on 12 october the news came out that sunil singhania’s fund, abakkus, had bought 1.15% of aether. a big-name fund manager walking in. you’d think that helps

aether fell the next four days in a row. ₹1,779.30 down to ₹1,538.60, gone 13.5%

even after that it’s ahead of the index over three months, 16 july to 16 october. aether up 2.6%, the nifty 500 down 4.1%. on 23 october it was still hanging on, down 5.8% from 16 july against the index’s 7.8%

two days up, four days down

it started rising after the april to june results on 31 july. sales up 27%, profit up 34%

then two big days, 25 september and 6 october, took it 20% above where it began. i couldn’t find anything from the company behind either day

and then the four-day slide after the abakkus news, back near the start

baker hughes does most of the lifting

aether is a chemical maker from surat. it does the hard step in a chemical recipe, and its building blocks end up in medicines, crop sprays, coatings and oil field chemicals

part of it sells its own products in bulk. part of it makes chemicals for a few big customers on long contracts

the biggest of those contracts is baker hughes, the oil field services company. about ₹45 cr a quarter in april to june 2025. about ₹70 cr in april to june 2026. roughly a fifth of all sales, from one name

odd detail. in january to march 2026 baker hughes bought about ₹84 cr. the latest quarter was a step down from that

the bulk side did something strange in the same quarter. prices up 22.5%. the amount sold down 22.5%. management says some lines were moved over to contract work and demand was fine

a price jump that big can come from something temporary. i’d want to see it hold for one more quarter

then there’s other income, the money that doesn’t come from making anything. minus ₹1 cr a year earlier, ₹8 cr this time. profit after tax rose ₹16 cr, and this line alone added ₹9 cr of it before tax. part of that was a fire insurance payout, and the company doesn’t split the two out

you’d hope the new plants are getting efficient by now. not yet. operating profit, what’s left from sales after the running costs, stayed at about 31.5% of sales, same as a year earlier. wear and tear on the new plants went from ₹14 cr to ₹21 cr a quarter, up 50%, on sales up 27%

others in the industry are leaning on contract work too. clean science and yasho both are, and chinese price pressure hasn’t killed that kind of business. what aether still hasn’t shown is a new plant or a new product making money on its own

the goal that moved before it was due

the promise i care about most is about stuck days. that’s how many days of sales sit as stock on shelves and as bills customers haven’t paid. fewer is better

in july 2024 the finance head, Faiz Nagariya, said about 200 days by march 2026. a year later he tightened it to 165 to 170. it came in at 179. the loose goal was beaten, the tight one missed

in november 2025 he set a new one. 140 days by march 2027. in may 2026 that became “around 160 days at least”. ten months before it was even due

20 days of sales is about ₹64 cr. last year the whole business brought in ₹142 cr of cash

the plants ran late too. site 3++, built for one contract customer, was due by december 2025 and started at the end of february 2026. site 5’s first lines were due the same december and were running by the july 2026 call. the fire insurance money was due by march 2026 and came in april to june

they said every one of those slips out loud on the calls. late plants happen. giving up on the cash goal early is the one that bugs me

where the cash goes

aether made ₹698 cr of profit in the five years to march 2026. the business brought in ₹214 cr of cash over the same years. about 31%

the rest is sitting as raw material and half-made chemicals, and as bills not yet paid. on last year’s sales of ₹1,160 cr, 179 days ties up roughly ₹570 cr

the plants get paid for with outside money instead. new shares first, now loans. borrowings went from ₹200 cr to ₹458 cr in the year to march 2026, and another ₹200 to 250 cr is planned this year

when cash runs this far below profit, i look at the stuck days over a few years. if they hold steady it’s growing pains. if they keep stretching while cash stays weak, the gap is built into the business

here three years of cash came to about half of profit. the days went 194 in march 2025, down to 149 in september, back up to 160 in december and higher again by march. the company says the march jump was stock for its two new plants. maybe. the dip didn’t hold, and i can’t call it growing pains yet

the price doesn’t leave room for that. people are paying 92.4 times aether’s yearly profit for the share. it has sat around 90 for most of its listed life, so the market has always expected a lot

from its low in september 2025 to 9 october the share rose about 2.4 times. profit grew 1.32 times in that stretch. the rest was people willing to pay more for each year of profit, 1.81 times more. even after the fall it’s still about 2.1 times the low

i’d drop the cash worry if the stuck days come in at 150 or lower at the half year, with site 5 already running. then 160 was just a cautious number

and the story breaks if baker hughes cuts back while site 5 runs below 30% full, with nothing new to fill it

anupam rasayan, down the road in surat

anupam rasayan is the closest match. also surat, also long stock cycles, also building a lot

it fell 7.3% over the same three months. and over five years it turned 53% of its profit into cash. aether turned 31%

30 october, 2 pm

that’s the results call. the numbers come out the same day

1. open the results on the stock exchange site. find the six month cash flow page and “net cash from operating activities”. put it next to six month profit. last year’s six month profit was ₹101 cr

2. in the presentation, find working capital days. last september was 149. above 170 and 160 by march gets hard

3. on the call, listen for baker hughes. still near ₹70 cr a quarter, or back toward ₹84 cr

4. look at other income again. if profit grows mostly on that line, the chemicals didn’t do the work

one more. in february the finance head said chinese rivals give customers 180 to 250 days to pay. anyone who actually buys these chemicals, is that what you get offered?

— Roshan, Sector Alpha

23 of the 28 listed jewellers did better than the NIFTY 500 from 16 july to 16 october. the index, India’s 500 biggest companies, fell 4.1%. the typical jeweller rose about 27%, which puts the group about 31% ahead

titan, the biggest by far, sat it out. it fell 3.8%, roughly with the index

the cover chart counts four shares equally. weigh all 28 jewellers by size instead, titan heaviest, and it looks calmer. that total moved sideways for 34 months, september 2023 to june 2026, inside a 40% range. in july it broke out

the big chains put out their april to june sales updates between 6 and 9 july. kalyan’s india sales were up 38%. that started it

most of the big names had already jumped by 16 july. what came after went company by company

more rupees, about the same gold

sales in rupees grew anywhere from 21% to 144% across these 15 in april to june. only 4 said how many grams of gold they sold. for all 4, grams grew far slower than rupees

most of the growth is the same gold at a higher price. a handful really are selling more

and the quarter was strange for them in two ways

gold stopped rising in rupees. in dollars it fell about 30% from its $5,528 peak. in rupees the average price over the quarter barely moved, partly because of a higher import tax. RBZ’s joint MD put it this way on 12 august: “the average gold rate has remained stagnant and thus there is negligible inventory gain in the system as of now.”

a jeweller normally earns twice when gold climbs. once on the craft, and again on gold it bought months back and now sells at today’s price. this quarter the second part mostly wasn’t there

then the tax. on 13 may, the customs duty on gold coming into India went from 6% to 15%

bringing in the same gold now costs about 8.5% more. whatever was already in a shop got about that much more valuable overnight, without one extra piece sold

titan’s finance head won’t take credit for it: “We also don’t want to take credit of that because at some point of time when customs duty will go down, we will have the opposite situation.”

the 15 below run from the biggest rise to the worst fall. P/E, the share price as a multiple of a year’s profit, is in the table at the end with cash for all 15

TBZ

GRT Jewellers agreed on 31 august to buy the founding family’s 74.12% of tribhovandas bhimji zaveri, the old mumbai name everyone calls TBZ. almost all of the 196.5% rise came after that

