Quarterly Results Insights- Q2 FY24

10/29/202317 min read

Our views - not from other analyst/ brokerages

Dmart H2 FY24 Results Insights

consolidated Revenue 19.7% up, PAT down 9%

Same store sales growth 8.6% YOY
Store additions H1 12 nos only ( vs 40-50 / year last 2yrs)

Revenue breakup H1 FY24 / H1 FY23

Food 56.2% / 54.75%
Non food 20.6%/ 20.5%
Apparel /GM 23.2% / 24.75%

1. Dmart mainly earns from non-food/ apparel sales ( higher margin business) - so this segment sales going down affects PAT as they operate on thin margins ( EBITDA 8.5%, PAT 5.6% )

2. Maybe they have slowed down store addition seeing tepid consumer discretionary buying ( non food/ apparel) among mass-premium category which they address .

3. Revenue/ sqft yet to touch FY20 nos of Rs 32880 indicating consumer demand recovery not recovered fully.

4. Once consumer demand resumes, things may look good. Q3 festive demand will be important to watch for.

5. Plus scaling up of Dmart Ready and cashburn required for scaling up needs to be watched. Here they are not competing with Blinkit, but objective is to address their own customers shifting to Blinkit , so cashburn should be low, considering they have established Dmart Ready model in Mumbai.

Jio Financial Services Q2 FY24

Total income 608cr
Dividend income 216cr
Interest income 186cr

Since Jio Financial is a financial institution, it can show DIVIDEND income in Income statement.
Otherwise, it had to record dividends in Cashflow statement, could not record Dividend income as Profits.

It may need to show lot of Interest Income to justify the current valuation.

Paytm Q2 FY24 Results Insights

Contribution margin 57% ( vs 49% FY23)
Revenues 2520cr (8% up QoQ)
Merchant base 92 lkh ( vs 68 lkh FY23)

Contribution profit 1420cr (3900cr FY23)
Net Loss 290cr ( 360cr Q1 FY24)

For high growth cos like Paytm, we need to track QoQ growth, for path to profitability

Revenues 2520cr (8% up QoQ)

Breakup

Payment services 1520cr ( vs 4930cr FY23 full yr)
Financial services 570cr ( vs 1540cr FY23)
Commerce/cloud 420cr (12% up YoY)

1. Payment services is UPI - mainly subscription fees received from merchants for Soundbox and UPI merchant transactions
Merchants base impressive growth 92 lakh ( FY23 - 68 lakh)

2. Financial services- (consumer/ merchant loans) - this is main growth engine.

Postpaid loans (ATS Rs5600) - good growth
Personal loans (ATS 1.65 lakh) / 16mth tenure- de-growth as they reduced shorter tenure loans for controlling ECL
Merchant loans -(ATS 1.8lkh/ 13 mth tenure)- good growth

Contribution margin 57% ( 49% FY23) - impressive
Contribution profit 1420cr (3900cr FY23)
Net Loss 290cr ( 360cr Q1 FY24)

Highlights-

1. results without UPI incentives ( will come in H2)
2. Contribution margin up owing to less cashback spends, will increase in Q3, payment processing charge going down -leverage

Ant Fin stake down from 23.8% to 9.9%
Vijay Shekhar sharma stake up from 10.3% to 19.4%
All encouraging developments around Paytm.

Credit loss due to loans how it goes need to be monitored

Paytm Business analysis

Bajaj Finance Q2 FY24 Results Insights

Bajaj Finance continues to grow its loanbook > 25% CAGR as promised, with top notch asset quality.

BUSINESS REACH

Rural lending location- 2465 vs 1360 (F20) - 80% up in 3yrs
Consumer durables reach 82200
Digital products reach 37100

And people are concerned that 550 Reliance Digital stores would slowdown Bajaj business.

