Top Quality Companies

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Current year Q1 were highly affected due to lockdown, but later we saw recovery. As Eicher belong to premium segment recovery was slower than other companies. This year volume have fallen by 12% hence sales and Profits have fallen by -5% and -28% respectively which were as expected. We can definitely expect improvements in coming time. Those holding since long time can add again during any fall near 2100 (Upgrade from the whole zone of 1280 to 1150) & bought during previous range or near 2300 can be held for this year target of 3200 & can even keep it for long term wealth.

2/3 wheeler industry for Q1 FY25:

### **Industry Overview:**

The 2/3 wheeler industry is critical in the automotive sector, especially in markets like India, where these vehicles are widely used for personal and commercial transportation. The industry is influenced by factors such as fuel prices, government policies, disposable income levels, and economic growth.

### **Key Metrics Analysis:**

1. **Market Capitalization:**

- The total market cap of the companies listed is ₹636,799 crores.

- The largest player Bajaj Auto has a market cap of ₹273,038 crores, showing a strong presence in the market. They are India’s largest 3 Wheeler Company & have strong export in 2 as well as 3 wheeler industry.

2. **Sales Growth (Q1 FY25):**

- The overall sales growth for the industry is 14.03%.

- The top performer in terms of sales is BajajAuto & has a 15.71% growth rate, indicating a solid demand for their products.

- HeroMoto, which is the largest 2 Wheeler company, has a high sales growth of 15.4%, indicating strong rural demand.

3. **Profitability:**

- The total profit for Q1 FY25 stands at ₹4,559 crores.

- Profit margins vary significantly among companies, with the highest margin of Eicher Motor due to the niche market in 2 wheeler at 25.06% and the lowest at 4.66% for TVS Motors due to debt. All other 3 companies are almost debt free.

- The profit growth is notably high for Heromoto at 47.43%, specifically due to low profits last year.

4. **Margin Expansion:**

- The average margin expansion across the companies is 1.08%, indicating a slight improvement in profitability, majorly driven by sales growth.

- However, companies like TVS were struggling with margin expansion, as indicated by negative growth, as they have high debt and this year we saw increased interest rates.

### **Investment Insights:**

- **Top Performers:**

Companies with strong sales growth, high profit margins, and significant market caps are likely to continue performing well, especially if they maintain or increase their market share.

- **Growth Potential:**

Investors might want to focus on companies showing high sales and profit growth, as these could indicate future industry leaders or companies with strong growth potential.

- **Risk Consideration:**

Companies with low profit margins and negative margin expansion might face challenges, making them riskier investments. It's essential to analyse their strategies for improving profitability.

### **Conclusion:**

The 2/3 wheeler industry shows promising growth, with several companies demonstrating strong financial performance in Q1 FY25. Investors should consider focusing on companies with high sales and profit growth, along with strong market capitalization, as these are likely to provide stable returns. However, careful consideration should be given to those with lower margins and growth rates, as they might face challenges in maintaining profitability.

**⚠️ Disclosure:** The information provided above is for educational and informational purposes only and should not be considered as financial advice.

Bajaj Auto's performance as of August 2024:

### 1. **Sales Performance Overview:**

- **2-Wheelers:**

- **Domestic Sales:** Bajaj Auto sold 2,08,621 units in August 2024, a 30% increase compared to August 2023.

- **Exports:** Export sales were 1,26,557 units, showing a modest increase of 2% compared to the same month last year.

- **Total 2-Wheelers:** The combined total for domestic and export sales was 3,35,178 units, marking an 18% overall growth compared to August 2023.

- **Commercial Vehicles (CV):**

- **Domestic Sales:** The domestic sales of commercial vehicles reached 45,206 units, reflecting a slight increase of 2% year-over-year.

- **Exports:** The export of commercial vehicles showed a significant rise, with 17,420 units sold, marking a 41% increase from the previous year.

- **Total Commercial Vehicles:** The total sales of commercial vehicles, combining domestic and export sales, stood at 62,626 units, up by 11% from August 2023.

- **Overall Sales (2-Wheelers + CV):**

- **Domestic:** Total domestic sales across all vehicle types were 2,53,827 units, which represents a 24% increase.

- **Exports:** Total export sales across all vehicle types were 1,43,977 units, reflecting a 5% growth.

- **Grand Total:** The overall sales for August 2024 were 3,97,804 units, an increase of 16% compared to August 2023.

### 2. **Year-to-Date (YTD) Performance:**

- **2-Wheelers:**

- **Domestic Sales:** 9,59,965 units were sold from April to August 2024, a 14% increase from the same period in the previous year.

- **Exports:** 6,23,671 units were exported during this period, marking a 4% growth.

- **Total 2-Wheelers:** The total YTD sales for 2-wheelers were 15,83,636 units, up by 10%.

- **Commercial Vehicles:**

- **Domestic Sales:** The domestic sales of commercial vehicles reached 1,95,480 units, showing an 8% increase.

- **Exports:** The export of commercial vehicles during this period was 74,913 units, up by 15%.

- **Total Commercial Vehicles:** The YTD sales for commercial vehicles were 2,70,393 units, a 10% growth from the previous year.

- **Overall YTD Sales (2-Wheelers + CV):**

- **Domestic:** Total domestic sales were 11,55,445 units, reflecting a 13% increase.

- **Exports:** Total export sales were 6,98,584 units, showing a 5% growth.

- **Grand Total:** The overall YTD sales were 18,54,029 units, marking a 10% increase from the previous year.

### 3. **Key Takeaways for Investors:**

- **Strong Domestic Growth:** The domestic market is performing robustly, with significant growth in both 2-wheelers and commercial vehicles, which indicates strong demand within India.

- **Modest Export Growth:** While exports are growing, the pace is slower compared to domestic sales, especially in the 2-wheeler segment. However, the commercial vehicle exports have shown a strong upward trend, which is promising.

- **Overall Healthy Performance:** The company has shown consistent growth both on a monthly basis (August) and year-to-date, which is a positive sign for sustained performance.

- **Focus on Strategic Markets:** The strong growth in commercial vehicle exports could indicate Bajaj Auto's effective strategy in tapping into new or existing international markets.

### 4. **Conclusion:**

As an investor, Bajaj Auto's performance for August 2024 and the YTD data suggest a healthy and growing business, particularly in the domestic market. The moderate growth in exports, especially in commercial vehicles, could be an area to watch as it might contribute more significantly to the company's overall growth in the future.

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Bharat Electronics Limited (BEL) JV with Israel Aerospace Industries:

1. **Joint Venture with Israel Aerospace Industries**: BEL has incorporated a new joint venture company, "BEL IAI AeroSystems Private Limited," with Israel Aerospace Industries (IAI), approved by the Ministry of Corporate Affairs. This partnership signifies an expansion into the aerospace sector, particularly focusing on the **Medium-Range Surface to Air Missile (MRSAM) System**. This venture will provide product support, including repair and maintenance, which is strategically important for defense contracts.

2. **Strategic Alignment in Defense Sector**: The incorporation aligns with BEL's ongoing emphasis on defense capabilities, indicating potential growth in contracts related to missile systems. The involvement of the Ministry of Defence suggests strong government support, which could further enhance the reliability and credibility of the venture.

3. **Authorized and Paid-up Capital**: The authorized share capital of the joint venture is **₹8.2 crores**, with a paid-up share capital of **₹4.1 crores**, and BEL holds a **40% stake** in this new entity. This significant shareholding suggests a long-term commitment and potential for steady revenue streams as the MRSAM support services get underway.

4. **Market Expansion and Collaboration with International Partner**: The joint venture is a collaboration between Indian and Israeli companies, giving BEL exposure to advanced technologies and best practices from Israel’s well-regarded defense sector. This can lead to enhanced technological capabilities for BEL and greater opportunities for international defense contracts.

