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June 2022

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

Dr. Lal Pathlabs reported a net profit of Rs. 58 Cr.

Dr. Lal Pathlabs reported a net profit of Rs. 58 Cr.

Dr. Lal Pathlabs reported a consolidated net profit declined 57% to Rs 58 crore for the first quarter June 30. The company had reported a net profit of Rs 134 crore in the April-June period of the last fiscal. The revenue from operations declined to Rs 503 crore in June 2022 from Rs 607 crore in June 2021. In Q1FY23, DLPL served 69 million patients and collected 180 million non-Covid-19 samples. The company declared an interim dividend of Rs. 6/share.

The diagnostic sector will experience tremendous growth.

Dr. Lal PathLabs reported healthy core business performance, driven by increased penetration, digitalization, enhanced testing facilities, and increased home sampling. Swasth fit contributed to 21% of total revenue; packaged tests accounted for 30% of sales. The company targets pre-Covid-19 level growth of 13-15% over the year and strives to double its volumes over 2-3 years.

The Indian diagnostic sector holds significant growth potential, as was evident by the industry’s response to the pandemic, and organised national brands have met these challenges without raising prices. The industry has seen the entry of many new competitors and the growth of the organised sector, both due to overall market growth as well as an accelerated shift from the unorganised to the organised segment.

The customers appreciate the certainty of quality and effectiveness that Dr. Lal PathLabs provides, which the unorganised players will not be able to successfully deliver. In the future, they will build and drive growth through organic expansion of lab and collection centre infrastructure, inorganic expansion, use of technology to improve customer experience, and provision of value-added services at one level while driving internal process efficiencies at another level to achieve productivity. On the organic front, the initiative of the creation of Hub Labs has started yielding good results, especially in the northern part of India. This will also give the capability to go deeper into Tier-II and Tier-III towns in large states like UP, Bihar, etc.

Valuations:

Dr. Lal Pathlabs, EPS was at Rs.6.2 in June 2022, down from Rs.15.74 in June 2021. The ROCE and ROE were at 29.4% and 25.1%, respectively. The stock was trading at a P/E ratio of 73.4x. The debt-to-equity ratio was 0.35x, whereas the asset turnover ratio was 1.04x. The interest coverage ratio stood at 12x. The scrip is trading at Rs.2389, down by 1.89% on Wednesday.

Everest Kanto reported a total revenue of Rs. 380 Cr.

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Everest Kanto reported a total revenue of Rs. 380 Cr.
Business, Editorials, Equities, Markets, Research, Uncategorized - September 12, 2022

Everest Kanto reported a total revenue of Rs. 380 Cr.

Everest Kanto reported a total revenue of Rs. 380 Cr.

The net sales stood at Rs 380.53 crore in June 2022, up 13.58% from Rs 335.02 crore in June 2021. The quarterly net profit was at Rs. 38.70 crore in June 2022, down 44.1% from Rs. 69.23 crore in June 2021. The EBITDA stands at Rs. 61.23 crore in June 2022, down 32.98% from Rs. 91.36 crore in June 2021. The company incurred a total expense of Rs. 331 Cr as compared to Rs. 257 Cr in June 2021.

Increasing CNG and Hydrogen Consumption To Drive Cylinder Demand:

Everest Kanto Cylinders Ltd. is a major player in High Pressure Seamless Steel Gas Cylinders. It generated its major revenue from India, which was around 270 Cr with a profit of Rs. 44 Cr. while the USA contributed 57 Cr. with  profit of Rs.2 Cr. The UAE reported total revenue of Rs. 51 Cr. and a net profit of Rs. 8 Cr. They manufacture a wide range of cylinders for industrial gases, medical gases, fire fighting equipment, beverage industry accumulator shells, aerospace scientific research, and CNG-NGV cylinders.

The auto OEMs have significantly reduced diesel vehicle production due to rising costs and lower demand. The Vehicle Scrappage Policy is expect to drive new vehicle sales and CNG adoption. The STCs continue to convert diesel bus fleets to CNG. CNG prices in India are link to key international benchmarks and are at  significant discount to other liquid fuels. The CNG vehicles operate at a much lower cost per km.India is a participant in the global commitment to set net zero emission targets.

