Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rpsg-ventures-limited" target="_blank" data-smartkarma-citation="entities:29022:1" rel="noopener">RPSG Ventures Limited (RPSGVENT IN)</a> ["RPSGV"] continues to scale up its FMCG business. Q3FY23 FMCG revenues saw a YoY growth of 23%. QoQ, there was some de-growth due to seasonality.</li>
<li>Excluding one-off other income, <a href="https://www.smartkarma.com/entities/firstsource-solutions-ltd" target="_blank" data-smartkarma-citation="entities:3099:1" rel="noopener">Firstsource Solutions (FSOL IN)</a> reported weak Q3FY23 earnings led by sluggish growth and weak margins.</li>
<li>RPSGV remains a deep-value holding company that is trading at a discount of &gt;85%. As its FMCG and Sports businesses scale up, the stock has potential to re-rate significantly.</li>
</ul>



RPSG Ventures Limited (RPSGVENT IN) ["RPSGV"] continues to scale up its FMCG business. Q3FY23 FMCG revenues saw a YoY growth of 23%. QoQ, there was some de-growth due to seasonality.
Excluding one-off other income, Firstsource Solutions (FSOL IN) reported weak Q3FY23 earnings led by sluggish growth and weak margins.
RPSGV remains a deep-value holding company that is trading at a discount of &gt;85%. As its FMCG and Sports businesses scale up, the stock has potential to re-rate significantly.


RPSG Ventures: FMCG Business Continues to Scale Up | Outsourcing Business Is Seeing Weak Demand

<ul>
<li>Key highlight of RPSG Ventures' (RPSGV) Q2FY23 results was the FMCG business which reported revenues of INR 125cr, suggesting an annualized run-rate of INR 500cr vs INR 430cr QoQ.</li>
<li>RPSGV is doing all the right things to scale up its FMCG business. Its Sports venture also holds lot of promise.</li>
<li>RPSGV's Venture Capital (VC) Fund that focuses on investing in D2C startups made a lucrative exit in one of its investments which generated 7x MOIC in just 4 years.</li>
</ul>


Key highlight of RPSG Ventures' (RPSGV) Q2FY23 results was the FMCG business which reported revenues of INR 125cr, suggesting an annualized run-rate of INR 500cr vs INR 430cr QoQ.
RPSGV is doing all the right things to scale up its FMCG business. Its Sports venture also holds lot of promise.
RPSGV's Venture Capital (VC) Fund that focuses on investing in D2C startups made a lucrative exit in one of its investments which generated 7x MOIC in just 4 years.


RPSG Ventures: FMCG Business Is Scaling Up; VC Business Is Germinating to the Next-Level

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rpsg-ventures-limited" target="_blank" data-smartkarma-citation="entities:29022:1" rel="noopener">RPSG Ventures Limited (RPSGVENT IN)</a> ["RPSGV"] is scaling up its FMCG and Sports business via Its Too Yumm! and Naturali brands in FMCG and IPL franchise in Sports.</li>
<li>Within Too Yumm!, RPSGV is now entering into the Indian Namkeens category - the largest category in salty snacks in India.</li>
<li>Within Sports, RPSGV's IPL franchise representing Lucknow, capital city of the India's largest state, Uttar Pradesh that comprises 15%+ of India's population, holds lot of promise to scale up. </li>
</ul>



RPSG Ventures Limited (RPSGVENT IN) ["RPSGV"] is scaling up its FMCG and Sports business via Its Too Yumm! and Naturali brands in FMCG and IPL franchise in Sports.
Within Too Yumm!, RPSGV is now entering into the Indian Namkeens category - the largest category in salty snacks in India.
Within Sports, RPSGV's IPL franchise representing Lucknow, capital city of the India's largest state, Uttar Pradesh that comprises 15%+ of India's population, holds lot of promise to scale up. 


RPSG Ventures: FMCG and Sports Business Have Significant Potential to Scale Up

<ul>
<li>We had highlighted in our prior note that IPL Media Rights for next 5Y (2023-27) could fetch a value of over INR 40,000cr.</li>
<li>The bidding concluded recently. Total value of IPL Media Rights came in at INR 48,390cr, well above the INR 40,000cr expectation and closer to our optimistic scenario of INR 50,000cr.</li>
<li>RPSGV's IPL team will receive INR 480cr+ per year from its share in media rights vs INR 300-350cr projected earlier. This improves IRR for RPSGV's investment in IPL team substantially. </li>
</ul>


We had highlighted in our prior note that IPL Media Rights for next 5Y (2023-27) could fetch a value of over INR 40,000cr.
The bidding concluded recently. Total value of IPL Media Rights came in at INR 48,390cr, well above the INR 40,000cr expectation and closer to our optimistic scenario of INR 50,000cr.
RPSGV's IPL team will receive INR 480cr+ per year from its share in media rights vs INR 300-350cr projected earlier. This improves IRR for RPSGV's investment in IPL team substantially. 


RPSG Ventures: IPL Media Rights Auction Update

<ul>
<li>The FMCG Business reported Q4FY22 revenues, in line with the recent annualized revenue run-rate of around INR 400cr.</li>
<li>The relatively new Naturali brand was advertised prominently at the IPL and its products are becoming increasingly visible at department stores.</li>
<li>A key monitorable for RPSGV's sports business is the IPL Media Rights Auction that is scheduled to be held on Jun 12.</li>
</ul>


The FMCG Business reported Q4FY22 revenues, in line with the recent annualized revenue run-rate of around INR 400cr.
The relatively new Naturali brand was advertised prominently at the IPL and its products are becoming increasingly visible at department stores.
A key monitorable for RPSGV's sports business is the IPL Media Rights Auction that is scheduled to be held on Jun 12.


