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Transforming ₹1 Lakh into ₹1.8 Crore: The Unbelievable Journey of Two Stocks

Transforming ₹1 Lakh into ₹1.8 Crore: The Unbelievable Journey of Two Stocks

Transforming ₹1 Lakh into ₹1.8 Crore: The Unbelievable Journey of Two Stocks

Imagine putting ₹1 lakh into a company and seeing that investment grow to over ₹1.8 crore in just five years. This kind of wealth creation is rare, and when it happens, it’s often fueled by a powerful mix of strategic vision, sectoral growth, and operational excellence. Two Indian companies— PG Electroplast and Transformers & Rectifiers—have recently turned heads with their exceptional stock performance. Here’s how they did it and what the future might hold.

PG Electroplast: Riding the EMS Wave with Precision

Founded in 2003, PG Electroplast has carved a niche for itself in the Electronic Manufacturing Services (EMS) space. The company produces plastic components and printed circuit boards and is deeply embedded in consumer electronics, automotive parts, and home appliances.
What sets PG Electroplast apart is its vertical integration across four business segments. The “product” vertical—comprising air conditioners, washing machines, and air coolers—contributed a commanding 61% to the company’s total revenue in FY24. Plastic moulding and consumer electronics made up the remaining share.
Its client list includes big names like LG, Carrier, Whirlpool, Acer, and Voltas—testament to its credibility in the OEM landscape.
Thanks to the Make in India initiative and the global China+1 manufacturing strategy, PG Electroplast has benefited from increased local demand and policy support. Revenue from its product business has skyrocketed 11x since FY20, growing at a staggering CAGR of 83%. In FY24 alone, it earned ₹16.7 billion from this segment, with 79% of that coming from room air conditioners.

Strong Financials Back the Growth Story

The total revenue of PG Electroplast increased at a CAGR of 44%, from ₹6.4 billion in FY20 to ₹27.5 billion in FY24. In the same time frame, its net profit increased from ₹26 million to ₹1.37 billion, an exponential growth.

The company’s return on equity (ROE) increased from 1.5% to 19%, and its EBITDA margin increased from 6.3% in FY20 to 10% in FY24. In line with this, return on capital employed (ROCE) increased from 7.5% to 21.6%.
Revenue increased 77% year over year to ₹29.6 billion in the first nine months of FY25, while net profit increased 121% to ₹1.4 billion. Additionally, the margin increased by four basis points.

Looking forward, the company plans to expand washing machine capacity and enter new areas like television manufacturing and RAC compressors. Its second air conditioner plant is nearing completion, and internal use of 60–70% of production could further lift margins.
However, investors should be aware that the stock trades at a high P/E ratio of 114x—more than double its 10-year median of 53. While it aligns with peers like Kaynes (120x) and Dixon (126x), valuation remains a concern.

Transformers & Rectifiers: Powering India’s Energy Needs
Transformers & Rectifiers, another multi bagger, is among India’s top domestic transformer makers. With three major units in Gujarat, the company has a capacity of 33,200 MVA and operates across various transformer categories—power, distribution, furnace, rectifier, and shunt reactors.
Its stellar rise has been aided by booming infrastructure, rising global power demand, and increased government spending. In FY25, the company clocked ₹19.9 billion in revenue, up from ₹7.3 billion in FY21—a CAGR of 28.5%.
Margins improved from 10% to 16%, while net profit surged to an all-time high of ₹1.8 billion. Profit has grown at a CAGR of 127.4% over the past four years, showing the power of operating leverage.

Big Plans for the Future
To fuel its next growth phase, the company raised ₹5 billion via a QIP and is investing ₹5.5 billion to expand capacity. It plans to add 15,000 MVA by May 2025 and another 22,000 MVA of high-voltage transformer capacity by February 2026.
The company is also stepping into the renewable energy space, focusing on exports and internal process optimization to stay competitive.
It trades at a P/E of 74x, higher than its 10-year median of 32, reflecting strong investor confidence. However, this puts it at a premium compared to ABB (57x) and a slight discount to CG Power (90x).

Final Thoughts : High Growth, High Valuations—Tread Wisely
PG Electroplast and Transformers & Rectifiers have created phenomenal wealth over the past five years, transforming modest investments into crores. Their growth has been driven by a combination of strategic positioning, industry momentum, and operational efficiency.
However, current valuations are significantly above historical averages, signalling that much of the optimism is already baked into the price. Investors should monitor earnings growth and execution carefully, as any slowdown could impact stock prices sharply.
As always, these tales serve as a reminder of the dangers associated with chasing high-growth, high-valuation stocks, even though they are inspirational. Thorough research, diversification, and caution are still crucial.