5. **Growth Potential in Aerospace**: The industry focus of this venture is aerospace, specifically in systems that are used and deployed in India. Given the increasing demand for air defense systems globally, this move could potentially open up new revenue streams for BEL and strengthen its market position in defense solutions.

6. **Government and Regulatory Approval**: The joint venture required approvals from the Indian Ministry of Defence and relevant committees in Israel. The support from both governments highlights the strategic importance of the venture, which may translate into preferential treatment in future defense procurement processes.

Overall, investors can consider the incorporation of this joint venture as a positive development for BEL, given its potential to diversify income streams, expand into the aerospace sector, and leverage international expertise. The partnership also positions BEL for future growth in the defense sector, particularly in high-value defense systems, which could positively impact its financial performance over time.

ARE&M
Q2 FY25 Full Analysis

Amara Raja Energy & Mobility Limited Q2_fy25 Results Update:

---

### ???? **Company Overview**

- **Amara Raja Energy & Mobility Limited (ARE&M)** is a prominent energy solutions provider in India, offering a range of products in the energy storage sector. Their offerings include advanced Lithium-ion batteries, EV chargers, and lead-acid batteries, serving automotive and industrial clients. Key brands under their portfolio include PowerStack®, AmaronVolt®, Quanta®, Amaron®, and Powerzone. With recent expansions in global markets, ARE&M is strengthening its footprint in the energy storage space.

### ???? **Financial Performance Highlights**

- **Consolidated Sales Growth**:

- **Q2 FY25 Revenue**: ₹3,250.73 crore, an increase of **9.83%** YoY compared to ₹2,959.72 crore in Q2 FY24.

- **Sequential Comparison**: Revenue saw a marginal decrease from **Q1 FY25**’s ₹3,263.05 crore.

- **Profit Margins**:

- **Q2 FY25 vs. Q2 FY24**: Profit before tax (PBT) margin was **9.75%** in Q2 FY25 compared to **10.98%** in Q2 FY24, indicating a **decline of 1.23%** in margin due to increased operational expenses.

- **Q2 FY25 vs. Q1 FY25**: The PBT margin in Q1 FY25 was **10.26%**, resulting in a **0.51% sequential decline**.

- **Consolidated Profit Growth**:

- **Net Profit After Tax (PAT)**: ₹235.61 crore in Q2 FY25, slightly below Q1 FY25’s ₹249.12 crore but up from Q2 FY24’s ₹238.40 crore.

### ???? **Profitability, Leverage, Liquidity & Valuation Ratios**

- **Profitability Ratios**:

- Gross margins remained stable, reflecting the company's control over cost pressures.

- **Leverage Ratios**:

- The company maintains minimal borrowing, ensuring low leverage, which strengthens its financial stability.

- **Liquidity Ratios**:

- Current Ratio: Strong liquidity support with current assets totaling ₹4,136.24 crore as of September 2024.

- **Valuation Ratios** (at CMP of ₹1332):

- Price-to-Earnings (P/E) and EV/EBITDA are metrics to assess market valuation at Traile EPS of 53.94 Trail PE is 24.

### ???? **Key Performance Indicators (KPIs)**

- **EPS**: ₹12.87 for Q2 FY25, slightly down from ₹13.61 in Q1 FY25, yet improved over Q2 FY24's ₹13.03.

- **Growth Investment**: The company approved an additional ₹1,000 crore investment in its subsidiary, Amara Raja Advanced Cell Technologies, enhancing its manufacturing capabilities. This could help add more revenues in future.

### ???? **Cash Flow Analysis**

- **Operating Cash Flow**: Robust cash flow from operations at ₹865.00 crore for the half-year ended September 2024, up from ₹689.31 crore the previous year.

- **Investing Cash Flow**: Significant investments in expansion, with net cash used in investing activities at ₹1,831.18 crore, highlighting its commitment to growth.

- **Financing Activities**: Dividend payouts and stable financing arrangements underscore a balanced financial approach.

### ???? **Industry Overview**

- The energy storage and battery sector is on a growth trajectory, driven by demand in the EV market and industrial storage solutions. ARE&M’s expansion into Lithium-ion technology positions it for sustained growth in alignment with global energy trends.

### ???? **Peer Companies**

- Major competitors include **Exide Industries** and **HBL Power Systems**, also active in energy storage. ARE&M’s focus on advanced battery technology provides a competitive edge through product innovation and market differentiation.

### ???? **Historical Growth & Near-Term Outlook**

- The company has shown consistent growth with a diversified product portfolio. The short-term outlook remains favorable due to increased investment in Lithium-ion technology and international market penetration.

### ???? **Future Outlook**

- ARE&M is set for expansion with ongoing investments in gigafactories and R&D. The focus on new markets, especially in EV infrastructure, is expected to drive strong growth over the long term.

AUM MARKET SHARE OF 42 MUTUAL FUND AMC'S

SBI, ICICI & HDFC AMC LEADING THE AUM | DEC_22

**Latest financial results of HDFC Asset Management Company (HDFCAMC) for H1 FY25**

### 1. **AUM Growth During H1 FY25 vs Last Year (H1 FY24)** ????

- **AUM (Assets Under Management):** HDFC AMC reported a closing AUM of ₹7,686 billion in Q2 FY25, up from ₹5,229 billion in Q2 FY24, reflecting a **47% YoY growth**.

- **Equity-Oriented AUM:** Closing AUM for equity-oriented schemes was ₹5,205 billion, up from ₹3,002 billion in Q2 FY24, showcasing a **62% YoY growth**.

---

### 2. **Market Share (H1 FY25 vs H1 FY24)** ????

- **Overall Market Share:** HDFC AMC's overall QAAUM market share was 11.5% for Q2 FY25, compared to 11.2% for Q2 FY24, showing a slight improvement.

- **Equity Market Share:** It maintained a 12.9% market share in actively managed equity mutual funds in Q2 FY25, reflecting consistency.

---

### 3. **Income Growth During H1 FY25 vs Last Year (H1 FY24)** ????

- **Revenue from Operations:** HDFC AMC's revenue from operations for H1 FY25 stood at ₹16,625 million, a **37% increase** compared to ₹12,176 million in H1 FY24.

- **Total Income:** Total income increased by **34%** to ₹20,062 million in H1 FY25 from ₹14,978 million in H1 FY24.

---

### 4. **Profitability Ratios Comparison (H1 FY25 vs H1 FY24)** ????

- **Profit Before Tax (PBT):** PBT increased by **39%** to ₹16,111 million in H1 FY25 from ₹11,605 million in H1 FY24.

- **Profit After Tax (PAT):** PAT rose by **29%** to ₹11,808 million in H1 FY25, compared to ₹9,151 million in H1 FY24.

- **Operating Margin:** The operating margin for Q2 FY25 was **36 bps**, a slight increase from Q1 FY25, indicating stable efficiency.

---

### 5. **Other Key Ratios** ????

- **Return on Equity (ROE):** HDFC AMC’s ROE for FY24 was 29.5%, and this has been maintained in FY25.

- **Dividend Per Share:** The company declared an interim dividend of ₹70 per share in H1 FY25.

---

### 6. **Industry Overview** ????

- The mutual fund industry saw **significant growth** in equity-oriented schemes, with equity as a percentage of total AUM increasing from 56% to 61% YoY.

- **Individual investors**' participation continues to rise, with individual folios contributing 62% of MAAUM in September 2024.

---

### 7. **Peer Group Analysis** ????

- HDFC AMC is among the **top three** players in the industry, competing with firms like SBI Mutual Fund and ICICI Prudential AMC. It holds a strong position in both equity and individual investor categories.

- **Peer Performance Comparison:** HDFC AMC's equity market share of 12.9% places it ahead of ICICI Prudential (12.7%) and Nippon India (6.8%) in terms of individual assets market share.

