Jio’s Giant Leap: Reliance Confirms IPO in Early 2026

Research, Research Reports, Result Updates - August 22, 2024

RIL's Q1FY25 Performance: Retail and Digital Drive Amid O2C Slump

RIL’s Q1FY25 Performance: Retail and Digital Drive Amid O2C Slump

About Stock:

Dhirubhai Ambaini started RIL in in 1966 as a small textile company which has now became a large company with holdings in petrochemicals, energy, natural gas, retail, telecommunications, energy, natural gas, retail, telecommunications, and digital services. RIL has continually pushed innovation and scaled operations to become a major power in a number of sectors under Mukesh Ambani’s direction. The biggest retailer in India, Reliance Retail Ventures Limited (RRVL), provides a wide range of goods online via JioMart, including food, gadgets, clothing, and more. With its reasonably priced 4G network, Jio Platforms has revolutionised the digital services industry in India and grown to become the country’s leading telecom operator.

Q1FY25 Performance Analysis:

Despite challenges in certain areas, Reliance Industries Limited (RIL) demonstrated solid overall performance in Q1FY25. The company’s consolidated sales reached INR 257,823 crore (approximately US $30,919 million), reflecting an 11.5% year-over-year (YoY) growth. This expansion was driven by strong contributions from key sectors, including oil and gas, retail, and digital services. However, the company’s Oil-to-Chemicals (O2C) division faced challenges due to lower refining margins and a decline in global demand.

EBITDA for the quarter increased by 2.0% YoY to INR 42,748 crore (US $5,126 million). While the O2C segment struggled, the robust performance of consumer-facing businesses, such as Retail and Digital Services, provided a counterbalance. A significant increase in production volumes from the KG-D6 block also contributed to the notable EBITDA improvement in the Oil & Gas segment.

On a quarter-over-quarter (QoQ) basis, EBITDA declined by 9.1%, primarily due to a 22% drop in O2C EBITDA, reflecting the challenging conditions in the global petrochemical and refining markets. This downturn in O2C performance also impacted the company’s profitability, with consolidated profit after tax (PAT) decreasing by 17.9% QoQ to INR 17,445 crore (US $2,092 million). Increased financing and depreciation charges further weighed on the bottom line.

Despite these challenges, RIL’s balance sheet remains strong, with a net debt reduction of INR 3,940 crore during the quarter, underscoring the company’s commitment to maintaining financial discipline and generating robust cash flows. RIL’s diversified business strategy has been key to its ability to capitalize on growth opportunities in consumer and digital sectors while navigating sector-specific obstacles.

Key Ratios:

Basic EPS (INR)	102.90
Cash EPS (INR)	191.35
Net Profit Margin (%)	8.72 %
ROE (%)	8.77 %
ROCE (%)	9.38 %
Total Debt/Equity	0.41
Asset Turnover Ratio (%)	0.54 %
Current Ratio	1.18
Quick Ratio	0.80
Dividend Payout Ratio (NP) (%)	8.74 %
EV/EBITDA	13.31

Segment Performance Analysis:

O2C Segment:
Reliance Industries’ O2C division faced significant challenges in Q1FY25. Revenue increased by 18.1% YoY to INR 157,133 crore (US $18,844 million), while EBITDA declined by 14.3% to INR 13,093 crore (US $1,570 million). The EBITDA decline was primarily due to lower refining margins, a sharp drop in prices for petrol (-30%), polypropylene (-17%), and the polyester chain (-15%), as well as weakened global demand. Despite these hurdles, the segment benefited from strong domestic demand, particularly in polyester and polymers, and from favorable feedstock economics, as ethane was used instead of naphtha.

Oil and Gas Segment:
The Oil and Gas division delivered exceptional performance, with revenue increasing by 33.4% YoY to INR 6,179 crore (approximately US $741 million) and EBITDA rising by 29.8% to INR 5,210 crore (around US $625 million). This impressive performance was largely driven by a 43.7% YoY increase in production volumes from the KG-D6 block, resulting in 69.4 BCFe. However, a 14.2% drop in gas price realization somewhat offset the segment’s EBITDA growth. Despite declining prices, higher production volumes continued to bolster the segment.

Retail Segment:
Reliance Retail maintained its strong growth trajectory, with EBITDA increasing by 10.5% to INR 5,664 crore (US $679 million) and revenue rising by 8.1% YoY to INR 75,615 crore (US $9,068 million). The segment saw robust sales in digital products, such as air conditioners, refrigerators, and televisions, alongside strong performance in food sales, driven by summer promotions. Additionally, the company expanded its registered customer base by 18% to 316 million and added 331 new locations, bringing its total retail footprint to 18,918 stores.

Digital Services Segment:
Jio Platforms led the strong growth in the Digital Services segment, with revenue increasing by 12.8% YoY to INR 34,548 crore (US $4,143 million) and EBITDA rising by 11.9% to INR 14,638 crore (US $1,755 million). The segment also benefited from a 32.8% YoY increase in data traffic, driven by growing 5G adoption and fiber-to-the-home (FTTH) penetration. Jio’s ability to maintain its industry-leading position, despite a competitive market, underscores the effectiveness of its customer-centric approach

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Maruti Suzuki India Q1FY25 Sees Double-Digit Profit Growth Amid Shifting Market Trends

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

Markets, Research, Research Reports, Result Updates - August 22, 2024

Dmart Q1FY25 Results Showcase Robust Growth and Strategic Expansion

Q1FY25 Financial Performance

Avenue Supermarts demonstrated robust financial performance in Q1 FY2025, as its operational revenue surged by 18.57%, reaching Rs 14,069.14 crore. The notable revenue growth reflects Avenue Supermarts’ robust market presence and successful implementation of its business approach. This upward trend highlights the company’s ability to capitalize on market opportunities and execute its strategies effectively.

Profitability metrics showed notable improvement, with profit before tax rising by 17.48% to Rs 1,054.13 crore in Q1 FY25, up from Rs 897.26 crore in the same period last year. This growth in profitability reflects the company’s operational efficiency and cost management strategies.

EBITDA performance was particularly strong, increasing by 17.97% to Rs 1,221 crore in Q1 FY25, compared to Rs 1,035 crore in Q1 FY24. The EBITDA margin remained steady at 8.7%, demonstrating the company’s ability to maintain profitability levels despite challenging market conditions.

Operational highlights revealed strategic expansion and growth. Avenue Supermarts added 6 new stores during the quarter, bringing its total store count to 371 as of June 30, 2024. This expansion strategy aligns with the company’s focus on increasing market presence and accessibility for customers.

The company’s standalone performance was equally impressive, with net profit jumping 16.83% to Rs 812.45 crore in Q1 FY25. Standalone revenue from operations also experienced a notable growth of 18.36%, reaching Rs 13,711.87 crore.

Avenue Supermarts’ commitment to its EDLC-EDLP strategy continues to drive its success, enabling the company to offer competitive prices while maintaining profitability. This approach has proven effective in attracting and retaining customers in a competitive retail landscape.

Management’s perspective highlighted key growth drivers. CEO & Managing Director Neville Noronha emphasized the improved contribution from general merchandise and apparel, which positively impacted gross margins. He also noted increased operating costs due to ongoing efforts to enhance service levels and build future capabilities.

Consolidated Financial Highlights: (Figures in Rs. Crs)

Particulars	Q1 FY24	Q1 FY25	FY24
Sales	11865	14069	12727
Expenses	10830	12848	11783
Operating Profit	1035	1221	944
OPM %	9%	9%	7%
Other Income	39	42	38
Interest	15	16	13
Depreciation	162	193	205
Profit Before Tax	897	1054	763
Tax	27%	27%	26%
Net Profit	659	774	563
EPS in Rs	10.12	11.89	8.66

The company’s performance in Q1 FY25 positions it well for continued growth, with its expansion strategy and focus on operational efficiency expected to drive further success in the coming quarters. Avenue Supermarts’ ability to maintain strong growth in revenue and profitability demonstrates its resilience and adaptability in the dynamic retail sector.

