Ranvir's Portfolio

Adani Ports -

Q4 and FY 25 results and Concall highlights -

Company’s current port facilities -

West Coast -

Mundra - 264 MMT
Kandla - 20 MMT
Dahej - 16 MMT
Hazira - 30 MMT
Dighi - 8 MMT
Mormugao - 5 MMT
Vizhinjam - 18 MMT
Total - 361 MMT

East Coast -

Haldia - 4 MMT
Dhamra - 50 MMT
Gopalpur - 20 MMT
Gangavaram - 64 MMT
Krishnapatnam - 75 MMT
Kattupalli - 25 MMT
Ennore - 12 MMT
Karaikal - 22 MMT
Total - 272 MMT

In addition, company is operating 3 overseas ports @ Haifa ( Israel ), Dar Es Salaam ( Tanzania ), Colombo ( Sri Lanka ) and a terminal @ Abbott Point ( Australia )

Logistics Infra owned by the company includes -

12 MMLPs
14 Agri Silos with a capacity of 1.2 MMT
7 large warehouses with a capacity of 3.1 MMT
68 Container rakes - handling cargo across 111 routes, 34 locations and 18 states ( its basically a container train )
54 Bulk rakes
7 Agri rakes - designed to handle agri products
3 AFTO rakes - designed for car transportation services
937 trucks
115 marine vessels

Company’s land banks -

Dhamra - Aprox 2000 hectares ( 1 hectare is 100m X 100m )
Mundra - Aprox 12500 hectares
Gangavaram - Aprox 1000 hectares
Krishnapatnam - Aprox 2750 hectares

FY 25 outcomes -

Revenues - 31079 cr, up 16 pc
EBITDA - 19025 cr, up 20 pc
PAT - 11061 cr, up 37 cr
Cargo volumes @ 450 vs 420 MMT

Company’s all India Cargo mkt share for FY 25 stood @ 27 pc vs 26.5 pc in FY 24. Their mkt share in container cargo stood @ 45.5 pc vs 44 pc in FY 24

Q4 outcomes -

Revenues - 8488 cr, up 23 pc
EBITDA - 5006 cr, up 24 pc
PAT - 3023 cr, up 50 pc
Cargo volumes @ 118 vs 109 MMT

FY 26 guidance -

Revenues - 36-38k cr
EBITDA - 21-22k cr
Capex @ 11-12k cr
Cargo volumes @ 505-515 MMT

Breakdown of cargo handled -

Container cargo - 42 vs 37 pc
Coal - 33 vs 38 pc
Dry ( ex-coal ) - 15 vs 16 pc
Crude - 6 vs 6 pc
Gas - 2 vs 2 pc
Liquids ( ex-crude ) - 2 vs 2 pc

Most of the growth in Q4 and FY 25 led by container volumes

Breakdown of proposed capex for FY 25 -

Domestic ports - 6000 cr
International ports - 2000 cr
Marine - 620 cr
Logistics - 2000 cr
Tech and Decarbonisation - 1380 cr

As the company is transforming from being a port operator to a complete and integrated logistics player owning trains, MMLPs, Agri Silos, Warehouses, Marine vessels ( & now entering the trucking business ), company’s EBITDA has started running ahead of their volume growth ( & naturally so )

Going forward, company’s inland logistics, trucking and Marnie business are slated to grow at much higher pace vs the ports business

There was a 40 day long strike @ Gangavaram port in H1 FY 25 which led to a loss of business to the tune of 10-12 MMT for the company

Company aspires to have a total ( national + international ) port capacity of 1000 MMT by 2030. Out of this, international capacity should be around 150 MMT

In FY 25, marine business clocked a revenue of 1145 cr with an EBITDA of 604 cr. Company intends to to be operating a fleet of 150 vessels by 2027 with a revenue of 3300 cr + and EBITDA in the vicinity of 1700 cr from marine line of business

Segmental revenues, EBITDA margins for FY 25 -

Domestic ports - 22740 cr, margins @ 73 pc
International ports - 3380 cr, margins @ 14 pc
Logistics - 2881 cr, margins @ 22 pc
Marine - 1145 cr, margins @ 53 pc
SEZ and Port development - 933 cr, margins @ 87 pc

Segmental RoE for FY 25 -

Domestic ports - 21 pc
International ports - 6 pc - aim to take this upto 14-15 pc in medium term
Logistics - 6 pc - should take some time before the ROE ramps up
Marine - 13 pc

Still open to more international acquisitions in the ME- Africa, SE Asia regions. More interested in expanding the Marine business

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

6 Likes

Thanks for this update. Company seems to have a lead ahead others in this space. Any insight on the barrier to entry for this business and competition perspective.

Entry barriers to the Ports business are literally quite tall. It’s capital intensive -1. U can’t have just one port and hope to clock great margins. U need to own multiple of them to be able to generate network effects, give / offer better deals to customers, extract economies of scale

A network of 19 ports + multiple logistic parks + Warehouses is like having / owning multiple permanent toll bridges where in u can keep extracting steady cash flows forever

Competition has to spend like crazy to even think of coming close

4 Likes

Hi, My query was on entry barrier was on Time technoplast

Oh … I m sorry

WRT Time Techno, the only entry barrier is the economies of scale and established customer relationships. For a new entrant, it may take a decade to replicate all this

Plus the business is not big enough ( nor is ever likely to be that big ) for the large corporate houses ( like Reliance, Tatas, Adanis, Birlas etc ) to enter

3 Likes

Akums Drugs and Pharmaceuticals -

Q4 and FY 25 results and concall highlights -

Company’s manufacturing facilities -

Haridwar -1 - General - Oral Solids
Haridwar - 2 - General - Oral Liquids
Haridwar - 3 - General - Injectables
Haridwar - 4 - Hormonal - Oral Solids, Injectables, Topical
Haridwar - 5 - Cosmetics - Topical
Haridwar - 6 - Ayurvedic / Nutraceuticals - Oral Solids + Liquids
Haridwar - 7 - General - all 4 dosage forms
Haridwar - 8 - B-Lactams and Steroids - all 4 dosage forms
Haridwar - 9 - General - Injectables
Kotdwar - Penems, Anti Infectives - Oral Solids, Oral Liquids, Injectables
Baddi - General - Oral Solids and Liquids
Derabassi - APIs - B Lactams ( mainly Cephalosporins )
Lalru - APIs - General APIs
Barwala - R&D center

Dosage form wise breakup of FY 25 revenues -

Oral solids - 73 pc
Injectables - 11 pc
Oral liquids - 8 pc
Topicals - 8 pc

Differentiated dosage forms that company offers include - tablet in Tablet, Bi Layered tablets, Tri - Layered tablets, Gummies, multiple tablets in capsule, pre filled syringes, lyophilised vials, mouth melting powder sachets

Q4 outcomes -

Revenues - 1073 vs 954 cr, up 12 pc
EBITDA - 111 vs 98 cr, up 13 pc ( margins @ 10.4 vs 10.3 pc )
PAT - 44 vs 46 cr, down 5 pc

Segmental revenues, margins -

CMO - 840 vs 732 cr. Margins @ 10.6 pc
Domestic branded - 104 vs 94 cr. Margins @ 21.6 pc
International branded - 40 vs 21 cr. Margins @ 22.1 pc
Trade generics - 22 vs 33 cr. Margins @ (-) 50 pc
APIs - 50 vs 64 cr. Margins @ (-) 12 pc

FY 25 outcomes -

Revenues - 4170 vs 4212 cr, down 1 pc
EBITDA - 513 vs 515 cr ( margins @ 12.3 vs 12.2 pc )
PAT - 234 vs 220 cr, up 6 pc

Segmental revenues, margins -

CMO - 3208 cr, down 1.8 pc. Margins @ 14.1 pc
Domestic branded - 434 cr, up 9 pc. Margins @ 17.7 pc
International branded - 143 cr, up 14 pc. Margins @ 19.3 pc
Trade generics - 115 cr, down 35 pc. Margins @ (-) 24 pc
APIs - 219 cr, up 3 pc. Margins @ (-) 20 pc

Capex in API segment is largely behind. Should be able to double their API sales from current levels. Cost optimisation initiatives to improve profitability are progressing well. At present, company makes 22 APIs with top 5 molecules contributing to 80 pc of sales

Company’s top therapeutic areas wrt their domestic branded formulations include - paediatrics, gynaecology, cardiology. Company is currently ranked no 58 in domestic mkt

Company’s top destinations for their exports business include - Uganda, Nigeria, Philippines, Myanmar, Cambodia

