Unbounded Land

  • Oriana Power Ltd Overview

    Ariana

    •

    1. Corporate Evolution:
    • Established in 2013 as Oriana Power Private Limited.
    • Transformed into a Public Limited Company on April 8, 2023, as Oriana Power Ltd.
    • Specializes in solar energy solutions for industrial and commercial clients.
    1. Operational Models:
    • Engages in the CAPEX model for solar projects (EPC services).
    • Operates under the RESCO model through 18 subsidiaries for solar solutions on a BOOT basis.
    1. CAPEX Model (EPC):
    • Clients include major names like Hindustan Petroleum, Hero Motocorp, Tata Memorial Hospital, and more.
    • Oriana’s role spans Engineering, Procurement, Construction, and Operation of solar projects.
    • Clients invest in capital expenditure, and Oriana delivers projects exceeding 100 MWp capacity.
    1. RESCO Model (Opex):
    • Clients include Hindustan Copper, National High-Speed Rail Corporation, and more.
    • Oriana arranges capital, owns, operates, and transfers solar projects.
    • Clients pay a predetermined tariff, and Oriana retains ownership, ensuring annuity income.

    Current Projects and Empanelment:

    • Ongoing projects include Coal India, Solar Energy Corporation of India, and others.
    • Empanelment for government projects, industry consortium participation, and corporate partnerships showcase Oriana’s commitment to advancement.

    Solutions:

    1. Floating Solar Panels:
    • Utilizes bodies of water for solar panel deployment.
    • Benefits include efficient land use, increased electricity production, and environmental impact mitigation.
    • Projects in Udaipur and Vizag showcase capacity and environmental benefits.
    1. Ground Solar Power Plant:
    • Thrives in open land environments, contributing to sustainable energy landscapes.
    • Projects in Udaipur, Bhatinda, Nava, and others demonstrate capacity and environmental contributions.
    1. Solar Park:
    • Large-scale solar farms amplifying energy utilization.
    • Projects in Bikaner, Lalitpur, and Sholapur under construction.
    1. Rooftop Solar:
    • Premier provider of rooftop solar solutions.
    • Projects in Sarvodaya Kanya Vidyalaya, Modern Delhi Public School, Terrestrial Foods Limited, and more.

    Operation and Maintenance (O&M):

    • Oriana Power emphasizes reliable and efficient O&M services.
    • Customized services with a fixed annual fee or a percentage of plant capacity, ensuring quality and client satisfaction.

    Conclusion:
    Oriana Power Ltd stands as a leading player in the renewable energy sector, offering a comprehensive suite of solutions under both the CAPEX (EPC) and RESCO models. The company’s commitment to innovation, sustainability, and client satisfaction is evident through its diverse portfolio of projects, operational excellence, and strategic empanelment. Oriana Power continues to contribute significantly to India’s renewable energy landscape, aligning with global efforts toward a cleaner and more sustainable future.

  • Indigo Paints Q2FY24 Summary

    Ariana

    •

    1. Financial Performance:
    • Revenue increased by 15% YoY but declined by 3.42% QoQ.
    • PAT decreased by 29% YoY and 20% QoQ.
    • PAT margin reported at 9.6% compared to the previous 15.3%.
    1. One-Time Impact on PAT:
    • Last year’s Q2 had a one-time gain in tax of INR 16.2 Cr, impacting the YoY comparison.
    1. Operational Highlights:
    • Indigo Paints is growing 3-4 times faster than the industry rate.
    • Higher growth observed in Tier 1 and Tier 2 cities compared to Tier 3 and Tier 4.
    1. Gross Margin and Production:
    • Gross Margin (GM) is 45.2%, benefiting from stable raw material prices.
    • Addition of 457 tinting machines, bringing the total to 9,114.
    • Commercial production has commenced at the water-based plant in Tamil Nadu.
    1. Depreciation and Expansion:
    • Increase in depreciation due to the commissioning of the new plant in Tamil Nadu affecting PAT.
    • Work initiated for water and solvent-based plants in Jodhpur.
    1. Sales Force and Depots:
    • Expansion of the sales force across the country to boost Apple Chime sales.
    • Opened two depots, one each in East and West India.
    1. Regional Dynamics:
    • Muted demand observed in Kerala for the last two quarters.
    • Sales in other states helping maintain the topline despite Kerala’s subdued performance.
    1. Dealer Dynamics:
    • Dealers enjoy high margins due to less intensive distribution, with each dealer having reduced competition.
    • Tinting machines for Indigo Paints are compact and embedded, providing convenience.
    1. Strategic Acquisition:
    • Apple Chime, a B2B player acquired by Indigo Paints.
    • Expansion plans for Apple Chime’s topline growth of 45-50% in the current fiscal year.

