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Shaping the Future: Key Trends in the Hospitality Industry

Shaping the Future: Key Trends in the Hospitality Industry

Shaping the Future: Key Trends in the Hospitality Industry

The Indian hotel industry has been a key contributor to the country’s economy, with its substantial growth trajectory. India’s charm, characterized by its lively culture, rich historical sites, and breathtaking natural beauty, has captivated tourists from around the globe, establishing it as a favored travel destination. As a result, the hospitality industry in India has been growing, and it’s making a big contribution to the economy. In recent years, the industry has faced challenges posed by the COVID-19 pandemic. However, it has shown resilience and adaptability, positioning itself for a robust future. According to the Indian Brand Equity Foundation, in 2021, the travel and tourism industry added $178 billion to India’s economy, and it’s expected to increase to $512 billion by 2028.

Nonetheless, professionals in the field assert that what we see is only the beginning, as there exists vast, unexplored potential waiting to be unlocked beneath the surface. In 2022, India witnessed significant investments in the construction of hotels, boasting a total of 256 new establishments. The hotel industry is anticipated to achieve a noteworthy valuation of Rs 1210.87 billion by the conclusion of 2023, displaying a notable Compound Annual Growth Rate (CAGR) of 13% over the period from 2018 to 2023.

Despite the substantial growth in the Indian hospitality industry, a critical impediment remains – the shortage of skilled professionals. To address this hurdle, it is imperative to nurture a workforce that possesses a harmonious mix of technical proficiency, interpersonal skills, and cultural awareness, thereby guaranteeing guests enjoy exceptional experiences devoid of any impediments.

In order to tackle the deficiency of skilled personnel, Indian educational institutions must adopt a proactive strategy. The foremost aim of educators should be to create awareness among the general public regarding the immense potential of the hospitality and tourism sector. It is imperative for Indian society to acknowledge the remarkable opportunities presented by this industry.

To fully harness the extensive potential of India’s hospitality sector, it is essential to employ a multifaceted strategy. Initially, it is vital for both the government and stakeholders in the industry to cooperate in order to cultivate a climate that encourages expansion and investment. This involves the expansion of infrastructure, streamlining regulatory frameworks, and proactively promoting lesser-explored destinations to attract a greater number of visitors and strengthen the sector.

The past year has brought remarkable transformations to the hospitality sector, primarily due to the far-reaching effects of the COVID-19 pandemic on travel and tourism. While the world is gradually on the path to recovery, hotels and resorts are shifting their focus towards the upcoming five years. Anticipations for the hospitality industry are optimistic, as a surge in travel demand and a craving for distinctive experiences are expected to fuel its resurgence. Nevertheless, to maintain a competitive edge, hoteliers must be prepared to accommodate evolving consumer tastes and leverage technological progress. The hospitality industry is currently undergoing substantial changes that are expected to shape its trajectory over the next five years. These evolving trends encompass various dimensions.

1. Technology Integration:


The hospitality sector is standing at the threshold of a technological revolution that promises to enhance the guest experience and streamline operations. Innovations such as mobile check-ins, smart room keys, and remote interactions with hotel services are becoming increasingly prevalent. Guests can now perform tasks like room bookings, ordering room service, requesting housekeeping, and making payments using their mobile devices. A report by Google and Boston Consulting Group predicts that the Indian online travel market will reach USD 13.6 billion by 2023, with a compounded annual growth rate (CAGR) of 13.5% from 2023 to 2028.

2. Sustainability:


In alignment with the Swachh Bharat Abhiyan, the Indian government’s nationwide cleanliness campaign, hotels and resorts are actively implementing zero waste management systems. These initiatives involve the adoption of eco-friendly materials, the introduction of composting systems, and the promotion of recycling. Sustainability is gaining increasing importance as global attention is directed towards environmental responsibility.

 

3. Personalization:

With the abundance of guest data, hotels and resorts are harnessing the potential of data-driven personalization. This encompasses tailoring room preferences, crafting custom packages, and offering recommendations based on guests’ interests and past behavior. The utilization of mobile applications plays a crucial role in delivering these personalized experiences.

 

4. Health and Wellness:


The concept of wellness in the hospitality industry has evolved to include not only
physical health but also mental and emotional well-being. Hotels and resorts are now
providing comprehensive wellness programs that incorporate mindfulness practices,
yoga, meditation, and wellness coaching. Immersive wellness experiences extend
beyond spa treatments and fitness classes to encompass outdoor activities, cultural
experiences, and retreats in natural settings.

 

5. Rise of Bleisure Travel:


More people are combining work and leisure when they travel. The phenomenon of bleisure travel is gaining prominence, prompting hotels to cater to the needs of both business and leisure travelers. This trend includes the provision of high-speed internet workspaces and recreational amenities such as spas, fitness centers, and rooftop bars. Hotels are also adopting flexible booking options to accommodate the unpredictable schedules of business travelers, including flexible cancellation policies and 24-hour check-in/check-out.

In summary, the hospitality industry is in a state of continuous evolution. To thrive in this dynamic environment, hotels and resorts must proactively embrace these emerging trends and implement innovative solutions. By doing so, they can provide memorable and fulfilling experiences for guests while maintaining their competitiveness in this rapidly changing landscape.

