India

• OneSource is riding the surging demand for GLP-1 drugs, a market projected to reach $30 Billion by 2030, with its expertise in Drug-Device Combination (DDC) solutions.
• OneSource is projected to achieve revenue of $350-$400 million over the next 3-4 years from $145 million in 2024 , with an impressive EBITDA margin approaching 40% from 25% in 2024.
• OneSource is expected to receive Listing Approval from the Stock Exchanges during Q4 FY25

• This insight explores the semiconductor industry’s fundamental building blocks, focusing on India’s role and target segments within the value chain.
• The Indian government has committed INR 76,000 crore to establish a self-reliant semiconductor manufacturing ecosystem.
• Key investments are being made in semiconductor manufacturing, focusing on design, assembly, testing, and packaging capabilities.

• Aegis Logistics (AGIS IN)  or ALL is an integrated logistics and supply chains provider to the oil, gas, petroleum and chemical players. 
• The company is currently on a capex spree, after joining hands with Royal Vopak to augment its terminals business.
• While the business possesses good cash conversion, one should be bothered by some doubtful accounting with respect to capitalization policy, receivable provisioning, etc which might have beneficial impact on bottom-line.

• Insolation Energy (INA IN), originated from Jaipur, Rajasthan has been a beneficiary of the heavy solar tailwinds in the last two years and has been involved in major capex phase.  
• The company has received big contracts such as the MoU with government to the tune of INR 100 bn in spite of having net worth of only INR 1.1 bn.
• As far as forensics is concerned, we notice several irregularities such as low capitalisations, misclassification of OCF, EPS, naïve accounting of investments, forex movements, strange movements in margins, etc.

• Kolte Patil reported a decent Q2FY25 with highest ever quarterly pre-sales of INR 770cr, a growth of 22% YoY. Pre-sales volume corresponding to this was 1.03 MSF (Million Square Feet).
• Notably, demand for premium projects has been strong. For H1FY25, 30% of pre-sales has come from 24K luxury segment. This compares to 12% in FY22.
• Year-To-Date, new launch activity has been decent with the launch of 2.2 MSF of saleable area. This includes Kolte Patil’s entry in Navi Mumbai with a project launch in Vashi. 

• Q2FY25 performance was strong led by volume growth and margin improvement. Q2FY25 revenue grew 31% YoY and 12%+ QoQ. Volumes grew 24.6% YoY (9.5% QoQ) led by strong demand environment.
• Margins have now normalized as raw material prices have stabilized. EBITDA margin improved to 14.9% vs 14.7% QoQ and 13.5% YoY. PAT margin grew to 5.8% vs 3.2% YoY.
• RPPL’s value-added segments like barrier packaging and injection molding are growing rapidly. Exports are also steady at INR 10cr+ per quarter and have a strong order pipeline.

• Options Market caught flat-footed on hawkish Fed rhetoric. IVs corrected sharply higher, with Monthly IVs trading up to 15.5%.     
• Vol Regime has switched to “High & Up” state. IVs now in top percentile of historical ranges. Look for a quick switch back to “High & Down” state.      
• Smile dynamics unchanged. Skew has undergone compression. Vol term structure trading in inverted-V shape – should normalize once market-holiday drops off the calendar.

• As HCG’s scale is growing and as its emerging centers are maturing, profitability is improving. Adjusted EBITDA crossed INR 100cr mark for the first time ever.
• EBITDA grew by 21% YoY in Q2FY25 with EBITDA margin improving to 18.8% vs 17.8% YoY. Q2FY25 revenue also grew healthy at 14% YoY to reach INR 550cr+.
• HCG also announced acquisition of a cancer hospital in Vizag that is margin accretive. Including this acquisition, EBITDA margin is 19% and proforma revenue growth is 20% YoY.

• DAM Capital (930970Z IN) is the fastest growing merchant banker in last 3 years between 2022-24. 
• DAM Capital is pure-play merchant banker and institutional equity business, delivering high growth and margins compared to its peers. 
• Since 2019, DAM completed  27 IPOs, 16 QIPs, 6 OFS, 6 Preferential issues, 4 rights issues, 8 buybacks, 4 open offers, and 1 REIT IPO.

• Ventive Hospitality Ltd (0807075D IN) is looking to raise about US$188m in its India IPO. The deal, a fresh issue of shares, is downsized from an earlier size of ~US$240m.
• Ventive Hospitality Limited (VHL) is the largest hospitality asset owner amongst public listed market peers, focused primarily on luxury offerings across business and leisure in India and Maldives.
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

• Continuum Green Energy Ltd (1580973D IN) is looking to raise about US$430m in its upcoming India IPO. The deal will be run by Kotak, Ambit, Citi and JM Fin.
• Continuum Green Energy Limited is an independent power producer with over 14 years of experience in identifying, developing, constructing and operating renewable energy projects in India.
• It acquired its first 16.50 MW wind project in 2010 and has grown its portfolio to a total operational and under-construction capacity of 3.52 GWp, as of Dec 9, 2024.

