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Transforming ₹1 Lakh into ₹1.8 Crore: The Unbelievable Journey of Two Stocks
Business, Equities, Market News, Markets, Research, Result Updates - August 29, 2022

Page Industries Ltd Q1 FY23 Result Updates. Strong net profit growth & margin performance.

Page Industries Ltd Q1 FY23 Result Updates.
Strong net profit growth & margin performance.

In Q1FY23, company reported a 167% YoY & 20.7% QoQ increase in sales to Rs 13,413 mn. Strong topline growth was backed by a volume growth of 150% YoY & 26% QoQ at 63 mn pieces. Company has taken a price increase of 3.5%-4.5% in Q1FY23.
The Earnings before interest, tax, depreciation and, amortization (EBITDA) increased by 771% YoY & 11.5% QoQ at Rs 2,978 mn. Company has been able to contain the impact of steep increases in raw material prices with a combination of price increase, better inventory management & cost control.
Net profit stood at Rs 2,070 mn up 1791% YoY & 8.7% QoQ. Board of Directors of the company has declared an interim dividend of Rs 60 per equity share.

Volume growth was led by growth across all its product categories.

Page Industries Ltd. (PAGE), reported strong topline growth in Q1FY23, with revenue up by ~167% YoY on a low base of last year backed by volume growth of 150% YoY & 26% QoQ. Volume growth was led by growth across all its product categories which is backed by an increase in distribution network, good demand traction in EBO’s & e-commerce channel. Growth was same across both primary & secondary sales channel. In Q1FY23 company has added 13 EBO’s & now has 1,144 EBO’s stores. Also it has added 3,167 MBO’s and is now present across 1,13,715 stores across India. Company has planned a capex of Rs 4500 mn in FY23 for capacity expansion and investment in increasing digital capabilities.
Demand was good across all its product categories and expects similar trend to continue. Management highlighted that there was good growth across all distribution channels. Demand was good across tier 3/4 cities along with metro and tier 1 cities. Company has taken a price hike of 3.5%-4.5% in Q1FY23 to pass on the impact of raw material inflation. Company has 16%-18% market share in men’s innerwear and a single digit market share in womens, athleisure, kids’ category which provides large opportunities for growth going forward.
Company has been able to contain the impact of steep increase in raw material prices with a combination of price increase, better inventory management and cost control. E-commerce sales contribution is 8.5%, which was 9% during pandemic period. Contribution from MBO’s and modern trade continue to be the same.
At the end of Q1FY23 cash & cash equivalent stood at Rs 3,144 mn vs Rs 2,835 mn QoQ.

The shares of Page Industries Ltd are trading at Rs. 49,517, down by 0.84%.

Valuations:
The return on equity (ROE) is 14.4% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 75.2. The return on capital employed (ROCE) for the company is 67.2%. The price to book value of Page Industries Ltd is 50.7. The EV/EBITDA is 51.4. EPS during the quarter came at Rs. 657.

Campus Active Wear Limited Q1 FY23 Result Updates. Net profit surged to Rs. 28.66 crores driven by strong demand.

Linc Pen and Plastics Ltd Q1 FY23 Result Updates. Increase in selling price to improve gross margin.

Trident Industries’ net profit stands at Rs. 129.35 crores.

Gujarat Alkalies clocked a net profit of Rs. 220 Cr. in Q1 FY23.

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Nestle India reported a net profit of Rs. 515 crores:
Business, Equities, Market News, Markets, Research, Result Updates - August 27, 2022

Minda Corporation Ltd Q1 FY23 Result Updates. Raw material prices to hamper margins.

Minda Corporation Ltd Q1 FY23 Result Updates.
Raw material prices to hamper margins.