Industry Overview

Avenue Supermarts Limited’s DMart has become a significant player in India’s affordable retail sector. The company began with humble origins in Mumbai at the start of the millennium and has since experienced impressive growth and expansion across the country. DMart’s rise in the budget retail landscape has positioned it as a formidable competitor in the market. Starting modestly in Mumbai in 2002, the company has undergone remarkable expansion over the years. It currently manages a vast array of 365 stores across a dozen states and territories in India. This impressive growth is reflected in DMart’s extensive retail footprint, which now covers 15.15 million square feet. Such widespread presence underscores the company’s effective growth tactics and its strong position in the marketplace. The company’s growth strategy centers on providing customers with quality products at competitive prices, adhering to the Everyday Low Cost/Everyday Low Price (EDLC/EDLP) model. DMart stores offer a diverse range of products, focusing on Foods, Non-Foods (FMCG), and General Merchandise & Apparel categories. The shopping experience is designed to combine the convenience of everyday value retail with the ambiance of a modern, large-scale mall. DMart’s success can be attributed to its focus on meeting customers’ daily shopping needs in a single location, coupled with competitive pricing. This pricing strategy is supported by the company’s deep understanding of local markets, carefully curated product selections, and efficient supply chain management. The broader economic context for DMart’s operations shows promise, with India’s GDP growth estimated at 7.6% for FY 2023-24, up from 7.0% in the previous year. While challenges such as geopolitical uncertainties and supply chain issues persist, domestic spending and supportive policies have contributed to economic resilience. Looking ahead, GDP growth is projected to moderate to 6.8% in fiscal 2025, influenced by factors such as fiscal consolidation, higher borrowing costs, and stricter regulations. However, potential for rural demand revival exists if normal monsoon conditions prevail and inflation eases. The retail industry in India has shown robust growth, with the overall sector expanding by 11% to reach ₹93 trillion in FY 2023-24. Organized retail grew at 16%, while e-retail surged by 20%. In the organized retail sector, food and grocery items constitute approximately one-fifth of the market value. Projections suggest the retail industry will maintain a compound annual growth rate of 10-11% between 2024 and 2028, driven by economic recovery and moderate inflation. This positive outlook, coupled with anticipated increases in consumer spending, bodes well for the retail sector’s long-term prospects.

Business Updates

Avenue Supermarts, which operates the DMart retail chain, expanded its presence by inaugurating 6 new outlets in the April-June period. The company further increased its footprint with two additional stores in July, bringing the total count to 373 as of July 13, 2024.

The company’s chief executive provided insights into DMart’s expansion and operational adjustments. He noted that the store count had grown to 371 by June 2024’s end. The executive also mentioned rising operational costs, attributing this increase to ongoing efforts to improve customer service and strategically invest in the business’s future potential.

The company reported a consolidated revenue growth of 18.4% for Q1 FY 2025, reaching Rs 14,069 crore. Noronha noted improved contributions from the General Merchandise and Apparel segments, which positively impacted the gross margin compared to the same quarter in the previous fiscal year.

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Maruti Suzuki India Q1FY25 Sees Double-Digit Profit Growth Amid Shifting Market Trends

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

Research, Research Reports, Result Updates - August 22, 2024

Neogen Chemicals Boosts Q1 FY25 Profit to INR 11.5 Cr, Lithium Sales Shine

About the Stock

Neogen Chemicals Ltd, established in 1991, is a leading manufacturer of bromine and lithium-based organic and organo-metallic compounds essential for the pharmaceutical, agricultural chemicals, and engineering sectors. Neogen produces sophisticated intermediates for pharmaceuticals, agrochemicals, flavours, and fragrances. As the largest importer of Lithium Carbonate and Lithium Hydroxide for the past three decades, Neogen has cultivated robust relationships with global leading lithium miners and processors, solidifying its position in the market.

Performance Highlights – Q1 FY25

In Q1FY25, Neogen Chemicals Ltd. demonstrated moderate growth and enhanced profitability in its consolidated financial results. The company’s revenues grew by 9%YoY to INR 180 Cr, while EBITDA rose by 10% to INR 30.8 Cr. Neogen maintained a stable EBITDA margin, which increased slightly to 17.1%, representing a 10-basis points improvement compared to the previous year. Notably, the company’s Profit After Tax (PAT) for the quarter reached INR 11.5 Cr, marking a significant 18% increase year-over-year.

Revenue break-up

Revenue break-up (in Cr)	Q1 FY24	Q1 FY25	YoY (%)
Organic Chemicals	121	142	17%
Inorganic Chemicals	44	38	-14%

Organic Chemicals	Inorganic Chemicals
Bromine prices declined on Y-o-Y basis. Adjusting for this fall in RM prices, the Organic revenue would have been higher by Rs. 14 crores in Q1 FY25.	Income from inorganic chemicals would have been higher by Rs. 27 crores, but for the steep decline in the prices of Lithium raw material during the period under review.

Strong revenue performance despite challenging operating scenario. Volume-led growth driven by higher contribution from non-agchem linked products amid weak pricings. A global recovery in agricultural chemicals is anticipated in the latter half of this fiscal year. Strong BuLi Chem performance driven by recovering demand for key application-specific products. Neogen Ionics enhanced revenue with Lithium Salt sales and limited Electrolyte testing. EBITDA improved despite increased employee costs and other expenses related to capacity expansion in Neogen Ionics. Operational efficiencies helped maintain margins at 17.1%, counteracting ongoing pricing pressures across key products. Net profit performance demonstrates robust operational trends, with an additional boost from reduced tax rates. However, as capital expenditure in Battery Chemicals accelerates, both depreciation and interest expenses are anticipated to increase.

Neogen Ionics (Battery Chemicals)

 Neogen Ionics secured financing for most of its capital expenditure, primarily through long-term project finance debt with a 10-year tenure and a grace period. Construction has begun on the new facility, with commercial production expected to start in FY26, aligning with India’s growing battery manufacturing capabilities.
 The company is negotiating long- term electrolyte force agreements with battery manufacturers.Two major producers are set to start operations this year, with several more expected to launch within the next one to two years.
 A dedicated team of 70-80 employees is focused on implementing the battery chemicals project while also managing ongoing production in the first phase.
 The US Inflation Reduction Act and Foreign Countries of Concern policies are expected to accelerate industry momentum. The company has initiated discussions, signed MOUs, and established pricing agreements with international customers.
 Battery chemicals account for approximately 35% of electric vehicle battery costs; advancements in this area are expected to contribute to reducing the overall price of EVs.

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Strategic Partnerships Fuel One97’s Financial Turnaround

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Renault's Bold Move: JSW Alliance Shifts India's EV Landscape

Research, Research Reports, Result Updates - August 22, 2024

Maruti Suzuki India Q1FY25 Sees Double-Digit Profit Growth Amid Shifting Market Trends

Company Overview

Maruti Suzuki India Ltd is engaged in the production and marketing of passenger cars in India. The company, which started with the iconic Maruti 800, now offers a wide range of automobile models with several variants. Maruti Suzuki’s entry-level compact cars include the Alto 800 and Alto K10, while the Ciaz represents the luxury car segment. The company’s operations also encompass fleet management, pre-owned car sales, and auto financing. It operates a state-of-the-art research and development center in Rohtak, Haryana, and production facilities in Gurgaon and Manesar. MSIL holds a 56.2% ownership stake in Suzuki Motor Corporation, a Japanese car and motorcycle manufacturer. With over 50% of the domestic car market, Maruti Suzuki is the largest passenger car company in India. The company’s consistent dedication to innovation and customer satisfaction is evident in its diverse vehicle models, ranging from hatchbacks to UVs, vans, and light commercial vehicles.