Q2 METRICS

Loanbook growth 33% yoy. AUM 2,90,230 cr
Net interest income 8845cr (26% up YOY)
PAT 3550cr (28% up)

ROA 5.2%
ROE 24.1%

Since leverage > 5 , co have decided to raise funds
Cost of funds gone up at 7.67% ( from 6.8% FY22) , may stabilize hereafter
All loan products apart from rural personal loans (18%yoy) shown very strong growth.

LOANBOOK

Total loanbook 2,90,230cr
MORTGAGE loanbook- 170150cr
Home loans 92300crLAP
Lease rental 33700cr

So, Bajaj Finance is no more an only consumer durable lender, loanbook is highly diversified.

Will JioFinance disrupt Bajaj Finance ?

Bandhan Bank Q2 F24 Insights

Loan book 1.08 lakh crore ( 12.3% up YoY)
Retail Loan book other than housing 80% up
Commercial Banking 65% up
Housing Finance 4% up
EEB remains flat YoY

Thoughts-

1. Housing loanbook is 20% of total AUM- with housing sector doing well, despite that 4% growth not good.
2. EEB flat- is as per strategy- they are reducing unsecured book
3. Profits 245% up due to provisions becoming half.
4. Fresh slippages 1320cr inline with Q1
5. Operating Expenses grew 6.6% QoQ ( 79 branches opened )
6. NPA provisioning at 5 Qtr high , maybe due to fresh provisions for Assam floods,- probable reason for NPA nos didnt reduce QoQ
7. Assam group loan NPA is dragging entire NPA nos.
8. YoY spread improved from 6.5% to 6.8%, still interest expenses 29% up- not clear
9. needs to reduce WB/Assam exposure (45%) faster

ROA 1.9% ( improved from 1.6% FY23)
ROE 14%
CRAR 20.6%
Post covid book GNPA 2.6%

So faster they grow secured loanbook, maintaining this quality, and reducing WB/ Assam contri- better the nos.

Astral H2 FY24 Result Insights

market leader of CPVC pipes

Last 4 yrs huge growth, half of that has come from raw material prices rising. Nevertheless, Astral has outperformed industry growth since its inception.

Pipes business 73%
Adhesives/ paints 27%

H1 FY24

Revenues 12% up YOY
Sales volumes 29% up
PAT 51% up
EBITDA 16.9%

Yes 29% volume growth is very impressive in PVC.
Revenue growth muted owing to raw material prices correcting sharply.

51% PAT growth is partially due to raw materials price cooling off, so EBITDA margins expanded , still below FY20 EBITDA of 17.6%
Adhesives and Paints business also doing equally well.

Even if they maintain this growth of 30% and margins of 17% in H2 , still might remain costly. Let's see how market rates it

Havells Q2/ H2 FY2 Results Insights

leader in wires, switchgear, fans, AC , electrical consumer durables

1. Wires/ cables- 8% up YOY weak compared to KEI /Polycab
2. Switchgear - 7% up- also weak considering housing demand
3. Fans & ECD - no growth
4. AC (Llyoyd) 20% up- strange considering consumer durables growth is still muted

Possibly because of low base of Q2 last year for most AC cos.
Though AC segment does not contribute to profits yet for Havells.

H1 total PAT 25% up mainly owing to wires/cables prices cooling off YoY, combined with wires/ cables growth in Q1

Thoughts

1. Fans, ECD , Switchgear critical for Havells business, esp ECD, Switchgear will drive growth in bottomline for them how upcoming festive season demands pan out needs to be seen.
2. Wires - understanding why they are underperforming peers despite strong demand is important

Overall, results not encouraging for Q2

ITC Q2 FY24 Results Insights

conglomerate of Cigarretes, FMCG, Paper, Agri, Hotels+ ITC infotech

Q2 Revenues- 16360cr
FMCG 5290cr/ Cigarretes 7660cr

1. Though FMCG constitutes significant portion of revenues, it only contributes to 7% of EBIT
2. Cigarettes- the high margin cashcow contri to EBIT 80%
3. Rest businesses contribute 13% to EBIT .

