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Trident Q2FY24 Results updates

Nykaa Result update Q1FY24

Nykaa Result update: Q1FY24

Company Overview:

Nykaa, a digital consumer technology platform founded in 2012, has established itself as a leading provider of lifestyle retail experiences to consumers. The company boasts a diverse product portfolio encompassing beauty, personal care (BPC), and fashion products, including their own brand offerings. As of March 2023, Nykaa collaborates with more than 6,250 national and international brands and has amassed a substantial customer base of over 24 million individuals. Furthermore, they benefit from the support of 6,900 celebrities and influencers.

Growth Potential in India: large headroom for growth

 India’s per capita spending on BPC and fashion is currently under-indexed, presenting a substantial growth opportunity. With India’s GDP per capita projected to reach $5,500 by 2030, per capita spending on BPC and fashion is expected to increase to $45-$50 and $160, respectively. India is currently in the early stages of growth, with per capita consumption in these categories being among the lowest in peer countries. The online BPC and fashion market in India is anticipated to grow at a remarkable 29% CAGR and 14% over the next five years, reaching values of 799 billion and 11,746 billion by 2027, respectively.

 Business Segments:

Nykaa’s primary revenue driver is the Beauty and Personal Care (BPC) segment, contributing 87% of its revenue. This segment offers a wide range of products, with nearly 300,000 SKUs from over 3,100 global and domestic brands. The Fashion segment, although launched relatively recently in 2018, has quickly gained traction, contributing 8.5% of revenue. It features 1,553 brands and more than 4.3 million SKUs across various fashion divisions.

 

Key Metrics for FY23:  

In FY23, Nykaa witnessed robust performance in both the BPC and Fashion segments. Monthly average visitors for BPC grew by 21% YoY to 22.7 million, leading to a total of 34.8 million orders, a 31% YoY increase, with a consistent average order value (AOV) of INR 1,857. Gross merchandise value (GMV) for BPC surged by 33% YoY to INR 66,491 million. In the Fashion segment, monthly average visitors increased by 13% YoY to 17.3 million, resulting in 6 million orders, a 21% YoY increase, and a growing AOV of INR 3,973. Fashion GMV showed remarkable growth, surging by 47% YoY to INR 25,696 million

Offline Reach:

Nykaa has extended its reach with 145 physical stores in 60 Indian cities, offering three store formats – Nykaa Luxe, Nykaa On Trend, and Nykaa Kiosks. The company has an extensive presence, serving 27,800 pin codes, covering approximately 98% of serviceable pin codes across India.

Valuation:

company’s current stock valuation is at a multiple of 2,348 PE, with a market price of INR 147, compared to the industry PE of 74.5. Nykaa reports relatively low return ratios, with ROE at 1.42% and ROCE at 5.55%. The stock is trading at 30.3 times its book value, and the EV/EBITDA stands at 136x.

Q1FY24 Results Update:

In Q1FY24, Nykaa continued its growth trajectory, with consolidated revenue increasing by 23.8% YoY to INR 1,422 crore. This growth was primarily driven by the BPC segment, which saw a 22.8% YoY increase to INR 1,130 crore, coupled with a 6.3% YoY increase in the Fashion business. Gross merchandise value (GMV) reached INR 26.7 billion, growing by 23.7% YoY, with substantial contributions from both BPC and the Other business. Notably, Nykaa’s distribution mechanisms boosted GMV across online and physical channels. The Fashion segment’s GMV grew by 12.3% YoY to INR 653 crore, driven by an 18.2% YoY increase in order count. EBITDA surged by 59.5% YoY to INR 73 crore, with margins expanding by 120bps YoY to 5.2% due to cost optimization. PAT increased by 8.3% YoY (and 138% QoQ) to INR 5 crore.

Conclusion:

Nykaa’s performance in FY23 and Q1FY24 demonstrates its strong position in the Indian beauty, personal care, and fashion markets. With a growing customer base, expanding offline presence, and a promising outlook for India’s per capita spending in these sectors, Nykaa is poised for continued growth. However, investors should carefully consider the stock’s valuation and return ratios as part of their investment strategy.

 

 

Astral Pipes posted a net profit of Rs. 96 Cr.

 

Kaveri Seeds reported a net profit of Rs. 240 Cr.

Kaveri Seeds reported a net profit of Rs. 240 Cr.

Kaveri Seeds reported a net profit of Rs. 240 Cr.

Kaveri Seeds reported consolidated revenue increased by 9% YoY to 690 Cr., led by higher cotton acreage and improved volumes. The EBITDA, at 250 Cr., improved by 18.3% YoY, while PAT grew 19.1% YoY to 240 Cr. The EBITDA margin improved to 37.1%. Cotton volumes increased by 8.3% YoY while revenue fell by 3.8%. The non-cotton volumes improved by 9.8% while revenue increased by 10% YoY. The company intends to improve volume and revenue for the rest of FY23 with double-digit growth in this segments.