Minda Corporation Ltd reported a net profit at Rs.524.9Mn, increased by 30.8% QoQ and 638.3% YoY.
The company reported at Rs. 10,102 Mn (including Minda Instruments Ltd-MIL) with 6.6% QoQ and 80.8% YoY growth driven by revenue visibility in both ‘Mechatronics & aftermarket’ and ‘Information & connected system’ business segments with increase in business share from existing customers and rise in content per vehicle.
EBTIDA stood at Rs. 1,066Mn, up by 1% QoQ and 246.1% YoY and EBITDA margin stood at 10.6% , declined by 81bps QoQ. The margins were supported by higher operational efficiencies despite increase in raw material prices.
Profit before tax reported at Rs. 709.8Mn, improved by 1.3% QoQ. Finance costs increased by 9.9% QoQ to Rs. 82.1Mn. Revenue growth is driven by overall industry growth.

Growth in all the business segments .

During the quarter, Minda corp has delivered growth in both the business segments. Mechatronic revenue reported at Rs. 4,920Mn 45.1% YoY and 4.6% QoQ with a continued growth in exports and aftermarket sales. It has increased in share of business. EBITDA margin stood at 12.6% in Q1FY23 as compared to 13.4% in Q4FY22 on account of rise in raw material prices during the quarter. The segment mainly focuses on EV segment for 2Ws and increasing share of business from existing customers.

Information and connected system revenue reported at Rs. 3,620Mn, up by 64.9% YoY and 6.8% QoQ; as there was an improvement across most segments that sustained revenue growth despite supply chain constraints. EBITDA margin declined up to 7.1% as compared with 7.4% in Q4FY22 due to rise in raw material prices. In Q1FY23, overall revenue grew by 80.8% at Rs. 10,102Mn which is highest in the history backed by new business and rise in share of business from existing customers from wiring harness and Mechatronics segments. Also, growth in PVs and 2Ws segment led to revenue growth in Die casting business along with exports.

By End market segments, Passenger vehicles, 2-3 wheelers, Commercial Vehicles and after market segments contributed 14.5% , 43.7% ,30.1% , 11.7% in Q1FY23 as compared with 15.9% , 50.4% , 22.6% , 11.1% in Q1FY22, respectively.

Minda Corp reported 85.2% of its revenue from domestic business and 14.8% of revenue from exports in Q1FY23 (8.9% from Europe and North America and 5.9% from South East Asia). Overall exports for the quarter impacted due to geopolitical issues and seasonal impact by a customer. Revenue from die casting business stood at Rs. 152Cr at full capacity utilisation levels. During the quarter, other expenses were de-grew on a sequential basis by 3.1% where Minda Corp has controlled conversion course and administration expense.

The shares of Minda Corporation Ltd are trading at Rs. 224.10, down by 0.07%.

Valuations:
The return on equity (ROE) is 13.5% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 25.4. The return on capital employed (ROCE) for the company is 11.8%. The price to book value of Minda Corporation Ltd is 4.05. The EV/EBITDA is 14. EPS during the quarter came at Rs. 9.92.

Campus Active Wear Limited Q1 FY23 Result Updates. Net profit surged to Rs. 28.66 crores driven by strong demand.

Linc Pen and Plastics Ltd Q1 FY23 Result Updates. Increase in selling price to improve gross margin.

Trident Industries’ net profit stands at Rs. 129.35 crores.

Gujarat Alkalies clocked a net profit of Rs. 220 Cr. in Q1 FY23.

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GDP likely grew by a median 6.3% in Q3, slightly higher than RBI’s 6.2% estimate
Business, Markets, Result Updates - August 26, 2022

Ambuja Cements reported a net profit of Rs. 752 for the fiscal year ending June 2022.

Ambuja Cements reported a net profit of Rs. 752 for the fiscal year ending June 2022.

Cement maker Ambuja reported a 14.2% drop in consolidated net profit to Rs 752 crore for the quarter ended June 2022 compared to June 2021. This was due to higher power and fuel costs and freight expenses, while the revenue climbed 15.1% YoY to Rs 8,033 crore.

The consolidated net sales rose 15.1% to Rs 7,943 crore in the April-June period versus the same period last year, while earnings before interest, tax, depreciation and amortisation (Ebitda) fell 39% to Rs 1,115 crore during the quarter. The company’s Ebitda margin stood at 14% during the quarter, a sharp fall from the 26.5 per cent reported in the same period last year. Last week, ACC’s net profit fell 60 percent year-on-year to Rs 227 crore, while net sales grew 15 percent over the year-ago period to Rs 4,468 crore.