Neogen Chemicals’ EBITDA Soars to 29.46 Cr fueled by lower input costs

 

Gabriel India Stock Rockets Nearly 80% in 13 Sessions: What’s Driving This Surge?

Credag outperforms analyst expectations Profit soar to 349 Cr

Credag outperforms analyst expectations Profit soar to 349 Cr

Company Overview:

CreditAccess Grameen Ltd is a Non-deposit taking NBFC-MFI (Micro Finance Institution) that specializes in providing microfinance loans, including income generation loans, family welfare loans covering medical and education expenses, home improvement loans for water and sanitation, and retail finance loans. The company also offers a wide range of products, such as unsecured business loans, 2-wheeler loans, gold loans, housing loans, and life insurance. They have expanded their reach by adding 51 new branches, bringing their total to 1,877 branches, and adding 3.36 lakh new customers, with 40% coming from states outside the top 3. Recently, the company raised 990 Cr through public NCDs with an average coupon rate of 9.3% and an average tenure of 3 years.

Robust Business momentum:- GLP/disbursement growth-36% YoY/13.5% YoY

In Q2FY24, the company experienced a significant growth in its Gross Loan Portfolio (GLP), which increased by 36% YoY and 3.1% QoQ, reaching 22,488 Cr. Disbursement amounts also grew by 13.5% YoY and 4.1% QoQ, totaling 4,966 Cr. Income generation loans (IGL) constituted 94% of the GLP, indicating a concentration risk on this product. The number of borrowers increased by 21.2% YoY and 4.1% QoQ, reaching 46.03 lakh.

Well Structured Liability Management:

CreditAccess Grameen Ltd has focused on securing long-term funding from foreign sources to mitigate short-term refinance risks. Their liability mix by tenure stands at 70% for long-term instruments, 23.5% for medium-term, and 6.7% for short-term as of Q2FY24. They maintain a diverse lender base, which includes 46 commercial banks, 3 financial institutions, 16 foreign lenders, and 6 NBFCs. Their cost of borrowing stood at 9.8% in Q2FY24

Asset Quality Improved & Strong CAR – 25% in Q2

The company’s asset quality improved significantly in Q2FY24, with Gross Non-Performing Assets (GNPA) reducing by 140 bps YoY and 12 bps QoQ to 0.77% amounting 173 Cr. Net Non-Performing Assets (NNPA) also declined by 53 bps YoY and 3 bps QoQ to 0.24% amounting 53 Cr. The company maintains a robust capital adequacy ratio of 25%, well above the RBI guideline of 15%. Collection efficiency stood at 98.7% in Q2

Valuation and key ratio: – ROA 170+ bps/ ROE 900+ bps/NIMs 110+ bps in Q2

The company’s stock is currently trading at 4.31 times its book value amounting to 364 per share at 1,571 Rs. In Q2FY24, they reported impressive return ratios, with Return on Equity (ROE) improving by 900 bps YoY and decreasing by 170 bps QoQ to 24.7%. Return on Assets (ROA) stood at 5.6%, growing by 170 bps YoY and decreasing by 20 bps QoQ. Net Interest Margins (NIMs) increased by 110 bps YoY and 10 bps QoQ to 13.1%, while the cost of borrowing grew by 60 bps YoY to 9.8%. The interest coverage ratio stood at 2.13x, indicating the company’s solvency.

Q2 FY24 Results Highlights: Standalone

➡️ In Q2FY24, the company saw significant growth in interest income, which increased by 53.95% YoY and 7.44% QoQ to 1,187 Cr. Interest expenses also grew by 55.13% YoY and 10.12% QoQ to 424 Cr, resulting in Net Interest Income (NII) reaching 763 Cr, a growth of 53.29% YoY and 6.01% QoQ, due to an increased yield on loans by 200 bps YoY and 40 bps QoQ to 21.1%.

➡️ Pre-provision operating income (PPOP) increased by 68.91% YoY and 4.28% QoQ to 565 Cr, attributed to a decline in the cost-to-income ratio by 650 bps YoY to 31.7%.

➡️ Provision decline 9.03% YoY (+25.46% QoQ) to 96 Cr while credit cost stood at 1.60% due to healthy asset quality in Q2FY24.

➡️ Net Interest Margins (NIMs) increased by 110 bps QoQ to 13.1%, while the cost of borrowing increased by 60 bps YoY.

➡️ Profit After Tax (PAT) surged by 99.38% YoY and 0.84% QoQ to 349 Cr, driven by strong GLP growth 36% YoY, NIMs improvement 110+ bps YoY, and cost efficiency. EPS for the quarter stood at 21.96 Rs (PQ-21.78) grew 99.38% YoY and 0.84% QoQ

Conclusion:

CreditAccess Grameen Ltd appears to be on a strong growth trajectory with robust business momentum, well-managed liabilities, improved asset quality, and impressive financial performance in Q2FY24. The company’s focus on microfinance and other financial products, along with its diverse funding sources, positions it favorably in the market. The positive financial ratios and strong capital adequacy further enhance its prospects. However, there may be a need for diversification in the product portfolio to reduce concentration risk.

