates of upto $ 1000 / night across Asia, India, North America , EU. Hence they believe, their ARRs can keep moving up in medium to long term

ITC ltd and RIL hold 19 and 16 pc stake in the company. Promoter holding is @ 32 pc

Company’s priority between profitability vs occupancy is clearly profitability

Company selects leisure location that are located at slightly offbeat locations, are well connected and are located 1-3 hr drive from nearest airports. These Hotels provide the company with best ARRs

Seasonality in company’s city hotels has reduced substantially. Seasonality in their leisure hotels is also coming down with each passing year - a key positive

Corporate segment is far more price sensitive vs the high end leisure segment - for the company

Flight catering business is doing really well - both on topline and EBITDA levels ( the EBITDA margins have improved vs LY )

Oberoi Grand ( Kolkata ) should open in about 18 months. Oberoi Rajgarh should open by Aug-Sep 25

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

[ranvir]

Hindustan Zinc -

Q3 FY 25 results and concall highlights -

Largest and the only integrated producer of Lead, Zinc and Silver in India. Has a 75 pc mkt share in India’s Zinc industry

3rd largest producer of Silver in the world

2nd largest producer of Zinc in the world

Among India’s largest producer of Wind Power with a generation capacity of 274 MW - spread across 5 states

Company’s Ore reserves - Company’s ore reserves are estimated @ 175 million tons of material graded @ 5.6 pc Zn, 1.6 pc Pb and 55gm/ton of Ag - amounting to 9.86 million tons of Zinc ( Zn ), 2.75 million tons of Lead ( Pb ) and 312 million Ounces of Silver ( Ag )

At current production rates and existing Resources and Reserves ( R&R ) company can sustain 25 yrs of mine life

In FY 23-24, company successfully added 24.7 million tons of material at gross level amounting to 1.85 million tons of metal

Company has set up a dedicated subsidiary - Hindmetal Exploration Services Pvt Ltd - to continuously focus on exploring, discovering, developing and tapping mineral resources. The subsidiary has interest in exploration of all minerals across the globe by implementing best in class technologies and practices

Company’s 5.1 lakh tons per annum fertilizers plant is under construction @ Chanderia. It ll be producing DAP fertiliser and NPK nutrients. Likely to go live by Q4 FY 26

Company’s 1.6 lakh tons per annum roast smelter ( using roast leach electro technology ) is likely to go commercial by Q4 FY 25

Company has entered into a 25 yr long renewable power purchase agreement with Serentica ltd - this would @ a fixed flat rate of energy buying without any inflation and would help the company move towards its sated goal of reducing costs to $ 1000 / Ton

In Q3, cost of production ( COP ) for Zinc stood @ $ 1041 / Ton - lower by 5 pc YoY

Current share of renewable power being used by the company in around 14 pc. By the end of Q4, company expects to hit a share of renewable power @ 24-25 pc, This should further help reduce the COP/Ton. Company is striving to achieve $ 1050 / ton - COP by end of Q4

FY 25 The fertiliser plant that the company is expected to commission next yr has the potential to do peak EBITDA of 450 - 500 cr / yr

Q3 financial outcomes -

Revenues - 8614 cr, up 18 pc YoY
EBITDA - 4539 cr, up 28 pc YoY ( margins @ 53 vs 49 pc - significant margin improvement )
PAT - 2678 cr, up 32 pc YoY

9M FY 25 financial outcomes -

Revenues - 24996 cr, up 17 pc
EBITDA - 12649 cr, up 26 pc YoY ( margins @ 51 vs 48 pc YoY )
PAT - 7350 cr, up 28 pc YoY

Globally, Zinc production has been flat for last 5 yrs. Demand in India for Zinc has been increasing @ 5 pc CAGR for last 5 yrs

Both Zinc and Silver are used extensively in clean energy + energy storage applications. And hence should have a bright demand future going forward ( Eg - Zinc coatings on Solar Panels, Wind Turbine blades, potential to develop Zn-Ion batteries, Zinc-Air batteries, Silver is used extensively in Solar cells, EV cells etc )

India is world’s 3rd largest consumer of Zinc. With continuous thrust on Infra and Clean energy development by GoI, Zinc’s demand in India is expected to remain robust. Hindustan Zinc has 77 pc mkt share for Zinc in India