Capex lined up for FY 26 @ 300 cr to set up new lines for Onco drugs, Steroids , LBPs ( live bio-therapeutic products )

Have signed a 200 million euros CMO contract with a global Pharma company. have received 100 million Euros advance against the same ( in Apr 25 ). Supplies to start in 2027

ANVISA Brazil inspected their Injectables facilities in Q4. Hopeful to get an approval in H1

Cash on books now @ 1520 cr ( including the 950 cr received against the European CMO contract )

Volume growth for FY 26 should be in high single digits. Absolute topline growth would depend on weather the API prices rise / fall as the company follows a Cost + model

Have been incurring losses in the trade generics business for last 2-3 yrs. Looking to consolidate the business ( operate only in those areas where they are likely to make money ) going forward so as to minimise losses

Looking @ inorganic opportunities ( in CMO or branded generic export segment ) in order to best use the cash on books

In FY 26, company expect to maintain similar margin profile as FY 25 for CMO, Branded generics business. Should be able to reduce EBITDA losses in both the trade generics and API businesses. Hence, overall margins at the company level should move up

Confident of reducing the API business losses to at least half of FY 25 levels in FY 26

Capex required in order to serve the European contract shall be around 200 cr ( to be incurred @ their Baddi plant )

API business will only pickup once the Cephalosporin prices pick up

The API business that the company operates was acquired via IBC proceedings ( where in they acquired Parabolic drugs ). Company got credits against 870 cr of previous losses which they plan to utilise over next 3-4 yrs ( hence their tax rates shall continue to remain on the lower side )

The European contract should be a 320 - 340 cr / yr kind of business for the company, lasting 6 yrs ( starting Mar 2027 ). EBITDA margins should be around 14-15 pc wrt this contract

International branded business should keep growing at rates > mid teens for next 2-3 yrs ( not accounting for any possible inorganic opportunities that the company is on the lookout for )

Capex breakdown for FY 26 - 100 cr of maintenance capex + 200 cr of growth capex ( mostly @ Jammu )

Once the base of API business grows to around 400 cr/ yr, company expects to start making profits in this segment

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

1 Like

In today’s age of widespread GenAI availability users can at least take a first step to get started with their queries, formulate more in depth questions and contribute towards more meaningful discourse

One sample response, while not always ideal should give the reader enough materials to get started. Happy Investing!

Navigating a Complex Landscape: The Entry Barriers for a Diversified Player Like Time Technoplast

For a company as diversified as Time Technoplast Ltd., a leading manufacturer of polymer and composite products, the entry barriers for potential competitors are not uniform. They vary significantly across its diverse business segments, which range from high-volume industrial packaging to technologically advanced composite cylinders. While some of its markets are characterized by intense competition due to lower entry hurdles, Time Technoplast has strategically built moats in other areas, creating significant obstacles for new entrants.

The primary entry barriers for a company operating in similar domains as Time Technoplast can be broadly categorized into:

  1. Capital Intensive Operations and Economies of Scale:
  • High Initial Investment: Setting up manufacturing facilities for a wide array of polymer and composite products, including large-size drums, intermediate bulk containers (IBCs), and especially composite cylinders, requires substantial capital investment in machinery, technology, and infrastructure.
  • Economies of Scale: As an established player with a large production capacity and a global footprint, Time Technoplast benefits from economies of scale. This allows them to procure raw materials at more competitive prices and optimize their manufacturing processes, leading to cost advantages that would be difficult for a new, smaller player to match.
  1. Technological Expertise and Research & Development:
  • Proprietary Technology and Innovation: In its value-added segments, particularly composite cylinders (for CNG, LPG, and industrial gases) and specialized automotive components, Time Technoplast has invested heavily in research and development. Their technological know-how in areas like filament winding for composite cylinders and developing multi-layer plastic fuel tanks is a significant differentiator and a barrier to entry. The company is a pioneer in India for Type-IV composite cylinders, showcasing a technological edge that is not easily replicable.
  • Continuous Product Development: A strong in-house R&D team enables Time Technoplast to continuously innovate and introduce new products, often as substitutes for traditional materials like metal. This culture of innovation keeps them ahead of potential competitors who may only offer standard products.
  1. Stringent Regulatory Approvals and Certifications:
  • Complex and Time-Consuming Approvals: Many of Time Technoplast’s products, especially those used for storing and transporting hazardous materials (chemicals, petroleum products, gases), are subject to stringent regulations and require approvals from various national and international bodies. For instance, in India, obtaining approvals from the Petroleum and Explosives Safety Organisation (PESO) for composite cylinders is a rigorous and lengthy process.
  • Established Trust and Compliance: Having already secured these critical certifications, Time Technoplast enjoys the trust of its customers and a significant head start over new entrants who would need to navigate this complex regulatory landscape from scratch.
  1. Established Customer Relationships and Brand Equity:
  • Long-Standing Contracts and Institutional Clientele: Over the years, Time Technoplast has cultivated strong relationships with a vast and diversified institutional customer base, including major players in the chemical, pharmaceutical, FMCG, and automotive sectors. These long-term contracts and preferred supplier status are difficult for newcomers to break into.
  • Brand Recognition and Trust: The “Time” brand is well-established and recognized for its quality and reliability in the industrial packaging and polymer products space. Building a comparable level of brand equity would require significant time and marketing investment for a new company.
  1. Global Presence and Supply Chain Management:
  • International Footprint: With manufacturing facilities in multiple countries, Time Technoplast has a resilient and efficient global supply chain. This allows them to cater to multinational clients and mitigate risks associated with regional market fluctuations. A new entrant would likely have a more localized and less robust supply chain.
  • Raw Material Sourcing: Their ability to source raw materials globally and in large volumes provides a cost and logistical advantage.
    Challenges in Lower-End Markets:
    It is important to note that not all of Time Technoplast’s segments have high entry barriers. In the market for smaller, standard industrial packaging and certain lifestyle products, the barriers are relatively low, leading to a fragmented market with intense competition from numerous smaller and unorganized players. In these segments, the competition is primarily on price, which can exert pressure on profitability.
    In conclusion, while a company like Time Technoplast faces a competitive environment, it has successfully created and fortified significant entry barriers in its more technologically advanced and value-added product segments. These barriers, built on a foundation of capital investment, technological prowess, regulatory compliance, and strong customer relationships, provide a sustainable competitive advantage and a formidable challenge to any new company looking to enter its key markets.
4 Likes

Dabur India ( studying as a contrarian / trading bet ) -

Q4 and FY 25 results and concall highlights -

FY 25 outcomes -

Revenues - 12653 cr, up 1.3 pc
EBITDA - 2316 cr, down 3.5 pc ( margins @ 18.4 vs 19.4 pc )
PAT - 1768 cr, down 4 pc

International sales @ 3281 cr, grew 17 pc in constant currency terms / 8 pc in INR terms ( 26 pc of company’s total sales ). Bulk of international sales come from - Egypt, Sub Saharan Africa, MENA, Bangladesh, Turkey, US

Q4 outcomes -

Revenues - 2830 cr, up 1 pc
EBITDA - 427 cr, down 8.5 pc ( margins @ 15.1 vs 16.6 pc )
PAT - 320 cr, down 8.5 pc

India business declined by 3.5 pc in Q4 @ 2016 cr
International sales in Q4 @ 814 cr, grew 19 pc in constant currency terms, 13 pc in INR terms

Total dividend declared for FY 25 @ Rs 8 / share ( corresponds to 1417 cr )

Segmental volume growth in Q4 ( domestic business ) -

Oral care - down 5 pc ( on a high base LY where it grew 22 pc )
Hair Care - down 5 pc
Home Care - up 1 pc ( Odonil grew in mid single digits, Odomos de-grew due high base in LY Q4 )
Skin Care - grew 9 pc ( led by Gulabari )
Health Supplements - down 4 pc ( due weakness in Honey and Chavanprash on account of weak winters )
OTC and Ethicals - down 8 pc ( on account of weakness in Lal Tail, Honitus - due weak winters. Health juices grew strongly at 25 pc )
Digestives - down 2 pc
Beverages - down 9 pc
Foods - up 14 pc ( strong growth in Homemade, Lemoneez )
Badshah - grew 6 pc ( volume growth @ 11 pc )

Emerging channels like E-Comm, Quick Comm, Modern trade grew in double digits in FY 25. General trade, Urban consumption continue to remain under pressure

70 pc of Company’s beverage sales come from Urban India, which was impacted by a consumption slowdown. Despite this ( + increased competitive intensity from Campa ), the premium portfolio comprising of Real Activ and Coconut water grew by 11 pc