Industry Outlook:

By 2030, India is expected to lead the world in shared mobility, creating opportunities for electric and autonomous vehicles. To reduce pollution, there is increasing emphasis on electric vehicles. The Indian government aims to have 30% of all new car sales in India be electric by 2030. The Indian passenger automobile market was valued at US$32.70 billion in 2021 and is projected to grow at a compound annual growth rate (CAGR) of more than 9% from 2022 to 2027, reaching a value of US$54.84 billion. The global EV market is anticipated to grow fivefold, from an estimated US$250 billion in 2021 to US$1,318 billion by 2028. In April 2024, a total of 23,58,041 units of passenger vehicles, two-wheelers, three-wheelers, and quadricycles were produced. In FY24, 2,84,34,742 units of passenger cars, commercial vehicles, two-wheelers, three-wheelers, and quadricycles were produced. The combined output of three-wheelers, two-wheelers, quadricycles, passenger vehicles, and commercial vehicles was 7.13 million units in the third quarter of 2023–2024.

Domestic Sales:

The company had an exceptionally busy year in FY 2023–2024. With the launch of new products, the company’s annual sales volume reached a record high of 1,793,644 units, comprising 33,763 light commercial vehicles and 1,759,881 passenger vehicles. The introduction of new models contributed to the company’s faster growth compared to competitors. While the competition grew by 8% during the same period, the company’s PV sales volume increased by 9.5% in FY 2023–2024. Additionally, the introduction of new SUVs helped the company achieve several milestones in 2018, maintaining brand excitement throughout the year. The company remains the most preferred brand, with 10 of the top 15 models in the nation.

Total Sales

Market	Number	Growth %	% Of Total Sales
Domestic	451,308	3.8%	86.5%
Exports	70,560	11.65	13.5%
Total Sales	521,868	4.8%	100%

Domestic Sales:

Segment	Number	Growth %	% Of Domestic Sales
Mini	30,816	-23.7%	6.8%
Compact	189,208	-10.3%	41.9%
Mini + Compact	220,024	-12.4%	48.8%
Mid-Size	2,169	-42.2%	0.5%
UVs	163,130	29.1%	36.1%
Vans	33,791	3.4%	7.5%
Lcv	7,946	-1.6%	1.8%
Sales to OEM	24,248	91.3%	5.4%
Domestic Sales	451,308	3.8%	100%

Q1FY25 Financials Performance:

MSIL’s Q1FY25 revenue increased by 9.8% YoY to ₹33,875cr. This growth was fueled by a 4.8% YoY increase in sales volume to 5,21,868 vehicles. Additionally, the 4.8% YoY rise in the average selling price (ASP) contributed to revenue growth. The utility vehicle (UV) segment saw the majority of growth in the domestic PV industry, with UV sales increasing by 29.1% YoY, reflecting a shift in consumer preferences. Export sales also grew, reaching 70,560 units, up 11.6% YoY, driven by rising demand from the Middle East, Africa, and Latin America. EBITDA increased to ₹4,502cr (+50.9% YoY), with the EBITDA margin growing by 360bps YoY to 13.3%, thanks to cost-cutting measures, strong operational leverage, and a decrease in commodity prices. Consequently, net profit rose by 46.9% YoY to ₹3,650cr.

Q1FY25 Financials Performance:

Particulars	Q1FY25	Q1FY24	YoY %	Q4FY24	QoQ %
Revenue	33,875	30,845	9.8	36,698	(7.7)
EBITDA	4,502	2,983	50.9	4,726	(4.7)
EBIT	3,771	2,236	68.7	3,997	(5.6)
PBT	4,689	3,190	47.0	4,998	(6.2)
TAX	1,039	705	47.4	1,120	(7.2)
PAT	3,650	2,485	46.9	3,878	(5.9)
EPS	116.1	82.3	41.1	123.3	(5.9)

Volume Increase and Sales Mix:
Total of 220,024 units were sold in the Mini + Compact car segments, representing a 12.4% YoY decline. The UV (Utility Vehicle) segment, however, showed strong growth, with sales increasing by 29.1% YoY to 163,130 units. This reflects the growing preference for SUVs in the Indian market. Sales of Vans increased by 3.4% YoY to 33,791 units, while LCV (Light Commercial Vehicle) sales slightly declined by 1.6% YoY to 7,946 units.

Key Updates:

• Maruti Suzuki India Limited sold 179,228 units in total in June 2024. The total sales for the month were 31,033 units exported, 8,277 units sold to other OEMs, and 139,918 units sold domestically.
Maruti Suzuki India Limited sold 179,228 units overall in June 2024 as opposed to 159,418 units in June
• Maruti Suzuki India: June output totalled 133,095 units, down from 137,133 units in May. YoY
Maruti Suzuki (MSIL) surpassed 2 million automobile deliveries via railways, speeding past a green milestone.
Maruti Suzuki (MSIL) surpassed 2 million automobile deliveries via railways, speeding past a green milestone.
Maruti Suzuki India Q3 Net Profit: ₹3760 crore compared to ₹2550 crore year-over-year in June 2024. Revenue 35779 crore versus 32535 crore year-over-year.
• Commencing with its maiden SUV launch in Japan, Maruti Suzuki India has started exporting 1,600 units of its ‘Made-in-India’ SUV Fronx.
When computing long-term capital gains on debt mutual funds, Maruti Suzuki India would have to increase the provision for deferred tax liability by about 28.50 billion because the indexation benefit was removed.

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Adani Group’s Q1 FY25 Results Highlight Resilience and Strategic Growth Across Sectors

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Research, Research Reports, Result Updates - August 22, 2024

Navneet Education Q1FY25: Exceptional Gains Boost Profits Amid Sector Challenges

About stock

Navneet Education Limited (NEL) is a prominent player in the Indian education sector with over 60 years of experience. The company specializes in syllabus-based content for both print and digital mediums and is a major manufacturer of stationery products, both for domestic and international markets. NEL’s portfolio includes non-curriculum books, supplementary curriculum books, and CBSE textbooks, alongside a wide array of stationery products.

Financial Performance Q1FY25

The company reported a modest revenue increase of 0.8% to INR 794 crores in Q1 FY25 compared to the previous year.EBITDA grew by 5% to INR 226 crores, resulting in an improved EBITDA margin of 28.5%. While PBT surged to INR 798 crores due to exceptional gains from the sale of a stake in K12 Techno Services, the normalized PBT margin excluding these gains also improved from 25.5% to 28.5%. Consequently, PAT skyrocketed to INR 742 crores, marking a 310.5% increase year-on-year. The exceptional items significantly inflated the PBT and PAT margins to 100.4% and 93.5%, respectively, compared to the previous quarter 27.4% and 22.9%.

Future Outlook

Navneet Education Limited is expected to continue benefiting from its strategic initiatives, with a focus on expanding product offerings in both domestic and export markets. The company aims for a 12%-15% growth in domestic revenue and 12%-14% EBIT margins in the stationery segment for FY25. The ongoing investments in R&D and infrastructure, coupled with a favorable market position, are anticipated to drive future growth.

Q1FY25 Segment wise performance

Publication stationary:
The publication business experienced a revenue decline in Q1FY25 of approximately 3% to ₹417 crores compared to ₹431 crores in the previous quarter. This contraction was attributed to curriculum reductions in certain grades by state boards, necessitating product redesign. However, absolute sales volume showed a slight increase.

Domestic stationary:
The domestic stationery business recorded a marginal revenue decline to ₹135 crores in Q1FY25 due to product repricing following a drop in raw material prices. While volume growth was observed, margins were impacted by high-cost inventory from previous quarters. Encouragingly, there are early signs of raw material price stabilization.