Both Zinc and Silver mkts are expected to remain in deficit for FY 26 where demand > supply

Q3 mined metals production @ 265 vs 271 kMT
Q3 refined metals production @ 259 vs 259 kMT

Hedging gains for 9M FY 25 are around 125 cr

Company lost some production in Q3 due to planned shut downs ( 2-3 pc of production )

Aim to do around 316kMT of metal production in Q4 to achieve the full year’s guidance. Company believes, they should be able to do it. With improving Zinc, Silver and Lead prices in Q3/Q4 - this should lead to better profitability in Q4

Royalty payments to the parent for full FY shall be around Rs 650 cr

Company’s current capacity of mined metal / year is 1250kMT or 1.25 MMT / yr. Their yearly capacity to produce refined metal is 1100KMT or 1.1MMT / yr

Company aims to keep going up from 1250 to 1450 kMT by FY 28. In long term, they aim to go upto 2000 kMT wrt mined metal. At the same time, they ll keep adding roasters and smelters so that their refining capacity also keeps going up

Hindustan Zinc Alloys Ltd ( company’s subsidiary ) generated an EBITDA of 43 cr and PAT of 31 cr. For full FY, at peak capacity - expect this company to ramp up to 200 cr / yr kind of yearly EBITDA

At present, company is meeting 15 pc of its total entry requirements from renewable sources

This year, company aims to finish the year with cost of production @ $ 1050 / MT. Aim to bring this down to $ 1000 / MT in medium term - by increasing the share of renewable sources of energy in the Cost of Production. In next 2-3 yrs, company aims to take its share of renewable energy from 15 pc to 70 pc !!!

By FY 28, company aims to take its COP even below $ 1000 / MT

Total Capex requirements for next 3-5 yrs to take production upto 2000 kMT should be around $ 2.5 billion

Company is setting up a 10000 kMT Tailing ( waste material after mining ) recycling plant - to produce Zinc out of it. Should be able to get 2 pc Zinc out of it.Silver will also be recovered from the same. Will be able to give further details on the same only by next Qtr’s concall

Company’s DAP fertiliser plant should have the potential to generate annual EBITDA of aprox 500 cr at peak capacity

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

[ranvir]

Dodla Dairy -

Q3 FY 24 results and concall highlights -

Revenues - 901 vs 746 cr, up 20 pc
Gross Profits - 254 vs 224 cr, up 13 pc ( gross margins @ 28 vs 30 pc )
EBITDA - 96 vs 83 cr, up 16 pc ( margins @ 10.6 vs 11.1 pc - sight fall in EBITDA margins )
PAT - 63 vs 41 cr, up 54 pc ( due lower tax outgo and higher other income due increased cash balances )

Avg milk procurement in Lakh Lit / day ( LLPD ) - 17.1 vs 12.8 YoY
Avg daily milk sales - 11.6 vs 10.5 LLPD
Curd sales - 307 vs 260 MT/day

VAP sales increased by 51 pc YoY to 281 cr - a key positive. Out of this, bulk sales @ 72 cr ( Butter and Ghee )

Excerpts from management commentary -

1. The performance of our Indian dairy operations was well complemented by the performance of Africa and Orgafeed businesses, both of which delivered healthy growth rates on the back of higher capacity utilisation levels

2. With our eyes on growth, the company is keen on expanding its manufacturing footprint in the state of Maharashtra, and the Board of Directors has approved capex of Rs. 280 crores for the same. Owing to our strong balance sheet position, we will be able to fund this capex with a combination of internal accruals and debt

Company’s infrastructure -

Domestic -

14 processing plants
Processing capacity @ 20 lakh lit/Day
616 Dodla retail parlours
1750 + Milk and Milk product distributors

International ( operating in Kenya + Uganda ) -

2 processing plants
Processing capacity @ 4 lakh lit/Day
30 Dodla retail parlours
300 + Milk and Milk product distributors

International business now contributes to 10 pc of sales. Margins in Intl business are higher, dairy farming is easier due abundance of grazing lands

Orgafeed - Their animal feed business. Has 02 manufacturing facilities in AP. Selling directly to farmers through company’s procurement network against the value of milk supplied to them by the farmers

