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Festo Launches ₹500 Crore Facility to Boost Automation
Equities, Markets, Research, Result Updates - January 23, 2025

LTFH Q3FY25: Retail Growth Shines Despite Profit Hit from Higher Provisions

LTFH Q3FY25: Retail Growth Shines Despite Profit Hit from Higher Provisions

Company Name: L&T Finance Ltd | NSE Code: LTF| BSE Code: 533519 | 52 Week high/low: 194 / 129 | CMP: INR 139 | Mcap: INR 34,758 Cr | P/BV – 1.44

About the stock
➡️LTFH is leading NBFC cater diversified financial lending prodcut in both rural and urban areas. Its offer consumer loan, 2W loan, home loan, MFI, farm and SME loans. Distribution network remain strong with 13,200+ distribution touch point, pan India presence in 2 lakh villages/100+ citiesand cover 18 states in India.

Reatil book shine up (23% YoY) led by 2W, HLand MFI segment
➡️LTF retail loan book has been contributing 97%> of overall loan book, company achieveing its FY2026 lakshya goal. Retail book grew 23% YoY (+4% QoQ) to 92,224 Cr driven by 2W, HL and MFI segment. 2W book contribute 14% of retail book, growing 21% YoY and MFL contribute 28% of retail book, growing 14% YoY and Home loan contribute 20% of retail book, growing 37% YoY in Q3FY25.

➡️The total book increased by 16% YoY (+2% QoQ) to 95,120 Cr led bt strong growth in retail book.

➡️Whole sale book report degrowth by 59% YoY growth but its weight has been reduce to only 3% in overall loan book in Q3FY25.

➡️Retail disbursement grew 5% YoY (+1% QoQ) to 15,210 Cr led by 2W and home loan segment. While MFL shake the disburesement growth down by 16% YoY and its contribute 29% of retail disbursement.

➡️Company’s borrowing growth in line with credit growth. Borrowing grew at 13% YoY to 86,161 Cr during the quarter.

NII grew on book growth, PAT down on higher provision
➡️Interest income grew 15% YoY (+4% QoQ) to 3,806 Cr driven by robust retail book growth and while yield decline by 56 bps YoY. NII increased 15% YoY (+3% QoQ) to 2,237 Cr attributed to book expansion while NIMS contract by 47 bps YoY.

➡️PPOP grew robust at 16% YoY (+4% QoQ) to 1,553 Cr thanks to higher other income and stable other OpEx. Profitability suffered decline 23% YoY (-10% QoQ) to 626 Cr due to higher provision expense (up 117% YoY).

Asset quality dissapoint on QoQ basis
➡️LTFH asset quality has maintain on YoY basis and sequentailly. GNPA up 2 bps YoY and 4 bps QoQ to 3.23% while NNPA dissapoint YoY as well as sequentially by 16 bps/1 bps to 0.97%. Its normal effect due to the lower base on last quarter while NNPA below the management target of 1% till FY26.

Valuation and key metrics
➡️Currently the stock is trading at multiple of 1.44 Price to book value. Yield on loan down 56 bps to 15.04% while CoF remain stable at 7.83% YoY. This result in contraction in NIMs by 47 bps to 8.5% as of Q3FY25. credit cost remain stable at 2.49% YoY while decline by 10 bps QoQ.

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Impact of Trump 2.0 on Indian Equity Market

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HUDCO Q3FY25 Results Update: Robust Performance Drives Strong Growth
Equities, Markets, Research, Result Updates - January 22, 2025

HUDCO Q3FY25 Results Update: Robust Performance Drives Strong Growth

HUDCO Q3FY25 Results Update: Robust Performance Drives Strong Growth

Company Name: Housing & Urban Development Corporation Ltd | NSE Code: HUDCO | BSE Code: 540530 | 52 Week high/low: 354 / 145 | CMP: INR 227 | Mcap: INR 45,551 Cr | P/BV – 2.66

HUDCO delivered an exceptional performance in Q3FY25, with its Profit After Tax (PAT) surging to INR 7.35bn, surpassing estimates of INR 6.32bn. The PAT grew by 6.7% QoQ and an impressive 41.6% YoY, driven by robust business momentum, strong Net Interest Income (NII), and significant provision writebacks due to marked improvement in asset quality.

Strong Net Interest Income and Stable Margins
NII for the quarter came in at INR 9.83bn, well above expectations of INR 8.32bn, reflecting growth of 23.3% QoQ and 47.3% YoY. This stellar growth was fueled by healthy interest income, supported by stable Net Interest Margins (NIM) at 3.19% for 9M FY25, compared to 3.2% in the same period last year.

Record AUM Growth Driven by Urban Infrastructure
The company’s Asset Under Management (AUM) reached a historical high of INR 1,189.3bn, growing 7.1% QoQ and 40.9% YoY, exceeding expectations. Urban Infrastructure emerged as the key driver, growing 6% QoQ and 72% YoY, and now accounts for 60% of AUM. Meanwhile, the Housing segment showed subdued growth of 8% QoQ and 11% YoY, though it is expected to gain momentum in Q4FY25 with disbursements under the Pradhan Mantri Awas Yojana (PMAY).

Resilient Disbursements Despite Prior Glitch
Disbursements for the quarter stood at INR 100.6bn, registering an 11% QoQ growth following a temporary setback in Q2FY25. Urban Infrastructure disbursements were particularly robust, rising to INR 98.5bn, an increase of 22% QoQ and an astonishing 189% YoY. However, Housing disbursements remained subdued at INR 2.1bn, witnessing a decline of 78% QoQ and 66% YoY.