8 of company’s brands clock annual sales of > 500 cr. These are - Dabur Red, Chawanprash, Honey, Hajmola, Odonil, Dabur Amla and Vatika

Company is aggressively pursuing M&A opportunities in the new age healthcare, wellness foods, premium personal care spaces

Company is planning to exit categories / products like - Daipers, Vita, Tea and Sanitizers. They ll focus their energy and capital on their mainstream brands + a few bold bets that the company is planning to make

In the last 4-5 yrs, company’s main focus was on consolidating and gaining mkt shares in Hair Oils, Honey, Juices, Chavanprash etc. Now onwards, company shall focus disproportionately on premiumisation like launching - premium shampoos, hair serums, newer variants of Juices etc

Rural growth in holding up well even in Q1

Company is aspiring for double digit value ( volume + price ) growth for full FY 26

Company’s premium cold pressed oils and ghee are already growing @ a rapid pace of around 30 pc

Since Dabur was always over indexed on Rural India, they never attempted serious premiumisation anytime in the past

Company has taken 3-4 pc price hikes in Q1. These should help them offset the margin contraction they saw in Q4 ( company did price hikes in Q4 to the tune of around 3 pc but that was not sufficient to offset the inflation seen in Q4 which was @ around 5 pc ). Should see benefits of both these hikes going forward - ie wef Q1 ( as they flow through the system )

The premiumisation efforts in Hair Oils shall only be focussed on Urban areas ( and not in rural areas )

FMCG growth in Rural India is outperforming Urban India by aprox 450 bps on the back of - msp hikes, increased MNREGA outlay, lower food inflation

Disc: hold a small position, a trading bet, looking for a bump in stock price if the Q1 results are good, not SEBI registered, not a buy/sell recommendation

1 Like

Cera Sanitaryware -

Q4 and FY 25 results and concall highlights -

FY 25 outcomes -

Revenues - 1915 vs 1871 cr
EBITDA - 293 vs 295 cr ( margins @ 15 vs 16 pc )
PAT - 246 vs 239 cr

Q4 FY 25 outcomes -

Revenues - 578 vs 547 cr, up 5 pc
EBITDA - 106 vs 92 cr, up 14 pc ( margins @ 18.3 vs 16.8 pc - healthy incline in margins - due cost optimisation efforts and favourable operating leverage )
PAT - 86 vs 75 cr, up 14 pc

Kiara Advani continues to remain company’s brand ambassador

Total Cera experience centers @ 13 across major cities. Store Size @ 7000 Sq Ft. Aim is to only display the company’s range ( no sales orientation ). These are company owned centers

Total Cara Style Galleries ( retailer owned, dedicated CERA brand outlet ) @ 234. Min store size @ 1000 Sq Ft

Total Cera Style Hubs ( retailer owned, dedicated CERA brand outlet ) @ 226. Store Size @ 500 - 800 Sq Ft

Total operational Cera Style Centers ( retailer owned, dedicated CERA brand outlet ) @ 1316. Aim to add another 1400 centers over next 4 yrs. Store Size @ 100 - 500 Sq Ft

Company continues to sell its products under 3 brand names - Senator, Cera LUXE and Cera

Cash on books @ 720 cr

For FY 25, Sanitaryware : Faucetware : Tiles + Wellness sales breakup stood @ 48 pc : 40 pc : 12 pc

Dedicated efforts are on to establish Senator as company’s premium brand. Currently operate 17 Senator stores with a plan to take them upto 50 stores by end of FY 26. Also aim to make Cera Luxe products available @ 50 stores by end of FY 26

Advertisement + Marketing spends in FY 25 @ 54 cr

Capex in FY 25 @ 23 cr - towards upgrading IT infra, improving retail displays. Aim to spend 25 cr on similar lines in FY 26

Wt Avg Gas costs for Q4 @ 36.03 / cubic meter ( Gas costs stood @ 3 pc of company’s revenues )

FY 25 - segmental revenue growth -

Faucets - 9.6 pc
Sanitaryware - (-) 1.6 pc
Wellness products - 46 pc
Tiles - 4.7 pc

Q4 breakdown of sales -

42 pc - premium segment
35 pc - mid segment
23 pc - entry segment

Net working capital days increased form 60 to 80 days in Q4 FY 25 vs Q4 LY

Geographical mix of Q4 sales -

35 pc - Tier 1
21 pc - Tier 2
44 pc - Tier 3 and beyond

Increase in WC days is primarily because the company has discontinued its cash discount sales

Project sales continue to remain healthy. Percentage of project sales as a percentage of company’s total sales has gone up from 30 pc in FY 23 to almost 40 pc in FY 25. Retail sales continue to remain sluggish ( for last 6 Qtrs now )

The slowdown in sanitary ware ( retail sales ) is more acute vs slowdown in other segments like Faucets

Exports contribute to 3.5 pc company’s total sales

Expect the project sales to remain buoyant in FY 26 as well

Company expects better pricing ( ie lower discounts vs last 6 Qtrs ) in the retail segment in FY 26. Early signs of that are visible in Q1

Company’s aspiration is that 10 pc of their revenues should come from Luxe, Senator brands within next 3 yrs

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

1 Like

Phoenix Mills -

Q4 and FY 25 results and concall highlights -

Company’s portfolio of Malls / annual rental income in FY 25 vs 24 / annual EBITDA -

Phonenix Palladium Mumbai - Rental @ 394 vs 383 cr / EBITDA @ 401 vs 399 cr
Phoenix Market City Bengaluru - Rental @ 206 vs 201 cr / EBITDA @ 220 vs 209 cr
Phoenix Market City Pune - Rental @ 218 vs 211 cr / EBITDA @ 243 vs 221 cr
Phoenix Market City + Palladium Chennai - Rental @ 225 vs 212 cr / EBITDA @ 244 vs 226 cr
Phoenix Market City Mumbai - Rental @ 179 vs 133 cr / EBITDA @ 189 vs 166 cr
Phoenix Palassio Lucknow - Rental @ 143 vs 133 cr / EBITDA @ 148 vs 138 cr
Phoenix United Lucknow - Rental @ 34 vs 34 cr / EBITDA @ 33 vs 32 cr
Phoenix United Bareilly - Rental @ 26 vs 25 cr / EBITDA @ 26 vs 26 cr
Phoenix Citadel Indore - Rental @ 89 vs 89 cr / EBITDA @ 83 vs 85 cr
Phoenix Palladium Ahmedabad - Rental @ 122 vs 85 cr / EBITDA @ 109 vs 67 cr
Phoenix Mall of Millennium Pune - Rental @ 149 vs 65 cr / EBITDA @ 142 vs 56 cr
Phoenix Mall of Asia Bengaluru - Rental @ 166 vs 56 cr / EBITDA @ 171 vs 49 cr

Total rental income - 1951 vs 1660 cr, up 18 pc
Total EBITDA from malls - 2010 vs 1673 cr, up 20 pc

In Q4, rental incomes from malls stood @ 482 vs 445 cr, up 8 pc

In Q4, EBITDA from malls stood @ 499 vs 448 cr, up 11 pc

Expansion of Phoenix Mall @ Mumbai is under progress. It ll add 2.5 lakh Sq Ft of leasable area to the mall

Office Spaces -

Company’s portfolio of commercial offices / annual income in FY 25 vs 24 / annual EBITDA -

Art Guild House Mumbai - Income @ 94 vs 83 cr / EBITDA @ 68 vs 56 cr

Phoenix Paragon Mumbai - Income @ 34 vs 33 cr / EBITDA @ 18 vs 17 cr

The Centrium Mumbai - Income @ 14 vs 12 cr / EBITDA @ 8 vs 6 cr

Phoenix House Mumbai - Income @ 10 vs 13 cr / EBITDA - NA ( as its a part of Palladium Mumbai )

Fountainhead Pune - Income @ 58 vs 49 cr / EBITDA @ 37 vs 31 cr

Total commercial office Income @ 210 vs 190 cr, up 10 pc
Total Commercial office EBITDA for FY 25 @ 131 cr, up 19 pc

Company’s tenants include - Xiaomi, Cipla, JSW, Hitachi, Bajaj Finance, MI etc. Gross leasing space @ 3 million Sq Ft. Another 4 million Sq Ft is under construction / development

Upcoming office spaces -

Millennium towers Pune - 13 lakh Sq Ft. OC received for tower no 3 - 5 lakh Sq Ft. Occupation certificates for tower no 1 and 2 are expected within FY 26

