AMP

STRICTLY CONFIDENTIAL

14 November 2024
ANTIQUE’S MORNING PRESENTATION
FROM THE RESEARCH DESK Market Snapshot
INITIATING COVERAGE Global Indices Closing % Chg % YTD
Allied Blenders and Distillers Dow Jones 43,958 0.1 16.6
NASDAQ 19,231 (0.3) 28.1
Scale up of P&A to drive growth
FTSE 8,030 0.1 3.8
QUARTERLY RESULTS REVIEW
CAC 7,217 (0.1) (4.3)
NMDC DAX 19,003 (0.2) 13.4
EBITDA impacted QoQ by lower volume, inventory swing; 2HFY25 Bovespa 1,27,734 0.0 (4.8)
outlook remains strong Nikkei 38,722 (1.7) 16.6
Alkem Laboratories Hang Seng 19,823 (0.1) 16.3
Shanghai Composite 3,439 0.5 15.6
India formulations revenue growth remains weak
CESC Indian Indices Closing % Chg % YTD
Steady business Sensex 77,691 (1.3) 7.5

Kirloskar Oil Engines Nifty 23,559 (1.4) 8.4

MSCI India 1,024 (1.6) 11.1
In-line operational performance; maintain BUY
CNX Midcap 53,801 (2.6) 16.5
Cera Sanitaryware BSE Smallcap 51,953 (3.1) 21.7
Demand to recover and valuations compelling; upgrade to BUY
Flows (USD mn) Prev. Day MTD
KNR Constructions
FII (43) 337
Subdued quarter
MF 75.6 121.2
H.G. Infra Engineering
A good quarter with double-digit revenue growth Provisional flows (USD mn)
FIIs (296)
Sunteck Realty
Locals 728
A steady quarter
Ashoka Buildcon Volumes USD bn % Chg
A subdued quarter Cash (NSE + BSE) 11.3 (2.2)

Venus Pipes and Tubes F&O (net) 5,739.4 102.5

YoY higher exports, backward integration supported EBITDA FII F&O Stock Fut Index Fut
Kolte-Patil Developers Net ($ mn) 1,523 135
Catch-up on BD, launches, and margin recovery critical OI (%) - 3.6

ADR/GDR Gainers Last % Chg

Global News Infosys 22.0 0.1
n The Nasdaq is down 43.57 points or 0.2 percent at 19,237.83, the S&P 500
is up 2.22 points or less than a tenth of a percent at 5,986.21 and the Dow is ADR/GDR Losers Last % Chg
up 122.82 points or 0.3 percent at 44,033.80. SBI 96.2 (1.7)
n The Nikkei 225 Index fell 1.66% to close at 38,722 while the broader Topix Dr Reddy 14.6 (1.4)
Index lost 1.21% to 2,708 on Wednesday, tracking losses on Wall Street HDFC 61.4 (1.2)
overnight as the market took a breather from the post-election rally. Domestically, Reliance 59.3 (0.8)
data showed that Japan's producer prices rose at the fastest pace in 14 ICICI Bank 29.7 (0.7)
months in October, highlighting ongoing inflationary pressures.

Sector & Corporate News

n Cipla received eight (8) observations in Form 483 for its recently concluded
USFDA inspection at its Virgonagar, Bengaluru plant from 7th-13th November,
2024.

Please refer to disclosures at the end of the Research Report

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 2

Sectoral indices Delivery Spike

Closing % Chg % MTD % YTD Company Volume Spike (%) Chg (%)
BSE Auto 51,443 (2.3) (3.9) 21.8 Hero MotoCorp Ltd 7,22,271 360% -4.33%
BSE Bank 57,199 (1.9) (2.5) 5.2 Grasim Industries Ltd 10,55,723 282% -0.73%
BSE Cap Goods 65,928 (2.7) (4.6) 18.5 Tata Steel Ltd 2,61,17,083 205% -3.47%
BSE Cons dur 60,146 (0.9) (0.8) 20.3 Steel Authority of India Ltd 77,28,354 191% -2.17%
BSE FMCG 20,738 (0.7) (4.3) 1.3 Glenmark Pharmaceuticals Ltd 4,60,803 186% -2.39%
BSE IT 42,071 (0.7) 4.1 16.8 Sammaan Capital Ltd 31,72,130 153% -3.33%
BSE Health 42,435 (1.8) (3.4) 34.5 Zee Entertainment Enterprises Ltd 38,66,915 124% -3.49%
BSE Metal 29,450 (2.5) (5.9) 9.1 ITC Ltd 76,69,907 118% -0.14%
BSE Oil 26,327 (1.8) (4.1) 14.4 DLF Ltd 15,24,106 111% -2.13%
BSE Power 7,336 (2.3) (6.3) 26.1 Bank of Baroda 45,72,757 95% -3.72%
BSE PSU 19,119 (2.1) (3.9) 22.9
BSE Realty 7,316 (3.2) (6.3) 18.2
BSE TECK 19,119 (0.5) 2.6 20.0

Derivatives Update
Long Build Up
Company Last % Chg % Chg OI OI (in 000)
SYNGENE 863.45 3.38 4.55 6,655
LTF 136.21 1.86 4.47 74,542
BERGEPAINT 490.05 1.03 4.45 8,367
MPHASIS 2,848.25 0.29 4.24 4,058
PIIND 4,456.85 2.05 4.16 1,235
Short Build Up
Nifty Outperformers Company Last % Chg % Chg OI OI (in 000)
Price % Chg % MTD % YTD MANAPPURAM 157.19 (0.04) 14.13 54,972
ZYDUSLIFE 964.15 (1.34) 8.93 14,018
Britannia Industries Ltd 5,047 0.4 (11.9) (5.5)
BRITANNIA 5,049.85 (0.21) 2.24 2,892
Ntpc Ltd 381 0.3 (6.6) 22.6
TATAMOTORS 788.70 (0.12) 0.92 99,548
Tata Motors Ltd 786 0.2 (5.7) 1.1
GODREJCP 1,185.20 (0.70) 0.12 11,623
Hindustan Unilever Ltd 2,465 0.1 (2.1) (7.1)
Infosys Ltd 1,868 (0.0) 6.3 21.8 Short Covering
Itc Ltd 472 (0.1) (3.4) 2.2 Company Last % Chg % Chg OI OI (in 000)
Asian Paints Ltd 2,471 (0.2) (15.8) (27.4) MARICO 598.30 (0.09) (2.36) 20,618
ALKEM 5,577.65 (1.62) (1.66) 1,750
Nifty Underperformers HINDUNILVR 2,467.25 (0.09) (1.48) 16,212
Price % Chg % MTD % YTD HAVELLS 1,618.80 (0.64) (0.15) 10,356
Hero Motocorp Ltd 4,520 (4.3) (9.4) 9.8 Long Unwinding
Hindalco Industries Ltd 627 (3.8) (8.7) 1.9 Company Last % Chg % Chg OI OI (in 000)
Tata Steel Ltd 139 (3.5) (6.3) (0.3) GNFC 545.95 7.94 (26.60) 8,084
Mahindra & Mahindra Ltd 2,799 (3.4) 2.6 61.8 IPCALAB 1,500.00 3.34 (13.86) 2,129
Eicher Motors Ltd 4,589 (3.2) (6.3) 10.7 DEEPAKNTR 2,479.35 3.00 (13.84) 2,367
Adani Ports And Special Econ 1,288 (2.9) (6.4) 25.7 METROPOLIS 2,056.45 6.12 (8.14) 1,120
Bajaj Auto Ltd 9,452 (2.3) (3.9) 39.1 SUNTV 707.55 0.69 (6.90) 5,869

Bulk Deals
Security Name Client Name Buy/Sell Qty Price Value (mn)
TIRTPLS Forbes EMF Buy 8,00,000 203.00 162
TIRTPLS Mitcon Sun Power Limited Sell 7,99,271 203.00 162
TIRTPLS Azura Projects Private Limited Sell 9,25,000 145.65 135
TIRTPLS Genesis Grand General Trading L.L.C Buy 8,90,000 145.65 130
TIRTPLS Walery Security Management Limited Buy 10,17,268 98.40 100
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 3

Nifty Nifty P/E Nifty P/B

30000 36 4.5
27000 4.0
24000 31
3.5
21000
26 3.0
18000
15000 2.5
21
12000 2.0
9000 16 1.5
Nov-20 Nov-21 Nov-22 Nov-23 Nov-24 Nov-20 Nov-21 Nov-22 Nov-23 Nov-24 Nov-20 Nov-21 Nov-22 Nov-23 Nov-24

Source: Bloomberg

Sensex FII Provisional Flows (INR bn) DII Provisional Flows (INR bn)
290 155
95000 130
230
85000 105
170 80
75000
65000 110 55
55000 50 30
5
45000 (10)
(20)
35000 (70) (45)
25000 (130) (70)
Nov-20 Nov-21 Nov-22 Nov-23 Nov-24 Nov-20 Nov-21 Nov-22 Nov-23 Nov-24 Nov-20 Nov-21 Nov-22 Nov-23 Nov-24
Source: Bloomberg

Economy, Money & Banking Commodities Update

Forex Rate Last % Chg % MTD % YTD Commodities Last % Chg % MTD % YTD
INR~USD 84.4 0.0 (0.4) (1.4) Gold ($/Ounce) 2,574 0.1 (6.2) 24.8
INR~EUR 89.7 (0.0) 1.9 2.5 Crude Oil ($/Bl) 68 (0.5) (1.7) (3.1)
INR~GBP 107.6 0.6 1.5 (1.7) Aluminium ($/t) 2,495 (1.3) (3.7) 6.4
Copper ($/t) 8,909 (1.0) (5.0) 5.3
Bond Market Last Chg (bps) MTD (bps) YTD (bps) Zinc ($/t) 2,971 1.8 (2.0) 12.5
10 Year Bond 6.8 1 (1) (34) Lead ($/t) 1,971 (0.8) (0.4) (3.1)
Interbank call 6.6 15 85 36 Nickel ($/t) 15,478 (1.1) 0.2 (5.5)

INR/USD Gold and silver prices (USD/Tr.Oz) Crude prices (USD/barrel)

84 2500 30 95
2200 27
24
1900 75
21
83 1600
18
1300 15 55
1000 12
82 Nov-20 Nov-21 Nov-22 Nov-23 Nov-24
35
Nov-23 Mar-24 Jul-24 Nov-24 Gold (LHS) Silver (RHS) Nov-20 Nov-21 Nov-22 Nov-23 Nov-24

Source: Bloomberg

Inflation vs 10 year yield Nifty premium/discount NSE volatility index (%)

20 120 101.2 99.5 22

15 100 85.0 76.1
10 80 71.6 18
5 60
0 40 14
-5 20
0
Aug-23

Nov-23

Aug-24

Nov-24
Feb-23

May-23

Feb-24

May-24

10
07-Nov

08-Nov

11-Nov

12-Nov

13-Nov

4-Oct
5-Aug
15-Aug
25-Aug
4-Sep
14-Sep
24-Sep

3-Nov
13-Nov
26-Jul

14-Oct
24-Oct

WPI Inflation (%) 10 Yr Yield (%)

Source: Bloomberg
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 4

Please refer to our detailed report to be published today

Reco : BUY INITIATING COVERAGE
CMP
Target Price
: INR 308
: INR 405
Allied Blenders and Distillers
Potential Return : 31% Scale up of P&A to drive growth
Allied Blenders and Distillers (ABD) is the 3rd largest IMFL (Indian Made
Foreign Liquor) company in India with ~8% market share and four millionaire
brands in its portfolio. Going ahead, we expect a turnaround in ABD's
performance on the back of a) New launches in its premium portfolio and
Dhiraj Mistry scaling up brands in the P&A (Prestige & Above) segment backed by strong
+91 22 6911 3434 distribution network. Historically, ABD has scaled up SR B7 and ICONiQ White,
[email protected]
turning them into millionaire brands within 1-2 years of launch; b) Driving
Abhijeet Kundu profitable growth in the popular segment, where other large players are
+91 22 6911 3430 reducing focus, by strategically focusing higher on the superior gross margin
[email protected] states; c) Improving profitability by driving premiumization of the portfolio,
cost rationalization on packaging, and other overheads. Additionally, its capex
plans (of INR 5.25 bn) for backward integration and strengthening of supply
chain (PET bottles) should aid margin expansion over the long term. In the
alcobev sector, premiumization trend is here to stay which provides superior
Market data growth visibility over the long term. This along with ABD's improving
Sensex : 77,691
execution and efficiencies should help the company deliver revenue/ EBITDA
Sector :Breweries & Distil.
CAGR of 9%/ 29% over FY24-27 driven by 13%/ 15% volume/ value growth
in the P&A segment. We initiate coverage on the stock with a BUY
Market Cap (INR bn) : 86.2
recommendation and a TP of INR 405, valuing it at 42x PER on FY27E EPS.
Market Cap (USD bn) : 1.022
O/S Shares (mn) : 279.7 Accelerating premiumization with new product launches and global tie-ups
52-wk HI/LO (INR) : 375/282 ABD's P&A portfolio volume contribution has increased from 25.2% in FY18 to ~37% in FY24
Avg. Daily Vol ('000) : 571 at 11.8 mn cases driven by the successful launch of Sterling Reserve B7 (SR B7) in FY18 and
Bloomberg : ABDL IN aggressively scaling up of the ICONiQ White whisky (in FY23). SR B7 is the third-largest
Source: Bloomberg selling brand in the mid-priced prestige and above segment with volumes of 4.5 mn cases in
Valuation FY24. Notably, the ICONiQ Whisky has reached a milestone of selling over 1 mn cases
within a year of its launch. The success of its new launches has been backed by its ability to
FY25e FY26e FY27e
make in-roads faster based on its trade relations, pan-India distribution strength, and
EPS (INR) 5.3 7.7 9.6
manufacturing network. Additionally, to cater to the fast growing luxury segment and leveraging
P/E (x) 57.6 40.0 32.0
its strong distribution network, ABD is tying up with global spirits companies to distribute
P/BV (x) 6.2 5.8 5.3
brands in India. We expect P&A brand volume contribution to reach 44% by FY27.
EV/EBITDA (x) 24.6 20.4 17.4
Dividend Yield (%) 0.9 1.2 1.6
Expanding mass popular in a profitable way; presence in high-margin states provide an edge
Source: Bloomberg ABD's Officers Choice also plays on the upgrade of the 350 mn cases country liquor industry
to entry level of the IMFL category. In our view, the reduced focus from pan-India IMFL players
Returns (%)
should help ABD strengthen its position in the popular segment and gain market share. ABD
1m 3m 6m 12m
tactically operates in states with high profit margins. As per our understanding, ABD's flagship
Absolute (6) 2 - -
brand Officer's Choice has 40% gross margin. About 60% of its sales are in states with the
Relative (1) 4 - - gross margin at +40%. Thus, despite high saliency of the popular segment, ABD has industry
Source: Bloomberg
parity gross margin.
Shareholding pattern Backward integration, premiumization, and cost rationalization to aid margin expansion
Promoters : 81% Over the last couple of years, ABD has worked extensively on cost saving from packaging
Public : 19% material, which has resulted in packing material as a % of COGS coming down from 47% in
Others : 0% FY22 to 40% in FY24. Gross margin improvement was restricted due to ENA and glass inflation,
however, with stabilization of commodity prices, the margin has improved by 400 bps in 1HFY25.
Source: Bloomberg Additionally, ABD is investing INR 5.25 bn over the next three years to strengthen it supply chain
Price performance vs Nifty and on backward integration. Over FY24-27, we expect EBITDA margin to improve by 470 bps
to 12% in FY27. Post its IPO, ABD retired its high-cost debt and the repayment of statutory
135
overdues will help reduce its interest burden and drive earnings growth.
125
115 Investment Summary
105
We expect significant improvement in ABD's performance with focus on driving premiumization
95
by expanding the P&A brand portfolio and driving profitable growth in the popular segment.
Jul-24 Sep-24 Nov-24
Currently, ABD is trading at 40%-60% discount to peers. With the improvement in performance,
Allied Blend. & Dist. NIFTY
we expect the valuation gap to narrow down to 20%-40%. We initiate coverage on the stock
Source: Bloomberg Indexed to 100
with BUY recommendation and a TP of INR 405, valuing it at 42x PER on FY27 EPS.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 5

Financials
Profit and loss account (INR mn) Key assumptions
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Net Revenue 31,466 33,279 34,918 39,270 43,446 Gross margin (%) 37.3 37.0 40.0 40.3 40.5
Gross Profit 11,726 12,299 13,967 15,826 17,595 Employee expenses (%) 5.9 5.3 5.3 5.1 4.9
Op. Expenses (29,616) (30,857) (31,208) (34,763) (38,248) Ad-spends (% of sales) 4.6 4.7 4.5 4.5 4.5
EBITDA 1,850 2,421 3,710 4,507 5,198
Depreciation (551) (579) (679) (833) (978) Cash flow statement (INR mn)
EBIT 1,298 1,843 3,031 3,674 4,220 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Other income 111 63 50 70 100 PBT 59 178 1,994 2,870 3,592
Interest Exp. (1,350) (1,728) (1,087) (874) (728) Depreciation & amortization 551 579 679 833 978
Reported PBT 59 178 1,994 2,870 3,592 Interest expense 1,350 1,728 1,087 874 728
Tax (43) (110) (498) (717) (898) (Inc)/Dec in working capital 327 (655) (5,472) 214 1,210
Reported PAT 16 68 1,495 2,152 2,694 Tax paid (40) (110) (498) (717) (898)
Net Profit 16 68 1,495 2,152 2,694 CF from operating activities 2,299 1,857 (2,210) 4,073 5,610
Adjusted PAT 16 18 1,495 2,152 2,694 Capital expenditure (195) (446) (2,500) (2,800) (2,200)
Adjusted EPS (INR) 0.1 0.1 5.3 7.7 9.6 Inc/(Dec) in investments (10) (122) - - -
Add: Interest/Div. Income Recd. 22 23 - - -
Balance sheet (INR mn) CF from investing activities (184) (545) (2,500) (2,800) (2,200)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Inc/(Dec) in share capital - (10) 9,071 - -
Share Capital 488 488 559 559 559 Inc/(Dec) in debt (557) 421 (958) - -
Reserves & Surplus 3,573 3,581 13,329 14,405 15,752 Dividend Paid - - (748) (1,076) (1,347)
Networth 4,061 4,069 13,888 14,964 16,311 Others (1,212) (1,501) (1,087) (874) (728)
Debt 7,762 8,241 7,283 7,283 7,283 CF from financing activities (1,768) (1,090) 6,279 (1,950) (2,075)
Net deferred Tax liabilities (121) (98) (98) (98) (98) Net cash flow 346 222 1,568 (677) 1,335
Capital Employed 11,702 12,213 21,073 22,150 23,497 Opening balance 184 530 753 2,321 1,644
Gross Fixed Assets 10,627 11,686 14,186 16,986 19,186 Closing balance 530 753 2,321 1,644 2,979
Accumulated Depreciation (4,911) (5,379) (6,058) (6,891) (7,869)
Capital work in progress 140 159 159 159 159 Growth indicators (%)
Net Fixed Assets 5,856 6,466 8,287 10,254 11,476 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Goodwill 39 39 39 39 39 Revenue 17.2 5.8 4.9 12.5 10.6
Current Assets, Loans & Adv. 18,861 19,754 25,619 25,740 26,700 EBITDA (6.3) 30.9 53.2 21.5 15.3
Inventory 5,592 4,188 5,166 5,138 5,666 Adj PAT (73.0) 14.3 NA 43.9 25.2
Debtors 9,576 12,437 16,619 17,444 16,542 Adj EPS (74.0) 14.3 NA 43.9 25.2
Cash & Bank balance 530 753 2,321 1,644 2,979
Loans & advances and others 3,163 2,376 1,513 1,513 1,513
Valuation (x)
Current Liabilities & Provisions 13,053 14,046 12,871 13,883 14,718
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
P/E (x) NA NA 57.6 40.0 32.0
Liabilities 12,697 13,686 12,511 13,523 14,358
P/BV (x) 18.5 18.5 6.2 5.8 5.3
Provisions 357 360 360 360 360
EV/EBITDA (x) 50.5 38.7 24.6 20.4 17.4
Net Current Assets 5,807 5,708 12,748 11,857 11,982
EV/Sales (x) 3.0 2.8 2.6 2.3 2.1
Application of Funds 11,702 12,213 21,073 22,150 23,497
Dividend Yield (%) - - 0.9 1.2 1.6
Per share data
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Financial ratios
No. of shares (mn) 244 244 280 280 280
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
RoE (%) 0.4 0.4 16.7 14.9 17.2
Diluted no. of shares (mn) 244 244 280 280 280
RoCE (%) 11.7 15.9 18.5 17.3 18.9
BVPS (INR) 16.6 16.7 49.7 53.5 58.3
Asset/T.O (x) 2.7 2.8 2.1 1.8 1.9
CEPS (INR) 2.3 2.6 7.8 10.7 13.1
Net Debt/Equity (x) 1.8 1.8 0.4 0.4 0.3
DPS (INR) - - 2.7 3.8 4.8
EBIT/Interest (x) (1.0) (1.1) (2.8) (4.3) (5.9)
Source: Company, Antique

Margins (%)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
EBITDA Margin (%) 5.9 7.3 10.6 11.5 12.0
EBIT Margin (%) 4.1 5.5 8.7 9.4 9.7
PAT Margin (%) 0.1 0.1 4.3 5.5 6.2
Source: Company Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 6

CMP : INR 223 2QFY25 RESULT REVIEW

Reco
Target Price
: BUY çè
: INR 294 çè
NMDC
Target Price Change : No Change EBITDA impacted QoQ by lower volume, inventory swing;
Target FY27 EV/EBITDA (x) : 6
EBITDA Change FY25/ 26/ 27 : -10%/ -4%/ -4%
2HFY25 outlook remains strong
NMDC reported standalone revenue at ~INR 48.1 bn, higher by 19.7% YoY but
declined 10.6% QoQ (3.2% above our and consensus estimate). Iron ore sales
volume at ~9.7 MT grew by 1.8% YoY but fell 3.3% QoQ, while iron ore
Pallav Agarwal production was at 8.3 MT (lower by 6.5% YoY and 9.9% QoQ). Realization
+91 22 6911 3411 came in at INR 4.876 per ton, higher by 16.8% YoY but lower 8.6% sequentially
[email protected]
(marginally above our estimate). EBITDA at INR 14.4 bn grew by 20.7% YoY
Suman Kumar but shrunk by 39% QoQ. EBITDA was 19.5% below our and 22.4% lower than
+91 22 6911 3416 consensus (primarily impacted by a sequential inventory swing of INR 5.2
[email protected] bn, 6% higher QoQ employee expenses, and 17% QoQ higher other expenses).
Royalty costs at INR 17.5 bn were up by 16.3% YoY but declined by 13.5%
QoQ. EBITDA per ton came in at INR 1,479, higher by 18.6% YoY but shrunk by
36.9% QoQ (19.5% below our estimate). Adjusted PAT came in at INR 12.7 bn;
Market data it grew by 23.5% YoY but declined by 36% sequentially. We favor the
Sensex : 77,691 company’s net cash position and capacity expansion plans to support higher
Sector : Metals volume offtake. We factor in 10%/ 4%/ 3% lower sales volume leading to
Market Cap (INR bn) : 654.1 10%/ 4%/ 4% reduction in FY25/ 26/ 27 EBITDA. We roll over our earnings
Market Cap (USD bn) : 7.752 estimate to FY27 (from 1HFY27 earlier) and maintain BUY rating with a TP of
O/S Shares (mn) : 2,930.6 INR 294 (earlier INR 291) at a target multiple of 6x FY27E EV/EBITDA.
52-wk HI/LO (INR) : 286/167
Iron ore sales grew YoY but declined QoQ; October’24 witnessed uptick
Avg. Daily Vol ('000) : 20,117
Bloomberg : NMDC IN Iron ore sales volume at ~9.7 MT grew by 1.8% YoY but fell 3.3% QoQ, while iron ore production
Source: Bloomberg was at 8.3 MT (lower by 6.5% YoY and 9.9% QoQ). October’24 witnessed ore production of
~4.1 MT (higher by 3.8% YoY and 33.9% MoM) while sales volume stood at 4 MT (grew by
Valuation
17.2% YoY and 13.8% MoM). Management had earlier guided for FY25 production of 50 MT
FY25e FY26e FY27e
(11% higher YoY; 1HFY25 stood at 17.5 MT, implying 2HFY25 production to be at 32.5 MT)
EPS (INR) 23.4 28.6 31.3
and FY26 production target of 54 MT with the long-term intent of touching 100 mtpa by FY31.
P/E (x) 9.6 7.8 7.1
Management had earlier expected NMDC Steel to break even by 3QFY25.
P/BV (x) 2.2 1.9 1.6
EV/EBITDA (x) 6.4 5.0 4.4 Realization declined QoQ impacted by price cuts; two price hikes taken in October’24
Dividend Yield (%) 4.3 4.5 4.9 Realization came in at INR 4.876 per ton, higher by 16.8% YoY but lower 8.6% sequentially,
Source: Company, Antique impacted by two successive price cuts in the quarter: INR 500 per ton in lumps, INR 500 per
Returns (%) ton in fines on June 30, 2024 and INR 600 per ton in lumps, INR 500 per ton in fines on
1m 3m 6m 12m August 7, 2024. These cuts have been followed by two price hikes taken in 3QFY25TD: INR
Absolute (4) (1) (13) 27 400 per ton in lumps, INR 400 per ton in fines on October 1, 2024 and INR 600 in lumps,
Relative 1 1 (18) 6 INR 400 in fines on October 23, 2024. This could aid realization in 3QFY25. NMDC’s
Source: Bloomberg current prices are close to the long-term average discount levels to global import parity iron
ore prices and are expected to stay supported at current levels.
Shareholding pattern
Capex for capacity expansion to be funded through internal accruals
Promoters : 61%
FY25 capex guidance was earlier at INR 22 bn (1QFY25 had witnessed a capex of INR 3.8
Public : 39%
bn), primarily focused on long-term capacity expansion (total capex amounting to INR 500 bn
Others : 0%
worth of projects to raise capacity to 67 mtpa by FY25 and 100 mtpa by FY30). Cash and cash
Source: Bloomberg equivalents at the end of FY25 are expected to be at INR 123 bn (most capex can be funded
Price performance vs Nifty through internal accruals). Repayment of INR 25 bn inter-corporate loan (pre demerger expenses
incurred for NMDC Steel) has commenced (INR 1 bn received in 1QFY25) and the rest would
175
be received in 12 months, post the break-even of NMDC Steel. Slurry pipeline is expected to be
155
fully operational by mid CY26. We expect the dividend yield to sustain at ~4% over FY25–26.
135
115
Investment Summary
95 We favor strong operational capacity, net cash position, capacity expansion plans (100
Nov-23 Mar-24 Jul-24 Nov-24 mtpa capacity by FY30 and long-term target of 10%–15% of revenue from non-iron ore
NMDC NIFTY segments like gold, magnetite, and lithium mining prospects in Australia). We maintain BUY
Source: Bloomberg Indexed to 100 rating with a TP of INR 294 at a target multiple of 6x FY27E EV/EBITDA.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 7

Table 1: Quarterly performance—standalone (INR mn)

2QFY25 2QFY24 YoY (%) 1QFY25 QoQ (%) 1HFY25 CPLY (1HFY24) YoY (%)
Sales 48,066 40,140 19.7 53,778 (10.6) 1,01,844 94,086 8.2
Cost of Material Consumed 35 36 -3.3 40 (12.9) 75 63 19.5
% of sales 0.1 0.1 -2 bps 0.1 0 bps 0.1 0.1 1 bps
Royalty cost 17,504 15,050 16.3 20,228 (13.5) 37,732 38,240 (1.3)
Employee cost 4,129 3,918 5.4 3,882 6.4 8,011 7,559 6.0
% of sales 8.6 9.8 -117 bps 7.2 137 bps 7.9 8.0 -17 bps
Other expenses 11,994 9,202 30.3 6,020 99.2 18,014 16,334 10.3
% of sales 25.0 22.9 203 bps 11.2 1376 bps 17.7 17.4 33 bps
Total Exp 33,662 28,207 19.3 30,170 11.6 63,832 62,196 2.6
EBITDA 14,404 11,933 20.7 23,608 (39.0) 38,011 31,891 19.2
Margin % 30.0 29.7 24 bps 43.9 -1393 bps 37.3 33.9 343 bps
Other income 3,605 3,207 12.4 3,645 (1.1) 7,250 6,014 20.6
Depreciation 842 886 (4.9) 736 14.4 1,578 1,577 0.1
Interest expenses 291 186 56.4 231 26.0 522 248 110.5
Profit Before Tax 16,875 14,068 20.0 26,286 (35.8) 43,161 36,080 19.6
Exceptional item (2) 2 nm -2.2 nm (0) 4 nm
PBT after exceptional 16,874 14,071 19.9 26,284 (35.8) 43,161 36,084 19.6
Tax 4,184 3,790 10.4 6,444 (35.1) 10,628 9,301 14.3
Tax Rate % 24.8 26.9 -214 bps 24.5 28 bps 24.6 25.8 -115 bps
Reported Net Profit 12,690 10,276 23.5 19,840 (36.0) 32,529 26,775 21.5
Adjusted Net Profit 12,692 10,278 23.5 19,842 (36.0) 32,533 26,779 21.5
EPS (INR) 4.3 3.5 23.5 6.8 (36.0) 11.1 9.1 21.5

Operating metrics 2QFY25 2QFY24 YoY (%) 1QFY25 QoQ (%) 1HFY25 CPLY (1HFY24) YoY (%)
Iron ore despatches (MT) 9.7 9.6 1.8 10.1 (3.3) 19.8 20.5 (3.6)
Iron ore realization (INR per ton) 4,876 4,176 16.8 5,334 (8.6) 5,105 4,513 13.1
EBITDA (INR per ton) 1,479 1,247 18.6 2,344 (36.9) 1,911 1,533 24.7
Source: Company, Antique

Exhibit 2: Iron ore realization rose YoY but declined QoQ

Exhibit 1: Volumes largely flat YoY but lower QoQ impacted by price cuts taken in the quarter
14.0 8,000

12.0 7,000
6,000
10.0
5,000
8.0
4,000
6.0
3,000
4.0 2,000
2.0 1,000

- 0
Q2FY23
Q3FY23
Q4FY23
Q1FY24
Q2FY24
Q3FY24
Q4FY24
Q1FY25
Q2FY25
2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
4QFY24
1QFY25
2QFY25

2QFY18
3QFY18
4QFY18
1QFY19
2QFY19
3QFY19
4QFY19
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23

MT INR per tonne

Source: Company, Antique Source: Company, Antique

Table 2: NMDC’s target price

FY27e EBITDA - INR mn 1,10,339
EV/EBITDA multiple 6.0
Target EV - INR mn 6,62,032
Add: FY27e net cash plus CWIP @0.4x 1,99,606
Target market capitalization - INR mn 8,61,638
Target price - INR per share 294
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 8

Table 3: Balance sheet

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Share capital 2,931 2,931 - 2,931 2,931 -
Reserves and Surplus 2,79,032 2,38,961 16.8 2,91,719 2,51,127 16.2
Loan Funds 41,576 35,363 17.6 17,085 33,585 (49.1)
Deferred Tax Liability (2,714) (2,725) (0.4) (2,659) (2,659) -
Total 3,20,824 2,74,530 16.9 3,09,076 2,84,984 8.5
Fixed Assets 48,121 29,239 64.6 37,958 31,636 20.0
Capital Work-in-Progress 37,642 25,767 46.1 45,347 32,347 40.2
Investments 9,917 8,867 11.8 9,917 9,917 -
Current Assets, Loans And Advances 2,98,003 2,70,127 10.3 2,83,504 2,76,933 2.4
Inventories 23,109 23,635 (2.2) 17,301 27,389 (36.8)
Sundry Debtors 45,141 20,640 118.7 32,416 34,992 (7.4)
Cash and Bank Balances 1,42,472 1,38,710 2.7 1,40,278 1,22,730 14.3
Loans and Advances 87,281 87,142 0.2 93,509 91,822 1.8
Current Liabilities and Provisions 72,858 59,470 22.5 67,650 65,848 2.7
Liabilities 55,542 45,379 22.4 50,337 48,996 2.7
Provisions 17,316 14,092 22.9 17,313 16,852 2.7
Net Working Capital 82,673 71,947 14.9 75,577 88,355 (14.5)
Total 3,20,824 2,74,530 16.9 3,09,076 2,84,984 8.5
Net debt (1,00,897) (1,03,347) (2.4) (1,23,193) (89,144) 38.2
Source: Company, Antique

Table 4: Cashflow statement

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Reported Profit 32,529 26,775 21.5 68,433 59,150 15.7
Depreciation 1,578 1,577 0.1 3,678 3,371 9.1
Interest 522 248 110.5 782 782 -
Changes in working capital (14,488) (38,202) (62.1) 12,779 24,092 (47.0)
Operating cash flow 20,141 (9,602) (309.8) 85,672 87,395 (2.0)
Capex (30,757) (11,658) 163.8 (23,000) (12,191) 88.7
Others - - (3,881) (100.0)
Investing cash flow (30,757) (11,658) 163.8 (23,000) (16,072) 43.1
Net proceeds from borrowings 6,212 13,104 (52.6) (16,500) 12,311 (234.0)
Others 24,146 76,387 n/a (28,624) (31,385) (8.8)
Financing cash flow 30,358 89,490 (66.1) (45,124) (19,074) 136.6
Net cash flow 19,743 68,230 (71.1) 17,548 52,249 (66.4)
Opening cash balance 1,22,730 70,480 74.1 1,22,730 70,480 74.1
Closing cash balance 1,42,472 1,38,710 2.7 1,40,278 1,22,730 14.3
Free cash flow (10,615) (21,260) (50.1) 62,672 75,204 (16.7)
Source: Company, Antique

Table 5: Revision in estimates — NMDC (Standalone)

Previous estimates Current estimates % change in estimates
FY25e FY26e FY27e FY25e FY26e FY27e FY25 FY26 FY27
Revenue (INR mn) 2,50,199 2,80,591 3,00,919 2,27,538 2,70,463 2,90,794 -9% -4% -3%
EBITDA (INR mn) 91,779 1,05,676 1,14,796 82,290 1,01,237 1,10,339 -10% -4% -4%
PAT (INR mn) 76,157 87,814 95,985 68,433 83,707 91,658 -10% -5% -5%
EPS (INR) 26.0 30.0 32.8 23.4 28.6 31.3 -10% -5% -5%
Iron ore sales volume (tons) 5,00,00,000 5,50,00,000 5,90,00,000 4,50,00,000 5,30,00,000 5,70,00,000 -10% -4% -3%
Iron ore realization (INR per ton) 5,004 5,102 5,100 5,056 5,103 5,102 1% 0% 0%
EBITDA per ton (INR) 1,836 1,921 1,946 1,829 1,910 1,936 0% -1% -1%
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 9

Financials
Profit and loss account (INR bn) Cash flow statement (INR bn)
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Revenues 177 213 228 270 291 PBT 64 83 92 112 123
Expenses 116 139 145 169 180 Depreciation 3 3 4 4 5
EBITDA 61 74 82 101 110 Interest 1 1 1 1 1
Depreciation & amortization 3 3 4 4 5 (Inc)/ Dec in working capital (46) 24 13 (16) (11)
EBIT 57 70 79 97 105 Tax paid (21) (24) (23) (29) (31)
Other income 7 14 14 16 18 CF from operating activities 1 87 86 72 86
Interest expense 1 1 1 1 1 Capex (12) (12) (23) (23) (25)
Profit before tax 64 83 92 112 123 (Inc)/ Dec in Investments 1 (1) - - -
Extraordinaries 12 (3) - - - Income from investments 12 (3) - - -
Tax 21 24 23 29 31 CF from investing activities 2 (16) (23) (23) (25)
Profit after tax 55 56 68 84 92 Inc/ (Dec) in debt 3 12 (17) (2) -
Adjusted PAT 43 59 68 84 92 Dividends & Interest paid (19) (21) (28) (29) (32)
EPS (INR) 14.6 20.2 23.4 28.6 31.3 Others 5 (10) (1) (1) (1)
CF from financing activities (11) (19) (45) (32) (33)
Balance sheet (INR bn) Net cash flow (9) 52 18 17 28
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e Add: Opening balance 79 70 123 140 157
Share Capital 3 3 3 3 3 Closing balance 70 123 140 157 185
Reserves & Surplus 220 251 292 346 406
Networth 223 254 295 349 408 Growth indicators (%)
Debt 21 34 17 15 15 Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Deferred tax/ other liabilities (3) (3) (3) (3) (3) Revenue (32.0) 20.5 6.9 18.9 7.5

Capital Employed 242 285 309 361 421 EBITDA (52.0) 21.3 11.9 23.0 9.0

Gross Fixed Assets 52 51 61 71 81 PAT (54.6) 37.8 15.7 22.3 9.5

Accumulated Depreciation 22 20 23 28 33 EPS (54.6) 37.8 15.7 22.3 9.5

Net Assets 30 32 38 44 49
Valuation
Capital work in progress 20 32 45 58 73
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Investments 9 10 10 10 10
P/E (x) 15.2 11.0 9.6 7.8 7.1
Current Assets Loans & Advances
P/BV (x) 2.9 2.6 2.2 1.9 1.6
Inventory 27 27 17 19 20
EV/EBITDA (x) 10.0 7.7 6.4 5.0 4.4
Debtors 44 35 32 41 48
EV/Sales (x) 3.4 2.7 2.3 1.9 1.7
Cash & Bank 70 123 140 157 185
Dividend Yield (%) 3.0 3.3 4.3 4.5 4.9
Loans & advances and others 94 92 94 111 120
Current Liabilities & Provisions
Financial ratios
Creditors 38 49 50 59 63
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Provisions 14 17 17 20 22
RoE 21.3 24.8 24.9 26.0 24.2
Net Current Assets 183 211 216 249 288
RoCE 26.4 29.5 34.8 38.2 35.3
Application of Funds 242 285 309 361 421
Debt/Equity (x) (0.2) (0.4) (0.4) (0.4) (0.4)