GRT is paying the family up to ₹209 a share. everyone else gets offered ₹249.61. on 16 october the share closed at ₹759, about three times that offer

i keep staring at that gap

the shops were doing well before any of this. april to june sales ₹841 cr, up 34.8%, and profit ₹34 cr, up 54.5%. for the year to march 2026 profit roughly tripled, ₹68 cr to ₹202 cr. there was no investor call this quarter, so no grams and no duty number

what i’ve wondered since august is whether that profit is old stock sold at a higher gold price. if operating margin, what’s left of sales after running costs, stays under 6.5% for two quarters while diamonds slip below a fifth of sales, it was the gold

shanti gold

shanti gold makes 22-carat jewellery with small cubic zirconia stones and sells it to other jewellers. it nearly doubled, up 98.6%. a first step after its 14 august call, then a bigger run from mid september that the company never explained

it grew faster than anyone in the group. sales up 144.4% to ₹716 cr, profit up 47.1% to ₹50 cr. operating margin went the other way, from 17.4% of sales to 9.9%

some of the profit was gold. it changed how it values its stock, which added 2-2.5% of sales this quarter. on ₹716 cr that’s ₹14-18 cr, about 20-25% of its ₹71 cr operating profit

i like how it guides, though. it’s the only one that splits its growth goal into rupees and grams. in may it said 60-70% in rupees, 30-40% in grams. in august rupees were cut to 50-60%. grams stayed at 30-40%. gold stopped rising and only the rupee number moved

its jaipur plant slipped twice, july to september-october, and now november-december

D.P. abhushan

D.P. abhushan runs big stores in the smaller cities of madhya pradesh and rajasthan. the share went nowhere until late september, then ran to a record around its 30 september investor call. 72.7% for the three months

on that call it said its margin after paying for the jewellery should stay at 7-8% of sales. in july it had called 10-11% normal. lower guidance, record price

sales were ₹852 cr, up 57.8%, and profit ₹64 cr, up 77.8%. grams grew about 1.5-2%. the finance head: “the balance growth has largely been driven by higher gold prices.”

he was just as blunt on cash. 95-98% of its assets are gold stock, so “it is very difficult to see significantly positive operating cash flows, irrespective of the size of the company.” over three years it booked ₹387 cr of profit while ₹116 cr of cash went out

in may it gave sales goals of ₹4,800 cr this year and ₹5,500 cr next. by july the only goal left was 10% more grams. i’d get worried if its stock sells through fewer than 3.5 times a year while grams fall more than 5% for two quarters, or if operating margin goes under 5%

sky gold

sky gold doesn’t run a single shop. it makes jewellery for other jewellers. a small rise after its 10 august call, then most of its 70.5% in the first half of october, when the july-september sales updates came out and jewellery shares rallied together

profit more than doubled, ₹44 cr to ₹105 cr, on sales of ₹2,013 cr, up 78%. grams rose 7-9%. none of it is gold gain. sky gold locks in the price the day it buys each gram. if gold jumps after that it earns nothing extra, and if gold falls it loses nothing

lighter, lower-priced pieces below 22 carat went from 10.5% to 14% of its sales in one quarter. the cash is weaker. over three years it reported ₹455 cr of profit and the business used ₹475 cr of cash. the profit sits in gold

one goal changed shape. in may its 2030 sales goal of ₹18,000-19,000 cr counted orders where the customer brings its own gold. in august it said those are left out. same grams, very different rupees

PC jeweller

PC jeweller, from delhi, spent years fighting its banks over unpaid loans. on 7 october it said every bank was repaid ahead of schedule and sales were up about 28%. the share, already climbing slowly, jumped. 57.8% in all

the april to june numbers are strange for a jeweller. ₹222 cr of profit on ₹877 cr of sales, which is 25.3%. most jewellers keep 3-8%. sales grew 21%, profit 37%

it paid about 1% tax, probably because of old losses. the year to march 2024 lost ₹629 cr, and that can be set against profit now

the bank repayment is real and done. my problem is the auditor. it couldn’t confirm when export customers will pay, or whether the money set aside for bad debts is enough. until that’s cleared i don’t fully trust the profit

shringar house of mangalsutra

a mangalsutra is the necklace a married woman wears, and shringar house of mangalsutra makes them for 1,333 clients, it says, tanishq among them. its 38.8% rise came almost all in two days, 12 and 13 october

sales ₹548 cr, up 64.6%. profit only 17.2% higher, at ₹34 cr

in its may call it first said its bridal jewellery sold through tanishq and malabar. later in the same call: “it is just with the Titan initially”. two answers, one call

RBZ

RBZ mostly makes gold jewellery for other jewellers in ahmedabad, and it’s now opening its own stores. its biggest day, 1 september, had nothing to do with RBZ. that was when TBZ jumped on the GRT news. 32.3% for the three months

sales ₹120.8 cr, up 59.8%, profit ₹9.09 cr, up 27.7%. that joint MD quoted up top said gold had added almost nothing so far

last year was different. he put the part of its ₹55 cr profit that didn’t come from gold at about ₹38-42 cr. gold was 24-31% of it

next year it wants about half its stock on gold loans. that’s borrowing the gold itself at about 3-3.5% instead of rupees at about 9%. borrowed gold can’t make or lose it anything when the price moves

an employee stole from it. it told everyone, and insurance paid the money back. that part i’m fine with. growth worries me more. its own outlook is ₹55-60 cr of profit this year, against the ₹55 cr it already earned last year, and every new store needs borrowed gold

bluestone

bluestone started online, selling mostly diamond and studded jewellery, then opened its own stores. it rose 28.7%, nearly all of it right after its 21 july results, and has been flat since

those results swung it from a ₹34.75 cr loss to a ₹5.96 cr profit, on sales of ₹737 cr, up 49.6%

this is the one jeweller here where the story really is costs. by its own measure operating profit rose 135%, because costs grew much slower than sales. 7.5% of sales, against about 4.8% a year ago. gold barely comes into it

in april it said marketing wouldn’t drop below 6% of sales. in july, that 6% was going down to around 4.5%

it only listed in 2025. a P/E of 211 has nothing to be measured against yet

motisons

motisons sells gold, diamond and kundan jewellery in jaipur. up 24.9%, most of it in one week in mid-august

sales grew 23% to ₹107 cr, slower than everyone except PC jeweller. profit ₹11 cr, up 37.5%. it keeps 10.3% of sales as profit, high for a jeweller

lower interest costs are helping. the stock is what bothers me. its jewellery sits about 525 days, about 17 months, before it sells, and it sold new shares to pay for more of it. if the next yearly results show stock sitting even longer and cash from the business below zero again, that money didn’t work

khazanchi

khazanchi started as a chennai gold wholesaler and is now opening shops of its own. it rose 16.1%, with no one date that stands out

it gave the best grams number on any call this quarter. about 15% more gold sold. sales ₹586 cr, up 45%, profit ₹28 cr, up 86.7%

the retail goal keeps sliding. in february retail was going to be 25% of sales in 1-1.5 years. in june that became 2-3 years. in august it turned into about 40% by 2030

kalyan

kalyan is the second biggest, with stores across india and the gulf, a lot of them franchises, where a partner owns the store. it barely moved, up 2.1%. its big move came just before 16 july, and a 7 october update with sales up over 26% didn’t restart it

april to june sales were ₹10,589 cr, up 45.7%, profit ₹349 cr, up 32.2%. leave out gold bar and coin sales and profit before tax was 5.1% of sales. it used to be about 5.5-5.6%

it booked about ₹30-40 cr of one-time duty gain and handed it back to customers as offers, to get them to bring in old gold. old-gold exchange is now over 46% of its sales

kalyan’s cash looks nothing like the rest. over three years ₹3,849 cr came in from the business, against ₹2,660 cr of profit. the MD explained it. in a franchise store the partner pays for the building and for the gold on the shelf

its promises held across the last three calls. i’d start worrying if sales growth drops below 15% with margin under 5%, or if it hasn’t paid off its ordinary loans (gold loans aside) by september, as it said it would