Phoenix Asia towers Bengaluru - 8 lakh Sq Ft. Upcoming metro station within the campus. Pre - leasing has commenced

One National Park Chennai - 6 lakh Sq Ft - should also come up within FY 26

Hospitality -

Company’s portfolio of Hotels / annual Revenues / annual EBITDA -

St Regis Mumbai ( @ Lower Parel ) - Revenues @ 523 vs 491 cr / EBITDA @ 248 vs 223 cr
Courtyard by Marriot Agra - Revenues @ 57 vs 55 cr / EBITDA @ 18 vs 16 cr

Total hospitality Revenues @ 580 cr, up 6 pc
Total hospitality EBITDA @ 266 cr, up 11 pc

Residential Portfolio -

Project wise sales recognised in FY 25 -

One Bengaluru West + Kessaku Bengaluru - 212 cr

Q4 Outcomes -

Revenues from core business (Retail + Offices + Hotels ) - 894 vs 829 cr, up 8 pc
Revenues from residential unit sales and other non core businesses - 122 vs 477 cr, down 74 pc
Total revenues - 1016 vs 1306 cr, down 22 pc
EBITDA from core businesses - 510 vs 490 cr, up 4 pc
EBITDA from non core businesses - 49 vs 137 cr, down 64 pc
Consol EBITDA - 560 vs 627 cr, down 11 pc
PAT - 269 vs 389 cr, down 18 pc

FY 25 outcomes -

Revenues from core business - 3507 vs 3030 cr, up 16 pc
Revenues from non core businesses - 306 vs 947 cr, down 68 pc
Consol Revenues - 3814 vs 3978 cr, down 4 pc
EBITDA from core business - 2111 vs 1815 cr, up 16 pc
EBITDA from non core business - 50 vs 362 cr, down 86 pc
Consol EBITDA - 2161 vs 2177 cr, down 1 pc
PAT - 984 vs 1099 cr, down 10 pc

Consol Cash and Cash equivalents @ 1329 vs 1722 cr YoY

Consol Gross Debt @ 3258 vs 3281 cr YoY ( avg cost of Debt @ 8.5 vs 8.8 pc YoY )

Land acquisitions in last 2 yrs -

Sep 24 - Mohali - 13 acres - Retail led mixed use
Aug 24 - Coimbatore - 9 acres - Retail
Apr 24 - Bengaluru - 6.6 acres - Under Planning
Nov 23 - Thane - 11.5 acres - Retail led mixed use
Feb 23 - Kolkata - 5.5 acres - Residential
Dec 22 - Surat - 7.2 acres - Retail

Company has added 5 malls ( 5.5 million Sq Ft of retail leasable area ) in last 5 yrs ( total mall count now @ 12, leasable area @ 11.5 million Sq Ft ). Aim to add another 5 malls by 2030 @ Thane, Chandigarh, Coimbatore, Surat and Kolkata taking total leasable area to 18 million Sq Ft

Targets for FY 27 -

Retail leasable area @ 14 vs 11.5 million Sq Ft currently
Office leasable area @ 7 vs 3 million Sq Ft currently
Hotel rooms @ 988 vs 588 currently

Secured additional FSI of 3.4 lakh Sq Ft @ Lower Parel in Q4 for 586 cr - Development planning for this asset is under progress

In Apr 25, company saw an avg of 14 pc YoY increase in retail sales across their retail assets ( indicating strong consumer spending )

Capex for FY 25 @ 2600 cr. Out of this, 1600 cr was spent towards land acquisition ( + additional FSI acquisition ), 1000 cr was spent on construction activities

Company’s Bengaluru mall is slated to open another floor with a leasable area of 1.7 lakh Sq Ft towards the end of FY 26. FY 27 should be a strong year for Market City Bengaluru

Phoenix Mkt City Mumbai is also going to add 50 k Sq Ft of leasable area in FY 26. Palladium Mumbai has added a new zone of 2.5 lakh Sq Ft leasable area. Should go live in Jul 26

Between Pune, Bengaluru and Chennai - active discussions r on for 12 lakh Sq Ft wrt leasing of company’s newly built office spaces. This should provide a good bump up to their Office spaces rental income in H2 this yr

Company charges either a fixed rent or a revenue share ( whichever is higher ) to its tenants. 75 pc of company’s tenants have hit revenues where their revenue shares > their fixed rentals ( a very healthy sign )

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

4 Likes

Somany Ceramics ( trading bet ) -

Q4 and FY 25 results and Concall highlights -

Q4 outcomes -

Revenues - 766 vs 732 cr, up 4.7 pc
EBITDA - 62 vs 79 cr, down 21 pc ( margins @ 8.2 vs 10.9 pc )
PAT - 19 vs 34 cr, down 31 pc ( depreciation @ 29 vs 19 cr YoY )

FY 25 outcomes -

Revenues - 2643 vs 2577 cr
EBITDA - 221 vs 253 cr ( margins @ 8.4 vs 9.8 pc )
PAT - 60 vs 97 cr, down 38 pc ( due higher interest outgo and much higher depreciation )

Company’s manufacturing facilities -

Tiles -

Tirupati - 7.08 MSM
Morbi - 11.44 MSM
Ahmedabad - 10.13 MSM ( they also manufacture Tile’s adhesives @ Ahmedabad )
Bahadurgarh - 23.32 MSM

Faucets -

Derabassi - 1.3 million pieces

Sanitaryware -

Morbi - 0.48 million pieces

Breakup of FY 25 sales -

Tiles ( own manufacturing ) - 725 vs 815 cr
Tiles ( JVs ) - 840 vs 815 cr
Tiles ( outsourced ) - 688 vs 611 cr
Bathware - 295 vs 266 cr
Others - 92 vs 67 cr

Total volume of tiles sold in FY 25 vs 24 @ 70.85 vs 69.31 MSM, up 2 pc YoY

Industry view - Tiles exports from India saw a 20 pc YoY dip in FY 25. Domestic demand was also sluggish

Company’s capacity utilisation for FY 25 stood @ 81 pc down from 86 pc in FY 24

Revenue breakup of tiles for full FY -

Ceramic - 34 pc
PVT - 28 pc
GVT - 39 pc

Avg gas prices for FY 25 stood @ Rs 44 / cubic meter ( similar to FY 24 prices )

Capacity utilisation @ Sanitaryware plant stood @ 96 pc. Faucets plant is running at peak capacity. Sanitaryware + Faucets sales grew by 11 pc in FY 25. Likely to clock double digit sales growth in bathware in FY 26 as well

Guiding for a high single digit / low double digit revenue growth for FY 26 ( volume led ). EBITDA margins should improve by 150 bps if the company is able to achieve this projected sales growth

Company’s new plant @ Morbi, producing large format GVT tiles and slabs is currently loss making. It’s operating @ 55 pc capacity utilisation. Once it reaches a capacity utilisation of > 75 pc, company expects a complete turnaround here

Sales breakup for FY 25 - Retail sales @ 81 pc, Private + Govt project sales @ 19 pc. For next FY company estimates that Govt + Private project sales should touch 25 pc of total sales

This yr, export of tiles from India are expected to be better than FY 25. This should help offset some pricing pressures from the domestic industry

No growth capex planned for FY 26

Advertisement spends for FY 25 were @ 2.5 pc of sales

20 pc of company’s sales come from Tier - 1 cities

Not planning any price hikes in near future

Weak exports form Morbi led to pricing pressures in the domestic mkt in FY 25 and company had to resort to increased discounting. This has hit their Gross and EBITDA margins this yr. Situation wrt exports is now seeing an improvement

Seeing good demand scenario in domestic mkts in Apr, May. This is where the company’s optimism is coming from wrt FY 26. Also, the freight rates have corrected substantially now vs LY which should help exporters and hence should resort to lesser dumping in domestic mkts

Company added 41 new exclusive stores in FY 25

Post COVID, Morbi players expanded their capacities very aggressively - hoping to cash in on the export markets. This has led to volume and pricing pressures for the likes of Kajaria and Somany in the domestic mkts. As this capacity gets absorbed + the Morbi players realise that it’s not easy to sell in domestic mkts - this added competition should abate gradually ( over next 1-2-3 yrs )

Last yr, 70-80 plants have been shut in Morbi. Its likely that another 50-60 plants are shut down this year as well ( because of the over capacity )

Disc : added a small tracking position, studying, not SEBI registered, not a buy / sell recommendation, posted only for educational purposes

2 Likes

Senco Gold -

Q4 and FY 25 results and Concall highlights -

Share of organised sector in India’s Jewellery mkt @ 40 pc vs 32 pc in FY 20 vs 6 pc in 2007

