British Fashion Titan ASOS Makes Exclusive Indian Debut Through Ajio

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

Nykaa Result update Q1FY24

Nykaa Result update: Q1FY24

Company Overview:

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

Growth Potential in India: large headroom for growth

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

Business Segments:

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

Key Metrics for FY23:

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

Offline Reach:

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

Valuation:

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

Q1FY24 Results Update:

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

Conclusion:

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

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

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

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

SpiceJet Result update Q1FY24

SpiceJet Result update: Q1FY24

Company Overview:

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

Revenue breakdown and Valuation:

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

Q1FY24 Results Updates:

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

Conclusion:

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

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

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

Indian Railways Finance Corporation Result update Q1FY24

Overview:

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

Diversified Borrowing Mix :

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

Clientele:

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

Financial Performance:

Robust AUM Growth in Q1FY24:

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

Cost of Borrowing Increase during FY22-23:

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

Zero Taxation, Nil GNPA + Robust Capital Adequacy:

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

Valuation and Key Ratios:

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

Q1FY24 Results:

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

Conclusion:

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

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

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

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

Shriram Finance Business Update Q1FY24

Shriram Finance Result update Q1FY24

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

Operational Presence :

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

Market Penetration and Position:

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

Financial Performance:

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

Profitability and Efficiency:

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

Valuations:

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

Asset Quality:

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

Conclusion:

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

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

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Business, Equities, Expert Views, Markets, Research, Result Updates - August 28, 2023

Fixed Income Portion of the Portfolio Should Stabilize the Overall Returns.

Fixed Income Portion of the Portfolio Should Stabilize the Overall Returns.

Mutual funds have gained business over the last few years as a safe form of investment alternative. Mindfulness of the performance and benefits from different equity and hybrid mutual fund schemes witnessed an upsurge over time. As a regulator, SEBI took several measures to simplify the categorization of investments and the AMFI helped to disseminate the idea of mutual funds through an easy to understand advertising campaign. Mutual funds as a legal mechanism can provide debt holders with a tax arbitration, provided that assets kept for three years through mutual funds are eligible as LTCG. Nevertheless, awareness of equity schemes are much more as compared to debt investments due to various uncertainties in the financial market investors obliged to put more attention in fixed income investments.

Taboo of Fixed Deposits:

Equity investment is much more risky than debt instruments and fixed earning investments but it has been observed that people tend to invest in Fixed earning asset class. Most investors are used to investing in fixed bank deposits, in which they are aware of their interest rate or total return on investment.

Volatility in Market:

It is easy to understand. In debt mutual fund investments, investors tend to rely on the yield from the portfolio depending on the past returns, which may not be the correct index for future returns. Although, debt funds invest in securities or bonds that provide mostly fixed coupons or interest payments but securities prices fluctuate to alter the return on investment during the investor’s holding period. The bond price can fluctuate because interest rates or the credit profile of the issuer change in the economy. Bond markets can also often become illiquid, contributing to lower prices for bonds in general. Investors need to be aware that the bond fund will fetch them returns which are close to their Portfolio Rate and which are adjusted to their expenses if things do not change much during their investment horizons. However, the situation completely changes and investors may get higher or lower return than their expectations.

Liquidity concern:

In the past, the world of fixed-income investors has been astounded by a variety of credit events, resulting in large write-downs in the fund values. Though we observed many uncertainties in a financial market over the years, the size of defaults was comparatively low and does not impact much in the investing pattern of the investors and even there was no such significant effect on mutual fund schemes. However, in recent times due to the massive problem of liquidity, investors tends to invest in fixed earning instruments. Investors have expressed a great deal about their disappointment that while the return on portfolio has captured the credit risk of the investment, the return on the portfolio is not at all worthy.

Therefore, when a scheme faced major redemptions, the scheme avoided accepting new subscriptions or redemptions which would lead the customer’s investment being illiquid. Based on this experience, investors are likely to reject credit risk or high yield funds which are unfortunate because any developed market requires a market where liquidity is stable and investors can evaluate and then take part in high yield trades. This dimension needs to be closely examined by the regulator, as failure to fix problems at ground level will lead to a fragmented market with less issuers locking up all liquidity.