Moderate Sanctions and Declining Other Income
Sanctions for the quarter were recorded at INR 156.8bn, a significant 53% YoY growth, although they declined by 75% QoQ from the record levels seen in Q2FY25. Other income witnessed a decline of 63.8% QoQ and 43.5% YoY, amounting to INR 242mn.

Efficient Cost Management and Operating Performance
Operating expenses for Q3FY25 came in at INR 925mn, down 4.9% QoQ but up 26.5% YoY. The cost-to-income ratio improved to 9.2% from 11.3% in Q2FY25, reflecting better efficiency. Pre-Provision Operating Profit (PPoP) stood at INR 9.1bn, significantly above estimates of INR 8bn, with a growth of 19.3% QoQ and 43.5% YoY.

Improvement in Asset Quality and Recoveries
Asset quality saw a notable improvement, with Gross Non-Performing Assets (GNPAs) declining to 1.88%, down 16bps QoQ and 126bps YoY. Absolute GNPA stock reduced by 2% QoQ and 16% YoY, to INR 22.3bn. During FY25, the company resolved four long-pending NPA accounts, recovering INR 2.6bn, bringing total recoveries to INR 4.6bn, including INR 1.7bn from six government agencies.

Status of Stressed Accounts
HUDCO continues to address stressed accounts, with INR 12.2bn worth of consortium projects under NCLT resolution and INR 0.35bn of projects outside NCLT, both fully provided for. For non-consortium projects, INR 0.3bn is under NCLT, while suit-filed or DRT cases involve projects worth INR 4.3bn, all with 100% provisions.

Valuation and Outlook
At the current market price, HUDCO is trading at an FY27E PABV of 1.9x. With a strong growth trajectory, improvement in asset quality, and robust performance in key segments, the company is well-positioned for sustained growth. We maintain our conviction BUY rating and will revisit our estimates in light of these outstanding results.

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Solid reason for GST reduction on two-wheelers

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Easing of risk weights on loans given to MFIs and NBFCs
Business, Equities, Markets, Research, Result Updates - January 22, 2025

South Indian Bank Q3FY25: Moderate NII, Robust Profitability, Improved Asset Quality

South Indian Bank Q3FY25: Moderate NII, Robust Profitability, Improved Asset Quality

Company Name: South Indian Bank Ltd | NSE Code: SOUTHBANK | BSE Code: 532218 | 52 Week high/low: 36.9 / 22.3 | CMP: INR 26.8 | Mcap: INR 7,014 Cr | P/BV – 0.79

NII Moderate; strong Profitability; NIMs flat; Asset quality improved

About the Stock
➡️South indian bank is private sector bank operate in south region of India headquartered in kerala. The bank has 950 branch network and majority situated in south India. The customer bas has increased from 7.3 Mn to 7.8 Mn within one year period. The bank loan book is well diversified 40% with corporate and remaining 60% retail book includes perosnal, agri and business.

Strong growth in Advances and Disbursement in Q3FY25
➡️The bank has reported strong growth annually in key business parameter. Gross Advances grew 12% YoY to 86,966 Cr, with corporate segment contributing 40% of the loan book, growing at 17% and personal segment contribute 26%, growing at same pace 26% while business loan and Agriculture contribute 15% and 19% respectively.

➡️Disburement grew 86% YoY to 1,22,572 Cr led by corpoarte book. While the bank deposit lagging behind, increased by 6% YoY and borrowings decline 30% YoY. The CASA stand at 31.15% in Q2FY25 lower by 65 bps YoY.

➡️Personal segment loan book driven by growth in mortgage loan at 79% folowed by home loan loan at 64%, gold loan 10%, auto loan 25% and credit card 4%.

➡️Retail disbursement momentum help by home loan, auto loan while agriculture and personal loan remian flat annually.

Book Growth (As on)  Q3FY25 Q3FY24 YoY (%) Q2FY25 QoQ (%)
Advances  86,966 77,686 12% 84,714 3%
Disbursement  1,22,572 65,805 86% 76,872 59%
Borrowings  2,956 4,213 -30% 2,609 13%
Deposit 1,05,387 99,155 6% 1,05,452 0%


NII growth moderate while PAT jump 12% led by lower opex and tax expense
➡️Interest income increased by 9% YoY (+1% QoQ) to 2,371 Cr driven by yield expansion and advance growth. The yield on loan expand 11 bps YoY to 7.64% while Cost of fund jump 13 bps to 4.84% result contraction in NIMs.

➡️NII grew moderate at 6% YoY (-1% QoQ) to 869 Cr due to high expansion in CoF makes NIMs flat.

➡️The bank’s PAT surged 12% YoY (+5% QoQ) to 342 Cr led by lower operating cost and tax expense despite the jump in credit cost. The stable the employee cost and total operating cost kick in operating leverage and boost the profitability.