Volume growth aids the topline:

The use of illegal cotton seeds has come down as organised players have gained market share in the cotton seed segment, which has also led to an increase in revenue. The new product launches continued in the quarter as the company introduced newer products across all segments. The new products in the North American market include KCH111, VIPLAV, Money Maker, and KCH 9333. The selected rice volumes grew by 15.2% in FY23. Hybrid rice volumes increased by 6.1% and revenue by 1.0%. The introduction of new hybrids such as the 425, 471, 729, and 473 fueled the segment’s rapid growth. The vegetable seed sales volume increased by 25.9% while revenue decreased by 2.5%. The company is expecting double-digit growth in maize, sunflower, vegetables, and rice in the second half of the year. Farmers’ sentiment has also been influenced by the delay in the onset of the monsoon across India until mid-June.

The company continues to see encouraging growth in vegetable seed acreage, revenue growth, and volumes. The overall exports of KSCL have contributed to 19 Cr. in revenues. The management expects exports to contribute a significant share in the next year. The high market shares and cotton prices drove increased cotton acreage during the current year. Increased competition in the cotton segment led to muted growth due to smaller companies with low realisations crowding the market, which will eventually result in lower overall realisations and higher discounts given during the quarter. The price of cotton per packet was up by 40 YoY.

The company remains confident that discount reversals will happen next year due to lower illegal BT cotton share and overall better market sentiment, despite not being able to realise prices. There is a decrease in acreage due to rain shortages. The higher prices will result in more acres in the cotton crop, which is a major risk for the company.

KSCL’s earnings seem to have normalised and are likely to improve for the rest of FY23. The contribution from the non-cotton segment is improving, and the division is expected to post double-digit growth. The leadership position, R&D focus, healthy product pipeline, presence across crop categories and strong distribution network will act as key levers for growth over the long term. The increasing contribution from the higher-growth projected non-cotton segment will aid the performance. There is a decrease in acreage due to rain shortages. The higher prices will reduce acres in the cotton crop.

Valuations:

In June 2022, the EPS was Rs. 41.27, compared to Rs. 33.44 in June 2021. The ROCE and ROE were at 17.1% and 16.3%, respectively. The stock was trading at a P/E ratio of 10.9x. The company is debt free, and the asset turnover ratio was 0.48x. The scrip is trading at Rs.461, down by 3.05% on Friday.

Krishna Institute reported a net profit of Rs. 79 Cr.

Krishna Institute reported a net profit of Rs. 79 Cr.

Krishna Institute reported a net profit of Rs. 79 Cr.

KIMS reported a net profit of Rs. 79 Cr., and decrease from Rs. 83 Cr. in March 2022 and Rs. 92 Cr. year on year. The revenue in Q1 FY22-23 increased to Rs. 459 Cr from Rs. 372 Cr in March 2021 and Rs. 473 Cr in June 2021. The operating profit was Rs. 137 in the current quarter versus Rs. 114 Cr. in the March quarter.

The expansion will be done using a cluster-based approach.

KIMS has entered into a definitive agreement to acquire a 51% stake in Kingsway Hospitals, Nagpur. This is one of the largest private multi-specialty hospitals in Nagpur, promoted by the Sancheti family and a few eminent doctors. The hospital was commissioned in 2019 with a 334-bed capacity, expandable to 500 beds. KIMS will pay upfront Rs. 800 crore for its 51% stake, which will be used to repay existing debt. After this infusion, the JV will still be left with Rs 150 Cr of debt.

Acquisition cost works out to be Rs 90 lakh/bed.

The acquisition cost works out to be Rs 90 lakh/bed. The acquisition will be completed by Sept. Assuming the operating leverage plays out, Kingsway hospital will have 250 operational beds with a 53% occupancy. For FY22 and FY23 (4 months), Kingsway generated Rs. 1700 Cr. and Rs. 47,500 Cr. of revenues, respectively. ARPOB stands at Rs 29,000/day and has turned EBIDTA positive within 3 years of operation.

KIMS management intends to enhance occupancy from current levels, as well as bring operational efficiencies and synergies. The Kingsway hospital’s COGS stands at 28-29% of sales versus KIMS’s 22% of sales. The management sees profitability scaling up from current levels and reaching 15-20% OPM over the next 2-3 years. KIMS currently has net cash of Rs 200 Cr. and thereby, the Kingsway acquisition will be funded through internal accruals. Currently, the payor mix stands at 80%, comprising of cash plus insurance.