Future Prospects

The company reported total expenses of Rs 7,276.72 crore in the June quarter. The expenses increased by 33.09% from Rs 5,467.33 crore in the year-ago period. The sales volume was up 15.1% in the April-June quarter at 7.39 million tonnes per annum (MTPA) from 6.42 MTPA in the corresponding quarter. The company recorded robust volume growth of 15% and top-line growth of 18% in the quarter. However, the April to June 2022 quarter was impacted by rising fuel prices and related inflationary impacts.

The company invested in a 3.2 MTPA brownfield clinker at Bhatapara and a 7.0 MTPA cement grinding expansion at its existing locations (Sankrail and Farakka). A greenfield grinding unit at Barh, Bihar. The company is acquiring limestone reserves to support long-term growth. The recovery in domestic economic activity is gathering strength. Rural consumption should benefit from the likely normal monsoon. The investment activity is expected to be supported by improving capacity utilisation, the government’s capex push, and strengthening bank credit. Geopolitical tensions, elevated commodity prices, supply bottlenecks, and tightening global financial conditions are key factors to look at.

Valuations:

The EPS stood at Rs. 3.79 for June 2022, which was at Rs. 3.32 in March 2022 and Rs. 4.42 in June 2021. The stock has a ROCE of 22.1% and a ROE of 11.8%. The P/E ratio is now 33.1x, up from 20.9x five years ago. The EBITDA is at 13.1x and the return on assets is at 8.94%. The interest coverage ratio is 29.2x and the asset turnover ratio is 0.68. The share is trading at a price of Rs.402, up by 1.35%.

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Zomato Q3FY25: Strong GOV Growth Amid Profitability Pressures
Business, Equities, Market News, Markets, Research, Result Updates - August 26, 2022

Vinati Organics Ltd Q1 FY23 Result Updates. Increase in revenue driven by ATBS sales.

Vinati Organics Ltd Q1 FY23 Result Updates.
Increase in revenue driven by ATBS sales.

Net profit has seen a jump of 24.97% YoY to Rs. 1,011 Mn. The PAT margins contracted by 97 bps YoY and 83 bps QoQ to 19.97% in Q1FY23.
In Q1FY23, Vinati Organics’s consolidated revenue grew by 31.03% YoY and by 4.16% QoQ to Rs. 5,063 Mn. Overall demand growth was led by ATBS segment.
Earnings before interest, tax, depreiation and amortization (EBITDA) has seen a growth of 28.79% YoY basis and de growth of 5.67% QoQ to Rs. 1,309 Mn, while EBITDA margins remained flat down 45bps YoY and declined by 269 bps QoQ to 25.85% in Q1FY23.
The demand from end user industry pushed ATBS sales. The company delivered sharp uptrend in its consolidated revenues 31.03% YoY and 4.16% QoQ to Rs. 5,063 Mn. Such performance was led by higher volumes coming in due to increasing demand for high purity grades of ATBS. The growth was also supported by Butyl phenol business. The antioxidant plant is currently operating at 25% capacity and is expected to touch 50% capacity in next year.

Increased realisations were the result of input cost transfer.

On operational front the company delivered EBITDA growth of 28.79% YoY basis and 5.67% QoQ to Rs. 1,309 Mn. EBITDA margins remained flat down 45bps YoY and declined by 269 bps QoQ to 25.85% in Q1FY23. The company has been able to maintain the margins per kg due to softening of Acrylonitrile prices and its ability to pass on the input cost to its customers. Also freight cost has begun to come off lately from peak levels. PAT saw a jump of 24.97% YoY to Rs. 1,011 Mn. The PAT margins contracted by 97 bps YoY and 83 bps QoQ to 19.97% in Q1FY23. Vinati organics is able to get bookings for shipments but overall time taken for it is still high.
Continuous investment led to growth. VOL intends to expand its Acrylamide tertiary-butyl sulfonic acid (ATBS) capacity from present 40,000MT to 60,000MT. The announced capex is going to be a brownfield expansion to the tune of Rs. 3,000 Mn which will be funded through internal accruals and is expected to get commissioned by December 2023. Also with that it plans to expand its product portfolio through Veeral Organics Pvt Ltd (its fully owned subsidiary) by introducing products like MEHQ & Guaiacol (2,000 MT) and Iso Amylene (30,000 MT). It will be a sole manufacturer of Iso Amylene in India and is initially looking to cater the export demand. These products are employed in pesticides, medicines, flavours, and polymerization inhibitors. While this will be a greenfield expansion the total capex is approximately Rs. 2,800 Mn.