Per share data

Margins (%)
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
No. of shares (mn) 2,931 2,931 2,931 2,931 2,931
EBITDA 34.3 34.5 36.2 37.4 37.9
BVPS (INR) 76.2 86.7 100.5 119.1 139.4
EBIT 32.4 33.0 34.5 35.8 36.3
CEPS (INR) 15.8 21.3 24.6 30.0 32.9
PAT 24.3 27.8 30.1 30.9 31.5
DPS (INR) 6.6 7.3 9.5 10.0 11.0
Source: Company Antique
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 10

CMP : INR 5,574 2QFY25 RESULT REVIEW

Reco
Target Price
: HOLD çè
: INR 4,670 é
Alkem Laboratories
Target Price Change : No Change India formulations revenue growth remains weak
Target FY27 P/E (x) : 22
Alkem Laboratories (ALKEM) reported a revenue of INR 34,147 mn in 2Q, flat
EPS Change FY25/ 26/ 27 : -4%/ -4%/ 3%
on YoY basis. ALKEM’s India business reported a growth of ~6% YoY; as per
IQVIA the growth was largely on account of higher than IPM growth in Anti-
diabetics, Neuro, VMN, and Respiratory whereas growth in its largest therapy
viz. Anti-infective remained weak in a seasonally strong quarter. Its US generic
segment reported a sequential revenue decline of ~8% with revenue at ~USD
Monish Shah 71 mn; the decline was mainly due to lack of new launches and continued
+91 22 6911 3412 price erosion. Gross margin came in at 64.7%, improving ~3% on a YoY basis,
[email protected]
the improvement can largely be attributable to a reduction in API prices (RM
cost) and price hikes in the India business. ALKEM’s India business growth
has been below IPM for the past two quarters, we believe given the continued
weak acute season and higher base, ALKEM is likely to grow below IPM at
Market data ~7% CAGR over the next two years. We reduce our FY27 revenue estimate by
Sensex : 77,691 ~4%, however, increase our EPS estimate by 3% mainly on account of higher
Sector : Pharmaceuticals gross margin and higher other income. We continue to maintain HOLD rating
Market Cap (INR bn) : 666.1 with a revised target price of INR 4,670 (earlier INR 4,652) valuing the company
Market Cap (USD bn) : 7.894
at a P/E multiple of 22x on FY27 EPS (earlier 1HFY27).
O/S Shares (mn) : 119.6
52-wk HI/LO (INR) : 6440/4285 India growth remains below IPM
Avg. Daily Vol ('000) : 300
India formulations revenue growth stood at ~6% YoY, which was largely driven by chronic
Bloomberg : ALKEM IN
therapies of Anti-diabetic, and CNS. The acute business continues to struggle with
Source: Bloomberg
underperformance in its key therapies viz. Anti-infective and Pain/ Analgesics which accounts
Valuation
for 2/3rd of its India revenue. To growth its chronic business, ALKEM has consistently invested
FY25e FY26e FY27e
EPS (INR) 194.2 208.0 212.3
in creating new divisions and adding MRs, these measures have resulted in higher contribution
P/E (x) 28.7 26.8 26.3 from chronic products at ~20% of India revenue. A clear strategy and growth initiatives in
P/BV (x) 5.6 4.9 4.3 place for the chronic segment offset by continued weak show in the acute segment is likely to
EV/EBITDA (x) 22.8 20.7 18.1 drive its underperformance against IPM. We expect India business revenue to grow at ~7%
Dividend Yield (%) 1.1 1.1 1.1 CAGR over a two-year period.
Source: Company, Antique
US generic to grow at low single-digit CAGR in coming years
Returns (%)
1m 3m 6m 12m ALKEM’s US generic revenue declined on QoQ basis to ~USD 71 mn, which was on account
Absolute (10) (2) 7 30 of increased competition in its one-off opportunities and ongoing price erosion. During the
Relative (5) (1) 1 8 quarter, the company launched only one product and received five additional approvals
Source: Bloomberg from the USFDA. We believe ALKEM has a few niche filings where the company has para 4
Shareholding pattern status; some of the key filings are gMyrbetriq, Firvanq Kit, etc. However, for gMyrbetriq,
ALKEM is unlikely to launch before FY26/ 27 given its stand on settlement with the innovator.
Promoters : 57%
This has further reduced its opportunity to launch a limited competition product; we expect
Public : 43%
ALKEM’s US revenue to grow at a CAGR of ~2% by FY27 to ~USD 350 mn.
Others : 0%

Source: Bloomberg Our View

Price performance vs Nifty Although revenue growth during the quarter was flat, gross margin improvement resulted in
155 an EBITDA margin of ~22%. With our estimates for the India formulation business to grow
145
135 below IPM and US generics to remain flat, we believe ALKEM revenue is likely to grow at 6%
125
115 CAGR over two year period. Given prudent expenditure management, we expect EBITDA
105 margin to improve to ~22% for FY27. We believe the stock trades at an expensive valuation
95
Nov-23 Mar-24 Jul-24 Nov-24 of ~21x/ 19x EV/EBITDA on FY26/ 27 and 26x P/E on our FY27 estimates, along with the
Alkem Labs NIFTY risk of underperformance in the India business. Our assumption is there are more downside
Source: Bloomberg Indexed to 100 risks to the stock and maintain HOLD rating.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 11

Table 1: Segmental revenue snapshot

(INR mn) 2QFY25 2QFY24 YoY (%) 1QFY25 QoQ (%) 1HFY25 1HFY24 YoY (%)
India 24,610 23,278 6 20,233 22 44,843 42,285 6
--US 5,940 7,675 (23) 6,416 (7) 12,356 14,630 (16)
--RoW 3,244 2,866 13 3,261 (1) 6,505 6,057 7
Gross sales 33,794 33,819 (0) 29,910 13 63,704 62,972 1
Source: Company, Antique

Table 2: Quarterly snapshot

(INR mn) 2QFY25 2QFY24 YoY (%) 1QFY25 QoQ (%) 1HFY25 1HFY24 YoY (%)
Net sales 34,147 34,402 (1) 30,318 13 64,465 64,079 1
RM Cost 12,047 13,271 (9) 10,760 12 22,807 25,256 (10)
% of sales 35.3 38.6 (330)bps 35.5 (21)bps 35.4 39.4 (404)bps
Staff costs 6,105 5,554 10 6,023 1 12,128 11,230 8
% of sales 17.9 16.1 173 bps 19.9 (199)bps 18.8 17.5 129 bps
Other expenses 8,467 8,110 4 7,450 14 15,916 16,233 (2)
% of sales 24.8 23.6 122 bps 24.6 22 bps 24.7 25.3 (64)bps
Expenditure 26,618 26,934 (1) 24,232 10 50,850 52,720 (4)
EBITDA 7,528 7,467 1 6,086 24 13,615 11,359 20
EBITDA margin (%) 22.0 21.7 34 bps 20.1 197 bps 21.1 17.7 339 bps
Other income 1,345 632 1,203 2,548 1,290
Interest 281 303 291 573 601
Depreciation 789 739 805 1,594 1,463
PBT before EO 7,803 7,057 11 6,194 26 13,996 10,586 32
Exceptional items - 577 - - 577
PBT 7,803 6,480 20 6,194 26 13,996 10,009 40
Tax 783 332 691 1,474 982
Tax Rate % 10.0 5.1 11.2 10.5 9.8
PAT before MI 7,020 6,149 14 5,502 28 12,522 9,027 39
MI 133 (56) 51 184 (46)
Reported PAT 6,886 6,205 11 5,452 26 12,338 9,073 36
Adjusted PAT 6,886 6,755 2 5,452 26 12,338 9,622 28
EPS (INR) 57.6 56.5 2 45.6 26 103.2 80.5 28
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 12

Table 3: Balance sheet snapshot

1HFY25 1HFY24 Change % FY25 FY24 Change %
Share Capital 239 239 - 239 239 -
Reserves & Surplus 1,14,689 98,186 17 1,36,625 1,18,929 15
Networth 1,14,929 98,425 17 1,36,864 1,19,168 15
Debt 14,779 14,430 2 14,184 14,184 -
Minority Interest 4,172 3,821 9 4,325 4,180 3
Net deferred Tax liabilities -16,533 -14,316 15 -15,148 -15,148 -
Capital Employed 1,17,347 1,02,359 15 1,40,226 1,22,384 15

Capital work in progress 3,642 1,938 88 4,586 3,086 49

Net Block 23,151 24,765 -7 24,571 24,697 -1
Goodwill 4,192 4,156 1 4,167 4,167 -
Investments 11,601 6,255 85 34,140 34,140 -
Non Current Investments 8,234 3,164 160 3,348 3,348 -
Current Investments 3,366 3,091 9 30,792 30,792 -

Current Assets, Loans & Advances 1,12,052 97,827 15 1,04,223 86,765 20

Inventory 29,122 25,415 15 29,044 27,061 7
Debtors 24,981 24,478 2 26,689 24,867 7
Cash & Bank balance 19,523 33,007 -41 34,923 22,003 59
Loans & advances and others 38,427 14,927 157 13,568 12,834 6
Current Liabilities & Provisions 37,291 32,582 14 31,461 30,470 3
Liabilities 32,624 24,552 33 27,194 26,203 4
Provisions 4,667 8,030 -42 4,267 4,267 -
Net Current Assets 74,761 65,245 15 72,762 56,294 29
Application of Funds 1,17,347 1,02,359 15 1,40,226 1,22,384 15
Source: Company, Antique

Table 4: Cash flow statement snapshot

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Reported Profit before tax 13,996 10,009 40 26,871 20,231 33
Depreciation 1,594 1,463 9 3,363 2,993 12
Interest 573 601 -5 1,844 1,124 64
Others (4,216) (1,590) 165 (3,493) (4,351) -20
Changes in working capital (2,529) (1,134) 123 (8,358) (517) 1,517
Operating cash flow 9,418 9,349 1 20,227 19,481 4
Capex (2,980) (1,143) 161 (5,000) (1,868) 168
Others 501 1,249 -60 - (16,538) -100
Investing cash flow (2,479) 106 -2,441 (5,000) (18,406) -73
Net proceeds from borrowings (1,978) (735) 169 - (4,809) -100
Others (1,232) (1,882) -35 (9,017) (6,641) 36
Financing cash flow (3,210) (2,617) 23 (9,017) (11,450) -21
Net cash flow 3,729 6,838 -45 6,210 (10,375) -160
Opening cash balance 15,794 26,169 -40 15,794 26,169 -40
Closing cash balance 19,523 33,007 -41 22,003 15,794 39
Free cash flow 6,438 8,206 -22 15,227 17,613 -14
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 13

Table 5: Actual vs. estimates

2QFY25
(INR mn) Actual Estimated % Variance
Net sales 34,147 35,156 (3)
EBITDA 7,528 8,350 (10)
EBITDA margin (%) 22.0 23.8 (170)bps
Adjusted PAT 6,886 7,114 (3)
EPS (INR) 57.6 59.5 (3)
Source: Company, Antique

Table 6: Old vs. new estimates

New estimates Old estimates Change %
(INR mn) FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Rating Hold Hold
Target (INR) 4,670 4,652 0
Sales 1,33,475 1,43,255 1,51,223 1,37,330 1,48,159 1,57,343 (3) (3) (4)
EBITDA 27,578 29,722 33,136 29,112 31,520 32,586 (5) (6) 2
EBITDA% 20.7 20.7 21.9 21.2 21.3 20.7 (54)bps (53)bps 120 bps
PAT 23,221 24,869 25,378 24,137 26,016 24,554 (4) (4) 3
EPS (INR) 194.2 208.0 212.3 201.9 217.6 205.4 (4) (4) 3
Source: Company, Antique

Exhibit 1: Quarterly revenue & growth (INR mn)

13
16

3
2
-1

-3
-5

29,358 -12
30,409

29,026

29,677

34,402

33,239

30,318

34,147
3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24 1QFY25 2QFY25
Revenue QoQ growth %
Source: Company, Antique

Exhibit 2: 4QFY24 geographical split

RoW
10%

US
17%

India
73%

Source: Company, Antique

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 14

Exhibit 3: Quarterly domestic revenue growth (INR mn)

22
22

3
1

-4

19,724 -12
-5
19,922 -10

20,113

19,007

23,278

22,328

20,233

24,610
3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24 1QFY25 2QFY25
India QoQ growth %
Source: Company, Antique

Exhibit 4: Quarterly US revenue growth (INR mn)

26

18

10

-7
-9
-11
5,916 -22
7,612

6,955

7,675

6,838

6,241

6,416

5,940
3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24 1QFY25 2QFY25
US QoQ growth %
Source: Company, Antique

Exhibit 5: Quarterly EBITDA & margin (INR mn)

20.1
19.7

22.0
21.7

21.3

13.7
13.1
12.2
5,991

3,533

3,892

7,467

7,076

4,020

6,086

7,528

3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24 1QFY25 2QFY25

EBITDA margins %
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 15

Exhibit 6: Quarterly PAT & margin (INR mn)

20.2
19.6

19.3

18.0
15.0

10.4
9.7
5.5
4,547

1,585

2,867

6,755

6,422

3,042

5,452

6,886
3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24 1QFY25 2QFY25
PAT margins %
Source: Company, Antique

Exhibit 7: Quarterly R&D (INR mn)

6.0
5.1

4.3
4.3
4.2

4.1
4.1

3.4

3.3
1,305

1,297

1,472

1,202

1,158

1,111

1,757

1,257

1,465
2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24 1QFY25 2QFY25
R&D spend as % sales
Source: Company, Antique

Exhibit 8: India revenue to grow at ~7% CAGR over next 2 years

8%
8%

7%
7%
5%

1,04,551
80,011

84,337

90,943

97,465

FY23 FY24 FY25E FY26E FY27E

India revenue (INR mn) YoY growth (%)
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 16

Exhibit 9: US generic revenue to grow at ~2% CAGR - 2 years (USD mn)

7%

6%
0%

347 -1%
331 -1%
312

334

351
FY23 FY24 FY25E FY26E FY27E
US revenue (USD mn) YoY growth (%)
Source: Company, Antique

Exhibit 10: EBITDA margin to remain steady at ~21%

17.7%

21.9%
20.7%
20.7%
13.9%
16,095

22,455

27,578

29,722

33,136
FY23 FY24 FY25E FY26E FY27E
EBITDA (INR mn) EBITDA Margin (%)
Source: Company, Antique

Exhibit 11: PAT to grow at ~5% CAGR – 2 years

15.0%

17.4%

16.8%
17.4%
9.2%
10,654

19,052

23,221

24,869

25,378

FY23 FY24 FY25E FY26E FY27E

Adj PAT (INR mn) PAT Margin (%)
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 17

Table 7: USFDA compliance status of various units

Facility and location Capability Last inspection Status post last inspection
Taloja –India Bioequivalence enter Oct'22 No observation
Baddi –India Formulation Mar'24 EIR received in Jun'24
Daman –India Formulation Aug’19 EIR received in Oct’19
California –US API Aug’18 EIR received in Oct’18
Ankleshwar –India API April'23 EIR received in July’23
Mandva –India API Dec'23 EIR received in Mar’24
Source: Company, Antique

Table 8: Peer comparison

P/E (x) EV/EBITDA (x) RoE (%)
FY25e FY26e FY27e FY25e FY26e FY27e FY25e FY26e FY27e
Alkem 28.7 26.8 26.3 22.8 20.7 18.1 20.9 19.4 17.4
Alembic pharma 40.9 31.0 23.5 22.5 17.8 14.1 11.6 13.8 16.1
Cipla 35.8 30.2 26.6 23.2 19.2 16.5 13.2 14.0 14.1
Lupin 33.7 26.8 23.9 19.9 16.5 14.4 18.7 19.9 19.0
Mankind 47.1 39.3 31.4 35.5 25.0 21.3 20.1 20.1 20.9
Torrent pharma 56.4 42.8 35.1 30.1 25.4 21.5 28.6 33.2 35.3
Zydus life 29.7 26.8 25.1 20.4 17.8 16.1 17.6 16.7 15.4
Ajanta pharma ^ 39.3 33.9 29.0 27.3 23.6 20.5 25.2 25.4 25.7
Eris ^ 46.3 32.0 24.3 19.6 16.9 14.6 13.4 18.1 19.1
Average 39.8 32.2 27.2 24.6 20.3 17.5 18.8 20.1 20.3
Source: Antique & Company; ^ Bloomberg estimates

Key risks to our assumptions

1) IPM—Low single digit growth in IPM.
2) India business—Increased genericization in India Rx business
3) Inorganic Growth—Any M&A in India business would remain an upside risk to our
estimates.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 18

Conference Call Highlights

Operational highlights
n ALKEM in 2QFY25 reported a revenue of INR 34.1 bn, flat on YoY basis.
n Gross margin improved ~330 bps on YoY basis to 64.7% driven by declining input costs,
rising share of chronic therapies, and lower sales in the US.
n Staff costs increased ~10% on YoY basis to INR 6.1 bn.
n Other expenses increased 4% to INR 8.5 bn, primarily driven by a rise in R&D spend.
n R&D spend for the quarter was INR 1.5 bn, accounting for ~4.3% of quarterly sales.
n EBITDA margin expanded ~30 bps YoY to 22%, driven by lower input costs and operating
leverage.
n ETR for the quarter was ~10%.
n PAT for the quarter was INR 6.9 bn.
n Gross debt as of Sep’24 stood at INR 14.8 bn vs. INR 14.2 bn as of Mar’24.
n Cash and investments as of Sep’24 stood at ~INR 31 bn.
n In 2Q and 1HFY25 the company reported a forex gain, accounted for in other income.
n Increase in inventory in 1HFY25 has been due to increase in inventory in the US to meet
demand.
India
n Domestic revenue grew 6% YoY to INR 24.6 bn, accounting for ~73% of revenue.
n As per IQVIA (SSA) data for 2QFY25, ALKEM registered a growth of 6.3% YoY vs. IPM
growth of 7.6%.
n In 2QFY25, ALKEM outperformed IPM in seven therapies: VMN grew by 1.7X; Anti-
diabetic grew by ~1.3X; Neuro/ CNS grew by ~2.0X; Gynaec ~1.6X, Derma ~1.4X,
Respiratory ~1.6X, and Urology ~1.1X.
n According to IQVIA (SSA) data, the company registered a positive volume growth of
1.1% in a challenging market that witnessed 0% volume growth in 2QFY25.
n PAN became the second-ranked brand in IPM, growing at 12.8% YoY compared to
market growth of 7.3% (as per MAT Sep24, SSA).
n The company improved its rank in Anti-diabetics, Respiratory, and Neuro/ CNS therapies
while declining in Cardiac.
n Alkem’s volume growth was at 1.1% in 2Q vs. IPM volume growth of 0%, per IQVIA.
n The company continues to face slow growth in Anti-infective due to portfolio level factors.
n The margins are lower in Anti-infective injectables than oral anti-infectives.
n Acute therapies account for ~80% revenue.
n Aspires to grow 8%-9% in FY25, with very strong growth in 4QFY25. Expect chronic
therapies to witness faster growth with improved focus.
n ~20% of domestic revenue derived from trade generic. Margin improvement seen in
trade generics on YoY basis driven by improved product mix and price increases.
US
n Revenue from US generics declined ~23% on YoY basis to INR 5.9 bn, accounting for
~18% of revenue.
n The company faced ~18% volume decline and ~6% price erosion in 2Q. The volume
decline was largely on account of supply challenges.
n Has seen significant volume decline and price erosion in 1HFY25 due to supply issues.
n During the quarter, one product was launched in the US and five approvals received
from the USFDA, including one tentative approval.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 19

n As of September 30, 2024, the company had filed 178 ANDAs and two new drug
applications (NDAs) with the USFDA. Of the filed ANDAs, 152 approvals (including 14
tentative) have been received till date. Till date the company has commercialized only
~100 products.
n Back orders down to 2% now vs. 38% at the start of the issue.
n One launch expected in 3Q where the company has 180 days exclusivity.
n Expect flattish revenue for FY25.
n Profitability has improved in the US, driven by discontinuing of unviable products and
cost optimization. Expect further improvement driven by improved launch.
n EBITDA margin in the US was lower than the company average.
n The company has received approval for Sacubitril + Valsartan but awaits litigation outcome
between Novartis and one generic player.
n ALKEM will be launching Mirabegron after FY26.
Other international markets
n Other international markets recorded ~13% YoY growth to INR 3.2 bn, accounting for
~10% of revenue.
n ROW market growth to be driven new launches and expansion of markets.
n Management remains bullish on the ROW business in the medium term.
Enzene biosciences
n Enzene biosciences’s US plant continues to progress as per plan and expects
commercialization in 1HCY25.
n The US unit would be focusing on pre-clinical to clinical opportunities.
n INR 4.5 bn has been spent on the unit so far.
n Expects the unit to EBITDA breakeven in a year of operation.
n 7-8 biosimilar products launched in India.
n Completed Denosumab clinical trials for the US market.
n Has commercialized seven products in India.
MedTech
n The company announced a tie-up with US-based Exactech to manufacture and to market
the latter’s joint replacement implants in India.
n Expect product launch in 1HFY26.
n The technical knowhow transfer for hip and knee implants from Exactech to ALKEM
remains as per plans.
n Brand transfers to Alkem MedTech has already began.
Guidance
n Revenue growth guidance revised downwards to mid-single digit in FY25.
n Gross margin for the fiscal to see an improvement of ~150 bps in FY25.
n R&D spends will be around 4.5%-5% for the fiscal.
n Margin guidance has been increased to ~18.5%-19% for FY25 from ~18%. Medtech
and Enzene related expects to be ~INR 600 mn for 2HFY25.
n Expect ~100 bps margin improvement annually post FY25.
n ETR guided at ~11%-13% for FY25.
n The company is exploring M&A opportunities and hence there is an increase in non-
current liquid deposits. Only INR 130 mn of strategic investments are reflected in non-
current assets.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 20

Financials
Profit and loss account (INR mn) Cash flow statement (INR mn)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Net Revenue 1,15,993 1,26,676 1,33,475 1,43,255 1,51,223 PBT 13,048 20,231 26,871 28,752 31,904
Op. Expenses 99,898 1,04,221 1,05,897 1,13,534 1,18,087 Depreciation & amortization 3,104 2,993 3,363 3,626 3,888
EBITDA 16,095 22,455 27,578 29,722 33,136 Interest expense 1,074 1,124 1,844 1,844 1,844
Depreciation 3,104 2,993 3,363 3,626 3,888 (Inc)/Dec in working capital 3,268 (517) (8,358) (3,547) (2,890)
EBIT 12,990 19,462 24,215 26,096 29,248 Tax paid (2,734) (4,069) (3,493) (3,738) (6,381)
Other income 2,161 3,108 4,500 4,500 4,500 Less: Interest/Div. Income Recd. (1,711) (2,758) - - -
Interest Exp. 1,074 1,124 1,844 1,844 1,844 Other operating Cash Flow 776 2,476 - - -
Extra Ordinary Items -gain/(loss) (1,030) (1,215) - - - CF from operating activities 16,824 19,481 20,227 26,937 28,366
Reported PBT 13,048 20,231 26,871 28,752 31,904 Capital expenditure (2,297) (1,868) (5,000) (5,000) (5,000)
Tax 2,980 2,117 3,493 3,738 6,381 Inc/(Dec) in investments 1,993 (18,933) - - -
Reported PAT 10,068 18,114 23,378 25,014 25,523 Add: Interest/Div. Income Recd. 1,471 2,395 - - -
Minority Int./Profit (loss) From Asso. (226) (157) (157) (145) (145) CF from investing activities 1,167 (18,406) (5,000) (5,000) (5,000)
Net Profit 9,842 17,957 23,221 24,869 25,378 Inc/(Dec) in share capital 1,615 - - - -
Adjusted PAT 10,654 19,052 23,221 24,869 25,378 Inc/(Dec) in debt (12,785) (4,809) - - -
Adjusted EPS (INR) 89.1 159.3 194.2 208.0 212.3 Dividend Paid (5,295) (5,405) (7,173) (7,173) (7,173)
Others (1,143) (1,236) (1,844) (1,844) (1,844)
Balance sheet (INR mn) CF from financing activities (17,608) (11,450) (9,017) (9,017) (9,017)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Net cash flow 383 (10,375) 6,210 12,920 14,349
Share Capital 239 239 239 239 239 Opening balance 25,786 26,169 15,794 22,003 34,923
Reserves & Surplus 90,214 1,02,882 1,18,929 1,36,625 1,54,830 Closing balance 26,169 15,794 22,003 34,923 49,272
Networth 90,453 1,03,121 1,19,168 1,36,864 1,55,069
Debt 13,967 14,184 14,184 14,184 14,184 Growth indicators (%)
Minority Interest 3,897 4,023 4,180 4,325 4,470 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Net deferred Tax liabilities (13,025) (15,148) (15,148) (15,148) (15,148) Revenue (%) 9.1 9.2 5.4 7.3 5.6
Capital Employed 95,292 1,06,180 1,22,384 1,40,226 1,58,575 EBITDA (%) (21.6) 39.5 22.8 7.8 11.5
Gross Fixed Assets 36,371 41,270 44,770 48,270 51,770 Adj PAT(%) (35.8) 78.8 21.9 7.1 2.0
Accumulated Depreciation 13,674 16,709 20,073 23,699 27,587 Adj EPS(%) (35.8) 78.8 21.9 7.1 2.0
Capital work in progress 3,232 1,586 3,086 4,586 6,086
Net Fixed Assets 25,929 26,146 27,783 29,157 30,268 Valuation (x)
Goodwill 4,132 4,167 4,167 4,167 4,167 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Investments 6,218 34,140 34,140 34,140 34,140 P/E (x) 62.6 35.0 28.7 26.8 26.3
Non Current Investments 3,046 3,348 3,348 3,348 3,348 P/BV (x) 7.4 6.5 5.6 4.9 4.3
Current Investments 3,172 30,792 30,792 30,792 30,792 EV/EBITDA (x) 40.5 28.2 22.8 20.7 18.1
Current Assets, Loans & Adv. 88,262 76,147 86,765 1,04,223 1,22,269 EV/Sales (x) 5.6 5.0 4.7 4.3 4.0
Inventory 26,075 26,612 27,061 29,044 30,659 Dividend Yield (%) 0.9 0.7 1.1 1.1 1.1
Debtors 21,322 22,528 24,867 26,689 28,173
Cash & Bank balance 26,169 15,794 22,003 34,923 49,272
Financial ratios
Loans & advances and others 14,696 11,214 12,834 13,568 14,165
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
RoE (%) 12.0 19.7 20.9 19.4 17.4
Current Liabilities & Provisions 29,250 34,421 30,470 31,461 32,269
RoCE (%) 15.4 22.4 25.1 23.3 22.6
Liabilities 21,829 30,154 26,203 27,194 28,002
Asset/T.O (x) 1.3 1.7 1.8 1.5 1.4
Provisions 7,421 4,267 4,267 4,267 4,267
Net Debt/Equity (x) (0.2) (0.3) (0.3) (0.4) (0.4)
Net Current Assets 59,013 41,726 56,294 72,762 90,000
EBIT/Interest (x) 14.1 20.1 15.6 16.6 18.3
Application of Funds 95,292 1,06,180 1,22,384 1,40,226 1,58,575

Per share data Margins (%)

Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
EBITDA Margin (%) 13.9 17.7 20.7 20.7 21.9
No. of shares (mn) 119.6 119.6 119.6 119.6 119.6
EBIT Margin (%) 11.2 15.4 18.1 18.2 19.3
Diluted no. of shares (mn) 119.6 119.6 119.6 119.6 119.6
PAT Margin (%) 9.0 14.7 16.8 16.8 16.3
BVPS (INR) 756.6 862.6 996.8 1144.8 1297.1
CEPS (INR) 110.2 176.6 223.7 239.6 246.0 Source: Company, Antique

DPS (INR) 50.0 40.0 60.0 60.0 60.0

Source: Company, Antique

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 21

CMP : INR 175 2QFY25 RESULT REVIEW

Reco
Target Price
: BUY çè
: INR 203 çè
CESC
Target Price Change : No Change Steady business
Target FY27 P/E (x) : SoTP
CESC's 2QFY25 consolidated PAT was +3% on YoY basis and in line with
EPS Change FY25/ 26/ 27 : No Change estimate. The company has taken a tariff hike of 6% and thus its regulatory
deferral income was lower in 2QFY25. Key miss subsidiary-wise was from
the Malegaon distribution franchise, which reported a loss of INR 430 mn,
which was higher than the INR 280 mn YoY loss. Other subsidiaries like
Dhariwal, Haldia, Noida Power's financial performance was satisfactory.
Vishal Periwal CESC plans to commission 3.2 GW in phases by FY29E, it has started with a
+91 22 6911 3414
[email protected]
tie-up for equipment and ancillary infra and made a few acquisitions. It plans
to commission an additional 7 GW in phase 2 after FY29E. We retain BUY
Pranav Furia rating with a SoTP-based TP of INR 203. The Kolkata business contributes
+91 22 6911 3467 ~42% to our TP, followed by the Dhariwal and Halida power plant at 26%,
[email protected] franchise discoms at 13%, and the remaining is from cash and regulatory
deferral income. CESC is a play on the turnaround of the Malegaon discom
(as its annual loss after tax is ~INR 1 bn), commencement of capex/ PPA for
3 GW hybrid renewables. Stock valuation (PBV) is attractive at 1.5x its FY27E
BV with dividend yield of ~3%.
Market data
Dependence on regulatory income declines as expected
Sensex : 77,691
Sector : Utilities For 2QFY25, CESC reported a revenue of INR 47 bn, up 8% YoY. EBITDA, including regulatory
Market Cap (INR bn) : 231.9
income, was at INR 10.1 bn, flat YoY. However, the reliance on regulatory income has
reduced, with EBITDA excluding regulatory income rising to INR 8.9 bn, up 39% YoY. Regulatory
Market Cap (USD bn) : 2.749
income of INR 1.1 bn vs. INR 3.6 bn in 2QFY24, down 67% YoY and 83% QoQ. Dependence
O/S Shares (mn) : 1,325.6 on regulatory income has lowered from 2QFY25 as CESC has commenced to levy a fuel
52-wk HI/LO (INR) : 213/89 adjustment charge from 2QFY25. With this, the PAT was INR 3.7 bn, up 3% YoY. Dependence
Avg. Daily Vol ('000) : 3,115 on regulatory income has lowered from 2QFY25 as CESC has commenced to levy a fuel
Bloomberg : CESC IN adjustment charge from 2QFY25.
Source: Bloomberg Volume growth in the distribution circle better than overall power demand
Valuation For the quarter ended 2QFY25, volume in distribution was up 1% YoY. For CESC, overall
FY25e FY26e FY27e volume growth was 4.3% to 5.2 BU. Kolkata distribution business witnessed 3.3% YoY demand
EPS (INR) 12.7 14.1 16.0 growth in 2QFY25. Noida Power reported sales of 1056 MU during 2QFY25, registering a
P/E (x) 13.8 12.4 10.9
YoY growth of 11% YoY, with PAT growing 43% to INR 530 mn. Rajasthan distribution franchisees
had a mixed quarter-Bharatpur DF and Bikaner DF, witnessing a volume growth of 1% and
P/BV (x) 2.0 1.7 1.5
8% to 94 MU and 269 MU respectively, while Kota saw a decline of 4% to 375 MU. In
EV/EBITDA (x) 10.9 8.0 7.2 Malegaon, there was just a slight decrease in T&D losses (40.09% vs 40.26%). The Malegaon
Dividend Yield (%) 2.6 2.6 2.6 DF reported a volume of 212 MU, up 3% YoY, however, PAT loss increased to INR 430 mn vs.
Source: Company, Antique INR 269 mn YoY.
Returns (%) Adding green assets, new hiring done
1m 3m 6m 12m CESC is planning to add 3.2 GW of renewable assets to its subsidiary, Purvah Green Power
Absolute (6) (0) 25 94 Private Ltd. by FY29E. Transmission connectivity for 2.7 GW renewable is expected to be
Relative (0) 1 18 62 granted in FY25E and 4 GW of wind and solar sites pipeline under evaluation for project
Source: Bloomberg
development. In 1HFY25, it has acquired Bhojraj Renewables (at INR 1 bn) which has land
in hand for 150 MW solar and 300 MW wind and has transmission line for 300 MW
Shareholding pattern renewable power evacuation. In addition to this, to strengthen its power portfolio, it has hired
Mr. Kush Singh to Head the Power Sector, effective October 1, 2024. Mr. Singh has worked
Promoters : 52% in Essar Power, NTPC, and Adani Power in strategic and project development roles. For
Public : 48% equipment, it has signed a binding agreement with Inox Wind Ltd. for a 1.5 GW of wind
Others : 0% turbines to be commissioned over 2-4 years and a MoU with Suzlon Energy for wind turbine
supply, EPC, and O&M to be commissioned over the next 2-4 year.
Source: Bloomberg

Price performance vs Nifty

Investment Summary
270 CESC is India's first fully integrated electrical utility company (since 1899) with business
240 interest in generation (2.1 GW operating asset) & distribution of power (more than six cities/
210 town). And has vast experience of running and turning around discoms. We retain BUY with
180 a SoTP-based TP of INR 203, we value the Kolkatta discom (which operate on cost plus, RoE
150
120 ~20%) at 2.0x regulated equity, 600 MW Dhariwal plant (which has ~80% power sold on
90 PPA and the balance on merchant, RoE ~16%) is valued at 1.5x equity, 600 MW Haldia
Nov-23 Mar-24 Jul-24 Nov-24 (which sells power on cost plus, RoE ~25%) is valued at 2.7x regulated equity, etc. Risks:
CESC NIFTY (1) Adverse or delay in recovery of dues from discoms and (2) Capital allocation to projects
Source: Bloomberg Indexed to 100 earning lower equity IRR.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 22

Table 1: Financial results

Quarter Ended Year Ended
In INR mn Sep-24 Sep-23 % Chg Jun-24 % Chg 1HFY25 1HFY24 % Chg
Net Sales 47,000 43,520 8.0 48,630 (3.4) 95,630 86,620 10.4
EBIDTA 8,960 6,460 38.7 3,710 141.5 12,670 13,700 (7.5)
Other income 700 620 12.9 550 27.3 1,250 1,210 3.3
PBIDT 9,660 7,080 36.4 4,260 126.8 13,920 14,910 (6.6)
Depreciation (2,950) (3,030) (2.6) (3,010) (2.0) (5,960) (6,030) (1.2)
Interest (3,280) (3,050) 7.5 (3,220) 1.9 (6,500) (6,130) 6.0
Regulatory Income 1,190 3,610 (67.0) 6,890 (82.7) 8,080 6,250 29.3
PBT 4,620 4,610 0.2 4,920 (6.1) 9,541 9,001 6.0
Tax (890) (980) (9.2) (1,040) (14.4) (1,930) (1,690) 14.2
Adjusted PAT 3,730 3,630 2.8 3,880 (3.9) 7,611 7,311 4.1
Reported PAT 3,730 3,630 2.8 3,880 (3.9) 7,611 7,311 4.1
No. of shares (mn) 1,326 1,326 1,326 1,326 1,326 0.0
EBIDTA margin (%) 19.1 14.8 7.6 13.2 15.8 (16.2)
PBIDT margin (%) 20.6 16.3 8.8 14.6 17.2 (15.4)
EPS - annualized (INR) 11.3 11.0 2.8 11.7 (3.9) 11.5 11.0 4.1
Source: Company, Antique

Table 2: Subsidiary financials

Subsidiary Quarter Ended Year Ended
All figures in INR mn,
stated otherwise Sep-24 Sep-23 % Chg Jun-24 % Chg 1HFY25 1HFY24 % Chg
Revenue (Subs)
Haldia 5,550 5,370 3.4 4,810 15.4 10,360 10,760 (3.7)
Dhariwal 5,370 5,300 1.3 5,260 2.1 10,630 10,460 1.6
Crescent Power 550 460 19.6 470 17.0 1,020 970 5.2
Noida Power 8,020 7,120 12.6 7,550 6.2 15,570 13,480 15.5
Kota/Bharatpur/Bikaner DF 6,320 5,910 6.9 6,500 (2.8) 12,820 11,610 10.4
Malegaon 1,860 1,600 16.3 1,650 12.7 3,510 3,140 11.8
Revenue (Subs) 27,670 25,760 7.4 26,240 5.4 53,910 50,420 6.9
Net profit (Subs)
Haldia 740 660 12.1 840 (11.9) 1,580 1,280 23.4
Dhariwal 810 680 19.1 1,120 (27.7) 1,930 1,470 31.3
Crescent Power 160 150 6.7 110 45.5 270 350 (22.9)
Noida Power 530 370 43.2 370 43.2 900 910 (1.1)
Kota/Bharatpur/Bikaner DF 10 (20) (150.0) 60 (83.3) 70 150 (53.3)
Malegaon (430) (269) 59.9 (420) 2.4 (850) (599) 41.9
Net profit (Subs) 1820 1571 15.8 2080 (12.5) 3,900 3,561 9.5
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 23

Table 3: Operational metrics

Key operational metrics Quarter Ended Year Ended
Generation (in MU) Sep-24 Sep-23 % Chg Jun-24 % Chg 1HFY25 1HFY24 % Chg
Budge Budge 1,360 1,415 (3.9) 1,363 (0.2) 2,723 2,830 (3.8)
Southern 90 206 (56.3) 217 (58.5) 307 438 (29.9)
Haldia 1,226 1,162 5.5 942 30.1 2,168 2,297 (5.6)
Dhariwal 1,156 1,120 3.2 1,141 1.3 2,297 2,217 3.6
Crescent 79 66 19.7 60 31.7 139 141 (1.4)
Solar 7 6 16.7 7 - 14 13 7.7

PLF
Budge Budge 89% 93% (370) 90% (100) 90.0% 93.0% (300)
Southern 34% 76% na 81% NM 57.0% 81.0% (2,400)
Haldia 100% 95% 510 78% 2,200 89.0% 94.0% (500)
Dhariwal 92% 91% 120 94% (200) 93.0% 91.0% 200
Crescent Power 101% 101% - 77% 2,400 89.0% 91.0% (200)
Solar 21% 14% 670 22% (100) 20.0% 21.0% (100)
Standalone distribution loss 6.9% 7.3% (38)
Source: Company, Antique