Over 30 countries have released hydrogen roadmaps, committed more than USD 70 billion in public funding, and total investments are expected to exceed USD 300 billion in hydrogen spending through 2030. The government of India notified its Green Hydrogen Policy with the aim of making India a Green Hydrogen Hub. This involves scaling up the use of domestically produced hydrogen to significantly reduce energy imports. The policy is in line with the country’s pledge to be carbon neutral by 2070. India’s hydrogen demand is expected to increase five-fold by 2050, from 6 MPTA in 2020. 80% of the demand in 2050 is expected to be green in nature.

Valuations:

Everest Kanto EPS has decreased to Rs. 3.45 in June 2022 from Rs. 6.17 in June 2021. The debt to equity ratio was 0.14x, whereas the asset turnover ratio was at 0.8x. The interest coverage ratio was at 33.6x compared to 6.3 in June 2021. This was due to a reduction in debt. The scrip is trading at Rs. 123, up by 5% on Monday.

 

 

 

HUL Q1 FY23 Result Update: HUL beats estimates with Rs 2,381-cr net profit in Q1; revenue up 19.6%

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Nestle India reported a net profit of Rs. 515 crores:
Business, Editorials, Equities, Markets, Research - September 7, 2022

Nestle India reported a net profit of Rs. 515 crores:

Nestle India reported a net profit of Rs. 515 crores:

Nestle India reported a total revenue growth of 16.1% YoY and 1.4% QoQ to Rs. 4036.6 crores. The net profit decreased by 4.3% YoY and 13.3% QoQ to Rs. 515.3 crores. Domestic sales increased by 16.4% with a healthy balance of pricing and volume & mix, and export sales increased by 0.7%. The cost of materials increased due to inflation, particularly edible oil, milk and its derivatives, and packaging materials, partly offset by better realizations. The 15% raw material inflation led to a 304bps decline in gross margins, to 54.0%. The EBITDA decreased by 3.4% YoY and 11.4% QoQ to Rs. 819.5 crores, while the EBITDA margin came in at 20.3%, which declined by 409bps YoY and 293bps QoQ.

Maintaining steady growth through the launch of new products.

The milk products and nutrition sectors witnessed double-digit growth, driven by strong growth in the Milkmaid brand. The out-of-home categories such as confectionaries and liquid beverages registered a strong growth of above 20% on the back of the opening up of offices and business-led initiatives, while the food category continued its strong double-digit streak of growth with improved market share in MAGGI Noodles. The company continued to see strong momentum in megacities and metros, as well as strong acceleration across smaller towns and classes.

Nestle is continuously focusing on entering new categories to maintain its consistent growth momentum in the medium to long term. The company acquired the pet food business of Purina Petcare India Pvt. Ltd. (PFB) from its parent entity Nestlé S.A. for Rs. 123.5 crores. The pet food business (PFB) has evolved very positively and has an exciting future with pet adoption on the rise post-pandemic. PFB has clocked a CAGR of 39.4% over CY18–21 and a turnover of Rs. 36 crores in FY22, valued at a price-to-sales ratio of 3.4x its sales. It derived 14% of its sales from the e-commerce channel. The pet food market in India has been estimated at Rs. 4,000 crores, with dry dog food comprising 75% of the category.
Going forward, leveraging Nestlé India’s network would further accelerate the growth of the pet food business in India. Nestle India Ltd. (NIL) is the market leader in instant noodles and baby food products in India and the No. 2 player in the instant coffee and chocolate segment. One of the most interesting aspects of NIL in recent years has been the spontaneous pace of launches. Since 2016, NIL has launched over 90 products across segments, including new launches as well as variants to boost volume growth and market share gain, with 20 projects in the pipeline.

Nestle continues to focus on innovation to drive growth. New launches across segments have led to strong volume growth over the last few years. The management stated that innovation will be undertaken across product categories and that some of the products launched in the global market can also be introduced in the domestic market. The company is also considering adding new categories that will add value to its existing portfolio. It is expected that the aggressive pace of new innovations, the success of new launches, and the improvement in demand could further accelerate the company’s growth. The major risks for the NIL are increased competitive intensity, rising input prices with an inability to pass on the same, and higher-than-expected A&P spending.

