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Newgen Software Wins Global Deal, Shares Surge
Business, Markets, Result Updates - August 3, 2022

Indus Towers reports weak numbers in Q1FY23.

Indus Towers reports weak numbers in Q1FY23.

The shares of Indus Towers fell harshly on August 3 after the company announced weak earnings for the quarter ended June. In the quarter, net profit fell 66% year on year to Rs 477 crore, while revenue increased only 1% to Rs 6,897 crore, and operating profit fell 34% to Rs 2,322 crore. The impact of a non-payment from one of the customers reduced operating cash flow by 60% to Rs 807 crore. While the company’s energy costs increased 5.3% and operating expenses increased by 18.2%.

Main reason for the weak performance. 

In the reported quarter, share revenue per tower fell 11.4 percent sequentially to Rs 75,688.Overall, total towers increased to 1,027 from March 2022 quarter to 186,474, which was weaker than the past performance for the company. The company had agreed to the payment plan modification of security arrangements proposed by VI promoters for clearance of the outstanding dues. Pursuant to an agreement, Vodafone has given all of its primary pledged shares in equities issued by it to be used exclusively for clearing the outstanding dues of the company. Further, Indus has a secondary pledge over Vodafone’s remaining shares and a corporate guarantee provided by Vi’s promoters which could be used. However, it is insufficient to cover the outstanding.

Their prudent accounting practise resulted in their financial performance, as they focused on bills receivables due to the financial situation of one of our major customers. The fundamentals of the business remain strong, and the successful conclusion of the 5G auctions has further improved the outlook.

Valuations:

The ROCE for the company is 25.0% and the ROE is at 33.5%. The P/E ratio is at 10.2 times and 5 years’ P/E is at 17.5 times. EPS for the company is Rs.23.7. The debt to equity ratio is at 0.89 for Indus Towers. The firm has maintained a healthy dividend payout ratio of 82.96%.

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Castrol India reported a net profit of Rs.206 crore.
Result Updates - August 3, 2022

Castrol India reported a net profit of Rs.206 crore.

Castrol India manufactures and markets automotive lubricants and specialty products. It  is one of the world’s most important lubricant manufacturers and has announced its financial results for June 2022. The company reported a net profit of Rs. 206 Cr., up by 47% compared to Rs. 140 Cr. in June 2021. The company witnessed a 40% increase in revenue from operations to Rs 1,242 Cr in Q1 June 2022 over Rs 890 Cr in Q1 June 2021.

The management said the current quarter’s performance was due to a volatile market environment where they had to balance rising input costs while maintaining an optimal price and volume mix. They were affected by price increases in the first half of the year, which enabled them to deliver a resilient performance and helped to stay ahead of June 2021, though the volumes and margins were under pressure compared to March 2022.

Upcoming threats:

The company needs to keep balancing the need to drive growth and serve customers’ needs while protecting margins as inflationary and forex pressures are likely to continue in the coming period.

An integral element of their future-ready strategy is their foray into service and maintenance with new formats such as Castrol Auto Service and Castrol Express Oil Change outlets. In addition, they will also explore collaboration with electric vehicle OEMs to supply advanced electric mobility while continuing to launch new products in the traditional lubricant space. The board of directors of the company has declared an interim dividend of Rs 3 per share, which will be paid on or before August 31, 2022.

Valuations:

The EPS for the stock is at Rs. 8.18 and the P/E ratio is at 14.0 times. The ROCE and ROE for the company are at 67.5% and 49.6%, respectively. The P/B ratio is at 6.35 times and the book value of the company is Rs.18.1. The EBITDA is 8.34 times. The company is almost debt free.

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Zomato's Q1 FY23 results improved.
Business, Equities, Result Updates - August 2, 2022

Zomato zooms up 20% after stellar Q1 performance.

Zomato zooms up 20% after stellar Q1 performance.

Zomato recorded a net loss of Rs. 186 Cr. in Q1FY23 compared to a net loss of Rs. 356 Cr. YOY. The scrip soared after the results. The revenue from operations was at Rs. 1,413 Cr., up by 67.44% versus 844.4 Cr. in June 2021 due to an increase in orders for meals from the online platform. However, the company’s adjusted revenue increased by 18% quarter on quarter and 56% year on year to Rs 1,810 Cr. in Q1FY23.Its adjusted EBITDA loss was Rs 150 Cr in the June quarter, down from Rs 220 Cr the previous quarter.

The revenue is comprised of mainstream food delivery and related fees it charges restaurants for using its platform. The total order value of all food delivery orders placed online rose for the first quarter by 41.6 % to Rs 643 Cr. YOY, with an average customer of 16.7 million. The margins were negatively impacted due to higher fuel costs and wage inflation as per the management. They also added that the monthly transacting customers were the key driver for volume growth.