Normally liquid milk gives 7-8% EBITDA margin while value added products give 12-13% margin. In value added products, ghee and butter have less margin (around 5-6%) while butter milk, curd, lassi have 15% margins

Revenues from Orgafeed and International dairy business for 9M FY 25 have already surpassed their FY 24 revenues

The Greenfield capacity in Maharashtra will come on-stream by end of FY 27. Expected capacity @ 10 lakh lit / day

**Avg milk procurement costs @ 35.6 / lit vs Rs 34.6 / lit in Q2. Realisations / lit ( including VAP sales ) were @ Rs **
62.2 / lit

Employee expenses in Q3 increased by 19 pc due annual increments + employee additions in Kenya plant

The bulk sales of Rs 72 cr were lower margin sales, hence had an adverse impact on EBITDA margins

Company at present is going slow wrt Quick Commerce. Once the logistics r sorted out, they ll ramp up going forward

Company at present is going slow wrt Quick Commerce. Once the logistics r sorted out, they ll ramp up going forward

Curd sales for Q3 @ 153 cr

Seeing better off take in milk sales in Jan/Feb. Should see better volume growth in India business wef Q4

Don’t need debt for Maharashtra Greenfield expansion. May still take on some debt if they get govt incentives like interest subvention etc

Company resorts to bulk sales to offset excess procurement. Earlier, company used to err on the side of caution by being a net buyer. Now they have turned aggressive and have turned a net seller - hence the need for bulk sales etc. This approach gives them a better grip over the entire supply chain and never be in a situation where they can’t meet the mkt’s demand

Expect another Rs 1 kind of milk price procurement hike in Q4 ( after a Rs 1 kind of hike in Q3 over Q2 ). Company is likely to take up the selling prices proportionately

Dodla’s branded ghee is priced slightly below other brands like Heritage etc. They hope to bridge this gap in medium term as the brand gets deeply entrenched

**Cooperatives in AP, Telangana, TN are not in such a good shape and hence the farmers are shifting / drifting towards the private players like Hatsun, Heritage, Dodla, Godrej Agrovet. Cooprratives generally don’t pay up as promptly as the private players **

**Karnataka cooperatives have also started delaying the subsidy payments to farmers. This Augurs well for the private sector **

The Cooperative sector in Maharashtra is as such not very strong

Holding onto growth guidance of 10 pc by volume and 15 pc by value for FY 26

The max revenue potential from this new Greenfield Maharashtra plant should be around 1800 - 2000 cr !!!

In 9M FY 25, company has grown volumes volumes by 60 pc in the Kenyan mkts

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

[saurabhgupta]

Sir the kind of knowledge you are sharing continously every qrtr with us is just show your passion and compassion to help others. Dil se sukriya sir and i really appreciate your efforts for teaching a naive investor like me.Thank you sir

[ranvir]

Heritage Foods -
Q3 FY 25 results and concall highlights -

Company’s Infrastructure -

Milk processing capacity @ 2.83 MLPD
Milk chilling capacity @ 2.4 MLPD
18 Milk processing plants
Daily milk procurement from over 3 Lakh farmers. Daily avg procurement @ 1.8 Million Lit per day
199 Chilling centers
7200 + distributors
1.8 lakh retail outlets
859 Heritage Parlours ( owned )
352 Happiness Points ( owned )
Selling online - on 16 E-Comm websites
Serve > 1 cr consumers on a daily basis
Milk procurement from - 9 states
Milk sales into - 17 states

Last 3 Yrs Milk procurement growing @ 8 pc CAGR
Last 3 Yrs Milk sales CAGR @ 5 pc
Last 3 Yrs VAP sales CAGR @ 24 pc

Q3 financial Outcomes -

Revenues - 1033 vs 941 cr, up 10 pc
EBITDA - 74 vs 52 cr, up 43 pc ( margins @ 7.2 vs 5.5 pc - significant margin improvement )
PAT - 43 vs 27 cr, up 60 pc ( margins @ 4.2 vs 2.9 pc )

9M FY 25 financial outcomes -

Revenues - 3086 vs 2043 cr, up 9 pc
EBITDA - 251 vs 139 cr, up 80 pc ( margins @ 8.6 vs 4.9 pc - massive margin improvement )
PAT - 150 vs 66 cr, up 127 pc ( margins @ 4.9 vs 2.3 pc )

