Research, Research Reports, Result Updates - August 23, 2024

Rites Limited Q1FY25 Profit Falls Amid Revenue Dip, Secures ₹1200 Cr Export Order

Company Overview

RITES is a multidisciplinary engineering and consulting firm, renowned as a Navratna and Schedule ‘A’ Central Public Sector Enterprise. It offers customized, diverse, and comprehensive solutions for all transport and infrastructure needs. The business operates in areas such as project design engineering, rolling stock export, turnkey construction, and management consulting, providing services to various industries including roads, metros, bridges, tunnels, green mobility and sustainability, airports, land ports, ropeways, infrastructure and urban planning, ports, harbours, and educational structures. Trusted by customers both domestically and abroad, RITES is essential to the growth and modernization of transportation infrastructure by offering innovative and sustainable solutions.

Products & Services: Locomotives, coaches, wagons, and train sets in narrow, meter, standard, cape, and broad gauges (including semi-high-speed train sets).Management consulting covering many sectors including railways, metros, airports and land ports, highways, ropeways, and urban planning. Services in consultancy, exports, leasing, turnkey, and EPC segments.

Industry Outlook:

The transport infrastructure environment is set to change due to growing economic demands, sustainability requirements, and technical advancements. Smart infrastructure will optimize traffic flow, enhance safety, and improve user experiences through intelligent transportation systems that leverage data analytics and artificial intelligence (AI). Increased semi-high-speed train services and related infrastructure will shorten travel times and improve connections between key urban centres. Infrastructure supporting extensive networks of charging and refuelling stations will accelerate the shift to electric and hydrogen-powered transportation, crucial for reducing the sector’s carbon footprint. Governments are prioritizing infrastructure capital expenditure due to its economic multiplier effect. The Asia-Pacific region plans significant investment in transportation infrastructure to accommodate urbanization and economic growth. Future transportation infrastructure will focus on inclusivity, sustainability, and innovation, with continued investment in next-generation transport technologies to build environmentally friendly, robust, and interconnected systems that enhance connectivity and quality of life. These developments will significantly impact global economic and social evolution.

Q1FY25 Business & Financial Performance:

RITES Ltd. reported sales of Rs 486 Cr in Q1FY25, an 11% decline YoY. This decline was primarily due to poor performance in the exports business and reduced revenue in the quality assurance segment, despite growth in other areas. EBITDA decreased by 34% to Rs 106 Cr YoY, and PAT was Rs 90 Cr, a 24% YoY decrease. EBITDA margins for the company were estimated at 21.8% in Q1FY25, up from 29.6% in Q1FY24 to 27.5%. The decrease in income was linked to lower QA, overseas consulting, and exports for the quarter. Profit decreased due to lower income without a corresponding reduction in expenses. Falling margins were a result of a changed revenue mix in exports and lower consulting profits.

Q1FY25 Financials Result: (Rs Cr)

Particulars	Q1FY25	Q4FY24	Q1FY24	% Change (QoQ)	% Change (YoY)
Sales	486	643	544	(24)	(11)
Total Revenue	486	643	544	(24)	(11)
Other Expense	22	31	50	(29)	(56)
Total Expenditure	380	467	383	(19)	(1)
EBIDTA	106	176	161	(40)	(34)
PBT	113	185	163	(39)	(31)
Tax	25%	50%	43%	(51)	(43)
PAT	90	137	119	(34)	(24)

Ratio Analysis:

Ratios	(%)
OPM%	26.3
Debt / equity	0.0
Current Ratio	1.65
ROE	19
ROCE	25.90
ROA	8.56
EBITDA MARGINS%	25.64
P/E	35.05
P/B	6.12
EV/EBITDA	17.43

Segment Performance :
RITES recorded sales of Rs 271 Cr (down 11% YoY) in consultancy, Rs 5 Cr (down 87% YoY) in exports, Rs 34 Cr (up 9% YoY) in leasing, and Rs 171 Cr (up 4% YoY) in turnkey during the quarter. Turnkey, leasing, and consulting all had EBITDA margins of 1.2%, 38%, and 40%, respectively. A pickup in the exports segment is anticipated in H2FY25, with the commencement of supply of locos/coaches to Bangladesh and Mozambique.

