In today’s briefing:
- Stylam Industries Q1 FY24: Slow Revenue Quarter, But Healthy Margin Expansion and 32% Profit Growth
- Suzlon Energy QIP – Well Flagged Deal and Will Allay Any near Term Debt Concerns
- TVS Supply Chain Solutions IPO- Forensic Analysis
Stylam Industries Q1 FY24: Slow Revenue Quarter, But Healthy Margin Expansion and 32% Profit Growth
- Stylam Industries (SYIL IN) reported a good quarter on the profitability front, with PAT up 32.4% YoY but revenues down 4% YoY.
- Exports showed degrowth temporarily by 11% YoY due to a slowdown in Europe and other key markets, but the company guided an improvement in subsequent quarters.
- Trading at 20x/16x FY24e/25e, the stock is not a steal, but with a remarkable growth profile of 20-25% CAGR, we see tremendous potential as a multibagger for the company.
Suzlon Energy QIP – Well Flagged Deal and Will Allay Any near Term Debt Concerns
- Suzlon Energy (SUEL IN) is looking to raise INR20bn (US$240m) from its QIP, with proceeds used to pay down debt.
- The firm has struggled with a debt issue in the past, most recently undertaking a rights issue in 2022 to raise INR12bn (US$150m).
- With the proceeds from this deal, the firm should enter into net cash territory.
TVS Supply Chain Solutions IPO- Forensic Analysis
- TVS Supply Chain Solutions (1915741D IN) is one of the leading Indian supply chain solution companies in India with an approximate market share of 7%.
- Around 70% of the operations come from outside India, however the foreign subsidiaries are not doing pretty well. Moreover, the profits that were only posted in F23 look unsustainable.
- Other concerns which are not to be overlooked, relate to impairment of assets, levered balance sheet, pricey acquisitions, disposal of fixed assets, high remuneration to promoter, etc.
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