 

Q2FY24: Shriram Finance reports robust AUM growth Drives NII soars to 4,594 Cr

Flexiloans Bags ₹375 Cr in Series C, Targets ₹5,000 Cr AUM Within 18 Months

Q2FY24: Shriram Finance reports robust AUM growth Drives NII soars to 4,594 Cr

Q2FY24: Shriram Finance reports robust AUM growth Drives NII soars to 4,594 Cr

Company Overview:

Shriram Finance, a prominent Non-Banking Financial Company (NBFC) in the retail finance industry, has been a leading provider of financial services in various sectors, including passenger vehicles, construction equipment, MSMEs loans, gold loans, personal loans, and working capital loans. Notably, the company has shown exceptional growth by opening 100 new branch offices in the past year, expanding its reach to 2,975 branches in Q2 FY24, including 1,027 in semi-urban areas, 1,552 in rural areas, and 396 in urban areas. Shriram Finance’s total Assets Under Management (AUM) have impressively crossed the 2,000 billion mark in Q2 FY24, registering a YoY growth of 19.65%. The company serves a vast customer base of 7.71 million individuals across India.

Robust AUM growth crossed 2,000+ bn in Q2FY24:

In Q2 FY24, Shriram Finance achieved a remarkable milestone by crossing the 2,000 billion AUM threshold, demonstrating a substantial YoY increase of 19.65%. The growth was particularly prominent in the passenger vehicles segment, which saw a 32% YoY surge, along with personal loans at 73% YoY, MSME loans at 25.67% YoY, and two-wheeler loans at 22.49% YoY. Notably, passenger and commercial vehicles collectively accounted for approximately 70% of the AUM in Q2 FY24, firmly establishing Shriram Finance’s leadership in commercial vehicle financing.

Segment wise – PL/MSME/PV outperform in Q2

In Q2 FY24, specific segments stood out with remarkable performance. The personal loan (PL) portfolio surged by 73.34% YoY, reaching 88,384 million INR, with a Gross Stage 3 (G3) rate of 5.17%. Similarly, the MSME loan book reached 213,103 million INR, growing by 25.67% YoY, and the Gross Stage 3 (GS) rate stood at 5.42% in Q2. The passenger vehicles loan book registered substantial growth, reaching 396,935 million INR, up by 32.30% YoY, with a GS rate of 6.26%.

Asset Quality improved (GNPA/NNPA), CAR maintained at 22.15% in Q2:

In Q2 FY24, Shriram Finance demonstrated enhanced asset quality, with a reduction in Gross Non-Performing Assets (GNPA) on both YoY and QoQ bases, declining to 5.79%. Moreover, Net Non-Performing Assets (NNPA) also decreased to 2.80% in Q2 FY24, compared to 3.32% in Q2 FY23. The Capital Adequacy Ratio (CAR) stood at a healthy 22.15%, well above the RBI guideline of 15% for NBFCs.

Valuation and Key Ratios:

Shriram Finance’s stock is currently trading at 1.46 times its book value, amounting to 1,234 INR per share at a current price of 1,798 INR. The return ratios improved in Q2, with Return on Equity (ROE) at 15.40% in Q2 FY24, compared to 15.19% in the previous quarter, and Return on Assets (ROA) at 3.14% in Q2 FY24, versus 3.08% in Q1 FY24. The Interest Coverage Ratio stood at 1.64x, indicating the company’s solvency.

Q2 FY24 Results Highlights: Standalone

➡️ In Q2 FY24, the company’s interest income grew by 15.81% YoY (+6.88% QoQ) reaching 8,216 crore INR, while interest expenses increased by 11.98% YoY (+3.85% QoQ) to 3,621 crore INR. Consequently, Net Interest Income (NII) reached 4,594 crore INR, marking a 19.02% YoY (+9.39% QoQ) growth.

➡️ PPOP grew by 16.27%YoY (+11.34% QoQ) to 3,480 Cr mainly due to a decline in the cost-to-income ratio to 25.68%.

➡️ NIMs improved by 60 basis points, standing at 8.93% (PQ-8.33%). This improvement was primarily driven by the outstanding performance of personal loans, MSME loans, and passenger vehicles in Q2.

➡️ PAT surged by 12.59% YoY (+4.50% QoQ) to 1,751 crore INR, attributed to strong AUM growth, NIMs+8%, and operating efficiency, resulting in an Earnings Per Share (EPS) of 46.69 INR for the quarter (PQ-44.68) grew 4.5% QoQ.

 

Conclusion:

In conclusion, Shriram Finance’s Q2 FY24 performance underscores its continued growth and stability in the retail finance industry. With a substantial increase in AUM, improving asset quality, and solid financial ratios, the company is well-positioned for sustained success in the coming quarters, making it a notable player in the NBFC sector.

Neogen Chemicals’ EBITDA Soars to 29.46 Cr fueled by lower input costs

 

 

India Readies Rs 25,000 cr boost for its electronics components industry

India Takes Standardised road to Charge up EVs

India Takes Standardised road to Charge up EVs

Introduction:


India is taking a standardised approach to electric vehicle (EV) charging in order to boost the adoption of EVs in the country. The government is preparing to introduce a standardised charging protocol, which would allow users to charge their EVs at any available charging station nationwide.