Company’s total store count now stands @ 175 stores ( which includes 5 stores of Everlite - Jewellery for the new generation, 4 Sennes stores - selling Lifestyle products, lab grown diamonds and accessories, 13 D’Signa stores - focussed on HNI customers )

90 pc of company’s stores are leased. Only 10 pc are built on owned premises

Company employs 198 exclusive Bengali Kaarigars to work on their exclusive designs ( this makes their jewellery unique and exclusive )

Company sells its trendy Silver Jewellery under the GOSSIP brand, Men’s Jewellery under the Aham Brand

Geography wise break up of stores -

WB - 98 ( 44 owned + 54 franchise )
North + NCR - 24 ( all owned )
East ( excluding WB ) - 25 ( 12 owned + 13 franchise )
NE - 6 ( 2 owned + 4 franchise )
West - 7 ( all owned )
South - 5 ( all owned )
Dubai - 1 ( owned )
Sennes stores - 4

Total 175 stores in Mar 25 vs 159 stores in Mar 24

Company added 9 new stores in Q1 FY 26, taking the total store count to 184. Aim to take it to 195 by end of FY 26

FY 25 stud ratio stands @ 11 pc vs 11 pc in FY 24 vs 10 pc in FY 23

Avg ticket Size for FY 25 @ 73k vs 64k YoY

FY 25 outcomes -

Revenues - 6328 vs 5241 cr, up 21 pc
EBITDA - 367 vs 375 cr ( margins @ 5.8 vs 7.2 pc ). There was an adverse impact of 57 cr on account of cut in customs duty. Adjusted for that EBITDA margins would have been 6.7 pc with EBITDA @ 425 cr
PAT - 159 vs 181 cr ( without the customs duty impact, PAT would have been 202 cr )

Q4 outcomes -

Revenues - 1377 vs 1137 cr, up 21 pc
EBITDA - 127 vs 88 cr, up 45 pc (margins @ 9.2 vs 7.7 pc)
PAT - 62 vs 32 cr

Q4 value / volume growth -

Gold Jewellery - 20 pc value growth , (-) 6 pc volume growth

Diamond Jewellery - 38 pc value growth, 21 volume growth

FY 25 value / volume growth -

Diamond jewellery - 15 pc value growth, 2 pc volume growth
Gold jewellery - 20 pc value growth, (-) 4 pc volume growth

Out of the 16 stores added in FY 25, 9 are company owned, 1 Sennes store, 6 Franchise stores

Non - East business grew by 23 pc to 1230 cr

People are looking for light wt jewellery ( due sharp increase in Gold prices )

Footfalls in FY 25 were 25 pc higher than FY 24 footfalls

For FY 26, aiming to achieve an EBITDA margins range of 6.8-7.2 pc and PAT margin range of 3.5 to 3.7 pc ( Extrapolation - assuming a topline growth of 18 pc for full FY, revenues and PAT ( @ 3.5 pc ) for FY 26 can be 7465 cr and 260 cr respectively. At 3 pc PAT margins PAT can be 225 cr )

Focus on light weight daily wear + handcrafted wedding jewellery shall continue. Wedding jewellery contributes to aprox 30-32 pc of company’s topline

Aiming to open 18-20 stores in FY 26 ( equally split between company owned and franchise stores ) - mainly focussing on North and East Indian mkts

Aim to hit 14-15 pc stud ratio in next 3-4 yrs ( this should help their margins )

Earlier in Q3, company raised Rs 459 cr @ Rs 557 / share to fund their expansion ( @ avg 10 company owned stores per year ), unsticking their existing stores and to trim their debt levels

An avg company owned store opening costs them aprox 23-24 cr ( Aprox 2 cr for the store + 20-22 cr for the inventory )

Old gold exchange contributed to 40 pc of company’s total sales. Out of the total old gold that came up for exchange, greater than 60 pc of old gold was non - Senco gold - representing a clear shift from unorganised to organised sector

High gold prices are stimulating trends like - higher sales of 14 Carat and 18 Carat gold Jewellery, higher sales of studded jewellery. These trends are likely to stay

The impact of lab grown diamonds is more in bigger diamond categories. The smaller diamond sales are hardly impacted by lab grown diamonds

In Q3, the company did spend aggressively on advertisements ( during the festive season ). In Q4, the company decided not to do the same and focussed on better margin generation. Hence the other expenses have fallen in Q4 on a YoY basis

Company resorts to outsourcing a part of their Jewellery manufacturing process. They r strong @ making hand crafted and traditional Jewellery. However, they have to resort to outsourced manufacturing while going for modern / machine made designs from players who are strong in these areas

Disc: initiated a tracking position after the company came out with strong Q1 FY 26 update, not SEBI registered, not a buy / sell recommendation, posted for informational purposes only

2 Likes

PN Gadgil Jewellers ltd -

Company retails Jewellery through a network of 53 stores ( 41 owned and 12 franchisee stores ) across 27 cities in Maharashtra and Goa. They were able to sell 8.6 tons of Gold and 25.2 tons of Silver in FY 25. They r the second largest Jewellery brand in Maharashtra ( after Tanishq ). Maharashtra accounts for 15 pc of India’s total Jewellery sales

Jewellery sales in India are highest during the Marriage seasons of - May - Jun, Sep - Nov and Jan. A lot of rural households in India invest their savings in Gold post the harvest season in Nov - Dec. Jewellery sales also pick up during the festive seasons of Diwali, Dhanteras and Akshay Tritiya ( Apr - May )

Industry is seeing a trend of youngsters preferring light weight Jewellery and consumers in general as a consumption item vs an investment item. Frequency of purchases have gone up due rising disposable incomes

SSSG for FY 25 vs 24 stood @ 26.5 pc

Stud ratio in Q4 stood @ 8 pc

Company launched ‘LiteStyle by PNG’ - a dedicated brand for light wt jewellery made in 18k and 22k gold. Currently 2 stores of this brand are operational in Pune and Goa

Q4 outcomes -

Revenues - 1588 vs 1512 cr, up 5 pc
EBITDA - 109 vs 91 cr, up 20 pc ( margins @ 6.9 vs 6 pc )
PAT - 62 vs 55 cr, up 13 pc

Segmental revenues for Q4 -

Retail - 1293 vs 861 cr, up 50 pc
E - Comm - 90 vs 26 cr, up 243 pc
Franchise sales - 185 vs 135 cr, up 37 pc
B2B bullion sales + Refinery operations ( discontinued in Oct 24 ) - 487 vs 18 cr, down 96 pc

FY 24 outcomes -

Revenues - 7693 vs 6112 cr, up 26 pc
EBITDA - 371 vs 278 cr, up 33 pc ( margins @ 4.8 vs 4.6 pc )
PAT - 219 vs 155 cr, up 41 pc

Company added 13 stores in FY 25. Aim to add another 23 stores in FY 26

Revenue per store for FY 25 @ 145 cr
Net profit per store for FY 25 @ 4.1 cr

Summary of Q1 FY 26 updates -

Revenues @ 1713 vs 1667 cr ( in Q1 FY 25, 353 cr of revenues came from refinery operations. These operations now stand discontinued wef Oct 24 )

On a comparable basis, Revenues are 1713 vs 1314 cr, up 30.1 pc

Segmental growth in Q1 FY 26 -

Retail - up 19.4 pc ( Retail segment represent 70 pc of company’s total revenues )
E- Comm - up 126 pc, now represent 4 pc company’s sales
Franchise Operations - up 109 pc, now represent 16 pc of company’s sales
B2B and corporate sales - now represent 10 pc of company’s sales. Refinery operations have been discontinued

Company recorded highest ever 1 day Akshay Tritiya sales of 140 cr in Q1

Stud ratio in Q1 ratio saw a sharp jump in Q1 and now stands @ 10 pc

SSSG in Q1 @ 8 pc - due absence of Gudi Padwa in Q1 ( as it was pre-ponned to Q4 this CY )

Opened 2 stores in Q1 ( 1 COCO, 1 FOFO ), taking total store count to 55. 7-9 new store openings are lined up for Q2. Company now intends to expand in MP + UP ( in medium to long term ). Should open a total of 23 stores for FY 26

Highlights from Q4 concall -

Since company has discontinued the low margin Refinery business, they expect sharp improvement in EBITDA and PAT margins for FY 26

Aim to open 13 full fledged PNG Stores + 10 LiteStyle stores for FY 26 with a broad 50:50 breakup between Franchise and Company owned stores. Should be entering UP + MP + Bihar within FY 26. By end of FY 26, company intends to be operating a total of 10 stores outside Maharashtra ( including 3 Goa stores )

