Profit Tantra

21/06/2024

Master your Finances: Control the Controllables - *https://www.facebook.com/profittantra*

13/06/2024

📈Hindustan Aeronautics LImited (HAL) Hindustan Aeronautic is involved in the business activities of Repair of transport equipment, except motor vehicles. Company’s Total Operating Revenue is Rs. 26927.85 Cr. and Equity Capital is Rs. 334.39 Cr. for the Year ended 31/03/2023.

Sharing updated from latest concall q4 -FY 23-24

📈 Revenue Growth: HAL's revenue from operations for FY23-24 was ₹30,381 crores, up 13% from ₹26,928 crores in the previous year.
🏆 Achievement: HAL achieved its double-digit growth target a year in advance, with significant contributions from the LCA aircraft program.
📉 Cost Optimization: HAL reduced manpower costs from 23% of revenue in FY18-19 to 17% in FY23-24 and aims to reduce it further to 16% in the current financial year.
💼 Overhead Reduction: Overhead expenditure was reduced from 8% of revenue in FY18-19 to 4.66% in FY23-24.
📦 Inventory Management: HAL reduced inventory holding from 360 days in FY17-18 to 159 days in FY23-24.
🏦 Debtors Turnover: Improved from 227 days in FY18-19 to 55 days in FY23-24.
🚁 Capacity Building: Investment in new helicopter factory in Tumakuru and third line of LCA in Nashik, expected operational in October 2024.
💡 Strategic Initiatives: Proactive procurement, CAPEX strengthening, and R&D investments to support future projects like LCA Mark 2 and IMRH engine manufacturing.
📊 CAPEX Plan: Estimated at ₹14,000 to ₹15,000 crores over the next five years, averaging ₹3,000 crores annually.
🛠️ Indigenization: Significant investments in indigenous capabilities, including forging presses and carbon fiber facilities.
🌍 Global Certification: Efforts to obtain global certifications to enhance export potential.
📚 Order Book: Outstanding order book of ₹94,000 crores as of date, with expectations of it reaching ₹1,20,000 crores by March 2025.
🚀 Future Outlook: HAL plans to scale up deliveries of various aircraft and engines, with new projects and manufacturing lines expected to be operational in the coming years.
These points highlight HAL's financial performance, cost management, strategic initiatives, and future growth prospects.

📌Price chart
Major support at INR 4200 to INR 4300 levels

📌Accumulate in the range of INR 4700 to INR 4900, seems good opportunity. We have started accumulation from 4600 levels, we have interest in the stock. Hence opinion may be biased

📌Disclaimer - We have a personal interest in the stock and our opinion can be biased. This is not a recommendation to buy or sell, the example is used for educational purposes only and to show the importance of technical and fundamental analysis in investment and trading. Consult your financial advisor for investing and risk profiling.

10/06/2024

📊Time Technoplast Ltd is involved in the business activities of Manufacture of plastics products. Company’s Total Operating Revenue is Rs. 2242.50 Cr. and Equity Capital is Rs. 22.61 Cr. for the Year ended 31/03/2023.

Sharing summary of the latest conference call q4 - FY 23-24, focusing on financial performance, growth projections, and strategic initiatives.

📌Key Financial Highlights
Revenue Growth: 17% increase, driven by increased volume and strong demand for value-added products.

📌Product Line Growth:
Established products (e.g., drums, jerry cans, PE pipes): 12% growth
Value-added products (e.g., IBC, composite cylinder, LPG, CNG, MOX film): 32% growth, constituting 26% of the product mix.

📌Operating Margin: Stable at around 14%.
📌Projected Growth: Anticipated growth momentum to continue for at least 2 years, targeting around 15% growth.
📌Dividend: Board recommended a dividend of 200% (INR 2 per share), up from 125% the previous year.
📌Financial Performance for Q4
Net Sales: INR 1,405 crores (highest in the company’s history), up from INR 1,193 crores.
EBITDA: INR 197 crores, up from INR 170 crores.
PAT: INR 92 crores, up from INR 64 crores.
Sales Increase: 18% overall, with India contributing 19% and overseas 16%.
Volume Increase: 19% overall, with India contributing 20% and overseas 18%.
📌Full Year Performance
Net Sales: Crossed INR 5,000 crores for the first time, reaching INR 5,007 crores.
EBITDA: INR 705 crores, up from INR 581 crores.
PAT: INR 311 crores, up from INR 219 crores.
Value-Added Products: Grew by 32%, now accounting for 26% of total sales.
📌Market and Product Expansion
Composite Cylinder Segment: Significant focus on expanding the LPG, CNG, and developing hydrogen cylinders.
Geographical Focus: Continued strong demand in FMCG, specialty chemicals, construction chemicals, paints, and pharmaceuticals sectors.
📌China Plus Strategy: Benefitting from the shift of business from China to other Asian countries.
📌Debt and Capex
Net Debt: Reduced to INR 591 crores.
Total Debt: INR 745 crores, down from INR 810 crores the previous year.
Capex: INR 181 crores for FY '24, with future capex estimated to be less than INR 150 crores.
📌Debt-Free Goal: Aiming to become debt-free in the next 2-3 years.
Additional Developments
📌Non-Core Assets: Identified non-core assets reduced to INR 90 crores, with plans to liquidate by March 2025.
NED Energy Limited: Working on advanced TBS or Transparent Container Batteries and E-Rickshaw batteries.
📌Q&A Highlights
- Revenue Breakdown for Composite Segment:
LPG: INR 210 crores
CNG: INR 308 crores
- Capital Employed in Composites: Significant increase due to ongoing expansion projects.
- Other Income Increase in Q4: Mainly due to a profit of INR 10 crores from the sale of non-core assets.

