Revolut Eyes $65 B Funding Round to Fuel U.S. Expansion

Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - September 20, 2023

Bharat Petroleum Corporation Limited PAT up 2.6x YoY led by operating efficiency

Company Overview:

Bharat Petroleum Corporation Limited (BPCL) is a prominent public sector company operating in the refining of crude oil and marketing of petroleum products. The company operates in two main segments: downstream petroleum, encompassing refining, storage, distribution, and marketing, and exploration and production of hydrocarbons. BPCL holds a significant position in the Indian petroleum industry with a refining capacity that includes three refineries in Mumbai, Kochi, and Bina, with respective capacities of 12 MMTPA, 15.5 MMTPA, and 7.8 MMT. Notably, BPCL ranks as the third-largest refining capacity holder in India, contributing to 13.90% of the nation’s refining capacity.

Market Presence and Distribution:

BPCL commands a substantial presence in the Indian market, operating through 21,142 retail outlets and 83 retail depots across the country. The company holds a notable market share of 27.2% in the retail segment, offering a diverse range of petroleum products. In the LPG business, BPCL’s market share is 27.3%, boasting a robust network of 6,245 distributors and 53 LPG bottling plants. The company’s strategic footprint extends to the aviation sector, with 61 aviation service stations across Indian airports and a domestic market share of 23.4% in ATF (Aviation Turbine Fuel).

Infrastructure and Global Operations:

BPCL’s infrastructure includes a comprehensive pipeline network spanning 3,536 kilometers, designed to accommodate a capacity of 29 MMTPA. The company’s subsidiary, Bharat Petro Resources Ltd, holds Participating Interest (PI) in eighteen blocks, with a balanced distribution between Indian and overseas operations. Additionally, BPCL has equity stakes in two Russian entities, which are license holders for four productive blocks in Russia.

Q1FY24 Results Updates: Standalone

In the first quarter of the fiscal year 2023-24, BPCL’s financial performance displayed noteworthy improvements. The company’s revenue experienced a decline of 6.67% YoY (-4.35% QoQ) to INR 1,12,978 Crore. Notably, gross profit surged significantly, growing by 6.5x YoY (+23.5%) to INR 22,091 Crore. This remarkable growth was attributed to effective cost of goods sold (COGS) management, leading to a 23% YoY decline in COGS. EBITDA also demonstrated substantial growth, increasing 3x YoY to INR 15,810 Crore, primarily due to a 33% reduction in other expenses. Consequently, EBITDA margins improved by approximately 9% to 14% in Q1FY24. EBIT witnessed a growth of 2.8x, reaching INR 14,200 Crore, supported by controlled depreciation costs, resulting in EBIT margins expanding by 7% YoY to 13% in the same period. Notably, PAT exhibited remarkable growth of 2.6x YoY to INR 10,551 Crore, attributed to robust operational efficiency and meticulous cost management, leading to a 400 basis points expansion in PAT margins to 9.3% in Q1FY24. The quarter’s earnings per share (EPS) stood at INR 48.62, a noteworthy improvement compared to the EPS of -28.86 in Q1FY23

conclusion:

Bharat Petroleum Corporation Limited’s operations span critical segments of the Indian petroleum industry. Despite facing challenges in some financial parameters in FY23, the company exhibited substantial growth and improved operational efficiency in Q1FY24. The strategic positioning, extensive distribution network, and focus on cost management position BPCL as a significant player in the Indian petroleum sector.

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Prakash Industries Announces ₹1.5 Dividend; Multibagger Stock Confirms Record Date

Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - September 20, 2023

Rail Vikas Nigam Ltd EBITDA up 24.35% YoY boosted by higher operating leverage

Company Overview:

Rail Vikas Nigam Ltd (RVNL), established in 2003 by the Government of India, operates as a prominent player in the realm of rail infrastructure development. The company is entrusted with the implementation of diverse rail projects, encompassing tasks such as doubling, gauge conversion, new line construction, railway electrification, significant bridge construction, establishment of workshops and production units, and the sharing of freight revenue as per concession agreements with the Ministry of Railways (MoR). Furthermore, RVNL has made strategic inroads into various infrastructure segments, including the metro and highways sectors, through competitive bidding processes.