---

### 8. **Future Outlook** ????

- The outlook for HDFC AMC remains **positive** due to:

- **Rising AUM** and an increase in equity participation.

- Continued focus on growing its retail customer base through digital platforms.

- A strong **SIP book** (₹1,786 billion AUM), with systematic transactions expected to provide **stable future cash flows**.

- The company is also focused on embedding **ESG principles** and diversifying its product offerings, including alternative investment funds and international business.

This combination of strong financial growth, a leading market position, and an expanding SIP base positions HDFC AMC well for future expansion.

Overall airline market share on domestic routes in India (%)

WHO LEADS THE MARKET SHARE?

India by economic size 5th Largest but population-wise 2nd largest. Agro Market in India to reach 90 Lakh Cr by 2023 with the growth of 12.2% CAGR during the last 5-years. Globally pathogens & Pests have affected crop yields by 10-40% for major crops like wheat, rice, maize, soybean & potato. The world will be of 860 Cr population in 2030 & 980 Cr in 2050. India is one of the largest Agro markets in the world. 18% of Chinese are Agri employed, v/s 43% of India. 58% of India's population depends on Agri. Around 70% of India’s rural Household depends on agri whereas 86% of Indian farmers are categorized as small with less than 2 hectares. India’s agri spending is 0.3% of Agri GDP v/s CHINA, US, Brazil, and South Africa spend of 2X, 4X, 6X 10X. The average income in rural areas was just 1417/month. Aim to Double the income by 2022 by PMKSY, PMFBY, DBT & NFSM. India expected to grow double farmer income from 1 Lakh/year during 2016 to 2 Lakh/year till 2022. India in agri Contributes 15% in GDP v/s global average of 6.4%. India has the 10th Largest arable land resources in the world. India’s Paddy yield/hectare for eg increased 2.5X over 56 years still is 18% less than China, 50% then Brazil or 62% to the US. 30-35% of annual crop yield was lost due to Pests. India pesticide usage is lowest in the world as India uses 0.6Kg/Hectare v/s 6Kg/Hectare in US & 12Kg in Japan. Up to 80% of the Increase in Agri output in the world is going to come from Emerging Countries. 55% Urban today India will be 68% Urban till 2050. Arable land is expected to decrease by 20% until 2050. Agri productivity growth by 1.66% v/s required by 1.75% until 2050. Growing Animal Meat consumption from today 300 MT to 455 till 2050. 40% of the world population suffers from water scarcity. Global GDP would be 130% more in 2050. In the coming time, India will be the country with the Highest Population and the growing population will need food. India in the coming time may need high growth in food production utilizing less manpower, less land, and less water. Companies helping in this problem can show huge growth in the coming time. Currently, there are around 25 Listed companies out of all UPL is the largest, but yes high debt due to high in-organic growth is cautious. PIInd, Bayer, Dhanuka, Sharda, Sumichem are almost debt-free.

Ceramics Industry Investment Analysis ????

Market Overview:
Total Market Cap: ₹25,079 Cr ????

Total Sales: ₹10,235 Cr ????

Net Profit: ₹272 Cr ????

The total market cap for the listed companies in the ceramics industry is ₹25,079 crores.

The combined sales for the industry stood at ₹10,235 crores, with a net profit of ₹272 crores.

Key Financial Metrics:
Market Capitalization & Profitability:

Kajaria Ceramics:

Market Cap: ₹18,476 Cr ????

Profit: ₹381 Cr ????

Kajaria Ceramics is the market leader with a market cap of ₹18,476 crores and profits of ₹381 crores, showing strong profitability and market presence.

Sales and Profit Margins:

Top Sales:

Kajaria Ceramics: ₹4,685 Cr ????

Profit Margin:

Kajaria Ceramics: 8.1% ????

Sales: Kajaria Ceramics again leads with ₹4,685 crores, followed by Somany Ceramics and Asian Tiles.

Profit Margin: Kajaria Ceramics has the highest profit margin at 8.1%, which is well above the industry average of 1.9%.

Sales Growth:

5-Year Growth:

Kajaria Ceramics: 10.08% ????

This Year's Q2 Growth:

Kajaria Ceramics: 5.1% ➕

5-Year Sales Growth: Kajaria Ceramics and Somany Ceramics show steady growth over the past 5 years, indicating good market adaptation and growth potential.

This Year's Sales Growth (Q2 FY25): The industry as a whole grew only by 1.0% this quarter, with many companies showing negative growth due to possibly market conditions or internal challenges. Kajaria Ceramics shows a modest growth of 5.1%, which is significant given the overall industry stagnation.

Debt to Equity Ratio:

Kajaria Ceramics: 0.05 ????️

Asian Tiles: 0.07 ????️

Low Debt Levels: Kajaria Ceramics and Asian Tiles both exhibit low debt levels (0.05 and 0.07 respectively), suggesting less financial risk associated with these companies.

Investment Insights:

Given the data and analysis, Kajaria Ceramics stands out as the most robust company in the ceramics industry for potential investment:

Strong Market Leadership: Dominates the market cap and sales volume in the industry.

Consistent Profitability: Best profit margin indicating efficient operations and strong pricing power.

Stable Growth and Low Debt: Shows sustainable growth with minimal debt, indicating good management and financial health.

Strong Recommendation:

Kajaria Ceramics: Proven market leader with stable growth and low debt. Ideal for conservative and steady investment. ????

Other Notable Companies:
Somany Ceramics: Good market position but with higher debt. Keep on watch. ????

Recommendations:
Primary Recommendation: Invest in Kajaria Ceramics for stable and reliable growth with lower risk.

Secondary Considerations: Monitor Somany Ceramics for potential investment if signs of operational improvements and market conditions favor the ceramics sector.

Investors should also keep an eye on industry trends, regulatory changes, and economic factors that might impact the ceramics sector's overall performance and the financial health of these companies.

*Kajaria Ceramics Limited's Q2 FY25 financial performance*: Muted Growth

---

### ???? *About the Company:*

Kajaria Ceramics Limited is India’s largest manufacturer of ceramic and vitrified tiles and the 8th largest globally. The company operates through nine plants with a combined annual capacity of 93.10 million square meters, distributed across various regions in India and Nepal.

---

### ???? *Industry Overview:*

The tile industry is closely linked to the real estate and construction sectors, which are witnessing renewed growth due to increasing urbanization and housing demands. The company expects H2 FY25 to show stronger demand due to a rebound in real estate activity after a subdued H1 FY25.

---

### ???? *Peer Companies:*

Kajaria Ceramics competes with companies such as Somany Ceramics, Asian Granito, and Orient Bell. All these companies are in the business of manufacturing and marketing tiles and sanitaryware, serving both residential and commercial construction sectors.

---

### ???? *Q2 FY25 Performance Highlights:*

- *???? Sales Growth: The company reported **8.5% growth in tile volumes*, with consolidated revenue growing from ₹1,121.62 crores in Q2 FY24 to ₹1,179.27 crores in Q2 FY25.

- *???? Profit Margins*:

- *EBITDA Margin* for the quarter dropped to *13.5%* due to losses in the bathware division, which stemmed from the newly operational sanitaryware unit in Morbi, Gujarat. The Keronite unit, which also started production recently, contributed to additional overheads.

- *PAT (Profit After Tax)* for Q2 FY25 stood at *₹84 crore, a decline of **22% YoY, compared to **₹108 crore in Q2 FY24*.

- *???? Profitability Margins*:

- *PBT* decreased to *₹123.46 crores* in Q2 FY25 from ₹147.65 crores in Q2 FY24.

- *PAT margins* were negatively affected due to higher costs in newly operational units and subdued sales growth.

---

### ???? *Volume Growth*:

- The company's tile volumes in Q2 FY25 grew by *8.5% YoY* to *28.70 MSM*. The growth in volumes came from both its own manufacturing units and subsidiaries.