The Need for Standardisation:


Currently, there is a lack of uniformity in EV charging infrastructure in India. Different
charging stations use different connectors and charging standards, which can be confusing and inconvenient for EV users. This lack of standardisation has also been a barrier to the adoption of EVs in India.

This action has been prompted by significant concerns raised by influential players within the industry regarding the lack of consistency in electric vehicle (EV) charging infrastructure. This inconsistency has led to complications in achieving interoperability.

The government’s plan:


A senior government official has stated that the primary aim is to establish standardized
protocols that can be universally adopted within the entire EV sector. The proposed solution involves either implementing a singular charging standard that is applicable to all types of EVs or, as an alternative, introducing two distinct standards: one for two-and three-wheelers and another for four-wheelers. It should be noted that the prevailing consensus appears to favour the latter option.

India faces a significant challenge in building an extensive network of public and community EV charging stations, especially in major metropolitan areas, as the adoption of electric vehicles, particularly two-wheelers, continues to grow.

The Ministry of Power has outlined five primary categories for EV charging infrastructure, including Electric Vehicle Supply Equipment (EVSE), which provides the necessary equipment for EV charging, Public Charging Stations for widespread access, Battery Charging Stations for recharging discharged or partially charged EV batteries, Captive Charging Stations under the control of station owners, and Battery Swapping Stations where electric vehicle owners can exchange their depleted batteries for fully charged ones.

As of the end of 2022, India had 2,700 public charging stations with 5,500 connectors available for electric vehicles (EVs). Counterpoint Research predicts that by the close of 2025, India is likely to increase its public charging stations to 10,000, but there’s a considerable challenge ahead to reach the estimated requirement of around 20.5 lakh charging stations by 2030, especially as EV sales need to surge in the meantime. Raghav Arora, the Co-Founder and CTO of EV charging solutions provider Statiq, points out that as the demand for EVs continues to grow significantly, the need for accessible and affordable public and community charging stations will also increase. Personal charging stations with the necessary capacity might not be a feasible solution for many. Statiq has an existing network of over 7,000 chargers across more than 60 cities and has ambitious plans to install 20,000 EV chargers throughout the country in the fiscal year 2023. They are actively collaborating with public sector undertakings (PSUs), corporations, and EV fleets to provide suitable charging solutions and ensure smooth operation within their respective areas. Additionally, they are setting up community charging stations in urban housing complexes at no cost. In recent years, EV sales in India have been consistently reaching record levels, reflecting changing consumer attitudes toward electric mobility. By 2025, the market share of electric
passenger vehicles in India is expected to surpass 6%. The three-wheeler segment currently leads the market with a 4% share, followed by two-wheelers at 3.5% and passenger vehicles at 1.3%, according to Soumen Mandal, a senior research analyst at Counterpoint specializing in IoT (internet of things), automotive, and device ecosystems.

The Indian government has been actively promoting the electric vehicle (EV) industry through initiatives like FAME-I and FAME-II, with a particular emphasis on expanding the charging infrastructure. They have set ambitious targets to electrify different vehicle segments, aiming for 70% of commercial vehicles, 30% of private cars, 40% of buses, and 80% of two-wheelers and three-wheelers to be electric by 2030.

Sohinder Gill, CEO of Hero Electric, shared that their company is committed to enhancing the EV charging network by collaborating with various EV technology firms such as Statiq, BOLT, Charzer, Massive Mobility, and Log9 Materials. They plan to install over 1 lakh charging points across India. Additionally, they aim to leverage this infrastructure to jointly develop electric vehicles, incorporating insights from the Indian market and their own research and development capabilities, in order to advance the electrification of India’s mobility sector.

It’s worth noting that the current state of India’s EV market has limited capacity for fast
charging electric vehicles. However, looking ahead, there will be a growing need for public fast-charging infrastructure, supplemented by AC chargers with capacities ranging from 3-22kW at workplaces, shopping centres, and restaurants to support the evolving charging needs in India. The government is currently consulting with industry stakeholders to get their feedback on the two options. The final decision on the charging standard is expected to be announced soon

Benefits of Standardisation

• EV users will be able to charge their EVs at any available charging station, regardless
of the make or model of their vehicle.
• Standardisation will lead to economies of scale, which will reduce the cost of
manufacturing and installing charging stations.
• Standardisation will make the Indian EV market more attractive to investors, which will
lead to increased investment in EV charging infrastructure.

 

Conclusion


The standardisation of EV charging in India is a positive step that will boost the adoption of EVs in the country. The government’s plan to introduce a standardised charging protocol is a welcome move that will make it easier and more convenient for people to use EVs.

Neogen Chemicals’ EBITDA Soars to 29.46 Cr fueled by lower input costs

 

How GST Cuts Are Fueling India’s Stock Rally

Delta corporation wins interim relief in GST case

Delta corporation wins interim relief in GST case

On October 24, 2023, the Bombay High Court granted interim relief to Delta Corp Ltd, India’s largest casino operator, in a case related to a Goods and Services Tax (GST) notice put out by the Directorate General of GST Intelligence (DGGI). The DGGI had released a notice to Delta Corp demanding payment of GST shortfall to the tune of Rs 16,195 crore for the period between July 2017 and March 2022.