That is how skewed it is- despite ITC doing well in FMCG ( revenues 25% up YoY), impact is marginal on bottomline.

In coming years, even if FMCG grows much faster, cigarettes contribution will still remain dominant for significant time - as cigarettes is 63% margin business, FMCG 11% margin business.

Yes, scope of margin expansion is there in FMCG as they achieve scale in long term- that will increase the contribution of FMCG more.

Q2 FY24 Results summary

1. FMCG Rev 25% up- despite fairly elevated wheat, sugar prices & margins 11% ( FY23 10.2%)
2. Cigarettes Rev 8% up despite sharp cost increase in tobacco & tax increase
3. Paper Rev 50% drop ( paper pulp prices)
4. Agri Rev 1.7% drop ( non-basmati rice export ban)

Ultratech Q2 FY24 Results Insights

Revenues 15730cr (15% up YOY)
EBITDA 2720 cr (35% up)
PAT 1280cr (69% up)
Operating EBITDA/MT Rs 955

Current capacity 132.5 MTPA ( much ahead of peers)

Shree Cement 46MTPA (FY23)
ACC 34 MTPA
Ambuja 31 MTPA

Ideally, Q2 is weakest for cement cos ( monsoon)

Last year, raw material prices were at peak ( pet coke) which has moderated now, leading to this too high PAT improvement YoY.

Last year, margins were affected owing to pet coke.
Logistics cost/MT also decreased YoY

Revenue growth & volume growth of 15% implies strong demand- boosted by govt infra spends, real estate.

Ultratech operations being diversified across India, remains better placed wrt regional cement players- who are prone to occasional demand slumps specific to a certain region.

Results good, nothing exceptional, as PAT YoY growth suggests

Jubilant Foodworks Q2 FY24 Results Insights

Same store sales growth 1.3% de-growth
60 new stores opened in Q2 , 202 new stores opened in last 1 year

Loyalty membership 1.95cr customers ( Mar '23- 1.36cr)- Started in Q1 FY23

Jubilant, sole master-franchisee of Dominos has 1950 stores in India ( 1888 Dominoes India stores), 73 more in Srilanka, Bangladesh.

Standalone Q2 FY24 ( since it is most of business)

Revenues 1340cr (4.5% up YOY)
Gross profit 1030cr (4.7%up)
EBITDA 280cr ( 10% down)
EBITDA margin 20.9% ( Q2 FY23 24.3%)

PAT 70cr ( 39.5% drop)
Same story of H1 ( Apr-Sep) total

Thoughts-

1. Gross margins protected 76.4%
2. EBITDA drop due to operating cost growing at 11-12% yoy
3. Despite loyalty customers increased so much, weak middle class consumer demand remains evident from same store sales 1.3% de-growth
4. on track to open 200-225 stores in FY24- indicating confidence of co. in future path ahead, as consumer demand restores.

Westlife Foodworld Q2 FY24 Results Insights

Sole Master franchisee of McDonalds for West & South

Dine in 59%
Delivery 41%

Same store sales growth 1%
Store count 370 ( 357 in Mar '23)

Revenues 610cr ( 7% up YoY)
Gross margin 70.1% ( vs 69.2%)
EBITDA margin 16.2% ( vs 17.3%)
PAT 22cr ( 32% down - Q2 FY23 32cr)

Revenue / store 6.65cr ( FY23 6.38cr)

Thoughts-

1. Muted Same store growth reflects same sentiments reflected in Jubilant's results- weak middle class discretionary spend

2. EBITDA margin impacted bcoz of raw material ( food & paper cost) went up

3. PAT impacted due to increased royalty cost 5.1% ( from 4.6%) YoY- imp parameter to watch out for, other operating cost also increased

4. Though very high gross margin business, untill there is scale, small changes in cost structure affects PAT drastically

5. On track for 40-45 store additions in FY24 - more large format stores to give focus on customer experience ( since 60% of revenues is dine-in)