Table 4: 1HFY25 balance sheet

Balance Sheet (INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Share capital 1,330 1,330 - 1,332 1,332 -
Reserves and Surplus 119,480 113,670 5.1 117,057 113,120 3.5
Minority Interest 5,620 5,050 5,400 5,400
Loan Funds 153,760 138,070 11.4 172,350 177,350 (2.8)
Others 65,920 90,370 (27.1) 41,250 41,250 -
Total 346,110 348,490 (0.7) 337,389 338,452 (0.3)
Fixed Assets 217,230 220,060 (1.3) 213,529 220,680 (3.2)
Capital Work-in-Progress 2,920 2,350 24.3 1,740 1,740 -
Investments 84,300 88,790 (5.1) 83,340 83,340 -
Current Assets, Loans And Advances 78,680 71,070 10.7 75,741 65,650 15.4
Inventories 5,990 6,150 (2.6) 9,846 8,780 12.1
Sundry Debtors 28,640 27,570 3.9 25,323 22,580 12.1
Cash and Bank Balances 30,800 28,210 9.2 32,520 27,110 20.0
Loans and Advances 20 20 - 1,110 1,110 -
Other current assets 13,230.00 9,120.00 45.1 6,943 6,070 14.4
Current Liabilities and Provisions 37,020 33,780 9.6 36,961 32,958 12.1
Liabilities 36,520 33,220 9.9 36,291 32,360 12.1
Provisions 500 560 (10.7) 671 598 12.1
Net Working Capital 41,660 37,290 11.7 38,780 32,692 18.6
Total 346,110 348,490 (0.7) 337,389 338,452 (0.3)
Net debt 122,960 109,860 11.9 139,830 150,240 (6.9)
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 24

Table 5: 1HFY25 cash flow statement

Cashflow statement (INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Reported PBT 9,540 9,000 6.0 19,615 16,830 16.5
Adjustments to reconcile profit before tax to net operating CF 11,800 11,560 2.1 24,281 24,510 (0.9)
Others 930 (6,250) (114.9) (2,751) 28,857 (109.5)
Changes in working capital (13,110) 1,260 (1,140.5) (678) (34,337) (98.0)
Operating cash flow 9,160 15,570 (41.2) 40,468 35,860 12.8
Investing cash flow (8,530) (4,034) 111.5 (12,110) (18,060) (32.9)
Financing cash flow 3,060 (9,210) (133.2) (22,948) (16,574) 38.5
Net cash flow 3,690 2,327 58.6 5,410 1,226 341.2
Opening cash balance 27,110 25,884 4.7 27,110 25,884 4.7
Closing cash balance 30,800 28,210 9.2 32,520 27,110 20.0
Free cash flow 9,160 15,570 (41.2) 35,248 30,304 16.3
Source: Company, Antique

Table 6: Sum-of-the-parts valuation

Business Value Remarks
INR/sh
Standalone Business 84 Kolkatta Discom and power plant cost plus basis,
valued at 2.0x regulated equity (ROE 20%)
Dhariwal 28 600MW, 80% power sold in PPA and balance on
merchant, valued at 1.5x equity (ROE 16%)
Haldia 25 600MW, sold on cost plus, valued at 2.7x regulated
equity (ROE 25%+)
Other Discom's 26 NPV of Noida, Kota, Bharatpur, Bikaner, Malegaon,
Chandigarh
Cash 20 1x BV
Regulatory deferral account 19 1x BV
Total 203
Source: Company, Antique

Exhibit 1: P/B bands

2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
May/18

Jul/19

Feb/20
Nov/14

Jun/15

Jan/16

Aug/16

Mar/17

Oct/17

Dec/18

Sep/20

Apr/21

Nov/21

Jun/22

Jan/23

Aug/23

Mar/24

Oct/24

P/B +1 Stdev -1 Stdev Avg PER

Source: Company, Antique

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 25

Financials
Profit and loss account (INR mn) Cash flow statement (INR mn)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Net Revenue 1,42,460 1,52,930 1,71,506 1,82,653 1,93,613 PBT 17,391 16,830 19,615 21,763 24,735
Op. Expenses (1,20,970) (1,31,670) (1,37,456) (1,39,272) (1,48,362) Depreciation & amortization 10,804 12,170 12,371 12,563 12,852
EBITDA 21,490 21,260 34,049 43,382 45,251 Interest expense 11,170 12,340 11,910 12,027 11,577
Depreciation (8,780) (12,170) (12,371) (12,563) (12,852) (Inc)/Dec in working capital (895) (34,337) (678) (407) (400)
EBIT 12,710 9,090 21,678 30,818 32,399 Tax paid (14,393) 5,290 (2,751) (12) (12)
Other income 3,088 2,510 2,957 2,971 3,913 Other operating Cash Flow (4,293) 23,567 - - -
Interest Exp. (11,170) (12,340) (11,910) (12,027) (11,577) CF from operating activities 19,784 35,860 40,468 45,934 48,752
Regulatory Income (Expense) 12,760 17,570 6,890 - - Capital expenditure 9,179 (5,556) (5,220) (5,000) (7,500)
Reported PBT 17,388 16,830 19,615 21,763 24,735 chng in investments (11,002) (12,505) (6,890) - -
Tax (3,420) (2,360) (2,751) (3,052) (3,468) CF from investing activities (1,823) (18,060) (12,110) (5,000) (7,500)
Reported PAT 13,968 14,470 16,864 18,711 21,266 Inc/(Dec) in share capital - - - - -
Minority Int./Profit (loss) From Asso. 540 710 - - - Inc/(Dec) in debt 15,972 1,804 (5,000) (5,000) (5,000)
Net Profit 13,428 13,760 16,864 18,711 21,266 Dividend Paid (6,038) (6,038) (6,038) (6,038) (6,038)
Adjusted PAT 13,428 13,760 16,864 18,711 21,266 Others (34,506) (12,340) (11,910) (12,027) (11,577)
Adjusted EPS (INR) 10.1 10.4 12.7 14.1 16.0 CF from financing activities (24,572) (16,574) (22,948) (23,065) (22,615)
Net cash flow (6,611) 1,226 5,410 17,869 18,637
Balance sheet (INR mn) Opening balance 32,495 25,884 27,110 32,520 50,389
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Closing balance 25,884 27,110 32,520 50,389 69,027
Share Capital 1,332 1,332 1,332 1,332 1,332
Reserves & Surplus 1,07,772 1,13,120 1,17,057 1,32,769 1,51,455 Growth indicators (%)
Networth 1,09,104 1,14,452 1,18,389 1,34,102 1,52,787 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Debt 1,65,966 1,77,350 1,72,350 1,67,350 1,62,350 Revenue 13.6 7.3 12.1 6.5 6.0
Minority Interest 4,787 5,400 5,400 5,400 5,400 EBITDA incl deferral income -7.9 21.3 9.9 7.2 4.3
Net deferred Tax liabilities 28,410 41,250 41,250 41,250 41,250 Adj PAT -1.2 2.5 22.6 10.9 13.7
Capital Employed 3,08,267 3,38,452 3,37,389 3,48,102 3,61,787 Adj EPS -1.2 2.5 22.6 10.9 13.7
Gross Fixed Assets 3,10,886 3,16,106 3,21,326 3,26,326 3,33,826
Accumulated Depreciation (83,256) (95,426) (1,07,797) (1,20,360) (1,33,212) Valuation (x)
Capital work in progress 1,404 1,740 1,740 1,740 1,740 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Net Fixed Assets 2,29,034 2,22,420 2,15,269 2,07,705 2,02,353 P/E (x) 17.3 16.9 13.8 12.4 10.9
Investments 82,104 83,340 83,340 83,340 83,340 P/BV (x) 2.1 2.0 2.0 1.7 1.5
Non Current Investments 82,104 83,340 83,340 83,340 83,340 EV/EBITDA (x) 17.3 18.0 10.9 8.0 7.2
Current Assets, Loans & Adv. 70,472 65,650 75,741 96,420 1,17,819 EV/Sales (x) 2.6 2.5 2.2 1.9 1.7
Inventory 8,802 8,780 9,846 10,486 11,116 Dividend Yield (%) 2.6 2.6 2.6 2.6 2.6
Debtors 21,915 22,580 25,323 26,969 28,587
Cash & Bank balance 25,884 27,110 32,520 50,389 69,027
Financial ratios
Loans & advances and others 13,871 7,180 8,052 8,575 9,090
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
RoE (%) 1.1 -2.8 8.6 17.2 17.2
Current Liabilities & Provisions 73,344 32,958 36,961 39,364 41,726
RoCE (%) 4.7 3.2 7.3 12.0 12.0
Liabilities 71,964 32,360 36,291 38,649 40,968
Asset/T.O (x) 0.4 0.4 0.5 0.6 0.6
Provisions 1,380 598 671 714 757
Net Debt/Equity (x) 1.1 1.0 0.9 1.0 0.8
Net Current Assets (2,872) 32,692 38,780 57,056 76,094
EBIT/Interest (x) 1.4 0.9 2.1 2.8 3.1
Application of Funds 3,08,267 3,38,452 3,37,389 3,48,102 3,61,787

Per share data Margins (%)

Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
EBITDA Margin, incl
No. of shares (mn) 1,326 1,326 1,326 1,326 1,326
regulatory income (%) 24.0 25.4 23.9 23.8 23.4
Diluted no. of shares (mn) 1,326 1,326 1,326 1,326 1,326
EBIT Margin, incl regulatory
BVPS (INR) 82.3 86.3 89.3 101.1 115.2
income (%) 17.9 17.4 16.7 16.9 16.7
CEPS (INR) 10.4 25.9 22.0 25.9 28.3
PAT Margin (%) 9.2 8.9 9.7 10.1 10.8
DPS (INR) 4.6 4.6 4.6 4.6 4.6
Source: Company, Antique
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 26

CMP : INR 1,096 2QFY25 RESULT REVIEW

Reco
Target
: BUY çè
: INR 1,550 ê
Kirloskar Oil Engines
Target Price Change : -3% In-line operational performance; maintain BUY
Target FY27E P/E (x) : 28
Kirloskar Oil Engines’ (KOEL) 2QFY25 performance was in line with our
EPS Change FY25/ 26/ 27 : No Change estimates on the operational front with revenue at INR 11.9 bn (+13% YoY)
meeting our estimate of INR 12.0 bn. Adjusted EBITDA stood at INR 1.5 bn
(+23% YoY), in line with our estimate of INR 1.5 bn with adjusted EBIDTA
Amit Shah
margin of 12.4% (+110 bps YoY). Earnings growth of 28% YoY was well
+91 22 6911 3466
[email protected] supported by better than estimated other income. We expect KOEL to deliver
strong earnings supported by healthy demand witnessed by key end markets
Dhirendra Tiwari like real estate, infrastructure, industrial, and railways. Incrementally, KOEL
+91 22 6911 3436
[email protected]
has been able to broadly retain its market share in the CPCB IV+ regime and
has been able to penetrate the data center market through its Optiprime
Prathamesh Rane series. Valuation continues to remain benign as compared to Cummins and
[email protected] given the strong earnings growth (26% CAGR) expected to play out over
FY24–27E, we retain BUY rating on the stock with a revised TP of INR 1,550
(earlier INR 1,591), valuing the core business at 28x its FY27E EPS.
Market data 2QFY25 result snapshot
Sensex : 77,691
Sector : Diesel Engines
n Sales at INR 11.9 bn (+13% YoY) was in line with our estimate of INR 12.0 bn (consensus
Market Cap (INR bn) : 159.1
est. INR 12.3 bn).
Market Cap (USD bn) : 1.886 n Gross margin at 36.8% (+2.4 pps YoY) was above our estimate of 33.5% supported
O/S Shares (mn) : 145.1 by better revenue mix.
52-wk HI/LO (INR) : 1450/526 n Provision for delayed receivables for 2QFY25 stood at (INR 174.4 mn) (provision
Avg. Daily Vol ('000) : 176 reversal) vs. INR 104.6 mn (provision created) in 2QFY24.
Bloomberg : KOEL IN
n Adjusted EBIDTA (adjusted for provision for delayed receivables) stood at INR 1.5 bn
Source: Bloomberg
(+23.4% YoY), in line with our estimate of INR 1.5 bn.
Valuation
n Adj. EBITDA margin (adjusting for provision for delayed receivables) stood
FY25e FY26e FY27e
at 12.4% (+1.1 pps YoY), in line with our estimate of 12.5%.
EPS (INR) 30.5 39.8 49.6
P/E (x) 35.9 27.5 22.1 n Adj. PAT stood at INR 989 mn (+28% YoY), was in line with our estimate of INR 972 mn.
P/BV (x) 5.4 4.8 4.1 Geared to meet market demand with CPCB IV+ compliant products
EV/EBITDA (x) 22.4 17.3 13.7 KOEL has been able to broadly retain its market share in the CPCB IV+ regime and has been
Dividend Yield (%) 0.8 1.1 1.4 able to take market share in select nodes. KOEL is concentrating on the technology track to
Source: Bloomberg solidify its position as a leader in power & energy systems. It has successfully transitioned to
Returns (%) the new CPCB IV product emission norms with one of the largest CPCB IV+ certified portfolios
1m 3m 6m 12m in the industry. It also has received certification for natural gas genset nodes, advancing its
Absolute (6) (12) (1) 96 flexible fuel strategy. KOEL has been able to penetrate the data center market with its Optiprime
Relative (1) (10) (6) 64 series of products. With a wide portfolio ready to hit the market, KOEL has the capability to
Source: Bloomberg
gain market share from competitors in the domestic market.

Shareholding pattern Ambitious aim to reach USD 2 bn by FY30 led by multiple initiatives
KOEL has strategically restructured its business reinforcing group values & cultivating a strong
Promoters : 41%
culture has helped it not only to prepare for 2X-3Y journey but also look out for a farfetched
Public : 59% horizon to reach USD 2 bn by FY30. The company believes that it can be achieved by its core
Others : 0% manufacturing strategy, make versus buy decision, efficient sourcing & machining strategies,
Source: Bloomberg and enhancing capacity levels. For the B2C segment, a new plant has been commissioned
during 2QFY25 & KOEL believes that the new plant should be help the company achieve
Price performance vs Nifty
productivity and efficiency and also help it deliver better profitability for the industrial portfolio.
270
Investment Summary
210
KOEL’s earnings have remained flat over FY17–22, impacted by weak end-consumer demand.
150 However, moving ahead, multiple demand drivers are evident: a) Strong demand from real
90 estate, b) Intent to scale up manufacturing contribution from 15% to 25%, and c) The CPCB
Nov-23 Mar-24 Jul-24 Nov-24 IV+ compliant product portfolio, which we believe will help the company register 26% earnings
Kirloskar Oil NIFTY CAGR over FY24–27E. We retain BUY rating on the stock with a revised SoTP TP of INR 1,550
Source: Bloomberg Indexed to 100 (earlier INR 1,591), valuing the core business at 28x its FY27E EPS.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 27

Conference Call Highlights

n Steady quarter after transition from CPCB II to CPCB IV+.
n Strong demand, especially from infrastructure and construction sector.
n Domestic demand is strong. Building export capabilities, channel, and right partners.
n B2C declined by 13% YoY due to planned plant transition. Completed construction of
new facility at GIDC, Sanand and consolidated five units at Ahmedabad at the Sanand
plant. Cost optimization to help drive greater growth in MGM business in coming months.
n Capex incurred for Sanand – INR 1.4 bn with 30% extra capacity.
n Power – Lower demand as market adjusting to new pricing levels that comes with upgraded
emission technology and correction due to the free-buy sales that happened over the last
few quarters. Will be observing market trend over the next few quarters.
n Industrial – 8% YoY strong demand from construction OEMs. Field trials for CEV-BS V
engines are progressing well and customer feedback has been positive.
n Strong demand in defence, railways, and marine as continued execution of key projects
with customers.
n Distribution and aftermarket business – 10% YoY growth. Continuing to focus on enhancing
service channel and capabilities to enable stronger support for newer technology products.
n International B2B business is steady as strategic realignments are underway. Strong growth
for industrial. Seeing some challenges on the power side due to change in prices, primarily
in Africa.
n Seeing several high horsepower orders. Continued push of Optiprime series. Obtained
necessary certifications from CPCB and ERI and execution of data centers is in place.
n Not expecting a significant pre-buy with the upcoming BS-5 norms in January 2025. Not
expecting margins to change drastically because there are multiple players and
competitive forces in each node.
n Objective at ARKA is to build a small ticket secured retail book.
n Overall industry demand fell during 2QYF25 by 12% to 15%. Demand picked up in
October and is gradually increasing. 1H overall volume growth of 12%-14% by KOEL.
n 2H exports are expected to be better. 1H affected primarily due to power gen business.
Evaluating strategy for high horsepower for the USA.
n INR 1.4 bn capex incurred at the LGM Sanand plant where five facilities are now being
integrated with 30% extra capacity. This will help improve productivity and efficiency
and help improve margins for LGM.
n November capacity utilization has been around 60% and the plant is expected to stabilize
around December 2024, post which margin improvement should materialize.
n 1HFY25 volume growth at the company level stands at 12%-14%.
n Transition to BS V in construction equipment segment should not lead to sharp increase in
pre-buying.
n HHP contribution in power gen segment has increased from 4% of power gen sales three
years back to now 15%-20% of power gen sales.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 28

Table 1: Quarterly financial performance (Q-format sheet)

Particulars (INR mn) 2QFY25 2QFY24 YoY (%) 1QFY25 QoQ (%) 1HFY25 1HFY24 YoY (%)
Total revenues (net) 11,944 10,590 12.8 13,429 (11.1) 25,373 23,237 9.2
RM 7,544 7,081 6.5 8,864 (14.9) 16,408 15,735 4.3
% of Sales 63.2 66.9 -370 bps 66.0 -284 bps 64.7 67.7 -305 bps
Staff cost 921 744 23.8 830 11.0 1,751 1,402 25.0
% of Sales 7.7 7.0 69 bps 6.2 153 bps 6.9 6.0 87 bps
Other operating expenses 1,828 1,778 2.8 1,759 3.9 3,587 3,584 0.1
% of Sales 15.3 16.8 -149 bps 13.1 221 bps 14.1 15.4 -129 bps
Total expenditure 10,294 9,603 7.2 11,452 (10.1) 21,746 20,720 5.0
Adj. EBITDA 1,475 1,196 23.4 1,736 (15.0) 3,212 2,726 17.8
Adj. EBITDA Margin (%) 12.4 11.3 106 bps 12.9 -58 bps 12.7 11.7 93 bps
Depreciation 266 243 9.1 247 7.4 513 456 12.4
Interest 26 16 63.1 27 (4.4) 53 30 81.0
Other income 118 64 84.5 108 9.3 225 148 52.2
Extraordinary items - - - - -
Adj. PBT 1,301 1,000 30.1 1,569 (17.1) 2,870 2,388 20.2
Tax 322 401 (19.7) 401 (19.7) 723 584 23.7
Tax rate (%) 24.7 40.1 -1536 bps 25.5 -81 bps 25.2 24.5 72 bps
Reported net profit 1,111 690 60.8 1,347 (17.6) 2,458 1,723 42.7
Adjusted net profit 979 599 63.5 1,168 (16.2) 2,148 1,803 19.1
Adjusted EPS (INR) 6.8 4.1 63.5 8.1 (16.2) 14.9 12.5 19.1
Source: Company, Antique

Table 2: Segmental performance

Particulars (INR mn) 2QFY25 2QFY24 YoY (%) 1QFY25 QoQ (%) 1HFY25 1HFY24 YoY (%)
Sales
Power Generation 4,810 3,600 33.6 5,280 (8.9) 10,090 9,630 4.8
Farm Mechanization 140 270 (48.1) 170 (17.6) 310 530 (41.5)
Water Management 980 1,160 (15.5) 1,550 (36.8) 2,530 2,500 1.2
Industrial 2,530 2,350 7.7 3,200 (20.9) 5,730 4,670 22.7
Customer Support
(After Market & Distribution) 2,020 1,840 9.8 1,980 2.0 4,000 3,590 11.4
International 1,230 1,250 (1.6) 1,060 16.0 2,290 2,110 8.5
Total 11,710 10,470 11.8 13,240 (11.6) 24,950 23,030 8.3
Exports (out of the above) 1,390 1,400 (0.7) 1,120 24.1 2,510 2,370 5.9
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 29

Table 3: Balance sheet

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Share capital 290 290 0% 290 290 0%
Reserves and Surplus 27,907 24,294 15% 29,036 25,937 12%
Loan Funds 2,562 841 1,991 2,091 -5%
Deferred Tax Liability 100 100
Total 41,388 34,747 19% 31,417 28,418 11 %
Fixed Assets 7,938 5,367 48% 4,741 4,081 16%
Capital Work-in-Progress 2,426 2,426
Goodwill 827 827
Investments 15,087 14,669 18,762 18,762
Current Assets, Loans And Advances 17,800 13,307 34% 16,240 13,115 24%
Inventories 7,239 5,651 28% 5,966 5,235 14%
Sundry Debtors 6,317 4,737 33% 6,058 5,684 7%
Cash and Bank Balances 934 942 -1% 2,821 896 215%
Loans and Advances 0 86 1,395 1,299
Other current assets 665 774 -14%
Current Liabilities and Provisions 10,629 9,322 14% 11,579 10,793 7%
Liabilities 7,346 6,356 16% 10,102 9,497 6%
Provisions 2,563 2,110 21% 1,477 1,296 14%
Net Working Capital 7,170 3,984 80% 4,661 2,322 101%
Total 41,388 34,747 19% 31,417 28,418 11 %
Net debt 1,628 (101) NM (830) 1,196 NM
Source: Company, Antique

Table 4: Cash flow

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Reported Profit 3,285 2,178 51% 5,919 4,868 22%
Depreciation 513 456 12% 1,132 970 17%
Interest 53 30 87 78
Changes in working capital (1,730) (1,326) (625) (441)
Operating cash flow 950 846 12% 5,021 4,339 16%
Capex (1,000) (1,327) (1,248) (2,765)
Others (261) (1,660)
Investing cash flow (399) 58 (1,581) (4,182)
Net proceeds/Repayment from borrowings (704) (704) 0% (100) (751) NM
Others (1,328) (724)
Financing cash flow (1,352) (288) NM (1,515) 500 NM
Net cash flow (801) 616 NM 1,925 657 NM
Opening cash balance 896 239 275% 896 239 275%
Closing cash balance 95 855 -89% 2,821 896 215%
Free cash flow (49) (481) NM 3,773 1,574 140%
Source: Company, Antique

Table 5: SoTP valuation

Valuation
INR mn Methodology Multiple EPS INR
Core Standalone business FY27 P/E 28x 50 1,389
La-Gajjar Machineries FY27 P/E 18x 5.1 92
Core Engineering Business 55 1,481
Investment in ARKA Fincap 10,000 P/BV 1x 69
Total 1,550
Source: Company, Antique
 1QFY18 650 9.2 2QFY18 480 7.5
2QFY18 570 8.8 460 6.7
3QFY18 641 9.4 4Q FY18 430 5.5
4Q FY18 784 9.9 450 5.5

17%
1QFY19 814 9.9 2QFY19 480 6.3
2QFY19 658 8.6 560 7.3

22%
3QFY19 663 8.6 4QFY19 580 7.3

Source: Company, Antique

Source: Company, Antique
Source: Company, Antique
490 6.5

margin at 12.4%
4QFY19 860 10.8
Story in Charts

11%
1QFY20 734 9.6 2QFY20 690 10.2
2QFY20 436 6.4 600 8.4
0%

4QFY20 610 8.7

3QFY20 570 7.9 14.6
461
4QFY20 691 9.7 2QFY21

10%
740 11.3
1QFY21 -45 (1.4)

EBITDA (INR mn)

590 7.5
ANTIQUE STOCK BROKING LIMITED

2QFY21 756 11.4 4QFY21 660 7.3

KOEL Exports (INR mn)

3QFY21 938 11.8 581 9.1
4QFY21 1,175 12.8 2QFY22 724 8.9
1QFY22 490 7.6 937 11.3
41%

2QFY22 665 8.1 4QFY22 940 9.6

Exhibit 1: Revenue mix (%) for 2QFY25

3QFY22 507 6.1 950 10.1

4QFY22 1,026 10.4 2QFY23 1,410 14.1
1QFY23 1,034 10.8 1,320 13.3
2QFY23 1,232 12.2 4QFY23 1,190 10.4
3QFY23 1,089 10.9 970 7.7
4QFY23 992 8.6 2QFY24 1,400 13.4
1QFY24 1,530 12.1 1,500 13.3

Exhibit 3: Exports register a marginal 1% YoY decline

Exhibit 5: Registers 23% YoY adjusted EBIDTA growth,

2QFY24 1,091 10.3 4QFY24 1,860 13.5
Distribution
Power Gen

International

3QFY24 1,329 11.7 1,120 8.5

EBITDA Margin (%)

After Market &

Export (%) of Sales

4QFY24 1,782 12.8 2QFY25 1,390 11.9
Industrial Engine

1QFY25 1,977 14.7

-
2
4
6
8
Water Management

Farm Mechanization

10
12
14
16
2QFY25 1,650 13.8
1QFY18 365 (38.0) 1QFY18 7.09 6.7

25
30
35
40
45
50
2QFY18 299 (29.8) 2QFY18 6.47 (2.5)
3QFY18 395 40.8 1QFY18 35.3 3QFY18 6.85 6.8
4Q FY18 443 0.2 2QFY18 36.0 4Q FY18 7.91 13.0
1QFY19 496 36.2 3QFY18 36.8 1QFY19 8.20 15.6
2QFY19 412 37.9 4Q FY18 35.4 2QFY19 7.62 17.8
3QFY19 420 6.3 1QFY19 32.8 3QFY19 7.74 13.1

Source: Company, Antique

Source: Company, Antique
Source: Company, Antique

4QFY19 921 107.8 2QFY19 34.4 4QFY19 7.97 0.7

FROM THE RESEARCH DESK

1QFY20 441 (11.2) 3QFY19 33.8 1QFY20 7.65 (6.7)

2QFY20 275 (33.3) 4QFY19 36.3 2QFY20 6.83 (10.3)
3QFY20 427 1.6 1QFY20 33.5
2QFY20 3QFY20 7.22 (6.7)
4QFY20 466 (49.4) 34.8
3QFY20 34.5 4QFY20 7.11 (10.8)

PAT (INR mn)

1QFY21 -108 (124.5) 4QFY20 37.2 1QFY21 3.20 (58.1)
71.6
Revenue (INR bn)

2QFY21 472 1QFY21 36.2 2QFY21 6.62 (3.2)

3QFY21 606 42.0 2QFY21 36.2 3QFY21 7.98 10.5
4QFY21 831 3QFY21 34.3 4QFY21 9.15 28.7
1QFY22 245 (326.6) 78.4
4QFY21 35.2 1QFY22 6.47
2QFY22 387 (18.0) 1QFY22 31.1 2QFY22 8.25 102.0
3QFY22 253 (58.3) 2QFY22 30.7 3QFY22 8.37 4.9 24.7
4QFY22 753 (9.4) Gross Margin (%) 3QFY22 29.0 4QFY22 9.90 8.2
1QFY23 646 163.9 4QFY22 31.4 1QFY23 9.53 47.2
Exhibit 2: Registers 13% YoY revenue growth

Exhibit 4: Gross margin expands 370 bps YoY

2QFY23 805 108.0 1QFY23 30.6 2QFY23 10.10 22.4

3QFY23 682 2QFY23 33.3 3QFY23 10.00 19.5

Exhibit 6: Registers 28% YoY adjusted PAT growth

4QFY23 649 (13.8) 169.8 3QFY23 32.3 4QFY23 11.53 16.4
1QFY24 1,032 59.9 4QFY23 32.5
1QFY24 31.6 1QFY24 12.65 32.7
2QFY24 771 (4.2) 2QFY24

YoY Growth (%)

2QFY24 33.1 10.59 4.8
YoY Growth (%)

3QFY24 785 15.1 3QFY24 34.0 3QFY24 11.35 13.5

4QFY24 1,176 81.3 4QFY24 33.8 4QFY24 13.92 20.7
1QFY25 1,168 13.2 1QFY25 34.0 1QFY25 13.43 6.2
2QFY25 979 27.0 2QFY25 36.8 2QFY25 11.94 12.8
14 November 2024 | 30
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 31

Financials
Profit and loss account (INR mn) Cash flow statement (INR mn)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Net Revenue 41,161 48,505 55,276 64,655 75,982 PBT 3,641 4,868 5,919 7,712 9,619
Op. Expenses 36,892 42,864 48,426 55,955 65,327 Depreciation & amortization 848 970 1,132 1,193 1,245
Gross Profit 13,264 16,066 18,517 21,983 25,834 Interest expense 54 78 87 98 109
EBITDA 4,269 5,642 6,850 8,700 10,655 (Inc)/Dec in working capital (1,025) (441) (625) (505) (610)
Depreciation 848 970 1,132 1,193 1,245 Tax paid (960) (1,084) (1,492) (1,944) (2,424)
EBIT 3,422 4,672 5,718 7,507 9,410 CF from operating activities 2,601 4,339 5,021 6,554 7,940
Other income 273 274 288 303 318 Capital expenditure (1,213) (2,765) (1,248) (1,248) (1,248)
Interest Exp. 54 78 87 98 109 Inc/(Dec) in investments (54) (1,660) (261) - -
Reported PBT 3,641 4,868 5,919 7,712 9,619 CF from investing activities (1,556) (4,182) (1,581) (1,147) (1,107)
Tax 939 1,252 1,492 1,944 2,424 Inc/(Dec) in debt (968) (751) (100) (100) (100)
Reported PAT 2,703 3,616 4,427 5,769 7,195 Dividend Paid (723) (724) (1,328) (1,731) (2,158)
Net Profit 2,703 3,616 4,427 5,769 7,195 CF from financing activities (1,009) 500 (1,515) (1,928) (2,368)
Adjusted PAT 2,703 3,616 4,427 5,769 7,195 Net cash flow 35 657 1,925 3,479 4,465
Adjusted EPS (INR) 18.6 24.9 30.5 39.8 49.6 Opening balance 203 239 896 2,821 6,300
Closing balance 239 896 2,821 6,300 10,765
Balance sheet (INR mn)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Growth indicators (%)
Share Capital 290 290 290 290 290 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Reserves & Surplus 23,029 25,937 29,036 33,074 38,111 Revenue 24.7 17.8 14.0 17.0 17.5
Networth 23,318 26,227 29,326 33,364 38,401 EBITDA 58.9 32.1 21.4 27.0 22.5
Debt 751 2,091 1,991 1,891 1,791 Adj PAT 87.2 33.8 22.4 30.3 24.7
Net deferred Tax liabilities 61 100 100 100 100 Adj EPS 87.2 33.8 22.4 30.3 24.7
Capital Employed 24,131 28,418 31,417 35,355 40,291
Gross Fixed Assets 15,822 16,722 17,622 18,522 19,422 Valuation (x)
Accumulated Depreciation 11,800 12,388 13,009 13,663 14,349 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Capital work in progress 664 2,426 2,426 2,426 2,426 P/E (x) 58.8 43.9 35.9 27.5 22.1
Net Fixed Assets 4,447 6,507 7,167 7,413 7,627 P/BV (x) 6.8 6.0 5.4 4.8 4.1
Goodwill 469 827 827 827 827 EV/EBITDA (x) 36.6 27.6 22.4 17.3 13.7
Investments 16,925 18,762 18,762 18,762 18,762 EV/Sales (x) 379.9 321.2 278.2 232.3 191.7
Non Current Investments 14,309 14,879 14,879 14,879 14,879 Dividend Yield (%) 0.5 0.7 0.8 1.1 1.4
Current Investments 2,617 3,883 3,883 3,883 3,883
Current Assets, Loans & Adv. 11,557 13,115 16,240 21,892 28,982
Financial ratios
Inventory 4,685 5,235 5,966 6,978 8,201
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
RoE (%) 12.1 14.6 15.9 18.4 20.1
Debtors 4,672 5,684 6,058 7,085 8,327
RoCE (%) 15.8 18.8 20.1 23.4 25.7
Cash & Bank balance 239 896 2,821 6,300 10,765
Asset/T.O (x) 7.2 6.2 5.4 4.7 4.2
Loans & advances and others 1,962 1,299 1,395 1,528 1,689
Net Debt/Equity (x) 0.0 0.1 0.1 0.1 0.0
Current Liabilities & Provisions 9,267 10,793 11,579 13,539 15,907
EBIT/Interest (x) 68.9 63.6 68.9 80.0 89.0
Liabilities 8,026 9,497 10,102 11,811 13,876
Provisions 1,241 1,296 1,477 1,728 2,030
Margins (%)
Net Current Assets 2,291 2,322 4,661 8,353 13,075
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Application of Funds 24,131 28,418 31,417 35,355 40,291
EBITDA Margin (%) 10.4 11.6 12.4 13.5 14.0

Per share data EBIT Margin 8.3 9.6 10.3 11.6 12.4
PAT Margin 6.6 7.5 8.0 8.9 9.5
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
No. of shares (mn) 145 145 145 145 145 Source: Company Antique

Diluted no. of shares (mn) 145 145 145 145 145

BVPS (INR) 161.3 181.4 202.8 230.7 265.6
CEPS (INR) 24.6 31.7 38.4 48.1 58.4
DPS (INR) 5.6 7.5 9.2 12.0 14.9

Source: Company, Antique

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 32

CMP : INR 6,771 2QFY25 RESULT REVIEW

Reco
Target Price
: BUY é
: INR 8,820 ê
Cera Sanitaryware
Target Price Change : -11% Demand to recover and valuations compelling; upgrade
Target FY27 P/E (x) : 35
EPS Change FY25/ 26/ 27 : -6%/ -9%/ -9%
to BUY
Cera Sanitaryware (Cera) reported a revenue growth of 6% YoY impacted by
persistently muted demand. EBITDA margin of 14.6% was below our estimate
Manish Mahawar being impacted by increased RM costs, discounts, and one-time expenses.
+91 22 6911 3427
[email protected]
Key highlights: 1) FW revenue growth of 21% YoY driven by increased volume
traction from projects business was a positive surprise. 2) Expect SW demand
Jenish Karia to revive in 2H driven by traction in projects business and an eventual retail
+91 22 6911 3406 demand revival in Tier 2 & beyond cities. 3) Considering green shoots in
[email protected] demand, discounts have been lowered by 1.5%-2%; price hike of 6%/ 1%
has been taken in FW/ SW segments. 4) Land has been finalized for SW
greenfield expansion. INR 1.3 bn capex (revenue potential INR 3.0 bn)
construction to commence in FY26. 5) Buyback of INR 1.3 bn was concluded in
2Q at INR 12,000/share. 6) Management has guided for high single-digit/
20%/ 20% revenue growth in FY25/ 26/ 27 with a revenue target of INR 29
Market data bn in FY27. EBITDA margin is expected to revive and stabilize at 16%-17% in
Sensex : 77,691 FY25. We cut our FY25/ 26/ 27 EPS estimates by 6%/ 9%/ 9% respectively
Sector : Mid Cap considering lower growth and roll forward valuation to FY27 (earlier 1HFY27).
Market Cap (INR bn) : 87.3 We cut our target multiple to 35x (earlier 38x) and upgrade to BUY (earlier
Market Cap (USD bn) : 1.034 HOLD) with a revised TP of INR 8,820 (earlier INR 9,940) based on a PE multiple
O/S Shares (mn) : 12.9 of 35x FY27 EPS. We believe Cera is attractively valued at 27x FY27 EPS
52-wk HI/LO (INR) : 11500/6551 considering conservative estimates (five-year high/ low/ avg., 49x/ 20x/
Avg. Daily Vol ('000) : 14 31x).
Bloomberg : CRS IN Muted demand scenario persists; guidance of INR 29 bn revenue in FY27 maintained
Source: Bloomberg
Cera reported 2Q revenue of INR 4.9 bn, +6% YoY. SW/ FW revenue grew -4%/ +21% YoY
Valuation in 2QFY25, respectively. Contribution from SW/ FW segments stood at 46%/ 41% (-500 bps/
FY25e FY26e FY27e +500 bps YoY). Retail revenue at INR 2.97 bn contributed 60% of 2Q revenue. Demand
EPS (INR) 191.9 217.8 251.9 sluggishness continued in 2QFY25. Discounts were extended to counter demand challenges.
P/E (x) 35.3 31.1 26.9 There are signs of demand revival and thus: 1) The discounts have been reduced by 1.5%-2%
P/BV (x) 6.5 5.8 5.1 and 2) Price hike of 6%/ 1% have been implemented in FW/ SW segments from Sept'24.
EV/EBITDA (x) 27.2 22.9 19.1 Demand traction is anticipated from the projects business, initially followed by the retail segment.
Dividend Yield (%) 1.0 1.2 1.3 Management has guided for high single-digit/ 20%/ 20% revenue growth in FY25/ 26/ 27. It
Source: Company, Antique expects a revenue of INR 29 bn in FY27. CU for SW/ FW stood at 89%/ 93%. We believe
Cera can deliver a revenue CAGR of 8% over FY24-27E driven by an improving share of new
Returns (%)
launches, premium products, and strong traction in the real estate sector.
1m 3m 6m 12m
Absolute (14) (32) (5) (24) EBITDA margin at 14.6% impacted by one-time costs
Relative (10) (30) (11) (36) Cera reported 2Q EBITDA of INR 721 mn, -6% YoY. Margin stood at 14.6%, -190 bps YoY.
Source: Bloomberg EBITDA margin was impacted by: 1) An increase in brass prices by 18% YoY for FW segment;
2) Additional discounts given to counter muted demand. The discounts have now been reduced
Shareholding pattern
by 1.5%-2%; 3) INR 18 mn in buyback expenses; 4) INR 40 mn of additional power cost due
Promoters : 54% to lower power generation at wind farms; 5) INR 11.5 mn in write-offs relating to shut down of
Public : 46% showrooms. 6) Higher mix of B2B projects business (37% of revenue). Publicity spends in 2QFY25
Others : 0% stood at INR 160 mn. Mid-level and premium product mix was stable YoY at 75%. Management
remains confident of delivering 16%-17% EBITDA margin in FY25 despite muted performance
Source: Bloomberg
in 1HFY25. The confidence is driven by expected recovery in retail segment demand and
Price performance vs Nifty traction from B2B projects business. We have factored in an EBITDA CAGR of 10% over FY24-
27E and expect an EBITDA margin of 15.2%/ 16.1%/ 17.0% in FY25/ 26/ 27 respectively.
130
Investment Summary
110
90 We believe Cera's pricing power coupled with the strong traction in replacement and project
demand will drive revenue growth going forward. The rising share of high-margin SW/ FW
70
Nov-23 Mar-24 Jul-24 Nov-24
segment and operational efficiencies will aid in margin expansion going forward. Upgrade to
Cera Sanitaryware NIFTY BUY (earlier HOLD).
Source: Bloomberg, Indexed to 100
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 33