The shares of Vinati Organics Ltd are trading at Rs. 2227.45, down by 0.72%.

Valuations:
The return on equity (ROE) is 20.6% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 62.6. The return on capital employed (ROCE) for the company is 26.6%. The price to book value of Vinati Organics Ltd is 12.5. The EV/EBITDA is 43.7. EPS in Q1FY23 came at INR 9.85 against Rs. 9.84 in the same period last year.

Campus Active Wear Limited Q1 FY23 Result Updates. Net profit surged to Rs. 28.66 crores driven by strong demand.

Linc Pen and Plastics Ltd Q1 FY23 Result Updates. Increase in selling price to improve gross margin.

Trident Industries’ net profit stands at Rs. 129.35 crores.

Gujarat Alkalies clocked a net profit of Rs. 220 Cr. in Q1 FY23.

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Shipa Medicare reported an 85 lakh net profit.
Business, Equities, Markets, Research Reports - August 26, 2022

Shilpa Medicare reported an 85 lakh net profit.

Shipa Medicare reported an 85 lakh net profit.

Shipa Medicare has reported a total income of Rs. 269.2583 crores during the period ended June 30, 2022 as compared to Rs. 346.0867 crores during the period ended March 31, 2022. The company has posted a net profit or (loss) of Rs. 0.8485 crores for the period ended June 30, 2022 as against a net profit or (loss) of Rs. 29.5490 crores for the period ended March 31, 2022. Gross margins declined in Q1FY23 due to pricing pressures in both the API and formulation segments.

First domestic player to launch Adalimumab :

To improve cost efficiencies and improve margin profile, the company is working on process changes, backward integration of intermediates, and increasing the scale of operations.In the API business, the company intends to continue its focus on oncology molecules while reducing its dependence on niche non-onco molecules. Shilpa has set up a dedicated block which includes R&D and production blocks. It intends to complete 6 molecules, 2 in FY23 and 4 in FY24, for the exhibit batches. The company is working on specialised polymers and believes there is enough opportunity to grow in the segment. Management expects phase-1 studies to start by CY22-end and complete them in 9 months. Shilpa has been able to stabilise the product for 1 kL. The molecule will start with the grade market, which has small potential, and then move towards formulations. Shilpa intends to give some time for the business to stabilise before looking at an IPO. Shilpa has largely completed the remediation of the Jadcherla formulations unit. Third-party audits of the plant have also concluded without any data integrity issues. Company is constantly in touch with the USFDA with regular updates. On approval, Shilpa is expected to become the first domestic company to launch high-concentration Adalimumab. Given the studies were conducted in the EU, the company intends to pursue launches in the RoW market. The domestic market size for the molecule is Rs. Certain expenses have been capitalised, which will impact P&L, but they are not significant. Capex: Rs 4 billion was earmarked for the Albumin project, of which Rs 1.2 billion has been utilised. Apart from maintenance, there is no major capex for the formulations plant. The Capex for the API business will depend on capacities and the management expects an expense of  Rs400mn-500mn.

The company does not plan more investments in biologics. Onco and other API segments witnessed one-offs during Q1FY23 on account of Ind-Asu requirements and trading revenues, respectively. We believe performance will remain steady going forward, with the USFDA resolution remaining the key to faster growth. Key upside risks are early resolution of the import alert, high-value launches in formulations, and quick success in biosimilars.