By end of FY 26, company aims to incline their retail sales to 75 pc of company’s total sales - aided by strong expansion spree that the company is undertaking

Breakup of FY 25 sales -

Retail - 5327 cr
Refinery ( now discontinued ) + Corporate + Franchise + Online - 2301 cr

Aiming to clock 3 pc kind of PAT margins on a consolidated basis for FY 26 ( with retail EBITDA margins @ 7-8 pc )

Assumption : assuming a 15 pc topline growth for full FY 26 ( because of loss of refinery sales ), Topline should be around 8850 cr and PAT may be around 265 cr ( @ 3 pc PAT margins )

Traditionally, Maharashtra was never a studded jewellery friendly market. Company has made dedicated efforts over last 5 yrs to start growing their Studded jewellery sales. They have introduced various new designs of diamond studded, Polki Studded, Kundan studded jewellery and are now seeing encouraging response. Now they r strong growth in these categories led by - smaller base, higher Gold prices

Talking about old stores ( opened before IPO ),Value growth for FY 25 was @ 27 pc and Volume growth was @ 3 pc. These stores operated @ 6.41 pc EBITDA margins

The new stores that the company has opened in last 6-8 months are doing exceptionally well ( clocking EBITDA margins > 8 pc for last 2 Qtrs - although both Qtrs were full of festive and marriage seasons )

The store opening + inventory costs for a LiteStyle store are 8-9 cr / store vs 16-18 cr for a normal PNG store. Plus the margins in LiteStlyle fashion jewellery are much higher than traditional Jewellery

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

3 Likes

Elecon Engineering -

Q1 FY 26 results and concall highlights -

Company’s product profile -

Gears - Company is a supplier of widest range of Industrial gears

Serve mainly to Industries like - Power, Cement, Sugar, Steel, Plastic, Defence, Mining, Rubber

Company is already a mkt leader in domestic mkt and is strategically expanding in overseas mkts

Products in this segment include - Helical gearboxes, Series gearboxes, Worm gearboxes, Couplings, Planetary gearboxes, Marine gearboxes, Custom made gearboxes, Central drive mill gearboxes, Double helical gear wheel, Loose gears etc

MHE ( material handling equipment ) -

Products include - Feeders, Pulleys, Automatic Weighing, Stackers, Mobile stackers, Truck Loaders etc End user industries include - Steel, Cement, mining, Fertilisers, Power, Ports, Oil and Gas

Q1 outcomes -

Revenues - 491 vs 392 cr, up 25 pc
EBITDA - 130 vs 92 cr, up 41 pc ( margins @ 27 vs 24 pc )
PAT - 175 vs 73 cr ( includes an exceptional pre tax item of 108 cr )

Exceptional items include - one time arbitration settlement claims of 25 cr in MHE division ( included in segmental revenues ) + another one time arbitration claim of 10 cr + MTM gain in their investments in one of their associate companies - Eimco Elecon to the tune of 80 cr

Order book intake in Q1 @ 614 cr, up 13 pc YoY

Total order book now stands @ 1110 vs 947 cr YoY

Segmental performance in Q1 -

Industrial gears -

Revenues - 357 vs 337 cr, up 6 pc
EBIT - 66 vs 80 cr, down 17 pc ( margins @ 18.4 vs 23.7 pc )

Margins were impacted due to accelerated depreciation because of new capacities that went live in Q1, increased employee costs, increased brand building activities related spends for International mkts. As the capacity utilisation of newly commissioned capacities improve, margins should start to see an uptick

Order intake @ 480 vs 396 cr, up 21 pc
Total order book @ 710 vs 598 cr, up 19 pc

Seeing steady demand coming from domestic power, steel and cement industries. Enquiry levels remain encouraging across domestic and international markets

MHE -

Revenues - 133 vs 56 cr, up 139 pc ( includes 25 cr of additional revenue recognition due favourable award of arbitration proceedings )
EBIT - 61 vs 14 pc, up 335 pc ( margins @ 46 vs 25 pc )

Order intake @ 134 vs 149 cr, down 10 pc
Open orders @ 400 vs 349 cr, up 15 pc

Even without considering the 25 cr of arbitration revenues in the MHE segment, the division’s revenues have almost doubled !!!

Geography wise revenue split for Q1 FY 26 -

Domestic - 357 vs 259 cr, up 41 pc ( domestic business did have a favourable base in Q1 )
International - 124 vs 133 cr, down 7 pc ( international business did have a high base in Q1 )

Segment wise revenue split for Q1 FY 26 -

Industrial gears - 357 vs 337 cr, up 6 pc
MHE - 133 vs 56 cr, up 139 pc

Adjusted for the 25 cr additional revenues recognised in the MHE division, consolidated revenue growth in Q1 would have been 18 pc instead of reported 25 pc growth. EBITDA growth would have been 14 pc instead of reported 41 pc with margins @ 22.6 instead of reported 27 pc margins. For full FY 26, company aspires to clock 24 pc EBITDA margins

Strong order book and continued enquiry levels make the company feel confident for better performance for the rest of the FY

MHE segment’s strong growth in Q1 led by Power, Steel and Cement sectors

Cash on books @ 550 cr. Capex planned for next 3 yrs @ 435 cr. 400 cr for the gears division and 35 cr for the MHA division

Company lost aprox 14 cr of sales in international sales due Iran - Israel tensions. Should be able to make up for these lost sales in Q2. This aside, company expects their exports business to pick up wef Q2 ( specially wrt supply to ME )

In the gears division, order inflows from International geographies in Q1 were @ 119 cr, up 10 pc YoY

Company expects to realise another 20 cr of gains from arbitration awards in next 12-15 months

They believe, they r on track to achieve 2650 cr of revenues for FY 26 ( assuming 24 pc margins, yearly EBITDA should be around 630 cr vs 543 cr that they clocked in FY 25 )

Over and above the Steel, Cement and Power sectors, company expects to start getting orders form defence sector wef FY 26 ( 200 cr this year and even bigger orders wef next FY - wrt Defence sector )

Expect to start clocking 24 pc EBITDA margins wef Q2

MHE division is expected to clock 650 cr in revenues with 23 pc EBITDA margins for FY 26

For FY 26, annual depreciation should be around 100 cr vs 61 cr in last FY

Seeing good order uptake in MHA business wef July ( in Q2 ). Order inflow for MHA division in Q1 was on the weaker side

No of OEM customers that company has now stands @ 18 ( for gears business ). Company expects to start accruing good revenues from this revenues wef Jan 26 ( to the tune of 70- 100 cr / yr )

32 pc of gear division revenues came from service + refurbishment + spares !!!

The bigger defence sector order that the company expects to win in next FY should be around 1000 cr - to be executed over 3 yrs

The service component in MHE division in Q1 stood @ 41 pc - very healthy levels

In gears division in Q1, company clocked 43 pc revenues from engineered products vs 57 pc revenues from standard products. Engineered products have a higher margin and generally the revenue contribution from these 2 segments is @ 50:50. Lower contribution from engineered products in Q1 led to margin pressures in Gears division in Q1 ( + the effect of added depreciation - as brought out earlier ). Expecting a pickup in sales of engineered products wef Q2

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

3 Likes

Hi @ranvir, given that you track a fairly large list of companies, do you have a standard process of determining management quality?

Is there a specific process you follow to unearth redflags?

I can see from your earlier posts around 2015 (haven’t gone through all of them yet) that you once owned Yes Bank as well, so would be pretty useful learning if shared here, thanks.