The management, in its cluster-based approach, is looking forward to replicating the AP and Telangana models in the Maharashtra and Karnataka regions. KIMS plans to commercialise 1500 beds over the next 4–5 years across Maharashtra and the Karnataka region. The expansion will be a combination of inorganic and greenfield expansion. More importantly, the company will partner with local doctors and consultants in specific micro-markets to generate better footfalls and achieve a faster breakeven. KIMS will have full control of decision-making in such a partnership.

Valuations:

In June 2022, the EPS was Rs. 8.74, compared to Rs. 10.08 in June 2021. The ROCE and ROE were at 14.8% and 15.6%, respectively. The stock was trading at a P/E ratio of 31.7x. The debt-to-equity ratio was 0.18x, whereas the asset turnover ratio was 0.99x. The interest coverage ratio stood at 29.5x. The scrip is trading at Rs.1241, down by 0.2% on Wednesday.

Dr. Lal Pathlabs reported a net profit of Rs. 58 Cr.

Dr. Lal Pathlabs reported a net profit of Rs. 58 Cr.

Dr. Lal Pathlabs reported a net profit of Rs. 58 Cr.

Dr. Lal Pathlabs reported a consolidated net profit declined 57% to Rs 58 crore for the first quarter June 30. The company had reported a net profit of Rs 134 crore in the April-June period of the last fiscal. The revenue from operations declined to Rs 503 crore in June 2022 from Rs 607 crore in June 2021. In Q1FY23, DLPL served 69 million patients and collected 180 million non-Covid-19 samples. The company declared an interim dividend of Rs. 6/share.

The diagnostic sector will experience tremendous growth.

Dr. Lal PathLabs reported healthy core business performance, driven by increased penetration, digitalization, enhanced testing facilities, and increased home sampling. Swasth fit contributed to 21% of total revenue; packaged tests accounted for 30% of sales. The company targets pre-Covid-19 level growth of 13-15% over the year and strives to double its volumes over 2-3 years.

The Indian diagnostic sector holds significant growth potential, as was evident by the industry’s response to the pandemic, and organised national brands have met these challenges without raising prices. The industry has seen the entry of many new competitors and the growth of the organised sector, both due to overall market growth as well as an accelerated shift from the unorganised to the organised segment.

The customers appreciate the certainty of quality and effectiveness that Dr. Lal PathLabs provides, which the unorganised players will not be able to successfully deliver. In the future, they will build and drive growth through organic expansion of lab and collection centre infrastructure, inorganic expansion, use of technology to improve customer experience, and provision of value-added services at one level while driving internal process efficiencies at another level to achieve productivity. On the organic front, the initiative of the creation of Hub Labs has started yielding good results, especially in the northern part of India. This will also give the capability to go deeper into Tier-II and Tier-III towns in large states like UP, Bihar, etc.

Valuations:

Dr. Lal Pathlabs, EPS was at Rs.6.2 in June 2022, down from Rs.15.74 in June 2021. The ROCE and ROE were at 29.4% and 25.1%, respectively. The stock was trading at a P/E ratio of 73.4x. The debt-to-equity ratio was 0.35x, whereas the asset turnover ratio was 1.04x. The interest coverage ratio stood at 12x. The scrip is trading at Rs.2389, down by 1.89% on Wednesday.

Everest Kanto reported a total revenue of Rs. 380 Cr.

Kaveri Seeds reported a net profit of Rs. 240 Cr.

LT FOODS reported an operating profit of Rs.166 cr.

LT FOODS reported an operating profit of Rs.166 cr.

LT Foods (LTF’s) declared its Q1 FY22-23 results with revenue rising 32.8% YOY to Rs 1,611 crore. The operating profit was up by 27.7% to Rs 166 crore and net profit went up by 23.28% YOY. Its profit margins recovered sequentially but contracted YOY. The net profit stood at Rs. 95 Cr, compared to Rs. 76 Cr. in June 2021. The revenue growth was on account of accelerated brand investments across various segments.

Margins under pressure:

The gross margin improved by 110bps YoY, aided by an improvement in product mix and higher realisation. However, EBITDA margin fell by 40 basis points year on year to 10.0% due to higher freight costs and additional brand investments.LTF has a strong focus on a value-added portfolio, which will support margin improvement in the long-term. The Health & Convenience product segments, which include ready-to-eat products, contributed 2% in FY22, an improvement from 1.5% in FY21. The company targets a 150 bps expansion in EBITDA margin through product mix, operational efficiency, and scale.
The green energy initiatives by the company will provide production efficiency. We anticipate that EBITDA margins will moderate in the near future due to higher costs, but will gradually improve thereafter. LTF’s consistent efforts on brand strengthening and distribution network expansion, as well as region and product diversification via organic and inorganic routes, have been the growth strategy.The recent acquisition in the Jasmine rice segment will strengthen market share. The re-opening of HoReCa channels is also aiding growth, while LTF’s strong focus on value-added products will improve margins.