Percentage wise breakdown of sales -

Milk - 59 pc
Fat - 8 pc
VAP - 30 pc
Others - 3 pc

Organised sector’s mkt share in Curd, Ghee, Paneer continues to be < 20 pc. This is a huge opportunity

Investing aggressively behind media advertisements to drive Heritage branded VAP sales

Indian per capita milk consumption is @ 81kg/ yr vs over 200 kg/ yr in Developed markets

Q3 saw Among the VAP products, categories like - IceCreams, Paneer, Cheese, Drinkables are growing @ > 30-40 pc CAGR ( although on a smaller base )

IceCreams revenues in Q3 is at 16 cr. On an annual basis, company sells about 115-120 cr of Ice Creams ( skewed towards Q1 )

In Q1, the share of VAP are highest vs other Qtrs ( specially Lassi, Buttermilk, Ice Creams ). Cheese, Butter, DoodhPeda are not so seasonal. Q3 is very heavy wrt Butter and Ghee as the demand for Butter and Ghee - boosted by festive demand

Company intends to take its VAP share to 40 pc of sales. However, company still intends to maintain its long term EBITDA margins in 7-8 pc band. They intend to keep spending on marketing, sales promotion and advertisements ( still, there is likelihood of upward pressure on the margins as the VAP contribution keeps improving )

Adding 35-40 Heritage happiness points / Qtr

Company has not increased prices in last 18 months. In Q3, product wise volume growth is as follows - Milk by 5 pc , Curd by 12 pc, Cheese by 60 pc, Paneer by 71 pc, Drinkables by 23 pc, Sweets by 38 pc !!!

Company is expanding its Ice Cream manufacturing facility. Should go operational by Dec 25. Company adds aprox 1200 freezers / yr to keep expanding their Ice Creams distribution

Expecting Rs 1.5 to Rs 2 hike in blended procurement prices over next 1-2 Qtrs ( across Milk + Buffalo milk, across states )

In Q1 FY 24, company’s avg milk procurement price was Rs 44.8 vs Rs 41.9 at present. Company basically saw a relief of almost Rs 3 / lit in milk procurement prices over last 6 - 7 Qtrs

As the milk procurement prices go up again, company will pass on the same to consumers in a calibrated fashion

Disc: holding, added recently, not SEBI registered, not a buy/sell recommendation, posted for educational purposes only

[imurlovish]

Ranvir Ji is back to back moving towards Milk & Dairy sector , first Dodla, now Heritage

[ranvir]

Action Construction Equipment -

Q3 FY 25 results and concall highlights -

Company Profile -

World’s largest Pick & Carry Crane Manufacturer with Pan India and Global Presence in over 37 Countries

Established Brand with over 30 years of Industry Presence

Over 63% market share in the Mobile cranes segment in the country and a majority market share of more than 60% in Tower Cranes segment domestically

Additionally, ACE also offers Crawler Cranes, TruckMounted Cranes, Lorry Loaders, Backhoe Loaders, Vibratory Rollers, Motor Graders, Forklifts, Access Platforms, Tele-handlers, Tractors & Harvesters and other Construction Equipment

Company’s sectoral exposure -

Manufacturing - 43 pc
Infra - 35 pc
Agri - 10 pc
RE - 12 pc

Company intends to significantly ramp up its exports business. Products earmarked for export thrust include - Tractors, Telehandlers ( 2-4 Tons ) and Backhoe loaders

Q3 financial outcomes -

Revenues - 905 cr, up 17 pc YoY
EBITDA - 165 cr, up 31 pc ( margins @ 18.2 vs 16 pc )
PAT - 112, up 27 pc ( margins @ 12.3 vs 11.4 pc )

9M financial outcomes -

Revenues - 2458, up 15 pc
EBITDA - 434 cr, up 32 pc ( margins @ 17.6 vs 15.4 pc )
PAT - 290 cr, up 26 pc ( margins @ 11.8 vs 10.7 pc )

Q3 saw company achieve its highest ever revenues, EBITDA and PAT

Q3 performance was driven by company’s strategic focus towards driving higher value equipment sales and better realisations