Years  Q3FY25 Q3FY24 YoY (%) Q2FY25 QoQ (%)
Interest income  2371 2184 9% 2,355 1%
Interest expenses 1501 1365 10% 1,472 2%
NII 869 819 6% 882 -1%
Other income  447 452 -1% 449 -1%
Total Net income 1316 1271 4% 1,332 -1%
Employee expenses 415 460 -10% 421 -2%
Other OpEx 373 328 13% 360 3%
Total Opex  788 788 0% 782 1%
PPOP 529 483 9% 550 -4%
Provision 66 49 36% 110 -40%
PBT 463 435 6% 440 5%
Tax expenses  121 130 -7% 116 5%
Tax rate  0 0 -12% 26% 0%
PAT  342 305 12% 325 5%
PAT% 12% 12% 5% 12% 5%
EPS 1.31 1.46 -10% 1.24 5%
No. of equity shares  262 209 25% 261 0%

Asset quality enhanced; stress book reduce
➡️Company has reduced the stress assets from 894 Cr in Q3FY24 to 404 Cr in Q3FY25. Bank has churned 78% of overall loan book since covid level and 91% current GNPA from old book. GNPA/NNPA stood at 4.43%/1.25% decline by 44bps/36 bps YoY (10bps/6 bps QoQ). Slippages ratio decline to 0.33% in Q3FY25 vs 0.34% in Q3FY24. The provision coverage ratio expand 310 bps YoY to 81.07% vs 77.97% in Q3FY24.

Asset Quality Q3FY25 Q3FY24 YoY (bps) Q2FY25 QoQ (bps)
GNPA 4.3 4.74 -44 4.40 -10
NNPA 1.25 1.61 -36 1.31 -6

Valuation and Key metrics
➡️Currently the stock is trading at 0.79 price to book value. The yield on advances jump 11 bps to 7.64% while CoF up by 13 bps YoY to 4.84%. This result in flat in NIMs at 3.19%. The increased in deposit rate to maintain and increased the deposit growt led to higher CoF and contract NIMs as Yield is stable.

Key metrics  Q3FY25 Q3FY24 YoY (bps) Q2FY25 QoQ (bps)
Yield 7.64 7.53 11 7.68 -4
CoF 4.84 4.71 13 4.80 4
NIMs 3.19 3.19 0 3.24 -5
ROA 1.12 1.07 5 1.07 5
ROE 13.93 16.38 -245 13.71 22
CASA  31.15 31.8 -65 31.8 -65
PCR 81.07 77.97 310 80.72 35
CAR 18 15.6 240 18.04 -4

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Jana SFB Q3FY25: Strong Secured Loan Growth, Margins Under Pressure

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UGRO Capital Acquires Profectus Capital in Ambitious ₹1,400 Crore Deal
Equities, Markets, Research, Result Updates - January 22, 2025

Jana SFB Q3FY25: Strong Secured Loan Growth, Margins Under Pressure

Jana SFB Q3FY25: Strong Secured Loan Growth, Margins Under Pressure

Company Name: Jana Small Finance Bank Ltd | NSE Code: JSFB| BSE Code: 544118 | 52 Week high/low: 761 / 364 | CMP: INR 430 | Mcap: INR 4,509 Cr | P/BV – 1.25

Abouth the stock
➡️Jana SFB is leading small finance bank engaged in providing MSME loan, affordable housing loan, 2W loan, gold loan, Micro LAP etc. Jana SFB has rapidly expanded network with 778 banking outlet including 252 outlet in unbanked rural centres, in 22 states/ 2UTs while serving 4.6 Mn active customers.

Robust Advance growth thanks to secured book
➡️Jana’s total advance book grew 18.5% YoY (+6% QoQ) to 27,984 Cr thanks to the secured book. Secured book at 68% of the Jana total book report a growth of 35.8% YoY (+11.9% QoQ) to 19,085 Cr while Unssecured book down at 6.90% YoY and de-growth 4.80% QoQ to 8,899 Cr. Secured book contribution jump from 60% in Q3FY24 to 68% in Q3FY25 and management further planning to increased its weight in overall book.

➡️Healthy growth of secured book attributed to affordable housing (up 39.1% YoY) and Micro LAP (up 22.5% YoY) segment. This both combines cross the milestone of 11,000 Cr. 2W and gold loan also report a sound growth of 108.8% and 127.9% YoY but have low weightage in overall book. MSME and term loans to NBFCs grew 15.5% YoY and 33.4% YoY respectively.

➡️Deposit growth higher than advance growth at 24.4% YoY to 25,865 Cr while CASA as % of total deposit decline to 18.4% in Q3FY25 vs 18.8% in same quarter previous year.

Book Growth (As on)  Q3FY25 Q3FY24 YoY (%) Q2FY25 QoQ (%)
Advance  27,984 22806.96 18.50% 26304.96 6%
Secured  19,085 12252.57 35.80% 16813.89 11.90%
Unsecured 8,899 9513.031 -6.90% 9326.152 -4.80%
Deposit 25,865 19553.94 24.40% 24752.81 4.30%

NII grew single digit on solid advance growth while NIMs contact
➡️Interest income grew 13% YoY and remain flat on QoQ to 1,177Cr led by solid secured book growth while yield down 10 bps YoY (+20 bps QoQ) to 17.4%.
➡️NII grew 8% YoY to 593 Cr with support of advance growth while CoF expand and NIMs decline. On QoQ NII remain flat led to modest growth of book on QoQ and NIMs contraction.
➡️PPOP report -5% YoY and -7% to 279 Cr due to higher operating expenses. PAT down 18% YoY and sequentially 14% to 111 Cr led by higher provision growth.