 

 

 

 

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Government Urges Mutual Funds to Embrace PSU Stocks: A Shift Towards Balanced Investing

HDFC bank Q3FY25: Loan growth decline, NIMs margin stable

HDFC bank Q3FY25: Loan growth decline, NIMs margin stable

HDFC bank Q3FY25: Loan growth decline, NIMs margin stable

About the Stock

HDFC Bank Limited is recognized as the biggest private sector bank in India in terms of assets value. The market capitalization of the bank is around Rs. 13,17,354 crore. On the basis of its large market capitalization , it is considered as the third biggest company on the Indian stock market. 

The company is active in various segments of banking which includes retail banking, wholesale banking, and rural banking. The bank has five major subsidiaries- HDFC Asset Management Company Limited (HDFC AMC), HDB Financial Services Limited, HDFC ERGO General Insurance Company Limited, HDFC Life Insurance Company Limited, and HDFC Securities Limited. 

Quarterly Update

1.Growth in net income and net profit- In the third quarter of the current financial year, the company recorded a growth of 7.7 percent YoY in net interest income which accounts to around Rs. 30,653.25 crore. HDFC also recorded a rise in PAT by 2.2 percent YoY which accounts to Rs. 16,735.5 crore. In terms of quarter-on-quarter basis, the rise in net income was about 1.8 percent. The provisions for NPAs fell to about 25 percent leading to a rise in net profit on a year-on-year basis.

  1. Robust growth in deposit ratio and slowdown in loan growth- HDFC recorded a strong  growth in its average deposit to around 15 percent YoY compared to moderate growth of gross advances by only 3 percent. It is faster than the credit growth of the bank. It acts as an aid for the bank in achieving the goal of stable credit-deposit ratio. Currently, the AUM advances growth of 7.6 percent YoY. 
  2. Slowdown in CASA- The company recorded weak CASA of only 1.1 percent QoQ growth in the third quarter of FY25. Consumers are opting more for time deposits due to economic uncertainties and high interest rates. The average time deposits surged by 22.7 percent in the third quarter.
  3. Stable Net interest Margin- In the third quarter of the financial year 2025, the company recorded a net margin of 3.43 percent compared to 3.46 in the previous quarter of the same financial year. It accounts for marginal decline. 
  4. Marginal increase in GNPA and NPA- The company recorded growth in GNPAs  to about 1.42 percent higher than the 1.36 percent in the previous quarter of the current financial year. Also, the company recorded a net NPA increase of about 0.46 percent compared to its net NPA growth of 0.41 percent in the second quarter of the current financial year. The reason for this is hike in GNPA and NPA is the seasonal slippage.
Years (In Cr) Q3FY25 Q3FY24 YoY (%) Q2FY25 QoQ (%)
Interest Income 76006.88 70582.61 7.7% 74016.91 2.7%
Interest Expenses 45353.63 42111.27 7.7% 43903.01 3.3%
NII 30653.25 28471.34 7.7% 30113.9 1.8%
Other income 11453.56 11137.04 2.8% 11482.73 -0.3%
Total net income 42106.81 39608.38 6.3% 41596.63 1.2%
Employee Cost 5950.41 5351.76 11.2% 5985.3 -0.6%
Other expenses 11156 10609.32 5.2% 10905.59 2.3%
Tota Opex 17106.41 15961.08 7.2% 16890.89 1.3%
PPOP 25000.4 23647.3 5.7% 24705.74 1.2%
Provision 3153.85 4216.64 -25.2% 2700.56 16.8%
PBT 21846.55 19430.66 12.4% 22005.18 -0.7%
Tax Expenses 5111.05 3058.12 67.1% 5184.31 -1.4%
Tax Rate% 23% 16% 48.6% 24% -0.7%
PAT 16735.5 16372.54 2.2% 16820.87 -0.5%
PAT% 22% 23% -5.1% 23% -3.1%
EPS 21.88 21.40 2.2% 21.99 -0.5%
No. of shares 765 765 765