The domestic food delivery industry is expected to grow three times over the next five years. With the rising order regularity and user count, we expect Zomato to have 45–50% of the market share.

Future plans for Zomato

The online food delivery company will be internally rebranded by moving to a multiple chief executive structure for its businesses that will be housed under a larger organisation called Eternal. In an internal message to employees, Deepinder Goyal said the company has matured from running a single business to running multiple and large companies. The restructuring is happening after the shareholders approved the Blinkit acquisition. Zomato currently has four companies — Zomato, Blinkit, Hyperpure, and Feeding India. Starting Monday (August 1), the company will call the larger organisation Eternal. The umbrella organisation will be called Eternal and will have four firms-Zomato, Blinkit, HyperPure, and Feeding India. Goyal hinted at a model where the company would get into other businesses.

Deepak Goyal said that there will be multiple CEOs running each other’s businesses and working as a “super-team” towards building a single, large organisation. Zomato has set aside a war chest of $1 billion to invest in multiple start-ups. Zomato has acquired a substantial stake in Mukunda, Curefit, and Magicpin. The restructuring is very important as it hints at a model where the company will do other businesses.

Valuations:

The EPS is currently RS.-0.18. The ROCE and ROE are at -10.1% and -10.2%. The large cap company closed at Rs.55.6, up by 20.9% on Tuesday. The company is also debt free, with a long-term borrowing of Rs. 30 Cr. The stock P/E is 194, which is quite expensive. The P/B ratio for the company is 2.62.

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Godha Cabcon & Insulation Reports Q1 2026 Results
Business, Markets, Result Updates - August 2, 2022

Revenue soars three-fold for Barbeque Nation in Q1 FY23:

Revenue soars three-fold for Barbeque Nation in Q1 FY23:

Barbeque-Nation Hospitality Ltd, which is one of the leading dining chains, on Monday, reported a net profit of Rs 16.02 Cr for June quarter 2022. The company had clocked a net loss Rs 43.85 Cr. in June 2021. Its revenue from operations was at Rs 314.86 Cr. during Q1 FY22 as against low revenue for March 2022 quarter. In Q1 FY21, Barbeque-Nation Hospitality’s revenue from operations was at Rs 101.97 Cr. Barbeque-Nation Hospitality total expenses were at Rs 244,41 Cr. 

The Earnings Before Interest, Tax & Depreciation (EBITDA) stands at Rs. 73.4 Cr. VS a loss of Rs.10.4 Cr. in Q1FY22, margin stood at 23.3%. Profit Before Tax (PBT) stood at Rs. 20.8 Cr. as against Loss Before Tax of Rs. 55.9 Cr. in Q1FY21. The same-store sales growth of 182% (Y-o-Y) and dine-in to delivery revenue mix of 87% and 13% respectively.

 

What were the key drivers in the growth of revenue?

As per the management, they have opened 11 new restaurants which helped in growth of sales making overall network to 195 restaurants. The gradual opening of the economy has also contributed in dine-in and delivery channels. The cumulative Barbeque Nation App downloads were 4.7mn, 61% increase over June 21. The strong profitable growth across Toscano business and Barbeque Nation international business also were witnessed. The dine-in segment of the company demonstrated a robust growth of 6x compared to previous year and 32% growth from the previous year. The company has a 4 pillar growth namely Barbeque Nation India, Delivery segment, Toscano and Barbeque Nation international and is focused to grow each of these verticals to build one of India’s largest food services company owning its restaurant.

 

Valuations:

The EPS for the firm is currently is at Rs. 8.28 and P/E ratio for the stock is 147 times making it expensive for investors. The 5 yrs P/E and 3yrs P/E is -122. ROCE and ROE for the scrip is at 3.76% and -9.68 % respectively. The P/B is 12.3 times for Q1 FY23 and Debt to equity ratio stands at 1.58. It is currently traducing at Rs. 1,221 up by 2.15%.

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Deepak Fertilizers and Petrochemicals reported a net profit of Rs. 434 Cr.
Markets, Result Updates - August 1, 2022

Deepak Fertilizers and Petrochemicals reported a net profit of Rs. 434 Cr.

Deepak Fertilizers and Petrochemicals reported a net profit of Rs. 434 Cr.