Valuations:

EPS is at Rs. 0.10 for the June quarter as compared to Rs. 3.40 in the March quarter and Rs. 0.2 in the June 2021 quarter. The ROCE and ROE are at 5.58% and 3.35%, respectively. The EBITDA stood at 19.2x while the price to book ratio was at 1.81x. The stock was trading at a P/E ratio of 62.0x. The scrip was at Rs.388 on Thursday, up by 0.90%.

 

 

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Burman Family takes over Religare
Business, Equities, Market News, Markets, Research, Result Updates - August 26, 2022

LUX Industries Ltd. Q1 FY23 Result Updates. Healthy sales growth, margins impacted due to higher raw material cost.

LUX Industries Ltd. Q1 FY23 Result Updates.
Healthy sales growth, margins impacted due to higher raw material cost.

Lux Industries Ltd. (LUX), reported sales of Rs. 5687 mn for Q1FY23 increased by 36.2% YoY backed by a volume growth of 14% YoY at 75 mn pieces and average selling price increase of 19% YoY. Growth in volumes was largely driven by increased demand for branded products from Tier I, II and III cities. Volumes in the economy/mid-premium/premium segment increased by 8%, 27%, 1% respectively while rest of the growth was on account of increase in price and product mix. Share of exports was 6% of total sales.
Net profit for Q1FY23 declined by 20.9% YoY to Rs 507 mn. PAT Margin was at 8.9% vs 15.4% YoY.
Company has been taking regular price increases in order to pass on higher raw material cost. Gross margin for Q1FY23 declined by 600 bps YoY to 31.8% on account of increase in raw material cost, stocking of high cost inventory in the previous quarters & volatile price of raw materials. In Q1FY23 EBITDA declined by 14.3% YoY to 748 mn. EBITDA margin for Q1FY23 declined by 776 bps YoY to 13.2%, mainly led by decline in gross margins and increase in advertisement expenditure which increased by 62% YoY at 420 mn.
Gross margins were impacted due to high cost inventory stocking in the previous quarters and volatile prices of raw materials. Company witnessed healthy traction for its men’s premium brand “ONN” (contributed 5% of sales in Q1FY23) with sales of Rs 300 mn up 94% YoY & women’s brand “Lyra” (contributed ~17% of sales in Q1FY23) with sales of Rs 970 mn up 136% YoY. Company’s latest offering of brand Lyra has been gaining good response from the market helping it to evolve from legging centric brand to multi-product, multi-category women’s wardrobe brand. Management highlighted that going forward with softening of raw material prices & streamlining of the high cost inventory, it expects gradual improvement in margins.

Growth on account of price increase and product mix.

In Q1FY23 company reported a volume growth of 14% YoY at 75 mn pieces, while rest of the growth was on account of price increase and product mix. Growth in volumes was largely driven by increased demand for branded products from Tier I, II and III cities. For Q1FY23 economy segment’s (35% of Q1FY23 sales) revenue grew by 20% YoY to Rs 1,980 mn while revenue from mid- premium segment (52% of Q1FY23 sales) grew by 52% YoY to Rs 2,960 mn. Additionally, revenue from the premium segment (13% of Q1FY23 sales) increased by 25% YoY to Rs 710 mn. Volumes in the economy, mid-premium, premium segment increased by 8%/27%/1% YoY respectively. Average realisations increased by 11%/20%/23% YoY respectively. Overall ASP increased by 19% YoY on account of price increases taken by the company to pass on higher raw material cost. In Q1FY23 geographical mix of sales was North: 35%, East: 21%, West: 25%, Central: 15%, South India: 4% In Q1FY23 womenwear brand “Lyra” reported sales of Rs 970 mn up 136% YoY. Lyra contributed 17% of total revenue. In Q1FY23 company’s premium brand “ONN” reported revenue of Rs 300 mn up by 94% YoY (contribution 5% of sales). Since premium brands have higher gross margins, increasing contribution should help the company to improve overall margins of the company. In Q1FY23 advertisement spend was Rs 420 mn (7.4% of Q1FY23 sales).
The shares of LUX Industries Ltd. are trading at Rs. 1763, up by 0.05%.

Valuations:
The return on equity (ROE) is 29.3% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 16.1. The return on capital employed (ROCE) for the company is 34.7%. The price to book value of LUX Industries Ltd. is 4.05. The EV/EBITDA is 11.6. EPS during the quarter came at Rs. 110.