Clientele and Expansion:

RVNL’s principal client is the Indian Railways, underscored by an expanding client portfolio encompassing central and state government ministries, departments, and public sector undertakings. With a commitment to growth and diversification, RVNL’s engagement now spans beyond railways, as evidenced by its participation in the metro, highway, and other infrastructure domains. Such endeavors are characterized by the company’s competitive pursuit of opportunities and successful bid wins, propelling its expansion into broader sectors.

New project and order book:

As of June 30, 2023, RVNL’s financial landscape demonstrates notable achievements and promising prospects. The company’s robust order book, valued at over Rs. 65,000 crores, serves as a testament to its operational prowess and growth trajectory. Notably, RVNL maintains a forward-looking perspective, aiming to further enhance its order book to a range of Rs. 75,000 crores to Rs.1 lakh crores. A significant catalyst for this optimism lies in the company’s impressive track record of securing railway tendering opportunities, marked by successful bids totaling more than Rs. 30,000 crores.

Valuation and return ratios:

The company is currently trading at a price-to-earnings (P/E) ratio of 18.6, while the industry average P/E ratio stands higher at 30.6. This suggests that the company’s stock price is relatively lower in relation to its earnings compared to its industry peers. company reports a healthy return ratio, return on equity stands at 20.7% where return on capital employed (ROCE) is at 17.8%. Return on assets stands at 7.42% as of 30 June 2023. The company reports a healthy interest coverage ratio standing at 4.35. Debt to equity stands at 0.88.

Financial Results – Q1FY24:Consolidated

The revenue breakup for Q1FY24 includes Rs. 838 crores from metro projects and Rs. 3,941 crores from non-metro projects. The financial results for the first quarter of the fiscal year 2023-24 reflect RVNL’s steadfast performance. The company recorded a remarkable 20.06% Year-on-Year (YoY) growth in revenue, amounting to Rs. 5,571 crores, attributing this achievement to a robust and well-structured order book. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) demonstrated a notable YoY surge of 24.35%, reaching Rs. 349 crores, while EBITDA margins remained consistent at 6.27%, aligned with the preceding quarter’s figures.

Further analysis of the financials reveals a 25.05% YoY increase in Earnings Before Interest and Taxes (EBIT), totaling Rs. 343 crores. This growth is attributed in part to a reduction in depreciation costs by 7.72%, alongside consistent EBIT margins of 6.17%, mirroring the previous quarter’s performance.

RVNL’s net profit exhibited a strong upward trajectory, registering a YoY surge of 15.26%, culminating in Rs. 343 crores. Notably, the company’s diligent management of operating expenses and associated costs contributed to this positive outcome. Additionally, the Earnings Per Share (EPS) for the quarter amounted to Rs. 1.65, signifying a commendable 15% YoY growth.

conclusion:

RVNL’s financial results for Q1FY24 underscore the company’s operational resilience and strategic acumen, positioning it for continued growth and value creation. The consistent pursuit of railway tendering opportunities, coupled with a robust order book, augurs well for its sustained positive trajectory across diverse infrastructure sectors.

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BPCL Q1 FY26 Results: A Robust Start to the Financial Year

Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - September 19, 2023

Fine Organic Industries LTD Result update Q1FY24

Fine Organic Industries LTD Result update: Q1FY24

Company Overview:

Fine Organic Industries LTD, founded in 1970 by Mr. Ramesh Shah and Mr. Prakash Kamat, is a leading player in the field of oleochemical-based additives used in various industries including food, plastics, cosmetics, and coatings. As the largest organized manufacturer of oleochemical-based niche additives in India, Fine Organic has expanded its global presence. The company boasts a diverse product portfolio comprising food additives, polymer additives, additives for coatings, and feed nutrition additives.

Distribution and Clientele:

Fine Organic operates strategically with warehouses in the USA and Europe, maintaining a robust network of over 180 distributors serving 850 direct customers and 5,000 end users worldwide. The company’s reach extends to more than 80 countries, distributing a wide range of 470+ products. Manufacturing facilities are located across seven sites in Maharashtra, including Patalganga, Badlapur, Dombivli, and Ambernath. Notable clients of Fine Organic include industry giants like Coca-Cola, Britannia, Asian Paints, Parle, Pidilite, Berger Paints, among others.