Healthy Order Book Secured

In Q1FY25, the company received orders worth Rs 1300 Cr—more than one order per day for the quarter. With a robust order book totalling Rs 6,355 Cr, the company can project its revenue for the next two years. Thirty-nine percent of the order book consists of high-margin consulting services. Steady expansion in the domestic and international consulting sectors is anticipated, and additional capital expenditure in the Railways budget for 2024–2025 will further spur the company’s growth. The company also holds export orders worth Rs 1200 Cr, with an expected increase in export revenue in H2FY25.

Concall Highlights:

• As of Q1FY25, the orderbook is valued at Rs 6,355Cr: The division of the order book is as follows:39 percent came from consulting (Rs 2,492 Cr), 37 percent came from turnkey (Rs 2,351 Cr), 19 percent came from exports (Rs 1202 Cr), 3 percent came from leasing (Rs 190 Cr), and 2 percent came from the REMCL segment (Rs 120 Cr). 61% of the projects in the order book are awarded through competitive bidding, with 39% awarded by nomination. The company secured projects totalling Rs 1301 cr in Q1FY25.
• Segment of consulting: In Q1FY25, projects totalling Rs 293 Cr were secured. The sector with the largest revenue and profit margins continued to be consulting, notwithstanding the segment’s depressed margins. Revenue from consulting decreased by 10% in the quarter .At least 40% of the orderbook from the consulting division is expected to remain with the company. Section is dealing with rigid competitiveness than in the past because most new orders are being placed through competitive bidding as opposed to nominations. While Due to a competitive bidding process for newly secured orders, the quarter’s QA business was negatively impacted, and margins decreased.

* Turnkey and Leasing: In Q1FY25, new Turnkey and Leasing projects totalling Rs 54 Cr and Rs 48 Cr were obtained. The business Expect the Turnkey segment’s margin to be between two and three percent.
• Export: The company currently has two export orders: one for the delivery of 200 locomotives to Bangladesh Railways and another for the delivery of 10 locomotives with CFM Mozambique. The two projects have an order value of Rs 1200 Cr. It is anticipated that export revenue will increase in H2FY25. The corporation has put in bids in new regions in an effort to get more export orders. For Zimbabwean orders While Zimbabwean officials are trying to secure finance from Asian sources, the company hopes to receive limited orders.
• REMC business: Due to one-time increased expenses, the company’s revenue in Q1FY25 was Rs 35 Cr, down 18% YoY. revenue from consulting for the RTC procurement in Q1 of FY24. Energy management operations kept growing.
• Capex: For FY25, the company plans to spend between Rs100 and Rs140 Cr. It is a low-investment company.

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

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HUDCO Q3FY25 Results Update: Robust Performance Drives Strong Growth

Research, Research Reports, Result Updates - August 23, 2024

South Indian Bank's Q1FY25: Steady Growth Amid Slight NIM Decline

South Indian Bank’s Q1FY25: Steady Growth Amid Slight NIM Decline

About the Stock:

South Indian Bank which began in 1929 has headquartered in Thrissur, Kerala, is a private sector bank in India. The bank has a significant presence in South India, especially in Kerala, but it also operates branches across the country. Known for its customer-centric approach, South Indian Bank emphasizes digital banking solutions, aiming to cater to both urban and rural populations. Despite challenges in the competitive banking sector, the bank continues to focus on growth through innovation and customer service excellence.

Q1FY25 Performance Analysis:

The total business of the company witnessed a significant growth of 10%, increasing from INR 1,69,601 crore in Q1FY24 to INR 1,86,112 crore in Q1FY25. This growth reflects the company’s successful expansion strategies and increased market penetration over the year.

Gross advances in Q1FY25 increased by 11%, reaching INR 82,580 crore, compared to Q1FY24 which is INR 74,102 crore. This rise indicates enhanced lending activity and a positive response from the credit market, showcasing the institution’s ability to deploy funds effectively.

Retail deposits saw an 8% increase, rising from INR 92,043 crore in Q1FY24 to INR 99,745 crore in Q1FY25. This indicates growing consumer trust and an expanding depositor base, which is critical for maintaining liquidity and funding future growth.

The CASA ratio slightly increased by 7%, from INR 31,166 crore (32.64%) in Q1FY24 to INR 33,195 crore (32.06%) in Q1FY25. Although the CASA ratio grew, the percentage of total deposits in CASA marginally decreased, suggesting a shift towards term deposits.