Export stationary:
The exports of the stationery business demonstrated growth, increasing to ₹241 crores from ₹214 crores quarter on quarter.This expansion was driven by a broader product range and tapping into diverse market segments. The company remains committed to quality, design, and customer engagement in this segment.

Market Opportunities

The textbook market, currently estimated at ₹4,000 crores, is projected to grow to ₹8,000-₹9,000 crores in the next 5-6 years due to increasing school affiliations. With the number of affiliated schools expected to rise from 26,000 to nearly 40,000, the company sees significant opportunities.

Digital Product Development
There is an emphasis on blended offerings combining physical books with digital tools. Recognizing the increasing digital usage in K12 education, especially in CBSE and ICSE schools, the company plans to develop future digital products that enhance physical book sales through integrated digital features.

Challenges and Market Dynamics
The Indiannica acquisition underperformed, and management turnover impacted growth. The company has shifted its strategy to develop Navneet-branded textbooks in Maharashtra and Gujarat, leading to a better understanding of the CBSE market. Future plans include publishing supplementary books for the CBSE curriculum.
Anticipated curriculum changes in Maharashtra and Gujarat, expected to commence next academic year, pose a challenge.However, management remains optimistic about future growth despite these headwinds.

Concall notes

During the Q1 FY25 earnings call, Navneet Education Limited reported a modest increase in overall revenue and a moderate rise in EBITDA compared to the same period last year. The company’s profit witnessed a significant surge, primarily driven by exceptional gains from the sale of its stake in K12 Techno Services. Despite these positive financial indicators, the publication segment faced a decline in revenue, attributed to the reduction of curriculum content by state boards, which impacted product redesigns. The domestic stationery segment also saw a marginal de-growth due to price adjustments following a decrease in raw material costs. However, the export stationery business showed resilience, recording healthy growth due to an expanding product portfolio and increased demand in international markets.

Navneet is strategically focusing on developing new educational content formats and digital learning tools, aiming to align its products with the evolving needs of students in a rapidly changing educational landscape. These efforts are part of the company’s broader strategy to adapt to market demands and maintain its leadership in the education sector.
However, the company is facing some challenges, notably the underperformance of its Indiannica acquisition, which has not met expectations. Additionally, anticipated curriculum changes pose a potential risk to the publication segment’s revenue. Despite these hurdles, the management remains optimistic about the future, citing the high growth potential in the textbook market and the positive impact of ongoing strategic initiatives. The leadership expressed confidence in navigating these challenges and achieving sustainable growth in the upcoming quarters.

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Adani Group’s Q1 FY25 Results Highlight Resilience and Strategic Growth Across Sectors

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Sensex Jumps 450 Points Amid Renewed US-China Trade Hopes and Strong Sectoral Buying

Research, Research Reports, Result Updates - August 22, 2024

Coforge's Strategic Acquisition of Cigniti to Fuel $2B Revenue Ambition

Coforge’s Strategic Acquisition of Cigniti to Fuel $2B Revenue Ambition

About the stock

Coforge Ltd. operates as an IT solutions provider with a focus on digital transformation and technology services. Its business model revolves around offering consulting, implementation, and support services in areas such as cloud computing, cybersecurity, analytics, and enterprise applications. The company provides solutions in product engineering, digital solutions, data analytics, artificial intelligence/machine learning (AI/ML), cloud, business process re-engineering, digital process automation, and Low Code/No Code platforms.

Coforge Q1 revenue up 8.1% YoY

In Q1FY25, Coforge Ltd. reported consolidated financial results that showed modest growth and improved profitability. The company’s revenues increased by 1.8% QoQ, reaching INR 24,008 million. Coforge’s EBITDA margin saw a substantial improvement, rising to 17.02%, which represents a 14.02% increase YoY. The company reported a PAT of INR 1,332 million for Q1. However, when adjusted, the consolidated PAT reached INR 2,285 million, marking a substantial 28.2% growth compared to the same period in the previous year.

Robust Order Book

Coforge Ltd. demonstrated strong business momentum in Q1FY25, securing a robust total order intake of $314 million, marking the tenth consecutive quarter of over $300 million in new orders. The company signed two large deals and added 10 new logos to its client portfolio. Coforge’s order book for the upcoming 12 months grew to $1,070 million, representing a substantial 19.3% increase compared to the same period last year. The company maintained one of the lowest IT attrition rates in the industry at 11.4% (LTM). The company’s global workforce expanded to 26,612 employees as of June 30, 2024, reflecting a net addition of 1,886 people and a 7.6% sequential increase.

Acquisition of Cigniti Technologies

In May 2024, Coforge entered into a definitive Share Purchase Agreement to acquire a 54% stake in Cigniti Technologies Ltd. for approximately Rs. 2000 crore. This strategic acquisition is expected to support Coforge’s growth ambitions, potentially helping it reach $2 billion in revenue by FY27 and establish three new major verticals: Retail, Technology, and Healthcare. The Cigniti acquisition is set to significantly boost Coforge’s presence in North America, with the company projecting a nearly 33% increase in revenue.
Coforge formed an alliance with Fiorano in May 24, launching a new offering that provides ISO 20022 Compliance as a Service. In March 2024, it also announced its multi-year strategic partnership with Carnival UK, for precision quality engineering & testing.

Strategic Partnerships

Coforge has recently formed two notable strategic partnerships. In May 2024, it joined forces with Fiorano to offer ISO 20022 Compliance as a Service. Earlier, in March 2024, the company entered into a multi-year agreement with Carnival UK, focusing on delivering precision quality engineering and testing services.

Consolidated Income Statement – Q1FY25 (INR Mn)

Particulars	Q1 FY25	Q4 FY24	QoQ%	Q1FY24	YoY%
Gross Revenues	24008	23585	1.8%	22210	8.1%
Gross Profit	7911	8034	-1.5%	6808	16.2%
Selling / General and Administration	3625	3561	1.8%	3264	11.1%
Adj. EBITDA	4286	4473	-4.2%	3545	20.9%
Cost of ESOPS	199	22	-10.5%	216	-8.0%
EBITDA	4087	4251	-3.8%	3316	23.3%
Depreciation and Amortization	815	846	-3.7%	757	7.7%
Other Income (net)	-272	-452	-39.8%	-152	78.9%
PBT (Excl. Transaction related expenses)	3000	2953	1.6%	2407	24.7%
Transaction Related expenses	953	96	889.0%	0
$1 Bn Milestone celebration cost		0		165	-100.0%
Profit Before Tax	2047	2856	-28.3%	2242	-8.7%
Provision for Tax	654	564	16.0%	485	34.8%
Minority Interest	61	55	10.5%	104	-41.3%
Profit After Tax	1332	2237	-40.5%	1653	-19.4%
Adj. Profit After Tax*	2285	2334	-2.1%	1782	28.2%
Basic EPS	20.9	36.2	-42.2%	27	-22.6%
Adj Basic EPS	35.9	38.1	-5.9%	29.2	23.1%

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Adani Group’s Q1 FY25 Results Highlight Resilience and Strategic Growth Across Sectors

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Adani Group Stocks Rally on SEBI Relief, Investors Watch Pending 22 Orders for Clarity

Research, Research Reports, Result Updates - August 21, 2024

Robust Q1FY25: Adani Wilmar's Revenue Climbs to INR 14,169 Crores

Robust Q1FY25: Adani Wilmar’s Revenue Climbs to INR 14,169 Crores

About Stock:

Adani Wilmar is recognized as one of the largest, newest, and fastest-growing companies in India’s FMCG industry. The company holds a 19% market share in branded consumer packaging and over 12% in edible oil consumption in India. With a presence in 2.1 million retail locations, the corporation has successfully expanded its reach to 121 million households nationwide.
In recent years, Adani Wilmar has been positioning itself as a comprehensive food and personal care company by expanding its product line and entering new markets. The company’s strategy focuses on expanding into new markets, enhancing its current product lines, and exploring international opportunities. Adani Wilmar’s extensive distribution network, strong brand identity, and commitment to innovation place it in a favorable position to capitalize on the growing demand for high-quality FMCG products in India and beyond.