Company Performance in Numbers (FY18-FY23):

Over the past five years, Fine Organic has exhibited remarkable growth:
Revenue from operations surged at an impressive CAGR of 31%, reaching ₹3,029.15 Cr in FY23 from ₹1,043.97 Cr in FY18. EBITDA experienced a robust CAGR of 37%, climbing to ₹781.28 Cr in FY23 from ₹222.25 Cr in FY18, with EBITDA margins improving from 21.30% to 25.79% in FY23.
PAT (Profit After Tax) nearly doubled, achieving a CAGR of 46% YoY, increasing from ₹129 Cr in FY18 to ₹590.60 Cr in FY23. This growth was driven by enhanced operating efficiency and margin expansion, with PAT margin improving from 12.4% to 19.5% in FY23. Despite high profit growth, Fine Organic maintained moderate return on equity and capital employed, growing at 11% and 10% CAGR respectively.

Key Ratios and Valuations (FY23):

In FY23, Fine Organic demonstrated strong financial health and attractive valuations:
The company’s PE ratio stands at 26.5, while the industry PE is higher at 31.8, indicating a favorable valuation. Additionally, it trades at 9.5 times its book value. The interest coverage ratio improved significantly to 164.18 in FY23 from 63.13 in FY22, reflecting improved debt management. The current ratio increased to 5.5% in FY23 from 3.56 in FY22, indicating strong liquidity. Fine Organic reduced its debt-to-equity ratio by 67%, achieving a nearly debt-free status at 0.02% in FY23 from 0.06% in FY22.The return on equity for FY23 reached an impressive 47.62%, showcasing strong profitability. Debtor turnover remained stable at 7.49% (48 debtor days), indicating efficient receivables management. EBIT margins improved to 24.21% in FY23 from 16.61% in FY22, and net profit margins increased from 13.49% to 19.5%, highlighting improved operational efficiency.

Q1FY24 Results Updates: Standalone

Standalone In Q1FY24, Fine Organic faced some challenges:
Revenue decreased by 29.2% YoY and 23.8% QoQ to ₹532.13 Cr, with exports contributing 54% and the domestic market 46%. Gross profit declined by 26.5% YoY and 16.4% QoQ to ₹228.11 Cr, but gross margins improved by 160 bps YoY to 42.87% due to a significant decrease in COGS by 31.23% YoY and 28.55% QoQ. EBITDA decreased by 26.12% YoY and 18.90% QoQ to ₹151.86 Cr. EBITDA margins improved by 120 bps to 28.54% due to reduced operating expenses. PAT declined by 27.38% YoY and 17.2% QoQ to ₹114.21 Cr, with margins remaining relatively flat at 21.4% YoY and 19.76% PQ. Earnings per share (EPS) for the quarter stood at ₹37.20, down from ₹44.98 in the previous quarter.

conclusion:

Fine Organic Industries LTD has been on a remarkable growth trajectory over the past few years, demonstrating strong financial performance and expanding its global presence. Despite facing challenges in the recent quarter, the company’s solid fundamentals and attractive valuations make it a compelling player in the industry.

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Avantel Soars 6% with ₹25 Crore DRDO Deal!

Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - September 19, 2023

Indian Energy Exchange (IEX) Result update Q1FY24

Indian Energy Exchange (IEX) Result update: Q1FY24

Company Overview:

Indian Energy Exchange (IEX) is a leading power exchange company incorporated in 2007. It operates as a licensed power exchange under the Central Electricity Regulatory Commission (CERC), facilitating spot trading in power and electricity, as well as trading of Renewable Energy Certificates (REC) and Energy Savings Certificates (ESCerts). With a remarkable market share of 94.2%, IEX dominates the power trading landscape in India, particularly excelling with a 99.9% market share in the Day-Ahead Market (DAM) and Real-Time Market (RTM). Expanding its horizons, IEX has also ventured into the gas trading exchange through the Indian Gas Exchange (IGX) and the carbon market via the International Carbon Exchange (ICX).