---

### ???? *Historical Performance*:

- Over the past few years, Kajaria has consistently increased its production capacity while maintaining a significant market share. However, challenges in the current quarter due to higher operating costs and lower-than-expected demand have reduced profit margins.

---

### ⚖ *Leverage Ratios*:

- *Net debt to equity ratio* was maintained at *-0.12* (net cash position), demonstrating strong financial discipline with no significant debt burden.

---

### ???? *Other Key Metrics*:

- *EBITDA Margins*: 13.5% for Q2 FY25 vs. 16.02% in Q2 FY24.

- *Return on Equity (ROE)*: 13.10% as of September 2024.

- *Return on Capital Employed (ROCE)*: 18.23%.

- *Working Capital Days*: 59 days in Q2 FY25.

---

### ???? *Key Investor Insights*:

- The overall growth in volumes and revenue is a positive indicator for long-term growth, but the short-term drop in profitability due to operational issues in the bathware division and additional costs associated with new production units are notable risks.

- Investors should consider the company’s expansion plans, particularly in tiles, adhesives, and other segments, as potential drivers for future profitability.

- The company's debt-free status, robust operational scale, and established market presence provide confidence in its ability to recover profit margins as demand picks up in the coming quarters.

### ???? *Disclosure:*

We are not a tip provider, we should check the data and invest accordingly if we feel confident.

**Tata Elxsi's Q2 FY25** :

### 1. **Revenue Growth**

- **Q2 FY25 Revenue from Operations**: ₹955.1 Cr, which represents a **3.1% QoQ** growth from ₹926.5 Cr in Q1 FY25 and an **8.3% YoY** growth from ₹881.7 Cr in Q2 FY24.

- **Revenue Growth in Constant Currency (CC)**: +5.1% YoY, but only +0.2% QoQ.

### 2. **Profitability**

- **EBITDA**: ₹266.4 Cr, showing a **5.6% QoQ** increase from ₹252.3 Cr in Q1 FY25 and a marginal **1.1% YoY** growth from ₹263.6 Cr in Q2 FY24.

- **PBT (Profit Before Tax)**: ₹298.7 Cr, a **13.2% YoY** increase from ₹263.9 Cr and a strong **18.3% QoQ** rise from ₹252.4 Cr in Q1 FY25.

- **PAT (Profit After Tax)**: ₹229.4 Cr, reflecting a **14.7% YoY** increase from ₹200.0 Cr and a **24.6% QoQ** rise from ₹184.1 Cr.

- **EBITDA Margin**: 27.9%, up from 27.2% in Q1 FY25 but lower than 29.9% in Q2 FY24.

### 3. **Segmental Performance**

- **Transportation**: Delivered **16.0% YoY growth** and **4.4% QoQ** growth, with key wins including a $50 million multi-year deal.

- **Media & Communications**: Declined **5.1% YoY** and **2.6% QoQ**, although the company sees future growth opportunities.

- **Healthcare & Life Sciences**: Experienced a significant decline of **11.8% YoY** and **11.2% QoQ**, mainly due to deal delays.

### 4. **Geographical Growth**

- **India**: Showed a robust **31.2% YoY** growth.

- **Japan and Emerging Markets**: Experienced exceptional growth at **81.9% YoY**.

### 5. **Employee Metrics**

- **Total Employees**: 13,142, reflecting a **2.7% decline** YoY from 13,399 in Q2 FY24.

- **Attrition Rate**: Decreased slightly to **12.5%** in Q2 FY25 from 13.7% in Q2 FY24.

### 6. **Profitability and Leverage Ratios**

- **PBT Margin**: 29.3%, up from 28.9% YoY and 26.3% QoQ.

- **PAT Margin**: 22.5%, compared to 21.9% YoY and 19.2% in the previous quarter.

- **EBIT Margin**: 25.0%, showing a slight improvement from 24.3% in Q1 FY25 but lower than 27.1% in Q2 FY24.

### 7. **Key Insights for Investors**

- **Steady growth despite sector challenges**: Tata Elxsi continues to demonstrate resilience with steady growth in revenue and profitability. Its focus on transportation and innovative digital solutions, particularly in automotive engineering and healthcare, offers promising long-term growth.

- **Future Outlook**: The company's strategic focus on expanding in Japan, emerging markets, and the Indian market has already started contributing to its growth. Major deals in the transportation sector and AI-powered digital innovation are likely to drive future performance.

### 8. **Industry Overview and Future Outlook**

- The **IT Services** industry remains poised for continued growth, driven by digital transformation, AI integration, and the rise of IoT. Tata Elxsi’s emphasis on design-led digital solutions positions it well in industries like automotive, healthcare, and communications. Challenges may arise in the healthcare sector due to deal renewals, but overall, the company's strategic wins indicate a positive outlook.

This analysis should provide a comprehensive picture for investors evaluating Tata Elxsi's Q2 FY25 performance. Let me know if you need further analysis or insights!

Disclosure: We are not a TIp provider, this document was prepared for education purposes.

HOW WEALTH IS CREATED ON LONG TERMMANY PEOPLE ARE ALWAYS LOOKING FOR THE SPECULATIVE MOVE FOR WEALTH, WHICH IS A HIGH RISK WHEN WE TALK ABOUT INVESTMENTS. LET ME TAKE THE EG OF SHREE CEMENTS WHERE MANY OF YOU ARE HOLDING THE COMPANY SINCE THE PRICE OF 1500 AND EVEN TODAY AT 25000 SEEMS TO BE HIGH CONFIDENT. HOW WEALTH IS CREATED IN A LONGER TIME. LET US CHECK WHY SHREE CEMENT MARKET CAP HAS GROWN BY ZOOM 30% DURING THE LAST 10 YEARS AND EVEN 40% DURING THE PAST 19 YEARS?GOOD COMPANIES FOCUS ON EXPANSION. SHREE CEMENT HAS CREATED HUGE WEALTH BECAUSE THEIR NETWORTH HAS GROWN BY 23% CAGR DURING THE PAST 10 YEARS AS WELL AS 20 YEARS. SO WHY NETWORTH HAS GROWN?BECAUSE THEIR SALES HAVE GROWN BY 14% CAGR AND HENCE PROFITS BY 27% CAGR. SO WHY SALES HAVE GROWN?BECAUSE THEY ARE ABLE TO INCREASE THEIR CAPACITY BY 12%. DESPITE INCREASED CAPACITY, THEIR DEBT TO EQUITY RATIO IS HIGHLY COMFORTABLE, JUST 8%. FOCUS ON THOSE COMPANIES WHO ARE LOOKING TO CASH THE BOOMING ECONOMY AND ARE ABLE TO GROW CONSISTENTLY.GROWTH + QUALITY IS THE FORMULA FOR WEALTH.

Larsen & Toubro (L&T) has recently carved out a separate business vertical for Renewable EPC (Engineering, Procurement, and Construction) within its Infrastructure Projects segment, effective from September 1, 2024. This move is part of L&T's strategy to capitalize on the global shift towards renewable energy, driven by the need for decarbonized electricity and the rapid development of renewable technologies, particularly in solar and wind energy.

### Key Insights:

1. **Strategic Repositioning:**

- L&T has created this vertical to enhance management visibility and ensure the seamless integration of resources and capabilities. This will provide increased autonomy, customer proximity, and leadership oversight to the renewable business, which is seen as a high-growth area.

2. **Market Potential:**

- The renewable energy sector is experiencing strong momentum, especially in India, where there is a concerted push towards increasing the share of non-fossil fuel-based electricity. The Middle East, with its ideal conditions for solar generation, also presents significant opportunities, along with regions like SAARC, ASEAN, CIS, and Africa.

3. **L&T's Capabilities:**

- L&T already has a significant portfolio, with 22 GWp of renewable EPC experience, including solar, wind, and battery energy storage systems. The company has been involved in major projects globally, including large-scale solar plants in Saudi Arabia and the UAE, and iconic renewable projects in India.

