Equity Research Analyst @PincWealth | Focusing on Technical and Fundamentals | NISM Certified Research Analyst |
Mumbai
Joined July 2021
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Prince Choudhary | TiltQuest retweeted
#Q2FY27
Observation:
Indian largecaps, midcaps, smallcaps, microcaps, SMEs are absolutely smashing sixes after sixes this earnings season
Many blockbuster/Very Good results in Q2FY27
Usually, Q2 is considered as lean quarter for Indian corporates
Record numbers everywhere despite higher RM costs and inflationary pressure
Must say, Indian companies have managed these challenges very well till now
And also balance sheet for most of the companies is very very healthy despite taking up huge capex
Amazing #Q2FY27 with almost 85% companies that have reported numbers already and I'm sure another 15% will deliver great numbers too
More power to Indian corporates 👏👏
Xpro Q2FY27 Concall (#XPROINDIA)
Barjora capacity doubled to 8,000 MT; production on the new line rose 35% QoQ; dielectric film exports doubled YoY; revenue surged 64%; received customer approvals for the newly developed 3.5-micron ultra-thin film.
Domestic import substitution in hazy film, which represents a total Indian addressable market of 1,800 to 2,000 MT per annum.
Construction of the third dielectric film production plant in the UAE is on track; commercial operations expected by end of FY27.
Realizations on conventional films range between Rs. 470-480 per kg; the newly commercialized 3.5-micron film commands over Rs. 600 per kg, and the upcoming 3.0-micron film is priced near Rs. 900 per kg.
The recently commissioned dielectric line is targeted to operate at 70% to 80% of its rated capacity by Q4FY27.
Demand for ultra-thin films is accelerating across new-age applications such as data centers, non-conventional energy, and electric vehicles (EVs).
Refrigerator sheets and liners volume grew 26% YoY in Q2 vs. industry volume growth of 8%; successfully passed on polymer price increases.
Increase in inventories due to macro issues.
Guidance of Rs. 700 Cr topline in FY27 vs 500 Cr in FY26 (40% guidance); Co-extruded business EBITDA margins 5-7%; capacitor films business margins ranging between 35-55%.
Sedemac EBITDA margins likely to hold for H2 FY27 vs H1FY27.
RM costs were high during the quarter
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Gujarat fluoro EV products revenue of 41 Cr in Q1 and 70 Cr runrate in H1.
On track to achieve 100 Cr + guidance in EV segment.
EBITDA Loss of 32 Cr in this segment in Q2
#GujaratFluoro
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Highest ever machines dispatched in Q2 - 1900
Order book inflow of 800 Cr total outstanding OB 5,000 Cr
1020 Cr investment at Rajkot facility...25% capacity subsidy.
Higher revenue contribution from Auto & Auto components at 36%
36% order contribution from Aerospace and Defence.
Jyoti CNC
Jyoti CNC Automation (#JYOTICNC)
Standalone EBITDA Margin expansion YoY to 27.6%
Profitability growth is higher than Rev growth (EBITDA, PBT and PAT ~45-46%)
Standalone CFO 122 Cr
Consolidated:
High other expenses and employees cost at consolidated levels - EBITDA margins down YoY, flat on QoQ, PBT down YoY.
24% growth in inventories...higher inventories probably due to delay in getting licence.
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Jyoti CNC Automation (#JYOTICNC)
Standalone EBITDA Margin expansion YoY to 27.6%
Profitability growth is higher than Rev growth (EBITDA, PBT and PAT ~45-46%)
Standalone CFO 122 Cr
Consolidated:
High other expenses and employees cost at consolidated levels - EBITDA margins down YoY, flat on QoQ, PBT down YoY.
24% growth in inventories...higher inventories probably due to delay in getting licence.
AKUMS Drugs (#AkumsDrugs )
Company sees double digit volume growth in the CDMO segment with better expected demand in coming quarters. Capacity utilisation > 50%
API prices has increased in Q2, but continues to drag the profitability. Heading towards EBITDA breakeven now.
Domestic and International formulations growing at rapid pace.
European CDMO plan is on track and supplies in Zambia's market will begin from Q4FY27 and revenue booking by Q1FY27.
Reduction in lower margins - API and trade generics are in-line with expectations. AKUMS Drugs focusing on high margin business like CDMO and formulations for Domestic and International market.
Potential turnaround story...need deeper analysis
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Mold-Tek Packaging (#moldtkpac)
EBITDA at Rs. 46.50 per kg, up 30% YoY.