Table 1: Quarterly results

INR mn 2QFY25 2QFY24 YoY (%) 1QFY25 QoQ (%) 1HFY25 1HFY24 YoY (%)
Sales 4,926 4,631 6.4 4,007 22.9 8,933 8,920 0.1
Cost of Material Consumed 2,337 2,186 6.9 1,812 29.0 4,149 4,123 0.6
% of sales 47.4 47.2 24 bps 45.2 222 bps 46.4 46.2 22 bps
Employee cost 636 585 8.8 589 8.1 1,225 1,161 5.5
% of sales 12.9 12.6 29 bps 14.7 (177 bps) 13.7 13.0 70 bps
Other expenses 1,231 1,095 12.5 1,026 20.0 2,257 2,167 4.2
% of sales 25.0 23.6 135 bps 25.6 (60 bps) 25.3 24.3 98 bps
Total Exp 4,205 3,866 8.8 3,427 22.7 7,631 7,451 2.4
EBIDTA 721 765 (5.7) 581 24.2 1,302 1,469 (11.4)
Margin % 14.6 16.5 (188 bps) 14.5 15 bps 14.6 16.5 (189 bps)
Other income 178 125 41.7 159 11.7 337 278 21.1
Depreciation 107 89 20.2 90 19.4 197 172 14.2
Interest expenses 26 14 91.6 13 108.4 39 27 43.7
Profit Before Tax 765 787 (2.8) 637 20.1 1,403 1,547 (9.4)
Exceptional item - (12) (100.0) - NA - (12) (100.0)
Share of associate/minority interest (6) (5) 29.5 (4) 57.3 (10) (9) 13.7
PBT after exceptional 759 771 (1.5) 633 19.8 1,392 1,527 (8.8)
Tax 79 202 (60.8) 163 (51.4) 242 395 (38.7)
Tax Rate % 10.4 26.2 (1,574 bps) 25.7 (1,529 bps) 17.4 25.9 (849 bps)
Reported Net Profit 680 569 19.5 471 44.5 1,150 1,132 1.6
Adjusted Net Profit 680 581 17.1 471 44.5 1,150 1,144 0.6
EPS (INR) 52.7 43.8 20.5 36.5 44.5 89.2 87.0 2.5
Source: Company, Antique

Table 2: Actual vs. estimates

INR mn 2QFY25 Antique Var (%) Consensus Var (%)
Revenues 4,926 4,813 2.3 4,604 7.0
EBITDA 721 799 (9.7) 720 0.1
Adjusted PAT 686 616 11.4 540 27.2
EBIDTA Margins% 14.6% 16.6% (196 bps) 15.6% (100 bps)
Source: Company, Bloomberg, Antique

Table 3: Changes in estimates

Previous Revised % ch
INR mn FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Revenue 20,088 22,469 25,144 19,391 21,510 23,882 (3.5) (4.3) (5.0)
EBITDA 3,305 3,800 4,368 2,950 3,463 4,057 (10.8) (8.9) (7.1)
EBITDA Margin 16.5 16.9 17.4 15.2 16.1 17.0 (124 bps) (81 bps) (39 bps)
Net Profit 2,663 3,129 3,616 2,475 2,809 3,249 (7.0) (10.2) (10.1)
EPS (INR) 204.7 240.6 278.0 191.9 217.8 251.9 (6.3) (9.5) (9.4)
TP (INR) 9,940 8,820 (11.3)
Source: Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 34

Table 4: Semi-annual balance sheet

Particulars 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Share capital 64 65 (0.8) 64 65 (0.8)
Reserves and surplus 12,164 12,135 0.2 13,344 13,393 (0.4)
Minority interest 136 114 19.6 128 128 -
Loan funds 145 237 (38.9) 279 205 36.2
Deferred tax liability (Net) 419 436 (3.8) 482 482 -
Total 12,928 12,987 (0.4) 14,297 14,272 0.2
Fixed assets 4,051 3,601 12.5 3,978 3,859 3.1
Goodwill on consolidation 9 5 77.7 10 10 -
Investments 6,393 7,327 (12.8) 7,769 7,769 -
Current assets, loans and advances
Inventories 3,928 3,778 4.0 3,705 3,636 1.9
Sundry debtors 1,956 1,745 12.1 2,125 2,026 4.9
Cash and bank balances 311 231 34.7 251 373 (32.8)
Other current assets 595 530 12.3 783 783 -
Less: Current liabilities and provisions
Current liabilities 1,819 1,824 (0.3) 1,853 1,790 3.5
Provisions 2,495 2,405 3.8 2,471 2,393 3.2
Total 12,928 12,987 (0.4) 14,297 14,272 0.2
Net Debt (6,559) (7,321) (10.4) (7,741) (7,937) (2.5)
Source: Company, Antique

Table 5: Abridged semi-annual cash flow statement

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Profit before tax 1,403 1,532 (8.4) 2,489 3,188 (22.0)
Depreciation 197 172 14.2 391 365 7.0
Interest 20 10 109.6 70 20 242.9
Others (437) (219) 99.3 (23) (585) (96.1)
Changes in working capital (188) 204 NA (28) 154 NA
Tax Paid (337) (398) (15.3) (705) (783) (10.1)
Operating cash flow 659 1,301 (49.4) 2,194 2,361 (7.1)
Capex (139) (199) (30.2) (510) (622) (18.1)
Others 2,015 (329) (712.9) 714 (806) (188.6)
Investing cash flow 1,876 (527) (455.7) 204 (1,428) (114.3)
Inc/(Dec) in equity/ warrants (1,621) - NA (1,621) - NA
Net proceeds from borrowings (60) (16) 263.2 74 (49) (251.8)
Others (858) (717) 19.6 (973) (786) 23.7
Financing cash flow (2,538) (733) 246.1 (2,520) (835) 201.8
Net cash flow (3) 41 NA (122) 97 NA
Opening cash balance 210 113 86.0 373 116 221.2
Changes in other bank balances 104 77 34.6 - 160 (100.0)
Closing cash balance 311 231 34.7 251 373 (32.8)
Free cash flow 520 1,103 (52.8) 1,684 1,738 (3.1)
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 35

Conference Call Takeaways

n Outlook: The demand environment continues to be pressurized impacted by the extended
monsoon. On the positive side, there was a gradual uptick in demand sequentially
during 2QFY25. Expect 2HFY25 demand to improve driven by traction in B2B sales and
also retail sales. The real estate market in Tier 2 and beyond cities have also been doing
well. Retail demand in the rural market remains subdued.
n Guidance
l High single-digit/ 20%/ 20% revenue growth in FY25/ 26/ 27. Maintains FY27
revenue guidance of INR 29.
l Expect FY25 EBITDA margin to be at 16%-17%.
n EBITDA margin was impacted by: 1) Increase in brass prices for FW segment; 2)
Additional discounts given to counter muted demand. The discounts have now been
reduced by 1.5%-2% QoQ; 3) INR 18 mn of buyback expenses; 4) INR 40 mn of
additional power cost due to lower power generation at wind farms; 5) INR 11.5 mn of
write-offs relating to shut down od showrooms.
n Revenue mix
l Sanitaryware - 46%, faucetsware - 41%, tiles - 10%, and wellness - 3%.
l Revenue increase (YoY basis) - Sanitaryware -6%, faucetware 20%, wellness 38%,
tiles 11%.
l New products development accounted for 34% of total sales in 2Q.
l In 2QFY25, sales from premium, mid, and entry-level categories were 41%, 34%,
25% respectively.
l Tier 1, 2, and 3 cities contributed 34%, 21%, 45% of total sales.
l Region-wise sales break-up - North 33%, West 21%, South 36%, and East 9%.
l Retail sales in 2Q - INR 2.97 bn.
l B2B sales accounted for 37% of revenue.
n Price hike of 6%/ 1% was undertaken in FW/ SW segment from Sept'24 onwards.
n Brass prices increased by 18% during Mar'24-Jun'24.
n Premiumization trend being witnessed: Consumer preferences tipping towards
luxury products in the product portfolio. The company is introducing new products such
as electronic toilets, touch-free flushing, tankless sensor closures. Expect luxury products to
account for ~10% of revenue in the next 3-5 years. Plans to open 50 exclusive showrooms
(25 in FY25).
n Gas prices
l Gas prices were favorable in 2QFY25. Average gas price from GAIL was INR
28.46 per cbm in 2QFY25 vs. INR 28.72 per cbm YoY. Average gas price from
Sabarmati was INR 53.89 per cbm in 2QFY25 vs. INR 44.53 per cbm YoY.
l Weighted average cost of gas in 2QFY25 was INR 33.95 per cbm, notably below
industry average.
l Gas cost represents 1.55% of the total revenue.
n Capacity utilization for 2QFY25
l Faucetware segment - 93%
l Sanitaryware segment - 89%
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 36

n Capex
l Capex will be spent for upgradation of sanitaryware and faucetware facilities.
l Planned capex for FY25 - INR 250 mn.
l Already expended in 1HFY25 - INR 110 mn.
n Sanitaryware greenfield expansion
l Land acquisition for greenfield expansion in sanitaryware segment has been
completed for INR 250-300 mn. The new project is expected to be completed within
18 months of commencement. This expansion is not expected to start in FY25.
l This capex is planned in two phases. Additional capacity in phase 1 would be 1.2
mn cases p.a. Capex would be INR 1.3 bn (including land acquisition cost). Expected
revenue from phase 1 to be INR 3 bn.
n Advertising costs: 2QFY25 - INR 160 mn. The spends are expected to bring traction
to its products in Tier 2 & 3 cities.
n Loyalty program: The company has enrolled 21,700 retailers. Recorded 3,60,000
invoices. Out of a total retail sales amounting to INR 2.97 bn, 39% are eligible for loyalty
rewards.
n Buyback of shares: The company completed buyback of shares amounting to INR
1.30 bn. Purchased 1,08,333 shares at INR 12,000 per share with the intent of returning
surplus cash back to the shareholders.
n Working capital: Inventory days increased from 73 days to 80 days. Receivable days
increased from 29 to 33 days. Payable days decreased from 42 to 41 days. Net working
capital days increased from 60 to 72 days.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 37

Table 6: Key financial parameters

Particulars 2QFY23 3QFY23 4QFY23 1QFY24 2QFY24 3QFY24 4QFY24 1QFY25 2QFY25 YoY (%) QoQ (%)
Revenue (INR mn)
Sanitaryware & Allied 2,246 2,461 2,812 2,273 2,362 2,282 2,730 2,124 2,266 (4.1) 6.7
Faucets 1,414 1,501 1,875 1,501 1,667 1,580 2,138 1,443 2,019 21.1 40.0
Tiles 374 537 586 472 509 439 510 361 493 (3.3) 36.6
Wellness 83 78 53 43 93 88 110 80 148 59.6 84.4
Total 4,159 4,578 5,325 4,289 4,631 4,389 5,488 4,007 4,926 6.4 22.9

Revenue mix (%)

Sanitaryware & Allied 54.0 53.8 52.8 53.0 51.0 52.0 49.8 53.0 46.0 -500 bps -700 bps
Faucets 34.0 32.8 35.2 35.0 36.0 36.0 39.0 36.0 41.0 500 bps 500 bps
Tiles 9.0 11.7 11.0 11.0 11.0 10.0 9.3 9.0 10.0 -100 bps 100 bps
Wellness 2.0 1.7 1.0 1.0 2.0 2.0 2.0 2.0 3.0 100 bps 100 bps
Total 100 100 100 100 100 100 100 100 100

Gross margin (%) 55.8 54.5 53.4 54.8 52.8 54.4 50.8 54.8 52.6 -24 bps -222 bps
EBITDA margin (%) 16.3 16.4 16.4 16.4 16.5 14.0 17.3 14.5 14.6 -188 bps 15 bps
EBITDA (INR mn) 679 750 872 704 765 614 950 581 721 (5.7) 24.2

Capacity Utilization (%)

Sanitaryware 115.0 104.8 115.0 100.0 91.0 85.0 82.0 76.0 89.0 -200 bps 1300 bps
Faucetware 116.0 115.4 118.0 106.0 122.0 82.0 90.0 84.0 93.0 -2900 bps 900 bps

Product mix (%)

Entry level products 27.2 27.0 26.0 24.0 25.0 23.0 24.0 24.0 25.0 0 bps 100 bps
Mid level products 29.8 28.0 31.0 31.0 32.0 34.0 35.0 32.0 34.0 200 bps 200 bps
Premium products 43.0 45.0 43.0 45.0 43.0 43.0 41.0 44.0 41.0 -200 bps -300 bps
Source: Company, Antique

Exhibit 1: One-year forward P/E Exhibit 2: P/E band chart

12,000 (INR) 55
48x 50
10,000
45
8,000 38x 40
35
6,000 28x
30
4,000 25
18x

2,000 20
15
Aug-19
Nov-19

Aug-20
Nov-20

Aug-21
Nov-21

Aug-22
Nov-22

Aug-23
Nov-23

Aug-24
Nov-24
Feb-19
May-19

Feb-20
May-20

Feb-21
May-21

Feb-22
May-22

Feb-23
May-23

Feb-24
May-24

0
Nov-12

Nov-13

Nov-14

Nov-15

Nov-16

Nov-17

Nov-18

Nov-19

Nov-20

Nov-21

Nov-22

Nov-23

Nov-24
May-12

May-13

May-14

May-15

May-16

May-17

May-18

May-19

May-20

May-21

May-22

May-23

May-24

Forward PE +1 SD -1 SD 5 year average

Source: Company, Bloomberg, Antique Source: Company, Bloomberg, Antique

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 38

Financials
Profit and loss account (INR mn) Cash flow statement (INR mn)
Year-ended March 31 FY23 FY24 FY25e FY26e FY27e Year-ended March 31 FY23 FY24 FY25e FY26e FY27e
Net Revenue 18,035 18,794 19,391 21,510 23,882 PBT 2,849 3,188 2,489 2,991 3,499
Op. Expenses 15,105 15,761 16,441 18,047 19,825 Depreciation & amortization 326 365 391 407 500
EBITDA 2,930 3,033 2,950 3,463 4,057 Interest expense 31 56 70 65 58
Depreciation 326 365 391 407 500 (Inc)/Dec in working capital (770) 154 (28) (122) (235)
EBIT 2,604 2,667 2,559 3,056 3,557 Tax paid (727) (783) (705) (944) (1,091)
Other income 356 595 714 785 864 Less: Interest/Div. Income Received - (36) - - -
Interest Exp. 60 58 70 65 58 Other operating Cash Flow (85) (585) (23) (23) (23)
Extra Ordinary Items -gain/(loss) 38 12 - - - CF from operating activities 1,624 2,361 2,194 2,373 2,708
Reported PBT 2,861 3,192 3,203 3,777 4,363 Capital expenditure (383) (622) (510) (1,060) (510)
Tax 751 779 705 944 1,091 Inc/(Dec) in investments 373 581 - - -
Reported PAT 2,111 2,413 2,498 2,832 3,272 Add: Interest/Div. Income Received 29 37 714 785 864
Minority Int./Profit (loss) From Asso. (16) (23) (23) (23) (23) CF from investing activities 20 (4) 204 (275) 354
Net Profit 2,094 2,390 2,475 2,809 3,249 Inc/(Dec) in share capital - - (1,621) 0 0
Adjusted PAT 2,132 2,402 2,475 2,809 3,249 Inc/(Dec) in debt (13) (49) 74 (79) -
Adjusted EPS (INR) 161.0 183.8 191.9 217.8 251.9 Dividend Paid (457) (652) (903) (1,032) (1,161)
Others (126) (134) (70) (65) (58)
Balance sheet (INR mn) CF from financing activities (596) (835) (2,520) (1,176) (1,219)
Year-ended March 31 FY23 FY24 FY25e FY26e FY27e Net cash flow 1,048 1,521 (122) 923 1,843
Share Capital 65 65 64 64 64 Opening balance 5,421 6,607 8,142 8,020 8,943
Reserves & Surplus 11,661 13,393 13,344 15,122 17,210 Closing balance 6,468 8,129 8,020 8,943 10,786
Networth 11,726 13,458 13,409 15,186 17,275 Changes in other bank balances 139 13 - - -
Debt 253 205 279 200 200 Cash and cash equivalents 6,607 8,142 8,020 8,943 10,786
Minority Interest 106 128 128 128 128
Net deferred Tax liabilities 376 482 482 482 482 Growth indicators (%)
Capital Employed 12,462 14,272 14,297 15,996 18,084 Year-ended March 31 FY23 FY24 FY25e FY26e FY27e
Gross Fixed Assets 5,447 6,267 6,527 6,787 8,347 Revenue 24.7 4.2 3.2 10.9 11.0
Accumulated Depreciation 2,303 2,528 2,919 3,326 3,826 EBITDA 28.1 3.5 -2.7 17.4 17.2
Capital work in progress 420 130 380 1,180 130 Adj PAT 37.2 12.7 3.0 13.5 15.7
Net Fixed Assets 3,564 3,869 3,988 4,641 4,651 Adj EPS 38.6 14.1 4.4 13.5 15.7
Current Assets, Loans & Adv. 13,203 14,587 14,633 16,149 18,701
Inventory 3,825 3,636 3,705 4,066 4,515 Valuation (x)
Debtors 1,892 2,026 2,125 2,357 2,617 Year-ended March 31 FY23 FY24 FY25e FY26e FY27e
Cash & Bank balance 6,607 8,142 8,020 8,943 10,786 P/E (x) 42.1 36.8 35.3 31.1 26.9
Loans & advances and others 879 783 783 783 783 P/BV (x) 7.5 6.5 6.5 5.8 5.1
Current Liabilities & Provisions 4,304 4,183 4,324 4,794 5,267 EV/EBITDA (x) 27.9 26.4 27.2 22.9 19.1
Liabilities 2,069 1,790 1,853 2,033 2,257 EV/Sales (x) 4.5 4.3 4.1 3.7 3.2
Provisions 2,235 2,393 2,471 2,761 3,010 Dividend Yield (%) 0.7 0.9 1.0 1.2 1.3
Net Current Assets 8,898 10,404 10,310 11,355 13,434
Application of Funds 12,462 14,272 14,297 15,996 18,084
Financial ratios
Year-ended March 31 FY23 FY24 FY25e FY26e FY27e
Per share data RoE (%) 19.5 19.1 18.4 19.6 20.0
Year-ended March 31 FY23 FY24 FY25e FY26e FY27e RoCE (%) 25.3 24.4 22.9 25.4 25.9
No. of shares (mn) 13 13 13 13 13 Asset/T.O (x) 1.5 1.4 1.4 1.4 1.4
Diluted no. of shares (mn) 13 13 13 13 13 Net Debt/Equity (x) (0.5) (0.6) (0.6) (0.6) (0.6)
BVPS (INR) 901.6 1,034.8 1,039.6 1,177.5 1,339.4 EBIT/Interest (x) 48.9 56.0 46.8 59.1 76.2
CEPS (INR) 187.3 213.6 224.0 251.1 292.5
DPS (INR) 50.0 60.0 70.0 80.0 90.0
Margins (%)
Year-ended March 31 FY23 FY24 FY25e FY26e FY27e
Source: Company, Antique
EBITDA Margin (%) 16.2 16.1 15.2 16.1 17.0
EBIT Margin (%) 14.4 14.2 13.2 14.2 14.9
PAT Margin (%) 11.6 12.4 12.3 12.6 13.1
Source: Company Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 39

CMP : INR 340 2QFY25 RESULT REVIEW

Reco
Target Price
: HOLD çè
: INR 286 ê
KNR Constructions
Target Price Change : -7% Subdued quarter
Target FY27 P/E (x) : SoTP based
KNR Constructions' (KNRC) 2QFY25 adj. revenue was muted (-9% YoY) but
EPS Change FY25/26/27 : -2%/-3%/-3% adj. PAT was up 5% led by lower tax rate and higher other income. Post the
result we have cut our EPS estimates by 2%-3% over FY25-27E, factoring
weak execution in 1HFY25. KNRC expects a revenue of INR 35-36 bn in FY25E
i.e. -12% to -14% YoY. However, it continues to expect inflow to pick up by INR
Vishal Periwal 60-80 bn vs. INR 23 bn in FY24. It is positive about the inflow as it expects
+91 22 6911 3414 INR 20 bn inflow from MSRDC, aims to secure 4-5 HAM projects as it expects
[email protected]
a flurry of orders from MORTH in 4QFY25, in BOT it expects to secure INR 20-
Pranav Furia 30 bn orders in JV with Adani or Cube, EPC and flyover work in Tamil Nadu
+91 22 6911 3467 worth INR 10-15 bn, orders from Andhra Pradesh at INR 20 bn in road/
[email protected]
irrigation, and a few orders from Telangana for irrigation and road work.
We retain HOLD rating, valuing its EPC business at 18x FY27E EPS and
investment at BV to arrive at a TP of INR 286 (earlier INR 307). The TP has
been reduced to factor in exit valuation of 18x vs. 20x earlier and the EPS cut.
Market data We have modelled in a revenue decline of 9% in FY25E and increase it by
Sensex : 77,691 11%/ 16% in FY26/ 27E as order inflow improves. But we expect EBITDA
Sector : Infrastructure margin to decline from 17% in FY24 to 14.5% by FY27E as the company bids
Market Cap (INR bn) : 86.5 for projects other than road/ HAM (1HFY25 adj. EBITDA margin at 16%).
Market Cap (USD bn) : 1.025
O/S Shares (mn) : 281.2
Muted executions but claim receipts boost profitability
52-wk HI/LO (INR) : 415/237 KNR has made a number of write back and claim amounts in 2QFY25. Adjusted revenue is
Avg. Daily Vol ('000) : 513 at INR 8.6 bn, down 9% YoY; this is in line with our and consensus estimates. Adj. EBITDA
Bloomberg : KNRC IN margin is at 16% vs. 17.7% YoY and thus EBITDA is at INR 1.4 bn, down 17% YoY. Reported
Source: Bloomberg EBITDA is INR 1.6 bn, flat YoY. Reported PAT stood at INR 3.3 bn, up 235% YoY, but factoring
Valuation the adjustment, adjusted PAT was at INR 1 bn, up 5% YoY. Despite the EBITDA decline,
flattish PAT is driven by lower tax rate and higher other income. The adjustments are pertaining
FY25e FY26e FY27e
to settlement with NHAI, which saw the company recognize interest income and write back of
EPS (INR) 12.3 12.9 14.6
provisions, while also some buy-back of shares by associate companies and provisions towards
P/E (x) 25.0 23.9 21.1
receivables.
P/BV (x) 2.4 2.2 2.0
EV/EBITDA (x) 13.6 12.8 11.2 Order book needs replenishment
Dividend Yield (%) 0.1 0.1 0.1 At the end of 2QFY25, the company's total order book stood at INR 44 bn (1.1x TTM
Source: Bloomberg revenue). Granted new HAM projects worth INR 12 bn are yet to be included in the order
Returns (%) book, post which the order book will be ~INR 56 bn (1.4x TTM revenue). Segment-wise the
1m 3m 6m 12m order book is split between: (1) Road HAM: 33%, (2) Road others 19%, (3) Irrigation 23%,
Absolute (3) (11) 25 17 and (4) Pipeline 25%. The 67% non-captive order book contains mainly of state government
Relative 2 (10) 18 (2) orders.
Source: Bloomberg
Physical progress strong across HAM projects
Shareholding pattern The percentage of physical progress as on Septermber 30, 2024 for four HAM projects-
Promoters : 49%
Magadi to Somwarpeth: 87.2% (+4 ppt); Ramanattukara-Valancherry: 81.5% (+4.5 ppt);
Valanchery-Kappirikkad: 84.1% (+ 1.7 ppt); and Chittor-Thatchur: 76.5% (+12.6 ppt). As of
Public : 51%
now the company has equity commitments of INR 2 bn in FY25, INR 1.2 bn in FY26, and INR
Others : 0%
1 bn FY27. The company is positive about receiving appointed dates for the Karnataka
Source: Bloomberg orders by January 2025.
Price performance vs Nifty
Investment Summary
150
140 The stock trades at 21x FY27E EPS on expectation of EPS growth of -21%/ 5% / 13% for
130
120 FY25/ 26/ 27E. KNRC is aiming for order wins and is eyeing opportunities in metro, mining,
110 railway, tunneling, solar. Revenue guidance is declined by 10% YoY for FY25E, FY26E and
100
90 depends on timely securing of orders in FY25E. Retain HOLD rating due to expensive valuation.
Nov-23 Mar-24 Jul-24 Nov-24
KNR Construction NIFTY
Source: Bloomberg Indexed to 100
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 40

Table 1: Financial highlights

Particulars (INR mn) Sep-24 Sep-23 YoY Chg (%) Jun-24 QoQ Chg (% ) FY24 FY25 YoY Chg (% )
Net Sales 8,838 9,415 -6 8,802 0 40,910 37,175 -9.1
EBIDTA 1,648 1,663 -1 1,920 -14 7,010 5,874 -16.2
EBITDA margin (%) 17.0% 17.7 -1749bps 21.8 -2165bps 17.1 15.8 -133bps
Other income 2,970 50 5821 196 1416 1,422 350 -75.4
PBIDT 4,618 1,713 170 2,116 118 8,431 6,224 -26.2
Depreciation 226 311 -27 225 0 1,245 1,292 3.8
Interest 20 58 -65 41 -50 293 102 -65.2
Pre-tax profit 4,371 1,344 225 1,851 136 6,893 4,830 -29.9
Tax (current+deferred) 877 346 154 512 71 1,955 1,370 -29.9
Profit after tax 3,344 999 235 1,339 150 4,938 3,460 -29.9
Adj Profit after tax 1,050 999 5 809 30 4,400 3,460 -21.4
Source: Company, Antique

Table 2: 1HFY24 balance sheet

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Share capital 562 562 - 562 562 -
Reserves and Surplus 36,310 28,814 26.0 35,095 31,694 10.7
Loan Funds 59 811 - -
Others 188 236 (20.4) 216 216 -
Total 37,120 30,423 22.0 35,873 32,472 10.5
Fixed Assets 3,391 4,144 (18.2) 2,914 3,706 (21.4)
Capital Work-in-Progress 12 40 (70.9) 22 22 -
Investments 10,931 10,356 5.5 12,136 10,066 20.6
Current Assets, Loans And Advances 30,140 23,699 27.2 30,579 28,584 7.0
Inventories 1,926 2,569 (25.0) 2,038 2,207 (7.7)
Sundry Debtors 10,702 8,393 27.5 12,397 13,642 (9.1)
Cash and Bank Balances 2,252 289 679.3 6,704 2,346 185.8
Loans and Advances 18 1 1,555.8 - - #DIV/0!
Other current assets 15,241 12,447 22.4 9,440 10,389 (9.1)
Current Liabilities and Provisions 7,354 7,816 (5.9) 9,778 9,905 (1.3)
Liabilities 55 108 (49.3) 9,694 9,825 (1.3)
Provisions 7,299 7,708 (5.3) 84 80 5.0
Net Working Capital 22,786 15,883 43.5 20,801 18,679 11.4
Total 37,120 30,423 22.0 35,873 32,472 10.5
Net debt (2,192) 522 (520.1) (6,704) (2,346) 185.8
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 41

Table 3: 1HFY25 cash flow statement

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Reported PBT 6,072 2,814 115.8 4,932 7,103 -30.6
Depreciation 451 594 (24.0) 1,292 1,245 3.8
Interest 48 76 (36.6) 102 293 -65.2
Others (3,682) (724) 408.3 (1,720) (3,298) -47.9
Changes in working capital (4,564) (2,996) 52.3 2,236 (2,872) -177.9
Operating cash flow (1,675) (237) 607.8 6,841 2,471 176.9
Capex (226) (586) (61.5) (500) (728) -31.3
Others 1,827 (1,566) (216.7) (1,720) (850) 102.3
Investing cash flow 1,601 (2,152) (174.4) (2,220) (1,578) 40.7
Inc/(Dec) in equity/premium - -
Net proceeds from borrowings 29 759 (96.1) - (3) -100.0
Others (50) (79) (37.4) (263) (543) -51.6
Financing cash flow (20) 679 (103.0) (263) (545) -51.8
Net cash flow (94) (1,710) (94.5) 4,358 348 1154.0
Opening cash balance 2,346 1,998 17.4 2,346 1,998 17.4
Closing cash balance 2,252 289 679.3 6,704 2,346 185.8
Free cash flow (1,901) (823) 131.0 6,341 1,743 263.8
Source: Company, Antique

Conference Call KTAs

n IN 1HFY25 there was a slowdown in awarding of infra projects mainly due to union
election
n Most of the tenders for this year will be floated in 4QFY25.
n Company looking to partner with developers to get into BOT projects.
n Company is evaluating 85 NHAI tenders in each in the range of INR 8 bn -16 bn
n Orders won in FY25 will start contribution in 2HFY26.
n The appointed date for INR 12 bn Karnataka projects, is expected to come in 2 months.
n Company has already received INR 1.3 bn claims for Q3FY24.
n As of now company has equity commitments pf INR 2 bn in FY25, INR 1.2 bn in FY26
and INR 1 bn FY27.
n Company is yet to receive new orders in FY25, however guided inflow for FY25 is INR
60-80 bn.
n Pipeline project will start contributing in 4QFY25, once it reaches 15% completion milestone.
n Capex for INR 1HFY25 is INR 130 mn, further capex will depend on the nature of new
orders.
n FY25 revenue guidance is in the range of INR 35-36 bn.
 1QFY20

0
20
40
60
80
100
120
2QFY20
1QFY20 46
3QFY20
2QFY20 51
4QFY20 3QFY20 59
1QFY21 4QFY20 52

Source: Company, Antique

Source: Company, Antique
2QFY21 1QFY21 72
3QFY21 2QFY21 86
4QFY21 3QFY21 77
1QFY22 4QFY21 71
1QFY22 66
Q2FY22

Revenue growth , yoy, %

ANTIQUE STOCK BROKING LIMITED

2QFY22 65

Order Book INR bn, LHS

3QFY22
3QFY22 100
4QFY22 4QFY22 90
1QFY23 1QFY23 86
Exhibit 1: Order book and book-to-bill

Exhibit 3: Revenue and EBITDA growth

2QFY23

100
120
140

0
20
40
60
80
2QFY23 80
3QFY23 3QFY23 81
3QFY20

43
4QFY23 4QFY23 71
1QFY24 1QFY24 63
4QFY20

53
2QFY24 57
Q2FY24
3QFY24 50

66
1QFY21

Source: Company, Antique

3QFY24 4QFY24 53
2QFY21 4QFY24

44
EBITDA growth, yoy, %
1QFY25 49
1QFY25 2QFY25 44
Book to bill (years, RHS)

3QF21

54
2QFY25
0
1
1
2
2
3
3
4
4

4QFY21

82

Debtors Days (x, LHS)

Exhibit 5: Working capital trend

Creditor Days (x, LHS)

1QFY22

66
0%
5%
10%
15%
20%
25%
100%

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%

Q2FY22 1QFY18

45
18%
21% 1QFY20 21% 79%
3QFY22 3QFY18 23% 2QFY20 36% 64%

40
19% 3QFY20
1QFY19 20% 28% 72%

Source: Company, Antique

Source: Company, Antique

63
4QFY22 4QFY20 30% 70%
20%
FROM THE RESEARCH DESK

Irrigation

3QFY19 20% 1QFY21 54% 46%

1QFY23

60
20%
1QFY20 19% 2QFY21 45% 55%
2QFY23

54
23% 3QFY21 45% 55%
3QFY20 22%
Exhibit 2: Order book trend

4QFY21 44% 56%

3QFY23 22%

53
1QFY22 46% 54%
Exhibit 4: EBITDA margin trend

1QFY21 20%
4QFY23 21% 2QFY22 27% 73%

67
3QFY21 20%
19% 3QFY22 26% 74%
Roads

1QFY24

62
1QFY22 19% 4QFY22 25% 75%
22% 1QFY23 26% 74%
EBITDA Margin %

Q2FY24

65
3QFY22 21%
21% 2QFY23 24% 76%
3QFY24

61
1QFY23 19% 3QFY23 23% 77%
22% 4QFY23
3QFY23 19% 23% 77%
4QFY24
89
1QFY24

Inventory Days (x, LHS)

18% 25% 75%
1QFY24 19% 2QFY24 28% 72%
78
1QFY25
Pipeline

18%
3QFY24 16% 3QFY24 23% 77%

Working Capital Days (x, RHS)

2QFY25
71

16% 4QFY24 15% 68%

1QFY25 22% 1QFY25 20% 58%

0
22%

19%

10
20
30
40
50
60
70
80
90
17%25%

100

2QFY25 23% 52%

14 November 2024 | 42
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 43

Table 4: Snapshot
INR mn FY19 FY20 FY21 FY22 FY23 FY24 FY25E FY26E FY27E
Order Book 40,156 52,297 71,179 90,008 70,921 53,048 65,873 84,608 1,06,742
Order Inflow 38,263 34,583 45,908 51,555 18,351 23,037 50,000 60,000 70,000
Book to bill x 1.5 2.1 2.3 2.5 2.1 1.5 1.6 1.8 2.0

Revenue 21,373 22,442 27,026 32,726 37,438 40,910 37,175 41,264 47,867
Change yoy, % 11% 5% 20% 21% 14% 9% -9% 11% 16%

EBITDA 4,270 4,871 5,358 6,777 7,217 7,010 5,874 6,190 6,941
EBITDA Margin % 20.0 21.7 19.8 20.7 19.3 17.1 15.8 15.0 14.5

PAT 2,657 2,335 2,515 3,680 4,110 4,400 3,460 3,626 4,097
Change yoy, % -2.4 -12.1 7.7 46.3 11.7 7.0 -21.4 4.8 13.0
PAT Margin % 12.3 10.0 9.0 11.7 13.3 12.1 9.3 8.8 8.6

WC as a % of sales 13% 23% 33% 28% 43% 40% 38% 37% 34%
Net debt (INR bn) 2,252 1,821 -1,163 -1,669 -1,942 -2,346 -6,704 -7,425 -8,697
Net debt/ equity (x) 0.16 0.11 -0.06 -0.07 -0.07 -0.07 -0.19 -0.19 -0.20
Capex (INR bn) 2,034 2,036 939 2,939 516 728 500 1,000 1,000
CFO (INR.bn) 2,485 3,941 2,920 3,432 129 2,178 6,740 3,639 4,223
CFO/ EBITDA 58% 81% 55% 51% 2% 31% 115% 59% 61%
Source: Company, Antique

Table 5: SoTP-based TP
Particulars FY27E
PAT 4,097
Target Multiple (x) 18
Total Equity value 73,742
No of shares (mn) 281
EPC value per share (INR) 262
Value of BOT & HAM projects (INR/sh) 24
Target price (INR/sh) 286
Source: Company, Antique

Exhibit 6: PE band

25

20

15

10

0
May/18

Jul/19

Feb/20
Nov/14

Jun/15

Jan/16

Aug/16

Oct/17

Dec/18

Sep/20

Apr/21

Nov/21

Jun/22

Jan/23

Aug/23

Oct/24
Mar/17

Mar/24

PER +1 Stdev -1 Stdev Avg PER

Source: Company, Antique

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 44

Financials
Profit and loss account (INR mn) Cash flow statement (INR mn)
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Net Revenue 37,438 40,910 37,175 41,264 47,867 PBT 7,413 7,103 4,932 5,211 5,909
Op. Expenses 30,221 33,900 31,301 35,075 40,926 Depreciation & amortization 1,474 1,245 1,292 1,346 1,418
EBITDA 7,217 7,010 5,874 6,190 6,941 Interest expense 393 293 102 150 190
Depreciation 1,474 1,245 1,292 1,346 1,418 (Inc)/Dec in working capital (6,625) (2,872) 2,236 (1,115) (1,096)
EBIT 5,743 5,765 4,582 4,844 5,523 Tax paid (2,117) (2,177) (1,370) (1,435) (1,622)
Other income 321 1,422 350 368 386 Less: Interest/Div. Income Recd. (17) (1,121) (350) (368) (386)
Interest Exp. 393 293 102 150 190 CF from operating activities 521 2,471 6,841 3,789 4,413
Extra Ordinary Items -gain/(loss) 1,380 - - - - Capital expenditure (516) (728) (500) (1,000) (1,000)
Reported PBT 7,051 6,893 4,830 5,061 5,719 Inc/(Dec) in investments 980 (1,950) (2,000) (2,000) (2,000)
Tax 2,062 1,955 1,370 1,435 1,622 Add: Interest/Div. Income Recd. 367 1,100 280 294 308
Reported PAT 4,988 4,938 3,460 3,626 4,097 CF from investing activities 830 (1,578) (2,220) (2,706) (2,692)
Net Profit 4,988 4,938 3,460 3,626 4,097 Inc/(Dec) in debt 3 (3) - - -
Adjusted PAT 4,110 4,400 3,460 3,626 4,097 Dividend Paid (70) (70) (59) (62) (70)
Adjusted EPS (INR) 14.6 15.6 12.3 12.9 14.6 Others (798) (472) (204) (300) (380)
CF from financing activities (866) (545) (263) (362) (450)
Balance sheet (INR mn) Net cash flow 486 348 4,358 721 1,271
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e Opening balance 1,513 1,998 2,346 6,704 7,425
Share capital 562 562 562 562 562 Closing balance 1,998 2,346 6,704 7,425 8,697
Reserves & Surplus 26,780 31,694 35,095 38,659 42,686
Networth 27,343 32,257 35,658 39,222 43,248 Growth indicators (%)
Other Non Current Liabilities 284 216 216 216 216 Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Capital Employed 27,627 32,472 35,873 39,437 43,464 Revenue 14.4 9.3 -9.1 11.0 16.0
Gross Fixed Assets 16,877 17,674 18,174 19,174 20,174 EBITDA 6.5 -2.9 -16.2 5.4 12.1
Accumulated Depreciation 12,724 13,969 15,260 16,606 18,024 Adj PAT 14.0 7.0 -21.4 4.8 13.0
Capital work in progress 25 22 22 22 22 Adj EPS 14.0 7.0 -21.4 4.8 13.0
Net Fixed Assets 4,179 3,728 2,936 2,590 2,172
Investments 2,633 7,283 9,283 11,283 13,283 Valuation (x)
Other Non Current Assets 2,817 2,783 2,853 2,927 3,004 Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Current Assets, Loans & Adv. 27,367 28,584 30,579 33,189 36,631 P/E (x) 21.1 19.7 25.0 23.9 21.1
Inventory 2,341 2,207 2,038 2,284 2,665 P/BV (x) 3.2 2.7 2.4 2.2 2.0
Debtors 9,834 13,642 12,397 13,001 13,114 EV/EBITDA (x) 11.7 12.0 13.6 12.8 11.2
Cash & Bank balance 1,998 2,346 6,704 7,425 8,697 EV/Sales (x) 2.3 2.1 2.1 1.9 1.6
Loans & advances and others 13,193 10,389 9,440 10,479 12,155 Dividend Yield (%) 0.1 0.1 0.1 0.1 0.1
Current Liabilities & Provisions 9,369 9,905 9,778 10,552 11,627
Liabilities 9,223 9,825 9,694 10,464 11,534
Financial ratios
Provisions 146 80 84 88 93
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
RoE (%) 16.5 14.8 10.2 9.7 9.9
Net Current Assets 17,998 18,679 20,801 22,637 25,004
RoCE (%) 24.4 24.1 14.5 13.9 14.3
Application of Funds 27,627 32,472 35,873 39,437 43,464
Asset/T.O (x) 2.0 1.8 1.6 1.7 1.8
Per share data Net Debt/Equity (x) -0.07 -0.07 -0.19 -0.19 -0.20
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e EBIT/Interest (x) 15.4 24.5 48.4 34.7 31.1
No. of shares (mn) 281.2 281.2 281.2 281.2 281.2
Diluted no. of shares (mn) 281.2 281.2 281.2 281.2 281.2
Margins (%)
BVPS (INR) 97.2 114.7 126.8 139.5 153.8
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
EBITDA Margin (%) 19.3 17.1 15.8 15.0 14.5
CEPS (INR) 19.9 20.1 16.9 17.7 19.6
EBIT Margin 15.3 14.1 12.3 11.7 11.5
DPS (INR) 0.2 0.2 0.2 0.2 0.2
PAT Margin 11.0 10.8 9.3 8.8 8.6
Source: Company, Antique
Source: Company Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 45