Valuations:

NIL will continue to deliver strong growth going forward as well and will gain share in the core categories, led by distribution expansion, further strengthening of its position in rural areas with the launch of new products backed by R&D capabilities, and growth in the premium portfolio. These factors, along with market leadership in 80% of its categories, mean the company has enough pricing power to further drive premiumization along with volume growth. The EPS was Rs. 53 in the June quarter. The stock is trading at a PE ratio of 80x. The EBITDA was at 50.4x. The ROCE and ROE stood at 147% and 113%, respectively. The stock was trading at Rs. 19196 on September 7th, down by 0.81%.

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Dalmia Bharat posted a net profit of Rs. 280 Cr. in the June quarter.
Business, Editorials, Equities, Markets, Research, Uncategorized - September 6, 2022

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Dalmia Bharat posted a net profit of Rs. 280 Cr. in the June quarter.

Dalmia Bharat’s revenue from operations increased 27.44 percent to Rs 3,302 crore during the quarter under review, as against Rs 2,591 crore in the corresponding period of the previous fiscal. The company had posted a net profit of Rs 280 crore during the April-June quarter a year ago, Dalmia Bharat said in a regulatory filing. Dalmia Bharat’s total expenses rose 37.7 percent to Rs 3,072 crore in Q1 FY 2022–23 from Rs 2,231 crore a year ago.

In the April-June quarter, sales volume increased by 26.53 percent to 6.2 million tonnes, up from 4.9 million tonnes in Q1 FY2021-22.The net debt/EBITDA stood at 0.59x. The cost of borrowing was 5.7% for the current quarter compared to 5.3% in June 2021.

Key highlights for the quarter:

The continuous efforts and resilience of teams have enabled them to deliver good performance again on the back of strong volume growth and continuous cost leadership. The company did capacity additions and commenced commercial production of a 2.9 Mn Tonnes Murli Cement plant in Maharashtra. The firms’ total cement capacity increased to 35.9 MNT and their total clinker capacity stood at 18.9 MNT. In FY22, CO2 emissions were reduced further to 489kg/ton of cement, with a water positivity of 12.5x. They doubled renewable power capacity to 62.6 MW and signed an MoU with FLSmidth A/S, a leading supplier of technology for the cement industry, to develop a breakthrough innovation to support sustainability in the cement industry and a completed restructuring of the refractory business. The company will divest its IEX investment as and when it requires additional funds for CAPEX.

The management aims to save power and fuel costs as it commissions 41MW/69MW of WHRS/solar power units in FY23, taking the total renewable capacity to 173MW in FY23 from 105MW in FY22. The management is optimistic about demand and expects it to rise in FY23, led by government spending on infrastructure and housing. The major risks for the company to watch are lower demand and higher costs.

Valuations:

The EPS stood at Rs. 10.46 for June 2022, which was at Rs. 31.76 in March 2022 and Rs. 12.13 in June 2021. The stock has a ROCE of 7.09% and an ROE of 7.47%. The P/E ratio is now 26.6x, up from 25.1x five years ago. EBITDA is at 12.8x and the return on assets is 4.71%. The interest coverage ratio is 6.54x and the asset turnover ratio is 0.49. The share is trading at a price of Rs.1531, down by 0.37%.

Tarsons Products earned Rs. 29 crores in net profit.

 

 

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Navneet education Q2FY24 result update
Business, Editorials, Equities, Markets, Research - September 6, 2022

Genus Paper And Boards reports a net profit of Rs. 4.81 crores.

Genus Paper And Boards reports a net profit of Rs. 4.81 crores.

Genus paper and boards reported a consolidated net profit of Rs. 4.81 crores in the June quarter as against Rs. 3 crores in June 2021. The total revenue stood at Rs 179 crore, a YOY growth of 195%. During this period, the company incurred a total expense of Rs. 172 crores. The EBITDA for the company was at Rs. 6.35 crore as compared to Rs. 4.19 crore in June 2021. The Kraft paper segment contributed to a total revenue of Rs. 157 crores, while the Coke business generated revenue of Rs. 21 crores. The company incurred a finance cost of Rs. 2 crores.