Industry Overview:

Prominent consumer products companies are increasingly focusing on meeting the growing demand for edible oils, juices, snacks, and ready-to-eat meals. This shift is driven by changing consumer preferences, particularly in the wake of COVID-19, which has significantly boosted the growth of the packaged food sector in India.
Between 2019 and 2023, India’s retail industry grew by 34%, rising from $890 billion to $1.2 trillion. This growth has made India the fifth-largest retail market in the world. Several factors have contributed to the rise of the packaged food sector, including the increasing popularity of quick-service casual dining, changing consumer preferences, rising urbanization, evolving lifestyles, and the expansion of e-commerce in rural areas. Additionally, the growth has been supported by modern retail spaces.

Q1FY25 Performance Analysis:

As of Q1FY25, the company reported a solid year-on-year (YoY) volume growth of 12%, driven by consistent expansion in its staple packaged foods segment. Edible oils registered a 12% YoY growth, while the Foods & FMCG sector exhibited an impressive 42% YoY increase. The Essentials Industry segment also saw double-digit growth in the Oleo and Castor businesses. However, the oil meal business had a dampening effect on overall volumes.
The company’s revenue for Q1FY25 stood at INR 14,169 crores, reflecting a 10% YoY increase. This growth aligns with the volume expansion and marks the end of the disinflationary impact that declining edible oil prices had on revenue in previous quarters. The company’s ability to achieve this growth demonstrates resilience and successful navigation through market challenges.
Q1FY25 also saw the company achieving its highest-ever EBITDA, amounting to INR 619 crores. This achievement was primarily due to the stabilization of edible oil prices, which significantly bolstered the profitability of the edible oil business. The strong EBITDA performance underscores the company’s effective cost management and strategic pricing initiatives.
The demand for branded oil and foods remained stable, supported by a consistent shift in consumer preference towards packaged staple foods. This steady demand has been crucial in sustaining the company’s growth trajectory.
The company has maintained a strategic focus on capturing market share, especially in under-indexed markets and categories. By leveraging local nuances to enhance regional engagement, the company has successfully implemented customized campaigns, specialized packaging, localized pricing strategies, and targeted schemes. This focus has allowed the company to gain a competitive edge in various segments and regions.
The company’s continuous efforts to raise transparency, strengthen ESG performance, and actively engage in significant ESG evaluations are evident in its inclusion in these assessments. The company’s proactive approach to ESG matters reflects its commitment to ethical business practices and long-term sustainability.

Segment Wise Performance:

Edible Oil:
In Q1FY25, the company’s sales in the Edible Oil category increased by 8% to INR 10,649 crores, representing a 12% year-over-year volume rise. Strong demand, particularly in South India, for mustard and sunflower oils was the primary driver of this expansion. Additionally, the company introduced a specialty mustard oil package for pickle enthusiasts and launched a premium mustard oil called “Fortune Pehli Dhaar.” Notably, the edible oil category achieved its highest-ever profits in Q1FY25, with sector earnings of INR 398 crores. The corporation maintained stable prices throughout the quarter, with minimal disruptions to the supply chain.
Food & FMCG Segment:
In Q1FY25, Adani Wilmar’s Food & FMCG segment recorded sales of INR 1,533 crores, a 40% increase from the previous year. This achievement was largely attributed to higher market share in South India, increased presence in retail outlets, and an increase in repeat business. For the past 11 quarters, the branded foods category has experienced steady growth, with sales rising at an annual rate of nearly 30%. The market for wheat flour continued to outpace the overall sector, and the rice industry also made significant progress, supported by effective marketing campaigns. Furthermore, Adani Wilmar used trade schemes and strategic bundling to increase penetration, driving additional expansion in the edible oil industry.

Segment-wise Profitability:

Particulars	Q1FY25 (INR in Cr.)	Q1FY24 (INR in Cr.)
Segment EBITDA:
Edible Oil	604	118
Food & FMCG	31	42
Industry Essentials	48	26
Unallocable	(14)	(0)
Total Standalone EBITDA (Incl. other income)	669	187
(-) Finance Cost	148	153
(-) Depreciation	86	83
PBT before Exceptional Items	434	(49)
(-) Exceptional Items	0	0
PBT after Exceptional Items	434	(49)
(-) Tax	111	(11)
Standalone PAT	324	(38)
(+) Share of Subsidiary Profit	(12)	(21)
(+) Share of JV Profit	2	(19)
(-) Consolidation Adjustments	0	1
Consolidated PAT	313	(78)

Key Ratios:

Net Profit Margin (%)	0.33 %
ROE (%)	1.77 %
ROCE (%)	11.33 %
Return on Assets (%)	0.74 %
Asset Turnover Ratio (%)	2.51 %
Current Ratio	1.22
Quick Ratio	0.53
Inventory Turnover Ratio	5.82
EV/EBITDA	28.93

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Strategic Partnerships Fuel One97’s Financial Turnaround

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Gautam Adani’s Freight Forwarding Foray: Challenging Global Logistics Giants

Research, Research Reports, Result Updates - August 21, 2024

Adani Group's Q1 FY25 Results Highlight Resilience and Strategic Growth Across Sectors

Adani Group’s Q1 FY25 Results Highlight Resilience and Strategic Growth Across Sectors

The firm experienced an uptick in its earnings by 13% year-over-year to Rs. 26,067 crores, the significant revenue increase was largely attributed to exceptional operational results in both the ANIL Ecosystem and the company’s airport operations. EBITDA showed significant improvement, increasing by 48% to Rs. 4,300 crores.

Profitability metrics advanced significantly, with profit before tax more than doubling, rising by 107% to Rs. 2,236 crores. Profit after tax attributable to owners exhibited even stronger growth, surging by 116% to Rs. 1,458 crores. Cash accruals demonstrated robust expansion, growing by 81% to Rs. 2,704 crores.

Operational highlights showcased impressive developments across various business segments. Solar module exports skyrocketed by 109% to 808 MW, while ANIL WTG achieved a milestone by crossing its 200th blade production during the quarter. Furthermore, ANIL WTG received the final type certificate for its 3 MW wind turbine, marking a significant technological advancement.

The Airports segment demonstrated strong performance, with passenger movement crossing 90 million for the first time on a trailing twelve-month basis, indicating a robust recovery in air travel demand. The company’s incubating businesses, particularly the ANIL Ecosystem and Airports, also recorded impressive performance. The Airports segment experienced a 27% rise in total income, growing from ₹1,711 crore to ₹2,177 crore.

Adani Group maintained a strong growth trajectory across its diverse portfolio, showcasing resilience and adaptability in various sectors. The substantial improvements in revenue, EBITDA, and profitability metrics position the company well for sustained performance in FY25, despite potential market challenges.

The ANIL Ecosystem saw its total income surge by 1.4 times to ₹4,519 crore in Q1 FY25, with EBITDA multiplying by 3.6 times to ₹1,642 crore and PBT rising by 4.1 times to ₹1,425 crore. Despite the PBT remaining negative, it improved to a loss of ₹89 crore. The Airports segment saw a 7% increase in passenger movement to 22.8 million and a 7% rise in ATMs to 152.1 thousand. The Roads segment reported an 8.1-fold increase in construction volume, while Mining Services saw a 47% increase in dispatch volume. However, IRM segment volumes fell by 13%. Additionally, 41 WTG sets were produced in Q1 FY25. These developments across various segments underscore Adani Group’s strong growth trajectory, with a focus on renewable energy and strategic expansion in key sectors.