Valuations:

LT Foods’ EPS was at Rs. 2.80 in June 2022, up from Rs. 2.27 in June 2021. The ROCE and ROE were at 14.8% and 15.6%, respectively. The stock was trading at a P/E ratio of 9.47x. The debt to equity ratio was 0.66x, whereas the asset turnover ratio was at 1.28x. The interest coverage ratio stood at 7.55x. The scrip is trading at Rs. 91.6, up by 2.92% on Monday.

Behavioural Finance

How co-working spaces can restart post lock down

How co-working spaces can restart post lock down.

 

Most co-working spaces are now outlining radical steps to reopen their company post lock down, maintaining participants’ health and sanitation at the maximum standard of premises. The risk and uncertainty of COVID-19 pandemic is increasing each day. Although, policy measures are in full swing to stem the dramatic effects of this pandemic, which is quickly tolling human lives. There is also little clarification as to when regular business resumes. This is well known that the lock down cannot stay in effect permanently.

 

Measures to implement:

When the lock down is ended and firms can function out of their office buildings, several innovative initiatives and procedures will need to be enforced in all working settings to take care of the possibility of contracting the infection. The organizations will have to introduce improved protection procedures higher than a conventional workplace to maintain business-as-usual and guarantee strong organizational interest into co-working work spaces.

 

Work from home:

Indian IT industry allowed workers to Work From Home according to policy order during the lock down. As a result, nearly 90 percent of workers operated from home, with 65 percent from urban areas and 35 percent from small-town areas. The IT industry moved to the Work from the home system during the lock down very smoothly offering operational continuity to consumers without reducing efficiency or profitability, shocking both major companies and customers. So several workers operating from home amid reports that a substantial portion of them will continue even once the condition returns to normal life. Companies will now need to reconsider their approach particularly in office, interior and architecture real estate, to make the segment more appealing to customers.

 

Post COVID:

When the job continues after the lock down, optimizing the use of workspace is a concern. The workplace will entail large-scale behavioural and physical room changes. Organizations would now take advantage to revaluate their working course of action to give more adaptability to their staff, particularly thinking about the advantages of profitability and commitment, This will push up the demand for co-working space.

 

Opportunities:

Risk reduction must now be an essential part of organizational decision-making, particularly as businesses follow their business continuity plans. Organizations will intend to make decent variety in the geography, expanding the opportunities for adaptable workspaces in Tier 2 and Tier 3. They may likewise observe a piece of organizations moving to Tier2 and 3 urban areas to keep away from a shutdown during emergency. Expanding activities through geographies is intended to work well with the co-working group.

 

Co-working space:

Co-working facilities have often provided an advantage in terms of cost-efficiency. The world hopes to see the quickest post-lockdown recovery. At the point when the pandemic hazard facilitates, more organizations look to continue their business. Co-working spaces is the main decision for some organizations since they are more flexible in the time of the rent agreement. Businesses cannot afford to operate from home for so long, because many of them have tasks needing a high degree of direct control that are only possible in a structured office environment. These enterprises are heavily reliant on the office facilities to work efficiently.

 

Looking on, co working spaces will continue to restructure their work environments, such as relying mostly on activity-based workplace and collaborative zones. The co-working space team will have to focus on other things, such as ramping up hygiene procedures with daily sanitization of premises, beginning shift-based jobs, simulated meetings, even sanitizing the hands of each participant entering the property, and sitting in offices in compliance with social distance norms. It may include the supply of hand sanitizers and the substitution of bio-metrics with card access.

 

Workspace administrators will have to enable participants to make the most possible use of their collective senses when allowing the use of community resources in co-working spaces since sanitation is the highest priority. They will also have to make sure that members comply with shift-based systems to eliminate the possibility of congestion. They will also be expected to establish a new regulatory structure or regulations. People should maintain social distancing and carry face masks for good effect. Co-working spaces will be required to re-plan their work areas and make sure their encounters do not lead to infection.

 

Drawbacks:

For all the undoubted upsides of co-working spaces that are primarily funded by companies, freelancers, small to medium-sized organizations and start-ups. They also have drawbacks and constraints. Besides most of them missing independent canteens they often prevent businesses from holding activities in local places. Trying to maintain these services is another problem. While several major businesses utilize co-working spaces, these drawbacks have usually driven some others away from the possibility of adopting them due to lower rentals.

 

 

How to Plan Invest In Insurance Sector and Tax Planning.

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