1⃣What does the company do and the sales split?
2⃣What to expect from the results/Business direction?
The Q4F22 Earnings season is almost here!
What are the Key things that you need to track in various businesses like Hospitals 🏥, Pharma🩹, Chemicals 🧪 and Music🎵 etc ⤵️⤵️
1⃣What does the company do and the sales split?
2⃣What to expect from the results/Business direction?
Over the years Divis has proven its capabilities as an API player and has the highest Ebitda margins (44%) when compared to the other Pharma companies. 57% of the business in the last Quarter Q3FY22 was contributed by Synthesis and 43% by Generic API’s.
Molnupiravir has contributed to almost 21% of sales for Divis in FY22 (According to Kotak).
Investors will need to track the recovery in the Generic API division which has been soft for the last 3 quarters and growth in CDMO ex of Molnupiravir.
Key monitorable to track is by how much the topline grows or degrows QoQ. Given the base was high in last Quarter due to Molnupiravir Sales.
Topline sustaining above 2100 crores and margins above 41% will be good!
Laurus over the years from just being one trick Pony company (ARV Api’s) has significantly expanded capacities and diversified into a full fledged Pharma company with a synthesis division, Api Division, Formulations Division and the upcoming Bio Division.
Over the last 3 Quarters in FY22 opposite of FY21 has happened. The company has degrown its topline QoQ. As there was stocking at customers' end and Global Funds have been diverted to fight Covid.
1⃣ Recovery in ARV Api Sales, Management expects recovery from this Quarter and the next Financial Year. This is how the TLD ordering cycle looks like:
The Management has been guiding to take Synthesis Division to almost 25% of sales in FY25. In this result 2 things need to be tracked- In Every Q4 Laurus supplies commercial Quantities (in the past) and initiatives for scaling.
1⃣Sales recovery in the ARV Division, which fell by 60% QoQ in the last quarter.
2⃣If there are negative surprises, then by how much the Ebitda Margins fall.
3⃣An investor must check the Gross Margins if product mix is improving.
5⃣Check CFO/PAT for the entire year.
6⃣Check the capex numbers from the cash flow from investing statement.
About the sector:- Hospitals have been doing well and might continue doing well as the capex cycle is behind them. Given this is a shallow cyclical business, when capex intensity is low. Hospitals generally do well and report higher ROCE.
1⃣ Recovery of international Patients: in the Pre Pandemic Era. International Patients used to contribute 10-12% of the revenues. This is a higher margin business, a key monitorable.
3⃣ In HCG’s case, one needs to check which Hospitals have broken even and if Operating Margins are improving or not.
5⃣ In Narayana’s case, the management is supposed to give capex plans for 300-400 beds this Quarter, Carefully track this (mentioned in last quarter). Check how their capex in Cayman progressing.
The DNA of the company lies in being an import substitution player, that is how it was formed. The company took a leap of faith and spent 1300+ crores to set up a Phenol plant, that was quickly utilised and prove the execution capabilities of the company.
1⃣How the EBIT Margins move in the Fine and Speciality Division, given they have suffered in the past. Management maintains guidance for 27-32% EBIT margins, investors must track whether they can meet this or not.
3⃣EBIT Margins in the Phenolics Division. Phenol prices have been volatile (rising again to close to highs seen in Q4FY21). Raw Material volatility in this division, given Coal Prices have been increasing.
APL Apollo operates in the structural steel tube market. Over the years the company has grown its sales from 900 crores in 2011 to almost 11,300+ crores on a TTM Basis. They have 1100+ SKUs, and in 50%+ of their SKU’s they don’t compete with anyone.
1⃣ This quarter they have already declared their volumes- Volumes have grown QoQ from 402,729 Tonnes to 551,723 tonnes. These are the highest ever.
One of the oldest IT companies, which is finally into a new Avatar post demerging its products business and focusing purely on the services part of the pie. Mastek has emerged as an important player when it comes to Public sector business in UK and Oracle (imple).
1⃣Any new contract wins expected?
2⃣Any softness in UK Governments Digital spend.
3⃣Attrition rates
4⃣Margins sustaining at 20%+.
5⃣Will they be back to sequential growth from Q4 onwards?
7⃣Acquisitions being planned in the USA.
IIFL Finance is a multiliner NBFC with Multiple Business lines.
31% of Aum is in Gold Loans
35% of Aum is in Housing Loans
15% in Business Loans
11% in Microfinance
8% Construction and Real estate
1⃣ Yields in Gold Loans Aum as the competition in this segment has been increasing. Maintaining above 17.4% will be good.
2⃣AUM growth in the Housing Segment and the Average Ticket Size.
3⃣ Pick up in the Microfinance AUM growth given the removal of Yield caps
5⃣Trend of Loan Losses and Provisions as a % of AUM. This used to be 1-1.5%, but post covid has increased to almost 3%. Normalisation is a key monitorable.
7⃣ The asset quality trends by checking the GNPAs and SMA Bucket trends in various loan classes.
Radico Khaitan has been one of the few Indian Companies in the Alcohol space which has built Domestic Brands like Magic Moments, Jaisalmer and 8pm etc. Along with this they have started the export of other brands like Rampur.
1⃣ One of the key changes in has been that they announced a Debt Funded capex of 750 crores for backwards integration.
2⃣ Due to governments ethanol blending programme. Co expects diversion of molasses and grain based ENA towards Ethanol.
4⃣ This seems to be a long term positive but short term pain type of move (I can be totally wrong, form your own views).
Things to Track:-
1⃣ Gross Margins and Ebitda Margins. There were bunched up supplies of High Margin CRAMS Business in last Quarter, investors should track the growth in this business.
3⃣ Look for addition to Employees, given they are doing a significant scale up.
5⃣Look for further capex announcements and plans on the EV and Semiconductor R&D front.
1⃣ OIBCID margins(Operating income before content charge, interest and depreciation), one of the key variables in Saregama’s business.
2⃣ What are they doing with the QIP capital? Any plans for inorganic growth?
More from Intrinsic Compounding
More from Screeners
So friends here is the thread on the recommended pathway for new entrants in the stock market.
Here I will share what I believe are essentials for anybody who is interested in stock markets and the resources to learn them, its from my experience and by no means exhaustive..
First the very basic : The Dow theory, Everybody must have basic understanding of it and must learn to observe High Highs, Higher Lows, Lower Highs and Lowers lows on charts and their
Even those who are more inclined towards fundamental side can also benefit from Dow theory, as it can hint start & end of Bull/Bear runs thereby indication entry and exits.
Next basic is Wyckoff's Theory. It tells how accumulation and distribution happens with regularity and how the market actually
Dow theory is old but
Here I will share what I believe are essentials for anybody who is interested in stock markets and the resources to learn them, its from my experience and by no means exhaustive..
First the very basic : The Dow theory, Everybody must have basic understanding of it and must learn to observe High Highs, Higher Lows, Lower Highs and Lowers lows on charts and their
Even those who are more inclined towards fundamental side can also benefit from Dow theory, as it can hint start & end of Bull/Bear runs thereby indication entry and exits.
Next basic is Wyckoff's Theory. It tells how accumulation and distribution happens with regularity and how the market actually
Dow theory is old but
Old is Gold....
— Professor (@DillikiBiili) January 23, 2020
this Bharti Airtel chart is a true copy of the Wyckoff Pattern propounded in 1931....... pic.twitter.com/tQ1PNebq7d