Asian Paints Q2 FY24 Results Insights

Decorative paints (india)- majority business.
Domestic volumes (cons) 1.1% growth YOY
Decorative vol 6% up - muted

Revenues ( Standalone) 7310cr (flat)
PAT 1160cr ( 52% up yoy)
EBITDA 21.7% ( 15.2% Q2 FY23)

Gross margin 43.9% ( highest in 2 yrs)
Almost similar performance H1 FY24

Thoughts-

1. No price hike taken since last 1 yr
2. Huge Margin/ PAT improvement YoY due to moderating raw material prices YoY
3. Despite upbeat demand from real estate, muted retail demand led to flat YoY- erratic monsoons in Sep, plus festive season delayed by 20 days this yr.
4. Industrial & powder coating divn good growth 6%/ 11% resp.
5. Kitchen/ bathwear ( emerging segment)- double digit degrowth, both does not contribute to PAT yet.
4. Exports 4% down - macro problems in Nepal, Bangladesh, Egypt.

Will Grasim disrupt Paints Industry?

IndiaMart Q2 FY24 Results Insights

60% market share in B2B Classified space
10x the size of next player
100% organic search enquiries- ad spends minimal

Paying subscribers 2.1 lakh ( 12% yoy)
ARPU ( Avg rev / user) Rs 53525 ( 10% up YoY)
Suppliers 77 lakhs ( 75 lakhs Mar '23)
Enquiries 2.4 lakh ( 6% up)

Revenues 295cr ( 22% up)
EBITDA margin 27% ( same)
EBITDA 80cr (19% up)
PAT 70cr (2% up)

Thoughts-

1. Enquiries uptick 6% after 4 muted quarters
2. ARPU up mostly due to price hike taken in FY24
3. Paying subs/ suppliers growth on track- normal
4. EBITDA margins stabilised at 27% ,despite manpower cost up QoQ by 6%
5. PAT impacted due to impact of investment in associate cos. (invested 650cr in different startups in accounting space - invoicing/ inventory/pricing - Busy, Vyapar etc)
5. SME loans growth figures good across diff NBFCs/Banks - shows increased SME activity
6. FY23 muted owing to dampened SME sentiments, plus co adding employees first time post covid, also didn't take price hike in FY23
8. Deployment of cash is challenge- still sitting on 1900cr cash after recent 500cr buyback plan.
7. Only 2.1 lakh of 77 lakh suppliers on board are paying subscribers

Further, top 10% customers contribute 46% of revenues

churn rate high among entry level Silver subscription model

Successful upgradation/ funneling plan by engaging with this segment of customers ( via on-ground team ) for these customers to Platinum/Gold will unleash real GROWTH for the co.

Shriram Finance Q2 FY24 Results Insights

Loan book mix similar- Auto loans ( Rural/ Semi-urban focus)

CV 49%
PV 19%
CE 8%

Operating exp 24% up
Provisions 26% up yoy, sharply up QoQ

NIM 8.93% ( 8.37% FY23)
Net stage 3 assets 5420cr ( 2.8%of AUM) , improved QoQ , Q1 was 3.3%

AUM 202640cr (19% up YoY)
NII 4820c ( 17% up)
Op Exp 1420cr ( 24% up)

Op Profit 3480cr ( 16% up)
Provisions 1130cr (26% up)
PAT 1750cr (12.6% up)

ROA 3.14% ( 2.89% FY23)
ROE 15.4% (14.84% FY23)
CRAR 22.1%

Thoughts-

1. Operating expenses increased due to 34% rise in employee expenses

2. ROA and ROE improved

3. CV / PV has 3% / 2.6% of AUM as net stage 3 assets

4. Launched Shriram One App in Sep for cross-selling other products to customers- target to onboard exisiting customers

5. Subsidiary - Housing AUM is 10800cr ( grown > 80% YoY) - going forward housing becomes bigger portion will balance loan book mix

