Shankara Building Products Overview

1. Financial Performance:

• P/E at 22, indicating reasonable valuation.
• PEG ratio below 1, suggesting potential growth at an attractive price.

2. Revenue and Growth Outlook:

• Current revenue at ₹4000+ Cr.
• Future outlook projects ₹10,000 Cr with a robust 20%+ CAGR.

3. Prominent Investors:

• Backed by notable investors Ashish Kacholia and Mukul Agarwal.

4. Business Model:

• Acts as a proxy for real estate and home premiumization.
• Omni-channel marketplace with 91 retail stores.
• Offers 1,00,000+ SKUs and 125+ brands.

5. Financial Highlights (H1FY24):

• Revenue grew by 31% YoY.
• EBITDA increased by 26% YoY.
• PAT saw a substantial 29% YoY growth.
• Impressive Same Store Sales Growth (SSG) at 23% in H1.
• Sustained double-digit growth over the last 10 quarters.

6. Operational Metrics:

• Working capital improved to 30 days.
• ROCE enhanced to 16%.

7. Shareholder Landscape:

• Key shareholders include Mukul Agarwal (2.27%) and Ashish Kacholia (1.86%).
• APL Apollo paid the balance amount of ₹78.75 Cr for the warrant.

8. Financial Strategy and Growth Guidance:

• Raised funds directed towards debt reduction and operational needs.
• Growth guidance set at an ambitious 20%+.
• Aiming for a turnover of ₹10,000 Cr in the next 5 years (20% CAGR).

9. Strategic Initiatives:

• Shift in product mix to enhance margins (targeting 3.5% from the current 3%).
• Non-steel business expansion expected to boost blended EBITDA margin.
• Targeting a non-steel business contribution of 25% to total revenue in the next 4-5 years.

10. Operational Efficiency:

• Average ticket size increased by 12% YoY.
• Improved throughput without the need for store expansion.

Conclusion:
Shankara Building Products displays a promising outlook with strong financials, strategic initiatives, and notable investor backing. The focus on product mix diversification and expansion into non-steel businesses positions the company for sustainable growth in the real estate and home premiumization sectors. As with any investment, thorough research and monitoring of industry trends are recommended.