Commentary

  1. The company recorded contraction in provisions of NPAs to around 25 percent leading to rise in net profit in the third quarter of FY25. The reason for this is wholesale credit segment performing well. Earlier, the contingent provision was set aside for its wholesale account. As it was unutilised due to performing assets in the segment, the company recovered it.
  2. The growth in deposit ratio is mainly driven by rise in retail term deposits rather than CASA ratio. The consumers’ preference towards term deposits was high in the third quarter due to the high interest rate and market condition in the economy. The management is also focused on holistic customer relationships. It believes CASA will gain again when changes in the interest rate take place.
  3. The loan portfolio of HDFC recorded contraction in credit growth by 10.4 percent YoY in corporate and other wholesale segments. While, the growth in credit creation of the commercial and rural banking segment was 11.6 percent. Apart from this, the growth in retail loans was about 10 percent due to cautious steps taken by the company in the midst of growing uncertainties in the economy. The growth in retail credit is mainly driven by growth in retail non-mortgages by about 10.5 percent YoY compared to 9.7 percent YoY in the retail mortgages segment. Overall, it aids in the company’s steps to stabilize its credit-to deposit ratio in the upcoming to 2 to 3 years.  
  4. 4. The growth in NIM margin is stable and fairly in range of its trend in previous consecutive quarters. The reason for this is a cautious approach towards loan growth and focus on deposit growth. It is also due to the shift of consumers towards retail term deposits in the scenario of macroeconomic uncertainty and high interest. This cautious approach of the bank can possibly lead to stable NIMs in the upcoming terms as well. 

Key Concall Highlights of 3QFY25
• HDFC Bank Ltd underlines some of the prevailing macroeconomic conditions such as moderate growth in demand at
urban levels, tightening of liquidity, depreciation of rupee, sluggish growth in private capital investment, and rise in
capital outflows in the midst of growing uncertainties in the world.
• Some positive indications like rise in government expenditure and also expansion in rural demand in the economy is
observed. It resulted in strong growth in service exports and inflation levels are gradually slowing down.
• Robust growth in deposit ratio to about 15 percent mainly driven by retail term deposits. While, slowdown in CASA
ratio and loan growth. It is expected to achieve stability in credit‐to‐deposit ratio in the upcoming 2 to 3 years.
• The employee headcount of the rose again by 2,10,000 in the 3Q compared to its contraction in 2Q of the current
financial year. The company is currently focused on increasing productivity of the employees.
• Addition of more than 1,000 branches YoY in the 3QFY25 and still able to maintain growth in cost at around 7 percent.
It indicates productivity gains for the company.
• Post‐merger of the company, the company manages to open about 1.9 million fresh accounts. It indicates the success
of the merger.
• The company aims to make investment in branches, people and technology. It expects to grow at a similar pace in the upcoming financial year 2026 and higher in the financial year 2027.

Valuations

In present times, the stock of HDFC is trading at multiple of 19.1 x  91.3 EPS at the CMP of Rs. 1,759. In book terms, trading  2.90x than its book value of Rs. 601  As of today, the ROCE and ROE of the company is at 7.67 percent and 17.1 percent, respectively. The company is progressive in terms of its strategy to expand deposit levels and is supported by hike in retail term deposits and moderate loan growth.

Investment Rationale

  • According to the Economic Survey of 2024-2025, the monetary and financial sector in India has recorded a robust performance in the first three quarters of the financial year 2025. Overall, the growth of bank deposits was in double-digit. 
  • According to the recent RBI report,  the banking sector in India recorded profitability for the sixth year in a row in the financial year 2023-24. It is anticipated to record profitability in the current financial year as well.  Also, the GNPAs of the Indian banking sector went down to 2.7 percent which  is the lowest since the last 13 years. It indicates an improvement in the asset quality of the banks 
  • In the first half of the current financial year, Indian banks are recording a continued rise in their Return on Assets and Return on Equity by 1.4 percent and 14.6 percent, respectively.  Apart from this, the scheduled commercial banks in India (including 21 private sector banks and excluding RRBs) recorded growth in their consolidated balance sheet 15.5 percent in the financial year 2023-2024. 
  • In the budget 2025, the decision of tax relief up to Rs. 12.75 lakh income is not only expected to drive consumption in the economy but also increase deposits levels of the banks to more Rs. 40,000 to 45,000 crore. It is anticipated to aid in mitigating liquidity issues of the banking sector.  
  • In terms of growth of HDFC Bank, the growth of the deposit ratio of the company is also increasing like the overall growth of deposit levels of the banking sector. It accounts for 15 percent YOY in the third quarter.  After the company’s merger in the year 2023, the company planned a goal to contract its loan-deposit ratio in the upcoming 2 to 3 years and to bring better financial stability in the company. 
  • Its result in the third quarter of FY25 indicates its progressive steps towards lowering loan-deposit ratio. Currently, the credit to deposit ratio is around 98 percent. The company believes that it will grow in line with the industry growth in the upcoming financial year and higher in the financial year 2027.

