Looks like market is slowly downgrading he valuation premium due to ROCE issues caused bcz of low margins, constant acquisitions etc…DIIs are offloading stake quite a much…
Guidance upped from 35-40% to 40-45%. It’s a solid value buy at CMP.
That it is according to me. Though I want Q2 to speak for itself. Management has given hints of a blockbuster result so lets see. Zaggle has the potential to be the Ramp of India
Acquisition of Greenedge Enterprises Pvt Ltd - Loyalty Experiences and Rewards (niche segment focused on golf based corporate engagement) for 25cr, company has a turnover of 20cr in FY24.
Greenedge Enterprises operates as a solution provider for golf travel, experiences, and access-based rewards
https://www.bseindia.com/xml-data/corpfiling/AttachLive/aa989c73-1fe7-430f-ac5c-f62900065a5f.pdf
EGM announcement to approve warrant issuance to promoter entity and Bennett & Coleman Co Ltd at Rs 567 each (to be converted in next 18 months). Out of total 10 Lakh warrants to be issued, 7 Lakh warrants would be taken by Bennett & Coleman Co Ltd . Very interesting development in terms of quantity as well as price (CMP Rs 346)
Fail to understand why the new investor would subscribe to warrants at 50-60% higher than cmp. Can directly buy from open market?
Warrants will inject cash into the company while open market purchase will not. So, the promoter in this case is injecting needed capital (around 56 Cr), which is a good sign.
On the contra side (am speculating here and can be completely wrong), it could be to pump the stock price and dump a larger amount in the market, which seems unlikely as it will completely erode trust.
I am more intrigued by such a large sum to be invested by Times of India promoters.
As a non promoter entity is involved, there is lesser chance of manipulative tactics in this case.
I am invested in the counter. The company is not able to utilise the QIP Funds for acquisiton. Time is ticking. That is one area of uncertainity. Anyone having more updates on the acquistion part may post.
Any idea why CFO to Ebita ratio is 14.2% and FCF yield is around -2.75% just from operations for 2025 is 20 Cr versus profit of 125 Cr
Because company has extremely poor working capital which is unlikely to change.
Some of their money gets tied up in receivables and the company keps expanding and so the receivables will keep extending. But if it makes things better Receivables were up 23% from 2024 to 2025 while revenues were up 68%, so it seems receivables are not increasing as fast.
I would not worry too much … PB FIntech is also operating cash negative
It is mentioned in the EGM notice that the Rs.40 Cr out of total Rs.60 Cr will be used for brand building activities, including promotions, advertisements, marketing, and related initiatives, aimed to enhance the Company’s and its subsidiaries’ market reach and visibility. Maybe Times of India network would be used for the promotion.
Yes this was confirmed by the CEO on TV:
The question is the margin deteriorating? Fast growth business often report lower margins as they spend big / price low to drive growth. India is a very price sensitive market generally. Some of the products or acquisitions will also be burning cash and wouldn’t have reached operating break even. So driving margins can compromise growth in certain areas. It’s a deliberated decision that managments have to take.
Yet your question about DII selling is extremely valid as it continued thru Aug and Sep. A more nuanced analysis and answer is required.
Unfortunately , I don’t have a good answer for it and am interested in understanding better.
40 cr spend on marketing seems already started. Saw this full page advertigement in newspaper last week.
which newspaper was this may i ask ?
Times of India by any chance?
Yup. Economic Times owned by Times group