Muzaffarnagar unit to boost profitability.

The company has successfully commenced production of duplex paper from one of the production lines at a new unit in Muzaffarnagar, Uttar Pradesh. The Muzaffarnagar unit has manufacturing facilities for the production of kraft paper and duplex paper. Genus Paper & Boards’ EPS has grown by 28% each year, compounded over three years. If growth like this continues, then shareholders will have plenty to smile about. One way to double-check a company’s growth is to look at how its revenue and earnings before interest and tax (EBIT) margins are changing.

The good news for Genus Paper & Boards shareholders is that EBIT margins have grown from 3.9% to 7.1% in the last 12 months and revenues are on an upward trend as well. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Genus Paper & Boards’ continuing strength. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it’s a good stock to follow.

The paper industry in India is growing steadily with increasing demand from various segments like education, business & corporate and commercial printing. The demand and growth drivers have come from a combination of factors such as rising income levels, growing per capita expenditure, rapid urbanization, industrial production, government spending on education, and increased school enrollments. Higher disposable income, coupled with urbanization, is expected to drive new and different consumer behaviours for paper products.

Valuations:
The EPS was at Rs. 0.19 in the June quarter. The stock is trading at a PE ratio of 15.6x. The EBITDA was at 10.3x. The company has a low-interest coverage ratio of 5.39x. The stock was trading at Rs. 16.8 on September 6th, down by 0.30%.

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Vodafone Idea reported lower margins-
Business, Equities, Research Reports - September 6, 2022

Vodafone Idea reported lower margins-

Vodafone Idea reported lower margins

Vodafone Idea reported a consolidated loss of Rs 7,295 crore in the June quarter as against Rs 7,312 crore in June 2021. The total revenue stood at Rs 10,410 crore, a YoY growth of 13.7%. The revenue metric improvement was largely a function of residual tariff hike pass-through and one extra day during the quarter, which led to 3.2% QoQ growth. Vodafone Idea’s ARPU for the quarter improve by 23.4 percent YoY to Rs 128, aided by tariff hikes. 

 

Restricted Competitiveness:

The subscriber base declined from 3.4 million to 240.4 million, with a churn rate of 3.5%. The 4G sub-base saw an addition of merely 0.9 million QoQ to 119 million. Data traffic/MOU increased 4%, 2% QoQ to 5.4 GB, 620 minutes, respectively. Data usage and subscriptions increased 4% year on year to 13.3 GB, but remained lower than peers, who use nearly 20 GB per month. Similarly, capex was at 840 crore vs. 1210 crore in Q4. The management reiterated its intent to raise tariffs by the end of the current calendar year, which will lead to a rise in ARPU. The net debt, at 1.982 lakh crore, was up by 1820 crore QoQ. The net debt includes deferred spectrum liability of 1.166 lakh crore, AGR liability of 67270 crore, and bank borrowing of 15200 crore. While the recent government measures ensure the survival of VIL, staying competitive will be a function of how quickly it raises funds. Substantial fundraising to meet capital spending to expand 4G network coverage, launch 5G and stay competitive  Improvements in subscriber churn and 4G subscriber metrics Many key risks for the company are its inability to raise funds and expand coverage to compete.

The company has acquired mid-band 5G spectrum in 17 priority circles and mmWave 5G spectrum in 16 circles. It has also acquired an additional 4G spectrum in three circles, i.e., in Andhra Pradesh, Karnataka, and Punjab, for 18799 crores, payable in 20 annual instalments of 1681 crores per annum. It did not specify any time frame for the 5G launch. The company expects cash EBITDA to improve as 5G spectrum deployment occurs. It will result in a reduction in SUC charges, while there will be some lower tower rent benefits. The Board of Directors has approved the allotment of 42.77 crore warrants to Vodafone Group on a preferential basis. This, coupled with the earlier preferential raise in Q4 of  4500 crore, takes the total fund infusion by the promoter groups to 4986 crore, largely to pay Indus Tower dues. The company recently agreed to convert interest accrued from the four-year moratorium into equity. It indicated that DoT has confirmed the NPV of Rs 16,300 crore. This equity conversion will lead to dilution with the government owning 33% in VIL and the promoters (Vodafone and Aditya Birla group) owning 50%.