There was a remarkable 51% increase in disbursements, from INR 22,108 crore in Q1FY24 to INR 33,482 crore in Q1FY25. This substantial growth highlights the institution’s aggressive lending practices and strong demand for credit in the market. Net Interest Income (NII) has seen steady growth, reaching INR 866 crore in Q1FY25, while the Profit after Tax (PAT) was INR 294 crore, indicating consistent profitability.

Profit & Loss Statement Overview:

Particulars	Q1FY25 (INR in Cr.)	Q4FY24 (INR in Cr.)	QoQ (%)
Net Interest Income	866	875	-1%
Non-Interest Income	422	346	22%
Total Income	1,288	1,221	5%
Operating Expenses	780	787	-1%
Operating Profit	508	434	17%
Provisions & Contingencies	113	41	176%
Profit Before Tax	395	393	1%
Provision for Tax	101	105	-4%
Profit After Tax	294	288	2%

The Net Interest Margin slightly decreased by 8 basis points, from 3.34% in Q1FY24 to 3.26% in Q1FY25. This decline could be due to rising interest costs or competitive pressures in the lending market. CRAR showed a solid improvement, increasing by 162 basis points to reach 18.11% in Q1FY25, compared to 16.49% in Q1FY24. This showcases the company’s ability to absorb losses and ensure a Financial Stability.

Gross NPA Movement:

	Q1FY24	Q2FY24	Q3FY24	Q4FY24	Q1FY25
Opening	3,708	3,804	3,714	3,682	3,620
Additions	487	315	306	289	346
Deductions	391	405	337	351	246
Closing	3,804	3,714	3,682	3,620	3,720

Net NPA Movement:

	Q1FY24	Q2FY24	Q3FY24	Q4FY24	Q1FY25
Opening	1,294	1,326	1,234	1,212	1,135
Additions	336	207	185	211	250
Deductions	304	298	207	289	232
Closing	1,326	1,234	1,212	1,135	1,153

The GNPA in Q1FY25 is 4.50% which is reduction from 5.13% in Q1FY24. Similarly, the Net Non-Performing Assets (NNPA) decreased from 1.85% to 1.44%. The good asset quality and effective recovery processes is the reason behind it. Overall, the company has demonstrated strong financial performance, marked by growth in business volume, improved asset quality, and consistent profitability. The slight dip in NIM is a point of attention, but overall, the institution appears well-positioned for continued growth.

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

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Genus Power Aims for 1.5M Smart Meters Monthly!

Research, Research Reports, Result Updates - August 23, 2024

Power Grid Corporation's Q1 FY25 Performance Reflects Resilience Amid Challenges

Power Grid Corporation’s Q1 FY25 Performance Reflects Resilience Amid Challenges

ABOUT COMPANY:

India’s interstate electricity transmission is primarily managed by Power Grid Corporation of India Limited (PGCIL), a major state-owned enterprise in the power sector.
The company’s main tasks include planning and maintaining the national grid, as well as providing telecom and advisory services. PGCIL also handles special projects assigned by the government. With its extensive network, the corporation plays a vital role in India’s energy distribution, helping to balance power supply across different parts of the nation.

FINANCIAL PERFORMANCE

Power Grid Q1FY25 Performance
Power Grid Corporation demonstrated steady financial performance in Q1 FY2025, with consolidated total income reaching ₹11,280 crore, marking a slight year-on-year growth of 0.20%. This modest increase underscores the company’s ability to maintain revenue streams in a dynamic market environment.

Profitability showed resilience, with consolidated Profit After Tax (PAT) at ₹3,724 crore, representing a 3.52% year-on-year increase. This growth in profitability, albeit modest, highlights Power Grid’s operational efficiency and cost management strategies in the face of market pressures.

Capital expenditure and asset expansion remained a key focus, with the company investing ₹4,615 crore in Q1 FY25. Assets worth ₹2,320 crore were capitalized, excluding Foreign Exchange Rate Variation (FERV). This strategic investment underlines Power Grid’s commitment to strengthening its infrastructure and expanding its operational capabilities.

The company’s asset base saw significant growth, with gross fixed assets on a consolidated basis reaching ₹2,77,213 crore as of June 30, 2024. Power Grid’s transmission network expanded to 1,77,790 Circuit Kilometers (CKM) of lines, supported by 278 substations and a transformation capacity of 5,28,761 MVA.

Operational excellence remained a hallmark, with the company maintaining an impressive average transmission system availability of 99.80% during the quarter. This high reliability underscores Power Grid’s commitment to efficient service delivery and network management.