Consolidated Financial Highlights: (Figures in Rs. Crs)

Particulars	Q1 FY24	Q1 FY25	% change Y-o-Y	FY24
Total Income	23,016	26,067	13%	98,282
EBIDTA	2,897	4,300	48%	13,237
Profit Before Tax	1,080	2,236	107%	5,640
Profit After Tax	675	1,458	116%	3,240
Cash Accruals	1,493	2,704	81%	7,376

Operational Highlights:

Volume	Q1 FY24	Q1 FY25	% change Y-o-Y	FY24
Ecosystem
Module Sales (MW)	614	1379	125%	2679
WTG (Sets)	–	41	–	54
Airports
Pax movement (Mn)	21.3	22.8	7%	88.6
ATMs (‘000)	141.6	152.1	7%	593.8
Cargo (Lacs MT)	2.3	2.7	17%	8.1
Roads
Construction (L-KM)	79.8	730.0	8.1x	514.8
Mining Services
Dispatch (MMT)	6.4	9.3	47%	30.9
Volume (MMT)	17.8	15.4	(13%)	82.1

Industry Overview:

India is endowed with a diverse range of minerals, including fuels, metallic, non-metallic, atomic, minor, and rare minerals, positioning it as a strong player on the global stage. The capacity to produce, process, utilize, and recycle these resources will be critical in the future. Despite the global shift toward renewable energy, coal still represents 50% of India’s energy mix. The country is steadily progressing toward an annual coal production of 1 billion tonnes, with an ambitious target of 1.5 billion tonnes by FY30 to meet rising energy demands. Although coal demand is expected to grow, initiatives like coal gasification are being pursued to meet energy requirements while also addressing sustainability objectives. Beyond coal, India’s mineral sector, including metals and rare earth elements, is on the brink of significant growth. As the world’s fifth-largest economy, with a GDP of approximately USD 3.6 trillion and a growth rate of 7.3%, India has a strong demand for copper, aluminum, steel, and rare earth minerals, which are vital for industries such as construction, electronics, and renewable energy. Over the last 20 years, the consumption of refined copper in India has tripled, driven by these expanding sectors. ANZ Research forecasts a strong decade for Southeast Asia and India, predicting substantial growth in global copper demand. CRU, a global market intelligence provider for mines and metals, projects India’s demand for refined copper to rise to 1,200 KT by 2028, up from 819 KT in 2023. The global iron ore market is expected to grow from 2.5 billion metric tonnes in 2023 to 2.7 billion metric tonnes by 2026, with a CAGR of 3%. India’s strong steel industry drives its iron ore consumption, creating significant opportunities for Mine Developers and Operators (MDOs) within the country. Additionally, India’s aluminum industry, supported by substantial bauxite reserves, particularly in Odisha, Chhattisgarh, and Jharkhand, is showing remarkable growth. The industry’s shift toward value-added products like extrusions and rolled products has increased its competitiveness and integration into global supply chains. By embracing modernization and technology, these industries have improved productivity and efficiency while reducing energy consumption and emissions. Government initiatives like “Make in India” and “Atmanirbhar Bharat” are further boosting the growth of the aluminum, copper, rare mineral, and other metal industries by promoting domestic manufacturing and innovation. As India advances towards sustainable practices and digitalization, these sectors are poised for a bright future, driven by increasing urbanization and industrialization, which offer significant opportunities for growth and investment.

Business Updates

Scheme of Arrangement for Food FMCG business:
Adani Enterprises, serving as an incubator, remains committed to fostering new businesses and generating sustainable, long-term value for its stakeholders. Over the years, we have established a strong track record of successfully nurturing ventures across various sectors, many of which have become leading players in their respective industries, delivering significant returns to shareholders. The food FMCG segment has now become self-sustaining, showing strong performance, and is well-positioned for further growth under AWL. This arrangement not only aims to unlock value for AEL’s shareholders but also allows the company to concentrate on a focused strategy for sustainable growth within its incubating businesses.

Adani New Industries Ecosystem has made significant strides in solar and wind turbine manufacturing. In solar manufacturing, module sales rose by 125% year-on-year, reaching 1,379 MW, with exports up by 109% and domestic sales growing by 151%. The company saw an improvement in EBITDA margins, fueled by cost reductions from the TopCon cell line, which became fully operational on March 31, 2024, along with decreased raw material expenses. In wind turbine manufacturing, Adani submitted an RLMM listing application for its 5.2 MW prototype 2, which utilizes ANIL blades. A key milestone was reached with the production of the 200th blade during this quarter. AdaniConnex Pvt Ltd (ACX), focused on data centers, also reported progress. The Noida Data Center is 89% complete in terms of construction for its 50 MW core and shell plus 10 MW MEP. Construction progress on the data centers varies by location. In Hyderabad, the initial stage is nearing completion, with 94% of work done on facilities that will offer 9.6 MW of capacity. Meanwhile, the Pune project’s first phase, also designed for 9.6 MW, shows different levels of advancement across its components, with completion rates at 20% and 38% respectively.

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Strategic Partnerships Fuel One97’s Financial Turnaround

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Zomato Q3FY25: Strong GOV Growth Amid Profitability Pressures

Research, Research Reports, Result Updates - August 21, 2024

Zomato's Q1FY25: 253 Crore Profit Surge, 4,206 Crore Revenue, Driven by Strong Vertical Performance

Zomato’s Q1FY25: 253 Crore Profit Surge, 4,206 Crore Revenue, Driven by Strong Vertical Performance

Company Overview

Zomato’s technological platform, introduced in 2010, serves the needs of customers, restaurant partners, and delivery partners by connecting them. When dining out, customers use the Zomato platform to find restaurants, order meal deliveries, reserve tables, write and read reviews, and upload and view images. Additionally, Zomato offers its restaurant partners industry-specific marketing tools that help them attract and retain customers to expand their businesses, while providing a reliable and efficient last-mile delivery service. Zomato also runs Hyper pure, a one-stop shop that provides restaurant partners with premium food and kitchenware.

Industry Overview:

The food delivery industry in India has grown rapidly over the last ten years due to a mix of factors, including rising internet usage, an expanding middle class, and shifting consumer habits.
Market Value: The Indian meal delivery market was estimated to be worth $5 billion in 2023 and is projected to expand at a compound annual growth rate (CAGR) of 12–15% in the coming years.
Drivers of Growth: Urbanization, rising disposable income, the spread of cell phones, and the convenience provided by meal delivery services are some of the main drivers propelling this expansion.

Challenges:

Profitability: Food delivery companies continue to struggle with profitability due to high customer acquisition costs, discounts, and delivery expenditures, despite their rapid expansion.
Competition: Food delivery businesses must exercise caution with respect to labor laws, food safety standards, and data privacy issues.

Future Outlook Expansion into Tier II and III Cities:

As urban markets reach saturation, businesses are branching out into smaller cities and towns, presenting new growth opportunities
. Service Diversification: Some platforms are extending their services beyond just meal delivery.
Technological Advancements: The application of AI, machine learning, and data analytics is anticipated to boost operational efficiency, optimize delivery routes, and improve customer experience. Considering all factors, the Indian meal delivery market is expected to grow significantly due to changing consumer tastes, technological breakthroughs, and the strategic expansion of major players. However, profitability and competition remain significant challenges to long-term success.

Q1FY25 Business Performance:

According to Zomato’s Q1 FY25 results, all major business segments performed exceptionally well. The company’s reported total net profit of ₹253 crore marks a considerable increase compared to ₹2 crore in the same quarter last year. This represents a 44.5% increase over the previous quarter. Operating income was ₹4,206 crore, up 74% year over year. Outstanding progress across Zomato’s various business verticals drove this growth: Businesses are growing and becoming more profitable, which is driving their scaling well
Gross Order Value (GOV): GOV growth accelerated to 53% YoY (14% QoQ) to INR 15,455 crore. Food Delivery: The segment’s gross order value (GOV) increased by 27% year over year, with revenue increasing by over 10% on a quarterly basis to ₹2,256 crore.
Quick Commerce (Blinkit): This category grew impressively, with sales reaching ₹942 crore in Q4 and GOV increasing by 130% year over year.
Going-Out: This relatively new area brought in ₹95 crore in revenue for the quarter, with a 106% year-over-year growth in GOV.
Hyperpure (B2B Supplies): Revenue increased to ₹1,216 crore, reflecting a 27% quarter-over-quarter growth.