Key Triggers

The outstanding debt will come down by a similar amount, with an annual interest cost savings of Rs 1200 crore from the same. The government also has the discretion to convert total deferred moratorium dues into equity at the end of four years. The guidelines for this are still awaited. VIL remains the weakest private telco. The need for capitalization is urgent, owing to the company’s impending debt repayment, lagging network spending, and continued relative market share loss. It is highlighted that recent government relief measures would ensure the survival of VIL, but the future growth outlook remains uncertain.

Valuations:

In the June quarter, the EPS was Rs. 2.27).The stock is trading at a PE ratio of 86.2x. The EBITDA was at 3.97x with an interest coverage ratio of 0.30x. The stock was trading at Rs. 9.28 on Septembe up by 3.69%.

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Adani Ports made a net profit of Rs. 1072 crore.
Business, Entertainment, Markets, Research Reports - September 3, 2022

Adani Ports made a net profit of Rs. 1072 crore.

Adani Ports made a net profit of Rs. 1072 crore.

Adani Ports and Special Economic Zone (APSEZ) posted a 16.09% drop in consolidated net profit at 1,072.38 crore for the quarter ended Q1FY23 compared to 1,277.99 crore in the same period last year. However, Q1 PAT climbed 4.72% from 1,024 crore in the preceding quarter. The growth was double-digit sequentially. Approximately 70% of revenues are contributed by its port operations. The remainder is led by harbour, logistics, and others, which account for 11%, 7%, and 5%, respectively.

Strong growth with inorganic acquisition

There was a higher realisation that bulk volume lifted operational performance. The revenues remained flat YoY at 4638 crore. As margins expanded, absolute EBITDA increased 13% to 3006 crores. However, PAT de-grew 19% to 1072 crore due to a forex loss of 1201 crore. The strong organic growth was coupled with the efficient incorporation of inorganic acquisitions. APSEZ, by integrating logistics operations both vertically and horizontally, has built a strong moat around the business.

As APSEZ embarks on becoming India’s largest integrated transport utility company by 2030, it is strengthening its capabilities in all logistics segments. It will offer end-to-end service to its customers, thereby capturing a higher wallet share and also making the cargo sticky in nature. DFC connectivity to Mundra (medium-term normalization) to provide faster port evacuation and transit time.

The management expects thermal and coking coal volumes to grow in FY23 in spite of comfortable thermal coal inventory levels in power plants. Construction on 4.5 million square feet of warehousing capacity has begun in Mundra, Moraiya, Ranoli, and Palwal. GPWIS cargo volumes have doubled YoY to 3.11 MMT and APSEZ has ordered more trains under the framework (total order count at 37)  Gangavaram NCLT approval is expected to be completed by the current The quarter following which the numbers would be consolidated with APSEZ, beginning April 1, 2021.The management is not seeing any slowdown in any segment and expects its run rate of 30 MMT per month to continue in FY22.

During Q1, the management took a price hike, renegotiated contracts with its customers, and expects the same to flow from Q2 onwards  Overall, the management has guided for a 1 to 1.5 pp incremental rise in EBITDA margins in the medium to long term. In spite of strong growth in its rail Exim volumes, the management is still keen on the Concor acquisition as it expects higher penetration and more Exim movement going forward. The management would soon come up with its strategy around last-mile logistics.

Valuations:

The company has an EPS of Rs. 5.08 for the period ended June 30, 2022 as compared to Rs. 6.40 for the period ended June 30, 2021. The ROCE and ROE stood at 11.2% and 14.7%, respectively. The stock is trading at a P/E of 37.1x and a 5-year P/E of 19.6x. The EBITDA multiple is 19.9x and has an interest coverage ratio of 3.14x. The price to book ratio is at 4.69x. The scrip was trading at Rs.850, up by 1.46% on Friday.

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The Tata SUV Curvv a new attraction in the Indian SUV segment
Business, Equities, Markets, Research Reports - September 2, 2022

Eicher Motors reported a net profit of Rs.610 Cr.