Years  Q3FY25 Q3FY24 YoY (%) Q2FY25 QoQ (%)
Interest income  1,177 1,038 13% 1,166 1%
Interest expenses 585 490 19% 572 2%
NII 593 548 8% 594 0%
Other income  177 140 27% 176 1%
Total Net income 770 688 12% 770 0%
Employee expenses 309 245 27% 296 5%
Other OpEx 181 148 22% 175 4%
Total Opex  491 393 25% 471 4%
PPOP 279 295 -5% 299 -7%
Provision 174 161 8% 210 -17%
PBT 105 135 -22% 89 18%
Tax expenses  5 0 -8 -167%
Tax rate  5% 0% -9% -156%
PAT  111 135 -18% 97 14%
PAT% 8% 11% -29% 7% 13%
EPS 10.49 18.3 -43% 9.28 13%
No. of equity shares  10.47 7.36 42% 10.45 0%

Asset quality tempered on YoY basis
➡️Jana asset qaulity has been decline due to the stress in the MFI segment. GNPA/NNPA jump 65 bps/24 bps YoY while on QoQ down 15/4 bps 2.71%/0.91%. Net NPA has 82% secured loan which signifies higher chances of recovery.

Asset Quality Q3FY25 Q3FY24 YoY (bps) Q2FY25 QoQ (bps)
GNPA 2.71 2.06 65 2.86 -15
NNPA 0.91 0.67 24 0.95 -4

Valuation and key metrics
➡️Currently the stock is trading at multiple of 1.25 price to book value and book value per share stood at 342 Rs. Yield decline 10 bps YoY (+20 bps QoQ) to 17.4% while CoF jump 40 bps YoY and down 5 bps on QoQ to 8.03%. Yield contraction is led by competitive environment and challenges in MFI segment while CoF expansion driven by increase in deposit rate for attracting retail deposit. This result in decline in NIMs by 30 bps YoY and 10 bps QoQ to 7.6%. Return ratio dissapoint as ROE and ROA down by 670 bps and 20 bps YoY. Company’s capital position remain solid with 18.4% Capital adequacy ratio.

Asset Quality Q3FY25 Q3FY24 YoY (bps) Q2FY25 QoQ (bps)
Yield 17.4 17.5 -10 17.2 20
CoF 8.03 7.64 39 8.08 -5
NIMs 7.6 7.9 -30 7.7 -10
ROA 1.5 1.7 -20 1.2 30
ROE 13.5 20.2 -670 10.2 330
PCR 66.9 6690 67.2 -30
CAR 18.4 16.3 210 18.8 -40
CASA 18.4 18.8 -40 20.1 -170

Management Guidance for FY25
➡️Management expect overall 20% growth in AUM and deposit in FY25.
➡️PAT growth of 30%-40% in FY25 will led by advance and disbursal growth.
➡️ROA and ROE maintained at 1.8% -2% and 19%-21% respectively. Company will continue to increase the secured business led to decline in NIMs.

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Solid reason for GST reduction on two-wheelers

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BEML Surges by 7.86% on Likely Upgrade to Navratna Status
Business, Equities, Markets, Research, Result Updates - January 21, 2025

Zomato Q3FY25: Strong GOV Growth Amid Profitability Pressures

Zomato Q3FY25: Strong GOV Growth Amid Profitability Pressures

Company Name: Zomato Ltd | NSE Code: ZOMATO| BSE Code: 543320 | 52 Week high/low: 305 / 127 | CMP: INR 212 | Mcap: INR 2,04,829 Cr | P/E – 309

About the Stock
➡️Zomato is engaged in multiple business vertical segment such food delivery, quick commerce (Blinkit), going out and B2B supplies. Company has done rapid expansion in quick commerce segment by adding 368 net new stores in Q3FY25.

GOV shoot up led by all segment (up 57% YoY /14% QoQ)
➡️Zomato’s gross order value grew healthy across all the segment. GOV (B2C business) increased 57% YoY (+14% QoQ) to 17,671 Cr thanks to all segment. This growth is attributed to strong growth in food delivery business (up 17% YoY/ 2% QoQ) followed by Quick commerce (blinkit) (up 120% YoY/ 27% QoQ) and Going out (up 191% YoY/ 35% QoQ ). Quick commerce business operating under the name Blinkit 
➡️Key operating metrics of all business segment helps in robust growth. In blinkit business 368 net new stores and also added 1.3 million sqft of warehousing space, account for 30% of overall warehousing space. This rapid expansion will take time to ramp up the business across all new store.
➡️Average monthly customer surged 9% YoY (+0% QoQ) to 20.5 Mn in Q3FY25 vs 20.7 Mn in Q2FY25 for food delivery business. While Quick commerce (blinkit business) customer base nearly double from 5.4 Mn in Q3FY24 to 10.6 Mn in Q3FY25 reflecting the change in buying pattern of consumer and habit for convenience buying.
➡️Quick commerce (blinkit business) order value double to 110.3 Mn in Q3FY25 from 5.8 Mn in same quarter previous year led by increase in Average order value and new customer base.

Profitability disappoint on higher depreciation; Quick commerce turn negative from break even
➡️Zomato’s food delivery business has maintained the overall profitability despite the loss in quick commerce business (blinkit). Overall EBITDA surged 218% YoY (-28% QoQ) to 162 Cr driven by strong growth in food delivey business and margin expansion (100 bps YoY). While quick commerce adjusted EBITDA at loss of 103 Cr from -89 Cr in Q3FY24. EBITDA margin has expand 100 bps YoY to 4.71%. led by all segment.
➡️Despite the robust growth in quick commerce GOV, margins are not improving due to the rapid infrastructure expansion.
➡️EBIT decline 10% YoY (-285% QoQ) to -85 Cr due to increment in depreciation by 93% YoY to 247 Cr.
➡️PAT down 57% YoY to 59 Cr due to the higher depreciation. PAT margin decline 300 bps YoY to 1%. While on QoQ basis PAT down 66% due to higher tax expenses and interest cost.