Deepak Fertilizers reported total revenue of Rs. 3031 Cr. in June 2022. The chemicals segment contributed around 87% of total profit. Chemicals revenue was at Rs. 1771 Cr, double from the previous year’s same quarter. The fertiliser segment’s revenues increased by 26% YOY. EBITDA margins increased from 15.2% in Q1 FY22 to 24.3% in Q1 FY23. The specialty segment portfolio grew by 321% YOY from Rs. 173 Cr. in Q1 FY22 to Rs. 729 in Q1 FY23.

Future Developments

The Greenfield ammonia plant is under development and is moving ahead as per the planned schedule. The farmer connect initiatives have increased customer experience, which will be instrumental in building market position in the crop nutrition business. The second quarter is a seasonally low period for mining activity due to the monsoon. The prices of imported Ammonium Nitrate (AN) have started to moderate. The TAN business aims to effectively compete on pricing to ensure reliability and supply security. The demand and pricing for nitric acid are relatively passive as they are typically expected during the monsoon season. The focus on customised offerings for the Solar/Steel and Parma sectors will help to gradually position Acids/IPA as a specialty chemical sector. A gradual slowdown of the raw material and ammonia prices would also help to sustain a reasonable delta for the TAN/Acid businesses.

Valuations:

EPS for the company is Rs. 36.13 compared to Rs. 23.19 in the previous quarter. The P/E ratio for the stock is at 9.15 times and 3 years’ P/E is at 7.69 times. The ROCE and ROE are 19.8% and 20.7%, respectively. The debt to equity ratio is 0.68. The interest coverage ratio is 10.5 and the dividend payout ratio is 16% for the year ending March 2022. The script closed at Rs.746, up by 4.99% or 35.50 points, which is its upper circuit. 

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TSC India Posts Strong Q1 2026 Results: Revenue and Profit Surge Fuel Optimism
Markets, Real Estate, Result Updates - August 1, 2022

Aurum Proptech will deliver a strong growth

Aurum Proptech will deliver a strong growth

Aurum Proptech recorded revenue of Rs. 14.64 Cr. in Q1 FY23 compared to NIL in Q1 FY22 and reported 8.1 Cr. in Q4 FY22 with a change of 78.9%. The company realised a loss of Rs. 6.85 Cr. in Q1 FY23 compared to a loss of Rs. 4.89 Cr. sequentially. EBITDA was at a loss of Rs. 5.69 Cr for the quarter compared to a loss of Rs. 6.22 in March 2022. Up by 9.3%, they managed to reduce their losses. The SAAS segment contributed revenue of Rs. 5.11 Cr. and the Real Estate as a Service (RAAS) contributed Rs. 9.53 Cr. The company reported other expenses of Rs. 11.27 Cr., which is a main negative point for the company.

 

Robust growth is expected from Helloworld in FY23.

Aurum Proptech now has five subsidiaries. K2V2 contributed around 9.8 Cr of the total revenue, whereas Helloworld recorded a total of 2.34 Cr. in the 15 days of its incorporation and is expected to give revenue of Rs. 15 Cr. of its own by the end of the current fiscal year. The management is optimistic about its future growth and has already tied up with the top developers. The company is operational in 15 cities and is currently mainly focused on Pune, Mumbai, Bangalore, and Delhi.

They received approval for two wholly owned subsidiaries, namely the Aurum software and solutions. The company calls for money from its rights issues by the end of FY23. We believe the stock at CMP still offers a risk-free upside of about 20% return (in three months) for any funds that do not pay any taxation on dividend income and thus offers a good special situation opportunity.

 

Valuations:

The ROE is at -6.50 % and ROCE at -9.04%. The debt to equity ratio is 0.04, which is a good sign as the company won’t have any short-term or long-term liquidity problems. The current quarter’s EPS was Rs. 1.93, with a P/E ratio of 14.74. The scrip was trading at Rs. 109 on Monday, up by 0.51 points. 

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Business, Markets, Result Updates - July 30, 2022

Chalet hotels reports a massive jump in the revenue:

Chalet hotels reports a massive jump in the revenue:

Chalet Hotels posted a net profit of Rs.28.55 Cr. in June 2022, compared to a loss of Rs.41.66 Cr. YOY. The company clocked up net revenue of Rs.253 Cr., up by 263% versus Rs.69.52 Cr. in June 2021 due to robust growth and higher rental incomes. The operating profit stood at Rs.102 Cr., which was up by 11% from March 2022. The Occupancy rate (OCC %) stood at 78% for the June quarter, compared to occupancy of 60% in March 2022. The Average Daily rate (ADR) was at Rs.7457 for the June quarter, higher by 37% from the preceding quarter. The domestic business travel increased by 100%, increasing profit

 

Cost reductions to increase efficiency:

The firm decreased its staff to room ratio to 0.84 from 1.18 in Q1 FY21. The division’s revenue was 5% higher from Q1 FY20 than in the pre-pandemic year. This was due to a strong recovery in business travel in the current quarter. The Revenue per room available (RevPAR) stood at Rs. 5,816/-in Q1 FY23 compared to 2,973/-in Q4 FY22 and Rs.1,252/-in Q1 FY22. EBITDA margins for the quarter were at 42%. The company reversed 16.6 million of its provisions. Hospitality sector revenue was up by 5% from June 2021 and 2.5% from the March 2022 quarter. Fixed costs were at 48% for the June quarter and reduced by 33%. Variable costs were reduced by 42% to increase operating leverage. The total number of rooms for June 2022 was 2,554 rooms.

The average payroll cost was 13%, down from 15% in the previous quarter. Renewable energy sources accounted for approximately 61% of total energy costs. The hotel intends to open a new hotel in Mumbai, which will be operational within a couple of months. They will also be upgrading the Bangalore hotel, which will be operational by December. Chalet Hotels were awarded a contract by DIAL, a good opportunity to debut in the northern Indian markets. They intend to have their 9th property with 350 to 400 rooms in the five-star deluxe space. A majority of the inventory came from metropolitan cities. It will give them entry to a major market in India.

The management is optimistic about its future opportunities and has witnessed a strong recovery trend. There is a potential area for innovation and change in the hospitality sector. Given the ongoing supply chain disruption and the surge in crude oil prices, we believe investors should wait for Q2 FY23 results before taking any further action.

Valuations:

The 5yrs P/E ratio is at -21.6 times and the stock P/E 33.34 times. The P/B ratio is at 4.86 times for Q1 FY23. The ROCE for Chalet hotel is at -0.12% with a Debt to equity ratio of 1.94% indicating that the company is borrowing more from the market to fund its operations. The ROE for the scrip was -5.35% .The share prices closed at Rs. 318 on Friday, down by 3.05%. It touched a 52-week high of Rs. 345 and a 52-week low of Rs. 159. The market cap for the company is at Rs. 6,507 cr.

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Vishnu Prakash R Punglia Promoters’ Stake Sale: A Strategic Step to Enhance Liquidity
Markets, Result Updates - July 29, 2022

Robust growth in the June quarter, witnessed by Kokuyo Camlin :

Robust growth in the June quarter, witnessed by Kokuyo Camlin :

Kokuyo Camlin reported a net profit of Rs.8.35 Cr. compared to Rs.2.94 Cr. in March 2022. The firm clocked in Rs. 196.15 Cr., up by 20.24 % from Rs. 163.95 Cr. in the previous quarter. The EBITDA margin stood at Rs. 13.54 Cr. in the June 2022 quarter compared to Rs. 7.69 Cr. in March 2022.

The demand for paper is strong in all the regions after the COVID-19 pandemic. India’s stationery market is estimated to be around USD 2.5 billion. The latter are dominating the market as this industry has a mix of both organised and unorganised players. With a literacy rate of 74% accompanied by a high population. There are numerous government programs inclined towards pushing higher studies that have resulted in new opportunities for the company. resulting in higher demand and enhanced stationery industry growth.

Camlin’s non-school product portfolio accounts for almost 50% of the total revenues and is improving in the Fine Art and Hobby domain. The company has contacted nearly 2500 hobby tutors across the country and is working with them to improve the quality of their product. The main risks for the firm are the cyclic nature of the stationary industry, economic risk, supply chain disruptions and shortage of raw materials due to the Russia-Ukraine war, etc. The company is taking steps to reduce risk while also creating value for its customers and shareholders.

We believe the share price of Kokuyo Camlin is around the same range as well. due to ongoing geopolitical issues, a slowdown in the economy and currency deprecation. Despite the fact that synergies across various distribution hubs will benefit in terms of low cost, expansion to new locations, quick roll outs, and R&D. The firm targets around 30% or more of its revenue from overseas in a ten-year time period. With the devaluation of the domestic currency, the company has opportunities to capture new markets since it has a competitive price.

The script was trading at Rs. 67.80 on Friday and was up by 0.59%, or 0.40 points. The stock touched an intraday high of Rs.69.25 and an intraday low of Rs.67.10. The 52-week high for the stock was at Rs. 79.6 and the 52-week low was at Rs. 50.5. The market cap for Kokuyo Camlin is Rs. 681Cr.

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Liquidity is a major concern in the Indian Banking Sector
Business, Markets, Result Updates - July 27, 2022

Axis Bank’s net profit was up by 91% in Q1 FY23.

Axis Bank’s net profit was up by 91% in Q1 FY23.