Future growth prospects appear promising, with a substantial work portfolio exceeding ₹1,14,000 crore (excluding Capital Work in Progress). The company’s success in securing 6 Inter-State Transmission System (ISTS) projects through competitive bidding, with an estimated cost of approximately ₹24,855 crore, further bolsters its future pipeline.

Consolidated Financial Highlights: (Figures in Rs. Crs)

(Rs crores)	Q1FY24	Q4FY24	Q1FY25	QoQ (%)	YoY (%)
Total income	11,258	12,305	11,280	-8.3%	0.2%
Total expenses	6,689	7,066	6,643	-6.0%	-0.7%
Profit before tax	4,564	5,301	4,666	-12.0%	2.2%
Tax	621	958	879	-8.3%	41.6%
Profit after tax	3,597	4,166	3,724	-10.6%	3.5%
Earnings per share	4.2	4.7	4.1

Power Grid continues to play a crucial role in India’s energy transition, focusing on large-scale integration of renewable energy sources into the National Grid. This strategic positioning aligns with national energy goals and sustainable development objectives. Quarter-on-quarter performance showed some fluctuations, with consolidated revenues decreasing by 8.3% compared to the previous quarter. Expenses saw a reduction of 6% quarter-on-quarter and 0.7% year-on-year, reflecting ongoing efforts in cost optimization. The company’s earnings per share (EPS) stood at 4.1 for Q1 FY25, providing a measure of its profitability on a per-share basis. This comprehensive performance overview highlights Power Grid’s resilience in navigating market challenges while maintaining its focus on strategic growth and operational excellence.

INDUSTRY OVERVIEW:

The Indian economy maintains its position as a standout performer among major global economies, demonstrating impressive fortitude and growth momentum. Despite various challenges, India’s economic engine continues to power forward, highlighting the country’s adaptability and robust fundamentals. This sustained economic vigor underscores India’s increasing significance on the world stage and its ability to navigate complex global conditions while maintaining a strong growth trajectory. Despite global headwinds, the nation’s economic trajectory remains strong, with the IMF projecting growth rates of 3.2% for FY24 and 3.1% for FY25. The outlook for FY 2023-24 is even more promising, with growth forecasts ranging between 6.5% and 7%, underlining India’s robust economic foundation. The country’s performance in FY 2024 was particularly noteworthy, with real GDP growth hitting 8% and surpassing pre-pandemic levels by 20%.

Sustainable Development and Energy Transition: India is making significant strides in environmental sustainability and climate resilience. The country’s G-20 presidency in 2023 emphasized clean energy transitions, energy security, and the development of international energy markets. These initiatives are expected to bolster India’s position in the global sustainable energy landscape.

Power Sector: A Pillar of Growth: The power sector, encompassing generation, transmission, and distribution, remains crucial to India’s economic development. Over the past decade, the country’s energy mix has evolved significantly, with renewables now comprising over 50% of the total grid capacity. As of 2024, renewable sources account for 55.03% of the grid capacity, while non-fossil-based energy makes up 44.97%. India’s National Grid plays a pivotal role in the global electricity market, emphasizing the importance of non-fossil fuels. The renewable energy sector is poised for substantial growth between 2024 and 2030, with clean energy investments projected to reach ₹8.5 lakh crore.

Investment Landscape and Future Outlook: The power sector is increasingly attractive for foreign direct investment, particularly in green energy. The government has allocated significant funds towards green hydrogen, solar power, and renewable energy development. The National Electricity Plan 2022-32 estimates that India’s power generation industry will require a total investment of ₹33 lakh crore by 2032. Recent policy measures, including support for rooftop solar and the Pradhan Mantri Surya Shakti Yojana, further highlight the government’s commitment to renewable energy. These developments paint a picture of a dynamic and forward-looking power sector, poised to play a crucial role in India’s sustainable economic growth and energy transition.

BUISNESS UPDATES:

Telecom Business: Power Grid’s telecom sector showed strong performance in Q1FY25, marked by several key achievements. The company successfully onboarded 35 new customers during this period, reflecting its expanding market reach and customer base. Additionally, Power Grid achieved 100% backbone availability, ensuring uninterrupted service and demonstrating its commitment to reliability. The network capacity was significantly enhanced to 1.8 Tbps, positioning the company to meet growing demand and deliver high-speed telecom services. Financially, the telecom division saw an increase in income, rising from ₹191 crores in Q1FY24 to ₹219 crores in Q1FY25, indicating a growth trajectory. Power Grid’s efforts in the telecom sector have been well recognized, with letters of appreciation received from institutions such as NIT Bhopal, IIITDM Jabalpur, and the Narmada Control Authority, acknowledging the satisfactory telecom services provided.