P N gadgil

P N gadgil has been in pune since 1832 and is growing now through franchises. the share rose into its 28 july call and then slid back to almost where it started. up 1.4%

sales ₹2,413 cr, up 40.7%, profit ₹105 cr, up 52.2%. hedging gains got their own line but no number on the call. it’s over 70% hedged and wants to be fully hedged next year

no one here used more cash. ₹783 cr of profit over three years, and the business used ₹1,386 cr

in may it planned 20 franchise stores this year. by july, 15

titan

titan owns tanishq, mia, zoya and caratlane, and it’s the biggest jewellery company in India. it sells watches and eyewear too, but jewellery is most of it. the share rose after its 7 august results, slid, then fell again on 7 october when jewellery sales came in up 21%, below what some brokers wanted. down 3.8%

₹21,356 cr of sales in april to june, up 29.3%. ₹1,777 cr of profit, up 62.9%

₹407 cr of that came from the duty hike. profit before tax was ₹2,429 cr, so about a sixth (407 ÷ 2,429 = 16.8%)

titan put the number out itself and asked analysts to strip it out. do that and jewellery kept 10.9% of sales as profit, against 11.3% a year ago on the same basis. a small slip

i’d watch for fewer people buying for two quarters in a row while tanishq’s margin drops below 9.5%. that would be costly gold pushing buyers away

senco

senco is a kolkata jeweller, strongest in the east, with a diamond line that’s growing. it fell hard the day after its 11 august results and never got back. down 7.7%, worse than the index

you can see why. sales ₹3,056 cr, up 67.4%. profit ₹101 cr, down 3.8%. grams sold fell about 1%, on the 24-carat basis its finance head uses. rupees up, gold down, and nobody in the group shows it more cleanly

the duty added ₹12-15 cr, on about 45 days of the new rate. 9-11% of its ₹139 cr profit before tax

a year ago its margin before interest, tax and depreciation was about 10%, and the finance head said 1.5-2 points of that was gold gain. this quarter, 7%

in august it raised its profit goal to 4.5-5% of sales, from 4-4.5% in may. this quarter it made 3.3%

at 9.7 times a year’s profit senco looks like the lowest in the group by far. for years it sat nearer 34.2. but that last year of profit includes october to december 2025, a fat quarter with operating profit at 13.2% of sales, and gold did a lot of that

thangamayil

thangamayil runs jewellery stores in tamil nadu, a state that buys about 40% of india’s gold. it fell 20.1%, the worst of the 15, most of it on 29 and 30 july, starting the day its results came out

and the results were good. sales up 71.1% to ₹2,666 cr, profit up 84.8% to ₹85 cr. it was one sentence that did it. sales stayed weak in the first 28 days of july-september, it said, because customers were holding off, hoping gold would fall

₹85 cr was also a step down from ₹143 cr in january to march

no investor call, so no grams and nothing on duty. even after the fall it’s at 40.4 times a year’s profit, above the 30 it has normally traded at

vaibhav global (gems and jewellery sold on TV shopping abroad), rajesh exports (mostly a gold refiner) and about a dozen very small names are left out

all 15 side by side

three months to 16 october for the share. sales and profit are april to june 2026 against a year earlier. “gain named” is the rupee amount the company itself put on the gold price or the duty, and “none” means it gave no figure. “3 yrs” is profit against cash from the business, in ₹ cr, three years to march 2026. P/E is on 16 october, with its normal level in brackets

the top of the list is small companies with something one-off going on. TBZ has a takeover, PC jeweller paid off its banks, D.P. abhushan and shringar had a few big days nobody explained. the bottom is where results let people down: senco’s profit fell, and thangamayil warned about the next quarter

over three years, just 4 of the 15 brought in more cash than they put into gold. titan, kalyan, thangamayil and TBZ. everyone else’s profit is sitting on the shelf as metal

where the group stands in late october

since the july breakout most jewellers have joined in. in late may about 41% of listed jewellers were beating the NIFTY 500. by 5 october it was 95%

october cooled it. the sector’s price ended the month about 5.3% below september

titan alone is 49.6% of the sector’s profit. when people say jewellery profit, they mostly mean titan’s

the whole sector trades at 43.6 times a year’s profit. since september 2016 it has mostly been around 52.7. it’s lower now mainly because profit grew, and part of that profit is the gold and the duty

one test for any profit jump

take out the profit that didn’t come from running the business. if that’s more than about a fifth of the total, go slow on the jump. it works for any company in any industry

RBZ was over that line last year. shanti gold sits right on it this quarter. titan’s duty gain alone is just under it

the case against me

organised jewellers really are taking business from small local shops, and that growth has nothing to do with the gold price. kalyan’s old-gold exchange, senco’s diamond pieces up 18% in volume, sky gold’s lighter pieces. that’s the shops getting better

july to september is the first full quarter at the 15% duty. take the duty gains out. if titan still keeps about 11% of jewellery sales as profit and kalyan gets back above 5.5%, i’m wrong and the shops are fine

if industry profit drops below a year ago once the duty gain fades, a big part of this run was the metal all along

before the next results

you can run the same checks on any jeweller from its results and its cash flow page

july to september results come out over the next few weeks. RBZ’s call is on 3 november, and titan said it will call out the duty gain again

the festive season is the part i can’t see yet. more grams than last year, or the same grams costing more? anyone behind a jewellery counter this diwali will know before i do

— Roshan, Sector Alpha

the short reason: it made its best april to june profit ever, and all the growth came from customers other than glenmark

a week later it’s still ahead. on 23 october alivus was up 7.4% from 16 july, the nifty 500 down 7.8%

what moved it, and when

the share was drifting lower until its april to june results came out on 30 july

then it jumped 22% in three trading days. profit was up 32% while sales grew only 6%

after that it just held its ground while the nifty 500 kept falling. a court hearing in september over one drug’s patent barely moved it. that steady hold is where most of the gap came from

the reasons, ranked

first i checked whether that profit jump is real or just a lucky quarter. mostly real. here’s what’s pushing it, biggest first

1. more of its newer products, sold to people who aren’t glenmark

alivus makes the active ingredient in medicines, the powder that does the work. drug companies buy it, turn it into tablets and sell them under their own name

it launched 11 new products in the year to march 2026. in april to june, sales to everyone except glenmark grew 26.5%. about 7 points of that came from the weaker rupee. take that out and it’s roughly 20% growth, and almost all of it is more units sold, not higher prices

2. those newer products keep more of each sale

what’s left after paying for raw materials was about ₹385 cr in april to june, against ₹332 cr a year before. up 16%, while sales grew 6%

as a share of sales that went from about 55% to 60%

the catch: a new ingredient usually sells at a better price for its first year or two, then others copy it. so this only lasts if the launches keep coming

3. the weaker rupee

margin here means the share of sales left as profit before interest, tax and wear and tear on machines. the company’s own margin figure for the quarter is 36.6%. that counts ₹22 cr of other income, which includes gains from the weaker rupee. leave it out and the margin is 33%. the rupee part can go away as easily as it came

one thing is NOT helping, even though management says it is. spreading fixed costs over more sales. in the last two quarters, staff and overhead costs grew faster than sales

and one thing is pulling the other way. glenmark, its old parent, is still its biggest customer and buying less every year. 41% of sales in the year to march 2022. 29% by march 2026. in april to june its orders roughly halved, down 52.6%, while it used up stock it already had

so the newer business is carrying the old one. for now it’s winning comfortably

why it can keep building

before march 2024 alivus belonged to glenmark, which owned 82.84% and itself had ₹4,921 cr of debt in september 2023. in the two years before the sale alivus made ₹720 cr of cash from its business. ₹667 cr went straight out, almost all dividends

then nirma bought 75% at ₹615 a share. yes, the detergent and cement nirma

in the two years since, alivus made ₹957 cr of cash and only ₹70 cr went out

by march 2026 it had ₹782 cr sitting in cash and short term investments

that money is going into reactor tanks, the big vessels the chemistry runs in. it had 1,198 kilolitres of them in march 2024 (a kilolitre is 1,000 litres). 2,690 are planned by march 2028. more than double. the part due in the year to march 2027 is ₹540 cr of building, and the CFO, the finance head, says all of that is paid from its own cash, no loans