6. Growth tied to CV cycle- when economic recovery underway, Shriram supposed to do well

SBFC Finance Q2 FY24 Results Insights

SME loans focussed NBFC

2 yr AUM CAGR 43%
Business loan 77%
gold loan 19%

AUM 5800 cr ( 43% up YoY / 9% up QoQ)

Disbursement 700cr ( 25% up )

Total income 250cr ( 7% up QoQ/ 39% up YoY)
Operating income 82cr (12% up QoQ/ 46% YoY)
PAT 53cr (12% up QoQ/ 47% up YoY)

NPA 2.37% ( vs 2.54% Q1 FY24)
NNPA 1.33% ( vs 1.55% Q1 FY24)

ROA 3.84% ( 3.72% Q1)
ROE 11.1% ( 10.6% Q2 FY23/ FY23 11.1%)

Stage 3 assets 2.3% (no fresh slippage QoQ)
Stage 3 provision coverage 44%

Credit Spread 7.6% ( HI FY23 7.3%)
Credit cost remains same at 0.8%
NIM 9.3% ( vs 9.7% last yr H1)

Thoughts -

1. on ground credit underwriting team ( focus on retail/ trading customers with steady cashflow)

2. Finance cost gone up 110 bps- credit cost remaining steady , limited impact

3. ROA/ ROE maintained , GNPA/NNPA reducing trend QoQ continues

4. All loans women co-borrower / 98% of loans secured against commercial/ residential property

For business loans, SBFC focuses on self- employed section with CIBIL score >700 , monthly income < 1.5 lakhs/ month.

They do 100% in-house sourcing of loans through 1900 strong sales team via door-to-door

SBFC Finance Business analysis

DLF Q2 FY24 Results Insights

Luxury segment focussed real estate
business in 2 parts- development properties, and rental properties

DLF ( Development Co)

Collections 2360cr ( highest ever)
Revenues 1470cr (9% up YoY)

Gross margin 57% ( 60% last Yr Q2)
EBITDA 590cr (19% up)
PAT 350cr ( 35% up)
Debt 3010cr ( 72% maturity > 3yr)

Net Debt 140cr ( +ve)
Total inventory 4240cr

DCCDL- Lease Rentals ( 66% owned by DLF)
consists of Office spaces as well as Retail ( DLF mall )

Total area 39.7 msf

Rental income 1070cr ( 7% up)
EBITDA 1110cr ( 6% up)
PAT 410cr (17% up)
CFO 1110cr

Net Debt 18020cr (61% maturity >3 yrs)
Cons. PAT 630cr (29% up) ( Devco+DCCDL)

FY24 onwards launch plan 19700cr ( 60% is luxury segment)

Liquidity

Net debt - 140cr
Receivables 12750cr
Payables 6420cr
Surplus cash 5650cr

1. With debt reduction done in last few years, DLF currently on healthy growth path - with steady rental income - both commercial and retail space
2. Aided by healthy real estate demand in luxury segment
3. Land bank available at key locations is strong MOAT.
4. Liquidity, cashflow/ debt levels good - sudden short term changes in demand / payments should not affect co.
5. Entering Mumbai finally

TVS Motors Q2 FY24 Results Insights

Volumes

Motorcycles 4.93 lakh ( 3.3% up)
Scooters 4.2 lakh (9.6% up)
Mopeds 1.18 lakh ( flat)
3 wheeler 0.43 lakh (14% drop)

Total 10.74 lakh (4.5% up)

Growth attributed to EVs ( 2 wheeler)
EV volumes - 57k vs 15k YoY

No growth barring EV

Standalone

Revenues 8140cr (13% up)
EBIT 720cr ( 32% up)
PAT 540cr ( 32% up)
EBITDA 11% ( 10.2% last yr Q2)

Consolidated PAT 420cr ( 120cr loss in subsidiaries)

Thoughts-

1. Growth in volumes entirely due to EVs , otherwise Sales flat YoY ( point has to be considered this is good considering , this year festive season is 20 days postponed YoY)