Commercial Performance Overview: In Q1 of the 2025 fiscal year, PowerGrid’s financial performance showed notable figures. The company logged billings amounting to ₹9,262 crore, while its actual collections reached ₹8,509 crore. This translated to a collection efficiency rate of 91.87%, indicating the company’s strong ability to convert billed amounts into realized revenue during the period. The outstanding dues stood at ₹5,548 crore, a decrease from ₹7,140 crore in the same quarter of the previous year (Q1FY24). Notably, dues outstanding for more than 45 days reduced significantly from ₹4,912 crore to ₹3,295 crore, while the dues pending for less than 45 days were relatively stable. This improvement is partly attributed to the LPS (Late Payment Surcharge) Rules 2022 by the Ministry of Power, which led to the collection of ₹1,849 crore from an outstanding amount of ₹2,438 crore. Major states with outstanding dues include Tamil Nadu, Jammu & Kashmir, Telangana, and Uttar Pradesh.

Business Outlook for 2032

PowerGrid has outlined an ambitious investment plan up to 2032, with an estimated outlay of ₹2,07,500 crore. The bulk of this investment, ₹1,90,500 crore, is earmarked for the transmission business. This includes inter-state transmission projects, intra-state ventures, cross-border initiatives, and international projects, with a significant 71% allocated to inter-state projects. Additionally, ₹17,000 crore is designated for other business areas, such as solar generation, smart metering infrastructure, and data center operations. Solar generation and smart metering, in particular, account for most of this segment’s investment.

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

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Z47 Launches $400M Fund for India's Tech Boom

Research, Research Reports, Result Updates - August 23, 2024

Shriram Finance Q1FY25 Reflects Strong growth across AUM, NIIMs & Asset Quality Improved.

Company Overview

Shriram Finance Ltd., a significant entity within the Shriram Group, operates extensively in consumer finance, stock broking, distribution, life insurance, and general insurance. Founded in 1979, the company stands as India’s largest non-bank financial company (NBFC) in retail asset finance. It is a leader in structured financing of used commercial vehicles and two-wheelers, specializing in serving small business owners and road transport operators.

Product Portfolio

Products: A. Commercial Vehicle Loans: Financing for tractors, farm equipment, passenger commercial vehicles, and commercial products.
B. Business Loans: Offers financing to dealers, private financiers, customers, and the broader commercial vehicle industry.
C . Deposits: Recurring Deposits (RD), Fixed Deposits, and related services.
D. Working Capital Advances: Includes fuel financing, challan marking down, asset financing, toll financing, tire financing, repair/top-up advances, and vehicle protection advances.
E. Life Insurance: Smart Protection Plan by Shriram Life and Cashback Term Plan by Shriram Life.
F. Emergency Credit Line Guarantee Program: Addresses the operating capital needs of micro, small, and medium-sized business borrowers. As of March 31, 2024, the AUM for personal loans stood at ₹8,974.7 crores, accounting for 3.99% of the total AUM. The AUM for gold loans was ₹6,299.8 crores, representing 2.80% of the total AUM.
Small and Medium Business (SME) Loans: These include both secured and unsecured business loans tailored to meet a variety of financial needs. As of March 31, 2024, SME loans comprised 11.66% of the total AUM, amounting to ₹26,234.6 crores.

Industry Outlook :

Non-Banking Financial Companies (NBFCs) have become crucial financial support systems for a significant portion of the Indian population, especially Small and Medium Enterprises (SMEs) and underserved groups that traditional banking institutions often overlook. In recent years, the financial services industry in India has undergone significant transformation. This transformation is characterized by the rise of neo-banking, digital authentication, the widespread adoption of mobile banking and the Unified Payments Interface (UPI), and the increasing penetration of mobile internet. Additionally, the 64 million MSMEs in the Indian MSME sector contribute 30% of the country’s GDP. Less than 15% of the total credit demand of ₹69.3 trillion, which is growing at a CAGR of 11.5%, is met by formal sources.