CMP : INR 1,207 2QFY25 RESULT REVIEW

Reco
Target Price
: BUY çè
: INR 1,792 ê
H.G. Infra Engineering
Target Price Change : -5% A good quarter with double-digit revenue growth
Target FY27 P/E (x) : SoTP
HG Infra (HGIEL) Q2FY25 result (revenue and EBITDA) was better than our
EPS Change FY25/ 26/ 27 : -1%/-2%/-1%
and street estimate. Revenue is up 22% and EBITDA margin stable at 16.4%
vs ~16% YoY. HG has maintained its revenue growth guidance of 18-20% in
FY25E and thus 2H to be equally good with revenue growth of 15%+. In
Vishal Periwal
+91 22 6911 3414
1HFY25 it has received inflow of INR62bn and expect incremental inflow of
[email protected] INR50bn in 2H and thus close FY25 with inflow of INR110bn (Hg guidance is
INR110-120bn). Order book at INR166bn equals to 3x TTM Revenue. Post the
Pranav Furia
+91 22 6911 3467 result we have factored working capital debt/interest cost and thus PAT is
[email protected] lowered by 1-2% over FY25-27E but Revenue/EBITDA is maintained. We
maintain BUY rating on the stock with ~48% upside on revised TP at INR1,792
(earlier TP INR1,888) we value HGIEL EPC segment at 16x FY27E EPS (earlier
at 18x 1HFY27E EPS). Stock catalyst remains order win, for this HGIEL has
Market data bided for orders INR300bn in railway, solar & roads.
Sensex : 77,691
A good quarter, amidst a good monsoon
Sector : Infra
Market Cap (INR bn) : 78.1 During the quarter, the company reported a revenue of INR 11 bn, up 22% YoY and 11%
Market Cap (USD bn) : 0.925 ahead of our estimate on the back of healthy execution. With slightly better EBITDA margin,
O/S Shares (mn) : 65.2 EBITDA came in at INR 1.7 bn, up 26% YoY and 16% ahead of our estimate. Margin for the
52-wk HI/LO (INR) : 1880/805 quarter was 16.4% vs. 15.9% in 2QFY24 and 16.2% in 1QFY25. With a healthy operating
Avg. Daily Vol ('000) : 215 performance, PAT came in at INR 886 mn, up 44% YoY. At the consolidated level revenue/
Bloomberg : HGINFRA
EBITDA were flattish at INR 9 bn/ INR 2 bn while PAT declined 16% to INR 807 mn, due to
Source: Bloomberg
higher tax rate (36% vs. 23%). Consolidated numbers are lower than standalone due to inter-
Valuation company elimination.
FY25e FY26e FY27e
EPS (INR) 78.1 90.0 106.0 Order book diversifying
P/E (x) 15.5 13.4 11.4 HGIEL's order book as of 2QFY25 stood at INR 166 bn (~3x TTM revenue). In FY24, the
P/BV (x) 2.8 2.3 1.9
company made an important shift in order inflow from the traditional road sector (75% of
EV/EBITDA (x) 9.3 8.1 7.0
order book) to railway/ solar (14%/ 11% of order book). Both these segments should increase
Dividend Yield (%) 0.1 0.1 0.2
the company's TAM, with an annual railway capex of INR 1 trn (excl. locomotive and others)
Source: Company, Antique
and annual solar EPC work of ~INR 150 bn. During the quarter, the company secured three
Returns (%)
railway orders worth INR 15.4 bn and road contacts worth INR 13.2 bn. Further, it is L1 for
1m 3m 6m 12m
INR 61 bn worth of projects.
Absolute (19) (21) (13) 42
Relative (14) (20) (18) 18 Planned investments, debt to marginally increase in FY25E
Source: Bloomberg
HGIEL has invested INR 8 bn in road assets and has lined up another INR 7 bn in roads and
Shareholding pattern INR 7 bn in solar assets. With INR 6.6 bn of additional working capital requirement in
Promoters : 75% 1HFY25, the company's cash flow from operations was negative INR 2.4 bn. Subsequently
Public : 25% INR 1.3 bn was used in investing activities, thus the standalone debt rose from INR 6 bn to
Others : 0% INR 8.8 bn, while project debt was stable at INR 15 bn. The major part of standalone debt
Source: Bloomberg
(67%) was term loans with 32% being working capital debt. With this the standalone net
debt to equity is 0.30 vs 0.25 YoY while the consol number is 0.85 vs 0.61 YoY.
Price performance vs Nifty
240 Investment Summary
210
180 We retain BUY on HGIEL and value its core EPC on a PER of 16x FY27E EPS to arrive at a
150
target price of INR 1792. Stock is down 18% in the last 1 month and at CMP, it trades at 11x
120
90 FY27E EPS. We foresee 17% CAGR in net profit over FY24-27E. HGIEL remains a beneficiary
Nov-23 Mar-24 Jul-24 Nov-24 of the uptick in road capex in India. The slow pace of execution is a risk, leading to lower
H.G. Infra Engg. NIFTY revenue growth and weak inflow versus a guidance of INR 110-120 bn.
Source: Bloomberg Indexed to 100
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 46

Table 1: Financial results

Quarter Ended Year Ended
In INR mn Sep-24 Sep-23 % Chg Jun-24 QoQ % FY24 FY25 YoY (%)
Revenue 10,645 8,695 22 15,059 (29) 51,217 59,683 16.5
Cost of Construction Material Consumed 5,271 3,255 62 6,749 (22) 22,633 26,499 17.1
Construction Expenses 2,781 3,164 (12) 4,918 (43) 16,556 19,293 16.5
Employee benefits expense 753 648 16 787 (4) 2,882 3,315 15.0
Other Expenses 95 245 (61) 172 (44) 927 1,324 42.9
Expenditure 8,900 7,311 22 12,626 (30) 42,998 50,430 17.3
EBITDA 1,744 1,384 26 2,433 (28) 8,220 9,253 (11.2)
EBITDA Margin % 16.4 15.9 16.2 16 16
Other income 33 17 92 32 3 126 170 34.7
Interest 226 216 5 220 3 810 990 22.3
Depreciation 359 354 1 348 3 1,412 1,518 7.6
PBT 1,192 831 43 1,897 (37) 7,191 6,914 (3.9)
Provision for taxation 306 214 43 501 (39) 1,737 1,791 3.1
Net income 886 617 44 1,395 (36) 5,454 5,123 (6.1)
Source: Company, Antique

Table 2: 1HFY25 balance sheet

Balance Sheet (INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Share capital 652 652 - 652 652 -
Reserves and Surplus 24,732 18,846 31.2 27,526 22,533 22.2
Loan Funds 8,837 5,973 47.9 8,599 4,599 87.0
Others 822 525 56.5 1,152 1,018 13.2
Total 35,043 25,996 34.8 37,929 28,803 31.7
Fixed Assets 7,011 7,280 (3.7) 6,654 7,422 (10.4)
Capital Work-in-Progress 57 78 42 42
Investments 8,883 5,970 48.8 15,345 7,772 97.4
Current Assets, Loans And Advances 31,186 22,432 39.0 30,149 25,777 17.0
Inventories 3,962 2,800 41.5 5,043 2,967 70.0
Sundry Debtors 10,234 7,142 43.3 10,648 9,138 16.5
Cash and Bank Balances 1,131 1,133 (0.2) 1,154 1,993 (42.1)
Loans and Advances 45 13 242.0 50 15 243.6
Other current assets 15,814 11,344 39.4 13,254 11,665 13.6
Current Liabilities and Provisions 12,094 9,764 23.9 14,260 12,210 16.8
Liabilities 12,094 9,764 23.9 14,260 12,210 16.8
Net Working Capital 19,092 12,668 50.7 15,888 13,567 17.1
Total 35,043 25,996 34.8 37,929 28,803 31.7
Net debt 7,706 4,840 59.2 7,446 2,607 185.6
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 47

Table 3: 1HFY25 cash flow statement

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Reported PBT 3,089 2,433 26.9 1,518 6,124 -75.2
Depreciation 707 664 6.3 990 1,412 -29.9
Interest 446 389 14.9 (3,300) 810 -507.6
Others (984) (750) 31.2 8,245 (1,698) -585.7
Changes in working capital (6,651) (2,420) 174.8 (3,300) (3,937) -16.2
Operating cash flow (3,393) 316 (1,174.1) 4,153 2,711 53.2
Capex (1,301) (1,704) (23.7) (750) (2,051) -63.4
Others 88 278 (68.5) (7,154) 996 -818.3
Investing cash flow (1,213) (1,427) (15.0) (7,904) (1,055) 649.1
Inc/(Dec) in equity/premium - - - 1
Net proceeds from borrowings 4,324 937 361.4 4,000 (525) -861.8
Others (580) (487) 19.1 (1,088) (932) 16.7
Financing cash flow 3,745 450 731.5 2,912 (1,456) -299.9
Net cash flow (862) (660) 30.5 (839) 200 -520.6
Opening cash balance 1,993 1,794 11.1 1,993 1,794 11.1
Closing cash balance 1,131 1,133 (0.2) 1,154 1,993 -42.1
Free cash flow (4,694) (1,388) 238.1 3,403 660 415.7
Source: Company, Antique
 -
2
4
6
8
10
12
14
16
18
20
40
60
80
100
120
140
160
180

0%
20%
40%
60%
80%
100%
1QFY20 5 1QFY19 53
2QFY20 5 1QFY19 49
3QFY20 6 2QFY19 3QFY19 43
3QFY19 62
4QFY20 6 1QFY20 57
4QFY19
1QFY21

Source: Company, Antique

Source: Company, Antique
Source: Company, Antique
3 53
1QFY20

Rajasthan
Story in Charts

2QFY21 5 2QFY20 3QFY20 62

3QFY21 7 3QFY20 71
4QFY21 10 1QFY21 68
4QFY20 64
1QFY22 9 1QFY21

Revenue (INR bn)

3QFY21 60
2QFY22 8 2QFY21 70
ANTIQUE STOCK BROKING LIMITED

3QFY22 9 3QFY21 1QFY22 61

4QFY22 10 4QFY21 68
1QFY23 11 1QFY22 3QFY22 80
2QFY23 8 2QFY22 80

Maharashtra
3QFY23 11 3QFY22 1QFY23 115

Exhibit 5: Revenue and revenue growth

4QFY22 109
4QFY23 15 3QFY23
1QFY23 111

Exhibit 3: Geography-wise order book split

1QFY24 13
Exhibit 1: Order book trend and book to bill

2QFY23 126
2QFY24 9 1QFY24 117
3QFY24 13 3QFY23 107
4QFY23 3QFY24 96
4QFY24 16
1QFY24 124
1QFY25 15

Haryana
2QFY24 1QFY25 156
2QFY25 11 3QFY24 166

Change (YoY%) - RHS

4QFY24
-

0%
1QFY25

50%

-50%
100%
150%
200%
250%
0.50
1.00
1.50
2.00
2.50
3.00
3.50

-100%
2QFY25

-100%
-50%
0%
50%
100%
150%
200%
250%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%

0%

1QFY20 17% 1QFY19

19% 3QFY21
2QFY20 11% 2QFY19
18%
3QFY20 4% 4QFY21 3QFY19
9%

Source: Company, Antique

Source: Company, Antique
Source: Company, Antique

7% 4QFY19
4QFY20 1QFY22
FROM THE RESEARCH DESK

9%
EPC – Road

1QFY20
1QFY21-43%
-38% 2QFY20
-1% 2QFY22
2QFY21 5% 3QFY20
3QFY21 28% 3QFY22 4QFY20
34%

Revenue growth
4QFY21 65% 1QFY21

Government
67% 4QFY22
1QFY22 207% 2QFY21
206% 3QFY21
2QFY22 61% 1QFY23
63% 4QFY21
3QFY22 26% 2QFY23
HAM - Road

29% 1QFY22
4QFY22 0% 2QFY22
-7%

Exhibit 6: Revenue and EBITDA growth

17% 3QFY23
1QFY23 3QFY22
Exhibit 2: Segment-wise order book split

8%
2QFY23 0% 4QFY23 4QFY22
-4%
3QFY23 23% 1QFY23
24% 1QFY24 2QFY23
4QFY23 43%
52%
Railway

2QFY24 3QFY23
19%
Private

1QFY24 26% 4QFY23

16%

EBITDA growth
2QFY24 15% 3QFY24 1QFY24
Exhibit 4: Order book split between private and public

3QFY24 19% 2QFY24

13% 4QFY24
4QFY24 11% 3QFY24
11%
Solar

1QFY25 18% 1QFY25 4QFY24

19% 1QFY25
2QFY25 22%
26%
50%
25%
14%
11%

2QFY25 2QFY25
14 November 2024 | 48
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 49

Exhibit 7: EBITDA margin Exhibit 8: Standalone and project debt

17% 16.0
14.0
17%
12.0
16% 10.0

16% 8.0
6.0
15%
4.0

1.6

10.3
11.2
14.0
14.7
14.3
13.6
10.5
13.9
15.2
15% 2.0
15%
15%
15%
16%
16%
16%
16%
16%
16%
17%
16%
15%
15%
16%
17%
16%
16%
16%
16%
16%
16%
16%

3.8
3.0
2.8
2.6
4.0
2.9
4.8
3.1
5.6
2.7
6.5
3.1
7.4
3.1
8.7
4.5
9.6
3.9
4.7
5.0
6.7
6.0
4.7
4.5
6.2
8.8
0.0
14%

1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
Q3FY22
Q4FY22

1QFY24
2QFY24
3QFY24
4QFY24
1QFY23
2QFY23
3QFY23
4QFY23

1QFY25
2QFY25
1QFY20
2QFY20
3QFY20
4QFY20
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
4QFY24
1QFY25
2QFY25
EBITDA margin Standalone Debt (INR bn) Project Debt (INR bn)
Source: Company, Antique Source: Company, Antique

Table 4: Change in estimate

Old New Change
FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Revenue 59,683 69,863 82,499 59,683 69,863 82,499 0% 0% 0%
EBITDA 9,253 10,723 12,180 9,253 10,723 12,180 0% 0% 0%
EBITDA Margin % 16% 15% 15% 16% 15% 15%
PAT 5,123 5,966 7,009 5,091 5,866 6,907 -1% -2% -1%
Source: Company, Antique

Table 5: Target price

Year Valuation INR/sh %
Method Multiple
Standalone business FY27E PER 16 1,696 95
HAM projects FY24 PBV 1 96 5
Total 1,792 100
CMP 1,207
Upside 48
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 50

Table 6: Snapshot
INR mn FY21 FY22 FY23 FY24 FY25E FY26E FY27E
Order Book 70,400 79,729 1,25,953 1,24,340 1,74,657 2,24,794 2,72,295
Order Inflow 21,849 45,481 90,409 49,604 1,10,000 1,20,000 1,30,000
Book to bill x 2.8 2.1 2.3 2.4 2.5 2.9 3.0
Revenue 25,350 36,152 44,185 51,217 59,683 69,863 82,499
Change yoy, % 15.4 42.6 22.2 15.9 16.5 17.1 18.1
EBIDTA 4,181 5,847 7,103 8,219 9,253 10,723 12,180
EBITDA Margin % 16.5 16.2 16.1 16.0 15.5 15.3 14.8
Interest Cost 596 528 633 810 990 1,309 1,344
PAT 2,110 3,388 4,214 4,701 5,091 5,866 6,907
Change yoy, % 27.3 60.6 24.4 11.6 8.3 15.2 17.7
PAT Margin % 8.3 9.4 9.5 9.2 8.5 8.4 8.4
WC as a % of sales 2.0 14.8 10.3 20.7 24.7 22.6 20.3
Net debt (INR bn) 317 1,574 3,278 3,526 8,365 8,767 6,422
Net debt/ equity (x) 0.03 0.12 0.18 0.15 0.30 0.26 0.16
Capex (INR bn) 587 568 3,418 1,810 750 750 750
CFO (INR bn) 5,273 1,140 5,871 2,711 4,153 6,528 7,384
CFO/ EBITDA 1.3 0.2 0.8 0.3 0.4 0.6 0.6
Source: Company, Antique

Exhibit 9: PER bands

20
18
16
14
12
10
8
6
4
2
0
Feb/19

May/24
Sep/19

Apr/20

Nov/20

Jun/21

Jan/22

Aug/22

Oct/23
Mar/23

PER +1 Stdev -1 Stdev Avg PER

Source: Company, Antique

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 51

Financials
Profit and loss account (INR mn) Cash flow statement (INR mn)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Net Revenue 44,185 51,217 59,683 69,863 82,499 PBT 5,687 6,124 6,870 7,917 9,321
Op. Expenses 37,082 42,998 50,430 59,140 70,320 Depreciation & amortization 963 1,412 1,518 1,601 1,683
EBITDA 7,103 8,219 9,253 10,723 12,180 Interest expense 633 810 990 1,309 1,344
Depreciation 963 1,412 1,518 1,601 1,683 (Inc)/Dec in working capital 65 (3,937) (3,300) (2,125) (2,361)
EBIT 6,140 6,808 7,734 9,122 10,496 Tax paid (1,571) (1,931) (1,779) (2,050) (2,414)
Other income 181 126 126 103 168 Other operating Cash Flow 94 233 (146) (123) (188)
Interest Exp. 633 810 990 1,309 1,344 CF from operating activities 5,871 2,711 4,153 6,528 7,384
Extra Ordinary Items -gain/(loss) - 1,067 - - - Capital expenditure (3,177) (2,051) (750) (750) (750)
Reported PBT 5,687 7,191 6,870 7,917 9,321 Inc/(Dec) in investments (2,628) 908 (7,280) (5,680) (2,980)
Tax 1,474 1,737 1,779 2,050 2,414 Add: Interest/Div. Income Recd. 81 88 126 103 168
Reported PAT 4,214 5,454 5,091 5,866 6,907 CF from investing activities (5,725) (1,055) (7,904) (6,327) (3,562)
Net Profit 4,214 5,454 5,091 5,866 6,907 Inc/(Dec) in share capital - 1 - - -
Adjusted PAT 4,214 4,387 5,091 5,866 6,907 Inc/(Dec) in debt 1,888 (525) 4,000 1,500 (1,000)
Adjusted EPS (INR) 64.7 67.3 78.1 90.0 106.0 Dividend Paid (65) (81) (98) (113) (134)
Others (648) (851) (990) (1,309) (1,344)
Balance sheet (INR mn) CF from financing activities 1,174 (1,456) 2,912 78 (2,477)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Net cash flow 1,321 200 (839) 279 1,345
Share capital 652 652 652 652 652 Opening balance 473 1,794 1,993 1,154 1,433
Reserves & Surplus 17,133 22,533 27,526 33,278 40,052 Closing balance 1,794 1,993 1,154 1,433 2,778
Networth 17,784 23,185 28,177 33,930 40,703
Debt 5,071 4,599 8,599 10,099 9,099 Growth indicators (%)
Other Non Current Liabilities 339 897 1,031 1,188 1,390 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Net deferred Tax liabilities 141 121 121 121 121 Revenue 22.2 15.9 16.5 17.1 18.1
Capital Employed 23,336 28,803 37,929 45,339 51,314 EBITDA 21.5 15.7 12.6 15.9 13.6
Gross Fixed Assets 10,942 13,429 14,179 14,929 15,679 Adj PAT 24.4 4.1 16.0 15.2 17.7
Accumulated Depreciation 4,595 6,007 7,525 9,126 10,810 Adj EPS 24.4 4.1 16.0 15.2 17.7
Capital work in progress 719 42 42 42 42
Net Fixed Assets 7,066 7,464 6,696 5,845 4,911 Valuation (x)
Investments 7,447 6,276 13,576 19,276 22,276 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Other Non Current Assets 709 1,496 1,769 2,000 2,286 P/E (x) 18.7 17.9 15.5 13.4 11.4
Current Investments 15,222 15,236 22,041 27,120 29,473 P/BV (x) 4.4 3.4 2.8 2.3 1.9
Current Assets, Loans & Adv. 19,870 25,777 30,149 34,916 41,663 EV/EBITDA (x) 11.5 9.9 9.3 8.1 7.0
Inventory 2,353 2,967 5,043 5,323 5,063 EV/Sales (x) 1.9 1.6 1.4 1.3 1.0
Debtors 8,712 9,138 10,648 12,575 15,097 Dividend Yield (%) 0.1 0.1 0.1 0.1 0.2
Cash & Bank balance 1,794 1,993 1,154 1,433 2,778
Loans & advances and others 7,011 11,680 13,304 15,586 18,724
Financial ratios
Current Liabilities & Provisions 11,756 12,210 14,260 16,698 19,822
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
RoE (%) 26.8 21.4 19.8 18.9 18.5
Liabilities 11,756 12,210 14,260 16,698 19,822
RoCE (%) 31.9 27.4 24.3 22.8 22.7
Net Current Assets 8,114 13,567 15,888 18,219 21,841
Asset/T.O (x) 3.1 2.8 2.7 3.0 3.2
Application of Funds 23,336 28,803 37,929 45,339 51,314
Net Debt/Equity (x) 0.29 0.20 0.31 0.30 0.22
Per share data EBIT/Interest (x) 10.0 8.6 7.9 7.0 7.9
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
No. of shares (mn) 65.2 65.2 65.2 65.2 65.2
Margins (%)
Diluted no. of shares (mn) 65.2 65.2 65.2 65.2 65.2
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
EBITDA Margin (%) 16.1 16.0 15.5 15.3 14.8
BVPS (INR) 272.9 355.8 432.4 520.6 624.6
EBIT Margin 13.9 13.3 13.0 13.1 12.7
CEPS (INR) 79.4 105.4 101.4 114.6 131.8
PAT Margin 9.5 8.6 8.5 8.4 8.4
DPS (INR) 1.3 1.5 1.5 1.7 2.0
Source: Company Antique
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 52

CMP : INR 491 2QFY25 RESULT REVIEW

Reco
Target Price
: BUY çè
: INR 786 é
Sunteck Realty
Target Price Change : 4% A steady quarter
Target FY27 EV/EBITDA (x) : 9
Sunteck Realty's (SRIN) 2QFY25 highlight is that the company turned net cash
Sales booking positive during the quarter and continued sales in the BKC project. The
Change FY25/ 26/ 27 : No Change
company continues to generate strong operating cash flow (OCF), leading
to net cash balance sheet (adj. net debt in 2QFY25 was INR -320 mn). SRIN
generated OCF of INR 910 mn (600% YoY) in 2QFY25 and INR 1.9 bn (112%
YoY) in 1HFY25. On the operational front, the quarter was steady. SRIN
reported pre-sales of INR 5.2 bn (33% YoY), driven by sustenance sales
Biplab Debbarma, CFA from all six ongoing projects and launch of one new project (Ultra World in
+91 22 6911 3418 Naigaon). Management has guided for 25%-30% growth in sales booking
[email protected]
for FY25; achieved sales booking of INR 10.3 bn (31% YoY) in 1HFY25, which
is 41% of guidance. Project launches remain the key monitorable. We keep
the sales booking estimates unchanged. Reiterate BUY with a revised target
price of INR 786 (previously INR 759), valuing the company on EV/EBITDA
multiple of 9.0x on embedded EBITDA of FY27E (earlier 1HFY27E).
Market data
2QFY25 in a nutshell
Sensex : 77,691
Sector : Real Estate Operational: Sales booking during the quarter was INR 5.2 bn (4%/ 33% QoQ/YoY) (vs.
Market Cap (INR bn) : 71.8 our est. of INR 4.8 bn) and collections were INR 2.7 bn (-22%/ 25% QoQ/ YoY). Operating
Market Cap (USD bn) : 0.851 cash flow (OCF) was INR 0.9 bn (-9%/ 600% QoQ/ YoY). Sales booking was predominantly
O/S Shares (mn) : 146.5 driven by sustenance sales (89% of total sales in the quarter). BKC contributed 31% of sales,
52-wk HI/LO (INR) : 699/380 Sunteck City (Oshiwara) 15%, Naigaon 19%, Vasai 20%, Mira Road 6%, Kalyan 3%, and
Avg. Daily Vol ('000) : 146 others 7%. Financials: Reported revenue was INR 1.7 bn (578% YoY), EBIDTA was INR 374
Bloomberg : SRIN IN mn (INR -142 mn in 2QFY24), and adj. PAT was INR 346 mn (INR -140 mn in 2QFY24).
Source: Bloomberg EBITDA margin was 22%. Adjusted net debt reduced to INR -320 mn with adj. D/E of -0.01x.
Valuation Strong pipeline
FY25e FY26e FY27e SRIN has already launched one new phase in Naigaon with GDV of INR 6 bn in 2QFY25.
EPS (INR) 21.4 19.4 16.7 It has a few more launches lined up in 2HFY25: Two towers in SBR (GDV INR 4-5 bn), one
P/E (x) 22.9 25.3 29.4 tower in Sky Park (GDV of INR 6 bn), and two towers Crescent Kalyan (GDV of INR 3 bn);
P/BV (x) 2.1 2.0 1.9 totaling a GDV of INR 14 bn. The three new projects-Napean Sea Road, Dubai, and Bandra
EV/EBITDA (x) -5.8 -9.4 -14.2 West are expected to be launched in FY26, giving strong growth visibility. In addition, the
EV/Sales (x) -1.7 -3.1 -5.2 company has unsold inventory of INR 18 bn in ongoing projects and another INR 10 bn of
Source: Antique ready inventory (predominantly BKC). Thus, SRIN is expected to meet its sales booking
Returns (%) guidance of 30% YoY growth in FY25 from sustenance sales and new launch sales.
1m 3m 6m 12m Business development momentum to continue
Absolute (12) (15) 19 10 SRIN doubled its GDV in less than three years. It would continue to grow strongly and double
Relative (7) (13) 12 (8) GDV from current level in the next three years without stressing the balance sheet. By FY27,
Source: Bloomberg GDV is expected to be INR 570 bn. As SRIN's projects are more towards the suburb or
Shareholding pattern peripheral suburb in Mumbai, it would like to keep a balance in terms of location. Thus, new
additions would be towards South Mumbai within city limits.
Promoters : 63%
BKC projects doing steady business
Public : 37%
Others : 0% BKC projects continue to see sales for the fifth consecutive quarter. In the last five quarters,
BKC projects did sales of INR 5.2 bn at a healthy realization of ~INR 50,000/sq. ft. (saleable
Source: Bloomberg
area). Steady sales of BKC projects auger well for SRIN as it leads to strong cash flow
Price performance vs Nifty visibility.
140
Investment Summary
120
We are confident of SRIN to maintain 25%-30% CAGR in sales booking with healthy margins
100 in the next few years. Continued focus on cash flow and balance sheet remains a key
80 positive. Reiterate BUY with a revised target price of INR 786 (previously INR 759), valuing
Nov-23 Mar-24 Jul-24 Nov-24 the company on EV/EBITDA multiple of 9.0x on embedded EBITDA of FY27E (earlier 1HFY27E).
Sunteck Realty NIFTY Key monitorable remains launch of the Nepean Sea Road project and business development.
Source: Bloomberg Indexed to 100
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 53

Valuation using Embedded EBITDA

SRIN did INR 10.2 bn in FY24 and with a strong launch pipeline and portfolio we expect the
company to do a CAGR of 25% in sales booking in the next few years. Thus, we expect SRIN
to do sales bookings of INR 24 bn/ INR 30 bn/ INR 37 bn in FY25E/ 26E/ 27E and post an
EBITDA margin of ~27.5% with an embedded EBITDA of INR 9.3 bn.

Table 1: SoTP valuation

SoTP FY27E
Sales booking INR 37.4 bn
Embedded EBITDA @27.5% INR 10.4 bn
(a) EV of residential at 9.5x to EV/implied EBITDA INR 93.3 bn
(b) Commercial (rental INR 3.2 bn in FY27/cap rate of 8.5%) INR 22.2 bn
(c) Total EV (a+b) INR 115.5 bn
(d) Net debt INR -0.32 bn
(e) Equity value (c - d) INR 115.2 bn
(f) # of shares 146 mn
(g) Target Price (e/f) INR 786
Source: Company, Antique

Table 2: NAV methodology

SoTP (NAV)
Completed -
Ongoing 11,241
Upcoming FY25 17,899
Upcoming FY26 19,866
Land 19,790
Commercial 22,204
net debt (320)
NAV (INR mn) 90,681
O/S 146
NAV/share (INR/share) 619

INR/share Premium to NAV

NAV 619 0%
CMP 491 -21%
TP 786 27%
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 54

Conference Call Highlights

n Strong balance sheet: Net cash surplus at INR 1 bn.
n Oshiwara: Sunteck City Avenue 4 nearing completion. New tower in Sunteck City with
GDV of INR 15 bn to be launched in 2HFY25.
n Naigaon: Sunteck Ultra-World in Naigaon with GDV INR 6 bn launched in 3Q and
received good response. Launched at INR 10,000/sq. ft.
n Upcoming projects: Napean Sea Road progressing well and is expected to be ready
for launch soon. Working on getting all the approvals for Dubai projects. All these projects
and Bandra West would be launched by FY26.
n Remaining launches in 2HFY25: Two towers in SBR (GDV INR 4-5 bn), one tower
in Sky Park (GDV of INR 6 bn), and two towers Crescent Kalyan (GDV of INR 3 bn).
n Growth of GDV: Doubled GDV in less than three years. Would continue to grow
strongly and double GDV from current level in the next three years without stressing the
balance sheet. By FY27, GDV expected to be INR 570 bn.
n Business development: Sunteck is a Mumbai centric developer and would like to
keep balance in terms of location. Thus, new additions would be towards South Mumbai
within city limits.
n Pricing in MMR: Pricing appreciated in the last few quarters. Thus, focus would be on
volume as prices have firmed up.
n Collection: Collections have dipped, would recover in coming quarter as possession
given in BKC projects.
n Burj Khalifa Dubai: Adjacent to Dubai Mall, high ticket size inventory, 1 mn sq. ft. in
two towers. Launch of one tower at a time. Both the towers to be sold in 3-4 years.
n Commercial project in Sunteck City: Approval received from court. Would start
construction soon.
n Borivali project: Comes under SDZ policy. Waiting for clarity once new government is
formed. Its landowner's scope to get the approval. Not added to GDV value as clarity
yet to come.

Table 3: Operational performance – 2QFY25

INR mn 2QFY25 1QFY25 QoQ % 2QFY24 YoY % FY24 FY23 FY22
Booked value (INR mn) 5,240 5,020 4 3,950 33 19,145 16,030 13,026
Collections (INR mn) 2,670 3,420 (22) 2,130 25 12,346 12,508 10,532
Source: Company, Antique;

Table 4: Financial performance – 2QFY25

INR mn 2QFY25 1QFY25 QoQ % 2QFY24 YoY %
Net Sales 1,690 3,163 (47) 249 578
Total Expenditure 1,317 2,849 391
EBITDA 374 314 19 -142 na
Margins (%) 22.1 9.9 12bps (56.9) na
Depreciation 36 34 22
Interest 99 103 158
Other Income 130 117 113
PBT before EO expense 368 295 25 -209 na
PBT 368 295 25 -209 na
Tax 22 70 -64
Rate (%) 5.9 23.9 30.4
MI & Profit/Loss of Asso. Cos. 1 -3 -6
Reported PAT 346 228 -140
Adj PAT 346 228 52 -140 na
Margins (%) 20.5 7.2 13.28035 (56.1)
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 55

Table 5: Balance Sheet

Year ended Sep-2024 Sep-2023 Mar-2024
Share Capital 146 140 146
Reserves & Surplus 31,458 27,356 31,095
Networth 31,605 27,496 31,242
Debt 2,959 6,260 3,749
Minority Interest - - -
Net deferred Tax liabilities (558) (679) (339)
Capital Employed 34,006 33,077 34,652
Net Fixed Assets 4,926 2,748 4,905
Capital work in progress 329 17 185
Net Fixed Assets 5,255 2,765 5,089
Investments 2,307 2,627 2,295
Non-Current Investments 2,307 2,627 2,295
Current Assets, Loans & Advances
Inventory 59,537 59,825 59,663
Debtors 1,450 1,027 2,925
Cash & Bank balance 937 680 1,058
Loans & advances and others 9,049 7,315 7,571
Current Liabilities & Provisions 70,972 68,847 71,217
Liabilities 44,461 41,106 43,885
Provisions 67 56 65
Net Current Assets 26,443 27,685 27,268
Application of Funds 34,006 33,077 34,652
Source: Company, Antique

Table 6: Cash Flow Statement

Year ended Sep-2024 Sep-2023
PBT 666 (297)
Depreciation & amortization 70 40
Interest expense 202 331
(Inc)/Dec in working capital 550 542
Tax paid (311) (59)
Less: Interest/Dividend Income Received (226) (277)
Other operating Cash Flow (5) (14)
CF from operating activities 946 267
Capital expenditure (217) (82)
Inc/(Dec) in investments (163) (46)
Add: Interest/Dividend Income Received 218 280
CF from investing activities (162) 152
Inc/(Dec) in share capital - -
Inc/(Dec) in debt (808) (1,101)
Dividend/Interest Paid (170) (510)
Others - -
CF from financing activities (978) (1,612)
Net cash flow (194) (1,193)
Opening balance 356 283
Closing balance 162 (911)
Changes in other bank balances 515 460
Cash and Bank balance 937 680
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 56

Story in charts
Exhibit 1: Steady growth in sales and collections Exhibit 2: Robust cash flow generation
8,000 6.0 45%
39%
7,000 36% 40%
5.0 34%

4,376
6,000 31% 35%

4,040

3,420
3,308

3,310
5,000
3,210

4.0 30%

3,040

2,960
2,880
2,850
2,700

2,670
2,525

4,000 23%

2,130
2,070

25%
1,722

3.0
1,410

3,000
20%
2,000
651
1,012
2,003
3,492
3,710
1,760
2,716
3,520
5,030
3,330
3,370
3,960
5,370
3,869
3,950
4,546
6,780
5,020
5,240
2.0 15%
1,000
10%
- 1.0

2.8

2.4

4.3

4.8
1QFY21
2QFY21
3QFY21
4QFY21
1QFY22
2QFY22
3QFY22
4QFY22
1QFY23
2QFY23
3QFY23
4QFY23
1QFY24
2QFY24
3QFY24
4QFY24
1QFY25
2QFY25
5%

1.9
- 0%
FY21 FY22 FY23 FY24 1HFY25
Pre-sales value (INRm) Collection (INR mn) LHS: Cashflow (INR bn) RHS: Collection/Cashflow

Source: Company, Antique Source: Company, Antique

Exhibit 3: Impeccable balance sheet Exhibit 4: Mid-income is the key segment

8.0 0.30
0.26 100% 4% 5% 11% 0%
7.0 11% 15% 12% 6% 9% 9%
0.25 90% 0% 10%
0.22 0% 0% 27%
23%
6.0 0.20 80%
25% 25%
0.17 0.20 70% 43% 40%
5.0 39% 43%
60% 63% 52%
0.13 0.15 44%
4.0 50%
47%
3.0 40% 24% 51%
0.10 64% 32%
30%
2.0 20% 46% 45%
0.02 0.05
1.0 10% 27% 22% 22% 33% 26%
4.9