Campus Active Wear Limited Q1 FY23 Result Updates. Net profit surged to Rs. 28.66 crores driven by strong demand.

Linc Pen and Plastics Ltd Q1 FY23 Result Updates. Increase in selling price to improve gross margin.

Trident Industries’ net profit stands at Rs. 129.35 crores.

Gujarat Alkalies clocked a net profit of Rs. 220 Cr. in Q1 FY23.

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Hero MotoCorp Ltd Q1 FY23 Result Updates.
Business, Equities, Market News, Markets, Research, Result Updates - August 25, 2022

Hero MotoCorp Ltd Q1 FY23 Result Updates. Input cost pressures to impact performance.

Hero MotoCorp Ltd Q1 FY23 Result Updates.
Input cost pressures to impact performance.

Hero MotoCorp Ltd reported a net profit of Rs. 624.5 crores, increased by 70.9% YoY from Rs. 365.4 crores and down by 0.4% QoQ from Rs. 627.1 crores. The net profit margin came at 7.4%, up by 78 bps YoY and down by 101 bps QoQ.
The total income stood at Rs. 8392.5 crores as compared to Rs. 5487.1 crores up by 53% YoY and 13.1% QoQ from Rs. 7421.7 crores. Gross margin for the quarter is 27.2%, down by 24 bps YoY and 348 bps QoQ.
The Earnings before interest, tax, depreciation and, amortization is at Rs. 940.8 crores as against 514.8 crores in June 2021 and 827.6 crores in the March quarter.
Q1FY23 numbers are below estimates largely due to input cost pressures, which expect to cool-off in the subsequent quarters owing to softening of commodity prices.

Domestic market share improved.

QoQ domestic motorcycle market share improved by 425bps to 51.8% and scooters share improved by 60bps to 6.7%. This is driven by premium xTec series, healthy marriage season & rural uptick. Export demand is facing headwinds due to currency depreciation & geopolitical conditions.
Two wheeler demand is on a healthy trajectory supported by normal monsoon & opening up of all sectors in the economy. Hero MotoCorp’s Q1 retails were better than wholesales. The underlying demand is good and the momentum is in the right direction. The company launched various models in xTec series; this along with future launches should help improve the market share in scooters and motorcycles. xTec series prices are 7-10% higher than base models, the demand for these models are better than anticipated.
July sales were lower as some variants were facing chip issues. Normal inventory level is 6-8 weeks, and by the end of June, the inventory was 6-7 weeks. On scooters, it launched Destini 125cc xTec model with good features and has been doing well. Export demand is facing some headwinds due to currency depreciation & geopolitical conditions . The demand for xTec series is healthy despite 7-10% higher prices.
Employee cost inched-up by 13% QoQ due to salary revision (higher increments than previous years) and bonus. Some part of it will moderate. No major cost impact expected due to OBD2. Other income declined sharply due to MTM loss of Rs 600mn. Blended realization dropped QoQ by 3% due to lower sales from spare parts, lower other operating income (Rs 1.09bn in Q1 vs. Rs 1.86bn in Q4) and expiry of Neemrana plant benefit. The core realization improved by Rs 800 QoQ due to price increase and better mix. QoQ drop is mostly due to seasonality.

The shares of Hero MotoCorp Ltd are trading at Rs. 2802.25, down by 0.15%.

Valuations:
The return on equity (ROE) is 14.4% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 21.2. The return on capital employed (ROCE) for the company is 18.6%. The price to book value of Hero MotoCorp Ltd is 3.55. The EV/EBITDA is 13.3. EPS during the quarter came at Rs. 133.

Campus Active Wear Limited Q1 FY23 Result Updates. Net profit surged to Rs. 28.66 crores driven by strong demand.

Linc Pen and Plastics Ltd Q1 FY23 Result Updates. Increase in selling price to improve gross margin.

Trident Industries’ net profit stands at Rs. 129.35 crores.

Gujarat Alkalies clocked a net profit of Rs. 220 Cr. in Q1 FY23.