so the next round of launches has somewhere to be made

did management deliver

i went through their calls from may 2025 to july 2026 and wrote down every promise with a date on it. five

profit margin of 28 to 30%. the year to march 2026 came in at 31%, then april to june at 33%. kept, and beat

the new solapur plant. first due january to march 2026. then april. then july. now “by diwali”. pushed three times

the two plant expansions at ankleshwar and dahej. due november to december 2025. moved to april to september 2026

money spent on plants in the year to march 2026. said ₹550 to 600 cr. actually spent ₹306 cr

one or two new deals to make an ingredient to order for a single drug company, by june 2026. now “early second half” of the year, so october 2026 at the earliest

so 1 of 5 kept. the one they kept is about running today’s plants well. all four misses are about building new things

i don’t read that as dishonest. the delays were told to investors each time, and the court case is about one drug’s patent, with no finding against them. but it means i’d discount any new date they give

what could stop it

this is the bit that still worries me

the price has already done a lot. from its low in early 2023 the share is up about 3.5 times. profit per share is up only about 1.5 times. most of the rest is people paying more for each rupee of profit

today the price is 26.2 times a year’s profit. its usual is about 21 times. it used to trade below that usual level. now it’s well above it

there’s an old pattern with new plants. they show up as costs before they show up as sales. wear and tear, staff, power, all start the day a plant opens. sales come later, as it fills up. so profit often stalls for a while right after a big plant starts

alivus’s yearly wear and tear charge already went from ₹53 cr to ₹75 cr in two years, and solapur hasn’t even started

two things would change my mind

if sales to everyone except glenmark grow less than 15% in a quarter while the profit margin drops under 30%, the newer business is no longer carrying the old one

if solapur starts and sits half empty. they said it begins at 40 to 50% use. if it’s still there a year later, the cash built tanks nobody needed

next to its peers

laurus labs, another big indian maker of drug ingredients, is up 32.3% over the same three months. divi’s labs, the biggest one, is up 25.0%

so alivus beat the market, but not the leaders in its own industry

and glenmark, the old parent? down 2.6%

check it yourself

the july to september results come out on thursday 29 october. the call with investors is the next morning, friday 30 october, at 8:30

1. open the results on the company’s website or the stock exchange site. find sales to “non-GPL” customers in the presentation (GPL means glenmark). anything under 15% growth is the warning

2. find the profit margin. under 30% is the second warning

3. on the call, listen for solapur. has it started, and how full is it

4. find the half year cash flow page. compare money spent on plants with the ₹540 cr plan for the year. near ₹270 cr means they’re catching up

if you’ve worked at a company that makes drug ingredients, how long does a new launch keep its better price before others copy it? one year or two?

see you tomorrow

— Roshan, Sector Alpha

they make gold jewellery in Ahmedabad. mostly heavy antique bridal pieces

they supply big jewellery chains, and run one big showroom of their own, Harit Zaveri Jewellers

that one store did ₹408 Cr of sales last year

I went through their May results call and a talk the joint MD gave at a broker conference on 30 September

analysts kept asking how much of the profit was just gold going up

jumped from ₹146 to ₹201 in one week in early September

₹199 now, going sideways under ₹217, a level it has hit twice

why the numbers moved

last 12 months to June, against the 12 before:

sales ₹523 Cr to ₹682 Cr

profit ₹37 Cr to ₹57 Cr

OPM 12% to 14%

April–June 2026 alone, against a year before:

sales up 60%, to ₹120.8 Cr

profit ₹7.1 Cr to ₹9.1 Cr

OPM 17.2% to 14.8%

1. gold going up, and old stock going out at new prices

they keep their gold stock at well below today’s price

“we have our weighted inventory at about 20% to 25% lower than the current market price.”

— Harit Zaveri, joint managing director and CFO, call of 15 May 2026

when gold rises, stock bought earlier goes out at today’s price

so profit goes up, but only while gold keeps rising

asked how much it added last year, his rough answer was ₹10–12 Cr. then:

“if gold prices were not to increase, I think somewhere around INR40 crores, INR45 crores should be the PAT.”

— Harit Zaveri, call of 15 May 2026

reported profit last year was ₹55 Cr

for April–June 2026, gold prices were flat. the gain from gold:

“it was almost nothing.”

— Harit Zaveri, call of 30 September 2026

April–June OPM 14.8%, with almost no gold gain in it

our 16-lever read calls this a one-off gold gain

April–June, gold flat: sales up 60%, operating profit up 38%

2. more retail in the mix

“Yes, retail would be around 12% or 14% GP. Wholesale will be around 7% to 8% GP.”

— Harit Zaveri, call of 15 May 2026

April–June retail sales ₹78 Cr, up 70%

wholesale ₹42 Cr, up 47%

April–June sales ₹120.8 Cr, against ₹75.6 Cr a year ago

but gross margin still fell, 30.9% to 25.8%

the 16-lever read: no proof yet, gross margin and OPM both below a year ago

3. new store costs, before any new store sales

Surat opened 24 September. Rajkot, Maninagar and Gandhinagar come next

hiring, training, ads and interest went up in April–June

none of the new stores had sales in that quarter

depreciation ₹0.85 Cr to ₹1.64 Cr

his profit number for this year:

“I expect the bottom line to be 55-60 crores.”

— Harit Zaveri, call of 30 September 2026

last year was ₹55 Cr

his reason is spending on the brand while four stores open

4. borrowing to fill the stores with gold

“A typical large format store will need an inventory of somewhere around INR125 crores to INR150 crores.”

— Harit Zaveri, call of 15 May 2026

debt ₹91 Cr to ₹170 Cr, in the year to March

interest in April–June ₹4.23 Cr, was ₹2.58 Cr

operating cash last year ₹−7 Cr, against ₹55 Cr profit

negative every year since March 2023

their plan is gold loans. they borrow gold instead of cash

“When we shift from a CC limit to a GML limit, the interest rate comes down by half.”

— Harit Zaveri, call of 30 September 2026

so far a very small part, they said

with gold loans, a rise in gold stops adding profit

The good and the bad

retail sales ₹78 Cr in April–June, up 70%

the Ahmedabad store alone, before any new store opened

Surat store open since 24 September

10,000 sq ft, their first outside Ahmedabad

profit last 12 months ₹57 Cr, was ₹37 Cr

some of that is gold gains, by their own estimate

₹10–12 Cr of last year’s profit was gold gains

his estimate, not a reported number

operating cash ₹−7 Cr last year, profit ₹55 Cr

the profit is stuck in gold stock and money owed by customers

debt ₹91 Cr to ₹170 Cr in a year

they’re okay with debt at 2 times equity on gold loans

What did management say

last year’s guidance, they hit it

in February they gave sales of ₹630–650 Cr

it came in at ₹636 Cr

profit ₹50–55 Cr, it came in at ₹55 Cr

store dates slipped

in May both big stores were due by September

Surat opened on time, Rajkot moved:

“After this store, the next one is Rajkot, which we expect to open before Diwali.”

— Harit Zaveri, call of 30 September 2026

on guidance, May:

“There is no guidance for this year, frankly saying.”

— Harit Zaveri, call of 15 May 2026

September: ₹55–60 Cr profit for the year

on debt, May:

“we want to keep the debt levels at 1:1 ratio ideally”

— Harit Zaveri, call of 15 May 2026

September, with gold loans:

“With GML, can we afford a debt-to-equity ratio of 2:1? The answer is yes, because the interest payout remains the same.”

— Harit Zaveri, call of 30 September 2026

asked about profit per store:

“We are not looking at unit economics in very great depth at this stage because of our strategy.”