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Renewable Energy Sector Awaits Budget 2025 for Key Support Measures

Transforming ₹1 Lakh into ₹1.8 Crore: The Unbelievable Journey of Two Stocks

Asian Stocks advance on tech rebound

Asian Stocks advance on tech rebound

Overview
As investors seized opportunities, Nvidia and other shares of artificial intelligence-related technology recovered from steep losses the day before, and U.S. stocks closed Tuesday’s trading session higher. As attention shifts to the Federal Reserve’s rate decision and US mega-cap earnings, Asian shares also increased Wednesday morning, following Wall Street’s tech-led recovery from a selloff that rocked global markets.

Mild rise after a rocky start for Global Markets
Australian and Japanese stocks increased. For the Lunar New Year holidays, the majority of other significant markets in the area are closed. Nvidia Corp. recovered 8.9% after the biggest one-day value loss in history, while US equities futures fell after the S&P 500 increased 0.9% and the Nasdaq 100 increased 1.6% on Tuesday. Following President Donald Trump’s remarks regarding universal tariffs, the dollar and oil both rose.

The share increases follow a rocky start to the week due to worries that a low-cost artificial intelligence model from DeepSeek, a Chinese startup, may make it difficult to defend valuations of the technology driving the bull market. But after a reassessment, many like Steve Cohen suggested it would be beneficial for the sector. The Fed’s rate decision and the opening of the Big Tech reporting season on Wednesday will now be the region’s investors’ main tests for AI bulls.

In the last three months of 2024, core inflation in Australia decreased more than anticipated. Bets that the Reserve Bank would soon start a monetary easing cycle caused the Australian currency to weaken and the policy-sensitive three-year yield to drop five basis points.

Regarding US earnings, growth is expected to be at its slowest pace in nearly two years, even though profits from the so-called Magnificent Seven behemoths are still increasing and significantly exceeding the rest of the market. After Monday’s long-awaited AI reckoning, the dust is finally settling. While it continues to believe in the productivity story powered by AI, investing in this industry may not be as simple as it has been in the last two years, according to Emily Bowersock Hill of Bowersock Capital Partners. She went on to say that when it comes to investing in AI, it is anticipated that investors will be more discriminating and choosy.

Fed Meeting Predictions
Amidst robust demand and recalcitrant inflation, it is generally anticipated that Fed members would maintain borrowing costs at their current level Wednesday. In the hopes that Fed Chair Jerome Powell will hint a cut in March, bond dealers are increasing their optimistic wagers on US Treasuries. According to a study by 22V Research, 67% of participants anticipate a “mixed/negligible” response to the Fed’s announcement on Wednesday, 21% said they are “risk-off,” and 12% said they are “risk-on.”

At 4.52%, the yield on 10-year Treasuries decreased by 1 basis point. After rising 0.8% on Tuesday, West Texas Intermediate oil continued to rise early on Wednesday. In a note, Win Thin of Brown Brothers Harriman stated that the US fundamental story of robust growth, high inflation, and a more hawkish Fed still favors higher US rates and a stronger dollar. This Fed meeting is predicted to be largely unremarkable for the stock market by several criteria.

According to Bowersock Hill, markets are not anticipating a cut and will instead concentrate on the Fed’s projections for the remainder of 2025. Interest rates and inflation will both continue to rise, so it wouldn’t be shocking to see one rate cut in 2025, or perhaps none at all.

US Market Rebound
In its largest daily percentage rise since July 31, the S&P 500 technology sector surged 3.6%, while an index of semiconductor equities saw a 1.1% gain. Apple’s stock increased 3.7%. When Apple, Microsoft, and other firms released their quarterly results later this week, investors were excited to hear what they had to say.

Following the release of AI models by Chinese startup DeepSeek that it claimed were on par with or superior to top U.S. competitors at a fraction of the price, there was a tech sell-off.
According to Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey, markets are seeing the usual bounceback rally, which is to be expected when there is news that is less precise and more about the possibility of a future change.

India’s IT stocks witness a surge
Information technology companies drove Wednesday’s opening gains for India’s major indexes, while investors awaited the U.S. Federal Reserve’s interest rate remarks later in the day. As of 9:25 a.m. IST, the Nifty 50 opened new tab up 0.27% to 23,019.15 points, while the BSE Sensex opened new tab up 0.28% to 76,102.57. Leading the sectoral advances were eleven of the thirteen key sectors, with IT stocks (NIFTY IT) up 1.6%.

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Budget needs to focus on local infrastructure

Shriram Finance Q3FY25: Strong Loan Book Growth, PAT Boosted by Exceptional Gain, NIMs Contract

Shriram Finance Q3FY25: Strong Loan Book Growth, PAT Boosted by Exceptional Gain, NIMs Contract

Shriram Finance Q3FY25: Strong Loan Book Growth, PAT Boosted by Exceptional Gain, NIMs Contract

Company Name: Shriram Finance Ltd | NSE Code: SHRIRAMFIN | BSE Code: 511218 | 52 Week high/low: 730 / 439 | CMP: INR 512 | Mcap: INR 96,205 Cr | P/BV – 1.88

About the stock
➡️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.