7.6

5.6

6.3

3.7

0.7

-0.01 19% 13%

- 0% 6%
0.0
FY 16

FY 17

FY 18

FY 19

FY20

FY21

FY22

FY23

FY24

1HFY25
-0.3

-1.0 -0.05
FY19 FY20 FY21 FY22 FY23 FY24 1HFY25

Net adj debt (INR bn) net D/E (x) Luxury High mid-income Low mid-income Others

Source: Company, Antique Source: Company, Antique

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 57

Financials
Profit and loss account (INR mn) Cash flow statement (INR mn)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Net Revenue 3,624 5,648 14,157 10,928 8,139 PBT 45 950 3,474 3,082 2,541
Op. Expenses 2,983 4,476 10,079 7,335 5,178 Depreciation & amortisation 92 95 295 298 301
EBITDA 642 1,173 4,078 3,594 2,961 Interest expense 859 684 309 214 119
Depreciation 92 95 295 298 301 (Inc)/Dec in working capital 2,022 (502) 26,462 7,022 6,173
EBIT 549 1,078 3,783 3,295 2,660 Tax paid (68) (121) (893) (792) (653)
Other income 284 555 555 555 555 Less: Interest/Dividend Income Received (267) (84) (555) (555) (555)
Interest Exp. 859 684 309 214 119 Other operating Cash Flow (63) 69 (97) (97) (97)
Reported PBT (25) 949 4,029 3,636 3,096 CF from operating activities 2,620 1,090 28,995 9,171 7,829
Tax 31 240 893 792 653 Capital expenditure (183) 2,188 118 (50) (50)
Reported PAT (56) 708 3,136 2,844 2,443 Inc/(Dec) in investments 247 274 - - -
Minority Int./Profit (loss) From Asso. (70) (1) Others (227) 48 (1,252) 1,205 1,117
Net Profit 14 709 3,136 2,844 2,443 CF from investing activities (162) 2,511 (1,134) 1,155 1,067
Adjusted PAT 14 709 3,136 2,844 2,443 Inc/(Dec) in share capital 7 2 - - -
Adjusted EPS (INR) 0.1 4.8 21.4 19.4 16.7 Inc/(Dec) in debt (1,647) (2,784) (1,000) (1,000) (1,000)
Dividend Paid (211) (211) (264) (264) (264)
Balance sheet (INR mn) Others (762) (534) (309) (214) (119)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e CF from financing activities (2,614) (3,527) (1,572) (1,477) (1,382)
Share Capital 140 146 146 146 146 Net cash flow (156) 74 26,288 8,849 7,514
Reserves & Surplus 27,738 31,095 33,413 35,439 37,064 Opening balance 438 283 356 26,645 35,493
Networth 27,879 31,242 33,560 35,586 37,210 Closing balance 283 356 26,645 35,493 43,007
Debt 6,885 3,791 2,791 1,791 791
Net deferred Tax liabilities 9 59 59 59 59 Growth indicators (%)
Others 90 173 173 173 173 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Capital Employed 34,862 35,266 36,583 37,609 38,234 Revenue(%) -29.4 55.8 150.6 -22.8 -25.5
Goodwill 1 23 23 23 23 EBITDA(%) -32.7 82.8 247.7 -11.9 -17.6
Property, Plant and Equipment 1,490 4,881 4,764 4,814 4,864 Adj PAT(%) -94.1 4934.3 342.1 -9.3 -14.1
Capital work in progress 1,025 185 185 185 185 Adj EPS(%) -94.1 4727.9 342.1 -9.3 -14.1
Other Non-Current Assets 1,734 2,900 2,900 2,900 2,900
Net Fixed Assets 4,248 7,966 7,849 7,899 7,949 Valuation (x)
Investments 2,407 2,295 2,295 2,295 2,295 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Non Current Investments 2,407 2,295 2,295 2,295 2,295 P/E (x) 4895.7 101.4 22.9 25.3 29.4
Current Assets, Loans & Adv. 65,930 68,951 72,510 72,114 71,610 P/BV (x) 2.5 2.3 2.1 2.0 1.9
Inventory 57,251 59,663 33,101 25,837 19,562 EV/EBITDA (x) 9.5 2.8 -5.8 -9.4 -14.2
Debtors 1,496 2,925 5,149 4,019 3,043 EV/Sales (x) 1.7 0.6 -1.7 -3.1 -5.2
Cash & cash equivalents 888 597 26,645 35,493 43,007
Bank balance 694 461 461 461 461
Financial ratios
Loans & advances and others 5,601 5,305 7,155 6,304 5,537
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
RoE (%) 0.1 2.4 9.7 8.2 6.7
Current Liabilities & Provisions 37,725 43,971 46,094 44,722 43,644
RoCE (%) 2.4 4.7 12.1 10.4 8.5
Liabilities 37,672 43,906 46,029 44,657 43,579
Asset/T.O (x) 0.1 0.2 0.4 0.3 0.2
Provisions 52 65 65 65 65
Net Debt/Equity (x) 0.2 0.1 -0.7 -0.9 -1.1
Net Current Assets 28,206 24,980 26,416 27,392 27,966
EBIT/Interest (x) 0.6 1.6 12.3 15.4 22.4
Application of Funds 34,862 35,266 36,583 37,609 38,233

Per share data Margins (%)

Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
EBITDA Margin(%) 17.7 20.8 28.8 32.9 36.4
No. of shares (m) 140 146 146 146 146
EBIT Margin(%) 15.2 19.1 26.7 30.2 32.7
Diluted no. of shares (m) 140 146 146 146 146
PAT Margin(%) 0.4 11.4 21.3 24.8 28.1
BVPS (INR) 198 213 229 243 254
CEPS (INR) 0.3 5.5 23.4 21.5 18.7 Source: Company Antique

DPS (INR) 1.5 1.5 1.5 1.5 1.5

Source: Company Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 58

CMP : INR 233 2QFY25 RESULT REVIEW

Reco
Target Price
: HOLD çè
: INR 253 é
Ashoka Buildcon
Target Price Change : 1% A subdued quarter
Target FY27 P/E (x) : SoTP based
Ashoka Buildcon (ASBL) reported a weak set of numbers with a 9% revenue
EPS Change FY25/ 26/ 27 : -16%/ -8%/ -9%
decline and PAT decline of 49% YoY. ASBL guides for flattish FY25E versus
earlier expectation of double-digit revenue growth. We were expecting flattish
revenue earlier but now expect a 5% decline. Post the result we have cut
Vishal Periwal execution and marginally improve the margin. And on net basis, we cut our
+91 22 6911 3414
[email protected] EPS estimates by 8%-16% over FY25-27E and keep the TP largely the same
Pranav Furia as we have rolled over our valuation to FY27E. Our TP (at INR 253) values
+91 22 6911 3467 the EPC construction business at 14x and investments are valued at BV. Key
[email protected]
catalyst for the stock remains pick-up in order inflow; YTDFY25 (up to mid
Nov-24) it has received an order inflow of INR 68 bn, is L1 in orders worth
INR 2.4 bn, and eyeing additional orders of INR 40-50 bn.
Market data
Sensex : 77,691
A weak quarter, margins remain volatile
Sector : Infrastructure In 2QFY25, ASBL reported a revenue of INR 14 bn, down 9% YoY. EBITDA margin continues
Market Cap (INR bn) : 65.5
to be volatile, with the company reporting 8.4% EBITDA margin vs. 9.2% in 2QFY24 and
Market Cap (USD bn) : 0.776
O/S Shares (mn) : 280.7
6.5% in 1QFY25. As new order executions start picking up, ASBL has guided to a margin
52-wk HI/LO (INR) : 285/131 increase of 10% in FY26E. With the EBITDA decline, PAT came in at INR 0.4 bn, down 49%
Avg. Daily Vol ('000) : 975 YoY. The PAT was further impacted by a higher tax rate (44% vs. 25% YoY) due to liquidation
Bloomberg : ASBL IN
of deferred tax assets.
Source: Bloomberg

Valuation Order book well diversified

FY25e FY26e FY27e Ashoka Buildcon ended 2QFY25 with an order book of INR 111 bn (1.4x TTM revenue).
EPS (INR) 8.8 12.7 17.3
Currently, the order book is mainly dominated by road EPC (46%), followed by Power T&D
P/E (x) 26.5 18.3 13.5
P/BV (x) 1.6 1.5 1.3 projects (36%). Further, road HAM, building EPC, and railways have small share ranging
EV/EBITDA (x) 13.0 10.4 8.5 from 5% to 8%. In terms of regions, the West (46%) and South (21%) dominate the order
EV/Sales (x) 1.0 0.9 0.8 book. This does not include projects worth INR 2.6 bn were the company is already declared
Source: Company, Antique
L1 and LOA of INR 43 bn the company got post September 30, 2024.
Returns (%)
1m 3m 6m 12m Bid pipeline of INR 650 bn and a strong start to 2HFY25
Absolute (7) (0) 41 67 NHAI total proposed bid pipeline would be around INR 1 trn. ASBL plans to bid to the tune of
Relative (2) 1 32 40
INR 650 bn. And capture much of the inflow in 3Q, 4Q of FY25. It has already won orders
Source: Bloomberg
worth INR 46 bn post 2QFY25 and is L1 for projects worth INR 2.6 bn. With this, the order book
Shareholding pattern
would be ~INR 150 bn (2X TTM revenue) basis the new order book in the pipeline and L1
Promoters : 54% orders. The company has already bid for INR 90 bn worth or projects and is awaiting results.
Public : 46%
Others : 0% Investment Summary
Source: Bloomberg
We anticipate revenue/ EBITDA/ net profit CAGR of 6%/ 15%/ 21% between FY24–27E.
Price performance vs Nifty
FY25E is expected to be weak and with order wins, execution should pick up from FY26E.
200
Upside risk to our TP a) On asset monetization, more than BV; b) Order inflow uptick, resulting
170
140 in revenue increase more than our estimate. Asset monetization has delayed and is in the final
110 stages of conclusion. Closure of this will reduce debt from current level of INR 14 bn in standalone.
80
Nov-23 Mar-24 Jul-24 Nov-24
Ashoka Buildcon NIFTY
Source: Bloomberg Indexed to 100
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 59

Table 1: Financial highlights

YoY Chg QoQ Chg YoY Chg
Particulars 2QFY25 2QFY24 (% ) 1QFY25 (%) FY24 FY25 (% )
Net Sales 14,176 15,613 -9 18,771 -24 77,267 73,691 -5
Cost of sales ex Depri 12,986 14,174 -8 17,557 -26 71,502 67,796 -5
EBITDA 1,190 1,439 -17 1,214 -2 5,765 5,895 2
EBITDA margin (%) 8.4 9.2 -82bps 6.5 193bps 7.5 8.0 54bps
Other income 413 284 45 237 74 1,14,614 1,169 -99
PBIDT 1,603 1,723 -7 1,451 11 1,20,378 7,064 -94
Depreciation 249 247 1 224 11 1,046 1,063 2
Interest 706 527 34 663 7 2,281 2,703 19
Exceptional items - - NA - NA 2,166 - NA
Pre-tax profit 648 949 -32 565 15 5,755 3,299 -43
Tax (current+deferred) 286 237 21 157 82 1,327 830 -37
Profit after tax 362 712 -49 408 -11 4,428 2,469 -44
Adj. profit after tax 362 712 -49 408 -11 2,761 2,469 -11
Source: Company, Antique

Table 2: Balance sheet

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Share capital 1,404 1,404 - 1,404 1,404 -
Reserves and Surplus 37,492 33,169 13.0 39,190 36,721 6.7
Loan Funds 22,503 1,657 13,804 14,427 (4.3)
Others 4,734 6,608 (28.4) 5,537 5,488 0.9
Total 66,133 42,837 54.4 59,934 58,040 3.3
Fixed Assets 3,105 3,178 (2.3) 3,210 3,273 (1.9)
Capital Work-in-Progress 90 109 (17.5) 22 22 -
Investments 30,023 26,229 14.5 21,749 20,749 4.8
Current Assets, Loans And Advances 55,596 47,321 17.5 61,532 63,295 (2.8)
Inventories 4,455 3,336 33.5 4,102 4,327 (5.2)
Sundry Debtors 10,811 9,054 19.4 10,731 10,985 (2.3)
Cash and Bank Balances 1,603 1,867 (14.1) 2,783 5,106 (45.5)
Other current assets 38,727 33,064 17.1 43,916 42,877 2.4
Current Liabilities and Provisions 22,681 34,000 (33.3) 26,579 29,299 (9.3)
Liabilities 22,480 33,588 (33.1) 26,173 29,164 (10.3)
Provisions 201 411 (51.2) 407 135 201.2
Net Working Capital 32,915 13,321 147.1 34,953 33,996 2.8
Total 66,133 42,838 54.4 59,934 58,040 3.3
Net debt 20,900 (210) (10,071.9) 11,020 9,320 18.2
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 60

Table 3: Cash flow

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Reported PBT 1,214 1,169 3.9 3,299 5,755 -42.7
Depreciation 473 469 0.9 1,063 1,046 1.6
Interest 1,369 1,041 31.5 2,703 2,281 18.5
Others (343) (288) 19.1 1,873 (2,358) -179.4
Changes in working capital (10,245) (2,243) 356.8 (3,232) (342) 845.0
Operating cash flow (7,533) 147 (5,215.3) 5,705 6,382 -10.6
Capex (451) (719) (37.3) (1,000) (1,159) -13.7
Others (2,201) (1,402) 57.0 (1,000) (1,656) -39.6
Investing cash flow (2,651) (2,121) 25.0 (2,000) (2,815) -29.0
Net proceeds from borrowings 8,077 3,029 166.6 (623) 3,994 -115.6
Others (1,395) (1,054) 32.4 (5,405) (4,319) 25.1
Financing cash flow 6,682 1,976 238.2 (6,028) (326) 1751.2
Net cash flow (3,503) 2 NA (2,323) 3,241 -171.7
Opening cash balance 5,106 1,865 173.8 5,106 1,865 173.8
Closing cash balance 1,603 1,867 (14.1) 2,783 5,106 -45.5
Free cash flow (7,984) (572) 1,296.5 4,705 5,223 -9.9
Source: Company, Antique

Conference Call KTAs

n The company guided for a flattish revenue growth for FY25.
n Total proposed bid pipeline of NHAI would be around INR 1 trn. ASBL plans to bid to the
tune of INR 650 bn.
n The company expects to complete HAM divestment in this quarter.
n The margin will be 8% for the next two quarters and get better in FY26.
n Working capital has gone up because most execution is done in power T&D, where the
cycles tend to be higher and because of some receivables in roads.
n The company has received three LoAs from MMRDA in October 2024 aggregating INR
17 bn and from CIDCO for EPC project received for the Integrated Infrastructure
Development under NAINA Project for a value of INR 17 bn.
 20
40
60
80
100
120
140
160
180

-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
28% 1QFY20 82
1QFY20 35% 2QFY20 75
2QFY20 8%
19% 3QFY20 81
3QFY20 -8%
-16% 4QFY20 84
-4%

Source: Company, Antique

Source: Company, Antique
4QFY20 26% 1QFY21 86
1QFY21 -35%
-25% 2QFY21 93
2QFY21 7% 3QFY21 92
7%
3QFY21 0% 4QFY21 82
-15%
4QFY21 11% 1QFY22 105

Revenue growth yoy

-12%

Order Book INR bn

77%
ANTIQUE STOCK BROKING LIMITED

1QFY22 47% 2QFY22 120

2QFY22 5% 3QFY22 137
-19%
3QFY22 13% 4QFY22 137
14%
4QFY22 12% 1QFY23 148
Exhibit 1: Order book and book to bill

-22%

Exhibit 3: Revenue and EBITDA growth

6 1QFY23 46% 2QFY23 149
1QFY20 21%
56 40% 3QFY23 161
5 2QFY23 6%
2QFY20 3QFY23 41% 4QFY23 158
59 -3%
5 31% 1QFY24 169
3QFY20 4QFY23 -4%
59 4% 2QFY24 148
1QFY24 -51%
4 22% 3QFY24 132

Source: Company, Antique

4QFY20 2QFY24
57 29% 4QFY24 117
37%

EBITDA growth yoy

2 3QFY24 51%
1QFY21 1QFY25 104
Book to bill (years)

56 4QFY24 22%
2 24% 2QFY25 111
2QFY21 1QFY25 23%
56 73%
2QFY25 -17%-9%
0.0
0.5
1.0
1.5
2.0
2.5
3.0

3
3QFY21
60

Exhibit 5: Debt profile (INR bn)

4 1QFY20 12%
4QFY21
3.5 100%

0%
20%
40%
60%
80%

Standalone
62 2QFY20 15%
5 3QFY20
1QFY22 13% 1QFY20
62
4 4QFY20 18% 2QFY20
Railway

2QFY22
65 1QFY21 14% 3QFY20
Road HAM

Source: Company, Antique

Source: Company, Antique

3QFY22 2QFY21 15% 4QFY20

FROM THE RESEARCH DESK

68
5 3QFY21 11% 1QFY21
4QFY22
67 4QFY21 15% 2QFY21
9
-

Exhibit 4: EBITDA margin

1QFY23 3QFY21
71 1QFY22 12%
4QFY21
Exhibit 2: Order book trend

9 2QFY22 12%
2QFY23 1QFY22
71 3QFY22
8 11%
3QFY23 2QFY22
70 4QFY22 10% 3QFY22
Road EPC

9 1QFY23 10%
4QFY23 4QFY22
69
EPC Buildings

10 2QFY23 9% 1QFY23

Consolidated
1QFY24
70 3QFY23 8% 2QFY23
11 4QFY23 3QFY23
2QFY24 7%
72
11 1QFY24 5% 4QFY23
3QFY24
69 2QFY24 9% 1QFY24
11 2QFY24
Others

4QFY24 3QFY24 8%
71
14 4QFY24 7% 3QFY24
Power T&D

1QFY25 4QFY24
72 1QFY25 6%
13 1QFY25
2QFY25 2QFY25 8%
69 2QFY25
14 November 2024 | 61
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 62

Table 4: Snapshot
INR mn FY19 FY20 FY21 FY22 FY23 FY24 FY25E FY26E FY27E
Order Book 83,943 83,719 81,669 1,37,309 1,58,050 1,16,970 1,43,279 1,82,326 2,31,710
Order Inflow 66,204 39,226 36,052 1,01,555 1,00,000 36,187 1,00,000 1,20,000 1,40,000
Book to bill x 2.2 2.4 2.3 1.8 1.8 2.0 2.3

Revenue 38,206 39,374 38,175 45,915 63,723 77,267 73,691 80,953 90,616
Change yoy, % 56% 3% -3% 20% 39% 21% -5% 10% 12%

EBITDA 5,152 5,856 5,195 5,025 5,337 5,765 5,895 7,488 8,609
EBITDA Margin % 13% 15% 14% 11% 8% 7% 8% 9% 10%

Interest Cost 907 855 772 697 1,410 2,281 2,703 2,544 2,316

PAT 3,332 3,871 4,081 4,610 3,221 2,761 2,469 3,730 4,689
Change yoy, % 41% 16% 5% 13% -30% -14% -11% 51% 26%
PAT Margin % 7% 10% 11% -7% 11% 6% 3% 5% 5%

WC as a % of sales 18% 6% 17% 43% 45% 37% 44% 41% 39%

Net debt (INR bn) 6,756 699 3,023 4,153 8,109 9,320 11,020 10,442 9,691
Net debt/ equity (x) 0.3 0.0 0.1 0.2 0.2 0.2 0.3 0.2 0.2
Capex 2368 670 297 767 820 1548 1000 1000 1000
Yearly Investment 179 471 473 -3957 2909 1263 1000 2000 2000
CFO (INR bn) 75 7,413 1,310 1,611 728 4,101 3,002 6,123 6,067
CFO/ EBITDA 1% 127% 25% 32% 14% 71% 51% 82% 70%
Source: Company, Antique

Table 5: Change in estimates

Old New Change
INR mn FY25E FY26E FY27E FY25E FY26E FY27E FY25E FY26E FY27E
Revenue 81,879 90,511 1,05,211 73,691 80,953 92,986 -10% -11% -12%
EBITDA 6,550 7,693 9,469 5,895 7,286 8,834 -10% -5% -7%
EBITDA Margin % 8.0 8.5 9.0 8.0 9.0 9.5
PAT 2,931 3,893 5,314 2,469 3,579 4,850 -16% -8% -9%
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 63

Table 6: SoTP-based TP
FY27E Base
Core EPC PAT (INR mn) 3,940
Multiple (x) 14.0
Equity value (INR mn) 55,155
No. of shares (mn) 281
Equity value (INR/sh) 196
BV Investments in Subs FY24 (INR/sh) 56
Target price (INR) 253
Source: Company, Antique

Exhibit 7: PE band
35

30

25

20

15

10

0 May/18

Feb/20
Nov/14

Jun/15

Jan/16

Aug/16

Dec/18

Jul/19

Sep/20

Nov/21

Jun/22

Jan/23

Aug/23
Mar/17

Oct/17

Apr/21

Mar/24

Oct/24
PER +1 Stdev -1 Stdev Avg PER
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 64

Financials
Profit and loss account (INR mn) Cash flow statement (INR mn)
Year ended 31 March FY23 FY24 FY25e FY26e FY27e Year ended 31 March FY23 FY24 FY25e FY26e FY27e
Net Revenue 63,723 77,267 73,691 80,953 92,986 PBT 7,733 5,755 3,299 4,782 6,480
Op. Expenses 58,387 71,502 67,796 73,667 84,153 Depreciation & amortization 742 1,046 1,063 1,153 1,243
EBITDA 5,337 5,765 5,895 7,286 8,834 Interest expense 1,410 2,281 2,703 2,544 2,327
Depreciation 742 1,046 1,063 1,153 1,243 (Inc)/Dec in working capital (3,136) (342) (3,232) (1,277) (1,787)
EBIT 4,594 4,719 4,833 6,133 7,591 Tax paid (1,390) (1,526) (830) (1,203) (1,630)
Other income 1,057 1,146 1,169 1,192 1,216 Less: Interest/Div. Income Recd. (729) (764) - - -
Interest Exp. 1,410 2,281 2,703 2,544 2,327 Other operating Cash Flow (2,493) (67) 2,703 2,544 2,327
Extra Ordinary Items -gain/(loss) 3,492 2,171 - - - CF from operating activities 2,137 6,382 5,705 8,542 8,959
Reported PBT 7,733 5,755 3,299 4,782 6,480 Capital expenditure (1,096) (1,159) (1,000) (1,000) (1,000)
Tax 1,020 1,327 830 1,203 1,630 Inc/(Dec) in investments (3,034) (1,907) (1,000) (2,000) (2,000)
Reported PAT 6,713 4,428 2,469 3,579 4,850 Add: Interest/Div. Income Recd. 221 251 - - -
Net Profit 6,713 4,428 2,469 3,579 4,850 CF from investing activities (3,909) (2,815) (2,000) (3,000) (3,000)
Adjusted PAT 3,221 2,761 2,469 3,579 4,850 Inc/(Dec) in debt 4,723 3,994 (623) (1,184) (1,065)
Adjusted EPS (INR) 11.5 9.8 8.8 12.7 17.3 Others (1,474.42) (4,319.50) (5,405.22) (5,087.76) (4,653.90)
CF from financing activities 3,248 (326) (6,028) (6,271) (5,719)
Balance sheet (INR mn) Net cash flow 1,477 3,241 (2,323) (730) 240
Year ended 31 March FY23 FY24 FY25e FY26e FY27e Opening balance 388 1,865 5,106 2,783 2,053
Share capital 1,404 1,404 1,404 1,404 1,404 Closing balance 1,865 5,106 2,783 2,053 2,293
Reserves & Surplus 32,294 36,721 39,190 42,769 47,619
Networth 33,697 38,125 40,594 44,172 49,022 Growth indicators (%)
Debt 9,973 14,427 13,804 12,620 11,554 Year ended 31 March FY23 FY24 FY25e FY26e FY27e
Other Non Current Liabilities 5,510 5,488 5,537 5,590 5,648 Revenue 38.8 21.3 -4.6 9.9 14.9
Capital Employed 49,180 58,040 59,934 62,382 66,225 EBITDA 6.2 8.0 2.3 23.6 21.2
Gross Fixed Assets 9,760 11,308 12,308 13,308 14,308 Adj PAT -30.1 -14.3 -10.6 44.9 35.5
Accumulated Depreciation 6,989 8,035 9,098 10,251 11,493 Adj EPS -30.1 -14.3 -10.6 44.9 35.5
Capital work in progress 335 22 22 22 22
Net Fixed Assets 3,107 3,295 3,232 3,079 2,837 Valuation (x)
Investments 13,537 14,799 15,799 17,799 19,799 Year ended 31 March FY23 FY24 FY25e FY26e FY27e
Other Non Current Assets 2,264 5,950 5,950 5,950 5,950 P/E (x) 20.3 23.7 26.5 18.3 13.5
Current Assets, Loans & Adv. 53,093 63,295 61,532 62,489 67,312 P/BV (x) 1.9 1.7 1.6 1.5 1.3
Inventory 2,984 4,327 4,102 4,458 5,092 EV/EBITDA (x) 13.8 13.0 13.0 10.4 8.5
Debtors 11,490 10,985 10,731 10,993 13,105 EV/Sales (x) 1.2 1.0 1.0 0.9 0.8
Cash & Bank balance 1,865 5,106 2,783 2,053 2,293
Loans & advances and others 36,754 42,877 43,916 44,985 46,821
Financial ratios
Current Liabilities & Provisions 22,820 29,299 26,579 26,935 29,672
Year ended 31 March FY23 FY24 FY25e FY26e FY27e
RoE (%) 10.6 7.7 6.3 8.4 10.4
Liabilities 22,605 29,164 26,173 26,434 29,054
RoCE (%) 14.8 12.2 11.2 13.2 15.0
Provisions 215 135 407 501 618
Asset/T.O (x) 2.2 2.2 2.0 2.1 2.4
Net Current Assets 30,273 33,996 34,953 35,554 37,640
Net Debt/Equity (x) 0.2 0.2 0.3 0.2 0.2
Application of Funds 49,180 58,040 59,934 62,382 66,225
EBIT/Interest (x) 4.0 2.6 2.2 2.9 3.8
Per share data
Year ended 31 March FY23 FY24 FY25e FY26e FY27e
Margins (%)
No. of shares (mn) 280.7 280.7 280.7 280.7 280.7
Year ended 31 March FY23 FY24 FY25e FY26e FY27e
EBITDA Margin (%) 8.4 7.5 8.0 9.0 9.5
Diluted no. of shares (mn) 280.7 280.7 280.7 280.7 280.7
EBIT Margin 7.2 6.1 6.6 7.6 8.2
BVPS (INR) 120.0 135.8 144.6 157.4 174.6
PAT Margin 5.1 3.6 3.4 4.4 5.2
CEPS (INR) 26.6 19.5 12.6 16.9 21.7
Source: Company Antique
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 65

CMP : INR 1,855 2QFY25 RESULT REVIEW

Reco
Target Price
: HOLD çè
: INR 2,062 ê
Venus Pipes and Tubes
Target Price Change : -5% YoY higher exports, backward integration supported EBITDA
Target FY27 P/E (x) : 22
Venus Pipes and Tubes reported standalone revenue at INR 2.3 bn (4.3%
EPS Change FY25/ 26/ 27 : -7%/ -3%/ -3% below our estimate and 5.1% lower than consensus ), which rose by 19.6%
YoY but declined by 4.7% QoQ, sequentially impacted by lower domestic
sales on account of heavy monsoon in certain areas. Export revenue
materially grew 165% YoY and 24.1% QoQ to INR 756 mn (exports contributed
Pallav Agarwal to 33% of revenue in 2QFY25 as against 15% in 2QFY24 and 25% in 1QFY25).
+91 22 6911 3411
[email protected] Standalone EBITDA at INR 410 mn (8.7% below our estimate and 15.4% below
consensus estimate) grew by 18.1% YoY but declined 14.6% QoQ; EBITDA
Suman Kumar margin stood at 17.9% (as against 18.1% in 2QFY24 and 20% in 1QFY25).
+91 22 6911 3416 PAT came in at INR 237 mn, higher by 16.8% YoY but lower by 14.2% QoQ
[email protected] (broadly in line with the EBITDA performance; materially higher other income
offset higher depreciation and finance costs). Margins are expected to be
supported by product mix improvement (fittings, value-added products like
hygienic stainless steel pipes, titanium tubes), higher exports, and operating
Market data leverage coming in with higher capacity. We factor in lower pipe realization
Sensex : 77,691 in FY25, leading to 3% lower EBITDA in FY25 and 7%/ 3%/ 3% reduction in
Sector : Metals FY25/ 26/ 27 EPS. We roll over our earnings estimate to FY27 (from 1HFY27
Market Cap (INR bn) : 37.8 earlier) and arrive at a TP of INR 2,062 (earlier INR 2,160) basis a target P/E
Market Cap (USD bn) : 0.448 multiple of 22x FY27 earnings. We maintain HOLD rating as we would prefer
O/S Shares (mn) : 20.3 more attractive entry levels.
52-wk HI/LO (INR) : 2490/1290
Avg. Daily Vol ('000) : 29
Strong export sales aided YoY topline growth
Bloomberg : VENUSPIP IN The company reported standalone revenue at INR 2.3 bn (rose by 19.6% YoY but declined
Source: Bloomberg by 4.7% QoQ). Seamless pipes’ quarterly revenue grew by 20.9% YoY but declined by
Valuation 3.6% QoQ to ~INR 1.3 bn in 2QFY25 while welded pipes’ revenue declined by 1.5% YoY
FY25e FY26e FY27e
and 18.9% sequentially to INR 763 mn during the quarter. Export revenue materially grew
EPS (INR) 54.5 81.6 93.7
by 165.3% YoY and 24.1% QoQ to INR 756 mn, supported by exports to new geographies
P/E (x) 34.0 22.7 19.8
like the USA and Middle East (exports contributed to 33% of revenue in 2QFY25 as against
P/BV (x) 7.1 5.4 4.3
15% in 2QFY24 and 25% in 1QFY25). The company has a current order book of INR 3.4 bn,
EV/EBITDA (x) 20.6 14.8 13.2
ensuring steady topline growth for the upcoming quarters.
Dividend Yield (%) 0.1 0.1 0.1 EBITDA margin largely flat YoY but declined QoQ
Source: Bloomberg Standalone EBITDA at INR 410 mn (8.7% below our estimate and 15.4% below consensus
Returns (%) estimate) grew by 18.1% YoY but declined 14.6% QoQ; EBITDA margin stood at 17.9% (as
1m 3m 6m 12m against 18.1% in 2QFY24 and 20% in 1QFY25). Further, capacity utilization and 100%
Absolute (7) (8) (9) 27 backward integration in seamless pipes through in-house manufacturing of mother hollow
Relative (2) (7) (15) 7 pipes would support margins. Product mix improvement (fittings, value-added products like
Source: Bloomberg hygienic stainless steel pipes, titanium tubes), higher exports, and operating leverage coming
in with higher capacity could sustain improved margins in the long-term.
Shareholding pattern
INR 1.8 bn of capex projects are underway to expand product mix
Promoters : 48%
The company is undertaking INR 1.8 bn in capex (~INR 1.2 bn for setting up fittings and
Public : 52%
welded tubes by March 2025 and INR 600 mn for a specialized product line of hygienic
Others : 0%
stainless steel tubes and titanium welded tubes by December 2025). 40% of this capex
Source: Bloomberg would be funded through warrants issued to promoters and others, while remaining 60%
Price performance vs Nifty would be sourced through long-term loans and internal accruals. On an overall basis, the
company’s market share has improved from 3.6% in FY20 to 6.2% in FY24. These value
180
addition projects could aid in further market penetration.
160
140 Investment Summary
120
100 The continued capacity expansion is in line with the company’s growth strategy. Higher
80 utilization of expanded capacity, product portfolio expansion, portfolio improvement in favor
Nov-23 Mar-24 Jul-24 Nov-24 of better margin products and cost-saving initiatives through backward integration could
Venus Pipes & T. NIFTY
support profitability. We arrive at a TP of INR 2,062 basis a target P/E multiple of 22x FY27
Source: Bloomberg Indexed to 100
earnings and maintain HOLD rating as we would prefer more attractive entry levels.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 66

Table 1: Quarterly performance—Standalone (INR mn)

2QFY25 2QFY24 YoY (%) 1QFY25 QoQ (%) 1HFY25 CPLY (1HFY24) YoY (%)
Sales 2,289 1,914 19.6 2,401 (4.7) 4,691 3,710 26.4
Inventory change (515) (220) 134.3 (63) 712.0 (578) (275) 110.5
Cost of Material Consumed 2,028 1,590 27.5 1,673 21.2 3,700 3,030 22.1
% of sales 88.6 83.1 547 bps 69.7 1889 bps 78.9 81.7 -279 bps
Employee cost 88 55 60.1 84 5.0 173 95 81.3
% of sales 3.9 2.9 98 bps 3.5 36 bps 3.7 2.6 111 bps
Other expenses 279 141 97.5 228 22.1 507 237 114.3
% of sales 12.2 7.4 480 bps 9.5 267 bps 10.8 6.4 443 bps
Total Exp 1,880 1,567 20.0 1,922 (2.2) 3,802 3,087 23.2
EBITDA 410 347 18.1 479 (14.6) 889 623 42.8
Margin % 17.9 18.1 -24 bps 20.0 -207 bps 18.9 16.8 217 bps
Other income 37 5 656.3 10 258.8 47 10 350.0
Depreciation 46 29 61.9 43 7.1 90 43 110.7
Interest expenses 82 50 62.0 77 6.9 158 84 89.4
Profit Before Tax 318 272 16.7 370 (14.0) 688 507 35.7
PBT after exceptional 318 272 16.7 370 (14.0) 688 507 35.7
Tax 81 70 16.4 94 (13.6) 175 130 34.9
Tax Rate % 25.6 25.6 -6 bps 25.5 12 bps 25.5 25.7 -16 bps
Reported Net Profit 237 203 16.8 276 (14.2) 512 377 36.0
Adjusted Net Profit 237 203 16.8 276 (14.2) 512 377 36.0
EPS (INR) 11.7 10.0 16.8 13.6 (14.2) 25.2 18.6 36.0
Source: Company, Antique

Table 2: Balance sheet

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Share capital 204 203 0.3 203 203 -
Reserves and Surplus 4,628 3,386 36.7 5,108 3,858 32.4
Loan Funds 1,810 1,456 24.3 2,293 1,493 53.6
Deferred Tax Liability 98 45 118.8 75 75 -
Total 6,740 5,090 32.4 7,679 5,629 36.4
Fixed Assets 3,012 2,442 23.3 4,009 2,818 42.2
Capital Work-in-Progress 146 104 41.0 110 121 (9.3)
Investments 32 30 7.8 31 31 -
Current Assets, Loans And Advances 6,255 3,899 60.4 6,045 4,605 31.3
Inventories 3,050 1,920 58.8 3,037 2,259 34.4
Sundry Debtors 2,059 1,336 54.1 2,195 1,771 23.9
Cash and Bank Balances 228 97 135.9 82 76 7.0
Loans and Advances 918 546 68.1 732 498 46.9
Current Liabilities and Provisions 2,705 1,385 95.3 2,516 1,947 29.2
Liabilities 2,691 1,377 95.5 2,501 1,936 29.2
Provisions 14 8 71.0 15 11 29.2
Net Working Capital 3,322 2,418 37.4 3,447 2,582 33.5
Total 6,740 5,090 32.4 7,679 5,629 36.4
Net debt 1,582 1,360 16.3 2,211 1,417 56.1
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 67

Table 3: Cashflow statement

(INR mn) 1HFY25 1HFY24 YoY (%) FY25E FY24 YoY (%)
Reported Profit 512 377 36.0 1,106 860 28.7
Depreciation 90 43 110.7 171 118 45.1
Interest 158 84 89.4 310 221 40.2
Changes in working capital (1,035) 381 (371.8) (866) (544) 59.3
Operating cash flow (275) 884 (131.1) 721 655 10.1
Capex (612) (1,937) (68.4) (1,350) (1,239) 8.9
Others - - (2) (100.0)
Investing cash flow (612) (1,937) (68.4) (1,350) (1,242) 8.7
Inc/(Dec) in equity/premium 1 - n/a 179 - n/a
Net proceeds from borrowings 354 926 (61.8) 800 589 35.9
Others 685 (36) n/a (344) (185) 86.0
Financing cash flow 1,039 890 16.8 634 404 57.2
Net cash flow 152 (163) (193.0) 5 (183) (102.9)
Opening cash balance 76 260 (70.6) 76 260 (70.6)
Closing cash balance 228 97 135.9 82 76 7.0
Free cash flow (888) (1,053) (15.7) (629) (585) 7.6
Source: Company, Antique

Table 4: Revision in estimates—Venus Pipes (standalone)

Previous estimates Current estimates % Change
FY25e FY26e FY27e FY25e FY26e FY27e FY25 FY26 FY27
Welded pipes sales (tons) 17,526 21,528 24,840 17,526 21,528 24,840 0% 0% 0%
Seamless pipes sales (tons) 12,240 13,018 13,392 12,240 13,018 13,392 0% 0% 0%
Total sales volume (tons) 29,766 34,546 38,232 29,766 34,546 38,232 0% 0% 0%
Welded pipe realization/t (INR) 2,80,000 2,90,000 2,95,000 2,65,000 2,90,000 2,95,000 -5% 0% 0%
Seamless pipe realization/t (INR) 4,45,000 4,55,000 4,60,000 4,40,000 4,55,000 4,60,000 -1% 0% 0%
Revenue (INR mn) 11,004 14,666 15,988 10,680 14,666 15,988 -3% 0% 0%
EBITDA (INR mn) 1,994 2,695 2,982 1,935 2,695 2,982 -3% 0% 0%
EBITDA/t (INR) 67,000 78,000 78,000 65,000 78,000 78,000 -3% 0% 0%
PAT (INR mn) 1,192 1,706 1,952 1,106 1,656 1,903 -7% -3% -3%
EPS (INR) 58.7 84.1 96.2 54.5 81.6 93.7 -7% -3% -3%
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 68