4. **Leadership and Vision:**

- The appointment of Mr. A. Ravindran as the Head of Renewable Business underscores L&T's commitment to strengthening its position in the renewable energy sector. The company's Chairman & Managing Director, Mr. S.N. Subrahmanyan, highlighted that L&T's early investments in renewable infrastructure have positioned it well to capitalize on the growing opportunities in this sector.

### Impact on Investors:

1. **Growth Potential:**

- L&T's strategic focus on renewable energy aligns with global trends, which could result in significant growth opportunities for the company. Investors may see this as a positive move, likely to drive long-term value as the renewable energy sector expands.

2. **Risk Management:**

- By diversifying its portfolio into renewable energy, L&T is mitigating risks associated with its traditional businesses, particularly those tied to fossil fuels. This diversification could make L&T a more resilient and attractive investment, especially for those focusing on sustainable and ESG (Environmental, Social, and Governance) investments.

3. **Market Leadership:**

- L&T's leadership in renewable EPC, combined with its strong execution track record, positions it to benefit from the increasing demand for renewable energy infrastructure globally. This could enhance its market valuation and investor confidence.

Overall, L&T's move to create a dedicated Renewable EPC business vertical signals a strong commitment to sustainability and positions the company to leverage emerging opportunities in the renewable energy sector, potentially offering attractive returns for long-term investors.

Join this channel to get access to perks:https://www.youtube.com/channel/UCs_MQFLeX7x6Fvr_e1oLAMA/joinQ3 Results of All Major Companies would be updated this Quarter By all Students. So Get ready for this Amazing Experience. Team Munir Paviwala: Research Would be Created By: Mayank Shah (Indore)S. Partha Saradhi (Vizag)Dr. A. Ravi Kiran (Hyderabad)Can Even Post Queries in advance in the Comment Box if any.Details Can Be Viewed From Below Link:https://docs.google.com/spreadsheets/d/e/2PACX-1vRjtoNqd6zODqWNh-YmzMgUVU2WPtjHFQc1JDQAr-fjT4MMpVYAD2udlTlFkin4INYOdGsg0m5jWR42/pubhtml?gid=1037543853&single=trueDisclosure: Do Not Buy or sell before consulting your advisor as the writer may have the position in the above-given stocks or indices

DMart's latest financial results for H1 FY25

---

### **???? Key Highlights:**

1. **???? Revenue Growth**:

- **Q2FY25 Revenue**: ₹14,050 crore, showing a 14.2% y-o-y growth (₹12,308 crore in Q2FY24).

- **H1FY25 Revenue**: ₹27,762 crore, a 16.2% y-o-y growth compared to ₹23,892 crore in H1FY24. This shows Q2 dragged this year overall growth.

- **???? Like-for-like (LFL) growth**: For H1 FY25, it was 7.4%, and for Q2 FY25, it was 5.5% for stores operating for at least 24 months. Q2 Like to like is also not favorable.

2. **???? Profitability**:

- **Q2FY25 PAT**: ₹710 crore, 7.9% y-o-y growth (₹659 crore in Q2FY24). PAT margin for Q2FY25 stood at 5.0%.

- **H1FY25 PAT**: ₹1,523 crore, 12.5% y-o-y growth (₹1,354 crore in H1FY24). PAT margin was 5.5%, slightly down from 5.6%. This shows H1 margins were lower dragging profits down.

- **???? EBITDA Margin**: Stood at 8.4% in H1FY25, compared to 8.5% in H1FY24. This year margin are 10 basis points down.

3. **???? Store Expansion**:

- **Stores Opened**: 12 new stores added in H1FY25, bringing the total to **377 stores**.

- **Retail Business Area**: Expanded to **15.8 million sq. ft.**.

4. **???? Bills and Sales**:

- **Total Bill Cuts (Transactions)**: Slight decline in Q2FY25 compared to Q1FY25 (from 8.6 crore to 8.5 crore). Q2 dragged bill cut down.

- **Revenue from Sales per Sq. Ft.**: Also saw a slight dip from ₹15.4 in Q1FY25 to ₹15.8 crore in Q2FY25. Sales per sq ft were affected.

---

### **???? Financial Ratios:**

1. **???? Profitability Ratios**:

- **Return on Net Worth**: 19.1% for H1FY25 compared to 15.1% in H1FY24.

- **???? Return on Capital Employed (ROCE)**: 19.6% for H1FY25.

2. **???? Leverage Ratios**:

- **Debt-to-Equity Ratio**: Remained at **0.03x** for H1FY25, reflecting low financial leverage.

3. **???? Liquidity Ratios**:

- **Current Ratio**: 3.09 for H1FY25, reflecting a strong liquidity position (Current Assets: ₹6,611 crore; Current Liabilities: ₹2,136 crore).

---

### **???? Like-for-Like (LFL) Growth:**

- **Q2FY25**: The LFL growth rate for stores open for 24 months was 5.5%. New stores underperformed.

- **H1FY25**: LFL growth was 7.4%.

---

### **???? Future Outlook:**

1. **Short Term**:

- The company expects continuous growth in its store footprint. However, margins might remain under pressure due to competitive pricing strategies and the growing online grocery segment, particularly DMart Ready.

- **????️ Online grocery** (DMart Ready) posted a **21.8%** growth in H1 FY25, indicating continued expansion in this channel.

2. **Long Term**:

- DMart is well-positioned for long-term growth due to its efficient procurement and supply chain practices, cluster-based expansion strategy, and focus on large-format stores in key cities.

- **???? Technology investment** and expanding its e-commerce segment will likely enhance its presence and operational efficiency in the years ahead.

Disclosure: Do not treat this document as recommendation, this was prepared for educational purposes.

### *???? Zomato Q2_fy25 Result Update:*

### *???? About the Company:*

Zomato is a prominent Indian online food delivery ???? and restaurant discovery platform ???? that has diversified into segments like quick commerce ????, B2B supplies (Hyperpure) ????, and entertainment ticketing ???? through acquisitions. Its core business includes food ordering and delivery, quick commerce, and B2B supplies to restaurants.

---

### *???? Industry Overview:*

Zomato operates in the rapidly growing digital food delivery ???? and quick commerce ???? sectors. The online food delivery market in India is experiencing significant growth ????, driven by urbanization, increased internet penetration ????, and lifestyle changes. However, the market is competitive ????, with key players like Swiggy, Dunzo, and others.

---

### *⚖ Peer Companies:*

- *Swiggy:* Zomato’s closest competitor in the food delivery market ????.

- *Dunzo:* Competes in the quick commerce segment ????.

- *BigBasket:* Active in the online grocery delivery segment ????, partially overlapping with Zomato’s quick commerce.

---

### *???? Historical Growth of Zomato (Consolidated):*

- Zomato has seen impressive growth over the years, with consolidated adjusted revenue ???? growing from INR 4,640 crore during its IPO in 2021 to INR 20,508 crore on an annualized basis for Q2 FY25.

- The company’s acquisitions, including Paytm’s entertainment ticketing business ???? and Blinkit ????, have further enhanced its service offerings and revenue streams ????.

---

### *???? Consolidated Sales Growth:*

- *Q2 FY25 Sales Growth:* Consolidated adjusted revenue grew by *58%* YoY (13% QoQ) to INR 5,127 crore.

- *H1 FY25 Sales Growth:* For the half-year ended September 2024, revenue was INR 9,005 crore, reflecting a YoY growth of approximately *71%* compared to the same period last year (INR 5,264 crore).

---

### *???? Segmental Revenue Share and Growth:*

- *Food Delivery ????:* The largest segment, contributing INR 2,012 crore in Q2 FY25, with a YoY growth of *30%*.

