In today’s briefing:
- Kolte Patil: New Launches Were Tepid In Q1 But FY25 Is On Track For Strong Performance
- EQD / NSE Vol Update / IVs Ride the Fed Seesaw
- Bajaj Finance: Mixed Q1, However Growth Trajectory Remains Intact
- HCG: Executing Well With Prudent Expansion
- KPIT: Stellar Performance Yet Again
- Nuvama: Continues to Post Robust Performance
- IREDA QIP Early Look – Strong Momentum, Although Valuations Are Eye-Popping
Kolte Patil: New Launches Were Tepid In Q1 But FY25 Is On Track For Strong Performance
- Kolte Patil reported a decent Q1FY25 with pre-sales of INR 711cr. This was lower than expected, however, adjusted for weak new launch activity, it was healthy.
- Q1FY25 pre-sales was mostly led by sustenance sales. New launches worth INR 1500cr have been initiated mostly in Q2FY25, thus will start reflecting in 2HFY25 pre-sales numbers.
- With highest-ever quarterly collection at INR 612cr, operating cash flows has remained strong. The balance sheet remains robust with negative net debt, allowing Kolte Patil to aggressively pursue new projects.
EQD / NSE Vol Update / IVs Ride the Fed Seesaw
- IVs seesawed through the week on account of the Fed meeting. Trading up to 12.7% going into the meeting & selling-off to 11.4% thereafter.
- Vol-Curve Term-structure in Contango post Fed meeting – Nifty50 vol curve sheds its inversion & BankNifty vol curve loses its kinked-shape
- BankNifty Smile & Skew characteristics extend relative to previous weeks – despite falling IVs & strengthening index.
Bajaj Finance: Mixed Q1, However Growth Trajectory Remains Intact
- Bajaj Finance (“BAF”) reported a decent Q1FY25 with robust AUM growth, however, loan losses came in slightly elevated. AUM grew 31% YoY to reach INR 3,54,192cr.
- Annualized credit cost inched up to 2.1% vs 1.75-1.85% guided for FY25. This was led largely by weak collection efficiency. BAF is working on enhancing its collection infrastructure.
- BAF listed its housing finance subsidiary on Sep 16, unlocking value for the shareholders. It created history with highest-ever subscription amount and got listed at a premium of 114%.
HCG: Executing Well With Prudent Expansion
- HCG reported a decent Q1FY25 with revenue growth of 16.7% YoY, adjusted for a discontinued center in Bangalore. Growth was robust across both established and emerging centers.
- Emerging centers (Kolkata, Borivali and South Mumbai) grew strong at 33% YoY while established centers also grew healthy at 14% YoY. All emerging centers, but South Mumbai center, are profitable.
- We estimate that HCG could post a PAT of around INR 280cr+ by FY27. An investment in HCG at the current level has potential to provide an upside of 85%+.
KPIT: Stellar Performance Yet Again
- KPIT Technologies (“KPIT”) reported constant currency (CC) revenue growth of 24.8% YoY in Q1FY25. Q1FY25 PAT grew 42.2% YoY, excluding one-time gains. Middleware and Architecture Consulting segment led the growth.
- EBITDA margin continues to expand led by operating leverage. Q1FY25 EBITDA margin grew to 21.1% vs 20.7% QoQ, despite two months of ESOP costs and quarterly promotions.
- New engagements’ TCV (Total Contract Value) at $202mm in Q1FY25 significantly exceeded the $150mm+ typical run-rate. KPIT’s Qorix venture received all the regulatory approvals and was restructured as 50:50 JV.
Nuvama: Continues to Post Robust Performance
- Nuvama’s Q1FY25 results were yet again stellar with 60% YoY growth in revenues. The excess growth came from the Capital Markets segment where the activity has been upbeat.
- The Wealth Management and Asset Management segments, which are core to the business, continued to post secular growth in the range of 18-25% YoY.
- For the first-time ever, Nuvama Wealth Management (“Nuvama”) also declared dividend. Given the capital light nature of the business, it indicates prudent capital allocation.
IREDA QIP Early Look – Strong Momentum, Although Valuations Are Eye-Popping
- IREDA (1845911D IN) is looking to raise INR45bn (US$538m) via its qualified institutional placement (QIP).
- Most recently on 19th Sept 2024, IREDA received the Department of Investment and Public Asset Management’s (DIPAM) approval for said QIP.
- Overall, the deal wouldn’t be a large one for the stock to digest at just 4.7 days of three month ADV.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