Years Q3FY25 Q3FY24 YoY (%) Q2FY25 QoQ (%)
Revenue  5,405 3,288 64% 4,799 13%
COGS 1500 782 92% 1334 12%
Employee cost 689 423 63% 590 17%
Advertisement & sales promotion 521 374 39% 421 24%
Delivery & related charges 1450 1068 36% 1,398 4%
Other expenses 1083 590 84% 830 30%
Total OpEx 3743 2455 52% 3239 16%
EBITDA 162 51 218% 226 -28%
EBITDA Margin% 3% 2% 93% 5% -36%
Depreciation 247 128 93% 180 37%
EBIT -85 -77 10% 46 -285%
EBIT Margin% -2% -2% -33% 1% -264%
Interest expenses 43 18 139% 30 43%
Other income 252 219 15% 221 14%
PBT  124 124 0% 237 -48%
Tax expenses 65 -14 -564% 61 7%
Tax rate % 52% -11% -564% 26% 104%
PAT 59 138 -57% 176 -66%
PAT Margin % 1% 4% -74% 4% -70%
EPS 0.07 0.16 -60% 0.20 -68%
No. of shares 906 857 6% 872 4%

Valuation and Key metrics
➡️Currently the stock is trading at a multiple of 309x 0.75 EPS at the CMP of 212 Rs. Company trading at 9.65x its book value of 22.1 per share. Trailing twelve months ROE and ROCE stood at 1.12% and 1.14% respectively. Interest coverage ratio stood at 7.45x signify strong solvency.

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Affordable housing to take a hit in the upcoming Budget

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Jio Financial Acquires Remaining SBI Stake to Fully Own Jio Payments Bank in ₹104.54 Crore Deal
Business, Equities, Markets, Research, Result Updates - January 20, 2025

Jio Financial Services Q3FY25 Result Update: Mixed Performance Amid Key Developments

Jio Financial Services Q3FY25 Result Update: Mixed Performance Amid Key Developments

Jio Financial Services Ltd (NSE Code: JIOFIN | BSE Code: 543940) reported a mixed performance in its Q3FY25 results. The company’s total income stood at ₹449 crore, reflecting an 8% year-on-year (YoY) increase but a 35% sequential decline. The growth was moderated by a 22% YoY decline in interest income from loans and investments, which was offset by an impressive 85% YoY surge in net gains from fair value changes.

Financial Highlights:
Pre-Provision Operating Profit (PPOP): PPOP grew 5% YoY to ₹330 crore, driven by higher employee costs (up 58% YoY) and increased operating expenses (up 20% YoY). However, on a quarter-on-quarter (QoQ) basis, PPOP declined by 40% due to the significant drop in total income.

Profit After Tax (PAT): PAT remained stable at ₹295 crore, with margins declining by 500 basis points YoY to 66%. The flat PAT was attributed to reduced contributions from associates and joint ventures.

Business Updates and Key Metrics:
Assets Under Management (AUM): The company’s AUM achieved a significant milestone, surging 248% QoQ to ₹4,199 crore from ₹1,206 crore in Q2FY25.

Payments Business: Jio Payments Bank (JPB) has grown its customer base to 1.89 million CASA accounts and expanded its business correspondent network to 7,300 BCs.

Asset Management Collaboration: The joint venture with BlackRock (50:50) filed for final approval to commence operations. Additionally, the company incorporated Jio BlackRock Investment Advisers Pvt. Ltd. in September 2024 to launch wealth management services.

Strategic Growth Outlook:
JFSL is well-positioned for robust growth, supported by its diversified product portfolio, digital-first approach, and strategic partnerships with industry leaders like BlackRock and Reliance. Key growth drivers include:

* Expansion in retail lending and corporate financing.
* Integration of tailored insurance products to cater to India’s growing demand for financial solutions.

Valuation Perspective:
Currently trading at a price-to-book value (P/Bv) of 1.28x, JFSL lags behind the sectoral average P/Bv of 1.81x. While the company reported lackluster growth in total income and flat PAT this quarter, its impressive AUM growth and upcoming asset management initiatives signal long-term growth potential.

Conclusion:
Although Q3FY25 results were underwhelming, JFSL’s strategic developments, particularly its venture with BlackRock, position it to capitalize on India’s evolving investment landscape. Investors should closely monitor the company’s progress in the asset management and wealth advisory segments for future growth opportunities.

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Solid reason for GST reduction on two-wheelers

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BEML Surges by 7.86% on Likely Upgrade to Navratna Status
Business, Equities, Markets, Result Updates - January 17, 2025

Sugar Industry Outlook: Prices, Production, and Market Trends

Sugar Industry Outlook: Prices, Production, and Market Trends

Domestic and Global Overview of sugar prices
The current sugar season is difficult for sugar mills. International raw sugar prices have decreased by 21% since the end of September. One factor adding to some pricing pressure is the Brazilian Real’s dramatic fall against the dollar, while another is healthier than anticipated output in important producing countries like Brazil and Thailand. Brazil is a major exporter of sugar, thus exporters will profit from a depreciating real.