Investments with fixed revenue will produce strong returns at least on a periodic basis. If the economy slows and inflation is not at its height, a central banker will try to lower interest rates, increase the money in the system, and encourage banks to loan to the real economy by lowering alternative deployment rates.
In these situation, value bonds have been observed at peak and investors get the capital gains added to their portfolio return. So if equity funds do not perform well, fixed-income funds are a perfect sanctuary for any portfolio. On the contrary, if rates increase instead of decreasing due to a decreased rating or an unregulated fiscal expansion, portfolios with a fixed income may produce returns lower than portfolio produce. Nevertheless, capital is not in danger of being frozen out forever because there is no chance of illiquidity.

Synopsis:

A good investment consultant, with some common sense and some history should be able to recognize the various risks linked with debt fund schemes and properly evaluate the client’s risk profile and identify schemes of better-managed funds and avoid obvious mistakes. Although, a fixed-income portfolio contains many moving parts. A competent adviser is usually able to separate all the advantages and disadvantages. The portfolio’s fixed income portion should add stability to the overall returns and not to results in anxiety and concern.

The History of the Modern Portfolio

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Lupin Soars on USFDA Nod for Billion-Dollar Drug

Business, Equities, Markets, Research, Result Updates - October 3, 2022

Lupin ltd consolidated revenue fell by 14% YOY to Rs 3604 Cr.

In Q1FY23, Lupin ltd consolidated revenue fell by 14% YOY to Rs 3604 Cr.

Lupin limited is a multi-national pharmaceutical company based in Mumbai. The company specialises in branded and generic formulations, APIs and advanced drug delivery systems in biotechnology. It has 18 manufacturing sites and 9 R&D sites across the globe.

Lupin ltd consolidated revenue fell by 14.9% YOY to Rs 3604 Crores, in Q1FY23, due to subdued performance of its US business.EBITDA was down by 76% YOY to Rs 238 Crores. EBITDA margin falls by 1680 basis points.YOY to 6.6% due to raw martial inflation, higher employee spends and other expenses. Consequently , company reported a loss of Rs 89 Crores. As against of Rs 542 Crores profit a year ago. Company increasing market share, new product ,and scaling up of the Indian business indicate well for the company performance.

Financial highlights :

In Q1FY23, lupin ltd consolidated revenue declined by 12.3% YOY and QOQ to Rs 3.74Crores.it is mainly due to muted performance in the US business. Revenue from the US business declined by 24.2% YOY and 28.7%Quarter On Quarter to Rs 1010 Crores due to inventory writw down , shelf stock adjustments and price erosion. Company s Indian revenue stood at Rs 1492 Crores which is down by 8.85 YOY and up by 10.4% QOQ DRIVEN BY A 9.9% Quarter on quarter driven by a 9.9 % QOQ growth in domestic formulations. API revenue grew by 3.7% YOY and 15.8% QOQ to Rs 255 Crores. While revenue from growth markets rose by 27.3% YOY and 11.2% QOQ to Rs 424 Crores.

Margins impacted due to raw material inflation:

Gross margin of company contracted by 720 basis points YOY to 55.3% as the company pared down inventories and took shelf shock adjustments on select products consequently; EBITDA fell by 76% YOY to Rs 238 Crores. Company owing to further price erosion in the US business and inflation in input materials. EBITDA margin thereby shrink by 16.8% YOY to 6.4% reported a loss stood at Rs 89 Crores as against Rs 542 Crores .

Quarter highlights:

Capex stood at Rs 161 Crores against Rs 106 Cr in Q1FY22 and Rs 158 Crores in Q4FY22. R&D expense was at Rs 348 Crores against Rs 374 Crores in Q1FY22 And Rs 344 Crores in Q4FY22. Total marketed generic products stood at 167. It launched cyclosporine ophthalmic in the US in the quarter. Current pipeline includes 54 FTF, OF Which 21 exclusive FTFs are awaiting for the USFDA approval. In India business, the company has a revenue run rate of more than Rs 1000 Crores. In cardiac and anti-diabetics .GI, pain and gynae grew in double digits.

Valuation:

The EPS was Rs. -1.96, compared to Rs. 10.15 in June 2021. The ROCE and ROE were at -7.16% and -11.8%, respectively. The book value of a stock is Rs 267. The company’s asset turnover ratio was 0.73x. The scrip is trading at Rs.717, up by 5.40%. on Monday.