In Q3, growth in Cranes, Material Handling, Construction equipment was @ 15 pc. Growth in Agri equipment was @ 24 pc

GoI’s continued thrust towards infra, manufacturing, power, logistics and housing sector augurs well for the company’s future

In a recent management interview with NDTV profit, guided for 3X profits within next 5 yrs

Exports + Defence - should contribute to 20 pc of their business in medium term

H1:H2 revenue breakup @ 45:55. H2 is always significantly better for the company ( with Q4 being the strongest )

Should be able to commercially start selling Electric Cranes by Q1 next FY

Ongoing Capex should end by Q4 taking company’s total revenue potential to Rs 5000 cr / yr

Import duty on cranes below 100 MT currently stands @ 7.5 pc. Govt is exploring imposition of further anti dumping duty on the import of cranes ( specially from China )

Seeing healthy demand trends in Q4

Q3 saw a volume growth of 19 pc. 9M volume growth @ 10.5 pc

ACE and KATO ( Japanese company ) are in talks for a potential JV ( for medium and large sized cranes ). Hope to conclude the deal by Q1 next FY. This JV may start full scale production in FY 27 ( barring some small scale production in FY 26 )

Company’s current export destinations include - ME, SEA, LatAm, Africa, SE Asia

Have been getting very positive feedback on their electric cranes. Very exited to launch them in next FY

Capex for 9M FY 25 has been 90-95 cr. With a further nominal capex, company can expand its capacity to a revenue of 5600 cr

Company buys engines from an array of manufacturers. Whichever manufacturer comes up with the best engines ( ICE/H2/EV ) - company is free to buy from them

With JV with KATOS, company aims to upgrade its own tech prowess and also of its products. Plus the KATOS JV / brand name should help them in export markets as well

The type of cranes that company intends to make with KATOS has a mkt size of about 1500 cr at present ( in India ) + the exports

Company is expecting one of their biggest defence order - anytime now ( executable over next 24-30 months )

Normally, a crane has a lifespan of 8-9 yrs

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

[ranvir]

Management commentary, business momentum, valuations - both in case of Dodla, Heritage look good

Plus, they r in a defensive sort of sector. So… Yes. I think, both should do well

[ranvir]

Crompton Greaves Consumer Electricals -

Q3 FY 25 results and concall highlights -

Revenues - 1769 vs 1693 cr, up 5 pc
Gross Margins @ 33.3 vs 32.5 pc
EBITDA - 188 vs 150 cr, up 26 pc ( margins @ 10.6 vs 8.8 pc - significant improvement )
PAT - 112 vs 85 cr

**Segmental revenues, EBITDA ** -

ECD ( electrical consumer durables ) - 1288 cr, up 6 pc. Margins @ 15.2 vs 13.6 pc

For 9Ms, ECD revenues grew by 14 pc with 27 pc growth in absolute EBITDA

Lighting - 257 cr, up 3 pc . Margins @ 10.8 vs 11.2 pc ( despite a sharp rise in A&P spending from 3.2 cr to 8.0 cr YoY )

For 9Ms, Lighting revenues grew by 4 pc, absolute EBITDA de-grew by 1 pc

Similarly, the A&P spends for 9Ms in the lighting segment jumped from 5 cr to 23 cr !!!

Butterfly - 238 cr, flat. Margins @ 7.2 vs 1.0 pc ( massive improvement )

Consumer sentiment continues to be subdued

ECD margin expansion led by disciplined pricing and tight cost controls

Air Coolers recorded highest ever pre-season sales in Q3

Mixer Grinders + Blenders grew 46 pc YoY in Q3 led by introduction of higher wattage models

Crompton + Butterfly - is now No 1 in Mixer Grinders in India

Growth in lighting is lower optically ( because of CFL sales in the base Qtr plus continued price erosion in the Industry )

Continuous expansion in new introductions / models - both Indoor and outdoor is helping the company grow its lighting business

Demand for TPW fans has been robust for last 3-4 Qtrs and has been outstripping ceiling fans demand ( led by lower penetration for TPW fans )

Non-Solar pumps are growing @ same rate as industry. In Solar pumps, company has executed 200 cr of business in last 12 moths. This should be a high growth area and expanded opportunity size going forward