Since exports have not yet been permitted, weak worldwide prices may put pressure on domestic producers’ realizations. However, depending on trade limitations, domestic prices are somewhat impacted by global price movements. Whether or not Indian sugar mills will be permitted to export during the current sugar season is still a major concern. The production of sugar for domestic use and ethanol diversion have been the government’s top priorities.

Impact of Ethanol Diversion on production
Cane crushing statistics as of December 31 were recently issued by the sugar industry group ISMA, and it showed a dramatic 16 percent decline as a result of rains impacting crushing in Uttar Pradesh. The season, which begins in October and concludes in September, is still in its early stages. A more precise estimate will be ready in March or April. The post-diversion amount for ethanol is currently 9.5 million tons. In a later statement, ISMA noted that ex-mill prices are less than the cost of production and that the government plans to evaluate the minimum selling price for sugar. Additionally, it stated that arrears for cane purchased during the current sugar season had accumulated to a total of Rs 6500 crore.

This situation is not new as noted by India Ratings about the state of the industry. Due to decreased recovery rates brought on by weather-related events and the red rod infestation in Uttar Pradesh, it is anticipated that this season’s sugar output will drop to 30-31 million tonnes from 34 million tonnes the year before. It will be the lowest sugar production since the 2020 sugar season if that occurs.

Sugar production predicted to fall
After the diversion of sugar for ethanol, production may fall slightly short of demand but there are ample opening stocks of sugar to take care of demand. The one thing that remains to be monitored on the cost front is the UP State Advised Price that is not out yet, which UP-based mills will need to pay to farmers. Lower output should ordinarily translate to higher domestic sugar prices and support profitability. If we look at government data on wholesale sugar prices, then they are up by only 0.2 percent over a year ago and up by 0.4 percent over three months ago. That looks hardly conducive for mills to raise prices. The government, of course, will be happy with that market situation as it wants to keep inflation under check. Since the government wants to control inflation, it will naturally be pleased with that market condition.

Sugar Mills’ Earnings from Ethanol
The next question is how much money sugar mills make from ethanol. The government halted ethanol diversion during the previous sugar season because it was concerned that it would limit the supply of sugar and cause prices to rise. The political sensitivity of such an event was increased by general elections. Although the regulations governing sugar diversion have been loosened, the India Ratings report indicates that during the current ethanol season, oil marketing corporations will mostly purchase maize as a feedstock for ethanol.

Indian Sugar stocks shoot up
In Thursday’s (January 16, 2025) trading, the majority of sugar stocks surged up to 8.1% as reports indicated the Indian government would likely decide soon to raise the minimum support price (MSP) of sugar. The price at which the government promises to purchase specific crops from farmers in order to guarantee that they receive a minimum price for their produce is known as the MSP. Its goal is to shield farmers from market price swings.

In terms of the BSE, Dhampur Sugar Mills, Dwarikesh Sugar, Dalmia Bharat Sugar and Industries, Shree Renuka Sugars, Bajaj Hindusthan Sugar, and Mawana Sugars all had increases of 5.9, 4.68, 4.14, and 3.46 percent, respectively.

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Railway Fare Hikes and What They Mean for IRCTC, IRFC, and RVNL Stocks
Business, Equities, Markets, Result Updates - January 17, 2025

Expectation of allocations for Railway Sector to about Rs 3 Lakh Crore

Expectation of allocations for Railway Sector to about Rs 3 Lakh Crore

In the Union Budget 2025, there are currently high expectations in the market about a positive announcement for the railway sector. Despite this, many railway stocks are performing low compared to their high record trend in the year 2024. The reason for this is muted market sentiments. There are high expectations about the railway sector securing allocation of around Rs. 3 lakh in upcoming Union Budget 2025-2026.

Expectations about Allocation of Funds
In the Union Budget 2024, the funds allocated for the railway sector was slightly more than Rs. 2.62 lakh crore. Till the date of 5th January, the funds utilised accounts to Rs. 2 lakh crore. Many analysts estimate that the coming budget will record a rise in 15 to 20 percent of allocation of funds.

Partner and Vice President of Complete Circle Capital, Aditya Kondawar points out some likely projects such as improvements in KAVACH safety system, adoption of artificial intelligence (AI) for functions such as ticketing and also to raise funds in the Bullet Train project. He further points out allocation for projects such as Gati Shakti Multi-Modal Cargo Terminals (GCT) in order to encourage private investments in cargo infrastructure and also for the progress of the Amrit Bharat Station Redevelopment Scheme.

Increase in only allocation of funds in the railway sector is not enough. The utilisation of these funds is a very important step to achieve planned goals and development.

The equity research analyst at Choice Broking firm, Mandar Bhojane stated that the amount of capital expenditure in the railway sector has constantly increased in the duration of the previous five years. However, it has failed to achieve project timelines on time. He also believes that companies working in the railway sector will receive stimulus from the Indian government on the basis of schemes such as Public-Private Partnership (PPP) and Make in India.

Government Plans
The Indian government seemingly has plans to acquire 90 more Vande Bharat trains. At present, 136 Vande Bharat trains are functioning in India. It also has plans to use funds to build infrastructure for high-speed rail testing. The test track infrastructure is being constructed in Rajasthan which accounts to funds of Rs. 820 crore.

To increase Indian railway’s market share in cargo, it is expected to announce purchase orders of big wagons in the range of Rs 20,000 to Rs 25,000 crore. The current market share of the railway sector in cargo is about 27 percent. Also, the funds are projected to be used for the purpose of complete electrification of main railway lines as well as for enhancement of safety with improvement in level crossings, bridges and signalling.