Delta Corp had challenged the GST notice on the grounds that the DGGI had erred in its interpretation of the GST law and that the company had paid all applicable taxes. The Bombay High Court has now directed the DGGI not to pass any final orders on the GST notice without its prior permission.

The interim relief granted by the Bombay High Court is a positive development for Delta Corp, as it provides the company with some breathing space to defend itself against the GST notice. The company has said that it is confident of its legal position and that it will continue to cooperate with the DGGI.

Since the GST Council approved a 28% uniform tax on online gaming, casinos, and horse racing, the share price of Delta Corp has been subject to intense selling pressure. The tax notice made matters worse and severely harmed feelings. On October 16, 2023, Delta Corp shares fell 52% from their 52-week high of 259.95 reached on June 28, 2023, to a 52-week low of 124.60.

The DG GST sent Delta Corp and its subsidiaries a letter requesting more than $23,000 crore in tax payments for the time frame of July 2017 to March 2022 within the past month. The amount of the tax notice is greater than six times the current market cap of Rs 3,600 crore.

The Directorate General of GST Intelligence has published a notice for the payment of lack tax last month, valued at 16,822 crores. This includes notices for a total of $5,682 crore against three of its companies, Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruise Company, as well as an alleged tax due of Rs. 11,139 crores, with interest and penalties, for the period from July 2017 to March 2022.

Furthermore, the casino operator received another notice from the DG GST this month regarding 6,384 crores. DeltaCorp said in a statement to the exchanges that it had received a notification under Section 74(5) of the CGST Act, 2017 and the West Bengal GST Act, 2017 from the Directorate General of GST Intelligence, Kolkata, asking for payment of shortfall tax. A regulatory filing states that there is a purported tax shortfall of 147,51,05,772 for the period of July 2017 through October 2022 and 6,384.3 crore for the period of January 2018 through November 2022. 

Impact on delta corporation’s business:

The GST notice issued by the DGGI had cast a shadow on Delta corporations’ business, as investors were concerned about the potential financial impact of the case. However, the interim relief granted by the Bombay high court has removed some of this uncertainty. In response to the announcement, delta corporation shares increased 8.2% to 140.7 in the first two hours of trading. The stock’s opening price of 136.05 was a 4.6% increase over its previous closing price of 130. With a market capitalization of $3,590 billion at the time of reporting, the stock was trading 3.15% higher at $134.1 per share.

The company’s share price has rallied since the interim relief was granted, reflecting the positive sentiment among investors. Delta Corp’s business is also expected to benefit from the gradual reopening of the economy, as people are returning to casinos and other entertainment venues.

Neogen Chemicals’ EBITDA Soars to 29.46 Cr fueled by lower input costs

 

Grainspan Boosts Ethanol Output with ₹520 Crore Investment in Gujarat Plants

Neogen Chemicals' EBITDA Soars to 29.46 Cr fueled by lower input costs

Neogen Chemicals’ EBITDA Soars to 29.46 Cr fueled by lower input costs

Company Overview:

Neogen Chemicals Ltd is a prominent Indian manufacturer specializing in the production of specialty chemicals, with a focus on bromine and lithium-based chemicals, both organic and inorganic in nature. These chemicals find applications across diverse industries, including pharmaceuticals, agrochemicals, engineering, electronics, polymers, water treatment, construction, aroma chemicals, flavors, and fragrances. The company also offers custom synthesis and contract manufacturing services. In a strategic move, Neogen Chemicals Ltd has recently ventured into the manufacturing of lithium-ion battery materials for energy storage and electric vehicle applications through its subsidiary, Neogen Ionics Ltd. Additionally, the acquisition of BuLi Chemicals India Private Ltd has bolstered their technology platform, particularly in the production of N-Butyl lithium and other organolithium products.

Clientele:

Neogen Chemicals Ltd has a prestigious client base that includes Sun Pharma, Piramal, Hikal, Hetero, Voltas, Divis Laboratories, Solvay, and others. The company operates from four manufacturing sites and two research and development facilities.

Product Portfolio

The company boasts a diverse product portfolio, comprising over 244 products that are distributed not only in India but also in 29 countries, spanning regions such as the United States, Europe, Japan, and the Middle East. The revenue distribution indicates a mix of organic and inorganic chemicals, with a split of 68% and 32%, respectively. In terms of geographical reach, domestic sales account for 52% of revenue, while exports contribute to the remaining 48%.

Q1FY24 results update:

In Q1FY24, Neogen Chemicals Ltd posted a 15% YoY growth in revenue, reaching 170.12 Cr. This was, however, a 17% decline compared to the previous quarter. The revenue mix was predominantly organic, constituting 73%, while inorganic chemicals contributed 27%. In terms of domestic and export sales, the split was 65% and 35%, respectively. EBITDA exhibited a 20% YoY growth, amounting to 29.46 Cr, attributed to lower raw material prices, particularly in lithium, and other input cost efficiencies. EBITDA margins improved by 65 bps to 17.32% YoY. EBIT grew by 18% YoY to 24.54 Cr, accompanied by a 40 bps increase in EBIT margins to 14.4% YoY. PAT performance was moderate, growing by 3% YoY but declining by 20% QoQ to 11.43 Cr, mainly due to higher interest costs and depreciation associated with ongoing expansions. Consequently, PAT margins contracted by 80 bps to 11.43% YoY. 