Eicher Motors reported a net profit of Rs.610 Cr.

Eicher Motors reported a 257.52% year-on-year (YoY) rise in consolidated net profit at Rs 610.66 crore compared with Rs 237.13 crore in the same quarter last year. The consolidated revenue from operations rose 71.18% YoY to Rs 3,325.80 crore from Rs 1,942.84 crore in the corresponding quarter last year. There are huge prospects for growth in exports. The volume contribution to the total has been increasing from 2.3% in FY17 to 13.5% in FY22 to more than 15% in Q1FY23. This is due to the increase in network and product portfolio expansion. In our opinion, the export opportunity is huge and management is serious about growing this piece of the business. We project faster export growth in the coming years.

Enormous growth potential:

Volumes will be supported by new domestic models and improved supply. The new launches like Scram 411 and Hunter 350 are clearly targeting a larger young audience. The Hunter model is likely to bring in more footfall in the showroom due to its accessible pricing and good looks. Just in time for the festival season, chip supplies are improving, network expansion is the primary focus, and newly launched models will increase volume. The trend is clear: EBITDA margin has risen from 20.2% in Q3 FY22 to 24.5% in Q1 FY23, an increase from 20.2% in Q3 FY22. They have strong pricing power in the market. We expect this uptrend to continue due to the benefits of softness in commodity prices, higher operating leverage, and better geographic and product mix. VECV is entering its best days for the next two years. The management sounded extremely optimistic about the CV industry’s high growth prospects in the coming two years. VECV is gaining market share led by network expansion, product launches, and service.

Valuations:

The company has reported an EPS of Rs.22.33 for the period ended June 30, 2022 as compared to Rs.8.67 for the period ended June 30, 2021. The ROCE and ROE stood at 18.3% and 14.0%, respectively. The stock is trading at a P/E of 45.7x, which is not expensive, and a 5-year P/E of 39.5x. The EVEBITDA multiple is 29.0x and has an interest coverage ratio of 153x. The price to book ratio is at 7.49x, which has a book value of Rs.94. The scrip was trading at Rs.3426, up by 0.41% on Friday.

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Creditors Raise Concerns Over Hinduja's ₹7,300 Crore Debt Proposal for Reliance Capital
Uncategorized - September 2, 2022

Reliance Industries earned a revenue of Rs. 223,113 cr.

Reliance Industries earned a revenue of Rs. 223,113 cr.

During the June 2022 quarter, Reliance Industries posted a consolidated net profit of 17,955 crore, up from 12,273 crore in June 2021, up by 46.3%. The revenue jumped by 54.5% to 223,113 crore from 144,372 crore in Q1 last year. Meanwhile, EBITDA was at 37,997 crore in Q1 FY23 as against 23,368 crore in Q1 FY22 and 31,366 crore in Q4 FY22. The margin improved to 17.3% compared to 16.7% in Q1 FY22 and 15.1% in Q4 FY22.

Best quarterly performance for Jio and Retail:

This was facilitated by higher contributions from fashion and lifestyle and consumer electronics segment sales. The segment added nearly 792 stores, bringing its total store count to 15,866 stores at the end of Q1FY23. Digital and new commerce increased twofold year on year and now account for 19% of total revenue. The company’s own-brand consumer electronics products portfolio continues to scale up. In Q1 FY23, sales of in-house consumer electronic brands increased by 6.0x year on year. Fashion and lifestyle have experienced strong growth in sales, driven by regional festivities and promotions. The average bill value (ABV) and conversion ratio are at an all-time high in this segment.

With increasing partnerships, Ajio’s online sales platform added nearly 660 brands in the quarter. Ajio Luxe sales rose by 6.0x YoY with the presence of 400 brands and over 38,000 options on the Ajio platform. Its in-house brands contributed 30% of total sales in the category in Q1FY23 vs. 27.0% in Q1FY22. It introduced 14 new in-house brands in Q1FY23. In Q1FY23, urban ladder and pharma retail sales increased 2.0x year on year.The merchant base has increased by 50% YoY and Reliance Retail has ramped up in 2,400 towns.