Performance of Railway Stock
Many railway stocks are representing a weak trend. The railway stocks such as Jupiter Wagon and RailTel Corporation fell to 44 percent and 42 percent, respectively. Stock of Texmaco Rail and Container Corporation of India declined to 42 percent and 38 percent, respectively. While railway stocks such as IRCTC, IRCON International, RVNL declined to 35 percent, 48 percent, and 45 percent, respectively. Also, IRFC which was at its 52-week high fell to 48 percent.

Smallcase Manager and Co-Founder of KamayaKya, Nitya Shah stated that the Indian railway stocks were placed at very high valuation in recent times. Many railway stocks were considered multi-baggers in the period of the previous three years.

The railway stocks such as IRFC, IRCON International, Titagarh Wagons, and RVNL have given strong annualised returns in between 25 to 50 percent. The high valuations show positive expectations about the future growth. Despite this, there are rising concerns about whether these high valuations can be maintained or not in case of no corresponding increase in earnings of the firms. In present times, investors have to wait for better fair prices in this situation of high valuations of the stocks.

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Jio’s Giant Leap: Reliance Confirms IPO in Early 2026
Business, Equities, Markets, Result Updates - January 17, 2025

RIL performance in third quarter supported by performance of consumer businesses

RIL performance in third quarter supported by performance of consumer businesses

Reliance Industries Limited (RIL) in terms of both EBITDA and revenue observed consecutive growth in the third quarter of the FY25. The main growth drivers were the Retail businesses and digital services of the firm.

Digital Services
The reason for increase in growth in the digital services segment of the business was mainly due to remarkable improvement in the Jio’s Average Revenue Per User (ARPU). This hike in ARPU indicates the potential of Jio to make more money from its customers. It is supported by factors such as increase in tariff, providing more expensive data plans and value-added services to customers.

Both EBITDA and revenue recorded a strong growth of 19 percent year-on-year. The growth in subscription additions was slow. However, the growth in ARPU was around 12 percent year–on-year. It was supported by a rise in contributions from 5G users and a spike in tariff.

Retail business
The revenue growth year-on-year of RRVL is high in single-digit for the third quarter of the financial year 2025. The positive growth was observed in consumption sections due to rise in positive customer sentiments. It was supported by the festive and wedding season. Also, the company’s strategy of network expansion along with strong growth in store throughput helped in achieving revenue growth.

In this quarter, RRVL recorded a year-on-year growth of 6 percent. It aims to draw more new customers, which is supported by growth of 15 percent in registered consumer base and 5 percent growth in shopping traffic.

The Business to customer (B2C) grocery recorded robust growth of 37 percent, supported by big stores. It observed growth in segments such as value apparel, premium personal care and general products. While, the retail electronic operations observed an increase in paying customers and a spike in average expenditures. While the fashion and lifestyle division of the company registered positive improvements due to launching of new fashion and enhancement of shopping experiences.

The contribution of digital and new commerce operations in total sales growth was 18 percent in the third quarter compared to 17 percent in the second quarter. The consumer brands’ revenue of the company is increasing at fast speed which accounts to Rs.8000 crore in the duration of nine months of the financial year 2025.

The total margins of RRVL raised by 8.6 percent due to increase in store throughput as well as efficiency in its operations.

One of the reasons for its increasing revenue growth is the company’s partnerships with global brands to expand its product base and to draw new consumers. In the third quarter, the company did a franchise partnership with Saks Fifth Avenue. It also did a joint venture with Mother care in order to get the Mothercare brand.

Oil and Gas Segment
In contrast to retail and digital services business, the oil and gas E&P segment recorded a fall in year-on-year revenue growth by 5 percent. The reason for decline in revenue was fall in volumes of gas and condensate in KGD6 and fall in prices of condensate and CBM gas. Though, it was partially balanced out by a rise in volumes of CBM gas and a slight rise in the price of KGD6 gas.

Oil to Chemical segment
Despite a fall in export by 9 percent, the revenues of the Oil to Chemical segment recorded an increase of 6 percent year-on-year growth. Overall revenue performance of the segment fell due to decline in export contribution.

The EBITDA of the segment increased by 16 percent on a quarter-on-quarter basis leading to improvement in margins by 165 bps. The transportation fuel prices were supported by robust demand in Asia except China. It was partially balanced out by the weak demand in China. Gasoline 92 RON prices in Singapore dropped slightly by $6.5 per barrel in the third quarter of financial year 2025 compared to $6.8 per barrel in the second quarter of the same financial year. The reason for this is sufficient supply in the market due to high US refinery production and slow demand in China.

The polymer margins of PVC and polypropylene were better which was partially supported by domestic demand levels and prices of Singaporean Naphtha. In contrast to this, polyester and polyethylene margins did not perform well.

Outlook
The diversified business structure of RIL is seen to be useful in the present domestic and international business challenges. Its proof is seen in the company’s growth in consumption-based businesses.

The company’s investment in 5G services is giving good results as 170 million 5G subscribers in the third quarter are recorded compared to 148 million subscribers in the second quarter. It made RIL as the biggest global 5G operator beyond China.

The broadband connectivity of Jio AirFiber is across India, particularly between the top 1,000 cities. It is important to note that more than 70 percent of the new connections are from these less served areas only. The home connection of Jio is increasing at a faster rate and the total installation has reached nearly 17 million. At global level, Jio is the fastest-growing fixed wireless operation. It has more than 2.8 million Jio AirFiber connections. The expansion of these services will certainly lead to a boost in financial performance of the company.