    Indigo Paints navigates through varied market conditions, focusing on operational efficiency, expansion, and strategic acquisitions to maintain its growth trajectory. The company’s emphasis on geographical expansion, innovative products, and streamlined distribution contributes to its competitive edge in the industry.

  • Bank of Maharashtra Q2FY24 Con Call Highlights:

    Ariana

    •

    1. Financial Growth:
    • Advances and deposits demonstrated robust growth, with a 24% YoY increase.
    • Notable performance in key sectors: Retail advances (20% YoY), MSME (26% YoY), and Agri (30% YoY).
    1. Asset Quality:
    • Substantial improvement in asset quality, with NPA reduced to 2.1% from 3.4% YoY.
    • Provision Coverage Ratio (PCR) stood at an impressive 98%.
    1. Profitability Metrics:
    • Strong profitability indicators: ROE (23%) and ROA (1.37%).
    • Confident in maintaining ROA between 1.2-1.4% in the upcoming quarters.
    1. Balance Sheet Strength:
    • Maintaining a robust balance sheet with a Capital Adequacy Ratio (CAR) of 30%.
    1. Equity Capital and Growth Plans:
    • Raised equity capital during Q2 to support expansion initiatives.
    • Aiming for a continued loan book growth of 20% in the coming quarters.
    1. Focus Areas:
    • Strategic focus on mid-corporates in sectors like pharmaceuticals, textiles, and engineering.
    • Exploring opportunities in the export side of textile businesses.
    • Emphasizing growth in the gold loan book with a targeted 25% increase.
    • Venturing into the Electric Vehicle (EV) space, particularly lending to auto Original Equipment Manufacturers (OEMs).
    1. Credit Cost:
    • Anticipating minimal credit costs in the upcoming quarters.

    Bank of Maharashtra showcases a resilient performance, marked by substantial growth, improved asset quality, and a strategic approach towards emerging sectors like EVs. With a strong capital base and a focus on diverse lending segments, the bank aims to sustain its growth momentum in the dynamic financial landscape.

  • Sai Silks Kalamandir: Elevating South India’s Ethnic Fashion Landscape

    Ariana

    •

    Business Model:

    1. Sai Silks Kalamandir, a prominent player in ethnic wear, particularly sarees, operates across South India through physical stores, e-commerce, and its website. The company boasts four distinctive brands:
    • Kalamandir: Offers a diverse range of sarees, including Tusser, Kota, and Georgette, priced between INR 1K-1L.
    • Vara Mahalakshmi: Specializes in premium ethnic silk and handloom sarees for weddings, featuring varieties like Kanchipuram, Kuppadam, and Banarasi, ranging from INR 4K-2.5L.
    • Mandir: Presents ultra-premium designer silk sarees tailored for HNI clientele, priced from INR 6K-3.5L.
    • KLM Fashion: Positioned as a value brand, offering fusion wear, sarees, western wear, and daily wear for men, women, and children, with prices ranging from INR 200-75K.

    Q2FY24 Results:

    1. Demonstrated robust financial performance with a 6% YoY and 7% QoQ growth in revenue.
    2. PAT soared by an impressive 33.3% YoY and 40% QoQ, achieving PAT margins of 7%, up from 5.6% the previous year.
    3. Minimal reliance on other income sources.