Robust loan book growth backed by healthy growth in CV, PV and MSME
➡️Shriram’s loan book has grew by double digit at 19% YoY (+5% QoQ) to 2,54,470 Cr supported by growth in CV, PV and MSME segment.

➡️Commercial vehicle constitute 45% of the overall loan book, growing by 13% YoY (+3% QoQ) to 1,15,767 Cr. Passenger vehicle segment constitute 20% of overall segment, growing by 25% YoY (+6% QoQ) to 51,884 Cr. While MSME segment constitute 14% of overall segment, growing by healthy growth of 50% YoY (+7% QoQ) to 34,632 Cr. This three segment led the solid growth in overall loan book in Q3FY25.

➡️Rest other segment report good growth but command a low weight in overall loan book. Construction equipment grew at 10% YoY followed by Farm equipment at 42% YoY, 2W at 27% YoY, gold at -7% while personal loan degrow by 9% YoY.

➡️Borrowing overtake the loan growth, increased by 26% YoY (+8% QoQ) to 2,235 bn driven by deposit growth of 24% YoY (+6% QoQ).

Book Growth (As on)  Q3FY25 Q3FY24 YoY (%) Q2FY25 QoQ (%)
Loan 2,54,470 2,14,233 19% 2,43,043 5%
Borrowings (bn) 2,235 1,775 26% 2,078 8%
Deposit (bn) 534 431 24% 502 6%

Double digit growth in NII backed by loan book expansion; while NIMS down 50 bps
➡️NII report a double digit healthy growth of 14% YoY (+2% QoQ) to 5,590 Cr driven by loan book expansion only while NIMs contract for the quarter. NIMs down by 50 bps YoY (-26 bps QoQ) to 8.48% due to the expansion in CoF.

➡️PPOP jump 11% YoY (+2% QoQ) to 4,085 Cr, Operating efficiency benefit lagged as total OpEx increased 22% due to rise in employee cost and other expense.

➡️PAT boost by 96% YoY (+72% QoQ) to 3,570 Cr on one time exceptional gain of 1,657 Cr. PAT excluding exceptional item report 5% YoY and on QoQ degrow 8%.

Years  Q3FY25 Q3FY24 YoY (%) Q2FY25 QoQ (%)
Interest income  10,341 8,618 20% 9,815 5%
Interest expenses 4,751 3,707 28% 4,350 9%
NII 5,590 4,911 14% 5,464 2%
Other income  365 309 18% 282 29%
Total Net income 5,954 5,220 14% 5,746 4%
Employee expenses 970 810 20% 907 7%
Other OpEx 899 721 25% 853 5%
Total Opex  1,869 1,531 22% 1,760 6%
PPOP 4,085 3,689 11% 3,987 2%
Provision 1,326 1,250 6% 1,235 7%
Exceptional items 0 0
PBT 2,759 2,440 13% 2,752 0%
Tax expenses  846 621 36% 680 24%
Tax rate  31% 25% 20% 25% 24%
PAT  1,913 1,818 5% 2,071 -8%
PAT% 18% 20% -12% 21% -13%
EPS 10.17 9.68 5% 11.02 -8%
No. of equity shares  188 188 0% 188 0%

Asset quality improved YoY; QoQ remain stable
➡️Shriram’s asset quality has been improved during the quarter as GNPA and NNPA are in downward trajactory. GNPA/NNPA decline 28 bps/ 4 bps YoY while QoQ basis remain stable to stood at 5.38%/2.68% as of Q3FY25.

Asset Quality Q3FY25 Q3FY24 YoY (bps) Q2FY25 QoQ (bps)
GNPA 5.38 5.66 -28 5.32 6
NNPA 2.68 2.72 -4 2.64 4

Valuation and Key metrics
➡️Currently the stock is trading at 1.88x price to book value. NIMs contract by 50 bps YoY and 26 bps QoQ to 8.48% led by the expansion in CoF. ROA dissapoint down by 23 bps YoY and QoQ both to 2.88% while ROE down 13 bps YoY and 59 bps QoQ 16%. Company capital position CAR remain stable YoY to stood at 21% but still above the RBI guidelines.