RRVL is also focusing on the creation of express deliveries of various products to fulfill consumer choice for quick delivery. It is implementing this plan through Jio Mart. The expansion of product base and improvement in customer sentiment will lead to a return of double-digit growth.

The E&P segment is going through temporary challenges. The 40 multi-lateral wells campaign (34 wells completed already) will help in production of CBM.

RIL will face risk and opportunity in the US-China trade war. RIL’s focus on premiumization in consumption productions and digitization will help its consumer-based operations. Directing cash flows in the clean energy sector will make RIL a key player in the transformation of the energy sector in India.

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D-Mart's Q3 Results Miss Estimates, Faces Margin Pressure and Leadership Change
Business, Equities, Markets, Research, Result Updates - January 14, 2025

D-Mart's Q3 Results Miss Estimates, Faces Margin Pressure and Leadership Change

D-Mart’s Q3 Results Miss Estimates, Faces Margin Pressure and Leadership Change

Overview
D-Mart’s top-line growth has been robust, according to the pre-quarter business update released on January 2. The top line was strong, but because of higher discounting and ongoing operating deleverage, margins fell short of projections.

Even though D-Mart is following a sound network expansion plan, it is facing more and more difficulties as quick commerce rivals gain market share quickly. Additionally, D-Mart has announced plans to replace its leadership. In light of the growing consumer preference for speedy transactions in the grocery industry, we are awaiting the new management’s strategy and plans for execution. When it comes to the stock, investors should have reasonable expectations.

Details of Q3 Results
Q3FY25 revenues increased 18% year-over-year. Revenue/square feet growth returned to the mid-single digits (4% YoY), but store count and retail business area expanded 14% year-over-year. A pick-up in demand was indicated by the 8.3 percent YoY improvement in like-for-like revenue growth for mature stores (those that have been in business for more than 24 months).

The FMCG segment’s higher level of discounting caused a little year-over-year fall in gross margins. Additionally, operating de-leverage brought about by muted revenue/square foot growth had an impact on the EBITDA margins. D-Mart’s operating margins were below street estimates and fell 70 basis points year over year. Profitability was further impacted by reduced revenue and higher depreciation costs brought on by the establishment of more outlets. Compared to the growth in revenue, the consolidated net profit growth was in the mid-single digits.

Store Addition significantly increased
As store openings accelerated in Q3FY25, D-Mart maintained its sound store expansion strategy. In Q3FY25, D-Mart opened 10 new locations, increasing the total number of new stores established in 9MFY25 to 22 (D-Mart opened 17 in 9MFY24). D-Mart has been expanding its footprint in the 12 states where it currently operates within the last 12 months. It still uses the cluster-based expansion strategy, which entails opening new stores close to existing ones. In addition to NCR and Chhattisgarh, D-Mart has opened new locations in every state where it operates.

Online business acceleration
D-Mart Ready which is the online-business arm of D-Mart, is progressively expanding into major cities. D-Mart expanded into three new cities in the last year, bringing its total number of cities to 25 as of December 2024. D-Mart is adhering to its policy of moderate and measured expansion because the internet business is losing money. D-Mart Ready is continuing to align its business with the growing demand for home delivery as opposed to pick-up. Actually, ‘Home Delivery’ is the only delivery option offered by D-Mart Ready in a few of the towns.

Margin Pressure on the rise
In Q3FY25, D-Mart reported a slight drop in gross margins due to heightened discounting intensity in the FMCG sector. Additionally, D-Mart’s store operating metrics remain muted, with mid-single-digit growth in revenue per square foot. The building of large stores in FY22 and FY23 has maintained revenue/square feet under pressure, even if the SSSG (same-store sales growth) for older, more established stores returned to a high single digit in Q3. This, together with higher operating expenses, has caused D-Mart’s operating leverage to continue to impact margins.

Quick commerce companies Blinkit, Big Basket, and Zepto have quickly expanded their product lines, especially in the grocery sector, and are posing a greater threat to D-Mart. We anticipate that D-Mart’s margin pressures will continue in the near future.

Change in Leadership
Neville Noronha, the managing director and CEO of D-Mart, will leave the company in January 2026. Neville began working at D-Mart in 2004 and was instrumental in developing managing teams, carrying out procedures, and carrying out strategies.

On March 15, 2025, Anshul Asawa will become the Chief Executive Officer designee of D-Mart, succeeding Noronha. After 30 years at Unilever, Anshul, an industry veteran and graduate of IIT Roorkee and IIM Lucknow, will join D-Mart. Anshul has held executive positions in India, Asia, and Europe, where he oversaw the expansion of product categories and created significant responsibilities. In light of the shifting dynamics of the sector, especially the move towards the rapid commerce segment, the Street will closely monitor any adjustments made by the new CEO to the strategy or execution process.

Stock Performance and Valuation
Avenue Supermarts, which operates the retail brand DMart, had its shares fall 5.7% in early trade on Monday, January 13, to a low of Rs 3,474 on the BSE, as investors were unhappy with the company’s Q3 results.

As of right now, the stock’s P/E ratio at the CMP is 68 times FY26 earnings projections.
Proposed leadership changes and increased competition would limit the stock’s upward potential in the medium run. At this point, investors should have reasonable expectations for the stock.

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