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

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Railway Fare Hikes and What They Mean for IRCTC, IRFC, and RVNL Stocks

Business, Editorials, Equities, Markets, Research - September 30, 2022

the-cabinet-okays-a-rs-10000-crore-futuristic-revamp-of-three-major-railway-stations

The Cabinet okays a Rs 10,000 Crore futuristic revamp of three major railway stations.

The union cabinet meeting, which is chaired by the hon. prime minister, Narendra Modi, have gave approval for the redevelopment of 3 major railway stations with a total investment of Rs 10,000 crores. Further, union minister of railways Ashwini Vaishnaw has said that the stations will be develop with a futuristic design.
1. New Delhi railway station
2. b] The railway station in Ahmadabad, as well as
3. c] Mumbai’s Chhatrapati Shivaji Maharaj Terminus [CSMT].
A railway station is an important and central place for any city. PM Shri Narendra Modi has given importance to station development in the transformation of railways by using green building techniques method with solar energy, water conservation, recycling and improved tree cover. cabinet decision gives a new direction to the station dev.,work on development of 199 station on and from these tenders have been issued for 47 railway stations. For the remaining stations, the master planning and design is in progress. Work progression is fast for 32 stations and the cabinet has sanctioned an investment of Rs 10,000 crores for 3 big stations, namely New Delhi, CSMT Mumbai and Ahmadabad.

The components of railway station design will be:

Every station will have a spacious roof plaza of [38/72/108m] with all the passengers’ amenities in one place, along with spaces for retail, cafeterias, and recreational facilities..
Both sides of the city will be connected to the station, and with the station building on both sides of the railway tracks.

Facilities like food courts, waiting lounges, playing areas for children , and places for local products, etc. will be available.

To make stations comfortable , there will be a proper illumination , way finding, signage, acoustics, lifts, escalators, and travelators.

A detailed plan have been prepare for the smooth movement of traffic with adequate parking facilities.

There will be corporations for transportation like metro, buses, etc.

Green building techniques will be use in stations redeveloping with solar energy, water conservation, and recycling and improved tree cover.

Special care will be taking to provide Divyang with friendly facilities.

This stations will be built on the concept of elegant building.

There will be segregation of arrivals and departures, clutter-free platforms, improved surfaces, and fully covered platforms.

All stations will have a CCTV installation with remote access.

development benefits:

These will be iconic station buildings. However, shifting from the earlier stance, the ministry will no longer be looking at station redevelopment on a public–private partnership [ppp] basis, the minister said. The 3 stations will be develop completely through budgetary means, he added. The projects will be tendered out through the engineering procurement and construction [EPC] mode. This comes from the ministry had earlier floated a tender for the redevelopment of Chhatrapati shivaji maharj terminus under the build-operate-transfer [BOT] MODE. A form of PPP.

The benefits of the EPC mode are that it results in the creation of 35,744 new jobs; it improves the daily experience of more than two million travellers; it also helps the local economy through investment and additional business opportunities; and it promotes transit-oriented development of cities.

The development assumes significance with respect to the monetisation plans of the railway ministry , which is the second highest contributor to the centres The Rs 6 trillion national transportation .Further, Vaishnaw said that the Delhi station will take around 3.5 years to complete as it involves complex operational changes, and the other two railway stations, Ahmadabad and CSMT Mumbai, will be ready in 2.5 years. The redevelopment of the stations is to be complete in a time span of approximately 2–3.5 years.

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Kalpataru Secures ₹708 Crore from Anchor Investors!

Business, Editorials, Equities, Markets, Real Estate, Research - September 27, 2022

DLF Ltd posted a consolidated revenue of Rs 1516 Crores.

DLF Ltd posted a consolidated revenue of Rs 1516 Crores.

DLF Ltd’s consolidated revenue in the first quarter of the fiscal year was Rs 1516 crores, a 22% increase year on year. Gross margins continue to operate in the 50% plus range. The Q1 23 margin stood at 53%. EBITDA stood at Rs. 488 crores. There is a drop in this quarter due to the scaling up phase and investing in the growth of the company. The increase in staff costs is driven by organisation scale up, and other expenses are driven by business scale up costs of marketing and brokerage Reflecting a 39% increase year on year. This was largely driven by a significant reduction in the financing costs, along with growth in the JV profits.