Financials
Profit and loss account (INR mn) Cash flow statement (INR mn)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Revenues 5,524 8,022 10,680 14,666 15,988 PBT 597 1,156 1,495 2,238 2,571
Expenses 4,833 6,559 8,745 11,971 13,006 Depreciation 20 118 171 209 243
EBITDA 691 1,463 1,935 2,695 2,982 Interest 98 221 310 305 232
Depreciation & amortization 20 118 171 209 243 (Inc)/ Dec in working capital (430) (544) (866) (1,112) (630)
EBIT 671 1,345 1,764 2,486 2,740 Tax paid (155) (297) (389) (582) (668)
Other income 24 32 41 57 64 CF from operating activities 130 655 721 1,058 1,747
Interest expense 98 221 310 305 232 Capex (1,612) (1,239) (1,350) (800) (850)
Profit before tax 597 1,156 1,495 2,238 2,571 (Inc)/ Dec in Investments (15) (2) - - -
Tax 155 297 389 582 668 CF from investing activities (1,627) (1,242) (1,350) (800) (850)
Profit after tax 442 860 1,106 1,656 1,903 Inc/ (Dec) in share capital and premium 1,505 - 179 - -
Adj. PAT after minority int. 442 860 1,106 1,656 1,903 Inc/ (Dec) in debt 215 589 800 145 (580)
EPS (INR) 21.8 42.4 54.5 81.6 93.7 Dividends & Interest paid (109) (241) (344) (345) (277)
Others 72 56 -
Balance sheet (INR mn) CF from financing activities 1,683 404 634 (201) (857)
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e Net cash flow 186 (183) 5 57 40
Share Capital 203 203 203 203 203 Add: Opening balance 73 260 76 82 139
Reserves & Surplus 1,017 1,856 2,928 4,544 6,401 Closing balance 260 76 82 139 179
Premium A/c 2,002 2,002 2,181 2,181 2,181
Networth 3,222 4,061 5,311 6,927 8,785 Growth indicators (%)
Debt 905 1,493 2,293 2,438 1,857 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Deferred tax/ other liabilities 15 75 75 75 75 Revenue 42.8 45.2 33.1 37.3 9.0
Capital Employed 4,141 5,629 7,679 9,440 10,717 EBITDA 40.4 111.7 32.2 39.3 10.7
Gross Fixed Assets 683 3,017 4,379 5,214 6,064 PAT 39.6 94.5 28.7 49.7 14.9
Accumulated Depreciation 85 199 370 578 821 EPS 4.7 94.5 28.7 49.7 14.9
Net Assets 599 2,818 4,009 4,635 5,243
Capital work in progress 1,216 121 110 75 75 Valuation (x)
Investments 29 31 31 31 31 Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Liquid Investments 29 31 31 31 31 P/E (x) 85.1 43.8 34.0 22.7 19.8
Current Assets Loans & Advances P/BV (x) 11.7 9.3 7.1 5.4 4.3
Inventory 1,669 2,259 3,037 4,022 4,548 EV/EBITDA (x) 55.4 26.7 20.6 14.8 13.2
Debtors 705 1,771 2,195 2,813 3,110 EV/Sales (x) 6.9 4.9 3.7 2.7 2.5
Cash & Bank 260 76 82 139 179 Dividend Yield (%) 0.0 0.1 0.1 0.1 0.1
Loans & advances and others 597 498 732 1,005 1,095
Current Liabilities & Provisions
Financial ratios
Creditors 927 1,936 2,501 3,261 3,543
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
RoE 19.6 23.6 23.6 27.1 24.2
Provisions 6 11 15 19 21
RoCE 17.4 21.5 20.2 22.0 20.7
Net Current Assets 2,298 2,658 3,529 4,698 5,368
Debt/Equity (x) 0.2 0.3 0.4 0.3 0.2
Application of Funds 4,141 5,629 7,679 9,440 10,717
EBIT/Interest (x) 6.8 6.1 5.7 8.2 11.8
Per share data
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Margins (%)
No. of shares (mn) 20 20 20 20 20
Year ended 31 Mar FY23 FY24 FY25e FY26e FY27e
EBITDA 12.5 18.2 18.1 18.4 18.7
BVPS (INR) 158.8 200.1 261.7 341.3 432.8
EBIT 12.2 16.8 16.5 17.0 17.1
CEPS (INR) 22.8 48.2 62.9 91.9 105.7
PAT 8.0 10.7 10.4 11.3 11.9
DPS (INR) 0.5 1.0 1.7 2.0 2.2
Source: Company Antique
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 69

CMP : INR 361 2QFY25 RESULT REVIEW

Reco
Target Price
: BUY çè
: INR 618 é
Kolte-Patil Developers
Target Price Change : 4% Catch-up on BD, launches, and margin recovery critical
Target FY27 EV/EBITDA
(embedded) (x) : 6 Kolte Patil Developers' (KPDL) highlights of the quarter are its highest-ever
quarterly sales booking and continued healthy cash flow generation. During
Sales booking FY25/26/27: No Change
the quarter, the company reported strong sales booking of INR 7.7 bn (22%
YoY). KPDL continues to see strong operating cash flow (OCF) and during the
quarter OCF was INR 2.0 bn (105% YoY); INR 4.4 bn in 1HFY25 (FY24 OCF
was INR 4.4 bn). Life Republic, the flagship 400-acre project, continues to
Biplab Debbarma, CFA drive sales booking and contributed 46% of the total sales booking in 1HFY25.
+91 22 6911 3418 EBITDA margin is in focus and in 2QFY25 it was 5.2%. Although KPDL has
[email protected]
guided for an improvement in margin to early teens in FY25 and better in
FY26, based on a higher revenue recognition base, we believe the reported
margin in 1HFY25 was too low and that it will be a key monitorable. We
keep the sales booking estimates unchanged and the embedded margin at
18%. We maintain BUY with a revised TP of INR 618 (previously INR 596)
Market data based on EV/EBITDA multiple of 6.0x on embedded EBITDA of FY27 (earlier
Sensex : 77,691
1HFY27E).
Sector : Real Estate
Market Cap (INR bn) : 27.4 2QFY25 in a nutshell
Market Cap (USD bn) : 0.324 Financial: Revenue was INR 3.1 bn (-10%/ 56% QoQ/ YoY), EBITDA at INR 162 mn (-42%/
O/S Shares (mn) : 76.0 365% QoQ/ YoY) and adj. PAT of INR 97.4 mn (vs. loss of INR 129 mn in 2QFY24). EBITDA
52-wk HI/LO (INR) : 585/345 margin for 1HFY25 was 6.8%, -550 bps YoY (in FY24 EBITDA margin was 3.7%). Net debt
Avg. Daily Vol ('000) : 438
continues to be negative and was INR -580 mn. Operational performance: Registered the
Bloomberg : KPDL IN
highest-ever quarterly pre-sales of INR 7.7 bn (8%/ 22% QoQ/ YoY); vs. our estimate of INR
Source: Bloomberg
7.8 bn. Thus, KPDL achieved pre-sales of INR 14.8 bn (11% YoY) in 1HFY25; ~42% of FY25
Valuation guidance of INR 35 bn. Sales volume was at 1.03 mn sq. ft. (7%/ 5% QoQ/ YoY) with
FY25e FY26e FY27e
realization of INR 7,441/sq. ft. (1%/ 16% QoQ/ YoY). The jump in quarterly realization was
EPS (INR) 18.0 20.0 25.1
due to a larger contribution from the 24K segment which contributed 30% of sales booking in
P/E (x) 34.2 31.0 24.7
2QFY25; premium segments in Life Republic too contributed to the uptick in realization.
P/BV (x) 5.6 4.9 4.2
EV/EBITDA (x) 6.4 5.9 5.4
Achieved quarterly collection of INR 5.5 bn (-10%/ 16% QoQ/ YoY); half-yearly collection of
EV/Sales (x) 1.3 1.2 1.1 INR 11.6 bn (18% YoY). Life Republic, KPDL's flagship project, continues to witness strong
Source: Company, Antique
traction and sold INR 3.9 bn, contributing 50% of the total sales value during the quarter;
INR 6.9 bn (46% of sales) in 1HFY25.
Returns (%)
1m 3m 6m 12m Catch-up on business development, launches, and margin recovery critical for 2HFY25
Absolute (8) 2 (26) (27) The company gave guidance on business development of GDV of INR 80 bn, on launches of
Relative (3) 4 (30) (39) GDV INR 70 bn (revised from GDV INR 80 bn) and EBITDA margin of low double digits for
Source: Bloomberg
FY25. However, in 1HFY25, KPDL fell short on all the parameters: no business development,
Shareholding pattern GDV of launches of INR 18 bn, and EBITDA margin of 6.8%. Thus, KPDL has to catch-up
significantly in 2HFY25 for it to meet the guidance.
Promoters : 69%
Public : 31% Lean balance sheet an advantage; strong OCF an icing
Others : 0% Steady cash flows and lean balance sheet led to the company continuing to be net cash at
Source: Bloomberg INR 580 mn at the end of 2QFY25. Both collections and OCF witnessing an uptick during the
Price performance vs Nifty quarter and grew by 17% YoY and 105% YoY respectively. 1HFY25 OCF/ collections was
38% compared to 21%/ 28% in FY24/ 23.
140
120 Investment Summary
100
80
In terms of sales booking and cash flow generation, KPDL did well in 1HFY25, however,
60
concerns with regards to margin remains. We maintain BUY with a revised TP of
Nov-23 Mar-24 Jul-24 Nov-24 INR 618 (previously INR 596) based on EV/EBITDA multiple of 6.0x on embedded EBITDA
Kolte Patil NIFTY of FY27 (earlier 1HFY27E). Key monitorable - Reported margin, launches, and business
Source: Bloomberg Indexed to 100 development.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 70

Valuation using embedded EBITDA

KPDL surpassed sales booking of INR 28.0 bn in FY24 and with robust launch pipeline, large
land bank and aggressive business development guidance, we expect to do CAGR of 20-25%
in sales booking in next few years. We in our estimate assumed conservative growth guidance of
CAGR 15% in FY24E-FY27E. Thus, we expect KPDL to do sales bookings of INR 34.8 bn/INR
40.3 bn/ INR 43.0 bn in FY25E/FY26E/FY27 and post an EBITDA margin of ~18%.
Table 1: SoTP valuation
FY27e
Sales booking INR 42.9 bn
Embedded EBITDA @18.0% INR 7.7 bn
(a) EV of residential at 6.0x to EV/implied EBITDA INR 46.4 bn
(b) Add: net cash INR 6.0 bn
(c) Equity value (a - b) INR 47.0 bn
(d) # of shares 76 mn
(e) Target Price (c/d) INR 618
Source: Company, Antique

Table 2: NAV methodology

Valuations Total NAV (INR mn) Per share
Residential - for sale 10,160 134
Land bank 20,948 276
Total GAV (INR mn) 31,108 409
Less: Net Debt (580) (8)
NAV 31,688 417

INR/share Premium to NAV

NAV 417 0%
CMP 361 -13%
TP 618 48%
Source: Company, Antique

Table 3: Operational performance - 2QFY25

2QFY25 1QFY25 QoQ % 2QFY24 YoY % FY24
Booking volume (mn sqft) 1.03 0.96 7 0.98 5 3.92
Booking value (INRbn) 7.70 7.11 8 6.32 22 28.2
Avg Realization (INR/sqft) 7,472 7,407 1 6,426 16 7,199
Collections(INRbn) 5.50 6.12 (10) 4.72 17 20.70
Net Debt (INRbn) -0.58 -0.37 -0.21 0.49 -1.07 -0.25
Net D/E (x) -0.08 -0.05 0.05 -0.03
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 71

Table 4: Financial performance - 2QFY25

INR mn 2QFY25 1QFY25 QoQ % 2QFY24 YoY %
Net Sales 3,083 3,408 (10) 1,982 56
Total Expenditure 2,921 3,130 1,947
EBITDA 162 278 (42) 35 365
Margins (%) 5.2 8.2 -291bps 1.8 349bps
Depreciation 24 42 31
Interest 107 187 94
Other Income 127 95 67
PBT before EO expense 157 144 9 -23 (766)
EO expense/impairment
PBT 157 144 -23
Tax 69 104 93
Rate (%) 44.0 72.2 -394.9
MI and Share of asso. -10 -22 13
Reported PAT 97 62 -129
Adj PAT 97 62 56 -129 (175)
Margins (%) 3.2 1.8 (6.5)
Source: Company, Antique

Table 5: Balance Sheet

Year ended Sep-2024 Sep-2023 Mar-2024
Share Capital 760 760 760
Reserves & Surplus 6,435 9,622 6,579
Networth 7,195 10,382 7,339
Debt 12,163 8,756 10,786
Minority Interest 14 63 16
Net deferred Tax liabilities (2,292) (1,992) (2,423)
Capital Employed 17,081 17,209 15,718
Net Fixed Assets 1,484 1,391 1,361
Net Fixed Assets 1,484 1,391 1,361
Goodwill - 1,917 -
Investments 650 483 1,248
Non-Current Investments 247 380 317
Current Investments 403 102 931
Current Assets, Loans & Advances
Inventory 35,925 30,267 34,685
Debtors 892 558 557
Cash & Bank balance 5,275 3,326 4,100
Loans & advances and others 6,208 5,269 5,058
Current Liabilities & Provisions 48,299 39,420 44,400
Liabilities 33,040 25,770 31,005
Provisions 312 232 286
Net Current Assets 14,946 13,419 13,110
Application of Funds 17,081 17,209 15,718
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 72

Table 6: Cash Flow Statement

Year ended Sep-2024 Sep-2023
PBT 301 441
Depreciation & amortization 66 62
Interest expense 295 461
(Inc)/Dec in working capital 228 (2,622)
Tax paid (36) (136)
Less: Interest/Dividend Income Received (71) (41)
Other operating Cash Flow (54) 127
CF from operating activities 729 (1,708)
Capital expenditure (251) (223)
Inc/(Dec) in investments (209) (180)
Add: Interest/Dividend Income Received 60 46
CF from investing activities (400) (357)
Inc/(Dec) in debt 1,377 2,726
Dividend/Interest Paid (1,159) (770)
Others (58) (76)
CF from financing activities 160 1,879
Net cash flow 489 (186)
Opening balance 2,998 2,257
Closing balance 3,487 2,072
Changes in other bank balances 1,788 1,255
Cash and Bank balance 5,275 3,326
Source: Company, Antique

Conference Call Highlights

n Revenue recognition in FY25: Expected revenue of INR 18 bn in FY25.
n Margin: Low margin project got recognized in 2Q. As higher margin projects get
recognized in 2HFY25, reported margin would improve for the year. EBITDA margin in
FY25 would be in double digit. Margin to be monitored.
n Launch pipeline: Approval challenges may lead to some launches in 4Q slipping to
FY25, thus, the launch pipeline has reduced from INR 80 bn to INR 70 bn. In addition,
in Kharadi, the opportunity for acquisition of land in the neighboring area has thus
reduced the size of launch.
n Approval uncertainties: Most of the projects in Pune are certain to be launched.
However, for MMR launch visibility would be better post-election. MMR launches are all
redevelopment projects which entails more approvals.
n Business development guidance: Discussion at advanced stage and certain of
meeting guidance of GDV INR 80 bn of business development (BD). 70% Pune market
and 30% non-Pune market is typical strategy for BD.
n Life Republic: Hinjewadi micro-market seeing strong demand due to better infrastructure
and LR would continue to see strong demand.
n Mumbai: Vashi launched in 3Q, for Laxmi Ratan most approvals in line. Other projects
are also on track. Margin expected for redevelopment projects is 16%-18%
n Team rebuilding going across departments for strengthening capabilities.
n High cost of financing due to zero coupon project level financing. The zero coupon
funds are being used for growth.
 -
1
2
3
4
5
6
-

(1)
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0

0
500
1000
1500
2000
2500
3000
2QFY20 4.78 0.51 1.64
1QFY20 1080 1QFY21 1.05
3QFY20 5.20 0.56
2QFY20 810 1.94

INR bn
4QFY20 4.34 0.48 2QFY21 2.01
3QFY20 740 1QFY21 4.38 0.50 3QFY21 3.17
3.82

(INR mn)
Operating
4QFY20 1580

cash flows

Source: Company, Antique

Source: Company, Antique
Source: Company, Antique
2QFY21 4.46 0.52 5.11
Story in charts

1QFY21 4QFY21 4.42

140 3QFY21 3.63 0.41
1QFY22 2.49
2QFY21 500 4QFY21 3.10 0.24 2.79
3QFY21 1770 2QFY22 4.29
1QFY22 2.81 0.30 3.74
4QFY21 1890 2QFY22 2.14 0.23 5.61
3QFY22 4.21
1QFY22 780

Booking value (INRbn)

3QFY22 1.72 0.19
ANTIQUE STOCK BROKING LIMITED

Net Debt (INRbn)

4QFY22 5.01
2QFY22 1450 4QFY22 1.31 0.14 5.00
1QFY23 4.45
3QFY22 1160 1QFY23 1.43 0.15 4.74
4QFY22 1660 2QFY23 2.51 0.26 2QFY23 3.67
4.04

Exhibit 5: Uptick in OCF in the quarter

1QFY23 1040 3QFY23 1.94 0.21 7.16
3QFY23 4.35
2QFY23 900 4QFY23 1.12 0.11 7.04
4QFY23

Exhibit 3: Continues to be net cash (INR bn)

3QFY23 1200 1QFY24 0.17 0.02 5.89
4QFY23 1QFY24 7.01
2160 2QFY24 0.49 0.05 5.13
1QFY24 870 3QFY24-0.32 -0.04 2QFY24 6.32
4.72
2QFY24 950 4QFY24-0.25 -0.03 7.46
3QFY24 4.93

Net D/E (x)

3QFY24 860 1QFY25-0.37 -0.05 Collections(INRmn)
4QFY24 7.43

INR/sqft
4QFY24 1670 2QFY25-0.58 -0.08 5.92
1QFY25 1QFY25 7.11
2470

-
6.12
Exhibit 1: 2QFY25: Steady pre-sales and uptick in collection

7.70

0.1
0.2
0.3
0.4
0.5
0.6
2QFY25 1950 2QFY25

-0.2
-0.1
5.50
-
0.2
0.4
0.6
0.8
1.0
1.2

1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000

-
1QFY21 0.31
1QFY21
2QFY21 0.35
2QFY21
3QFY21 0.55

Source: Company, Antique

Source: Company, Antique
Source: Company, Antique

3QFY21

Pune
FROM THE RESEARCH DESK

4QFY21 0.85
4QFY21
1QFY22 0.40
1QFY22
Exhibit 2: Steady volume

2QFY22 0.67
2QFY22
3QFY22
Exhibit 4: Realization steady

0.86
3QFY22
4QFY22 0.78
4QFY22

2% 3%

MMR
1QFY23 1QFY23 0.61

2QFY23 2QFY23 0.56

3QFY23 3QFY23 1.13
4QFY23 4QFY23 0.97
Booking volume (mn sqft)

Avg Realization (INR/sqft)

1QFY24 1QFY24 0.93

Exhibit 6: Geographical contribution in 2QFY25

95%
2QFY24 2QFY24 0.98
3QFY24 3QFY24 0.98

Bengaluru
4QFY24 4QFY24 1.03
1QFY25 1QFY25 0.96
2QFY25 2QFY25 1.03
14 November 2024 | 73
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 74

Financials
Profit and loss account (INR mn) Cash flow statement (INR mn)
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Net Revenue 14,884 13,715 18,372 20,190 24,267 PBT 1,696 (611) 2,542 2,811 3,529
Op. Expenses 12,992 13,204 14,698 16,152 19,414 Depreciation & amortization 116 142 163 188 216
EBITDA 1,893 511 3,674 4,038 4,853 Interest expense 407 979 1,203 1,272 1,341
Depreciation 116 142 163 188 216 (Inc)/Dec in working capital 324 (1,192) 8,051 (2,123) (4,761)
EBIT 1,777 369 3,511 3,850 4,638 Tax paid (563) (354) (653) (723) (907)
Other income 326 233 233 233 233 Other operating Cash Flow (55) (74) (153) (153) (153)
Interest Exp. 407 979 1,203 1,272 1,341 CF from operating activities 1,925 (1,110) 11,152 1,273 (735)
Extra Ordinary Items -gain/(loss) - (235) - - - Capital expenditure (183) (419) (163) (188) (216)
Reported PBT 1,696 (611) 2,542 2,811 3,529 (Inc)/Dec in investments (429) (1,399) (275) (300) (300)
Tax 546 (34) 653 723 907 Interest Received 54 81 50 50 50
Reported PAT 1,150 (577) 1,888 2,089 2,622 Others 106 400 100 100 100
Minority Int./Profit (loss) From Associates (109) (116) CF from investing activities (453) (1,338) (288) (338) (366)
Net Profit 1,041 (694) 1,888 2,089 2,622 Inc/(Dec) in long-term debt 118 4,676 750 750 750
Adjusted PAT 1,041 (694) 1,371 1,517 1,904 Inc/(Dec) in short-term debt 1 - - - -
Adjusted EPS (INR) 13.7 (9.1) 18.0 20.0 25.1 Interest paid (529) (1,074) (1,203) (1,272) (1,341)
Dividend Paid (152) (304) (304) (304) (304)
Balance sheet (INR mn) Others (120) (110) - - -
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e CF from financing activities (682) 3,188 (757) (826) (895)
Share Capital 760 760 760 760 760 Net cash flow 790 740 10,107 109 (1,996)
Reserves & Surplus 9,704 6,579 7,646 8,859 10,459 Opening balance 1,464 2,258 2,995 13,102 13,211
Networth 10,464 7,339 8,406 9,619 11,219 Closing balance 2,255 2,998 13,102 13,211 11,215
Debt 5,415 10,786 11,536 12,286 13,036 Bank Balance 1,278 1,103 1,103 1,103 1,103
Minority Interest 86 16 534 1,129 1,870 On account of acquisition of subsidiary 3
Others 1,177 1,338 1,338 1,338 1,338 Cash and bank balance 3,533 4,100 14,205 14,314 12,318
Capital Employed 17,142 19,479 21,814 24,371 27,463
Property, Plant and Equipment 677 1,048 1,211 1,399 1,615 Growth indicators (%)
Capital work in progress 100 - - - - Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Other Non-Current Assets 4,489 5,415 5,415 5,415 5,415 Revenue 33.2 -7.9 34.0 9.9 20.2
Net Fixed Assets 5,266 6,463 6,626 6,814 7,030 EBITDA 1.6 -73.0 619.1 9.9 20.2
Goodwill 2,040 - - - - Adj PAT 31.1 -166.6 -297.7 10.6 25.5
Investments 197 1,238 1,513 1,813 2,113 Adj EPS 31.1 -166.6 -297.7 10.6 25.5
Non Current Investments 173 307 307 307 307
Current Investments 25 931 1,206 1,506 1,806 Valuation (x)
Current Assets, Loans & Adv. 34,698 41,773 42,693 45,381 49,168 Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
Inventory 28,938 34,685 25,721 28,266 33,974 P/E (x) 45.1 -67.7 34.2 31.0 24.7
Debtors 273 557 337 371 446 P/BV (x) 4.5 6.4 5.6 4.9 4.2
Cash & Bank balance 3,533 4,100 14,205 14,314 12,318 EV/EBITDA (x) 15.5 65.0 6.4 5.9 5.4
Loans & advances and others 1,954 2,430 2,430 2,430 2,430 EV/Sales (x) 2.0 2.4 1.3 1.2 1.1
Current Liabilities & Provisions 25,060 29,994 29,019 29,636 30,848
Liabilities 24,938 29,843 28,868 29,484 30,696
Financial ratios
Provisions 122 152 152 152 152
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
RoE (%) 10.4 -7.8 17.4 16.8 18.3
Net Current Assets 9,638 11,778 13,674 15,745 18,320
RoCE (%) 12.8 3.3 18.1 17.7 18.8
Application of Funds 17,142 19,479 21,813 24,372 27,463
Asset/T.O (x) 1.0 0.8 1.0 0.9 1.0
Per share data Net Debt/Equity (x) 0.2 0.8 -0.5 -0.4 -0.1
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e EBIT/Interest (x) 4.4 0.4 2.9 3.0 3.5
No. of shares (mn) 76 76 76 76 76
Diluted no. of shares (mn) 76 76 76 76 76
Margins (%)
BVPS (INR) 138 97 111 127 148
Year-ended 31 Mar FY23 FY24 FY25e FY26e FY27e
EBITDA Margin (%) 12.7 3.7 20.0 20.0 20.0
CEPS (INR) 16.7 -5.7 27.0 30.0 37.3
EBIT Margin (%) 11.9 2.7 19.1 19.1 19.1
DPS (INR) 4.0 4.0 4.0 4.0 0.0
PAT Margin (%) 6.8 -5.0 7.4 7.4 7.8
Source: Company, Antique
Source: Company Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 75

Valuation Guide
Company Reco CMP TP Return M. Cap M. Cap Net profit (INR bn) EPS (INR) P/E (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)
(INR) (INR) (%) (INR bn) (USD bn) FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY26 FY26 FY26 1m 12m
AGROCHEM & FERTILIZERS
Bayer Cropscience Hold 6,079 5,540 (9) 273.2 3.2 7.8 9.4 10.5 173.2 208.4 234.2 35.1 29.2 26.0 26.5 22.1 19.6 8.8 30.9 39.8 -8 11
Coromandel Intl. Buy 1,685 2,170 29 496.3 5.9 17.4 19.9 25.8 57.1 66.3 86.7 29.5 25.4 19.4 18.1 15.9 12.2 4.0 17.4 24.7 4 52
Dhanuka Agritech Buy 1,525 2,090 37 68.7 0.8 2.8 3.1 3.8 62.4 69.8 83.3 24.4 21.9 18.3 16.9 14.9 12.3 4.1 19.9 26.8 3 78
Paradeep Phosphates Buy 107 140 31 87.0 1.0 4.5 6.0 7.3 5.5 7.3 9.0 19.5 14.6 11.9 10.6 8.7 7.7 2.0 14.3 14.4 17 69
PI Industries Buy 4,446 4,770 7 674.6 8.0 16.7 19.2 22.2 109.6 126.5 145.8 40.6 35.1 30.5 27.2 23.3 19.9 5.7 17.5 23.2 -3 21
Rallis India Sell 307 310 1 59.7 0.7 1.8 2.4 3.0 9.1 12.4 15.7 33.8 24.8 19.6 15.3 12.4 9.9 2.8 11.7 16.3 -5 44
Sharda Cropchem Buy 747 830 11 67.4 0.8 2.6 3.3 4.2 28.5 37.0 46.3 26.2 20.2 16.1 10.8 8.5 6.7 2.4 12.7 16.3 31 78
Sumitomo Chemical India Buy 511 630 23 254.9 3.0 5.4 6.5 7.8 10.8 13.1 15.7 47.3 39.0 32.5 36.7 30.2 25.2 7.3 20.4 27.2 -5 35
UPL Buy 515 740 44 386.9 4.6 10.3 25.3 37.0 13.7 33.8 49.3 37.6 15.3 10.4 7.5 6.2 5.1 1.5 9.9 11.9 -11 -7
BUILDING MATERIALS
Apollo Pipes Buy 481 730 52 19.9 0.2 0.5 0.6 1.0 10.7 14.3 22.6 45.1 33.7 21.3 17.2 12.9 8.9 2.4 7.5 10.6 -13 -31
Astral Buy 1,730 2,450 42 464.8 5.5 6.7 8.4 10.1 24.8 31.2 37.7 69.8 55.4 45.9 40.9 33.0 27.6 10.2 20.2 26.3 -9 -8
Cera Sanitaryware Hold 6,765 8,820 30 87.3 1.0 2.5 2.8 3.2 191.9 217.8 251.9 35.3 31.1 26.9 27.0 22.7 18.9 5.7 19.6 25.4 -14 -24
Finolex Industries Hold 263 270 3 163.4 1.9 6.2 6.5 7.4 10.0 10.6 12.0 26.4 25.0 22.0 22.0 20.4 17.9 2.4 10.0 11.9 -17 37
Greenlam Industries Buy 519 800 54 66.3 0.8 1.3 2.1 3.2 10.3 16.6 24.8 50.5 31.2 21.0 22.4 15.1 12.0 4.9 16.7 16.1 2 -8
Greenpanel Industries Buy 342 550 61 41.9 0.5 0.9 1.5 2.7 7.0 12.5 21.9 48.6 27.3 15.6 24.3 13.4 8.8 2.7 9.9 8.1 -18 4
Kajaria Ceramics Buy 1,142 1,500 31 181.9 2.2 4.3 5.5 6.8 27.0 34.3 42.7 42.2 33.3 26.7 24.2 19.5 15.7 5.3 17.2 22.4 -19 -11
Prince Pipes and Fittings Buy 442 690 56 48.9 0.6 1.3 1.8 2.5 11.5 16.4 22.7 38.5 27.0 19.5 18.7 14.1 10.5 2.7 10.4 13.4 -19 -37
Somany Ceramics Buy 655 900 38 26.8 0.3 1.0 1.4 1.8 24.5 33.0 45.0 26.7 19.9 14.6 11.2 9.1 7.1 2.9 15.6 17.5 -8 -4
Supreme Industries Buy 4,516 6,380 41 573.7 6.8 12.1 14.2 16.2 95.1 112.0 127.6 47.5 40.3 35.4 32.1 27.5 24.2 8.4 22.4 26.6 -15 6
CEMENT
ACC Buy 2,198 2,600 18 412.7 4.9 16.0 21.2 25.8 85.1 112.7 137.2 25.8 19.5 16.0 12.7 10.0 8.3 2.1 11.3 15.6 -5 20
Ambuja Cement Buy 545 680 25 1,343.3 15.9 27.2 29.9 41.2 11.1 12.1 16.7 49.3 45.0 32.6 24.5 18.1 14.3 2.5 5.6 9.8 -7 30
Birla Corp Buy 1,085 1,500 38 83.5 1.0 2.0 4.0 4.9 26.3 52.0 64.2 41.2 20.9 16.9 9.9 8.0 7.1 1.1 5.5 7.2 -12 -15
Dalmia Bharat Hold 1,738 1,930 11 325.9 3.9 8.1 12.4 14.0 43.1 65.9 74.7 40.3 26.4 23.3 13.1 10.9 10.0 1.7 6.6 8.1 -8 -18
Grasim Industries Buy 2,503 3,000 20 1,683.2 19.9 8.6 14.8 19.5 13.0 22.2 29.4 192.1 112.6 85.1 101.8 69.4 54.6 3.0 2.7 3.6 -8 30
Heidelberg Hold 216 190 (12) 49.0 0.6 1.7 2.2 2.6 7.4 9.6 11.3 29.4 22.5 19.0 13.8 11.0 9.4 3.4 15.3 18.3 -3 15
JK Cement Buy 3,974 5,000 26 307.1 3.6 7.1 9.0 11.2 91.6 117.1 145.1 43.4 33.9 27.4 17.1 14.4 12.2 4.6 14.3 14.0 -7 16
JK Lakshmi Cement Hold 709 890 26 83.5 1.0 4.9 5.9 6.4 41.8 47.8 51.2 17.0 14.8 13.9 9.4 8.4 7.8 2.3 16.5 14.8 -13 -9
Nuvoco Vistas Hold 329 370 13 117.4 1.4 0.3 2.3 3.7 0.8 6.5 10.5 387.9 50.2 31.3 11.0 9.3 8.2 1.3 2.6 5.6 -7 -5
Orient Cement Hold 337 315 (6) 69.0 0.8 1.2 2.8 3.8 5.8 13.8 18.5 57.7 24.5 18.2 19.6 13.1 10.6 3.3 14.3 15.5 15 55
Shree Cements Buy 24,049 28,800 20 867.7 10.3 14.3 20.3 25.5 396.4 563.2 707.2 60.7 42.7 34.0 19.7 15.6 13.1 3.7 9.0 11.7 -2 -8
Ramco Cement Hold 884 920 4 208.9 2.5 2.1 5.2 7.2 8.9 22.0 30.4 99.6 40.2 29.1 17.6 13.7 11.6 2.7 6.8 8.8 2 -11
UltraTech Cement Buy 10,782 12,800 19 3,112.8 36.9 68.0 89.3 116.0 230.6 303.0 393.8 46.8 35.6 27.4 24.5 18.6 14.8 4.5 13.2 16.6 -5 24
FMCG
Asian Paints Hold 2,471 2,527 2 2,369.7 28.1 43.7 48.3 53.9 45.6 50.3 56.2 54.2 49.1 44.0 38.1 33.8 29.7 10.2 22.1 25.8 -19 -20
Bajaj Consumer Care Buy 204 284 39 28.1 0.3 1.6 1.8 2.0 11.1 12.6 14.2 18.3 16.2 14.4 11.6 9.5 7.7 2.1 13.3 16.2 -10 -9
Colgate Palmolive Hold 2,763 3,054 11 751.5 8.9 14.7 16.7 18.5 54.0 61.6 67.9 51.1 44.9 40.7 35.0 31.0 28.0 28.5 69.5 105.5 -22 30
Dabur India Buy 511 710 39 905.4 10.7 19.2 22.0 25.1 10.9 12.5 14.2 47.1 41.0 36.0 35.3 30.8 26.9 7.7 19.7 23.2 -10 -4
Emami Buy 650 884 36 285.3 3.4 8.8 9.8 11.0 20.2 22.4 25.3 32.2 28.9 25.7 26.1 23.2 20.3 8.9 32.9 39.7 -10 27
Godrej Consumer Buy 1,184 1,605 36 1,211.1 14.3 21.7 27.9 32.8 21.3 27.3 32.1 55.7 43.4 36.9 36.1 30.6 26.2 8.2 19.8 25.8 -10 21
Hindustan Unilever Hold 2,465 2,666 8 5,791.6 68.6 104.5 114.8 125.3 44.5 48.9 53.3 55.4 50.4 46.2 38.1 34.5 31.5 11.5 22.6 27.9 -11 0
Honasa Consumer Hold 364 450 24 118.3 1.4 1.5 2.1 2.8 4.7 6.3 8.7 78.2 57.4 42.1 38.9 27.4 19.2 8.1 15.2 29.5 -14 15
ITC Buy 472 557 18 5,907.1 70.0 209.2 238.9 270.2 16.8 19.1 21.6 28.2 24.7 21.8 22.1 19.0 16.3 5.8 26.0 33.5 -5 8
Jyothy Labs Buy 436 561 29 160.1 1.9 4.1 4.5 5.2 11.2 12.4 14.0 39.0 35.3 31.1 29.5 26.2 22.6 6.9 20.9 27.4 -16 0
Kansai Nerolac Buy 262 370 41 212.0 2.5 7.2 8.4 10.0 8.9 10.3 12.3 29.6 25.3 21.3 17.5 14.9 12.4 3.3 13.5 18.6 -9 -15
Marico Buy 597 823 38 773.2 9.2 15.8 18.2 21.2 12.2 14.1 16.5 48.8 42.3 36.3 34.6 29.5 25.3 15.4 39.3 45.2 -13 15
Nestle Hold 2,235 2,563 15 2,155.1 25.5 32.7 36.3 41.2 33.9 37.6 42.7 66.0 59.4 52.3 44.3 39.9 35.2 37.2 69.0 94.6 -11 -7
Patanjali Foods Buy 1,843 2,100 14 667.2 7.9 14.4 21.7 25.3 39.8 59.9 70.0 46.3 30.8 26.3 33.3 21.6 17.8 5.0 17.5 21.9 7 27
Radico Khaitan Buy 2,258 2,500 11 302.0 3.6 4.1 5.4 6.7 30.4 40.4 50.0 74.2 55.9 45.2 43.5 35.3 29.3 9.5 18.3 20.8 3 61
United Spirits Buy 1,428 1,703 19 1,038.4 12.3 15.1 17.9 20.6 20.8 24.6 28.4 68.8 58.0 50.3 49.2 41.8 35.8 11.4 21.0 34.7 -7 37
RETAIL
Aditya Birla Fashion & Retail Hold 290 325 12 310.7 3.7 -2.2 1.6 4.5 -2.2 1.6 4.4 -133.5 181.1 65.2 17.9 13.8 11.3 7.4 4.2 8.3 -16 35
Arvind Fashions Buy 549 700 27 73.3 0.9 1.1 1.8 2.6 7.9 13.4 19.6 69.2 40.9 28.0 12.5 9.7 7.6 5.1 12.4 19.8 -12 42
Avenue Supermarts Hold 3,760 5,026 34 2,446.5 29.0 32.2 38.7 47.0 49.5 59.5 72.3 76.0 63.2 52.0 49.6 41.1 33.7 9.3 14.7 19.8 -10 -1
Devyani International Buy 169 205 21 204.0 2.4 0.8 1.5 2.0 0.7 1.3 1.7 245.8 133.5 101.0 23.8 18.6 15.8 15.8 12.6 22.0 -6 -7
Jubilant Foodworks Hold 625 584 (7) 412.5 4.9 3.2 4.9 6.4 4.9 7.5 9.7 128.8 83.9 64.3 26.7 22.2 19.2 15.9 20.0 29.0 1 24
Kewal Kiran Buy 602 1,040 73 37.1 0.4 1.6 1.9 2.1 26.6 31.3 34.7 22.6 19.3 17.4 16.6 14.5 12.7 4.0 20.7 23.6 -10 -23
Restaurant Brands Asia Buy 85 133 57 42.2 0.5 -0.8 -0.8 -0.4 -1.6 -1.6 -0.7 -53.4 -53.2 -118.6 12.1 9.5 7.5 2.5 -4.6 9.3 -20 -27
Sapphire Foods India Buy 309 416 35 99.2 1.2 0.4 0.9 1.9 1.4 3.0 5.9 222.8 104.4 52.0 18.8 13.7 10.1 6.7 6.6 18.8 -13 17
Senco Gold Buy 1,059 1,709 61 82.3 1.0 2.3 2.6 3.3 29.4 34.0 42.7 36.1 31.1 24.8 21.0 18.1 15.3 4.7 15.0 13.6 -24 52
Shoppers Stop Buy 626 1,016 62 68.8 0.8 0.2 1.4 2.8 1.5 12.6 25.8 422.0 49.8 24.2 10.0 7.9 6.1 14.4 28.9 14.5 -18 -6
Titan Co Ltd Buy 3,188 4,598 44 2,830.1 33.5 37.9 55.2 68.0 42.7 62.2 76.6 74.7 51.3 41.6 49.2 36.0 29.8 17.2 38.6 24.3 -9 -2
Trent Buy 6,498 7,642 18 2,310.0 27.4 17.6 24.6 33.6 49.5 69.1 94.5 131.4 94.0 68.7 77.1 55.3 40.7 26.8 28.5 39.5 -21 154
Vedant Fashion Buy 1,328 1,490 12 322.5 3.8 4.3 5.1 6.2 17.7 20.9 25.6 75.1 63.4 51.9 44.8 37.8 31.1 14.0 24.2 31.3 1 -1
V-Mart Retail Buy 3,538 5,101 44 70.0 0.8 -0.2 0.7 1.3 -11.3 35.3 67.3 -314.0 100.2 52.5 21.4 14.8 11.8 8.8 9.2 11.9 -19 108
Westlife Foodworld Hold 726 878 21 113.3 1.3 0.6 1.0 1.4 3.6 6.6 9.3 204.3 110.4 78.3 29.6 23.6 19.7 16.0 15.3 32.9 -17 -12
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 76

Valuation Guide
Company Reco CMP TP Return M. Cap M. Cap Net profit (INR bn) EPS (INR) P/E (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)
(INR) (INR) (%) (INR bn) (USD bn) FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY26 FY26 FY26 1m 12m