— Harit Zaveri, call of 30 September 2026

four new stores, no store-level numbers yet

this one bugs me

P/E 14.1, usual level about 15.8

the next thing I’m checking

OPM in October–December, the first quarter with the new stores open

the same quarter a year ago was 13.1%

above 13% with store costs in, I’d say the retail shift is working

under 11%, I’ll be worried

and operating cash for the full year, after the stores fill up with stock

July–September results get discussed on 3 November

October–December is the one I’m watching

he says Surat is a walk-through store, no sitting at a counter

anyone been inside?

that’s it from me, see you tomorrow

— Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 16 October 2026 · results to Apr–Jun 2026 · business analysis from 10 October 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 22 October 2026. Full data page: https://sectoralpha.in/stocks/RBZJEWEL

they make axles and suspensions for trailers, the long beds pulled behind big trucks

plus forged and machined parts for trucks and tractors

in trailer axles they’re number two, with about 26–28% of the market

the leader has about 45%

I read their May and July 2026 calls

then the July–September results came out on 17 October

₹272 now, its highest in a year

in an uptrend since late August. it bounced off about ₹222 three times

The good and the bad

July–September sales ₹235 Cr, was ₹131 Cr

a weak base. truck owners had waited for the GST rate cut

July–September profit ₹20 Cr, was ₹8 Cr

OPM went from 11% to 13%

more axles went through plants they had already built

steel cost settled in July, paid back to April

truck makers pay suppliers for steel price rises, but late

OPM 13%, they promised 14–15%

the bigger catch-up, for gas, oil and tooling, wasn’t settled by the July call

₹28 Cr cash from ₹55 Cr profit last year

customers took about 107 days to pay

debt went from ₹34 Cr to ₹54 Cr

tipping jacks: about 200 kits, aimed for 300

small product, still short of what they planned

What did management say

sales came in ahead of what they said. margins and new products came in late

in May the CFO said 22% sales growth for the year

“In Quarter 4, we have been able to increase our revenue by around 22%. That is what we would be looking at for this financial year as well.”

— Kunal Rai, whole-time director and CFO, call of 13 May 2026

April–September came in up 55%

same call, on margin:

“But between 14% to 15% margin is what we are looking at for the further quarters as well.”

— Kunal Rai, call of 13 May 2026

April–June was 12%. July–September 13%

the tipping jack number changed inside that same May call

Sumeet Rai said 300 kits by the end of June

then the CFO said:

“And in Quarter 1, we would be doing approximately 150 to 200 kits.”

— Kunal Rai, call of 13 May 2026

it came in at about 200. the CFO’s number was the right one

the single-piece axle line slipped for months. in July:

“We have finally commissioned and productionized our extrusion line.”

— Sudhir Rai, chairman and managing director, call of 27 July 2026

no sales figure for it yet

why the numbers moved

the last 12 months, against the year before:

sales ₹605 Cr to ₹821 Cr

profit ₹50 Cr to ₹69 Cr

OPM 13% to 14%

1. trucks and trailers came back

July–September 2025: sales down 6% on the year

then up 18% and 22%

then 32% in April–June

now up 79.6% in July–September

“But, for the last six months, we have seen both tonnage and demand going up.”

— Kunal Rai, call of 13 May 2026

this one is real, but it moves with the truck cycle

it ran backwards a year ago. sales fell and OPM dropped from 13% to 11%

July–September 2025 was the low, ₹131 Cr

2. more axles through the same plants

January–March: over 10,500 trailer axles and 3,500 suspensions

April–June: about 9,500 axles, up 30% on last year

in May they couldn’t keep up:

“Very honestly, at the moment, we are struggling to meet the demand which is being given to us, struggling to ramp up to meet our peak capacity.”

— Sumeet Rai, whole-time director, call of 13 May 2026

an analyst put axle capacity at 7,500 a month, up from 5,000 with the new line

forging and casting are already built:

“We would not be requiring any more in the forging and casting for these volume ramp-up and we will still be operating at around a 70% utilization.”

— Kunal Rai, call of 27 July 2026

operating profit in July–September: ₹15 Cr to ₹31 Cr

operating profit grew faster than sales in January–March and April–June too

it goes into reverse if trucks slow

OPM peaked at 15% in January–March

3. steel and other costs, paid back late

truck makers cover their suppliers’ cost rises, a quarter later

“we get it retrospective, but the settlement is at least delayed by one quarter.”

— Kunal Rai, call of 13 May 2026

that’s a big part of why OPM went from 15% to 12% in April–June

the steel part settled in July:

“So steel, there has been a very recent settlement which has been given retrospective to all the suppliers.”

— Kunal Rai, call of 27 July 2026

the gas, oil and tooling part hadn’t:

“That is a larger factor because that is somewhere we have been paying since day one and not yet been compensated on yet.”

— Kunal Rai, call of 27 July 2026

on trailer axles there’s no catch-up. they deal with fabricators and set prices themselves

up 3–5% from April

another 1–2% planned

but they can’t go past the leader:

“We are a #2 player. So, we cannot price our product more than the #1 player.”

— Sudhir Rai, call of 13 May 2026

OPM 13% in July–September, still under the 15% of January–March

4. tipping jacks, slower than planned

the hydraulic lift under tipper trailers

75–80 kits in January–March

about 200 in April–June

they can make 800 a month

they hope for 65–70% use by next March

for now it’s too small to move profit

5. the seamless tube plant

they import these tubes now

₹100 Cr term loan taken, trials by March 2027

“So, it is not going to be in this financial year that the seamless tube will contribute towards revenue growth.”

— Sudhir Rai, call of 13 May 2026

not running yet, so I’m not counting it

P/E 30.4, usual level about 26

what I’m watching next

the gas, oil and tooling catch-up from truck makers

OPM needs to reach 14% to keep the May promise

if it slips under 13% in October–December, I’ll be worried

cash: ₹28 Cr from ₹55 Cr of profit last year

the March 2027 numbers will show if customers pay faster

anyone who runs trailers, have fabricators started asking for the single-piece axle?

that’s it from me, see you tomorrow

— Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 16 October 2026 · results to Jul–Sep 2026 · business analysis from 10 October 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 21 October 2026. Full data page: https://sectoralpha.in/stocks/KROSS

they run a port on the Gujarat coast

containers, export cars, fertiliser, limestone, LPG

APM Terminals, part of the Maersk group, owns 44%

they don’t own the port. they run it on a 30-year deal with the Gujarat Maritime Board that ends in September 2028

I read their May and August 2026 calls

cars are up a lot

gas cargo is down because of the war in the Middle East

₹166 now

fell to ₹146 in early April

back above its 40-week average since mid-August

going sideways now. it turned back near ₹176

The good and the bad

Car volumes up 53% in April–June

more Indian cars shipped abroad, same berths and land

they say they can go to 300,000–350,000 cars a year without new spending

Profit ₹559 Cr in 12 months, was ₹390 Cr

take out every one-off they named and operating profit still grew about 15%

₹510 Cr cash from operations, profit ₹515 Cr

that’s the year to March 2026

dividend for that year was ₹10.40 a share

₹31.6 Cr of April–June sales were export scrips

old government export incentives that got paid now

₹49.6 Cr more came in January–March. only one small scrip is left

Liquids down 47%, LPG down 63%

most of their LPG came from the Gulf. the war cut it off

a Maersk container service to Jebel Ali has also been stopped since March

Concession ends September 2028

no terms or royalty known yet

on 26 August the Maritime Board asked for a business plan within 90 days (report)

why the numbers moved

April–June against a year ago

sales ₹250 Cr to ₹332 Cr

profit ₹104 Cr to ₹148 Cr

OPM 59% to 64%

last 12 months against the 12 before

sales ₹992 Cr to ₹1,240 Cr

profit ₹390 Cr to ₹559 Cr

1. more cars over the same berths

car volumes up 39% in January–March, up 53% in April–June

depreciation flat at ₹31 Cr, no new berths needed

“We are already doing about 250,000 cars. We can easily handle 300,000 to 350,000 cars today.”