RIL is a preferred downstream player with a strong growth outlook for consumer-centered businesses, and further value unlocking in digital and retail businesses would add to shareholders’ returns in the coming years. Expecting the 5G network to further skew the telecom market in favour of Jio, Its growth prospects look promising, led by subscriber accumulation post churn and regular tariff surg. The launch of 5G is to be looked forward to. RIL is an ideal pick given its dominant position across business verticals. However, we expect 17% annual growth in EBITDA over FY22-FY25, driven by a 6% CAGR for the cyclical business and a 26% CAGR for the consumer business. The increase in value of energy business will offsets decrease in consumer business.

Jio stands to garner connectivity and IOT revenues along with a significant share of the market. Jio’s growth prospects look promising, led by subscriber additions post churn and regular tariff hikes. The company will include the migration of high-end customers from competitors due to superior user experience and balance from the upgrade to 5G smartphones.

Valuations:

The company has reported an EPS of Rs. 26.54 for the period ended June 30, 2022 as compared to Rs. 19.36 for the period ended June 30, 2021. The ROCE and ROE stood at 9.42% and 8.1%, respectively. The stock is trading at a P/E of 26.9x, which is not expensive, and a 5-year P/E of 17.9x. The EBITDA multiple is 14.6x and has an interest coverage ratio of 7.01x. The price to book ratio is at 2.22x, which has a book value of Rs.1152. The scrip was trading at Rs.2560, down by 2.94% on Thursday.

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GST Storm Hits ICICI Prudential, ₹429 Crore at Stake
Business, Equities, Markets, Research Reports - September 2, 2022

CCL reported a net profit of Rs. 30 crore.

CCL reported a net profit of Rs. 30 crore.

CCL Products’ total revenue from operations was at Rs 333.86 crore in June 2022, up 50.38% from Rs 222.02 crore in June 2021. The net profit was at Rs. 30.77 crore in June 2022, up 25.89% from Rs. 24.44 crore in June 2021. The EBITDA stood at Rs. 56.67 crore in June 2022, up 21.51% from Rs. 46.64 crore in June 2021. The results were driven by capacity utilization of approximately 85% in its Indian and Vietnam units. CCLP posted volume growth of some 25% in the first quarter of the current fiscal, thus helping the company post 56.2% growth in revenues to Rs 509.28 crs when compared to Rs 326.12 crs in the same quarter a year ago.

The company’s fundamentals are strong:

The coffee was sourced from some of the small players, which has barely helped diminished volume growth in the last couple of quarters. The record product realizations, OPMs, have all but fallen to 17.4%, not least due to little variation in their pricing model. Therefore, operating profits rose by a much diminished 23% to Rs 88.54 crs as against Rs 71.98 crs in the same quarter a year ago. Needless to say, margins have gotten a leg up from the growing capacity utilization of its small pack facility, whose throughput surged past 50% in the last quarter. The depreciation costs were up 25.5%, PBT rose by a little over 24%, and post-tax earnings advanced by 20.3% to Rs 52.74 crores as against Rs 43.84 crores in the year ago period. entthralled by higher coffee demand, which was reflected in the order book. CCLP has drawn up plans to increase its spray dried capacity by 16,500 tons at a cost of $30 million, largely funded by debt. Ngon Coffee’s previously increased capacity of 3500 tons operated at high utilization last fiscal.

The increased value addition and penetration in the overseas market hold the key to supporting CCLP’s volume growth over the next few years. Though increased utilization in Vietnam and India helped in the revival of revenue growth in the last few quarters, the introduction of value-added products and the identification of potential markets are essential for market share gains globally. Buttressed by higher volumes at the new Vietnam facility, post-tax earnings are projected to grow by some 29% next fiscal.

Valuations:

The company has reported an EPS of Rs.3.96 for the period ended June 30, 2022 as compared to Rs.3.30 for the period ended June 30, 2021. The ROCE and ROE stood at 15.6% and 17.5%, respectively. The stock is trading at a P/E of 30x, which is not expensive, and a 5-year P/E of 24.5x. The EBITDA multiple is 19.8x and has an interest coverage ratio of 17.4x. The price to book ratio is at 5.10x, which has a book value of Rs.94. The scrip was trading at Rs.479, down by 0.14% on Thursday.

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