Debt on books @ aprox 300 cr. Company is quickly paying down the debt taken on books for Butterfly acquisition. As this happens, finance costs should keep falling and other income should keep increasing

Growth in Butterfly business should accelerate going forward

**With every passing Qtr, company is improving both the front end and back end integration of Butterfly’s and Crompton’s manufacturing and sales infra. This should yield even better results going forward **

**Company did not disclose its order book on the Solar Pumps business. But its a significantly large order book ( said this much ) **

As the scale improves in the Butterfly + Crompton’s kitchen appliance business, margin trajectory should also improve meaningfully

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

[ranvir]

TD Power Systems -

Q2 and Q3 FY 25 Concall highlights -

Company’s products -

Generators - Over the years, TDPS has established itself as an international market leader in A.C generator manufacturing delivering a wide product spectrum from 1 to 250 MVA. Our machines cater to all prime movers including steam turbines, gas turbines, hydro turbines, wind turbines, gas engines & diesel engines

Motors - Company manufactures synchronous and induction motors designed to suit various industrial & irrigation applications - delivering high performance with greater reliability and efficiency. Their traction motors power complex propulsion systems that drive freight locomotives and passenger transit vehicles

Q3 outcomes -

Revenues - 351 vs 245 cr, up 43 pc
EBITDA - 61 vs 42 cr, up 46 pc ( margins @ 17 vs 16 pc )
PAT - 45 vs 30 cr, up 50 pc

Highlights from Q2 concall -

In the motors business, company expects to do 80 cr business this FY and 160 cr in FY 26. Most of the demand for motors is coming from India and Middle East

Company will start hiring people wef Q4 so as to start training them so they are ready by the time company’s new plant is ready in next FY. This new facility is going to be housed in 3 big buildings. They will be commissioned + operationalised one at a time ( as and when they r ready ie in stages )

The new plant that the company is putting up should cost them around 120 cr and they should be able to do revenues of aprox 400 cr from the same

The margins in the GeoThermal generators are > Hydro Electric generators due greater degree of sophistication and complexity involved

Turkey is one of the largest GeoThermal mkt in the world as they have multiple sites where these plants can be set up. They have those reservoirs. It’s a gift of nature. Now with stabilisation of their currency and moderation in inflation, Turkish mkt is showing signs of revival

Once the incremental orders start to pick up for the traction motors, company will also put up a completely new facility for traction motors as well. These r not as bulky as their generators. So - a smaller site, smaller building should suffice. Should come up in 5-6 months

Company is mostly getting its order for Waste 2 Energy generators from Japan and Singapore. The W2E plants are mostly supplying energy to Google’s Data centers in Japan and Singapore

Company has been supplying generators to hydro and gas based power plants for about 20 yrs now. They are also seeing good replacement demand for the equipment installed long back. They are also getting demand for replacement of equipment installed by the competitors

Highlights from Q3 concall -

Cash on books @ 200 cr

Order inflow in Q3 @ 407 cr - highest ever Qtly order intake

Total order book @ 1309 cr, out of which railways order stand @ 349 cr

Order inflows over 9M FY 25 have improved by 40 pc YoY

Exports orders in 9M FY 25 @ 752 cr vs 401 cr in 9M FY 24 - registering a strong 88 pc growth. This order book is mainly led by Gas Generators, Gas Engines and Motors

Most of these Gas turbine generators, Gas engines are used in grid stabilisation units, AI data centers, Heat power plants, GeoFarms. Expecting strong order flows to continue for next 18-24 months as well

Recieved a 46 cr repeat order from Turkish mkts in Q3. Expecting more going forward. Company does all its Turkish business in Euros and hence remains immune from Lira’s volatility

Revenue guidance for FY 25 @ 1270 cr and 1500 cr for FY 26 ( with scope for upward revision )

Looking at the current rate of order inflow, FY 26’s guidance may well receive an upwards revision

Company’s exports to US are 8 pc of company’s topline. In case of tariffs, the cost hikes will have to be passed onto the customers

Company’s India business is focussed on steam turbine generators - mainly used in captive power plants. Clearly, company’s India business will only get into a high growth trajectory once the private capex picks up. Not before that