— Gujarat Pipavav management, call of 29 May 2026

for this year they expect 260,000–270,000 cars

take out every one-off and April–June operating profit was about ₹167 Cr

a year ago it was ₹147 Cr

this depends on car exports. if those slow, this slows

2. a price rise in January and a weaker rupee

money per container went from ₹9,000–9,500 in May to ₹9,500–10,000 in August

“First, the favorable exchange rate benefited this quarter. Second, the tariff increase that we took in January has started to materialize based on the contractual arrangements with customers from this quarter.”

— Santosh Breed, CFO, call of 13 August 2026

containers are 60–65% of sales, billed in dollars

the price rise stays. the rupee part can go either way

3. export scrips

₹49.6 Cr in January–March, ₹31.6 Cr in April–June

they’re booked inside sales, so they lift OPM too

“Excluding this, underlying revenue performance was higher for the quarter by 20%.”

— Girish Aggarwal, managing director, call of 13 August 2026

without them, April–June OPM was 61%. one-off

the 70% and 64% bars both have scrips in them

4. one-time extras in April–June

other ports were jammed, so some ships came here

“Apart from that, we also had some one-offs on provision reversals, as well as opportunities from ad hoc transshipment volumes.”

— Santosh Breed, CFO, call of 13 August 2026

about 5% of sales, they said

they didn’t call it lasting

₹332 Cr in April–June, about ₹300 Cr without scrips

a year ago it was ₹250 Cr

5. the war in the Middle East

liquids down 47%, LPG down 63% in April–June

and the Shaheen container service to Jebel Ali is gone for the year

“That represents a substantial volume of 70,000-80,000 TEUs that we will lose this year because of Shaheen.”

— Girish Aggarwal, managing director, call of 13 August 2026

for the year they expect liquids at 1.3–1.4 million tons, down 15–20%

LPG has started coming from the US instead

this one hurt. Shaheen comes back only if the Strait of Hormuz opens

6. the new liquid jetty, not here yet

₹720 Cr in all, ₹250 Cr spent by March

adds 3 million tons of space

no customer has signed yet

they expect to fill it over 3–5 years

I’m not counting it yet

What did management

say

cars and margin came in at or above what they said

containers and the jetty date fell short

April–June containers, in May

“A growth of 5% to 7%.”

— Gujarat Pipavav management, call of 29 May 2026

it came in at 3%. in August

“Container volumes have essentially been affected by a difficult quarter because of the Middle East conflict.”

— Girish Aggarwal, managing director, call of 13 August 2026

cars, they said 45–50% more. it came in at 53%

the margin

“We believe operating profit margins of about 59% to 61% is a reasonable assumption on an ongoing basis.”

— Gujarat Pipavav management, call of 29 May 2026

April–June without the scrips was 61%. kept

the new liquid jetty date moved again

May

“The jetty will be ready potentially in December this year, and next year is when we should think about volume growth.”

— Gujarat Pipavav management, call of 29 May 2026

August

“The current completion is scheduled for March 2027, so there will be no impact in this financial year.”

— Girish Aggarwal, managing director, call of 13 August 2026

not sure why it slipped

on the concession, the same line both times

“There are no red flags, but there is also nothing further to report compared with where we were 3 months ago.”

— Girish Aggarwal, managing director, call of 13 August 2026

P/E 14.8, usual level about 19.7

what I’m watching from here

July–September operating profit, with scrips and one-offs taken out

a year ago it was ₹178 Cr

if it’s above that with cars still up, I’ll believe the car growth

if it’s below, I’ll be worried April–June was mostly one-offs

then the Maritime Board plan, and the royalty after 2028

The 90-second video

that’s it from me, see you tomorrow

— Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 16 October 2026 · results to Apr–Jun 2026 · business analysis from 10 October 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 21 October 2026. Full data page: https://sectoralpha.in/stocks/GPPL

they make the tubes your toothpaste and face cream come in

sold to big consumer brands, from plants in India, China, Europe and the Americas

toothpaste tubes were always the core. beauty and cosmetics tubes are the big push now

I read their May and August calls

sales up 25%, profit flat at ₹101 Cr

₹232 now, a bit above its 40-week average

went to ₹266 in August after results, and keeps slipping back under ₹238

why sales grew and profit didn’t

April–June, against a year before:

sales ₹1,108 Cr to ₹1,388 Cr

operating profit ₹227 Cr to ₹261 Cr

profit ₹101 Cr both times

last 12 months, against the 12 before:

sales ₹4,313 Cr to ₹5,043 Cr

profit ₹399 Cr to ₹393 Cr

1. price rises for costlier raw material

the Middle East crisis pushed up raw material and freight costs

they passed it on to customers, so part of the sales jump is just higher prices

“On an underlying basis, excluding the pass-through impact of higher raw material prices, we delivered 20% underlying revenue growth while delivering EBITDA margins of 19.6%.”

— Hemant Bakshi, managing director and global CEO, call of 11 August 2026

contracts cover freight and currency too, not only raw material

“So all our customer contracts, Sanjesh, are on blended cost basis. So currency depreciation also gets recovered.”

— Hemant Bakshi, call of 11 August 2026

in May they called the extra price temporary

“That will probably come on a temporary basis in a quarter or two.”

— EPL management, call of 14 May 2026

so 20% is the number I’m using

cost passed on at no extra margin, so OPM drops

OPM 20.47% to 18.82% in April–June

the last bar is the lowest since April–June 2024

2. more orders for beauty tubes and toothpaste tubes

beauty and cosmetics grew over 20%. toothpaste tubes grew 24%

everything other than toothpaste is now 54% of sales

they said the 24% won’t repeat every quarter

“The 24% growth will not be something which we’ll be able to deliver every quarter, but this quarter has been exceptional on Oral.”

— Hemant Bakshi, call of 11 August 2026

they say supply held up in the crisis, so customers gave them a bigger share

operating profit grew 12–15% over the year before in each of the last four quarters

₹1,388 Cr in April–June, the highest quarter on the chart

3. spending before the sales show up

separate sales teams, new decoration machines, a new plant in Thailand

they spent ₹480 Cr on plants and machines in the year to March

depreciation that year was ₹385 Cr

in April–June depreciation went from ₹90 Cr to ₹109 Cr

“I think we will continue at a slightly elevated level of capex because we see the opportunity in the marketplace to gain market share.”

— EPL management, call of 14 May 2026

Thailand plant set up in November. beginning to ramp up, no number yet

until the new plants fill up, depreciation keeps hitting profit

4. the tax rate

tax rate went from 14% to 22% in April–June

tax across many countries, so the rate swings

“Last year was at the lower end of this range, at 18% for the full year. And this quarter is at the higher range, at the 22% of this quarter.”

— Deepak Goyal, CFO, call of 11 August 2026

profit before tax was up 10%. after tax, profit didn’t move

they guide 20–22% for this full year, so it stays

5. Europe

Europe sales up 20.2%. margins still behind

they’ve called it operational issues since February

“As operational efficiencies improve, we expect margins to progressively recover.”

— Hemant Bakshi, call of 11 August 2026

no date, no number. I’m counting it as a drag until I see one

The good and the bad

Sales ₹1,108 Cr to ₹1,388 Cr in April–June

20% without the price rises, they say

Toothpaste tubes up 24%, beauty over 20%

they said 24% on toothpaste won’t repeat every quarter

Operating profit ₹227 Cr to ₹261 Cr

up 15%, but depreciation and tax took it

Profit stuck at ₹101 Cr, same as a year ago

higher depreciation and a higher tax rate took the gain

OPM 20.5% to 18.8% in April–June

19.6% without the price rises, still lower

Borrowings ₹802 Cr to ₹962 Cr, March 2025 to March 2026

they called it de-leveraging in May

What did management say

on passing costs on, they deliver

on margin, they’re a bit short

the story on price lag changed between calls

May:

“We do not see any likely lag even with non-contractual customers.”