Conclusion:

Neogen Chemicals Ltd has demonstrated consistent growth and expansion, underpinned by its diverse product portfolio, strategic acquisitions, and foray into cutting-edge technology areas such as lithium-ion battery materials. While the company continues to experience financial growth, its Q1FY24 results reflect the impact of ongoing expansion efforts and external factors affecting profitability. Careful management of input costs and effective project execution will likely be essential moving forward as Neogen Chemicals Ltd navigates its path in the specialty chemicals industry.

Responsive Industries Ltd’s EBITDA Surged 172% YoY to 48.5 Cr 

 

 

Dabur Subsidiaries Face Cancer Lawsuits in US and Canada

Dabur Q1FY24 Revenue Hits 3,130 Cr Amid Lower Inflation

Dabur Q1FY24 Revenue Hits 3,130 Cr Amid Lower Inflation

Company Overview:

Dabur India Ltd, with a rich legacy of 138 years, stands as a prominent player in the fast-moving consumer goods (FMCG) industry. It boasts a diverse portfolio encompassing Health Care, Home and Personal Care, and Food and Beverages products. Dabur is recognized as the 4th largest FMCG company in India and the world’s largest ayurvedic and healthcare company, offering a portfolio of over 250 herbal/ayurvedic products. The company’s expansive distribution network covers 7.7 million retail outlets, extending its reach into both urban and rural markets.

Industry Overview:

The FMCG sector in India plays a pivotal role in the country’s economy. Notably, it continued to exhibit robust growth, even during the challenging years of the COVID-19 pandemic. Dabur benefited from a consumer shift towards natural healthcare products during this period. However, inflation and central bank interest rate decisions have presented challenges, impacting volume growth.

Strong Global Presence through robust distribution reach:

Dabur’s global reach is extensive, with products distributed to 120+ countries across four continents. This impressive reach is facilitated by 28 warehouses and 3000+ distributors in India alone. The company’s manufacturing infrastructure comprises 13 sites in India and 8 overseas locations. Notably, Dabur expanded its operations by acquiring a 51% stake in Badshah Masala, increasing its total manufacturing sites in India to 14.

Business Segments:

A Consumer Care Business: This SBU includes Health Care (HC) and Home and Personal Care (HPC) segments, contributing to 56.2% of Consolidated Sales.
Food & Beverages (F&B) Business: Comprising fruit-based beverages and a range of food products, this segment expanded with the addition of spices through the acquisition of Badshah Masala. It accounts for 15.1% of Consolidated Sales.
International Business: This segment combines Dabur’s organic overseas business with acquired entities such as Hobi Group and Namaste Laboratories LLC, making up 25.1% of Consolidated Sales. Dabur has significant market shares in various categories, including healthcare supplements, oral care, hair oil, and fruit juice.
The company has a 63.20% market share in healthcare supplements (chyawanprash), 17% in the oral care (toothpaste) segment, and 16.3% in the hair oil segment. It is a market leader in the fruit juice segment around 16.20% market share with its real and active brands.

Valuation and Key Ratios:

Dabur’s stock is currently trading at a multiple of 56.5x EPS of 9.77, with a market price of 547, while the industry PE stands at 40.5x. The stock is valued at 10.8 times its book value of 50.6 Rs per share. The company demonstrates robust return ratios, with ROE at 19.5% and ROCE at 22.7%. Moreover, the interest coverage ratio stands at 25.9%, indicating that the company’s earnings are significantly higher than its interest costs, reflecting a strong financial position. The EV/EBITDA ratio stands at 36.5x.

Q1FY24 Results Update:

In Q1FY24, Dabur reported a 10.91% YoY increase in revenue to 3,130 Cr, driven by increased sales volume due to reduced inflation in Q2, which boosted demand for consumer goods. EBITDA grew by 11.23% YoY and 47.55% QoQ to 605 Cr, with EBITDA margins remaining steady at 19.32%. This performance was despite rising raw costs and operating expenses. The company achieved a PAT of 457 Cr, reflecting a 3.53% YoY growth and a significant 55.97% QoQ increase. However, PAT margins witnessed a slight YoY decline of 100 bps, while they increased by 360 bps QoQ. The EPS for the quarter stood at 2.58 Rs, marking a 3.53% YoY growth.

 

Conclusion:

Dabur India Ltd, with its long-standing history, diverse product portfolio, extensive distribution network, and strong financial performance, continues to be a formidable player in the FMCG sector. Despite challenges such as inflation and interest rate fluctuations, the company has demonstrated resilience and growth, as evident from its Q1FY24 results. Investors may find Dabur an attractive proposition given its strong market position and financial stability.