Products for Trading:

IEX offers a diverse range of trading products, catering to the energy needs of its participants. These products include the Day-Ahead Market for physical electricity trading with 15-minute contracts, the Green Day-Ahead Market for renewable energy trading, the Term-Ahead Market for longer-duration contracts of up to 11 days, and the Real-Time Market, featuring half-hourly auction sessions for power delivery.

Market Participants:

As of June 2023, IEX boasts an extensive network of over 7,500 registered participants, including 60+ distribution utilities, 600+ conventional generators, 1,800+ renewable energy generators, obligated entities, and 100+ ESCert entities. The company also serves over 4,600 commercial and industrial consumers across various sectors, such as metal, food processing, textile, cement, ceramic, chemicals, automobiles, information technology, institutional, housing, real estate, and commercial entities.

Valuation and Key Ratios:

Currently, IEX shares are trading at a multiple of 41.7x, with a current price of 140, while the industry price-to-earnings (PE) ratio stands at 26.3. Additionally, the shares are trading at 15.7 times their book value. The company reports healthy return ratios, with a Return on Equity (ROE) of 39.4% and a Return on Capital Employed (ROCE) of 51.8%.

Q1FY24 Results Updates: consolidated

During Q1FY24, IEX witnessed a 5.7% YoY revenue growth, amounting to 104 Cr, driven by a 7.3% increase in trading volume. The revenue breakdown comprises transaction fees (78%), admission and annual fees (4%), and other income (18%). EBITDA growth was moderate, with a 0.6% YoY increase to 81.5 Cr, primarily affected by a 400 bps YoY drop in margins to 78.4%. This margin decline was attributed to one-time expenses related to Corporate Social Responsibility (CSR) initiatives. Profit After Tax (PAT) grew by 9.6% YoY to 76 Cr, with a significant boost from a 55.1% YoY increase in other non-core income.

Q1FY24 – Concall Highlights: General:

In Q1 FY24, IEX introduced ‘EnergX,’ an online bidding platform designed to offer seamless and secure access to market data insights and simplified financial reconciliation services for all IEX Electricity segments. Notably, other expenses in this quarter included CSR expenses and the 15th-anniversary celebration of IEX, resulting in an additional expense of Rs. 75 Mn. This expense was clarified not to recur in Q2 FY24. As of Q1 FY24, IEX had approximately 1,500 registered participants, with 600-700 actively participating. Additionally, the average clearing price on the DAM in Q1 FY24 stood at Rs. 5.7/unit but decreased to Rs. 4.69/unit in July 2023.

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

Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - September 18, 2023

Suzlon Energy Ltd Result update Q1FY24

Suzlon Energy Ltd Result update: Q1FY24

Company Overview:

Suzlon Energy, established in 1995, is a prominent player in the wind energy industry, specializing in the manufacturing of wind turbine generators and the operation and maintenance of wind turbine generators. Over the years, Suzlon has made significant contributions to the renewable energy sector, boasting an impressive track record of installing over 20 gigawatts (GW) of wind energy across 17 countries. With 111+ wind farms and a combined capacity of 13,880 megawatts (MW), the company has firmly established itself as a global leader. Suzlon’s extensive clientele includes power utilities and electricity producers in both the private and public sectors.

Products and Services:

Suzlon Energy offers a diverse range of wind turbine generators to cater to various wind regimes. Their product portfolio includes the S144 Wind Turbine Generator, designed for low wind regimes in India, the S133 Wind Turbine Generator, optimized for improved energy yield across all wind regimes, and the S120 Wind Turbine Generator, suitable for low wind sites. Additionally, the company has phased out older WTG models but continues to provide support, operation, and maintenance services for all installed wind turbines. Suzlon also extends its expertise in operations and maintenance services to multi-make WTGs, offering turnkey project services and solar energy solutions. Their services encompass wind project planning, wind resource assessment, infrastructure development, power evacuation, and technical planning and execution of wind power projects.