    Financial Insights:

    1. Strong financial health reflected in a Current Ratio > 2 and no Asset-Liability Mismatch (ALM) concerns.
    2. IPO led to an increase in the equity base.
    3. Negligible receivables, given the credit-centric business model.
    4. Stable borrowings, primarily in the form of lease liabilities, aligning with the need for store infrastructure.
    5. Net CFO remained flat in H1 compared to the previous year.
    6. IPO proceeds strategically utilized for loan repayment and temporary placement in deposits.

    Q2 Concall Highlights:

    1. Facing challenges in achieving significant YoY improvement due to restricted access to one of the main Chennai stores in Mylapore, impacted by ongoing Metro construction. The persisting impact is estimated at INR 15-20 Cr.
    2. Muted sales in Q2 attributed to the Adhik Maas period, with festivities shifting to Q3.
    3. Expansion initiatives include opening premium Vara Mahalakshmi stores and establishing a warehouse in Salem.
    4. INR 130 Cr from the IPO earmarked for setting up 30 stores over 18 months in Tamil Nadu, with a predominant focus on Vara Mahalakshmi and Kalamandir formats.
    5. A strategic plan to open 7-10 stores this year and the remainder in the following year, concentrating on South markets.
    6. Over the past two years, the company achieved a remarkable Store Expansion Compound Annual Growth Rate (CAGR) of 24.5%, with an average revenue of Rs 25 Cr per store per year.
    7. Operating in 4 states and 12 cities of South India, targeting areas with untapped potential within the existing cities.
    8. Comparable Store Sales Growth (SSSG) currently at -5%, anticipated to reach single-digit figures by year-end. Mature store SSSG stands at a healthy 3-4%.
    9. All 57 stores are Company-Owned, Company-Operated (COCO), with a potential shift to Franchisee-Owned, Company-Operated (FOCO) for the KLM brand.
    10. Saree contributed to 68% of revenue in FY23, with only 10% of the inventory offered at a discount.

    Risks:

    1. Intense competition from both organized and unorganized markets, with noteworthy players like Nalli’s, Potli, and Jaylakshmi in the South.
    2. Shift in saree usage from everyday wear to occasional wear, emphasizing the premium segment.

    Outlook:

    1. Single-digit growth anticipated this year, with a robust 15-20% growth forecasted for the next two years.
    2. Growth primarily driven by an aggressive store expansion strategy.
    3. IPO targets include achieving a topline of INR 2000 Cr and PAT of 200 Cr within two years, with a current-year PAT goal of 120 Cr.
    4. Acknowledgment of potential fluctuations by up to 10%.

    In summary, Sai Silks Kalamandir is strategically positioned to capitalize on the evolving trends in South India’s ethnic wear market, leveraging its diverse brand portfolio, expansion plans, and financial prudence to navigate challenges and achieve sustainable growth.

  • Escorts Kubota Q2 FY24 Conference Call Highlights: Tractor Challenges, Construction Equipment Surge, and Growth Strategies

    Ariana

    •

    During the Q2 FY24 conference call for Escorts Kubota, key insights into the company’s performance, challenges, and future strategies were shared.

    Tractor Segment:

    1. Escorts tractor volumes experienced a 7% YoY decline in Q2, with volumes reaching 22k units. This downturn was attributed to an overall industry-wide decrease in tractor volumes due to a delayed festive period.
    2. Escorts holds a market share of approximately 10% in the tractor segment.

    Export Challenges:

    1. Exports in the tractor industry faced a significant setback, plummeting by 25% YoY, primarily due to recessionary conditions in Europe.

    Margin Expansion and Construction Equipment Growth:

    1. Escorts reported margin expansion driven by favorable reductions in raw material prices.
    2. Construction Equipment volumes witnessed an impressive 72% YoY growth, totaling 1577 units in Q2. This growth was attributed to the rapid execution of government infrastructure projects.

    Outlook and Growth Expectations:

    1. Escorts anticipates around 2% growth in Q3 FY24 compared to Q3 FY23. The relatively subdued growth is attributed to a higher base in FY23, erratic monsoons, and the absence of a festive period in Q2.
    2. The company is exploring the establishment of a captive financing arm to enhance turnaround times for its products.