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BHEL Secures Major Power Project Contracts from Adani Group
Business, Editorials, Markets, Research Reports - August 25, 2022

Bhageria India reported a net profit of Rs. 2.38 cr.

Bhageria India reported a net profit of Rs. 2.38 cr.

The net sales were at Rs 108.12 crore in June 2022, down 4.33% from Rs 113.02 crore in June 2021. The quarterly net profit stood at Rs. 2.38 crore in June 2022, down 81.65% from Rs. 12.96 crore in June 2021. The EBITDA stands at Rs. 11.99 crore in June 2022, down 49.83% from Rs. 23.90 crore in June 2021.

Are retained earnings used effectively?

The company earned revenue of Rs.99.59 Cr from the chemical segment, Rs.8 Cr. from solar power and Rs.0.4 Cr. from other segments for the year ending in March 2021. The EBIT from the chemical segment was Rs. 2.43 Cr., Rs. 3.75 Cr. from the solar power segment and Rs. 0.86 from other. The company incurred a finance cost of Rs. 1.08 cr. and other unallocated expenditure of Rs. 2.38 cr. The surplus current assets suggest that Bhageria Industries has a conservative balance sheet and could probably eliminate its debt without much difficulty. Succinctly put, Bhageria Industries boasts net cash, so it’s fair to say it does not have a heavy debt load.

Any business needs free cash flow to pay off debt; accounting profits just don’t cut it. Bhageria Industries has net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt. Bhageria Industries created free cash flow of 14% of its EBIT. That level of cash conversion undermines its ability to manage and pay down debt. While it is always sensible to investigate a company’s debt, in this case, Bhageria Industries has 152.4m in net cash and a decent-looking balance sheet. So we are not troubled with Bhageria Industries’s debt use. However, not all investment risk resides on the balance sheet.

Valuations:

EPS is at Rs.0.55 for the June quarter as compared to Rs.4.17 in the March quarter and Rs.2.39 in the June 2021 quarter. The ROCE and ROE are at 19.2% and 14.7%, respectively. The EBITDA stood at 6.48x while the price to book ratio was at 1.46x. The stock was trading at a P/E ratio of 12.3x. The scrip was at Rs.170 on Thursday, up by 0.18%.

 

 

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Hindalco Industries plans to invest Rs. 15,000 crore in Madhya Pradesh
Business, Editorials, IPO research, Markets, Research - August 25, 2022

ONCG made a profit of Rs. 15205 Cr.

ONCG made a profit of Rs. 15205 Cr.

ONCG reported a standalone profit of Rs 15,205.85 crore for the month of June 2022, up 251% compared to the year-ago period, driven by strong operating performance and top-line growth. The standalone profit in Q1 FY22 stood at Rs 4,334.75 crore. The standalone revenue for the June FY23 quarter grew by 84% to Rs 42,321 crore compared to the corresponding period last fiscal. ONGC had a 91% year-on-year growth in its offshore business at Rs 27,990.4 crore and its onshore business increased by 72% to Rs 14,330.3 crore during the quarter.

Consistent natural gas output

At 1.63 million tons, Oil and Natural Gas Corporation (ONGC) produced 1.7% less oil due to lower output from western offshore. The production decreased by 12.34% in fields run by private businesses. However, compared to April through July 2021, when output was 9.96 million tons, it was only slightly lower during the first four months of the current fiscal, which started on April 1. On August 4, Oil Minister Hardeep Singh Puri tweeted that the trend of diminishing crude oil production had changed. The data from the ministry showed that Vedanta’s Rajasthan block had a lower output than ONGC’s oilfields in Gujarat and Assam.

The natural gas output was nearly steady in July at 2.88 billion cubic metres but was 3.4% higher from April to July at 11.43 bcm. The refineries processed 83.96 million tonnes of crude oil between April and July, operating at 103.87% of their capacity, compared to an operating rate of 92.01% for processing 76.64 million tons. Fuel production increased by 6.23% in July to 21.97 million tonnes and by 11.67% from April to July to 90 million tons.