Client Portfolio:

Suzlon Energy has established partnerships with a wide array of prestigious clients, including ACC, Adani Renewables, Aditya Birla Group, Bajaj, GAIL, Hero, ITC, ONGC, Reliance, SBI, Tata, TVS, Vedanta, among others.

Valuation and Key Ratios:

Currently, Suzlon’s stock is trading at a multiple of 110x with a share price of 23.8, while the industry P/E stands at 46.2. The stock is trading at 27 times its book value. The company reports a Return on Capital Employed (ROCE) of 20.6% and a Return on Equity (ROE) of 15.1%.

Q1FY24 Results Updates: consolidated

In the most recent quarter, Suzlon Energy faced some challenges. Consolidated revenue fell by 2.15% YoY and 20.2% QoQ, totaling 1,350 Crores. However, the company managed to increase its gross profit by 9.72% YoY (despite a 7.33% QoQ decline), reaching 540 Crores, mainly due to an 8.72% YoY reduction in the cost of goods sold (COGS). This cost optimization resulted in a significant improvement of gross margins by approximately 400 basis points YoY and 600 basis points QoQ, settling at 40%. EBITDA decreased by 7.21% YoY and 14.56% QoQ to 199 Crores, with EBITDA margins remaining relatively stable at around 15%. EBIT also declined by 7.33% YoY and 5.12% QoQ to 144 Crores, with EBIT margins holding at 11%. Profit After Tax (PAT) took a significant hit, dropping 95% YoY and 68.47% QoQ to 101 Crores, primarily attributed to a substantial reduction in exceptional items by 99% YoY. PAT margins stood at 7%, down from 19% in the previous quarter, and earnings per share (EPS) for the quarter amounted to 0.07 Rs, a 95% YoY decline.

Conclusion:

Suzlon Energy, a pioneer in the wind energy sector, has demonstrated its commitment to sustainable energy solutions through its extensive wind farm installations and a diverse product and service portfolio. While the company faces challenges reflected in its recent Q1FY24 results, including declining revenues and profitability, it continues to provide essential services to a robust clientele. Suzlon’s ability to adapt to market dynamics and optimize costs will be critical to its future success in the renewable energy industry. Investors should closely monitor the company’s financial performance and strategic initiatives as it navigates the evolving energy landscape.

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Hindalco Industries plans to invest Rs. 15,000 crore in Madhya Pradesh

Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - September 18, 2023

Coal India Ltd Result update Q1FY24

Coal India Ltd Result update: Q1FY24

Company Overview:

Coal India Ltd, incorporated in 1973, plays a pivotal role in India’s coal mining and production sector. Operating across approximately 82 mining areas in eight states, it contributes an impressive 82% to the nation’s coal production. The company primarily serves the power and steel sectors, with additional consumers from industries such as cement, fertilizers, brick kilns, and more. Recognized as a ‘Maharatna’ company under the Ministry of Coal, Government of India, Coal India Ltd is headquartered in Kolkata, West Bengal.

Product Portfolio:

Coal India Ltd’s product portfolio encompasses coking coal, essential for steel and metallurgical industries; semi-coking coal, utilized in steel production, merchant coke manufacturing, and metallurgical processes; non-coking coal, primarily for power generation and also in sectors like cement, fertilizer, glass, ceramics, paper, and chemicals; and washed and beneficiated coal, essential for hard coke manufacturing, power generation, cement, and sponge iron production.

Mining Projects:

The company has recently approved 24 coal mining projects with a combined capacity of 140.3 million tonnes per year, representing a sanctioned capital investment of Rs 22,130.22 crore. These projects are expected to significantly contribute to the company’s production capacity in the coming years.

Major Consumers:

Coal India’s major consumers include the power sector, accounting for 82% of its total output, and the steel sector, alongside various other industries such as cement, fertilizer, brick kilns, and numerous others.

Capital Expenditure in FY22-23:

During the fiscal year 2022-23, the company invested a substantial Rs 18,619.27 crore in capital expenditure, marking a remarkable 20.9% YoY growth. This robust capital investment is anticipated to yield positive results in terms of enhanced production and improved coal transportation in the future.