• International Gemmological Institute (India) raised around US$500m in its India IPO. 
• IGI India is part of the International Gemmological Institute (IGI) group. As of 22nd August 2024, IGI India handled operations of the IGI business in India and Türkiye.
• We have looked at the company’s past performance and IPO valuations in our previous notes. In this note, we talk about the trading dynamics.

• Our base case valuation of LG Electronics India is implied market cap of 1,256 billion INR or US$14.7 billion.
• Several media accounts have mentioned that LGEI could be targeting a valuation of about US$13 billion to US$15 billion.
• LGEI’s valuation would need to be about US$13 billion or less in order for us to be Bullish on this IPO. 

• KCP Ltd (KCPL IN) is available at a significant discount due to underperformance and margin deterioration.
• The sugar sector is performing well due to higher realization and higher sugar cultivation. 
• The company is poised for a high valuation if it demerges or sale its cement business, which is a big drag in the overall valuation. 

• Bluestone Jewellery and Lifestyle Ltd Ltd (BJL) (0124165D IN) is planning to raise about US$118m through its upcoming India IPO. The lead bookrunners for the deal are Axis, IIFL, Kotak.
• BJL offers contemporary lifestyle diamond, gold, platinum, and studded jewellery under its flagship brand. 
• It is a digital-first direct-to-consumer (DTC) brand and is the second largest digital-first omni-channel jewellery brand in India in terms of revenues for FY24 as per RedSeer Report.

• Ventive Hospitality Ltd (0807075D IN) is looking to raise about US$188m in its India IPO. The deal, a fresh issue of shares is downsized from an earlier target of ~US$240m.
• Ventive Hospitality Limited (VHL) is the largest hospitality asset owner amongst public listed market peers, focused primarily on luxury offerings across business and leisure in India and Maldives.
• In this note, we talk about the company’s historical performance.

• FY 2024-25 H1 witnesses 12% YoY growth in tire exports value 
• Motorcycle tire exports volume up by 37%; Columbia largest importer 
• Bridgestone to invest US$85 million for India expansion 

• Travel Food Services Ltd (1450229D IN)  (TFS) is planning to raise about US$236m in its upcoming India IPO. The lead bookrunners for the deal are Kotak, HSBC, ICICI, B&K.
• The company was established in 2009 and operates in the airport travel quick-service restaurant (Travel QSR) and lounge sectors.
• TFS holds a market share of 24% in the Indian airport travel QSR sector based on revenue for FY24, according to CRISIL Report.

• Kauntam Papers (KAUN IN) is implementing a significant capacity expansion project, estimated to increase production capacity by 50% within 18 months. Total Capex: 735Cr, including debt of Rs. 535 crore.
• Despite recent industry challenges, Kuantum Papers maintained a healthy EBITDA margin of approximately 22% Q2FY25. The company expects improved margins with anticipated demand increases and raw material price stabilization.
• Under Project NIRMAN, focused on Industry 4.0 integration, the company has successfully implemented online sensors and control logic in its wood bleach section, improving automation and efficiency.

• The retail landscape in India is witnessing a rapid transformation with the rise of Quick Commerce
• These companies are challenging traditional retail models by combining competitive pricing with the convenience of super-fast deliveries.
• For Dmart, which has long been the leader in value retailing, this shift presents significant challenges to Same Store Sales Growth (SSSG), store expansion plans, and overall valuation.

• Bajaj Finance Ltd (BAF IN) is transitioning into a “FINAI” company, integrating AI across all operations to drive transformative growth.
• This strategy will focus on acquiring the next 100 million customers, penetrating new growth frontiers like MSME lending, and bolstering risk management and operational efficiency. 
• The company’s success hinges on the successful execution of its FINAI strategy, navigating competition, managing credit costs, and adapting to the evolving regulatory landscape.

• High Energy Batteries is a well established manufacturer of high-tech batteries for the Indian defence requirements. In CY2024, the promoters purchased shares worth INR 43 Mn from open market.
• Company has robust pipeline of new products, including the 330kW Torpedo Propulsion Battery, One-Shot-Battery, Battery for Sonobuoy, Proton Exchange Membrane Fuel Cells, Vanadium-Redox Flow Battery which could drive future earnings.
• The Indian Government’s procurement policy, with its focus on indigenization in defence procurement, promotes the domestic manufacturing sector, creating favorable growth opportunities for the company.

• Paras Healthcare Limited (0490145D IN)  is looking to raise up to US$180m in its upcoming India IPO.
• It is the fifth largest healthcare provider in India with a core focus on providing affordable and quality, specialized tertiary medical care in Tier 2 and 3 cities.
• In this note, we look at the firm’s past performance.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Vedanta Resources, China Hongqiao, Gajah Tunggal
• In the US, November advance retail sales came in above estimates at 0.7% m-o-m (0.6% e / 0.5% revised p), bolstered by a jump in car purchases and solid online shopping during Black Friday.
• That said, retail sales excluding auto slowed to 0.2% m-o-m (0.4% e / 0.2% revised p). Separately, November industrial production unexpectedly fell 0.1% m-o-m (0.3% e / -0.4% p), the third straight month of decline, owing to weaker utilities and mining output.