2. Margins increment led by EVs ( higher priced higher margin vs ICE scooty)- same is reflected in revenue growth - hence PAT growth 32%

3. EV sales increased QoQ in Q2 despite reduced FAME II incentives. ( EV Q1 FY24- 39k / Q2- 57.5k)

4. H2 supposed to be better than H1 - normal monsoons & festive season.

5. Launched Apache RTR 310cc and TVS X ( premium EV) in Q2

Overall, being first mover in EVs paid off well for TVS till date- driving growth for Q2 as well as H1

KEI Industries Q2 FY24 Results Insights

Revenues-

Retail 47%
Insti sale 44%
EPC 6%

Wires & cables 90%
FMEG ( appliance) 10%

Revenue 1940cr ( 21% YoY)
EBITDA margin 10.87% ( 10.31% last yr same Q)
PAT 140cr (31% up YoY, 15% up QoQ)

H1 Revenue growth 17.5% Yoy
Pending orders 3360cr

Thoughts-

1. EPC( projects) contribution they are not increasing due to payment lags

2. KEI doing 750cr capex in 3 years

3. Insti sales for KEI much more- since margins are lesser in institutional sales , so KEI margins lesser than Polycab ( higher retail contri)

4. KEI trying to increase retail business contri , improving distribution reach by extending channel credit , deepening branding initiatives at par with Polycab ( sponsoring IPL teams/ other BTL activities)

5. Strong demand in wires/ cables evident from govt infra spends/ real estate

Adani Wilmar - Q2 FY24 Results Insights

Commodity business or FMCG ?

Dominant position in Edible oils (fortune)
Also FMCG , Basmati ( Kohinoor) , industry essentials (oleochemicals etc)

Revenues 12270cr ( 13% down)
EBITDA 140cr ( 43% down)
PAT -130cr (loss) ( Q2 FY24 49cr)

EBITDA margin 1.1%

Revenues contribution-

Edible oils 75%
FMCG 9%
Essentials 16%

Thoughts-

1. Essentially 91% of business is commodity business
2. 75% business is cooking oil ( commodity) impacted by sharp raw material price drop YoY ( as price drop passed on to consumer)
3. Industry essentials oleo-chemicals profits vanished

Co is now loss making.

This is what happens in 2% margin business with interest cost > 50% of EBITDA

Such low margin business needs to be debt free to absorb commodity price shocks

Growth is FMCG business is impressive ( 26% YoY)

Unless FMCG becomes majority , this will remain commodity business

Still commanding 50PE ( wrt FY22 Profits) as market discounting the fact that earlier margins would recover to normal with time,plus high growing FMCG would alter margin structure gradually

Hero Moto Q2 FY24 Results Insights

Volumes - Oct '23 ( YoY growth)

Motorcycle 5.29 lakh (26% up)
Scooters 45k (30% up)
Total 5.75 lakh ( 26% up)

Sept volumes 5.36 lakh ( 3% up)

Combined Sep-Oct- volumes are good

Standalone (majority)

Revenues 9690cr ( 5.6% up)
PBT 1400cr ( 45% up)
EBITDA margin 14.1%
PAT 1050cr (47% up)

cons. PAT 1010cr (48%up)

Thoughts-

1. Volumes of Sep/Oct combined indicative of good festive demand - rural recovery ( as roughly 50% of Hero volumes are from rural)

2. Sep '18 volumes were 8 lakh - indicating demand fully not recovered, and more imp. strong shift in customer preferences from mass category to premium category ( Hero is struggling in premium category)

3. To address this, Hero launched Harley 440 in Q2 ( 25000 bookings) - if they are not able to gain traction in premium category, co. may struggle to grow its volumes/ revenues significantly

4. Growth in PAT & margin improvement mainly due to raw material prices reduction & other cost initiatives

Indraprastha Gas Q2 FY24 Results Insights

city gas distribution/ CNG auto fuel
based out of NCR

CNG Volumes (YoY)