    Railway Order Book and Regional Market Insights:

    1. The railway order book has witnessed a decline due to an accelerated pace of execution.
    2. Uttar Pradesh (UP) stands out as the largest tractor market in India.

    In summary, Escorts Kubota addressed challenges in the tractor segment, showcased robust growth in construction equipment, and outlined strategic initiatives for future expansion. The focus on a captive financing arm and insights into regional market dynamics position the company for resilience and adaptability in the evolving industry landscape.

  • TVS Motors Q2 FY24 Conference Call Highlights: Record Sales, EV Growth, and Global Expansion Plans

    Ariana

    •

    In the Q2 FY24 conference call for TVS Motors, the company shared notable achievements, market dynamics, and future strategies.

    Financial Performance:

    1. TVS Motors reported its highest-ever sales and Profit After Tax (PAT), with sales growing by 13% YoY and PAT witnessing a substantial 32% YoY increase.

    Two-Wheeler Volumes and International Sales:

    1. Total two-wheeler volumes experienced a 6% YoY growth in Q2.
    2. International sales faced a YoY decline due to a moderation in demand in Europe. Norton sales were adversely affected.

    Electric Vehicle (EV) Growth:

    1. TVS i-Cube, the electric vehicle offering, achieved remarkable success, selling 58k units in Q2 FY24 compared to 16k in Q2 FY23.
    2. The company envisions transforming TVS i-Cube into a global brand, showcasing its commitment to the EV segment.

    Global Expansion Strategy:

    1. TVS Motors is set to focus on Latin American nations for expansion after targeting Africa and Europe.
    2. This strategic move aligns with the company’s vision to establish a strong global presence.

    Challenges in Entry-Level Bikes Segment:

    1. Regulatory changes and increased insurance costs have elevated entry-level bike prices by 30-50%. However, rural income has not seen a corresponding increase.
    2. Entry-level vehicles have faced challenges in recent years, and TVS is patiently waiting for a revival in rural demand.

    Scooter Market Presence:

    1. TVS emphasized its robust presence in the scooter space, expressing confidence in the continued success of both i-Cube and Jupiter models.

    In summary, TVS Motors demonstrated stellar financial performance, particularly in the EV segment, and outlined plans for global expansion. The company remains agile in navigating challenges in the entry-level bike segment, anticipating a resurgence in rural demand, and is poised for sustained success in the competitive two-wheeler market.

  • Varun Beverages Ltd Q2 FY24 Conference Call Highlights: Resilient Growth, Strategic Expansion, and Future Plans

    Ariana

    •

    In the Q2 FY24 conference call for Varun Beverages Ltd, the company provided insights into its financial performance, capex initiatives, market strategies, and plans for future growth.

    Financial Performance:

    1. Sales exhibited a robust 22% growth, with Profit After Tax (PAT) surging by 30%, while volume growth reached an impressive 15%.
    2. The strong recovery in sales volume followed unseasonal rains in the previous quarter, marking a significant improvement from the 4% volume growth recorded in the last quarter.
    3. Gross Margin (GM) for this quarter stood at 55.3%, showcasing an enhancement from the previous quarter’s 53.7%.

    Capex Initiatives:

    1. FY23 witnessed a capex of 2000 Cr over nine months, directed towards greenfield projects in Bundi, Rajasthan, Jabalpur, and brownfield expansions in India and internationally.
    2. Further capex of 1600 Cr is planned for the next year, focusing on greenfield projects in Gorakhpur (UP), Supa Partner (Maharashtra), Khorda (Odisha), and one in DRC – Africa.
    3. Once commissioned, the combined capex is expected to increase the peak month capacity by 45% compared to FY22 levels, with the Congo plant set to be operational by April/May next year, capable of handling 35-40 million cases.

    Operational Outlook:

    1. EBITDA margin is projected to be around 21%, subject to fluctuations depending on the prices of raw materials like pet chips and sugar.
    2. Varun Beverages anticipates achieving higher volume growth compared to the FMCG business, driven by rapid distribution expansion, particularly in rural areas, and unlocking value.
    3. Formation of a subsidiary in Mozambique aims to leverage surplus capacity in Zambia and Zimbabwe to cater to the Mozambique market.