Exports : Domestic : Railways order book split @ 25:49:26

Company has high exposure to Europe as a geography ( a key risk - IMHO )

Company has started hiring and training people for its third plant. Those costs are already in the P&L

Expect 400 cr to be the new normal for qtly

Won’t need to set up another plant till they hit topline of around 2000 cr

Steam and Gas turbine generators continue to drive bulk of company’s business followed by Hydro Turbine generators. Hydro segment is likely to be slower than other 2 segments as most Hydro projects have much longer gestation times

Company also supplies Motors to Nuclear power plants. It’s a steady business. Company is currently qualified for outside the dome applications. Have applied for Inside the dome qualifications too

Bulk of Company’s domestic business is Steam turbine generators followed by Hydro turbine generators ( hardly any gas generators ). Some new ( 03 projects of smaller capacity - mostly in NE ) Hydro power plants are coming up in domestic mkt where company is slated to supply

Depreciation costs iro new manufacturing plant will start to hit company’s P&L wef next FY

Company intends to scale up its Induction and Synchronous Motors business to 500-600 cr kind of topline in 3-4 yrs. Its a huge area of growth and a bigger TAM than company’s current range of generators

Motors business should eventually be higher margin business than company’s current avg

US intends to add another 100 GW of energy capacity till 2030. A lot of business should come company’s way as these new capacities start to come up

The Motors mkt is 8-10X the generator’s mkt. Therefore, this business can potentially be really big in long term

Company is capable of making Gas turbine generators that run on Hydrogen

Most of EU’s demand is coming from grid stabilisation and data centers ( despite weakness the Eurozone’s economy ). As renewables share in total energy mkt keeps increasing, the demand of grid stabilisation is expected to remain robust

Company doesn’t bid for these orders. Company supplies to the big utility companies / data center companies / prime mover companies who in-turn do the bidding

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

[ranvir]

Maruti Suzuki -

Q3 FY 25 results and concall highlights -

Revenues - 36802 vs 31860 cr, up 15.5 pc
Gross margins @ 25.3 vs 26 pc
EBITDA - 3665 vs 3156 cr, up 16 pc ( margins @ 10 vs 9.9 pc )
PAT - 3525 vs 3130 cr, up 13 pc

Q3 Sales volumes @ 5.66 vs 5.01 lakh vehicles, up 13 pc
9M sales volumes @ 16.29 vs 15.51 lakh vehicles, up 5 pc

Breakup of Q3 sales -

Domestic - 4.66 lakh, up 9 pc ( including sales to Toyota )
Exports - 0.99 lakh, up 38 pc

E Vitara is going to to come with 2 battery pack options - 49KWH and 61 KWH. The latter shall have a single charge range of 500 km

Company to offer smart home chargers along with installation support along with E-Vitara. Will also provide fast charging stations across top 100 cities and then expand further

Maruti Suzuki ( not Suzuki Motors Japan ) will take on the exports baton for E Vitara. Company intends to export it to over 100 countries world wide + OEM sales to Toyota ( with Cross Badging as Urban Cruiser EV )

Company aspires to be biggest EV maker in India within FY 26

In Q3, Maruti’s share in car exports from India stood @ 50 pc !!!

Avg discount / vehicle in Q3 was @ Rs 32k which is similar to discounts offered in Q3 FY 24

Rural growth is doing far better than Urban

Their new plant at Kharkoda has commenced production in Q4

In Q3, value of export sales was around 6500 cr

Margins on EVs are likely to be lower than company’s corporate avg. However, the company is likely to get PLI benefits on E-Vitara’s sales

Exports are turning out to be a happy story for the company. Company is doing well in LatAm, Africa and ME

Wrt Dzire, 37 pc of new bookings are for the top Spec variant vs 19 pc for the old Dzire. This is great news for the company. 5 Star safety has been a big clincher for the new Dzire

Strong Q3 sales have ensured that high dealer inventories are a thing of the past - a key positive

Suzuki is setting up an EV battery manufacturing plant @ Hansalpur ( Gujarat ). At present, company’s EV batteries are imported. Sometime in future, company shall start procuring batteries from this plant

Disc: holding, biased, added recently, not SEBI registered

[abhijitjph]

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