Overall sales volume up 10.09% YoY to 11,028.46 MT.
Except for lubricants packaging volumes, which declined by 12.32%, all other segments delivered good volume growth.
The company successfully passed on the increase in raw material costs.
*Food:* Management expects growth to sustain or improve in the coming quarters, supported by Unit-14 in North India. High demand for IML packaging.
Commercial production of IODEX containers from Q3FY27 and new packs under development for 3 more MNC companies (expected to add revenue from Q4FY27).
Entering into trays, dosing pens, and semiconductor packaging for future growth.
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Devyani International (#devyani)
SSSGs ranging between 4-9%
Net store additions 70 in Q2, guidance of 200-220 net new store additions for full year.
EBITDA grew 18% despite high inflationary pressure in Raw materials and wages.
Management: Expecting discretionary spending to stay under pressure.
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What to do with a 'cheap' stock-
1) Name the reason - say why it is cheap.
2) Check the E, not the P - Is the profit durable or a cyclical high about to fall?
3) Find th catalyst- Cheap plus a reason the gap closes is an opportunity. Cheap plus hope is a trap.
4) Follow the cash: Is management fixing the core, or scattering money into a diversification that never shows up in the numbers.
5) Write your kill switch: Decide in advance what would prove you wrong, and by when, before you buy;
For any stock write one sentence on why it will not stay cheap, and one line on what would tell you, you are wrong.
This will help in distinguishing whether you're holding a bargain or you are holding a hope.
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In AI stack everyone is looking at the logic side, graphics processing units (GPUs). The market is giving higher valuation to companies like Nvidia.
Now, the computing bottleneck has shifted not to doing the math (logic) but the energy and time required to move the data to and from memory.
Earlier memory was just 2D structure built on surface floor, and was treated as a plug-and-play commodity, a cyclical sector prone to price wars.
Now, the foundation is moving to advanced logic processes. HBM are pairing memory dies with foundations built on 4 or 2-nanometer logic nodes. These are expensive logic silicon which sits underneath every memory stack.
Companies that have realised the bottlenecks:-
1. Samsung is building memory, where processing units sits directly into the foundation.
2. TSMC a logic foundry company, has now become a supplier of memory foundations.
3. SK Hynix partnering with logic foundries to integrate advanced packaging.
To summarise logic (processing) and storage are integrated together to shorten the time and energy required to move data.
Ramkrishna Forgings (#RKFORGE)
Won new contracts worth Rs. 673 Cr in Q2FY27 with a tenure of 4 years.
Forgings:
35% YoY volume growth from 39.4k tons in Q2FY26 to 53.1k tons in Q2FY27; 15% YoY growth in blended realizations; remained flat QoQ.
Castings:
126% YoY volume growth from 5,113 tons to 11,583 tons; realizations remained largely in line with the last quarter.
Blended capacity utilization at 72% in Q2 vs. 68% in Q1FY27.
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Asian Energy Services (#asianenergy)
Reaffirmed standalone revenue growth guidance of 30-40% for FY27; Long term revenue objective of 3000 Cr by FY29/ FY30
Standalone order book 1,633 Cr
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Ajanta Pharma's India branded generic performance exceeded IPM growth by 27% High growth came from new launches, which exceeded IPM by 70% & volumes, which exceeded IPM by 18%
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PINE LABS (#pinelab)
Contribution margin increased by 18% to 587 Cr
All segments performing well with deeper integration and new customer acquisitions; A large consumer biller has also signed up
and is expected to go live in Q3 FY27.
International business grew 40% YoY and operating across 22+ markets; Close to 1 lakh POS terminals deployed in Malaysia and 50,000 POS terminals
in the Philippines.
Strategy: - Deploying 10 lakh sound boxex in near term, expanding corporate pre-paid-card opportunity.
Monthy UPI GTV is ~₹20,000 Cr which is expected to reach 34000 Cr in FY28; UPI MDR monetization can add ₹1.3 bn to FY28 adjusted EBITDA.
200 bps adjusted EBITDA margin expansion expansion QoQ; Operating leverage can playout with expansion in transaction volumes.
H2 contributes more business than in H1
FY27 Revenue growth guidance at upper end of 21-23.5%
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KRN Heat Exchangers (#KRN)
Rev growth 27% qoq
COGS 50% increase qoq
Hit in margins
Trade receivables 310 Cr in H1 vs Rev 572 Cr in H1; 54% of Rev.
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