Key metrics  Q3FY25 Q3FY24 YoY (bps) Q2FY25 QoQ (bps)
NIMs 8.48 8.99 -51 8.74 -26
ROA 2.88 3.11 -23 3.06 -18
ROE 15.41 15.54 -13 16 -59
PCR 0 51.7 -5170
CAR 21 21.01 -1 20.16 84

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Budget needs to focus on local infrastructure

Dalmia Bharat Reports Disappointing Q3 Results, Sees Limited Short-Term Growth

Dalmia Bharat Reports Disappointing Q3 Results, Sees Limited Short-Term Growth

Dalmia Bharat Reports Disappointing Q3 Results, Sees Limited Short-Term Growth

Overview
The fourth-largest cement manufacturer in India, Dalmia Bharat, released a poor set of results for the October–December 2024 period. This is because the cement industry’s overall demand is still weak because of weak consumer mood and a slowdown in housing and infrastructure development.

Q3 Result Highlights
The most recent third-quarter results from Dalmia Bharat Limited disappointed overly enthusiastic predictions by missing earnings. Overall, the outcome wasn’t great with statutory earnings missed predictions by an astounding 62%, coming in at just ₹3.25 per share, while sales was only slightly below analyst estimates at ₹32b. Investors may monitor a business’s performance, examine what analysts predict for the upcoming year, and determine whether sentiment toward the company has changed, making earnings a crucial moment for them.

The quarter’s total volume was 6.7 MT, a 2% decrease from the previous year. Volumes in the previous quarter were negatively impacted by the termination of tolling agreements with Jaiprakash Associates, labor shortages during the holiday season, a slow market environment, and insufficient government spending. Due to excess industry capacity and intense competition, realisations fell 10% year over year, even though the price situation improved sequentially. Revenues for the third quarter were Rs 3,181 crore, a 12% year-over-year (YoY) decrease.

The softening of fly ash, slag, and limestone prices resulted in favorable input costs. The decrease in power and fuel costs was driven by a shift in the fuel mix, a sharp decline in the price of coal and pet coke, and a greater contribution from green energy. As the corporation used its eastern factories to service the central markets, freight costs increased slightly. Poor realisations caused operational earnings to drop 34% year over year to Rs 511 crore from Rs 779 crore, despite a 4% YoY fall in the entire cost base.

Industry expectation
Cement prices across the board have been declining since Q3 of FY25, and they showed same patterns in October and November. However, because dealers had started raising prices in December, realizations were stronger, therefore the quarter concluded on a good note. During the busy construction season (January to June), the sector anticipates a rise in realizations driven by a pickup in demand.

On a sequential basis, the average power and fuel price for Q3 was $96/tonne, a decrease from $101/tonne. The cost curve should flatten here as the current spot costs for fuel and electricity are between $95 and $100 per tonne.

Capacity to boost
The business’s total capacity at the end of the quarter was 46.6 MT, following the start of commercial production in Ariyalur (1MT) and Kadapa (1MT). By the end of FY25, the company wants to reach a capacity of more than 49.5 MT. Of the approximately Rs 3,000 crore in investment guidance for the entire fiscal year FY25, Rs 2,000 crore has already been spent in the first nine months of FY25.

Through the utilization of captive coal blocks, route optimization, and a higher percentage of renewable energy (RE), Dalmia hopes to reduce costs by Rs 150–200/tonne over the course of the next three years. Dalmia inked 21 MW of RE power agreements in Q3FY25, bringing its total captive RE power contracts to almost 300 MW.

Share Price Movement
The stock price movement is expected to be significantly impacted by the near-term difficulties, which include increased competition in its core markets and restricted growth prospects as a result of the postponed capacity expansion plan. Supported by a better blending ratio, green power share, and lower freight cost, the company is one of the least expensive producers in the sector. The company is selling at 11x/10x FY26E/FY27E EV/EBITDA and USD82/USD80 EV/t at CMP, which is an appealing price. In order to arrive at our revised TP of INR2,100 (as opposed to the previous TP of INR2,250), analysts value DALBHARA at 12x Dec’26E EV/EBITDA.

Future Outlook
Dalmia continues to be our top choice among major cement firms, despite the company’s limited short-term development potential. Over the medium to long term, the company is anticipated to outperform the industry. This stock is worth keeping an eye on for long-term investors looking to buy on dips.

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Impact of Trump 2.0 on Indian Equity Market

Stable performance of Pidilite in third quarter of FY25

Stable performance of Pidilite in third quarter of FY25

Stable performance of Pidilite in third quarter of FY25

Pidilite Industries performance in the third quarter of the financial year 2025 was remarkable. The company’s current market price is about Rs. 2,910. Its market cap is Rs. 1.48 lakh crore. The rating of the company is equal weight indicating that performance of the stock will be in line with the average performance of its peers.