Coal Production in FY22-23:

In FY 22-23, Coal India achieved an impressive coal production of 703.2 million tonnes, surpassing its target with a 100.5% satisfaction rate. This represents a remarkable 13% growth compared to the previous year, with an increase of 80.6 million tonnes produced in a single year, an unprecedented achievement in the company’s history. Several coal-producing subsidiaries, including BCCL, MCL, NCL, WCL, and CCL, exceeded their production targets for 2022-23.

Capacity Utilization:

The year 2022-23 witnessed a significant increase in the volume of coal and overburden handled by Coal India, reaching approximately 2079 million cubic meters. The overall system capacity utilization rose to approximately 85.80%, a substantial increase from the previous year’s approximately 77%.

Q1FY24 Results Updates – Consolidated:

In Q1FY24, Coal India reported a 2.5% YoY revenue growth, totaling Rs 35,983 crore. Operating profit decreased by 14.2% YoY to Rs 10,514 crore, although it showed a notable increase of 52.4% QoQ due to reduced employee and repair costs, down by 29% and 52% QoQ, respectively. Coal offtake volume reached 187 million tonnes, a 5% YoY increase in line with provisional volume numbers. Profit after tax (PAT) declined by 9.8% YoY but saw a significant 44.1% QoQ improvement, totaling Rs 7,971 crore. EBITDA margins rose by 1113 bps QoQ while declining by 570 bps YoY to 29.2%. Earnings per share (EPS) for the quarter stood at Rs 12.9, down by 9.8% YoY.

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British Fashion Titan ASOS Makes Exclusive Indian Debut Through Ajio

Beauty, Business, Equities, Expert Views, Investor Forum, Life Style, Market News, Markets, Research, Research Reports, Result Updates - September 15, 2023

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.

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SpiceJet Soars to Profit: Q4 Surge Delivers First Annual Gain in Seven Years

Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - September 15, 2023

SpiceJet Result update Q1FY24

SpiceJet Result update: Q1FY24

Company Overview:

SpiceJet Ltd, a holding company incorporated on February 9, 1984, is a prominent player in the Indian aviation industry. It primarily operates in the air transport sector, providing passenger and cargo services. In the domestic aviation market, SpiceJet holds the second-largest market share of approximately 13%, while it maintains a similar market share in the international aviation market among domestic players, ranking as the third-largest, trailing Air India and Indigo Airlines. Notably, SpiceJet is the largest cargo operator in India. The company’s extensive network covers 53 domestic and 12 international destinations for its passenger services and a remarkable 107 destinations for its cargo business, making it India’s leading passenger airline concerning regional connectivity.

Revenue breakdown and Valuation:

SpiceJet’s revenue structure is diversified, with the air transport segment contributing around 71% of its revenues, encompassing passenger transport both domestically and internationally. The remaining 21% of its revenues come from Freight & Logistics Services, which include its cargo operations under the brand name Spice Xpress, offering cargo connectivity across India and internationally. As for valuation, the stock currently trades at a negative Price-to-Earnings (PE) ratio, with a share price of 40 Rs. The Return on Capital Employed (ROCE) stands at -24.4%, reflecting financial challenges. The current ratio is 0.22, indicating potential liquidity concerns, and the interest coverage ratio is -0.02, signaling difficulties in covering interest expenses. The Enterprise Value-to-EBITDA (EV/EBITDA) ratio is 10.4.

Q1FY24 Results Updates:

In the most recent quarterly update, SpiceJet’s standalone revenue experienced an 18.52% YoY decrease (-6.67% QoQ) to 20,017 million Rs., largely attributed to a substantial 70% reduction in freighter and logistics services (-10% in air transport services). Nevertheless, the company managed to improve its EBITDA by 1.6x YoY (133x QoQ) to 2,675 million Rs. due to a remarkable 37% reduction in operating costs. EBITDA margins stood at 13.37% (PQ- 0.09%), demonstrating improved operational efficiency. Furthermore, EBIT grew by 108% YoY (127% QoQ) to 603 million Rs., primarily driven by a 26% fall in depreciation expenses, resulting in EBIT margins improving to 3.01% (PQ- -10%). Profits After Tax (PAT) witnessed significant growth, increasing by 125% YoY (12x QoQ) to 2,024 million Rs., thanks to a 12.3x increase in other income from non-core business activities. Earnings Per Share (EPS) stood at 3.39 Rs (PQ-0.28 Rs), reflecting a 125% YoY growth.