The company has fixed August 19th, 2022 as the “Record Date” for determining members eligible to receive a final dividend of 3.25 per share (i.e., @ 65%) for the financial year 2021-22.

Valuations:

The EPS stood at Rs. 12.09 for Q1 FY23. The price to book ratio was at 0.73x. The return on assets was at 12.3%. The interest coverage ratio was 24x for June 2021. The EBITDA was at 2.50x. The ROCE and ROE were at 18.0% and 18.2%, respectively. The stock is trading at 3.35x while the five-year P/E ratio is at 7.51x. The scrip closed at Rs.136, up by 1.68% on Wednesday.

 

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Business, Equities, Market News, Markets, Research, Result Updates - August 25, 2022

Alembic Pharmaceuticals Ltd Q1 FY23 Result Updates. Profitability declined due to sales decline and increased costs.

Alembic Pharmaceuticals Ltd Q1 FY23 Result Updates.
Profitability declined due to sales decline and increased costs.

The company witnessed a 4.8% YoY (-10.8% QoQ) decline in the revenue to Rs. 12.62 bn in Q1FY23. This was due to flat to a decline in the US, Ex-USA, and India formulations revenue as well as in the API revenue on a YoY basis, in Q1FY23.
The EBITDA margins declined 871 bps YoY (-222 bps QoQ) to 9.1% and EBITDA declined 51.4% YoY (-28.4% QoQ) to Rs. 1.15 bn in Q1FY23.
The company incurred a net loss of Rs. 659.0 mn in Q1FY23 vs. net income of Rs. 355.0 mn in Q4FY22 and a net profit of Rs. 1.65 bn in Q1FY22. Adjusting for the unusual expenses, the company’s adjusted net profits declined 70.2% YoY (+38.3% QoQ) to INR 491.0 mn in Q1FY23.

Revenue decline across segments.

The US revenue declined 0.5% YoY (-34.1% QoQ, 29.0% of revenue), the Ex-USA revenue declined 7.6% YoY (-3.2% QoQ, 14.0%), India revenue declined -0.2% YoY (+6.9% QoQ, 38.0%) and API revenue declined 16.5% YoY (+5.0% QoQ, 18.0%). The US revenue was flat YoY due to price erosion across the portfolio; partially offset by higher volumes with market share gains. The sequential revenue growth was negative for the US, due to the higher stocking carried out by the distributors in Q4FY22. India’s revenue was affected due to the higher base effect of Q1FY22 with more of COVID 19 product sales then. However, excluding COVID 19 sales, India branded business revenue would have grown at 20.0% YoY in Q1FY23. The API sales decline was due to lower volumes in Q1FY23.

The company’s gross profit margins (GPMs) declined 131 bps YoY (-374 bps QoQ) to 70.0% in Q1FY23 due to increased raw materials costs (as a % of revenue) in Q1FY23. Gross profits declined 6.1% YoY (- 14.2% QoQ) to Rs. 8.84 bn. Also, the EBITDA margins declined 871 bps YoY (-222 bps QoQ) to 9.1% and EBITDA declined 51.4% YoY (-28.4% QoQ) to Rs. 1.15 bn in Q1FY23. The company’s employee costs remained flat YoY (+4.8% QoQ) and other expenses increased 15.3% YoY (- 19.2% QoQ). However, with a 41.5% YoY (-89.3% QoQ) fall in other income, Rs. 1.15 bn of Aleorrelated unusual impairment expenses, and a 316.6% YoY (+31.2% QoQ) rise in interest expenses.

With the change in crude oil prices, the company is witnessing an increase in costs such as of solvents and materials costs but is trying to contain the costs as much as possible. The margins have eroded in the US across therapy products.

The shares of Alembic Pharmaceuticals Ltd. are trading at Rs. 658.95, up by 1.36%.

Valuations:
The return on equity (ROE) is 10% for the quarter ended June 2022. The price-to-earning (P/E) ratio stood at 43.7. The return on capital employed (ROCE) for the company is 11.1%. The price to book value of Alembic Pharmaceuticals Ltd. is 2.46. The EV/EBITDA is 19.3. EPS during the quarter came at Rs. 16.

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