    Product-Specific Performance:

    1. Juice sales faced a challenge with a flat growth due to adverse weather conditions, impacting the April-June season, which is crucial for juice sales.
    2. Gatorade experienced a significant 50% growth.
    3. Value-added dairy products faced capacity constraints, which are expected to improve with the addition of new plants in January.

    Market Dynamics and Challenges:

    1. The slow pace in volume growth is attributed to a combination of base effects and adverse weather conditions in July.
    2. Increasing penetration in South and West India is expected to improve the seasonality curve.

    Operational Efficiency and Stake Acquisition:

    1. Once all new plants reach full capacity, asset turnover is projected to be around 1.8-1.9 times.
    2. Pricing corrections in large packs have been implemented, stabilizing net realization per case despite increased volume.
    3. Margins in international business remain stable, except in Zambia, where currency devaluation occurred.
    4. The company increased its stake in Lunarmech Technologies to 60%, focusing on backward integration as they manufacture caps for Varun Beverages.

    Future Plans:

    1. Varun Beverages plans to launch additional energy drinks from Pepsi’s product portfolio in India, with pricing details yet to be finalized.

    In summary, Varun Beverages demonstrated strong financial performance, strategic expansion plans through capex, and a proactive approach to market dynamics, positioning itself for sustained growth in the evolving beverage industry.

  • Maruti Suzuki Q2 FY24 Conference Call Highlights: Adapting to Market Dynamics and Future Strategies

    Ariana

    •

    In the Q2 FY24 conference call, Maruti Suzuki discussed key highlights, market trends, and future strategies amid changing dynamics in the automotive industry.



    Market Performance:
    1. The industry experienced a 5% YoY growth, reaching 10.2 lac cars in Q2.
    2. Maruti Suzuki outpaced the industry, achieving an 8% YoY growth in volumes and gaining market share.

    Shifts in Market Dynamics:
    3. Utility Vehicles (UVs) now constitute 50% of the total car market, with Multi Utility Vehicles (MUVs) and UVs representing 60% of the entire market.
    4. The share of Compressed Natural Gas (CNG) and Hybrid vehicles is increasing, while Diesel engine shares are declining.

    Supply Chain and Production:
    5. Improvement in the chip supply situation, with no reported production volume losses.
    6. Maruti Suzuki sold 5.52 lac cars in Q2, reflecting a 6.7% YoY growth.

    Sales and Pricing Strategies:
    7. Sales growth outpaced volume growth due to strategic price hikes and increased sales of high-value cars in the UV segment.
    8. Favorable commodity prices and operating leverage contributed to Maruti’s positive Q2 performance.

    Market Share and Future Growth:
    9. Maruti Suzuki commands a 23% market share in the SUV space.
    10. The company aims to grow in line with the industry in the upcoming quarters.

    Rural vs Urban Dynamics:
    11. Rural growth slightly outpaced urban growth, indicating evolving consumer preferences.

    Transition to Electric Vehicles (EVs):
    12. Maruti Suzuki is planning a transition to EVs over the next 6 years, introducing six new models to align with the evolving automotive landscape.

    Challenges in Small Car Segment:
    13. Challenges persist in the small car segment, driven by regulatory cost increases and a lag in income levels catching up. The share of small cars in the industry decreased to 28% from 34% last year.
    14. The share of first-time buyers is declining for Maruti, highlighting changing consumer trends.

    Industry Growth and Future Outlook:
    15. Despite a 4% Compound Annual Growth Rate (CAGR) in the last 5 years, the car industry’s overall growth is deemed disappointing for a country like India.
    16. Only the top 3% of the Indian population currently owns a car, emphasizing potential for future growth.

    In conclusion, Maruti Suzuki’s Q2 FY24 conference call outlines the company’s proactive stance in navigating market shifts, embracing new technologies, and addressing challenges to ensure continued growth and relevance in the evolving automotive landscape.

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