2 Likes

Nothing beyond the routine stuff ( like reading the financial statements and following concalls ) with enhanced skepticism wrt lenders

In case of lenders - once u smell a rat, it’s better to just exit. With other companies, one can afford to be a little more forgiving

In case of Yes bank - Once RBI started flagging issues, I just sold. I was fortunate enough to exit at near the top

1 Like

Action Construction Equipment -

Q4 and FY 25 results and concall highlights -

Company’s mkt share in India in mobile cranes segment is @ 63 pc and in tower cranes segment is @ 60 pc

Company’s vast product portfolio includes - Pick and carry cranes, lorry loaders, truck cranes, rough terrain cranes, tower cranes, backhoe loaders, tele handlers, vibratory rollers, forklift trucks, warehousing equipment, access platforms, tractors, track harvesters

Company received its biggest ever order from MoD in Q4 for supply of 1121 Rough Terrain Forklifts amounting to 420 cr ( @ Rs 37.46 lakh / forklift )

Sector wise sales breakup for company’s products -

Manufacturing and Logistics - 45 pc
Infrastructure - 35 pc
Agriculture - 7 pc
RE - 13 pc

FY 25 outcomes -

Revenues - 3427 cr, up 14.6 pc
EBITDA - 606 cr, up 26 pc ( margins @ 17.7 vs 16.1 pc )
PAT - 409 cr, up 25 pc

Q4 outcomes -

Revenues - 969 cr, up 13 pc
EBITDA - 172 cr, up 14 pc ( margins @ 17.7 vs 17.5 pc )
PAT - 118 cr, up 20 pc

Yearly volume growth in Cranes, material handling and construction equipment stood @ 14 pc

Guiding for a subdued start to FY 26 led by geo-political tensions, tariff related issues, new emission norms and their cost implications, impact of early onset of monsoons. Guiding for a 14-15 revenue growth for FY 26

Yearly sales volume of Cranes + Material handling + construction equipment @ 13.36 k vs 11.64 k

Yearly volumes for agri equipment @ 2.79 k vs 2.94 k ( company discontinued sales of Rotavators in H2 )

Company intends to significantly ramp up its exports business. Products earmarked for export thrust include - Tractors, Telehandlers ( 2-4 Tons ) and Backhoe loaders. Company aspires - Exports + Defence - should contribute to 20 pc of their business in medium term. Company’s current export destinations include - ME, SEA, LatAm, Africa, SE Asia

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

Segmental revenues, EBITDA -

Crane + material handling + construction equipment revenues - 3090, up 15 pc, EBITDA @ 564 cr with margins @ 18.3 pc

Agri equipment revenues - 230 cr, EBITDA @ 9 cr with margins @ 3.73 pc

Company’s current manufacturing capacity for cranes stands @ 13.2k units, Material handling @ 2.7k units, Construction equipment @ 1.8k units. Blended current capacity utilisation @ 70 pc

In FY 26, revenues from defence sector should be around 4 pc, from exports should be around 6 pc

Q1 continues to be slow because of the price hikes that the company has been forced to take because of new emission norms. On 60 pc of their product portfolio, price hike has been 12-13 pc, which is really steep - mkt should take some time to adjust to new prices. On the balance 40 pc, price hikes have been around 4-5 pc which have been absorbed by the mkt

Company generates 55-60 pc of its revenues from H2 ( which should be strong ). H1 is expected to be weakish in FY 26

Not seeing any slowdown in Govt spending wrt Capex spending. However, did see some slowdown in enquiries post the Pahalgam incident

Should be able to maintain EBITDA margins between 17-18 pc in H1. Should be able to improve their margins in H2

Hopeful of imposition of further anti dumping duty on imports of cranes from China ( a 7.5 pc duty is already in place ). Some more is expected by sometime in Q2. If the anti dumping duties are increased, it can be a huge boost for the company as Chinese imports command significant mkt share in truck and crawler cranes

Working capital cycles for defence and exports business are longer than their normal course of business. Margins in defence business are largely similar to current corporate avg. Export margins are slightly higher

Company’s current capacity can generate an annual revenue of aprox 5000 cr

Have lined up 300 cr of capex for FY 26. 100 cr for modernisation of existing facilities. Another 100 cr to start setting up facility to manufacture new types of cranes. Balance 100 cr to acquire land for future capex

ACE and KATO ( Japanese company ) have finalised a JV ( for making medium and large sized cranes ). This JV should start production in Q3 FY 26. This JV should start to generate 300-400 cr in revenues / yr wef FY 27

The ADD on Chinese imports are expected on Crawler and Truck Cranes. The extent of duties may be as high as 40 pc ( as per company’s calculations - to be taken with a pinch of salt ). ACE sells < 100 cr of these two types of cranes because of heavy discounting by the Chinese players. If the ADD is imposed, it ll open up an annual mkt of 1500 cr for the company - can be a huge growth trigger !!!

ACE sold a total of 70 units of truck mounted + crawler cranes in FY 25. They have a capacity to produce 400 of these / yr but have not been producing because of Chinese dumping

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

2 Likes

Five Star Business finance -

Q4 and FY 25 results and concall highlights -

FY 25 outcomes -

No of branches @ 748 as on 31 Mar 25 vs 520 as on 31 Mar 24

AUM @ 11.87 k cr, up 23 pc
Gross NPAs @ 1.79 vs 1.38 pc
Net NPAs @ 0.88 vs 0.63 pc
PCR @ 51.31 vs 54.27 pc
Capital Adequacy @ 50.10 pc !!!
30 DPD + @ 9.65 vs 7.9 pc YoY ( includes 90 DPD + @ 1.79 pc )
PAT - 1072 cr, up 28 pc
NIMs @ 16.75 pc
RoA @ 8.18 pc
RoE @ 18.9 vs 17.8 pc YoY

Company is present across 11 states and UTs

100 pc of company’s loan book is secured. 95 pc is against self owned residential property

Avg ticket size @ 3.9 lakh. LTV @ 40 pc - indicating conservative lending practices

Restructured book @ 0.30 pc. Holding 45 pc provisions on restructured book

Active loans as on 31 Mar 25 @ 46 vs 39 lakh YoY
Company added 19 branches in Q4
Total employee count @ 11934 vs 9327 as on 31 Mar 24

**FY 25’s cost of borrowing @ 9.64 vs 9.71 pc **
**Portfolio yeild @ 24.03 vs 24.27 pc **
Spreads @ 14.39 pc

Geography wise breakup of AUM -

TN - 29 pc
AP - 38 pc
Telangana - 19 pc
Karnataka - 6 pc
MP - 7 pc
Others - 2 pc

Tier wise breakup of AUM -

Tier - 1 and 2 - 1 pc
Tier - 3 - 8 pc
Tier - 4 - 14 pc
Tier - 5 - 32 pc
Tier - 6 - 45 pc

AUM breakup by ticket size -

< 3 Lakh - 32 pc
3-5 Lakh - 53 pc
5-10 Lakh - 13 pc
10-15 Lakh - 1 pc

AUM breakup by vintage -

Less than 1 yr - 39 pc
1-3 yr - 48 pc
3-5 yr - 8 pc
More than 5 yr - 5 pc

Trend of 30 DPD + over last 5 Qtrs -

Mar 24 @ 7.89 pc
Jun 24 @ 8.11 pc
Sep 24 @ 8.44 pc
Dec 24 @ 9.16 pc
Mar 25 @ 9.65 pc

Trend of 30 DPD + over last 5 yrs -

Mar 20 - 11.82 pc
Mar 21 - 12.36 pc
Mar 22 - 16.78 pc
Mar 23 - 10.5 pc
Mar 24 - 7.89 pc
Mar 25 - 9.65 pc

Stage wise breakup of current AUM -

Current ( stage 1 ) - 10009 cr @ 84.92 pc of AUM
1-30 DPD ( stage 1 ) - 720 cr @ 6.07 pc of AUM
Total stage 1 @ 10730 cr

31 - 60 DPD ( stage 2 ) - 487 cr @ 4.1 pc of AUM
61 - 90 DPD ( stage 2 ) - 446 cr @ 3.76 pc of AUM
Total stage 2 @ 934 cr @ 7.87 pc of AUM

90 DPD + ( stage 3 ) - 212 cr @ 1.79 pc of AUM

Total provisions @ 194 cr ( out of which 85 cr are against stage 1 + 2 assets, 109 cr are against stage 3 loans )

Q4 P&L statement -

Interest Income - 734 vs 599 cr, up 23 pc
Fee and Other inc - 25 vs 19 cr
Interest expenses - 175 vs 138 cr, up 27 pc
NII - 584 vs 481 cr, up 21 pc
Operating expenses - 188 vs 149 cr, up 26 pc
Provisions + loan losses - 25 vs 19 cr
PAT - 277 vs 236 cr, up 18 pc

FY 25 P&L statement -

Interest Income - 2766 vs 2116 cr, up 31 pc
Fee and Other income - 100 vs 79 cr
Interest expenses - 668 vs 468 cr, up 43 pc
NII - 2198 vs 1726 cr, up 27 pc
Operating expenses - 678 vs 555 cr, up 22 pc
( yearly operating expenses @ 5.74 pc of AUM )
Provisions + loan losses - 89 vs 56 cr
PAT - 1069 vs 834 cr, up 28 pc

Comments from Q4 concall -

If the disruption in Karnataka had not happened in Q4, company would have grown its AUM by 25 pc ( instead of reported growth of 23 pc ). The bump up in gross NPAs to 1.79 is also partially attributable to the new Bill passed in Karnataka assembly. Things have now started to improve