- *Hyperpure (B2B Business) ????:* Contributed INR 1,473 crore in Q2 FY25, with a YoY growth of *98%*.

- *Quick Commerce ????:* Showed the highest growth with INR 1,156 crore in Q2 FY25, a YoY increase of *129%*.

- *Going Out (Dining and Entertainment) ????????:* Generated INR 154 crore, up *214%* YoY.

---

### *???? Profit Margins:*

- *Q2 FY25 vs. Q1 FY25:* The company recorded an EBITDA of INR 330 crore in Q2 FY25, up from INR 239 crore in Q1 FY25.

- *Q2 FY25 vs. Q2 FY24:* EBITDA improved by INR 289 crore YoY, demonstrating enhanced profitability across business segments ????.

---

### *???? Profitability Ratios:*

- *Operating Profit Margin (EBITDA Margin):* Approximately *6.4%* in Q2 FY25, improving significantly from *1.2%* in Q2 FY24.

- *Net Profit Margin:* Zomato recorded a profit of INR 176 crore in Q2 FY25, compared to INR 36 crore in Q2 FY24.

---

### *⚖ Leverage Ratios:*

- *Debt-to-Equity Ratio:* Zomato maintains a *low leverage* position, with significant cash reserves of INR 10,800 crore, and no major plans for minority investments or acquisitions in the near term.

---

### *???? Other Key Ratios/KPIs:*

- *GOV Growth (Gross Order Value):* *55%* YoY, with food delivery growing *21%* YoY and quick commerce at *122%* YoY.

- *Return on Equity (ROE):* Zomato’s ROE remains positive with improving profitability ????.

- *Inventory Turnover Ratio (Hyperpure):* Increased efficiency in the B2B segment reflected in the substantial revenue growth ????.

---

### *???? Near-Term and Future Outlook:*

- *Short-Term ????:* Zomato expects continued strong growth in the quick commerce ???? and entertainment ticketing ???? segments. The food delivery business remains stable ????, with steady growth.

- *Long-Term ????:* Zomato aims to scale further through its diversified revenue streams ???? and expects long-term profitability in all its segments ????. Additionally, its focus on maintaining a strong cash balance ???? will help sustain competitive positioning.

### ???? *Disclosure:*

We are not a tip provider, we should check the data and invest accordingly if we feel confident.

### **Key Metrics Analysis Zomato & Swiggy**

The financial data for both Zomato and Swiggy covers revenue, profit/loss before tax, and profit margin from FY22 to Q1 FY25.

#### **1. Revenue Growth** ????

- **Zomato**:

- **FY22**: ₹4,192 Crore

- **FY23**: ₹7,079 Crore (Growth: 69%) ⬆️

- **FY24**: ₹12,114 Crore (Growth: 71%) ⬆️

- **Q1 FY25**: ₹4,206 Crore ???? (Quarterly)

- **Swiggy**:

- **FY22**: ₹5,705 Crore

- **FY23**: ₹8,265 Crore (Growth: 45%) ⬆️

- **FY24**: ₹11,247 Crore (Growth: 36%) ⬆️

- **Q1 FY25**: ₹3222 Crore ???? (Quarterly)

**Analysis:**

- ???? **Both companies have demonstrated strong revenue growth year-on-year**, with Zomato showing a slightly faster growth trajectory compared to Swiggy.

- ???? **Zomato has outpaced Swiggy** in recent years, reflecting better market capture or strategic initiatives that are yielding higher revenue.

#### **2. Profit/Loss Before Tax** ????

- **Zomato**:

- **FY22**: -₹1,223 Crore (Loss) ❌

- **FY23**: -₹971 Crore (Reduced Loss) ➖

- **FY24**: ₹351 Crore (Profit) ✅

- **Q1 FY25**: ₹351 Crore (Continued Profit) ✅

- **Swiggy**:

- **FY22**: -₹3,629 Crore (Loss) ❌

- **FY23**: -₹4,179 Crore (Increased Loss) ????

- **FY24**: -₹2,350 Crore (Reduced Loss) ➖

- **Q1 FY25**: -₹2,350 Crore (Continued Loss) ❌

**Analysis:**

- ???? **Zomato has successfully turned profitable** in FY24 and maintained profitability in Q1 FY25, a significant positive sign for investors.

- ❗ **Swiggy**, while showing a reduction in losses, still remains loss-making, indicating challenges in achieving profitability.

#### **3. Profit Margin** ????

- **Zomato**:

- **FY22**: -29.2% (Negative Margin) ❌

- **FY23**: -13.7% (Improved but still negative) ➖

- **FY24**: 2.9% (Positive Margin) ✅

- **Q1 FY25**: 6.0% (Improved Positive Margin) ✅

- **Swiggy**:

- **FY22**: -63.6% (Negative Margin) ❌

- **FY23**: -50.6% (Negative Margin) ❌

- **FY24**: -20.9% (Reduced Loss) ➖

- **Q1 FY25**: -19.0% (Reduced Loss) ➖

**Analysis:**

- ???? **Zomato has achieved positive margins** in FY24 and Q1 FY25, indicating better cost control and operational efficiency.

- ???? **Swiggy**, despite reducing its negative profit margins, still reports substantial losses. The company needs further improvement to become profitable.

### **Investor Perspective Analysis** ????

#### **1. Revenue Growth and Market Expansion** ????

- **Zomato**: ???? The company has shown consistently strong revenue growth over the last few years. This suggests that Zomato has been successful in expanding its market presence, either by increasing order volumes, improving pricing, or introducing additional services.

- **Swiggy**: ⚠️ Though Swiggy’s revenue has grown, it has been relatively slower compared to Zomato. Investors need to consider whether Swiggy is focusing more on profitability at the cost of growth, or if market conditions are making it difficult to achieve faster growth.

#### **2. Profitability** ????

- **Zomato**: ✅ Turning profitable is a major milestone, demonstrating the company's ability to achieve financial sustainability, significantly reducing the risk associated with investment.

- **Swiggy**: ❌ Swiggy is still struggling with losses, which could be a red flag for risk-averse investors. The company needs to show a clearer path to profitability to attract more investors who prioritize sustainable earnings.

#### **3. Efficiency and Cost Control** ⚙️

- **Zomato**: ???? The improving profit margins indicate efficient cost management and scaling operations effectively, showing that the company can generate profit from its expanding revenue base.

- **Swiggy**: ???? Still incurring high losses despite improved revenue, which could imply higher marketing or operational expenses relative to revenue.

#### **4. Investment Outlook** ????

- **Zomato**: ???? From an investment perspective, Zomato is a more appealing choice for investors seeking a growth company transitioning to profitability.

- **Swiggy**: ???? It may appeal to investors who believe in the long-term growth of the company, but with significant risks attached due to ongoing losses.

### **Conclusion: Zomato vs. Swiggy for Investors** ????????

- **Zomato**: ???? Currently in a stronger financial position, with profitability achieved in FY24 and Q1 FY25, indicating effective management and scalability. It provides a **lower-risk investment** with a clearer path to sustainable earnings.

- **Swiggy**: ???? **Still in the growth stage but loss-making**, which makes it a riskier investment. Investors would need to believe in Swiggy's long-term market strategy despite ongoing challenges in reaching profitability.

Overall, **Zomato** presents a more balanced opportunity for investors looking for growth with a manageable risk profile, whereas **Swiggy** might attract those who are willing to bet on its long-term market strategy despite ongoing losses.

*Indian Energy Exchange's (IEX) Q2 FY25 financial results:*

### *Key Financial Highlights (Q2 FY25):*

1. *Revenue Growth:*

- *Revenue from operations* for Q2 FY25 increased to ₹13,924.38 lakhs compared to ₹10,853.26 lakhs in Q2 FY24, marking a *revenue growth of approximately 28.31% year-on-year* (YoY).