— EPL management, call of 14 May 2026

August:

“So the consumption cost does have an impact of old inventory, but the pricing also comes with some lag with a few customers.”

— Hemant Bakshi, call of 11 August 2026

so part of the margin dip is price lag

growth guidance changed too

May:

“We are guiding that in the long run we will continue to deliver low double-digit growth in the range of 11-13% consistently”

— EPL management, call of 14 May 2026

August:

“we are raising our growth guidance to high teens for next few quarters”

— Hemant Bakshi, call of 11 August 2026

then the merger with Indovida, which makes plastic bottles and caps

competition approval came in April–June. BSE and NSE cleared it on 19 October

they want it done by January–March 2027

P/E 18.1, usual level about 24

what I’m watching next

OPM in July–September

it was 20.86% a year earlier

near 20% again and I’ll put the dip down to price lag

under 19% again and I’ll be worried about the spending

also toothpaste tubes, after 24% growth this time

The 90-second video

that’s it from me, see you tomorrow

— Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 16 October 2026 · results to Apr–Jun 2026 · business analysis from 22 August 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 19 October 2026. Full data page: https://sectoralpha.in/stocks/EPL

small chemical maker from Mumbai. they make the building blocks other factories use

chlorophenols for farm chemicals, nitroanilines for dyes, and PAP, a painkiller ingredient

70,000 tons a year of capacity across six units

45% of sales in the year to March 2026 went to dye and pigment makers

their own pitch:

"the company has primarily focused on manufacturing specialty chemicals that have a high demand but low supply"

— Valiant Organics, results presentation for the call of 1 February 2026

I went through their February 2026 file. it’s a slide deck, not a call transcript

there’s no call transcript I could read after November 2023

₹467 now. it was ₹208 in March

flat since 1 October

under ₹504, a level it hit once

above ₹430, where it bounced 3 times

The good and the bad

OPM 18% in April–June, was 12%

sales went from ₹204 Cr to ₹232 Cr on the same plants

gross margin was 42.2%

Core pre-tax profit ₹26 Cr, was ₹9 Cr

that’s pre-tax profit with other income taken out

operating profit ₹25 Cr to ₹42 Cr

₹92 Cr operating cash on ₹33 Cr profit

year to March 2026

₹11 Cr of ₹37 Cr pre-tax was other income

30% of April–June pre-tax profit

nothing I have says what it is

Borrowings ₹256 Cr, up from ₹249 Cr

March 2025 to March 2026

they had said term loans would be gone by March 2026

Customers take 120 days to pay, was 90

year to March 2026 against the year before

no comment from the company on why

What did management say

the promises on the card are from their 2023 calls. nothing newer that I could read

the record is poor

in May 2023 they aimed for ₹1,200 Cr of sales in the year to March 2024. it came in at ₹723 Cr

in November 2023 they said the year to March 2025 would bring a revival

it had sales of ₹719 Cr and a ₹3 Cr loss

they also said a turnaround in one to two years

first full-year profit was the year to March 2026, ₹33 Cr

the 22–25% margin from May 2023 hasn’t come. best recent quarter is 18%

the February 2026 deck is the newest thing in their own words

on April–December 2025 margins it says:

"indicating stronger pricing discipline and improved cost efficiencies."

— Valiant Organics, results presentation for the call of 1 February 2026

and on October–December 2025:

"While the third quarter witnessed pricing pressure and demand softness"

— Valiant Organics, results presentation for the call of 1 February 2026

pricing discipline and pricing pressure in the same deck

I’d like to hear someone explain that on a call

why the numbers moved

last 12 months (July 2025–June 2026), against the 12 before:

sales ₹755 Cr to ₹766 Cr

operating profit ₹62 Cr to ₹102 Cr, OPM 8% to 13%

profit ₹5 Cr to ₹55 Cr

sales hardly moved, so the profit came from margin

April–June 2026 against a year ago:

sales ₹204 Cr to ₹232 Cr

profit ₹8 Cr to ₹29 Cr

1. more sales through plants already built

operating profit ₹25 Cr to ₹42 Cr in April–June

sales up ₹28 Cr

work in progress on new plant fell from ₹86 Cr to ₹21 Cr

that’s March 2024 to March 2026, so most of the building is done

in November 2023 they said the plants ran 55–60% full

only two quarters of it so far

July–September 2025 sales were ₹157 Cr, October–December ₹159 Cr

our 16-lever read calls this too early

no tons or plant-use number since November 2023, so I can’t split more tons from better prices

2. raw materials costing less, prices under pressure

gross margin 35.0% in January–March 2025, 42.2% in April–June 2026

highest was 45.5% in July–September 2025

the deck says pricing discipline. it also says:

"despite near-term pricing pressures."

— Valiant Organics, results presentation for the call of 1 February 2026

prices under pressure and margin up, so inputs probably cost less

our 16-lever read: the biggest jump came in July–September 2025, when sales fell

that fits lower input costs, or better products

no product split since November 2023 to check

this one is unclear

gross margin under 38% for a quarter and I’d say the gap is closing

OPM 8% in October–December 2025, 18% six months later

3. one-offs in profit

October–December 2025 profit was ₹4 Cr

sales ₹159 Cr, OPM 8%

that quarter had this:

"Exceptional income of INR 57 million, related to an insurance claim refund"

— Valiant Organics, results presentation for the call of 1 February 2026

₹5.7 Cr. won’t come back

April–June 2026 had ₹11 Cr of other income. no file I have explains it

take it out and pre-tax profit is still ₹26 Cr, was ₹9 Cr

so the business did improve

4. interest down, debt not

interest was ₹8 Cr in July–September 2024, ₹3 Cr in January–March 2026

back to ₹5 Cr in April–June 2026

in August 2023 they said term loans would be fully repaid by March 2026

long-term loans were still ₹38.9 Cr in September 2025

loans they’d given out fell from ₹49.2 Cr to ₹0.5 Cr

money put into other companies rose from ₹93.6 Cr to ₹152.4 Cr

both March 2025 to September 2025

our read is the loans became a bigger stake in Valiant Laboratories, a group company

its share of loss was ₹2.3 Cr in October–December 2025

I haven’t seen the company explain this choice

P/E 25.9, usual level about 21

what I’m watching next

the July–September 2026 results

operating profit ₹30 Cr or more is what I want to see

a year ago it was ₹21 Cr, on ₹157 Cr of sales

OPM under 14% on sales under ₹200 Cr, and I’ll call April–June a one-quarter spike

gross margin under 38% means the input cost gap is closing

other income under 20% of pre-tax profit

and a call where they say how many tons they sold

anyone here work with dye or pigment makers? curious how orders look this year

The 90-second video

that’s it from me, see you tomorrow

— Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 16 October 2026 · results to Apr–Jun 2026 · business analysis from 10 October 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 18 October 2026. Full data page: https://sectoralpha.in/stocks/VALIANTORG

they make the active ingredient in medicines, the chemical that actually does the work

two kinds of business

generics: standard ingredients sold to generic drug makers. prices there keep falling

custom work: made to order for big drug companies, for their patented drugs. pays more

April–June was their best quarter in at least three years. I read the May and August calls to see how much of it sticks

₹9,340 now, in an uptrend since June

jumped after the results on 1 August

The good and the bad

profit ₹545 Cr to ₹902 Cr in April–June

on sales up 28%

₹2,738 Cr cash from the business, ₹2,568 Cr profit

year to March 2026. their plants are paid for from cash they earned, borrowings just ₹7 Cr

plants about 85% full, 70–80% in February

gross margin 68% this quarter, about 60% last year

they say not to count on 68% for the whole year

₹500 Cr of stock built up in one quarter, usually ₹50–100 Cr

an analyst’s maths says that’s a big part of the jump

3 customer plants built, start dates keep slipping

about ₹2,000 Cr. they earn properly only after the customers’ drugs get approved

why the numbers moved

April–June 2026 vs a year ago:

sales ₹2,410 Cr to ₹3,080 Cr, up 28%

OPM 30% to 41%

1. more custom work

custom work was 55% of sales last year (year to March 2026)

in April–June it was 60%

“Considering this quarter, we did have more of custom synthesis, which is 60%. We do see the margins slightly higher than the previous quarter. But again, as we always said, there is lumpiness.”

