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.