The company’s sales volume growth for the third quarter of the financial year 2025 was about 10 percent on a year-on-year basis. Its standalone growth in terms of value also rose to about 9 percent. This remarkable growth acts as a turning point from the previous low growth in both sales and value of the company for some quarters.

About the company
Pidilite is a leading manufacturer in the production of adhesives. Its product Fevicol has become a common household name for different adhesives across India. It is also a major manufacturer of construction chemicals, sealants, polymer emulsions.

Performance of the margins
The gross profits margins of the company increased by 100 bps on a year-on-year basis. The reason for this is contraction in production cost. In contrast to this, the operating margins of the company remain stable around 23.7 percent because of a hike in expenditure on advertisements and promotion (A&P).

The company focuses on financing its brand development, improvement and expansion of its manufacturing capacity and distribution network in order to increase production and customer base efficiently.

Performance of different segments
The Consumer and Bazaar is the biggest segment of the Pidilite. Its contribution to the revenue of the company is close to 80 percent. In the third quarter of the current financial year, the company recorded a moderate revenue growth of about 7 percent on a year-on-year basis. The reason for this is muted consumer demand.

On the contrary, a remarkable revenue growth of about 21 percent was recorded in the business to business segment. It was influenced by the positive project operations. As the prices of inputs become stable, the difference between the number of products sold and the amount of revenue earned narrows in the third quarter. The total growth in terms of volume for business to business segment was about 22 percent and consumer and business segment was about 7 percent.

Factors influencing performance
The demand in rural areas is persistently overshadowing the performance of urban demand during the last three years. The reason for this is putting efforts to educate craftsmen and customers about Pidilite and its products. One of the initiatives by Pidilite is known as ‘Pidilite ki Duniya.’

The company’s products such as floor coats, wood finishes, and tile adhesives are gaining momentum. It helps the company to strengthen its position in the market.

International performance
Its operations at global level recorded a slight growth in the third quarter of the financial year 2025. It is majorly because of rising inflation, growing political instability in some parts of the world and also rising uncertainty in the economy at global level. Despite the scenario of uncertainty, there are indications of revival in segments such as pigment and pigment emulsions. This segment has finally recorded robust demand growth compared to the muted growth for some years.

Domestic Performance
The subsidiaries of the company registered a revenue growth in double digit form. Its operating margins were also good. However, the company is facing the pressure of consumer demand. The reason for this is weak growth in real wage and rise in food inflation levels. Though, it is anticipated to relieve in the upcoming two quarters. Along with this, some construction projects are slowdown in some major metropolitan regions. The demand is low in some states of India such as Kerala and Gujarat. In the midst of these challenges, the company uses 3 to 5 percent of the revenue amount in the advertisement and promotion segment. Apart from this, Pidilite is also focusing on developing the supply chain for the future requirements.

Change in VAM price
Vinyl Acetate Monomer (VAM) is an important input material for production of adhesives. In the third quarter, the price of VAM was about 884 dollars per tonne in relation to 902 dollars per tonne in the previous year of the same period. As per the management of Pidilite, prices of VAM are anticipated to not change much in the fourth quarter of the financial year 2025. It has taken into consideration uncertainty in prices of crude oil and currency.

New Opportunities
In the second quarter of the financial year 2024, the company bought Pargo Investment at a worth of Rs. 10 crore. It marked the company’s entry into the credit business. It aims to give loans to small businesses working in its network. It has already got its regulatory approval and licence. The company has also issued its first credit in the initial period of the current financial year. The performance of this business will be observed in the upcoming few quarters. It plans to inject close to Rs. 100 crore for its credit business in the duration of upcoming 2 years. The goal of the company is to aid its dealers and contractors’ operations.

The company also marked its entry in the interior decorative paints segment by establishing Haisha Paints in the first quarter of the financial year 2024. The company is using its distribution networks in states such as Odisha, Andhra Pradesh, and Telangana to create its presence in the decorative paints market in small towns (with tier 3,4,5). Despite being a new operation, it is able to record remarkable profitability and volume growth in the past 12 months.

Projection
Pidilite has given an impressive performance in all its product categories, in spite of moderate customer sentiment. In present times, the company’s valuation is 65 times higher than its projected earnings for financial year 2026. High valuation and subdued consumer demand may restrain growth of stock in the upcoming medium term.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Indian Quick Commerce: Growth Amid Challenges

Indian Quick Commerce: Growth Amid Challenges

Industry Overview
It is anticipated that the Indian Quick Commerce market will bring in US$5,384.00 million by 2025. A compound annual growth rate (CAGR 2025-2029) of 16.60% is anticipated for this market, resulting in a projected market volume of US$9,951.00m by 2029. A youthful, tech-savvy populace and rising smartphone penetration are driving the quick commerce sector in India. The Quick Commerce sector has expanded as a result of India’s expanding middle class and rising disposable income. Furthermore, the digital economy has grown as a result of foreign investment drawn to India by the government’s digitization initiatives and the country’s ease of doing business. Nonetheless, regulatory obstacles and inadequate infrastructure remain a danger to the expansion of the Quick Commerce business in India.