 

Responsive Industries Ltd’s EBITDA Surged 172% YoY to 48.5 Cr 

 

 

Manorama Industries Ltd Q1FY24 results updates

Manorama Industries Ltd PAT surges by 70.69% YoY 

Manorama Industries Ltd PAT surges by 70.69% YoY 

Company Overview:

Manorama Industries Ltd specializes in the production of specialty fats and butter derived from exotic seeds and nuts. The company is a prominent supplier of these specialty fats and butter, catering to the demands of the chocolate, confectionery, and cosmetics sectors. Moreover, they produce sal, shea, and mango-based cocoa butter equivalents (CBE), as well as shea-based specialty fats and butter.

Diverse Products Portfolio:

Manorama Industries boasts a diverse product portfolio, including Cocoa Butter Equivalent (CBE), Shea Stearin, Sal Butter, Sal Stearin, Mango Butter, Mowrah Butter, Kokum Butter, and De Oiled Cake (DoC). These products find applications in the chocolate manufacturing, confectionery, bakery, and cosmetics industries. The company serves various sectors, including food, chocolates, confectionery, cosmetics, and the HoReCa market.

Manufacturing Sites and Capacity Utilization:

The company’s primary manufacturing site is situated in Birkoni near Raipur, Chhattisgarh. This facility encompasses key processes such as expelling, extraction, refining, and fractionation. It has a substantial production capacity with 45,000 MT for refinery, 30,000 MT for interesterification, 25,000 MT for deodorization, 40,000 MT for fractionation, and 30,000 MT for blending and packing. The strategic location of the plant, at a mere 550 Km from the Visakhapatnam port and the anticipated Raipur-Visakhapatnam expressway, promises reduced transportation times, cost savings, and enhanced operational efficiency. As of June 2023, the company has invested 1,099.5 million in capital expansion.

Valuation and Key Ratios:

The company’s stock is presently trading at a multiple of 80.2x earnings per share (EPS) of 29, with a current market price of 2,325 Rs, while the industry’s price-to-earnings (PE) ratio stands at 43.9x. Furthermore, the stock is trading at 9.29 times its book value, which is 250 Rs per share. Manorama Industries exhibits robust return ratios, with a return on equity (ROE) of 10.5% and a return on capital employed (ROCE) of 13.2%. The interest coverage ratio stands at 6.43, indicating that the company’s earnings are 6.43 times its interest costs, underscoring its strong financial position. The enterprise value to EBITDA (EV/EBITDA) ratio stands at 39.7x.

Q1FY24 Results Updates (Standalone):

In Q1FY24, the company experienced substantial growth, with revenue increasing by 52.89% year-on-year (YoY) and 9.65% quarter-on-quarter (QoQ) to reach 111.56 Cr. This growth was driven by improving realizations and growing demand in the chocolates, confectionery, and cosmetic industries. EBITDA increased by 47.86% YoY and 13.05% QoQ to 18.64 Cr, although EBITDA margins dropped by 60 basis points YoY but increased by 50 basis points QoQ due to operational efficiency. Profit after tax (PAT) surged by an impressive 70.69% YoY and 15.57% QoQ, reaching 11.55 Cr, with PAT margins improving by 100 basis points YoY and 50 basis points QoQ to 10.36%. Earnings per share (EPS) stood at 9.71 Rs, a growth of 15.62% QoQ.

Conclusion:

Manorama Industries Ltd appears to be on a growth trajectory, as evidenced by its impressive Q1FY24 results, strong financial ratios, and a diverse product portfolio that caters to multiple industries. The company’s strategic manufacturing site location and ongoing capital expansion also bode well for its future prospects. However, investors should keep an eye on industry trends and competition as they assess the company’s long-term potential.

Manorama Industries. Strong Growth potential.

 

Peerless Group to Exit Insurance Distribution and Double-Down on Hospitals

Softtech Engineering Ltd's EBITDA Surged 26.85% YoY

Softtech Engineering Ltd’s EBITDA Surged 26.85% YoY 

Company Overview:

Softtech Engineering Ltd, established in 1996, operates in the software products and services sector, primarily serving the architecture, engineering, and construction (AEC) industry. The company has a diverse portfolio comprising seven products that cover the entire construction value chain. Notably, their AutoDCR solution automates building and layout plan approvals, contributing to Smart City projects. Softtech Engineering Ltd has a global presence, having served over 4600 clients in India and around the world.

Product Portfolio:

Their product portfolio includes AutoDCR, PWIMS, and OPTICON. AutoDCR streamlines building plan approvals by analyzing 2D CAD drawings for compliance with Development Control Regulations. PWIMS offers integrated works and procurement management for civil infrastructure organizations, while OPTICON serves as an ERP solution for construction enterprises, optimizing various construction processes.

Industry Overview:

Operating within the IT and Technology industry, Softtech Engineering Ltd is positioned well, given the promising prospects of the Indian software product industry, expected to reach $100 billion by 2025. Furthermore, the growing demand for AI is driving the data annotation market, which is anticipated to reach $7 billion by 2030.