Conclusion:

SpiceJet Ltd, a key player in the Indian aviation industry, has shown significant resilience and adaptability in its financial performance. Despite challenges in the aviation sector, the company managed to improve its operational efficiency in Q1FY24, leading to substantial growth in EBITDA and PAT. However, it still faces financial hurdles, as evident from its negative PE ratio, low current ratio, and negative interest coverage ratio. The company’s cargo operations and regional passenger connectivity remain strengths in its portfolio, but it will need to address its financial stability to ensure long-term sustainability in a highly competitive market.

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Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - September 14, 2023

Indian Railways Finance Corporation Result update Q1FY24

Overview:

Indian Railway Finance Corporation (IRFC) Ltd, established in December 1986, serves as the financing arm for the Indian Railways. Registered as a non-deposit taking NBFC and infrastructure finance company with the RBI, its primary goal is to secure funds from the financial market for the acquisition and creation of assets, which are then leased to the Indian Railways and other entities. IRFC issues both taxable and tax-free bonds and obtains term loans from banks and financial institutions for its borrowing and lending activities within the Ministry of Railways (MoR).

Diversified Borrowing Mix :

IRFC boasts a diverse funding profile, encompassing taxable and tax-free bonds, term loans, commercial papers, and external commercial borrowings (ECB). Its strong CRISIL/ICRA ratings (AAA/A1+) have allowed it to secure low-cost borrowings. As of June 30, 2023, the company’s total debt stood at INR 4,10,099 crore, comprising ECB bonds (45%), term loans (32%), ECB (16%), and other sources. IRFC enjoys a margin of 40 bps/35 bps over the weighted average cost of borrowing for financing Rolling Stock and Project Assets, respectively, for FY23.

Clientele:

In addition to lending to the Indian Railways, IRFC extends loans to other entities within the Ministry of Railways, such as Rail Vikas Nigam Ltd and IRCON International Limited.

Financial Performance:

Robust AUM Growth in Q1FY24:

In Q1FY24, IRFC’s Assets Under Management (AUM) reached INR 4,66,251 crore, reflecting an 8% YoY growth and a 5-year CAGR of 23.88%. These assets are diversified across railway assets (47.53%), rolling assets (38.10%), project assets (13.30%), and other assets (1.06%). With 98.94% of AUM exposure to the Ministry of Railways, the credit risk is minimal. However, Q1FY24 disbursements have declined over the last three years.

Cost of Borrowing Increase during FY22-23:

The weighted average cost of IRFC’s borrowings for rolling stock increased to 7.51% p.a. in 2022-23 from 6.62% in the previous year, attributed to the RBI’s rate hikes. Despite this, IRFC maintains a margin over its borrowing costs for FY23, and its Net Interest Margin (NIMS) stood at 1.33% in Q1FY24.

Zero Taxation, Nil GNPA + Robust Capital Adequacy:

IRFC’s lending to the Ministry of Railways, with an exposure of 98% of its AUM, results in a credit cost of Nil. This has led to a robust capital adequacy ratio of 627.57% in Q1FY24, contributing to high credit ratings from CRISIL (AAA) and ICRA (A+). The company’s tax-free status since FY19 has added value to its earnings.

Valuation and Key Ratios:

IRFC’s stock is currently trading at 2.30x FY23 (TTM) book value of INR 36 per share, with a market value of INR 82.8. Although the return ratios (ROE/ROA) have slightly decreased to 12.69%/1.33% in Q1FY24 from 14.83%/1.59% in Q1FY23, the company’s strong AUM growth, zero GNPA, healthy capital position, and cost-plus model suggest potential for higher valuations in the upcoming quarters.

Q1FY24 Results:

In Q1FY24, IRFC reported a notable 18.69% YoY increase in revenue, primarily driven by a 25% growth in interest income and a 15% growth in lease income. However, interest expenses also increased by 29.22% YoY due to rising borrowing costs, resulting in a 5.90% YoY decline in Net Interest Income (NII) to INR 15,882 million. Net profit decreased by 6.32% YoY to INR 15,565 million, with NIMS standing at 1.33% in Q1FY24. The EPS for the quarter was INR 1.19, reflecting a 6% YoY decrease.