2. *Profit Growth:*

- The *profit before tax (PBT)* for Q2 FY25 was ₹14,292.32 lakhs compared to ₹11,078.95 lakhs in Q2 FY24, representing a *profit growth of 28.98%*.

- *Net profit* for Q2 FY25 stood at ₹10,608.40 lakhs, up from ₹8,286.98 lakhs in Q2 FY24, reflecting a *net profit growth of 28.01%* YoY.

3. *Profit Margins and Profitability:*

- *Profit margins* (Net profit as a percentage of total income) for Q2 FY25 stood at *63.20%, slightly lower compared to Q2 FY24's margin of **62.35%*.

- The company continues to exhibit robust profitability with high operating and net margins, reflecting efficient cost management and strong operating performance.

### *Leverage, Liquidity, and Valuation Ratios:*

1. *Leverage:*

- The company's *finance costs* remained stable at ₹65.99 lakhs, indicating controlled leverage. IEX's balance sheet reveals a *low debt-to-equity ratio* given minimal finance costs and high equity capital.

2. *Liquidity:*

- *Cash and cash equivalents* as of September 30, 2024, stood at ₹1,944.05 lakhs, down from ₹14,780.12 lakhs as of March 31, 2024, indicating reduced liquidity, potentially due to dividend payouts and investment in assets.

- *Current ratio: With current assets of ₹1,13,598.14 lakhs and current liabilities of ₹63,078.35 lakhs, the company’s current ratio is approximately **1.80*, which suggests healthy short-term liquidity.

3. *Valuation Ratios:*

- *Earnings per share (EPS)* for Q2 FY25 is ₹1.19, up from ₹0.93 in Q2 FY24, indicating growing profitability.

- *Trail EPS* is ₹4.37, up from ₹4.15 in Q1 FY24, indicating growing profitability.

- *Trail PE ratio* Considering today’s close of 184 & Trail EPS of 4.37 Trail_PE = 42X which is higher then its Fair PE assumed at 30X.

### *Company Overview:*

IEX is India's premier energy exchange, providing a platform for the trading of electricity, renewable energy, and energy-saving certificates. It plays a vital role in the deregulated power market, offering transparent price discovery and an efficient market mechanism.

### *Industry Overview:*

The energy trading industry in India is experiencing rapid growth due to increased demand for electricity, renewable energy integration, and government initiatives to boost renewable energy production. IEX stands to benefit from the government's focus on clean energy and the expected growth in power consumption across industrial and residential sectors.

### *Future Outlook:*

- *Short-term:* The company is expected to maintain steady growth driven by increasing electricity demand and growing participation in the energy exchange market. The Opening of the market with other players removes the monopoly which could affect the growth.

- *Long-term:* The emphasis on renewable energy, the expansion of the power market, and favorable regulatory changes will likely support IEX's growth trajectory. Additionally, the introduction of newer market segments like real-time electricity markets will further strengthen its market leadership.

### *Disclosure Considerations:*

We are not a tip provider, we should check the data and invest accordingly if we feel confident.

NBFC (Non-Banking Financial Company) industry for Q1 FY25:

### 1. **Market Leadership:**

- **Bajaj Finance (BAJFINANCE)** continues to dominate the NBFC space with a market capitalization of ₹407,511 crores, the highest in the sector. This indicates strong investor confidence and a leading market position.

- **Jio Financial (JIOFIN)**, with a market cap of ₹208,422 crores, is also a major player, but its operational metrics show areas of concern, as discussed below.

### 2. **Revenue and Profit Leaders:**

- **Bajaj Finance** not only leads in market cap but also in sales and profit, generating ₹16,102 crores in sales and ₹3,955 crores in profit. This indicates strong business operations and profitability.

- **Shriram Finance (SHRIRAMFIN)** and **Cholamandalam Investment (CHOLAFIN)** are also notable, with sales of ₹9,605 crores and ₹5,812 crores, respectively. However, their profit margins are significantly lower than that of **Bajaj Finance**.

### 3. **Margin Analysis:**

- **Jio Financial** stands out with an exceptional margin of **75.06%**, which is far above the industry average. But the low sales figure suggests it may be operational sales & Profits & hence it is yet not comparable to traditional NBFCs.

- **Fivestar (FIVESTAR)** and **Poonawalla** also exhibit high margins of **39.31%** and **29.35%**, respectively, indicating robust profitability.

### 4. **Growth Metrics:**

- **Cholamandalam Investment** and **CGCL** are leading the sector in Q1 sales growth with **41.79%** and **43.31%**.

- **M&M Financial (M&MFIN)** shows the highest Q1 profit growth at **37.29%**, which could indicate either high volatile profits that may not be good last year and now this year we saw the surge in Profits

- On the contrary, **PEL** and **IIFL** show negative growth in both sales and profit, which is a significant red flag for investors. **PEL** has particularly troubling figures with a **-26.24%** decline in sales and a **-64.44%** drop in profits, indicating severe challenges in maintaining profitability.

### 5. **Challenges and Concerns:**

- The **NBFC sector** as a whole is facing a slight decline in margin expectations, with an overall decrease of **-1.58%**. This may suggest rising costs due to high interest rates in current economy affecting profitability across the sector.

- **Bajaj Finance** and **Muthoot Finance (MUTHOOTFIN)** have significant decreases in margin expectations by **-3.18%** and **-3.37%**, respectively, which could indicate potential challenges in maintaining their current profit margins due to increasing cost of fund.

### 6. **Outperformers:**

- **Bajaj Finance** and **Muthoot Finance** are strong performers overall for long term with leading presence across the nation one in pure retail finance and another in God Finance.

- **Fivestar** and **Poonawalla** are emerging as strong performers, with both companies showing high profit margins and significant growth rates.

- **Sundaram Finance (SUNDARMFIN)** is also notable for its strong margins and decent growth metrics, making it a solid player in the sector.

### 7. **Underperformers:**

- **PEL** and **IIFL** are underperforming significantly, with negative growth and low margins. These companies may face serious operational or market challenges, and investors should approach with caution.

- **Jio Financial** shows an impressive margin but very low sales growth, which could indicate it is in a nascent stage.

### 8. **Sector Outlook:**

- The overall sector shows strong Advances demand growth with a **19%** increase in sales but **11%** growth in profit is not well due to high interest cost. Once the Interest cycle may start in reverse mode we may see an increase in Profits.

- Investors should keep an eye on margin trends, as the slight decrease in margin expectations could signal challenges ahead, especially in a potentially rising interest rate environment or in the face of increased competition.

### Conclusion:

Investors should consider **Bajaj Finance**, **Cholamandalam Investment**, and **Muthootfinance** as strong candidates for their portfolios due to their robust financial metrics. However, caution is advised with companies like **PEL** and **IIFL** due to their negative growth trends. The NBFC sector is showing overall resilience, but margin pressures could pose risks in the near future.

**⚠️ Disclosure:** The information provided above is for educational and informational purposes only and should not be considered as financial advice.

Footwear Industry: Expected growth 15%

Footwear Industry Globaly is around 31 Lakh Cr and is expected to grow by 5.5% in future becoming around was 38 lakh cr till 2025. If we see Par capita consumption of Developed countries it is 6.5 pairs while world is 3.2 & India underp performing with just 1.9 per capiata pair. This gap is supposed to be filled in coming year as Per capita income of India is growing fast. It is estimated that Indian market which was around 1 Lakh Cr during fy_2020, dropped to 66,000 cr in fy_2021 while it was still under pressure in fy_2022 with the market size of 93,000 Cr. It is estimated that Indian market could grow by 15% to 17% CAGR becoming the market size of 1.4 lakh Cr till fy_2025. During fy_2020 organised market was around 31% which grew to 34% currently as will be around 38% till fy_2025. India is the 2nd largest footwear producer. The sector holds an important place in Make in India Initiative and thus has been chosen as a Champion Sector. Domestic manufacturing poised for growth in wake of decline in footwear imports. Rising disposable income, changing life style and increase in literacy rate will help grow the industry. Now Footwear has evolved from being a mere necessity to an important fashion accessory. The growing trend of premiumization in the Indian footwear industry and the shift to branded footwear will help branded footwear companies grow.