Valuation and Key Ratios:

As of the latest data, the stock of Softtech Engineering Ltd is trading at a substantial multiple of 77.6x earnings per share (EPS) of 3.78, with an industry PE ratio at 36.4. The stock also trades at 2.44 times its book value. The company reports a moderate return on equity (ROE) of 3.91% and return on capital employed (ROCE) at 7.85%. Additionally, an interest coverage ratio of 2.44x suggests the company’s solvency. The EV/EBITDA ratio stands at 14.2, and the total debt is reported at 48.1 Crores.

Q1FY24 Results Updates:

In the first quarter of FY24, Softtech Engineering Ltd witnessed robust YoY revenue growth of 54.97%, reaching 18 Crores, although it showed a minor QoQ increase of 2.57%. Operating expenses also increased by 67.55% YoY, reflecting growth challenges. EBITDA grew by 26.85% YoY to 4.75 Crores, but EBITDA margins dropped by 500 basis points (bps) YoY due to the significant increase in operating expenses. EBIT increased by 19.68% YoY, but margins declined by 200 bps YoY due to increased depreciation. Profit after tax (PAT) declined by 27.84% YoY, yet saw a substantial QoQ increase of 285.71%. The earnings per share (EPS) for the quarter stood at 0.49 Rs, marking a 27.54% YoY decrease.

Conclusion:

Softtech Engineering Ltd is a well-established player in the AEC software domain with a diverse product portfolio. While their Q1FY24 results indicate strong YoY revenue growth, increasing operating expenses and declining margins raise some concerns. Investors should carefully monitor the company’s ability to manage expenses and sustain profitability in a competitive and evolving market.

 

Responsive Industries Ltd’s EBITDA Surged 172% YoY to 48.5 Cr 

 

 

HUDCO Q3FY25 Results Update: Robust Performance Drives Strong Growth

PFC Sanctions Rs 15,000 Cr, Forays into Airport Funding

PFC Sanctions Rs 15,000 Cr, Forays into Airport Funding

Power Finance Corporation (PFC), a state-owned non-banking financial company (NBFC), has
sanctioned Rs 15,000 crore in new loans for various projects, including its maiden financing for a
greenfield airport in Andhra Pradesh.
The announcement was made on October 3, 2023, after the company’s board of directors (BOD)
meeting. The loans have been sanctioned for a variety of projects, including power generation,
transmission, and distribution, as well a renewable energy airport project.
Some of the key projects that have received funding from PFC include:
➢ Rs 3,000 crore for a 660 MW supercritical thermal power plant in Rajasthan
➢ Rs 2,000 crore for a 500 MW solar power plant in Gujarat
➢ Rs 1,500 crore for a 220-kV transmission line project in Maharashtra
➢ Rs 1,000 crore for a 100 MW wind power plant in Tamil Nadu
➢ Rs 500 crore for a greenfield airport project in Andhra Pradesh
PFC’s foray into funding airport projects is a new development. The company is looking forward to
diversify its portfolio and expanding into new infrastructure segments. The greenfield airport project in Andhra Pradesh is expected t be a major boost to the state’s economy and infrastructure.

PFC’s Q1 FY24 Net Profit Rises 31% to Rs 5,982 Crore

Power Finance Corporation (PFC) reported a 31% increase in its consolidated net profit to Rs 5,982.14 crore in the first quarter of the financial year 2023-24 (Q1 FY24), from Rs 4,579.53 crore in the corresponding quarter of the previous financial year. The company’s total income rose 13% to Rs 21,001.44 crore in Q1 FY24, from Rs 18,544.04 crore in Q1 FY23.

PFC’s asset quality improved during the quarter, with gross non-performing assets (NPAs) declining to 2.99% from 3.11% a year ago. Net NPAs also fell to 1.27% from 1.45% in the same period. The company’s board of directors recommended a 1:4 bonus issue for approval at the upcoming annual general meeting.

PFC’s strong performance in Q1 FY24 was driven by a combination of factors, including higher interest income, lower provisions, and improved asset quality. The company’s foray into new infrastructure segments, such as airports and green hydrogen, is also a positive development.

PFC to raise Rs 10,000 crore through tax-free bonds

PFC plans to raise Rs 10,000 crore through tax-free bonds in the current financial year. The company will use the proceeds to finance power projects and other infrastructure developments.
PFC is one of the few companies that is allowed to issue tax-free bonds. The bonds are attractive to investors as they offer exemption from income tax on the interest earned.

PFC to partner with NTPC to develop Green Hydrogen projects

PFC has signed a memorandum of understanding (MoU) with NTPC to develop green hydrogen
projects in India. The companies will work together to identify and develop potential projects.
Green hydrogen is produced using renewable energy sources, such as solar and wind power. It is a clean and sustainable fuel that can be used in a variety of applications, including power generation, transportation, and industrial processes.

PFC Inks MoU with IFC to Promote Sustainable Financing in India

PFC has inked an MoU with the International Finance Corporation (IFC), a member of the World Bank Group, to promote sustainable financing in India. The two organizations will work together to develop and implement sustainable financing solutions for the power sector and other infrastructure sectors. The MoU also includes a provision for the IFC to provide technical assistance to PFC to help it strengthen its sustainable financing capabilities.

 

South India Bank Ltd’s report robust PAT up 75.42% YoY