CNG 574 mmscm ( 3% up)
PNG 189 mmscm ( 3% up)

PNG domestic grown, industrial degrown

Revenues (YoY)

CNG 2560cr ( 1% degrowth)
PNG 880cr (7% degrowth)

Total 3440cr ( 3% up)

EBITDA 650cr (25% up)
EBITDA margin 19% ( vs 15%)
PAT 530 cr (29% up)

1. No significant volume growth

2. growth in margins and PAT due to natural gas prices correcting sharply YoY ( last year supply chain impacted due to Ukraine-Russia war)

3. Significant dependence ( 75%) on CNG - contribution of CNG as auto fuel not clear- that will determine the near term impact on revenues considering the 50% Ola/Uber fleet EV conversion decision by Delhi govt.

Berger Paints Q2 FY24 Results Insights

Standalone business ( decorative paints)

Volumes 10.9% up YoY
Revenues 2440cr (2.8% up)
EBITDA 400cr ( 27% up)

EBITDA margin 16.5% ( vs 13.4% Last Yr Q2)

PAT 240 cr (28% up)
Cons. PAT 290cr (33% up)
cons. EBITDA 17.8% ( vs 14.2%)

H1 EBITDA 15.4%
H1 PAT 34% up YoY

Gross margins 40% ( highest in 10 Qtrs)

Thoughts-

1. Low value growth due to more economy products sale - extended monsoon - low consumption of premium emulsions

2. Margin improvement mainly due to raw material prices correcting YoY

2. Deepened network- Added 2000 retail touchpoints , installed 1700 Colorbanks

3. capacity to increase by 3500 KL/MT per month by FY25, some more brownfield capex

4. market share gains to 20% from 19.8%

5. Rural demand + festive demand expected to aid Q3

6. International - Poland double digit growth, Nepal degrowth due to inflation,Nippon automotive JV doing well

7. In case crude going above 100 and staying there for long- would affect margins again

Chola Finance Q2 FY24 Results Insights

AUM 1.34 lakh cr

Loan book mix

Vehicle finance 61%
Loan against prop (SME) 20%

Housing loan 9%
New business 10%

Disbursements H1

Vehicle fin 35% up YoY
LAP 37% up
Housing 124% up ( low base- current AUM 10800cr ( 67% up))

Q2 FY24

Operating profit 2370cr ( 39% up)
PAT 760cr (35% up)
Yield 14.3% ( vs 13.6% )

Cost of funds 6.9% ( same)

NIM 7.4% ( same vs NIM compression in industry)
Credit cost 1.3% (same)
ROA 2.4%
ROE 19.2% ( 20.3% FY23)

Gross stage 3 Assets 2.96% ( QoQ improved)
Provision coverage 47%

Thoughts-

1. Very strong growth in all segments maintaining asset quality

2. Housing and New business - New engines of hypergrowth for Chola

Amazing growth in housing ( catering affordable sector) -compared to standalone players like Aavas, Homefirst - though base was < 10000cr till date- whether they can replicate this post this base has to be seen.

Given the powerful rural franchisee of Chola, and pan India presence, they are supposed to grow much faster than AHF players

3. New business 4300 employees -huge- to focus on personal loans, digital lending with fintechs, term loans, loan against shares

4. Highly diversified loanbook ( even in Auto loans)- with asset quality maintained with high growth.

5. Auto sector/ housing sector/ LAP - all credit sectors doing well- Chola is best placed to ride the same, growing MUCH faster than sectors it is catering to

RR Kabel Q2 FY24 Results Insights

After very good Q1, results of Q2 inline
5th largest wires / cables player ( recent IPO)

5% market share

Revenue contri

90% wires/cables
10% FMEG

Q2 figures (growth YoY/QoQ)

Revenues 1610cr ( 18% up/ 0.8% up)
EBITDA 120cr (93% up/ 6.6% up)
EBITDA margin 7.5% ( Q1 7.1%)
PAT 74cr ( 101% / -0.3%)