Demand continues to exhibit sustained momentum.

The high demand for luxury homes has been a key trend that is expected to continue. In addition, the residential business maintains its consistent performance, with new sales bookings of Rs 2040 crores, representing a 101% year-on-year increase. The Camellias company’s luxury product offering remained the preferred destination across the super luxury segment and delivered a healthy sales booking of Rs 350 crores during the quarter. The company’s new product remains to continue contributing to the sale of Rs 1532 crores during the quarter, which was approximately 75%.

DLF Cyber City Developers Limited consolidated results for Q1 Financial Year ’23.company witnessed steady performance across the portfolio. The retail business continued its growth path and delivered healthy growth. Rental income grew by 20% year-on-year, driven by a strong growth in retail revenue. Consolidated revenue of Rs. 1,260 crores as compared to Rs. 1,041 crores last year, reflecting a21% year-on-year growth. EBITDA at Rs.961 crores, reflecting a year-on-year growth of 18%, and net profit at Rs.323 crores, reflecting a year-on-year growth of 60%
.

Retail businesses continue to exhibit steady growth with an improvement in consumption trends. Organized retail is expected to gain further share with a strong preference for quality assets at established locations. Given these tailwinds, company remain committed to growing the portfolio across multiple geographies and retail presence in the next few years. Companys strong balance sheet and healthy cash flow generation, coupled with a diversified pipeline of quality offerings, provide a unique opportunity to leverage this up cycle.

VALUATIONS:

The EPS was Rs. 1.90, compared to Rs. 1.36 in June 2021. The ROCE and ROE were at 4.84% and 4.61%, respectively. The stock was trading at a P/E ratio of 54.3x. The company’s asset turnover ratio was 0.11x. The scrip is trading at Rs.395, up by 2.61% on Tuesday.

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

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Business, Editorials, Equities, Markets, Research - September 17, 2022

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

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

Astral posted consolidated revenue growth of 73.2% YoY in Q1FY23, majorly led by growth in plastic and adhesive. In the plastics segment, the company reported volume growth of 48.5% YoY, which was on par with the industry growth, indicating that Astral gained market share in the plumbing segment. The company’s gross margins fell by 717bps YoY due to a fall in PVC prices, leading to an inventory loss of Rs 25 Cr. The raw material and PVC prices are falling continuously and reached Rs 102/kg in July ’22 from Rs 120/kg in April-Jun 22. The company’s EBITDA margins fell by 433bps YoY due to a fall in its gross operating profitability. However, its reported PAT grew by 27.0% YoY at Rs. 96 Cr. as compared to sales due to a fall in operating profitability.

Volume expansion to boost growth:

Astral has reported volume growth of 10% in the piping segment, the highest among peers in the last 4 years. This reflects that Astral is gaining market share in the plumbing segment. The raw material and PVC prices have been falling continuously, which would help in improving the gross margins of the company after inventory is stabilised. Astral could deliver consolidated margins in the range of 17% to 18% in the upcoming quarters. Furthermore, Astral’s foray into valves, resins, sanitary ware, and tanks would add revenue growth in the upcoming years.

The company estimates that newly launched products and segments, including tanks, drain-pro, ball-valve, sanitary ware and faucets, and paint business, will be able to generate revenue of Rs 1,500 Cr over the next 5 years. Astral has invested Rs 1,000 crores in capex over the last five years, with the funds being used in the coming years. Therefore, the company is confident that it will be able to grow not only in its existing product portfolio but also accrue additional revenue of Rs 1,500 Cr in the next 4–5 years by leveraging its new products and categories. In April ’22, the company entered into a definitive agreement to acquire a controlling 51% stake in the operating business of Gem Paints Private Limited. ‘Gem’ paints have been manufacturing industrial and decorative coatings in South India.

Valuations:

The EPS was Rs. 4.42, compared to Rs.3.68 in June 2021. The ROCE and ROE were at 29.6% and 22.6%, respectively. The stock was trading at a P/E ratio of 94.3x. The company has an asset turnover ratio was 1.45x.The scrip is trading at Rs.2339, down by 6.65% on Friday.

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Business, Editorials, Equities, Food, Markets, Research - September 16, 2022

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

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

Volume growth aids the topline:

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

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

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

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

Valuations:

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

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