Distributed a dividend of Rs 2 / share for FY 25

Massive branch addition in FY 25 is mainly due to split up of bigger branches into smaller branches to improve coverage and efficiencies with minimal additional expenses

Cost of incremental borrowings has fallen further to 9.3 pc

As the interest rates keep falling, credit demand should pick up further

The over leveraging by retail customers ( specially lower income groups - which are company’s customers ) - also played a role in worsening of credit quality through FY 25. The same is now getting reversed. Should take another 2 Qtrs for situation to normalise completely

Still the company is much better off vs MFIs as their nature of lending is 100 pc secured. Customer behaviour is completely different while dealing with Five Star finance vs MFIs as the company holds their residential property as collateral

Should be able to grow their AUM by another 25 pc in FY 26

Similar bill has now been passed in TN. But the disruption levels in TN are far lower and the situation is completely under control

Should see a sizeable drop in cost of funds ( 20-40 bps ) both on the existing borrowings and on incremental borrowings as the RBI has started cutting rates and the banks have also stared passing on the cuts

Company believes that a PCR of 1.65 pc of AUM ( 194 cr of provisions on a loan book of 11.8 k cr ) is more than adequate for a 100 pc secured loan book

Company is deliberately trying to lend more in 3-5 and 5-10 lakh ticket size bracket. They believe, the stress in this segment of customers is far lesser vs the customers with loan size < 3 lakh. Also as the cost of borrowing is falling and the company is also willing to lending at lower rates, the profile of customers that the company is getting ( incrementally ) is also improving. These ( supposedly ) better customers generally have ticket sizes > 3 lakh

Out of 228 branches added in FY 25, 150 branches were added because of split up of bigger branches. Any branch servicing > 1500 customers, company is happy to split it. Most of branch splitting is behind. As and when reaches > 1500 customers, company shall keep splitting them. New branches + Splitting combined - should be able to add 75-100 / yr going forward

Aim to bring the < 3 lakh ticket size loans down to 20 pc of AUM from 32 pc currently. There shall be a corresponding 12 pc gain in the 3-5 lakh + 5-10 lakh ticket size books ( combined ). Primary focus shall be on the 3-5 lakh bracket - that’s their sweet spot

Because of stress in the system wrt retail lending to low income customers, the MFIs have sharply pulled back their lending over last 2 Qtrs. The over indebtedness at retail level is now getting abating on a QoQ basis - this augurs well for the Industry. Also the cash flows in Rural India are showing descent signs of recovery

Looking to get into affordable housing segment - as it’s an adjacent product for the company. Should start rolling it out wef Q3/Q4 FY 26

Company aspires per employee AUM to be around 1.25 cr

In Q4, Avg new loan disbursements per employee per month was 2.6 loans / employee / month which corresponds to aprox 31 loans / employee / Yr

Company’s avg customer has a CIBIL score profile of 500-550 or is completely new to credit vs bigger NBFC’s / Banks which lend to customers with CIBIL score > 700

For the incremental loans, company is lending @ rates between 21.5 - 23 pc with an avg yeild of about 22.5 pc - which is aprox 150 - 200 bps lower than their previous lending rates ( basically they are now passing on the reduced rates to the customers ). This drop is yeild is also attracting better customers for the company

Expansion in employee count should moderate going forward as company intends to now ramp up AUM per employee

Expecting growth rates in TN and Karnataka to pick up wef Q1 FY 26 ( should be closer to 30 pc growth in these 2 states )

Intend to keep paying dividends every year from now on

State wise spread of branches -

TN - 208
Karnataka - 59
AP - 234
Telangana - 115
Maharashtra - 25
MP - 94
Gujarat - 1
Rajasthan - 5
UP - 6
Chattishgarh - 3

When company enters a new state, they open a small number of branches ( < 5-6 branches ) and study the mkt closely for 18-24 months. Only once they r confident, they then ramp up quickly

FY 26, earnings growth should be moderate at 12-15 pc despite 25 pc AUM growth because the company is now lending ( wef Nov 24 ) @ 200 BPS lower than their historical lending rates. RoA should be between 7.5 - 8 pc

End use of company’s loans include - Business loans ( 60 pc of loans ), construction related expenses ( 20 pc of loans ) , personal consumption like medial, educational etc ( 15 pc of loans )

Disc: hold a tracking position, studying, not a buy/sell recommendation, biased, not SEBI registered, posted for educational purposes

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Heritage Foods -

Q1 FY 26 results and concall highlights -

Q1 outcomes -

Revenues - 1136 vs 1032 cr
EBITDA - 74 vs 94 cr ( margins @ 6.5 vs 9.1 pc )
PAT - 40 vs 58 cr

Segmental revenues -

Milk - 594 vs 562 cr, up 6 pc
VAP - 403 vs 382 cr, up 6 pc
Fat Products - 81 vs 47 cr, up 73 pc
Ice Creams - 33 vs 31 cr, up 8 pc

Avg temperature across Apr, May, Jun were lower and avg rainfall was higher - hurting company’s VAP / Ice cream sales

FY 25 vs FY 22 breakdown of sales -

Milk - 57 vs 66 pc
VAP - 32 vs 26 pc
Fat products - 8 vs 5 pc
Others - 3 vs 3 pc

Company’s Infra -

Milk processing capacity @ 2.83 MLPD
Milk chilling capacity @ 2.5 MLPD
18 Milk processing plants
Daily milk procurement from over 3 Lakh farmers. Daily avg procurement @ 1.8 Million Lit per day
190 Chilling centers
7400 + distributors
Own 2000 + vehicles for distribution
2.05 lakh retail outlets
859 Heritage Parlours ( owned )
421 Happiness Points ( owned )
Selling online - on 16 E-Comm websites, 25 Modern retail chains
Serve > 1 cr consumers on a daily basis
Milk procurement from - 9 states
Milk sales into - 17 states
No milk holiday since inception
Last 3 Yrs Milk procurement growing @ 10 pc CAGR Last 3 Yrs Milk sales CAGR @ 5 pc
Last 3 Yrs VAP sales CAGR @ 24 pc

High growth categories / products for next 5-7 yrs include - Ice Creams, Curd, Paneer, Ghee ( most of these should be able to grow @ rates > mid teens over the medium term )

Have recently launched Heritage Livo - flavoured milk ( with attractive packaging ) in flavours like - Badam milk, Pista milk, Strawberry milk. Other new launches include - Truly Good Gawa Ghee ( Bengali Aromatic brown Ghee ), Total Curd

Avg milk procurement prices in Q1 @ Rs 43.3 / lit - higher by 4.7 pc YoY. Avg milk selling price in Q1 @ Rs 56.4 - higher by 3 pc YoY. Milk sales volumes increased by 2.8 pc YoY

VAP sales ( as a percentage of total revenue ) in Q1 @ 36.1 vs 37.5 pc YoY - due unfavourable weather conditions

Avg milk procurement in Q1 was up by 10 pc YoY to 17.8 lakh lit / day. Avg milk sales in Q1 stood @ 11.6 lakh lit / day, up 2.8 pc

Seeing good recovery in sales of VAP in July 25. Recovery started wef June 25

Company’s Greenfield ice cream plant is expected to go live by Dec 25

Bulk fat sales in Q1 @ 36 cr ( vs a total Fat sales of 81 cr )

Flush season in milk procurement starts wef Sep every year. Post Sep, milk availability should naturally become better

Because of unfavourable weather ( specially in Apr, May ), company did not take full price hikes in VAP, Milk - which they would have otherwise taken

At present, company hold a stock of 6197 vs 4586 MT ( YoY ) of SMP - due lower sales of VAP that happened in Q1. This SMP inventory is expected to normalise over Q2/Q3

Company aspires to keep growing in teens in next 2-3 yrs and in double digits for next 5-7 yrs

Company’s marketing expenses were higher by 7 cr vs Q1 LY - due aggressive media campaigns behind their milk and curd offerings

Have launched Heritage Livo Yogurt ( under Heritage Novandie ). Initial aim is to be able to sell 2 MTs of Yogurt per day ( within 1 yr ) and ramp it up to 10 MT / day over next 3 Yrs. Its distribution will be handled by Heritage’s organic supply chain with no additional requirement of feet on street / logistical assets

Total capex spends for the greenfield ice cream facility that is company is setting up should be around 225 cr

Should be able to maintain working capital days @ < 20 days for foreseeable future

Company expects EBITDA margins to inch up by 100 - 120 bps wef Q2 ( as their topline growth + growth in VAP picks up again )

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

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