Price chart
- Major price breakout at INR 220 to 240 levels, upside move with increasing volumes. Good support at 260 levels

- 📌Accumulate in the range of INR 260 to INR 280, seems good opportunity. We have started accumulation from 260 levels, we have interest in the stock. Hence opinion may be biased

Disclaimer - We have a personal interest in the stock and our opinion can be biased. This is not a recommendation to buy or sell, the example is used for educational purposes only and to show the importance of technical and fundamental analysis in investment and trading. Consult your financial advisor for investing and risk profiling.

01/06/2024

10 Key Considerations Before Buying Land or a Flat for Investment -

Ensure no water bodies, railway crossings, drainage channels (Kaluve), or high-tension wires are near the property. Maintain a minimum distance of 50-75 meters from lake edges and comply with the Indian Electricity Act for power lines. Banks may not provide loans, and reselling could be difficult fo...

07/01/2024

🏆 Excited & Humbled that “Profit Ta**ra Financial Services” is Recognized Among the "Top 10 Platinum Advisors across India" 🎉🌟
This recognition is a testament to the dedication and hard work
of our "entire team", as well as the trust and support of our "valued clients".

I extend my heartfelt gratitude to ICICI Lombard for this prestigious honour. It motivates us to continue delivering top-notch service and innovative solutions to our clients in the realm of insurance and financial planning.

Proud to be part of a company that values excellence and is committed to making a positive impact in the industry.

Thank you to everyone who has been a part of this journey. Looking forward to continuing our commitment to excellence and serving our clients with the highest level of professionalism.

.com

13/10/2023

Note on Sanghi Industries & impact of Adani take over

- Sanghi is India’s largest single-location cement and clinker unit by capacity
- Good candidate for re-rating.
- Working capital issues was there with the company
- This seems to get re-solved post take over by Adani group
- Currently, Sanghi has a clinker (an essential component in producing cement) capacity of 6.6 million tonnes per annum (mtpa)
- a cement manufacturing capacity of 6.1 mtpa, and most importantly, reserves of 1 billion tonnes of limestone, a key raw material
- Adani will increase the capacity 10 to 15 mtpa, will help in boosting revenues and profit in long term.
- Buy with long term view between 115 to 125.

Risks:
- Adani fails to take over the company
- Or any legal allegations on Adani Group or funding constraint may have negative effect on the stock.

Update: 25th Jan 24 - Exit Sanghi @120.2, entry was at 121.5

As per the Master Supply Agreement, Adani Group companies Ambuja Cement and ACC will procure 80 per cent of Sanghi Industries’ 6 million tonne per annum cement capacity at cash cost plus 10 per cent excluding depreciation in the financial year 2023-24 and 2024-25 ++ they will pay 8% interest to Ambuja on a loan of 2100 crore.

Will also source, fuel and Fly Ash from Adani Enterprizes

Disclaimer: Educational and Learning update, consult your financial advisor for risk profiling.

20/03/2023

How Rule of Zero-precondition, can help you grow!

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Because the only thing holding you back is what you think you need to wait for.

09/11/2022

📊NIIT limited is a skills and talent development company offering online & offline training courses, having presence in 30 countries, with 40 years of experience in the training field
Business vertical is divided in two groups:
a) Corporate Learning Group (CLG) – focused in international markets
b) Skills and Career Group (SNC) – focused in Indian markets