• Vishal Mega Mart (VMM) raised around US$950m in its India IPO.
• Vishal Mega Mart Limited (VMM), is a one-stop retail destination. As per the company it targets middle and lower-middle income consumers across India
• We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.

• SAI Life Sciences (SAILS12 IN) raised around US$360m in its India IPO.
• Sai Life Sciences is a contract research, development and manufacturing organisation providing end-to-end services across drug discovery, development and manufacturing value-chain, for small to global pharmaceutical innovators and biotechnology firms.
• We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.

• Edelweiss Financial Services Ltd. is a financial services firm in India with a market cap of $1.2 billion USD
• The company includes the largest private credit and private real assets fund manager in the country
• Management plans to sell a strategic minority stake in the Edelweiss Alts business unit and IPO the Alts unit to distribute shares directly to shareholders, potentially creating value for investors as seen in a previous div-en-specie transaction with Nuvama

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Emerald Finance (EMERALD IN) is a Chandigarh-based NBFC. Since receiving its NBFC license in 2015, Emerald has broadened its offerings to include personal loans, business loans, and Early Wage Access.
• The Company focuses on retail and MSME lending and acts as a loan origination platform for over 40 financial institutions through its subsidiary, Eclat Net Advisors Private Limited.   
• Onto the forensics, there are unsecured loans to RPs, representing 15% of the networth, large amounts of cheques-in-hand reflected under Other loans and advances and incorrect calculation of EPS

• Inventurus Knowledge Solutions (IKSINCD IN) raised around US$295m in its India IPO.
• IKS is a technology-enabled healthcare solutions provider, assisting physician enterprises in US, Canada and Australia, with a core focus in the US.
• We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.

• The paint industry experienced significant challenges in Q2FY24, with most companies reporting subdued performance.
• Asian Paints reported typical fluctuations in market share of 1-1.5%, while Berger Paints and AkzoNobel both reported gains in their respective market positions.
• Asian Paints’ current market share reduction and increased competitive pressure stem from its size and the slowing macro environment.

• Akums Drugs and Pharmaceuticals (0200361D IN) shares are currently trading below their IPO price post Q2FY25 result announcement. Compared with year-ago quarter, Q2FY25 revenue and adjusted EBITDA declined.
• Digging deeper into the seemingly weak Q2FY25 result, we have come across some positive takeaways. With some of the recent developments, the company is well-positioned for long-term growth.
• The share price reaction is overdone. Over the last one month, Akums shares gained 6.5% and outperformed most of its domestic peers, as the long-term growth prospect remains intact.

• Optically speaking LICHF’s Q2FY25 results may not look as strong given modest PAT growth of 12% YoY, however, there was substantial improvement in asset quality and credit cost.
• Annualized credit cost has stabilized to below 0.2% of AUM for the past couple of quarters, in line with the historical averages.
• Last few quarters saw significant variation in earnings due to NIM variation, however, it has now stabilized at around 2.7% vs 3%+ earlier, making the earnings more predictable going forward.

• A long-short strategy with HDFC Bank, ICICI Bank, and State Bank Of India outperformed the NSE Nifty Bank Index by 2.1% from 21 November to present.
• The trade is supported by strong fundamentals, institutional and systemic aspects, and favorable technical factors.
• The strategy is market-neutral with zero correlation to the Nifty Bank Index, enhanced by the yield pick-up from shorting the futures in a contango market.

• Inventurus Knowledge Solutions (IKSINCD IN) is looking to raise up to US$295m in its upcoming India IPO.
• It is a technology-enabled healthcare solutions provider, assisting physician enterprises in US, Canada and Australia, with a core focus in the US.
• We have looked at the company’s past performance in our earlier notes. In this note, we discuss the industry growth, conduct a quick peer comparison and discuss the company’s valuation.

• KPIT Technologies (“KPIT”) reported a decent Q2FY25 with revenue growth of 20.1% YoY in constant currency (CC) terms. Growth came largely from Asia – Japan, Korea and India.
• EBITDA margin has been steady at 20.5%+ and grew 27.7% YoY. This is despite the salary increments and one-time ESOP costs, which impacted the margin adversely by about 270bp.
• KPIT has guided that FY25 revenue growth could be at the lower end of the guidance, however, profit margin is projected to be on the higher side led by offshoring.

• IVs guided lower as Inflation data furthers expectations of easier monetary policy. Weekly IVs lower by -3.3 vols, Monthly IVs lower by -1.6 vols & Quarterly IVs remained unaffected.
• IV mark-down seems overdone given the heavy upcoming event-risk calendar. Weekly contracts capture the 18.12.2024 FOMC meeting. 
• Strategic Implications: (1) Consider Long Gamma positioning given upcoming event risk & IV markdown (2) Retain Short Vega allocations while Monthly IVs still above 10.5%.