Recently, the quick commerce space has been near a saturation point due to cut-throat competition amongst key players in the market such as Swiggy, Zomato, Zepto, etc. Investors have begun to worry even more after the Q3 Results of Zomato which were announced on the 21st of January, 2025.

Worrisome Stakeholders
Investors in Quick Commerce companies have been rudely awakened by Zomato’s performance. On Tuesday, January 21, the company’s stock was down 10%, while rival Swiggy’s stock was down 9%. Based on their performance up to the previous quarter, shop rollouts, and market trends including expanding customer bases, increasing order values, expanding assortments, and store expansion, investors had mentally mapped out a path to profitability for these companies’ rapid commerce businesses. It was anticipated that Blinkit, Zomato’s fast commerce division, would approach breakeven during the December quarter.

While affirming that these tendencies are still there, Zomato’s management comments that accompanied its results also indicated a sense of urgency to open locations quickly, even at the risk of lower profitability. By the end of the year, it plans to build another 1000 dark stores, bringing its total to 1000, extending its goal by a full year. Additionally, it stated that even though the gross order value will expand by more than 100%, losses will persist in the near future.

The two main factors causing this trend to change are competition and the increasing demand from customers. The privately funded Zepto has become aggressive with its intentions for retail expansion, while publicly traded competitors like Swiggy are growing. The popularity of speedy commerce in the private market has also been cemented by the success of Zomato and Swiggy in the public markets. Zepto seems to be receiving money from investors hand over fist. Then there are e-commerce businesses that are entering the fast-paced market. Even omni-channel retailers are investigating methods to expedite delivery. The word “quick” is becoming synonymous with all online retail platforms.

As a result, the incumbents are working to increase their market share in other markets while also fortifying their position in the top ten cities, which are the primary drivers of rapid commerce growth. Future app fatigue may be a major contributing factor in this case.

Customer Retention is crucial
Analyze Blinkit’s retention rate for clients who made a single purchase between September 2022 and December 2022 from a different angle. Despite the rise in competition during this time, this customer group’s retention rate is 40–42 percent from March 2024 to December 2024. These clients also cover the cost of shipping. They are also what consumer firms call stickiness, even if Zomato promotes them as evidence of its unique proposition and execution.
Thus, if you attract clients early and provide them with a positive experience, they may become lifelong clients. This explains why it is necessary to open more stores in order to attract a larger percentage of clients who are switching to rapid commerce and then provide them with the services they require to stay loyal in the face of competition.

This will result in more depreciation, more investments, and a larger percentage of new stores that are not yet profitable in the short term. Because of the increased need for labor in the rapid commerce sector, competition may also result in higher operating expenses. When Swiggy’s results are released, it should be evident whether this kind of retail expansion has an effect on the company’s performance.

There’s another reason to be concerned. Zomato claimed that because of the low level of customer demand, their meal delivery service grew somewhat slowly. This is related to the slowdown in urban consumption that has occurred in certain areas. Profitability has increased, but business growth has slowed. In the December quarter, QoQ growth was only 3%.

Future of QC companies
The performance and future prospects of listed rapid commerce companies are questioned by Zomato’s financials, but the ecosystem is also called into uncertainty. For QC players as well as e-commerce and omnichannel businesses, online commerce will be a difficult environment. Significant expenditures and faultless execution are required in the battle to get customers on board—not just for groceries, but for everything from clothing to electronics—and deliver them in ten minutes. If not, accidents will probably occur, and it won’t be shocking if they do within the next year or two.

Conclusion
The primary cause of investors’ preference for short-term investments over long-term ones is their perception that QC plays are becoming profitable, which led them to overlook the comparatively high stock prices. Second, it’s unknown who will ultimately prevail among the expanding field of QC competitors. Thirdly, it is also clear how lengthy the long-term prospects will be if everyone chooses to invest. Investor opinion for these stocks may improve as the winners are separated from the losers, as time goes on, or when values become more realistic.

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HUDCO Q3FY25 Results Update: Robust Performance Drives Strong Growth

HUDCO Q3FY25 Results Update: Robust Performance Drives Strong Growth

HUDCO Q3FY25 Results Update: Robust Performance Drives Strong Growth

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


NII growth moderate while PAT jump 12% led by lower opex and tax expense

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

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

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

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

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

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

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

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

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