RPSG Ventures (RPSGV): FMCG Business Gaining Traction; IPL Media Rights Auction - A Key Monitorable

India

Genesys International Corporation Ltd. provides engineering and information technology solutions to the commercial and government sectors.

Vakrangee Limited develops computer software for corporations and governments uses. Some of the software developed are HRMS (human resource management system) and E-Administrator.

SQS India BFSI Limited provides financial software testing services. The Company provides test automation services using a wide variety of tools.

Accelya Solutions India Limited provides software products for the banking, education, hotels, airlines and healthcare sectors.  The Company operates both in the local and international market.

Accelya Solutions India Limited (KALE IN)

NIIT Limited is a managed training services company. The Company provides managed training services in the IT, Banking, Global Finance, Management, and Marketing fields.

Kellton Tech Solutions Ltd. develops enterprise software applications.

Xchanging Solutions Ltd provides Business Process Outsourcing (BPO) and Information Technology Outsourcing (ITO) software.  The Company develops solutions for industries that include insurance, financial services, government, manufacturing, logistics, public services, and emerging markets such as real estate, healthcare, media, and entertainment.

Ramco Systems Limited is a provider of enterprise solutions and services in key areas such as manufacturing, aviation, asset management and trading & logistics. The Company provides converged networking solutions, information security services and total contact centre solutions. Ramco also provides engineering process optimization solutions to the cement and power sectors.

Allied Digital Services Limited is an information technology infrastructure management and technical support services outsourcing company. The Company's solutions include software, information technology, networking, and communications solutions.

Onward Technologies Limited operates an Information Technology company, whose services include IT solutions, value-added reselling and systems integration. The Company also provides its clients with hardware, software, training and upgrading, in addition to a number of applications in CAD/CAM/CAE, engineering, networking and banking.

AGTech Holdings Ltd. provides professional lottery services in China. The Company offers game content and software, hardware and terminals, and online and mobile lottery systems.

ITFOR Inc. imports, exports, and markets information processing and telecommunication equipment.  The Company also develops software for related systems and provides total customer supports such as maintenance, operation, and management.

Wistron Information Technology & Services Corporation is an IT service provider that specializes in Glocalization, Software Development and Resource Management Services and Business Process Outsourcing.

Datasonic Group Bhd provides ICT Solutions. The Company's solutions include smart card personalization such as secure ID or chip-based credit/debit bank cards.

Dimerco Data System Corp. provides computer system integration and software services.

Toyo Business Engineering Corporation, a subsidiary of Toyo Engineering, specializes in system integration services.  The Company provides construction, introduction, and consulting services for ERP (Enterprise Resource Planning) and SCM (Supply Chain Management).  Toyo Business Engineering provides e-business related services such as EC (Electronic Commerce) as well.

KCP Co., Ltd. concentrates on developing enterprise-wide technology solutions to the retail industry.  The Company offers fully integrated retail automation solutions, including point of sale solutions (POS), back office management systems, goods storage managements.  KCP also provides POS related hardware such as bar-scanners as a Korean agency of IBM.

Shanghai DragonNet Technology Company Limited provides third-party IT infrastructure services, including IT support and maintenance, IT professional services and IT outsourcing services for government agencies and enterprises.

Shanghai Dragonnet Technology (300245 CH)

GHL Systems Berhad provides online transaction services with emphasis on payment and transaction processing. Through its subsidiaries, the Company also deals with electronic draft capture (EDC) equipments.

Hunan Copote Science & Technology Co., Ltd. develops customized software and provides system integration to the postal and telecommunications industries. Hunan Copote also provides website design and building design services.

Hunan Copote Science & Tech Co, Ltd. (600476 CH)

RPSG Ventures Limited operates as a venture capital investment company. The Company focuses on information technology, business process outsourcing, real estate, and entertainment sectors. CESC Ventures serves customers in India.

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RPSG Ventures Limited (RPSGVENT IN)

RPSG Ventures: FMCG Business Continues to Scale Up | Outsourcing Business Is Seeing Weak Demand

RPSGV is trading at a deep holding company discount of >85%. Even if this discount narrows to 70%, the stock can double. Its FMCG and Sports...

Ankit Agrawal, CFA

RPSG Ventures: FMCG Business Is Scaling Up; VC Business Is Germinating to the Next-Level

RPSGV has made great strides in three large-TAM businesses - FMCG, Sports and VC. It has proven its mettle in all three businesses and is now at an...

Ankit Agrawal, CFA

RPSG Ventures: FMCG and Sports Business Have Significant Potential to Scale Up

RPSGV is available at a holdco discount of >80%. Its FMCG and Sports businesses has potential to scale up significantly.

Ankit Agrawal, CFA

RPSG Ventures: IPL Media Rights Auction Update

Strong bidding for IPL Media Rights has further validated our thesis on RPSGV. Now our thesis on RPSGV not just hinges on the FMCG business, but is...

Ankit Agrawal, CFA

RPSG Ventures (RPSGV): FMCG Business Gaining Traction; IPL Media Rights Auction - A Key Monitorable

The FMCG Business is on track to scale up to INR 1500cr+ by FY26, at which point, it can become profitable. For the Sports business, a key trigger...

Ankit Agrawal, CFA

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