Adjusted Revenue INR CR

Particulars	Q1FY24	Q2FY24	Q3F24	Q4FY24	Q1FY25	Q-o-Q Change
Food Delivery	1,742	1,938	2,064	2,050	2,256	10%
Quick Commerce	384	505	644	769	942	22%
Going Out	42	49	73	93	95	2%
B2B supplies Hyper pure	617	745	859	951	1,212	27%
Others	1	3	8	10	15	50%
ADJ .Revenue	2,786	3,240	3,646	3,873	4,520	17%
YOY %	54%	54%	54%	61%	62%	–

Adjusted EBITDA INR CR

Particulars	Q1FY24	Q2FY24	Q3FY24	Q4FY24	Q1FY25	Q-o-Q %
Food Delivery	181	204	252	275	313	38%
Quick Commerce	-133	-125	-89	-37	-3	34%
Going Out	3	1	1	-11	10	21%
B2B supplies Hyper pure	-35	-34	-34	-23	-22	1%
Others	-4	-5	-5	-10	1	11%
Adj.EBITDA	12	41	125	194	299	105%

Gross Order Value ( B2C Business)

Particulars	Q1FY24	Q2FY24	Q3FY24	Q4FY24	Q1FY25	Q-o-Q %
Food Delivery	7,318	7,980	8,486	8,439	9,264	10%
Quick Commerce	2,140	2,760	3,542	4,027	4,923	22%
Going Out	616	682	858	1,069	1,268	19%
GOV B2C	10,070	11,422	12,886	13,536	15,455	14%
YoY % Food Delivery	14%	20%	27%	28%	27%	–
YoY % Quick Commerce	–	–	103%	97%	130%	–
YoY % Going Out	61%	129%	154%	207%	106%	–
YoY % B2C Business	48%	47%	47%	51%	53%	–

Additionally, the company’s adjusted EBITDA increased to ₹287 crore from ₹299 crore in the prior quarter, primarily due to margin expansion in every business unit. Zomato’s robust market position has been strengthened by these outcomes, as evidenced by its market cap surpassing $25 billion during the quarter. The contribution margin from food delivery witnessed some contraction in Q1FY25, although the adjusted EBITDA margin saw improvement. The contribution margin decreased marginally on a QoQ basis (from 7.5% to 7.3%), and small fluctuations are expected to persist due to seasonality and other variables. Nonetheless, the company remains on course to reach its objective of a 4-5% adjusted EBITDA margin (as of Q1FY25, it stands at 3.4%).

Q1FY25

Particulars	Q1FY25	Q4FY24	Q1FY24	YoY%	QoQ%
Total Revenue	4,206	4,206	2,416	74%	18.08
Operating Income	177	177	-48	-469%	-3%
Operating Income	236	235	181	–	–
PBT	239	161	-15	-1693%	48.57%
Tax	-6%	-9%	113%	283	-1191
PAT	253	175	2	12550%	44.57%
EPS	0.29	0.2	0	–	45%

Highlights of the Business with New Annual Initiatives:

Zomato Everyday: Offers reasonably priced home-cooked meals on a cycle. The service is still in its early stages and is currently being tested in a few select locations in Mumbai, Bengaluru, and Delhi NCR. Zomato Legends: Allows users to order famous dishes from legendary restaurants. Currently available in eight Indian cities, with eighty renowned restaurants already on board. Meals Served on Trains: Customers can get restaurant-quality food delivered to their trains through a partnership with IRCTC. Live streaming is available across more than 80 train stations in India. Blink it: Expanded the range of products on its platform in FY24 to meet customers’ needs in both new and existing product categories, such as games and toys, flowers and plants, printing, sports, home renovation, luggage, and fashion jewellery. In FY24, the going-out GOV increased by 136% YoY to INR 3,225 crore. Topline development was solid: Balanced income expanded by 56% YoY, and B2C GOV by 48% YoY. Bengaluru had Zomato’s biggest nourishment conveyance arrange in FY24, with a single arrange totalling INR 32,828. Order frequency and transacting client growth were the main drivers of order volume growth. Both the delivery partner network and restaurant partner base saw significant growth. The shop network experienced significant growth in FY24, leading to a 28% YoY increase in warehousing capacity, reaching 4.8 million sqft.

Financial Performance

Zomato Ltd. (Zomato) revealed sales of Rs 4,206 Cr in Q1FY25, surpassing projections and rising 18% on a quarter-over-quarter (in rupee terms). 1. Revenue: Zomato recorded ₹4,206 crore in total revenue from operations, a 74% increase from the previous year. Comparing this to ₹2,416 crore in Q1 FY24, there was a noticeable increase.2. Net Profit: From ₹2 crore in Q1 FY24 to ₹253 crore, the company’s consolidated net profit experienced a sharp increase. This was a consecutive rise of 44.5% from ₹175 crore in Q4 of FY24. 3. Expenses: In Q1 FY25, total expenses came to ₹4,203 crore, compared to ₹2,612 crore in Q1 FY24 and ₹3,636 crore in the previous quarter. The expenditures related to delivery, procurement, and employee benefits were the main causes of the increase in expenses. Net Arrange Esteem (GOV): Zomato’s GOV expanded by 53% year over year to ₹15,455 crore over all of its B2C operations. The GOV for the food delivery sector went up from ₹8,439 crore to ₹9,264 crore in the previous quarter. Positively, the B2B vertical experienced strong QoQ growth of 19%, and the management is still quite optimistic about this sector.

Concall Highlights:

Financials Management:

Growth in Q1FY25: Zomato recorded a year-over-year (YoY) increase in Gross Order Value (GOV) of 27%–28%, and growth above 20% is anticipated in the near future.

Margin: The management stated that they want to continuously invest in growth while focussing on expanding the margins over time. Contribution margins are targeted to be between 4% and 5%, although no deadlines have been established for meeting this goal.
Food Delivery Industry Perspectives:
Market Dynamics: The management saw that restaurant partners did not express any particular concerns about demand, which suggests a stable picture for the meal delivery industry.

Promotional Discounts: The absence of significant promotional discounts that had an adverse effect on margins during the quarter indicates a robust demand environment.

Order Volume Growth: With a major contribution from Zomato Gold subscribers, order volume—rather than average order value (AOV)—drives GOV growth.
Rapid Growth in Trade:
Store Ramp-Up: Zomato has already opened 113 of its planned 2,000 locations by March 2026. The management has faith in its ability to keep up service standards in order to draw clients in new areas.

Competition: Zomato’s growth is likely to bring about competition, but management is confident that they can continue to turn a profit in spite of possible market challenges.
Blink its operation:
Take Rate Dynamics: A number of variables, including product mix and food inflation, affect Blinkit’s take rate. The management emphasised that higher-take-rate products outside of the core category are now responsible for a greater share of sales.
Store Operations: Local partners oversee the majority of new locations, with an emphasis on upholding consistent and high-quality customer service. SKU Expansion: Blink it has been steadily increasing the number of SKUs, which has aided in overall growth.
Working capital and capital expenditures:
Capex Increase: The expansion of Blink it stores and improvements to Hyperpure’s warehouse capacity are the reasons for the increase in capital expenditure.
Working Capital Release: Growth in the Hyperpure business, which runs on positive working capital, was responsible for a working capital release of almost ₹175 crores.
Perspective on Strategy:

Market Share in Southern India: Over the last few years, Zomato’s market share in southern India has increased dramatically and is now on par with national norms.