INDUSTRIALS
ABB Buy 6,802 8,624 27 1,441.4 17.1 17.7 20.8 26.1 83.6 98.3 123.2 81.3 69.2 55.2 63.8 53.8 42.7 16.9 26.5 36.1 -21 60
BHEL Buy 223 364 64 775.0 9.2 17.8 34.3 42.3 5.1 9.8 12.1 43.6 22.6 18.3 29.3 16.0 13.1 2.8 12.8 15.3 -17 63
Cummins India Buy 3,326 4,289 29 922.0 10.9 17.3 20.2 24.8 62.3 73.0 89.3 53.4 45.6 37.2 45.3 37.9 30.2 12.2 28.2 37.1 -9 87
Engineers India Buy 179 238 33 100.8 1.2 3.3 4.3 5.4 5.2 6.9 8.6 34.6 26.1 21.0 28.5 19.1 14.2 3.6 16.5 19.0 -8 22
GE T&D Buy 1,777 2,180 23 455.1 5.4 5.6 7.4 10.1 21.9 29.0 39.6 81.2 61.2 44.8 56.9 43.0 31.4 17.9 34.2 48.9 -1 360
Hitachi Energy Buy 12,121 17,315 43 513.7 6.1 3.6 7.7 12.2 84.0 183.0 288.6 144.2 66.2 42.0 84.2 45.1 29.3 23.9 41.2 56.6 -24 178
Honeywell Automation Buy 41,988 56,560 35 371.2 4.4 5.3 7.0 9.6 602.1 788.6 1,087.7 69.7 53.2 38.6 53.7 39.2 27.4 7.8 15.8 16.1 -16 13
KEC International Buy 966 1,075 11 257.1 3.0 7.5 12.0 17.3 29.1 46.7 67.2 33.2 20.7 14.4 16.9 12.7 9.0 4.3 22.8 24.1 -4 69
Kirloskar Pneumatic Buy 1,517 1,747 15 98.3 1.2 2.2 2.6 3.1 34.6 40.9 48.5 43.8 37.1 31.2 30.0 24.9 20.5 7.1 21.1 19.5 9 168
Kirloskar Oil Engines Buy 1,097 1,550 41 159.1 1.9 4.4 5.8 7.2 30.5 39.8 49.6 35.9 27.6 22.1 22.5 17.3 13.7 4.8 18.4 23.4 -8 96
Lakshmi Machine Works Hold 15,250 15,996 5 162.9 1.9 2.0 3.6 5.7 182.9 335.3 533.2 83.4 45.5 28.6 65.3 33.6 20.2 5.3 12.2 16.1 -11 18
Linde India Hold 6,688 7,201 8 570.4 6.8 4.8 6.6 9.4 55.8 77.5 110.8 119.8 86.3 60.4 73.4 54.3 38.6 13.4 16.5 20.6 -18 11
Larsen & Toubro Buy 3,548 4,204 18 4,878.4 57.8 162.2 226.2 276.7 115.8 161.5 197.6 30.6 22.0 18.0 20.3 15.7 12.8 4.1 19.8 14.8 0 16
Siemens Buy 6,705 8,827 32 2,387.6 28.3 31.0 41.9 59.2 87.0 117.7 166.2 77.1 57.0 40.3 58.6 43.0 30.2 13.2 24.8 33.7 -13 96
Thermax Hold 4,908 5,144 5 584.8 6.9 6.8 9.7 13.5 60.3 85.8 119.9 81.4 57.2 40.9 60.0 42.9 30.7 9.6 18.0 21.8 -4 69
Transformers & Rectifiers India Buy 890 861 (3) 133.6 1.6 1.5 3.1 4.7 9.6 19.5 29.7 93.2 45.6 30.0 47.4 25.6 17.9 9.6 23.2 31.6 9 370
DEFENCE
Bharat Dynamics Buy 979 1,579 61 358.9 4.3 5.8 11.0 14.7 15.9 30.1 40.1 61.6 32.5 24.4 64.6 26.7 18.9 7.7 25.5 26.0 -18 81
Bharat Electronics Buy 282 373 33 2,058.1 24.4 45.9 56.8 68.2 6.3 7.8 9.3 44.8 36.2 30.2 32.8 26.0 21.2 9.3 27.8 28.6 -1 96
BEML Buy 3,812 5,185 36 158.7 1.9 3.4 4.8 7.2 82.1 116.0 172.8 46.5 32.9 22.1 29.8 21.6 14.9 4.7 15.2 15.8 2 72
Cochin Shipyard Hold 1,317 1,627 24 346.6 4.1 7.6 8.5 10.4 28.9 32.4 39.7 45.6 40.6 33.2 28.1 25.0 20.4 5.7 14.8 19.3 -19 150
Garden Reach Shipbuilders Buy 1,384 2,092 51 158.6 1.9 4.4 5.3 5.4 38.3 46.0 47.0 36.1 30.1 29.4 29.6 22.7 20.7 6.5 23.2 31.8 -18 80
Hindustan Aeronautics Buy 4,067 6,184 52 2,719.8 32.2 67.9 85.9 97.9 101.6 128.5 146.4 40.0 31.7 27.8 28.0 21.2 17.6 7.0 23.8 24.8 -10 97
Mazagon Dock Shipbuilders Buy 3,891 5,513 42 784.7 9.3 28.6 30.1 38.5 141.6 149.4 190.8 27.5 26.0 20.4 23.6 20.3 13.1 7.4 31.6 43.9 -9 97
PTC Industries Buy 11,111 19,653 77 166.4 2.0 0.8 1.7 5.0 52.5 112.0 334.8 211.8 99.2 33.2 132.8 55.1 22.4 10.7 11.3 14.5 -18 125
CONSUMER DURABLES
Bajaj Elec. Hold 806 901 12 92.9 1.1 1.0 2.1 3.0 8.5 18.0 25.7 94.6 44.7 31.3 33.6 21.8 16.6 5.7 13.2 16.7 -11 -19
Blue Star Hold 1,760 1,946 11 362.0 4.3 6.4 8.9 11.3 31.3 43.1 55.0 56.3 40.8 32.0 37.5 27.5 21.6 9.3 25.2 32.3 -13 83
Crompton Consumer Buy 385 503 31 247.8 2.9 5.4 7.1 9.1 8.5 11.0 14.2 45.5 35.1 27.2 27.8 21.8 17.0 6.7 20.1 23.2 -10 38
Havells India Hold 1,614 2,000 24 1,011.9 12.0 15.7 19.8 25.0 25.2 31.7 40.0 64.1 51.0 40.4 44.0 34.9 27.5 10.0 21.2 27.9 -17 29
Voltas Hold 1,685 1,901 13 557.7 6.6 9.5 12.0 16.3 28.6 36.2 49.2 58.8 46.5 34.3 44.8 34.8 25.5 7.6 17.4 23.4 -6 107
RAILWAYS
IRCON International Hold 192 205 7 180.4 2.1 7.8 8.4 9.5 8.3 8.9 10.1 23.0 21.5 19.1 22.1 20.5 18.0 2.7 12.9 16.5 -14 21
Jupiter Wagons Ltd Hold 440 507 15 186.7 2.2 4.4 5.6 6.5 10.7 13.6 15.8 41.1 32.4 27.8 26.6 21.1 18.0 5.4 18.1 23.7 -16 38
RITES Hold 270 325 20 129.6 1.5 3.4 4.0 5.2 7.0 8.4 10.8 38.4 32.1 24.9 19.9 16.6 12.9 4.9 15.3 21.6 -13 18
Rail Vikas Nigam Ltd Sell 420 251 (40) 875.4 10.4 14.8 16.2 17.8 7.1 7.8 8.5 59.2 53.9 49.1 72.9 64.8 56.8 8.1 15.8 16.1 -11 168
Titagarh Rail Systems Buy 1,089 1,712 57 146.7 1.7 3.9 5.9 7.3 30.5 46.2 57.1 35.8 23.6 19.1 25.5 17.0 13.6 4.4 20.4 29.6 -3 33
INFRASTRUCTURE
Ahluwalia Contracts Hold 1,025 1,139 11 68.6 0.8 2.8 3.4 4.2 41.7 51.1 62.8 24.6 20.0 16.3 12.8 10.2 8.0 3.1 16.7 25.3 -5 52
Ashoka Buildcon Hold 233 253 8 65.5 0.8 2.5 3.6 4.8 8.8 12.7 17.3 26.5 18.3 13.5 13.0 10.4 8.5 1.5 8.4 13.2 -10 67
Dilip Buildcon Buy 477 652 37 69.8 0.8 3.6 5.3 7.0 22.3 32.7 42.8 21.4 14.6 11.1 6.6 5.6 4.7 1.2 8.8 16.0 -6 20
HG Infra Engineering Buy 1,198 1,792 50 78.1 0.9 5.1 5.9 6.9 78.1 90.0 106.0 15.3 13.3 11.3 9.2 8.1 6.9 2.3 18.9 22.8 -19 42
IRB Infra Buy 49 76 56 293.0 3.5 8.6 11.5 13.8 1.4 1.9 2.3 34.2 25.5 21.2 13.7 11.5 10.1 1.9 7.6 7.7 -17 39
KNR Constructions Ltd. Hold 308 286 (7) 86.5 1.0 3.5 3.6 4.1 12.3 12.9 14.6 25.0 23.9 21.1 13.6 12.8 11.2 2.2 9.7 13.9 -3 17
NCC Ltd. Buy 280 395 41 175.6 2.1 9.3 11.9 15.5 14.9 19.0 24.7 18.8 14.7 11.3 8.7 7.2 5.8 2.1 14.9 25.5 -6 69
PNC Infratech Buy 309 633 105 79.3 0.9 5.9 7.1 8.7 23.0 27.5 33.9 13.4 11.2 9.1 8.1 6.9 5.5 1.3 12.4 16.5 -31 -3
PSP Projects Buy 619 909 47 24.6 0.3 1.5 1.9 2.4 38.8 49.1 60.6 16.0 12.6 10.2 8.3 6.8 5.5 1.7 14.1 17.8 -4 -22
Welspun Ent. Hold 456 553 21 63.2 0.7 3.2 3.8 4.5 23.1 27.7 33.2 19.7 16.5 13.7 14.0 11.3 9.0 2.1 13.2 18.7 -17 46
IT
Cyient Hold 1,795 2,250 25 199.2 2.4 8.0 9.1 10.3 64.9 83.1 93.8 27.7 21.6 19.1 14.2 12.1 10.6 3.8 18.1 22.3 -3 8
FirstSource Sol. Buy 349 400 14 243.6 2.9 6.4 8.3 9.5 9.1 11.8 13.4 38.6 29.6 26.1 21.1 17.5 15.2 5.5 19.7 17.1 10 119
HCL Tech Buy 1,865 2,000 7 5,060.3 59.9 177.0 195.6 218.1 64.7 71.2 79.1 28.8 26.2 23.6 18.4 16.1 14.2 7.8 29.7 38.3 0 48
Infosys Hold 1,868 1,980 6 7,757.9 91.9 265.6 306.3 333.7 64.1 73.9 80.6 29.2 25.3 23.2 19.2 16.8 15.0 7.6 31.2 41.2 -5 37
LTI Mindtree Hold 5,948 6,675 12 1,761.6 20.9 51.0 57.4 65.7 172.4 194.0 222.1 34.5 30.7 26.8 24.4 20.4 17.6 6.7 23.3 31.3 -8 13
L&T Technology Services Hold 5,175 5,450 5 547.7 6.5 13.2 14.9 17.4 125.1 140.7 164.7 41.4 36.8 31.4 26.9 23.5 19.6 8.8 25.0 32.0 -2 22
Mphasis Buy 2,845 3,725 31 538.8 6.4 17.0 19.4 22.0 90.3 103.2 116.6 31.5 27.6 24.4 20.0 17.3 15.3 5.2 19.7 24.2 -4 32
Coforge Ltd Buy 8,056 8,400 4 537.5 6.4 10.3 14.4 16.9 155.2 216.3 253.9 51.9 37.2 31.7 26.6 22.1 18.9 11.2 32.7 41.9 8 58
Persistent Sys Hold 5,641 4,800 (15) 879.1 10.4 13.6 17.4 21.1 90.4 115.2 139.6 62.4 49.0 40.4 43.4 34.8 28.3 14.4 30.7 41.0 0 81
TCS Hold 4,150 4,425 7 15,016.3 177.9 501.1 565.7 617.2 138.5 156.4 170.6 30.0 26.5 24.3 20.8 18.8 17.1 12.1 48.3 60.4 0 25
TeamLease Buy 2,716 4,100 51 45.5 0.5 1.1 1.7 2.4 66.8 103.8 140.4 40.7 26.2 19.3 30.2 21.7 14.5 4.2 17.5 18.4 -10 9
Tech Mahindra Buy 1,676 1,875 12 1,639.5 19.4 46.4 56.5 67.5 52.4 63.8 76.1 32.0 26.3 22.0 20.6 16.8 14.3 6.0 22.3 31.2 -1 48
Wipro Hold 569 575 1 2,976.9 35.3 115.9 127.0 137.8 22.1 24.2 26.3 25.8 23.5 21.7 15.1 13.9 12.7 3.6 15.8 19.2 4 49
Zensar Technologies Buy 698 800 15 158.3 1.9 6.7 7.5 8.4 29.6 33.0 37.1 23.6 21.2 18.8 15.8 13.5 11.7 3.4 17.1 23.0 -3 43

contd...
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 77

Valuation Guide
Company Reco CMP TP Return M. Cap M. Cap Net profit (INR bn) EPS (INR) P/E (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)
(INR) (INR) (%) (INR bn) (USD bn) FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY26 FY26 FY26 1m 12m
METALS & MINING
APL Apollo Tubes Buy 1,498 1,718 15 415.8 4.9 7.1 11.3 17.0 25.6 40.7 61.4 58.5 36.9 24.4 35.5 24.5 17.2 8.1 24.3 27.4 -4 -11
Hindalco Industries Buy 627 794 27 1,408.1 16.7 131.6 122.7 128.1 59.2 55.2 57.6 10.6 11.4 10.9 6.2 6.4 6.1 1.1 9.7 11.6 -16 29
Hindustan Zinc Sell 486 419 (14) 2,052.2 24.3 106.8 116.1 123.5 25.3 27.5 29.2 19.2 17.7 16.6 11.4 10.5 9.9 11.1 68.6 57.4 -7 61
HI-Tech Pipes Buy 166 225 35 33.7 0.4 0.8 1.4 2.1 4.1 7.0 10.2 40.2 23.8 16.3 18.4 13.1 9.9 2.4 10.5 13.3 -16 45
Indian Hume Pipe Buy 416 579 39 21.9 0.3 0.7 1.0 1.2 13.2 18.6 22.9 31.5 22.3 18.1 16.8 13.7 11.8 2.2 10.5 13.2 -10 78
Jindal Steel & Power Buy 859 1,183 38 875.9 10.4 64.3 90.0 102.4 63.6 89.1 101.3 13.5 9.6 8.5 7.5 5.7 5.0 1.4 15.9 17.5 -14 35
JSW Steel Hold 936 909 (3) 2,288.8 27.1 89.6 135.8 157.3 36.8 55.7 64.6 25.4 16.8 14.5 10.9 8.7 7.8 2.5 15.5 13.7 -8 23
JTL Industries Buy 184 263 43 35.2 0.4 1.4 1.8 2.6 7.3 9.4 13.1 25.3 19.5 14.0 18.8 14.0 10.2 2.5 13.4 17.8 -14 -15
Kirloskar Ferrous Buy 607 797 31 99.8 1.2 4.0 5.8 8.7 24.5 35.4 52.8 24.8 17.2 11.5 12.0 9.4 6.9 2.5 15.3 17.3 -12 22
MOIL Buy 299 451 51 60.9 0.7 4.4 6.2 8.3 21.8 30.7 40.9 13.8 9.8 7.3 7.5 5.1 3.6 1.9 20.8 28.1 -21 11
NALCO Buy 220 236 7 403.5 4.8 27.1 32.8 33.6 14.8 17.9 18.3 14.9 12.3 12.0 8.6 7.1 6.7 2.2 18.7 24.0 -3 139
NMDC Buy 223 294 32 654.1 7.7 68.4 83.7 91.7 23.4 28.6 31.3 9.6 7.8 7.1 6.5 5.1 4.4 1.9 26.0 33.7 -6 27
SAIL Hold 112 130 16 461.3 5.5 38.3 45.8 50.3 9.3 11.1 12.2 12.1 10.1 9.2 6.9 6.2 5.8 0.7 7.5 8.2 -17 27
Tata Steel Buy 139 175 26 1,737.4 20.6 88.1 146.8 171.6 7.1 11.8 13.8 19.7 11.8 10.1 8.4 6.4 5.7 1.5 13.7 14.0 -12 15
Venus Pipes Hold 1,862 2,062 11 37.8 0.4 1.1 1.7 1.9 54.5 81.6 93.8 34.1 22.8 19.9 20.7 14.9 13.2 5.5 27.1 29.7 -7 27
Vedanta Hold 435 475 9 1,700.0 20.1 155.6 195.8 217.5 39.8 50.0 55.6 10.9 8.7 7.8 5.1 4.4 3.9 3.6 43.6 28.4 -13 80
OIL & GAS
BPCL Buy 306 405 32 1,326.9 15.7 138.5 140.3 142.9 31.9 32.3 32.9 9.6 9.5 9.3 6.2 6.4 6.8 1.5 16.1 16.3 -10 58
GAIL Sell 189 203 7 1,245.8 14.8 98.6 86.8 98.3 15.0 13.2 15.0 12.6 14.3 12.7 9.3 10.1 8.7 1.7 11.9 12.2 -18 50
Gujarat Gas Hold 492 579 18 338.5 4.0 12.0 17.0 18.7 17.4 24.7 27.2 28.2 19.9 18.1 16.4 11.9 10.7 3.5 18.9 22.6 -17 18
HPCL Buy 371 523 41 790.3 9.4 83.1 87.5 89.3 39.0 41.1 42.0 9.5 9.0 8.8 7.4 6.9 6.8 1.6 19.0 12.6 -8 84
IGL Hold 420 405 (3) 293.7 3.5 16.5 17.2 18.3 23.5 24.6 26.1 17.8 17.0 16.1 11.3 10.5 9.6 2.7 16.7 21.4 -19 7
Indian Oil Corp Buy 136 246 81 1,920.3 22.7 233.8 241.5 278.6 17.0 17.5 20.2 8.0 7.8 6.7 6.4 6.0 5.1 0.9 12.3 11.1 -18 37
Mahanagar Gas Hold 1,330 1,539 16 131.3 1.6 10.0 10.2 11.1 100.9 103.7 112.7 13.2 12.8 11.8 6.9 6.5 5.8 2.1 17.3 22.5 -26 28
Oil India Buy 481 659 37 782.2 9.3 66.3 69.7 83.8 40.7 42.8 51.5 11.8 11.2 9.3 8.2 7.4 5.9 1.5 13.9 15.9 -18 130
ONGC Buy 253 364 44 3,177.1 37.6 369.7 415.6 427.0 29.4 33.0 33.9 8.6 7.6 7.4 4.3 3.7 3.3 0.9 12.2 14.7 -12 29
Petronet LNG Hold 315 363 15 472.3 5.6 37.9 42.4 43.2 25.3 28.3 28.8 12.5 11.1 10.9 8.4 8.1 8.1 2.4 22.2 23.6 -11 59
Reliance Industries Hold 1,252 2,846 127 16,943.7 200.7 693.4 804.8 852.7 102.5 118.9 126.0 12.2 10.5 9.9 11.1 9.5 8.5 0.9 9.3 9.6 -9 8
PHARMA & HEALTHCARE
Alkem Hold 5,571 4,670 (16) 666.1 7.9 23.2 24.9 25.4 194.2 208.0 212.3 28.7 26.8 26.2 22.8 20.7 18.1 4.9 19.4 23.3 -11 30
Alembic Pharma Buy 1,020 1,411 38 200.4 2.4 6.2 7.8 11.1 31.5 39.9 56.4 32.4 25.6 18.1 18.6 15.1 11.3 3.4 13.9 17.3 -9 38
CIPLA Sell 1,506 1,204 (20) 1,215.9 14.4 32.6 36.6 40.4 40.4 45.4 50.2 37.2 33.2 30.0 23.1 20.2 17.8 3.7 11.8 16.5 -6 21
Concord Biotech Buy 1,854 2,187 18 193.9 2.3 3.7 4.9 6.5 35.1 46.7 62.5 52.9 39.7 29.7 37.9 28.1 20.8 9.1 25.0 32.6 -4 42
Divi's Laboratories Ltd Sell 5,770 4,150 (28) 1,531.8 18.1 21.2 26.3 29.7 79.8 99.2 112.0 72.3 58.1 51.5 50.4 39.8 34.9 9.4 16.9 22.1 -7 64
Dr Reddys Sell 1,245 1,190 (4) 1,038.8 12.3 32.1 41.7 47.8 38.5 50.0 57.3 32.3 24.9 21.7 18.1 13.9 12.4 3.6 14.7 18.3 -7 15
IOL Chemicals Buy 370 468 26 21.7 0.3 2.1 2.4 2.2 35.2 40.5 37.5 10.5 9.1 9.9 6.3 5.3 5.1 1.1 12.5 15.9 -14 -14
JB Chemicals Hold 1,715 1,679 (2) 266.4 3.2 7.5 8.5 9.7 48.1 54.7 62.2 35.6 31.4 27.6 22.0 19.2 16.6 3.3 22.7 28.0 -6 14
Laurus Labs Hold 477 398 (16) 257.0 3.0 4.2 6.9 8.6 7.8 12.7 15.9 61.2 37.5 29.9 23.5 17.5 14.7 5.1 14.3 15.2 0 28
Lupin Buy 2,039 2,259 11 930.2 11.0 31.3 38.9 43.4 68.7 85.4 95.3 29.7 23.9 21.4 17.9 14.8 12.9 4.6 20.9 26.1 -9 74
Mankind Pharma Buy 2,532 2,827 12 1,014.5 12.0 22.2 25.8 31.5 55.3 64.3 78.5 45.8 39.4 32.2 34.6 25.1 21.8 7.4 20.6 18.3 -8 38
Shilpa Medicare Buy 825 1,300 58 80.7 1.0 1.6 3.8 6.3 16.0 39.2 64.8 51.5 21.0 12.7 22.4 12.0 8.0 2.8 14.4 18.8 -4 126
Solara Active Pharma Sell 742 566 (24) 32.3 0.4 0.9 1.6 1.5 17.8 32.5 31.4 41.7 22.8 23.6 14.3 11.0 9.1 2.4 11.7 10.4 0 132
Torrent Pharma Buy 3,117 3,589 15 1,054.8 12.5 20.3 27.0 32.8 59.9 79.9 97.0 52.0 39.0 32.1 28.0 23.2 19.6 12.0 32.9 37.0 -11 51
Zydus Life Science Hold 964 1,033 7 969.8 11.5 37.0 40.3 42.7 36.8 40.0 42.5 26.2 24.1 22.7 17.4 15.4 13.9 3.7 16.3 19.9 -9 55
HOSPITALS & DIAGNOSTICS
Dr Lal Pathlabs Sell 2,957 2,461 (17) 247.2 2.9 4.4 5.1 5.9 52.4 61.2 70.3 56.5 48.3 42.0 34.4 29.6 25.8 51.0 22.5 29.5 -14 13
Metropolis Healthcare Sell 2,050 1,758 (14) 105.1 1.2 1.7 2.1 2.6 33.4 41.4 50.2 61.4 49.5 40.8 29.9 25.0 20.9 7.5 16.1 20.5 -10 27
Vijaya Diagnostic Centre Hold 1,017 930 (9) 104.4 1.2 1.6 2.1 2.6 15.6 20.2 25.3 65.4 50.3 40.1 35.4 28.0 22.4 5.3 23.1 26.0 3 63
REALTY
Arvind SmartSpaces Buy 863 1,159 34 39.3 0.5 0.7 1.1 1.5 17.1 26.8 36.2 50.5 32.2 23.8 30.8 20.6 16.1 5.4 18.2 24.2 0 146
Brigade Enterprise Buy 1,073 1,620 51 262.1 3.1 6.8 8.2 10.3 29.7 35.5 44.8 36.1 30.2 24.0 19.1 17.0 14.5 24.1 17.3 15.0 -16 53
Aditya Birla Real Estate Buy 2,558 3,804 49 285.7 3.4 2.8 4.2 4.6 25.5 37.6 41.5 100.3 68.0 61.6 35.0 27.7 25.2 6.3 9.6 11.2 -6 112
DLF Buy 749 1,014 36 1,852.9 21.9 37.4 44.4 56.5 15.1 17.9 22.8 49.5 41.8 32.8 71.8 59.6 56.6 3.9 9.8 7.0 -13 23
Godrej Properties Buy 2,569 3,826 49 714.4 8.5 13.2 30.5 39.6 47.3 109.6 142.5 54.3 23.4 18.0 115.8 62.1 49.9 5.0 23.7 19.2 -17 41
Kolte Patil Buy 360 618 72 27.4 0.3 1.4 1.5 1.9 18.0 20.0 25.1 20.0 18.0 14.4 6.4 5.9 5.4 2.8 16.8 17.7 -7 -27
Macrotech Developers Buy 1,202 1,413 18 1,197.9 14.2 29.3 33.8 39.5 29.5 34.0 39.8 40.7 35.4 30.2 29.2 25.9 22.2 5.0 15.3 16.1 -1 41
Nexus Select Trust Buy 142 172 22 214.7 2.5 6.6 7.5 8.8 4.3 4.9 5.8 32.7 28.8 24.4 15.8 14.3 13.6 1.6 5.3 7.2 -1 10
Oberoi Realty Buy 1,927 2,688 40 700.7 8.3 27.3 32.6 37.1 75.1 89.8 102.2 25.7 21.5 18.9 20.6 17.0 14.6 3.5 17.9 20.9 -4 56
Phoenix Buy 1,446 1,633 13 516.9 6.1 10.3 12.1 13.0 57.6 67.8 72.8 25.1 21.3 19.9 24.8 22.3 20.8 2.3 11.2 10.8 -10 37
Prestige Estates Buy 1,520 2,311 52 654.5 7.8 14.5 15.6 17.2 33.6 36.3 39.9 45.2 41.9 38.1 27.0 24.0 21.2 4.3 10.9 11.0 -18 80
Sobha Buy 1,547 3,003 94 155.2 1.8 3.4 5.9 8.2 31.5 55.1 76.7 49.1 28.1 20.2 24.3 16.2 12.0 4.3 18.7 21.9 -10 90
Sunteck Realty Buy 490 786 60 71.8 0.9 3.1 2.8 2.4 21.4 19.4 16.7 22.9 25.2 29.4 - - - 2.0 8.2 10.4 -12 10
TELECOM
Bharti Airtel Buy 1,550 1,822 18 9,274.1 109.8 218.4 309.4 407.7 38.1 54.0 71.2 40.7 28.7 21.8 12.3 10.2 8.4 7.1 27.5 19.8 -9 66

contd...
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 78

Valuation Guide
Company Reco CMP TP Return M. Cap M. Cap Net profit (INR bn) EPS (INR) P/E (x) EV/EBITDA (x) P/BV (x) RoE (%) RoCE (%) Absolute (%)
(INR) (INR) (%) (INR bn) (USD bn) FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY26 FY26 FY26 1m 12m

TEXTILE
Arvind Ltd Buy 336 529 57 88.1 1.0 3.8 5.8 7.2 14.4 22.1 27.6 23.4 15.3 12.2 10.8 8.2 6.8 2.0 13.7 16.1 -6 58
KPR Mills Hold 879 926 5 300.5 3.6 9.4 11.0 12.7 27.6 32.1 37.0 31.8 27.3 23.7 21.9 19.1 16.7 5.1 20.0 24.4 -6 15
Welspun Living Buy 149 216 45 142.7 1.7 9.0 11.0 13.1 9.2 11.3 13.5 16.1 13.2 11.0 9.2 7.7 6.3 2.3 18.6 19.0 -9 -6
UTILITIES
CESC Buy 175 203 16 231.9 2.7 16.9 18.7 21.3 12.7 14.1 16.0 13.8 12.4 10.9 10.9 8.0 7.2 1.7 17.2 12.0 -7 94
COAL India Buy 407 598 47 2,507.6 29.7 375.2 401.8 429.0 60.9 65.2 69.6 6.7 6.2 5.8 4.4 3.9 3.4 2.0 34.6 18.7 -18 16
Indian Energy Exchange Buy 163 282 74 145.1 1.7 4.0 4.8 5.6 4.5 5.4 6.3 36.1 30.4 25.9 30.6 25.4 21.1 11.3 40.1 42.3 -17 23
JSW Energy Hold 729 630 (14) 1,274.0 15.1 22.1 25.3 28.3 12.7 14.5 16.2 57.4 50.3 44.9 23.1 20.6 18.9 4.2 8.7 8.1 4 86
NHPC Hold 78 92 18 782.9 9.3 37.1 44.4 55.3 3.6 4.3 5.4 21.6 18.0 14.5 23.8 20.3 16.0 1.8 10.4 4.9 -14 49
NTPC Buy 381 477 25 3,697.8 43.8 179.4 206.1 237.4 18.5 21.3 24.5 20.6 17.9 15.6 12.2 11.0 10.0 2.2 12.5 9.8 -10 55
Power Grid Hold 318 333 5 2,957.6 35.0 153.0 162.9 174.4 16.4 17.5 18.8 19.3 18.2 17.0 10.2 9.9 9.5 3.0 17.2 13.4 -4 50
SJVN Ltd Hold 104 118 13 409.4 4.8 8.1 9.2 11.6 2.1 2.3 3.0 50.3 44.4 35.2 30.1 25.4 20.9 2.8 6.3 4.1 -13 36
Torrent Power Hold 1,645 1,150 (30) 790.7 9.4 24.1 26.4 30.4 50.1 54.9 63.2 32.8 30.0 26.0 17.1 15.6 14.0 5.2 18.2 14.1 -15 101
Tata Power Buy 399 513 29 1,276.1 15.1 49.0 59.6 71.0 15.3 18.7 22.2 26.0 21.4 18.0 13.8 12.0 10.7 3.2 14.7 8.4 -14 55
TRAVEL & LEISURE
Indian Hotels Hold 714 640 (10) 1,016.5 12.0 17.3 21.5 25.0 12.2 15.1 17.6 58.5 47.2 40.6 37.1 30.6 25.7 7.9 18.2 19.3 1 74
Chalet Hotels Buy 819 1,000 22 178.6 2.1 3.9 5.2 7.4 18.1 23.7 34.1 45.2 34.6 24.0 23.7 19.4 14.1 4.3 13.4 14.0 -8 37
Yatra Online Buy 112 159 42 17.5 0.2 0.5 1.0 1.1 3.4 6.1 7.2 32.5 18.4 15.5 16.8 10.2 8.3 2.0 11.2 13.2 -10 -19
MIDCAP DIVERSIFIED
CCL Products Buy 697 850 22 93.1 1.1 2.6 3.7 5.3 19.9 27.8 40.0 35.1 25.1 17.4 21.3 16.7 12.8 4.3 18.4 12.4 5 10
EPL Ltd. Buy 261 360 38 83.2 1.0 3.5 4.7 5.6 11.0 14.8 17.5 23.7 17.6 14.9 9.8 8.2 7.2 3.2 19.4 23.2 -1 35
Ganesha Ecosphere Buy 2,194 1,910 (13) 55.6 0.7 1.4 1.6 2.4 51.8 61.2 91.4 42.4 35.8 24.0 22.7 19.9 14.2 4.1 12.1 13.9 -4 158
Gravita India BUY 2,158 3,300 53 149.0 1.8 2.9 4.0 5.0 41.4 57.4 73.1 52.1 37.6 29.5 38.1 28.7 23.3 10.4 31.5 27.4 -15 87
Mold-Tek Packaging Buy 676 1,000 48 22.5 0.3 0.7 0.8 1.1 19.8 25.4 32.7 34.1 26.7 20.7 16.5 13.6 11.1 3.1 12.3 11.2 -8 -23
Solar Industries Hold 9,688 9,730 0 876.7 10.4 12.9 16.1 19.1 142.2 177.8 211.4 68.1 54.5 45.8 42.2 34.1 28.5 14.7 30.7 38.1 -14 56
Varun Beverages Buy 568 690 21 1,845.6 21.9 26.6 34.8 44.6 8.2 10.7 13.7 69.3 53.1 41.4 38.7 31.5 25.9 15.1 32.5 32.6 -4 41

Company Reco CMP TP Return M. Cap M. Cap Net profit (INR bn) BVPS (INR) P/BV (x)* NNPA Ratio (%) P/E (x) RoE (%) RoA (%) Absolute (%)
(INR) (INR) (%) (INR bn) (USD bn) FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY26 FY26 FY26 1m 12m

FINANCIALS
Axis Bank Buy 1,139 1,375 21 3,524.6 41.7 274.6 324.4 388.5 551.0 632.8 730.9 1.9 1.7 1.4 0.3 0.4 0.5 10.9 17.7 1.8 -2 11
Bank of Baroda Buy 243 315 30 1,258.2 14.9 185.7 208.3 230.5 227.6 259.7 295.4 1.1 0.9 0.8 0.7 0.7 0.8 6.0 16.5 1.1 -1 24
Canara Bank Buy 98 135 37 891.9 10.6 151.2 169.0 195.1 100.7 115.6 132.8 1.0 0.9 0.7 1.0 0.9 0.8 5.3 17.2 1.0 -6 22
City Union Bank Buy 171 190 11 126.4 1.5 10.4 11.8 12.4 125.8 140.0 155.1 1.4 1.2 1.1 1.3 0.9 0.9 10.8 11.9 1.4 11 19
DCB Bank Buy 114 165 45 35.6 0.4 6.4 7.8 8.9 171.6 194.7 221.5 0.7 0.6 0.5 1.1 1.1 1.2 4.6 13.6 1.0 -2 1
Equitas SFB Buy 63 110 76 71.5 0.8 6.7 11.0 13.8 57.1 64.6 73.9 1.1 1.0 0.8 0.7 0.9 0.9 6.5 15.9 1.8 -15 -35
Federal Bank Buy 199 220 10 488.9 5.8 41.1 47.0 56.6 135.1 151.0 168.7 1.5 1.3 1.2 0.6 0.6 0.7 10.3 13.5 1.2 1 30
HDFC Bank Buy 1,681 1,900 13 12,848.2 152.2 670.4 781.1 923.4 629.4 708.3 801.5 2.3 2.1 1.8 0.4 0.4 0.4 16.4 15.4 1.8 0 13
ICICI Bank Buy 1,254 1,400 12 8,845.0 104.8 450.5 490.8 555.0 382.9 438.8 502.0 2.7 2.3 2.0 0.6 0.7 0.6 17.9 16.8 2.1 2 34
IndusInd Bank Buy 1,037 1,825 76 807.6 9.6 95.3 115.1 137.8 901.11,018.01,155.8 1.2 1.0 0.9 0.6 0.6 0.7 7.0 15.4 1.8 -24 -31
Karur Vysya Bank Buy 212 270 28 169.0 2.0 18.4 20.0 22.8 144.6 166.0 190.7 1.5 1.3 1.1 0.3 0.4 0.4 8.5 16.0 1.5 4 33
Kotak Mahindra Bank Buy 1,688 2,000 19 3,355.6 39.7 162.5 145.6 172.7 562.2 632.7 716.4 2.3 2.0 1.7 0.4 0.5 0.6 23.0 12.3 2.0 -12 -3
L&T Finance Buy 136 220 62 339.0 4.0 30.8 37.9 45.0 103.5 114.9 128.5 1.3 1.2 1.1 0.6 0.6 0.6 8.9 14.0 2.9 -18 -6
Punjab National Bank Hold 101 130 30 1,155.7 13.7 152.4 183.8 198.5 102.2 114.7 128.2 1.0 0.9 0.8 0.5 0.5 0.5 6.0 15.4 1.0 -4 27
Shriram Finance Buy 2,854 3,500 23 1,073.1 12.7 85.0 99.7 116.1 1,473.7 1,689.1 1,948.0 1.9 1.7 1.5 2.8 2.8 2.9 10.8 16.8 3.3 -16 45
State Bank of India Buy 809 975 21 7,216.9 85.5 679.0 710.9 822.7 416.6 480.3 554.0 1.5 1.3 1.1 0.6 0.6 0.6 10.2 16.9 1.0 0 39
South Indian Bank Hold 23 32 40 59.2 0.7 9.9 10.9 13.8 35.8 39.5 44.1 0.6 0.6 0.5 1.5 1.5 1.5 5.4 11.1 0.8 -5 -3
Ujjivan Small Bank Buy 34 60 75 66.0 0.8 12.0 13.6 14.9 35.1 42.1 49.9 1.0 0.8 0.7 0.4 0.4 0.4 4.9 18.2 2.5 -14 -41
Union Bank of India Buy 116 170 47 882.9 10.5 154.8 167.1 179.8 134.2 150.0 166.9 0.9 0.8 0.7 1.0 1.1 1.2 5.3 15.4 1.0 1 3
*Adjusted for subsidiaries

Company Reco CMP TP Return M. Cap M. Cap VNB (INR bn) EVPS (INR) P/EV (x) P/VNB (x) RoEV (%) Absolute (%)
(INR) (INR) (%) (INR bn) (USD bn) FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY25 FY26 FY27 FY26 1m 12m

Insurance
HDFC Life Insurance Buy 685 870 27 1,474.6 17.5 40.5 48.2 56.9 260.8 301.2 347.6 2.6 2.3 2.0 23.8 18.2 13.6 16.4 -8 10
ICICI Prudential Life Insurance Buy 688 865 26 994.0 11.8 26.1 30.9 35.9 343.3 390.7 444.4 2.0 1.8 1.5 20.2 14.8 10.6 14.5 -7 31
LIC of India Buy 898 1,260 40 5,679.2 67.3 111.5 121.8 130.9 1,330.1 1,460.1 1,597.7 0.7 0.6 0.6 NA NA NA 10.8 -6 48
Max Life Insurance* Buy 1,198 1,540 29 413.3 4.9 22.3 26.9 32.1 741.2 874.7 1,031.5 2.5 2.1 1.8 18.0 13.2 9.4 18.5 0 30
SBI Life Insurance Buy 1,547 2,060 33 1,549.7 18.4 59.4 69.9 81.9 709.1 832.4 976.3 2.2 1.9 1.6 14.5 10.6 7.3 17.8 -11 16
*Valuations after factoring 20% holdco discount
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 79

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ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 14 November 2024 | 80

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