Q1 was better than Q2

Thoughts-

1. Revenue growth lesser than peers KEI / Polycab despite smaller base
Volume growth higher than this - as raw material prices high last year

2. RR Kabel has increased its electrician connect / reach drastically in last 2 years, which should aid them now

Retail outlet reach still half of Polycab

3. Improvement of margins YoY due to raw material prices

4. FMEG business loss making - no scale yet

5. RR Kabel has highest export revenues after Polycab ( highest export contri amongst peers)

RR Kabel Business analysis

Nykaa Q2 FY24 Results Insights

Gross margin 43.1% ( 221bps down YoY)
Contribution margin 20.3% ( 20.6% LY Q2)
Contri margin BPC 26.4%
Contri margin Fashion 4.7% ( 2.3% LY Q2)

Q2 ( growth YoY/ QoQ)

Revenues 1510cr ( 22% up / 6%up)
BPC rev 1280cr
Fashion rev 130cr

EBITDA 80cr ( 32% up/ 10% up)
EBITDA % 5.4% ( 5.2% Q1)
PAT 7.8cr ( 5.2 cr LY Q2/ 5.4 cr Q1 FY24)

Average spend / customer/ yr Rs 6500

Offline stores 165 ( 8% of BPC GMV contri)
Revenues/ sqft/ yr ~ Rs 20k ( GMV 39k)
GMV/ sqft data released ( revenues estimated)

Costs- as % of revenues Q2FY24 (Q2FY23 )

fulfillment 9.7% ( 11.8% )
ad spends 11.2% ( 10.9%)
employee 9% (9.9%)

Thoughts-

1. Revenue growth looks slowed down , good thing is fashion GMV has neared BPC GMV, margins improvement will create the difference, though high competition

2. Offline presence imp- 165 stores, offline rev/ store good , and now 8% of BPC GMV, should aid them in the long run, improve brand visibility/ experience

3. Costs- fulfillment cost reduced due to efficiency , employee cost decreased due to scale improving,Fashion driving increased ad spends

4. Existing customers BPC 79% of revenue ( 75% LY Q2)- new customer acquisition slowed down or exisiting customer repeat buying increased ?

5. Cash 26cr ( 41cr Mar 23), bank balance 120cr

Inventory 1090cr ( vs 1000cr Mar 23)

Borrowing ( short term) 660cr (460cr FY23)

Will they have to raise more debt in near term?

IRCTC Q2 FY24 Results Insights

E-ticketing is majority business

Revenues 1000cr ( 25% up YoY)
EBIT 360cr (20% up )
PAT 300cr (36% up)
EBIT margin 36.4% ( vs 35% FY23 avg)

Segment wise EBIT

Ticketing 270cr ( 8% up YoY)
Catering 74 ( 110% up)
Rail neer 10cr ( vs 6 cr LY Q2)
Tourism -6cr ( vs -10cr)
State teertha 11cr ( vs 4cr)

Thoughts-

1. Ticketing revenue ( main source of income) is not doing that good

Q1 metrics ( detail in attached thread) reveals total tickets booked reduced YoY, but EBIT increased due to premiumisation- AC tickets increased YoY, non-AC decreased

So non- AC passengers decreasing is a concern

Q2 metrics ( could not get hold of)

Ticketing EBIT 270cr ( vs 250 LY Q2 , FY24 Q1 was 240cr)

Looks like growth will come from more AC tickets- provided govt increasing number of AC coaches/ premium trains ( being done)

2. Catering business EBIT margin increased from 12% to 17%. Revenues 110% up

3. Monopoly and moat is very strong ( unless privatized)

4. 82% tickets already booked online, further improvement in penetration will be slow

6. Increasing Ad revenues ( under head- ticketing) has scope as huge captive customer base

7. Air tickets business can be looked at for future growth ( ~65% of ticketing revenues of travel industry comes from air tickets )

More on air ticketing industry in Yatra article

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Quarterly Results Insights- Q2 FY24

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