Relaxo Limited's Q2 FY25

Relaxo Footwears Limited's results for Q2 FY25:

### 1. **Sales Performance**: *Weak Sales Performance Continued*

- **Sales Growth:** Revenue from operations declined to ₹679.37 crore in Q2 FY25, a decrease of 5.03% from ₹715.32 crore in Q2 FY24.

- **Volume and Pricing:** The number of pairs sold was 4.3 crore in Q2 FY25, down from 4.8 crore in Q2 FY24. Average realization per pair increased to ₹156 from ₹147 in the same period last year, indicating improved pricing per unit.

### 2. **Profit Margins**

- **EBITDA Margin:** The EBITDA for Q2 FY25 was ₹87.66 crore, with a margin of 12.9%, compared to a margin of 12.8% in Q2 FY24, showing a marginal improvement.

- **Profit Before Tax (PBT):** PBT declined to ₹49.57 crore in Q2 FY25 from ₹60.38 crore in Q2 FY24, with a reduced margin of 7.3%.

- **Net Profit Margin:** PAT for Q2 FY25 stood at ₹36.73 crore with a profit margin of 5.4%, down from 6.2% in Q2 FY24.

### 3. **Profit Growth Comparison**

- **YoY Comparison (Q2 FY25 vs. Q2 FY24):** Profit decreased by 16.88% YoY, with PAT declining from ₹44.19 crore in Q2 FY24 to ₹36.73 crore in Q2 FY25.

- **QoQ Comparison (Q2 FY25 vs. Q1 FY25):** Profitability showed a sequential decline in Q2, as Q1 FY25 PAT was higher at ₹44.37 crore.

### 4. **Key Ratios**

- **Profitability Ratios:** ROE and ROCE for FY24 were at 10.4% and 14.7%, respectively.

- **Liquidity Ratio:** Current Ratio stood at 2.4 as of FY24, reflecting healthy liquidity.

- **Leverage Ratio:** The company maintained a net debt position of ₹(123) crore in H1 FY25, reflecting low leverage.

### 5. **Footwear Industry Overview**

- **Market Growth:** The Indian footwear market is projected to grow, driven by rising disposable income, changing lifestyles, and a shift toward branded and premium products.

- **Consumer Dynamics:** The industry is moving from unorganized to organized retail, with organized retail expected to grow at a CAGR of ~19% until FY30.

### 6. **Peer Comparison**

- Competitors include Bata India, Khadim, and Liberty Shoes, which cater to various segments within the footwear industry. Relaxo’s strong brand portfolio and extensive distribution network (with 70,000+ retail points) provide a competitive edge in reaching a broad customer base.

### 7. **Historical Growth and Future Outlook**

- **Historical Trends:** Relaxo has shown consistent growth in past years, with FY24 revenue reaching ₹2,914 crore.

- **Outlook:** Relaxo’s focus on premiumization, brand diversification, and efficiency in production places it well for capturing future growth in the organized footwear segment. However, volume challenges might affect short-term profitability.

### 8. **Other Industry-Relevant KPIs**

- **Inventory Turnover:** Efficient inventory management is critical, with Relaxo holding inventories worth ₹669.51 crore in H1 FY25.

- **Distribution Efficiency:** Relaxo has around 403 exclusive brand outlets and exports to 34 countries, indicating strong market outreach.

### 9. **Near-Term and Long-Term Outlook**

- **Short-Term:** Expected fluctuations in consumer demand could impact sales volumes, though average realization per pair is expected to sustain.

- **Long-Term:** With a shift toward branded products, growth in disposable income, and a robust distribution model, Relaxo is positioned to expand its footprint and market share.

Relaxo’s comprehensive strategy encompassing product diversity, manufacturing efficiency, and strong distribution is set to support its competitive position in the expanding Indian footwear market. For valuation, factors such as profitability ratios, liquidity, and industry growth projections are key considerations. But current trends along with Latest quarter data are not appraising.

### ICICI Lombard General Insurance (ICICI GI) - Investor Analysis for H1 FY25 vs H1 FY24

**Gross Direct Premium Growth:**

- **H1 FY25**: The Gross Direct Premium Income (GDPI) stood at ₹144.09 billion, representing a growth of 15.5% compared to ₹124.72 billion in H1 FY24. This growth outpaced the industry growth of 7%.

- **Q2 FY25**: GDPI for Q2 FY25 was ₹67.21 billion, growing 10.4% compared to ₹60.86 billion in Q2 FY24. This growth also surpassed the industry growth of 2%. Growth was muted for the whole Industry during Q2_fy25.

**Combined Ratio:**

- **H1 FY25**: The combined ratio improved slightly to **103.2%**, compared to **103.8%** in H1 FY24. Excluding catastrophic (CAT) losses, the combined ratio was **102.2%** in H1 FY25, compared to **102.7%** in H1 FY24.

- **Q2 FY25**: Combined ratio was **104.5%**, compared to **103.9%** in Q2 FY24. Excluding CAT losses, it stood at **102.6%** for Q2 FY25, compared to **102.8%** in Q2 FY24. Looks attractive in H1_fy25 but when we see for Q2 majorly Gujarat Floods have raised the claims and Combined ratio is again high 104.5% which is not a good thing.

**Profitability Ratios and Margins:**

- **H1 FY25**: Profit after Tax (PAT) increased by **31.7%** to ₹12.74 billion, compared to ₹9.68 billion in H1 FY24. The **Return on Average Equity (ROAE)** also improved to **20.3%** from 18.0% in H1 FY24.

- **Q2 FY25**: PAT increased by **20.2%** to ₹6.94 billion compared to ₹5.77 billion in Q2 FY24.

**Key Financial Ratios:**

- **Capital Gains**: Increased significantly to ₹5.21 billion in H1 FY25 from ₹2.87 billion in H1 FY24 majorly due to boom in stock market.

- **Solvency Ratio**: As of September 30, 2024, ICICI GI had a solvency ratio of **2.65x**, well above the regulatory requirement of 1.50x.

- **ROAE (Annualized)**: 20.3% in H1 FY25 vs. 18.0% in H1 FY24.

**Industry Overview and Future Outlook:**

- The non-life insurance industry in India continues to show **strong growth** potential, but penetration levels remain low compared to global standards, highlighting significant untapped market opportunities. ICICI GI is well-positioned as a leading private sector insurer with a comprehensive product portfolio.

**Peer Comparison:**

- ICICI GI has outperformed the industry in terms of **premium growth** and profitability. Its growth in **GDPI** and **profitability metrics** such as ROAE and PAT stand above many peers, making it an attractive choice for investors looking for strong players in the Indian non-life insurance sector.

**Near-Term and Long-Term Outlook:**

- **Near-Term**: The company's focus on leveraging **technology** and its diversified product portfolio will continue to drive growth. Its ability to manage risks through prudent underwriting and robust reserves positions it well to navigate near-term challenges.

- **Long-Term**: With India's low insurance penetration and ICICI GI's leadership position in the private sector, the long-term outlook remains positive. The company is expected to benefit from continued economic growth, urbanization, and increasing awareness of insurance products.

### Conclusion:

From an investor's perspective, ICICI Lombard shows **strong financial health**, with consistent **premium growth**, improving **profitability** ratios, and a solid **solvency position**. The company’s outperformance compared to industry peers, coupled with its technological advancements and market leadership, makes it a solid investment choice with both near-term resilience and long-term growth prospects.

### Disclosure:

We are not a tip provider, we should check the data and invest accordingly if we feel confident.