Axis Bank reported a net profit of Rs. 4,125 Cr. in the June 2022 quarter, a jump of 91% from the June 2021 quarter at Rs. 2160 Cr. The advances stood at Rs. 7.01 lakh crore, up by 17% from June 2021. However, the advances were down by about 7.07 lakh crores from March 2022.

In Q1 FY23, NII increased by 20.9% year on year to Rs. 938 Cr. NIM stood at 3.6%, improved by 11 bps QoQ and by 14 bps YOY. The PPOP was at Rs. 588 Cr., with a decline of 8.2% YOY. The fee income was at Rs. 357 Cr. in June 2022, up by 34% YOY. The provisions for the quarter stood at Rs. 359 Cr. The street is disappointed with the loan growth for the June 2022 quarter, down by 7.5% QOQ and 43.5% YOY at Rs. 368 Cr. The gross slippage ratio was at 2.05%, declining by 20 bps YOY and 33 bps QOQ. 45% of the gross slippages were contributed by borrowers’ linked accounts, which were standard. The GNPA and NNPA ratios improved and stood at 2.7% and 0.64%, respectively.

The PCR ratio was at 77% for the quarter. We believe that the asset quality will be constant and improve in the near future. The cost to income ratio stood at 52.5% for the June 2022 quarter at Rs. 357 Cr. and we expect the ratio to increase due to investments in technology. While income growth is expected to improve, The bank is focused on the three core areas: deepening performance culture, strengthening the core and building for the future. It continues to invest in the SME space, extending its distribution and service across India. On Citibank customer business integration, Axis Bank is waiting for CCI approvals and expects to close transactions. 69% of the bank’s loan book is floating rates, which will rise in the policy tightening environment.

The stock price closed at Rs.719.05 and touched an intraday high of Rs.707 and a low of Rs.703. The market capitalization for the bank is Rs. 2.21 lakh cr. The 52-week high was at Rs. 866 and the 52-week low was at Rs. 618.25.

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Happiest Minds Technologies' net profit jumps by 57% in Q1 FY23.
Markets, Result Updates - July 26, 2022

Happiest Minds Technologies' net profit jumps by 57% in Q1 FY23.

Happiest Minds Technologies’ net profit jumps by 57% in Q1 FY23.

Happiest Minds recorded net sales of Rs. 328.92 crores in June 2022 compared to Rs. 244.61 crores in June 2021. The net profit stood at Rs. 56.34 crores in Q1 FY23, up by 57.68% sequentially at Rs. 35.73 crore because of lower other income. The free cash flows were recorded at Rs. 86.39 cr. The service business was driven primarily by Edu-tech, contributing 23.7%, BFSI, contributing 13.7%, and industrials, at 8.2%. Digital infrastructure/Cloud, AI/Analytics and SaaS had a contribution of 45%, 11.6%, and 21.5%, respectively.

EPS stood at Rs. 3.96 in June 2022, up from Rs. 2.51 in June 2021. EBITDA stands at Rs. 87.75 crore, up 32.65% from Rs. 66.15 crore YOY. The reported operating margin stood at 22.7% QoQ, down by 30bps due to lower utilization. 97% of the total revenue comes from digital business, and 93% is contributed by Agile. Europe and the USA witnessed positive growth on a QOQ basis, with healthy pipelines in digital services. 90% of the total revenue was repeat business. The IT tech added 5 new clients and now has 211 active clients in total. The smaller accounts of non-top 10 clients did well and contributed approximately 57.1% of the total revenue. The firm was able to increase business from existing clients while also adding two new clients to the Fortune 2000/Forbes 200 billion dollar corporation.

In the concall, the IT firm mentioned that 15% of the total revenue was from the new business and the remaining came from the existing operations. One of the large clients was cautious in the last quarter but has shown interest in investing more in its new features in the product platform. The firm intends to hire more than 500+ freshers and around 300+ will be joining by August 2022. Happiest Minds will continue to invest in new technology and maintain an EBITDA of 22% to 24% in the coming period. The management believes that they will maintain a CAGR of 25% over the next five years. They are optimistic about their future opportunities and focus on the annuity business. The management expects a multi-year tail wind in digital technologies, multi-hybrid cloud and automation.

We believe that the recent intake of freshers, constant investments in skill addition, currency depreciation, along with supply side challenges, wage hikes, increasing subcontracting costs, and higher intake will keep margins under check in the near term. The stock is currently trading at Rs.974.55, down by 24.05 points, or 2.41%. The stock touched a 52-week high of Rs.1568.00 and a 52-week low of Rs.785.60. The Bangalore-based firm’s market cap is at Rs.14258 crores.

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