Emphasis on Quality: In order to stand out from rivals, particularly in emerging areas, management stressed the significance of upholding high service standards.

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Strategic Partnerships Fuel One97’s Financial Turnaround

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LTFH Q1FY24: Retail Portfolio Grows 31% YoY, Reaches ₹84,444 Cr

Research, Research Reports, Result Updates - August 20, 2024

LTFH Q1FY25: Retail Portfolio Grows 31% YoY, Reaches ₹84,444 Cr

LTFH Q1FY24: Retail Portfolio Grows 31% YoY, Reaches ₹84,444 Cr

Company Overview:

L&T Finance Ltd., formerly known as L&T Finance Holding Ltd., is a Non-Banking Financial Company (NBFC) offering a diverse range of financial products and services. In March 2024, the company underwent a name change and applied for registration as a Systemically Important Non-Deposit Accepting Core Investment Company. As a subsidiary of Larsen & Toubro, which holds a 65.86% stake, L&T Finance benefits significantly from its parent company’s technical expertise and capital support.

Q1FY25 Results Update:

L&T Finance reported a robust financial performance for Q1FY25, with a 29% year-over-year (YoY) increase in Profit After Tax (PAT) to ₹686 Cr, and a 55 basis points YoY improvement in Return on Assets (RoA) to 2.68%. The company’s retail-focused strategy continued to deliver strong results, with the retail book comprising 95% of the overall portfolio and growing 31% YoY to ₹84,444 Cr. Consolidated book growth reached 13% YoY, the highest since Q1FY20. Net Interest Margins (NIMs) and fees remained steady at 11.08%, with NIMs increasing by 125 basis points YoY to 9.31%. Credit cost stability was maintained at 2.37% YoY.

Key Ratios	Q1FY24	Q4FY24	Q1FY25
Yield	14.74%	15.53%	15.54%
Net Interest Margin	8.06%	9.14%	9.31%
Fee & Other Income	1.58%	2.11%	1.77%
NIM + Fee & Other Income	9.64%	11.25%	11.08%
Operating Expenses	3.81%	4.69%	4.45%
Pre-provision Operating Profit	5.83%	6.56%	6.63%
Credit Cost	2.33%	2.39%	2.37%
Return on Assets	2.13%	2.19%	2.68%
Debt / Equity (Closing)	3.42%	3.27%	3.41%
Debt / Equity (Average)	3.50%	3.22%	3.21%
Return on Equity	9.72%	9.53%	11.58%

L&T Finance introduced several strategic initiatives, including the beta launch of ‘Cyclops,’ an advanced credit underwriting engine, and a revamped home loan product. Additionally, the company partnered with PhonePe to expand its reach and broaden its sourcing channels. L&T Finance also achieved the ‘Great Place to Work-Certified®’ designation, underscoring its focus on employee satisfaction.

Retail Disbursement: Retail disbursements stood at ₹14,839 Cr, showing a 33% YoY increase but a slight 1% quarter-over-quarter (QoQ) decrease.
Retail Book: The retail book grew to ₹84,444 Cr, a 31% YoY increase and 6% QoQ growth.
NIMs+Fees: Consolidated NIMs+Fees were at 11.08%, improving by 144 basis points YoY but declining by 17 basis points QoQ.
PAT: Consolidated PAT reached ₹686 Cr, demonstrating strong growth of 29% YoY and 24% QoQ.
Profitability Metrics: Consolidated RoA improved to 2.68%, up 55 basis points YoY and 49 basis points QoQ, while consolidated Return on Equity (RoE) increased to 11.58%, up 186 basis points YoY and 205 basis points QoQ.

Lending Business – Business wise book split
Segment (₹ Cr)	Q1FY24	Q4FY24	Q1FY25	Y-o-Y (%)
Farmer Finance
Farm Equipment Finance	13125	13892	14204	8%
Rural Business Finance
Rural Group Loans & Micro Finance Loans	19743	24716	25887	31%
Urban Finance
Two-Wheeler Finance	9190	11205	12025	31%
Personal Loans	5995	6440	6667	11%
Home Loans	11274	14550	15690	39%
LAP	2801	3893	4272	53%
SME Finance	1779	3905	4471
Acquired Portfolio	367	1435	1229
Retail Finance	64274	80037	84444	31%
Real Estate Finance	4096	2337	2310	-44%
Infrastructure Finance	9939	3191	1963	-80%
Wholesale Finance	14035	5528	4273	-70%
Focused Business	78309	85565	88717	13%
De-focused	257	–	–	-100%
Total Book	78566	85565	88717	13%

Retail Disbursement Growth:

Overall: Retail finance disbursements totaled ₹14,839 Cr in Q1FY25, a 33% YoY increase but a 1% decrease QoQ.
Rural Business Finance: Grew by 28% YoY to ₹5,773 Cr.
Urban Finance: Showed the highest growth, increasing by 44% YoY to ₹6,043 Cr.
Farmer Finance: Increased by 8% YoY to ₹1,903 Cr, with a 24% QoQ growth.
SME Finance: Grew by 61% YoY to ₹978 Cr but saw a 19% decrease from Q4FY24.

Lending Business – Business wise disbursement split
Particulars (Rs Cr )	Q1FY24	Q4FY24	Q1FY25	Y-o-Y (%)
Farmer Finance
Farm Equipment Finance	1757	1530	1903	8%
Rural Business Finance
Rural Group Loans (JLG)	4240	5639	5659	28%
Micro Finance (JLG)	271	129	114	28%
Urban Finance
Two-wheeler Finance	1726	2502	2621	52%
Personal Loans	1162	968	1178	1%
Home Loans	1072	1823	1656	55%
LAP	227	690	588
SME Finance	607	1213	978	61%
Acquired Portfolio	130	549	141	9%
Retail Finance	11193	15044	14839	33%
Infrastructure Finance	1040	320	175	-83%
Real Estate Finance	132	3	4	-97%
Wholesale Finance	1172	323	179	-85%
Total Disbursement	12365	15366	15019	21%

Retail Book Growth:

Overall: The retail finance book grew to ₹84,444 Cr in Q1FY25, a 31% YoY increase and 6% QoQ growth.
Rural Business Finance: Grew by 31% YoY to ₹25,887 Cr, with a 5% QoQ increase.
Urban Finance: Increased by 32% YoY to ₹38,653 Cr, with a 7% QoQ growth.
Farmer Finance: Grew by 8% YoY to ₹14,204 Cr, with a 2% QoQ growth.
SME Finance: Demonstrated remarkable growth of 151% YoY to ₹4,471 Cr, with a 14% QoQ increase.

Asset Quality:

Retail Portfolio:
- Gross Stage 3 (GS3) Assets: Increased from ₹2,063 Cr in Q1FY24 to ₹2,355 Cr in Q1FY25.
- Net Stage 3 (NS3) Assets: Rose from ₹437 Cr to ₹511 Cr over the same period.
- GS3 Ratio: Improved from 3.21% to 2.79%.
- NS3 Ratio: Decreased from 0.70% to 0.62%.
- Provision Coverage Ratio (PCR): Remained stable at around 78-79%.
Consolidated Portfolio:
- GS3 Assets: Decreased from ₹3,172 Cr in Q1FY24 to ₹2,789 Cr in Q1FY25.
- NS3 Assets: Decreased from ₹907 Cr to ₹688 Cr over the same period.
- GS3 Ratio: Improved from 4.04% to 3.14%.
- NS3 Ratio: Decreased from 1.19% to 0.79%.
- PCR: Increased from 71% to 75%.

The image added is for representation purposes only

Strategic Partnerships Fuel One97’s Financial Turnaround

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