Conclusion:

IRFC’s diverse borrowing mix, robust AUM growth, low credit risk, and favorable tax status position it as a strong player in the financing of Indian Railways and related projects. Although recent increases in borrowing costs have affected profitability, its capital adequacy and credit ratings remain strong, suggesting potential for future growth and improved valuations.

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

Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - August 30, 2023

Shriram Finance Business Update Q1FY24

Shriram Finance Result update Q1FY24

Overview: Shriram Finance, a key constituent of the Shriram Group conglomerate, is a prominent non-banking financial company (NBFC) in India, specializing in a wide range of credit solutions including commercial vehicle, two-wheeler, car loans, home loans, gold loans, and small business financing. The conglomerate underwent a strategic consolidation in November 2022, merging Shriram Transport Finance, Shriram City Union Finance, and Shriram Capital to form Shriram Finance. This merger solidified its position as one of the largest NBFCs in the country with an impressive Assets Under Management (AUM) of INR 1,85,683 crore.

Operational Presence :

As of June 30, 2023, Shriram Finance boasts a robust presence with an extensive network of 2,930 branches across India. The company’s workforce stands at 66,343 employees, servicing a substantial customer base of approximately 7.54 million. This extensive reach covers rural, semi-urban, and urban areas, thereby facilitating a comprehensive market outreach.

Market Penetration and Position:

Shriram Finance holds a dominant position in the market for second-hand truck financing. Despite this, the market remains under-penetrated, with around 55-60% still served by private financiers and money lenders charging high-interest rates. This presents an opportunity for formal players to incrementally enhance their market share. Shriram Finance, leveraging its domain expertise, is strategically positioned to capitalize on this potential, thus cementing its foothold in the industry.

Financial Performance:

In Q1FY24, Shriram Finance exhibited commendable financial performance. Interest income surged by 13.3% YoY (+3.5% QoQ) to INR 76,880 million. Correspondingly, interest expenses witnessed an increase of 18.1% YoY (+7.5% QoQ) amounting to INR 34,875 million. Net Interest Income (NII) exhibited a robust growth of 9.7% YoY, reaching INR 42,004 million. The Net Interest Margin (NIM) contracted by approximately 25 basis points (QoQ) to 8.3%, attributed to declining yields and an uptick in borrowing costs.

Profitability and Efficiency:

The Profit After Tax (PAT) exhibited impressive growth, surging by 25.1% YoY (+28% QoQ) to INR 16,754 million. However, it’s noteworthy that the Cost-Income ratio stood at approximately 31% (compared to the previous year’s ~27%) due to a notable 33% YoY increase in employee expenses. This reflects the company’s focus on expansion and enhancing operational capabilities.

Valuations:

As of June 30, 2023, Shriram Finance’s Price to Book Value stands at 1.60, a notable improvement from 2.2 in FY22. Return on Equity (ROE) and Return on Assets (ROA) exhibited year-on-year improvements of 70 basis points and 30 basis points, reaching 15.19% and 3.08%,

Asset Quality:

A significant highlight of the quarter was the notable enhancement in asset quality. Gross Non-Performing Assets (GNPA) and Net Non-Performing Assets (NNPA) ratios demonstrated improvement, declining to 6% and 3.1%, respectively, from 6.2% and 3.3% in the preceding quarter (Q4FY23). Additionally, the Provision Coverage Ratio (PCR) for Stage 3 loans witnessed a substantial increase of around 240 basis points (QoQ) to approximately 52%, underscoring prudent risk management practices.

Conclusion:

Shriram Finance’s merger-driven consolidation, comprehensive market outreach, dominant position in second-hand truck financing, commendable financial performance, and focused approach towards profitability and asset quality reinforce its stature as a leading player in the NBFC landscape. The company’s strategic maneuvers and operational excellence position it advantageously to harness future opportunities and navigate challenges, further bolstering its credibility and standing in the financial industry.

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