Q1FY25 Business & Financial Performance:

Shriram Finance exhibited strong AUM growth, with AUM increasing by 21% year over year in FY24, compared to a similar 21% growth in the previous year. For FY25, management has projected an AUM increase of more than 15%. Total disbursements amounted to ₹377 billion, reflecting a 24% year-over-year growth. Asset Quality: Asset quality improved due to better collections, although it slightly declined from 5.5% to 5.4%. Credit costs decreased quarter over quarter as a result of better recoveries; management maintained the 2% credit cost projection. The improvement in asset quality is attributed to recovery from the election period and fewer disruptions. The gross non-performing assets (NPA) showed a year-over-year decrease to 5.39% from 6.01%, indicating improved asset quality management. Additionally, the company’s cost-to-income ratio slightly increased to 27.45%.Net Interest Income (NII): The NII increased by 21% year over year to ₹5,555 crore, primarily due to a stable yield on advances and slightly better liability expenses. This rise in NII was crucial for enhancing the company’s overall profitability. Disbursements: Disbursements rose by 24% year over year to ₹37,709 crores. As of March 31, 2024, Stage 3 Assets improved to 5.45% from 6.21% on the same date in 2023. Net Stage 3 Assets, after accounting for Stage 3 provisions, were at 2.70%, down from 3.19% on March 31, 2023.Due to increased AUM growth, a higher net interest margin, and improved asset quality, which led to greater profitability for the year ending March 31, 2024, the return on net worth rose to 15.64% as of March 31, 2024, compared to 14.84% as of March 31, 2023.OEM Sales in Q1 FY25: Sales were reasonably good, with commercial vehicle sales growing by 3.5% to 224,000 units, including a 9.7% growth in the MHCV segment to 85,421 units. The company’s net profit increased to ₹2,030 crore for the quarter, up from ₹1,712 crore during the same period last year, representing an 18.6% year-over-year increase. The business also benefited from consistent back costs and effective cost-control measures

Shriram Finance financial statements for Q1FY25:

Particulars	Q1FY25	Q4FY24	Q1FY24	QoQ %
Interest income	95,210.1	93,714.1	79,566.7	1.60%
Net interest income	53,544.7	53,360.6	44,386.8	0.35%
Operating expenditure	15,744.2	15,540.9	13,617.1	1.31%
Core operating profit	37,800.5	37,819.7	30,769.7	-0.05%
Other income	740.9	1,236.3	492.6	-40.07%
Operating profit	38,541.4	39,056.0	31,262.3	1.32%
Profit before tax	26,665.9	26,441.2	22,476.2	0.85%
Tax Expense	6,860.0	6,982.5	5,721.8	-1.75%
Profit after tax	19,805.9	19,458.7	16,754.4	1.78%
EPS	52.70	51.79	44.73	1.76%

Ratios

Ratios	%
Capital Adequacy Ratio	20.30%
Return on Total Assets	3.13%
Debt Equity Ratio	3.83
Net Interest Margin	8.84%
Interest Coverage Ratio	2.34
Net Profit Margin	20.55%
Return on Equity	15.64%
ROCE	11.31
Price To Book Ratio	12.04

Concall Highlights:

Financial Performance : In Q1 FY25, disbursement growth was 23.82% year over year, and AUM increased by 20.82% year over year. Net interest income grew by 20.63% year over year, while PAT increased by 18.21% year over year. Net Stage 3 was at 2.71% in Q1 FY25, while gross Stage 3 was at 5.39%. The credit cost for the quarter was 1.87%. The cost-to-income ratio stood at 27.45%.
Subsidiary Performance (Shriram Housing Finance): In Q1 FY25, AUM grew by 50.93% year over year. Net interest income increased by 40.62% year over year, while PAT rose by 5.85% year over year.
Asset Quality and Recovery: Recovery efforts and fewer disturbances during the election season contributed to the improvement in asset quality. There has been a decrease in repo operations across the business as borrowers aim to retain their assets. Recovery efforts have been continuous over the past thirty months.
Plans for Branch Expansion: The company plans to add 500 gold loan branches and 175 MSME branches over the next two years. The total number of branches is expected to reach approximately 900 for MSME loans and 2,000 for gold loans
MSME Business: The company specializes in providing loans to small businesses in the trading and service industries. The average MSME loan ticket size is approximately ₹10 lakhs, with 40% of MSME loans originating from outside the South.
Asset Quality and Provisioning: ECL provisions are based on model performance and take into account various factors. There is no fixed rule for maintaining ECL provisions at 6%; it depends on the product mix and other variables.

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

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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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