Trigger for the stocks in brief:

a) Debt free company with 1200 crores in cash, market cap is 4400 crore, market cap net of cash is 3200 crores
b) Demerger of both the business verticals
 CLG and SNC in next six months, hence resulting in value unlocking
 Management guidance of 50% growth in SNC vertical post demerger (we should be conservative on this guidance by management consider around 20% since at EBITDA level this contributes approx 10% to 20% of the business)
 And also SNC has not stabilized and is a volatile business
 CLG is the cash cow generating, conservatively generating around 50 crores per quarter on an average
 Considering 50 crores of cash flow per quarter, 200 crores per year, in next 5 years it can generate 1000 crores of cash (at current run rate)
 CLG business has grown consistently from 6 clients in FY 11 to 56 clients in FY 22
 Current focus of the company is in the sectors were regulatory compliance is high to name few, BFSI, PHARMA, CLINICAL Research

c) The transformation journey started in 2019 after divestment of NIIT technologies for consideration of 2020 crores to Baring Private Equity Asia.
d) Aims to be among the top 5 in the training space in CLG group. (Corporate learning group)
e) The board of directors are highly qualified and expert in their domains. Promoter group shareholding increased by 3% in last 2 years to 35%
f) Recent acquisition’s done by company to add new capabilities
 KNOLSKAPE - for 2 million $ (approx. 15 crores @ INR 70) earlier this year
 RPS Consulting Bangalore - for INR 82 cores
 St Charles Consulting Group – total consideration of USD 65.086
- An initial amount of 23.4 million fixed $ (approx. 187 crores @ INR 80)
- and a balance of USD 41.658 million based on annual performance over the next four years. (approx. 333 crores @ INR 80)
 Total recent acquisition – INR 617 crores break-up (284 crore + 333 based on future performance for St. Charles Consulting Group)
g) Clearly on the growth path, the business is sticky business with minimum contract renewal period is 3 years, maximum is 5 years
h) The company is debt free
i) Current quarter result was not good and margins in last few quarters have come down from 29% to 15% which is visible in the price correction.
j) Company consistently improved margins over the last 10 years from 6.8% in 2010 to 21% in 2022, but such high level may not sustain year on year, 15% margin on an average can be a good assumption on consistent basis.
k) Why conservative 15% margin because when acquisitions happens, depreciation may increase due to increase in asset & restructuring or other costs may reduce margins.
l) Stock is in our watch list from last 5 months, last week took a support at previous breakout levels. May not move upside in the short term, but long term prospects seems good.

The major risk to the above assumptions:

a) Slowdown in hiring by corporates
b) Continued prolonged recession in the US and major markets may result in low budget allocation for training by the clients.
c) Currency risk if revenues are not hedged
d) Margin impact – Increase in depreciation due to recent acquisitions in consolidated numbers. May have an impact in margins. Though management has guided they will maintain the margin at the current 15% levels.

Price chart
- Major price breakout at INR 200 levels, upside move with increasing volumes. Good support at 280 levels

- 📌Accumulate in the range of INR 300 to INR 335, seems good opportunity. We have started accumulation from 288 to 330, safe to assume we have interest in the stock.

Disclaimer - We have a personal interest in the stock and our opinion can be biased. This is not a recommendation to buy or sell, the example is used for educational purposes only and to show the importance of technical and fundamental analysis in investment and trading. Consult your financial advisor for risk profiling.

28/09/2022

Escorts Kubota is involved in the business activities of Manufacture of tractors used in agriculture and forestry. The company’s Total Operating Revenue is Rs. 7152.68 Cr. and Equity Capital is Rs. 131.94 Cr.

Overview of the Company:

Escorts Kubota Limited Formerly Escorts Limited is an Indian multinational conglomerate that operates in the sectors of agricultural machinery, construction machinery, material handling, and railway equipment. Its headquarters are located in Faridabad, Haryana.

Trigger for the stocks in brief:

a) Infusion of 9400 crores by Kubota in Escorts
b) Aims to be the number one tractor manufacturer in the world in terms of volume
c) Old promoter Mr. Nikhil Nanda not exiting his stake. (This shows the confidence promoter has in the company)
d) Promoter group shareholding increases to 72.9%
e) India to be used as the export hub for tractors including sales channel of Kubota around the world
f) The setting of the New R&D center will help to introduce new products with new technologies to stay ahead of the competition
g) All three business verticals of Escorts match perfectly with Kubota corporation's existing portfolio
 Agri Machinery
 Construction Equipment
 Railway Equipments
h) The company is debt free
i) Mahindra has a market share of 40% in India, Escorts share is around 13%. Large room to acquire market share
j) Current quarter results may not be good as guided by management in the con-call due to the dull season, but the coming quarter's numbers may start improving.
k) Company consistently improved margins over the last 10 years from 4% in 2010 to 14% in 2022, and seems on track to improve further with the increase in volumes
l) Net has doubled in last 3 years, and have improved consistently. Key ratios and important numbers below
m) Stock is in our watch list from last 6 months, last week made all time high. May not move show upside in the short term, but long term prospects seems good from the long term
n) Stock is also a re-rating candidate if performs good.

Accumulate in the range of INR 1700 to INR 2000, seems good opportunity to keep for long term

Disclaimer - We have a personal interest in the stock and our opinion can be biased. This is not a recommendation to buy or sell, the example is used for educational purposes only and to show the importance of technical and fundamental analysis in investment and trading. Consult your financial advisor for risk profiling.