— Nilima Divi, whole-time director (commercial), call of 1 August 2026

our 16-lever read rates this real. in the one quarter custom slipped (January–March, 55%), margin slipped too

2. trial batches for new plants

part of that 60% was validation batches. trial runs at new plants before a customer’s drug gets approved

they come in bursts, not every quarter

“So it’s hard for me to say, will it be 60-40 in the coming month or 2? Will it be 50-50?”

— Dr. Kiran Divi, CEO, call of 1 August 2026

3. ₹500 Cr of stock

since March they keep 3 months of raw materials on hand

so no plant stops if supply gets cut

“Like any given point of day for the next 3 months, are we secured for our production.”

— Nilima Divi, call of 1 August 2026

stock went up about ₹500 Cr in the quarter. usually ₹50–100 Cr

an analyst on the call worked it out: without that, OPM would have been 28–30%, not 41%

management’s answer: it’s also more production for the trial batches, sitting in the plants as half-made goods

they said no inventory gain was booked

either way, I don’t think a ₹500 Cr build repeats every quarter

4. plants fuller

about 85% used now, 70–80% in February

“Around 85%, I would say, across all the 3 units.”

— Nilima Divi, call of 1 August 2026

5. solvent prices up 2–3x

they use a lot of solvents

solvent prices doubled or tripled after the trouble in the Middle East. some of it they passed on as small price rises

“Even we have increased our price slightly wherever possible with our customers because otherwise the products become unviable to even produce.”

— Dr. Kiran Divi, call of 1 August 2026

the CEO was clear these rises only cover costs. the pressure on generic prices hasn’t gone

sales ₹3,080 Cr, highest quarter on the chart

and the clearest line on the whole call, from the company itself:

“It’s going to be close to 68% this quarter approximately. But I would not look at that as something consistent throughout the year. I would say there would be lumpiness.”

— Nilima Divi, call of 1 August 2026

last year: gross margin about 60%, OPM 33%

What did management say

what’s in their hands, they deliver. growth, plants built, cash

dates that depend on their customers’ approvals keep moving

the first dedicated customer plant was meant to start January 2027, when announced in April 2024

in May this year:

“We are hopeful by 2027 it will be commercialized or earlier or maybe later.”

— Dr. Kiran Divi, call of 23 May 2026

iodine dyes, used in scans

May: about three big customers, some raising volumes

August: contracts being signed with 2, one already buying

they don’t share product names or order sizes. contracts with customers don’t allow it

normal in this business, but it means we’re partly guessing

P/E 83, usual level about 50

what I’m checking next

the July–September results

custom work 56% of sales or more, still

the ₹500 Cr stock coming down

OPM back near 33%, the 41% was batches and stock

OPM holding well above 33%, the custom shift is bigger than I think

one of the 3 customer plants shipping real volumes would change a lot

The 90-second video

that’s it from me, see you tomorrow

— Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 9 October 2026 · results to Apr–Jun 2026 · business analysis from 22 August 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 14 October 2026. Full data page: https://sectoralpha.in/stocks/DIVISLAB

they run blood test labs and scan centres. MRI, CT, X-ray, ECG under one roof

started in Hyderabad, now in Andhra, Pune, Kolkata and Bengaluru too

92% of their sales come from people walking in themselves, not from hospitals or other labs

I read their May and August calls

₹1,437 now, in an uptrend since late May

went up to ₹1,559 in September

what happened in April–June

sales ₹188 Cr to ₹231 Cr, up 23%

profit ₹39 Cr to ₹53 Cr, up 36%

OPM 39% to 43%

1. more people coming in

tests done went up 16.5% on last year

the rest of the sales growth came from people doing more, and costlier, tests

"this strong revenue growth was again driven by test volume growth of 16.5% year-on-year. Balance growth was due to change in the test mix and increase in realization."

— Narasimha Raju, CFO, call of 7 August 2026

Hyderabad grew 17%. it’s 67% of their sales, so this matters most

centres there older than five years also grew in double digits

they say they’re taking customers from small local labs

sales went up every quarter, ₹156 Cr to ₹231 Cr in two years

2. most costs don’t move with sales

rent, machines, doctors and staff are most of the cost

test kits and chemicals are only about 11% of sales

"60% to 70% of our cost is coming from the fixed cost base. So most of these centres as we announced in the previous calls they’ve already achieved the break even."

— Narasimha Raju, call of 7 August 2026

OPM sat around 40% for years. last two quarters, 44% and 43%

3. last year’s new centres caught up fast

they opened 10 big centres (hubs) last year

most now cover their costs

Khammam and Nandyal did it in 2 quarters, they had said 3

the ones still losing money cost under ₹1 Cr a quarter

"But overall if you compare all the 10 hubs together, there is no burn as such because majority of the hubs have achieved break even."

— Dhiren Gala, head of corporate development, call of 7 August 2026

4. bigger bills per visit

a Vijaya customer spends about ₹1,860 a visit

a lab that only does blood tests gets ₹900–950, per the CFO

because people get scans done in the same visit, 3.7 tests each vs 2.5–3

health check-up packages people book themselves are now 15% of sales. before Covid, about 8%

and the packages are getting bigger

"early on the packages would probably end at an ultrasound 2D echo TMC. Now you are seeing packages go all the way from your basic urine blood investigations all the way up to whole body imaging."

— Suprita Reddy, managing director, call of 7 August 2026

5. not price

no price rise since June 2025, and that one was only in Hyderabad

so all of this came without charging more for the same test

The good and the bad

Hyderabad still growing 17%

their oldest city, and still the biggest piece

2 new hubs covered costs in 2 quarters, they’d said 3

Bengaluru’s big new hub only opened in July. too early for that one

₹271 Cr cash from the business on ₹173 Cr profit

year to March 2026. patients pay at the counter, so cash comes in fast

spending plan ₹140–150 Cr in May, ₹190–195 Cr in August

9 more hubs this year

they say the margin can take a 1–1.5% hit from these and stay above 40%

no price rise in over a year

in May they said 1–1.5% this year. in August, they’ll look at it again after September or December

Pune stuck at 6% of sales for over two years

Pune grew 18% in April–June. the whole company grew 23%

What did management say

on running the business, they deliver, sometimes early

on spending and price, the numbers keep moving

they do admit misses. on Pune in May:

"that was the only one guidance which did not happen according to our guidance, which we gave three years back"

— Siva Rama Raju, COO, call of 8 May 2026

and on price, the August call:

"The last price hike which we had taken was in the month of June 2025 where it was restricted to Hyderabad across select tests."

— Dhiren Gala, call of 7 August 2026

P/E 79, usual level about 62

what I’m checking next

the 9 new hubs

₹190–195 Cr this year, about 70% of last year’s cash from the business

last time they opened 6 hubs in one quarter, OPM dropped to 39% for that quarter

this time they say the openings are spread out

OPM above 40% while these open, I’m fine

sales growth under 15% and OPM under 40% for two quarters, I’ll be worried

July–September results are next. last year that was their slowest quarter, sales up just 10%

anyone used a Vijaya centre outside Hyderabad?

The 90-second video

that’s it from me, see you tomorrow

— Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 9 October 2026 · results to Apr–Jun 2026 · business analysis from 22 August 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 14 October 2026. Full data page: https://sectoralpha.in/stocks/VIJAYA?utm_source=substack&utm_medium=email&utm_campaign=2026-10-17-vijaya&utm_content=site

they make steel pipes. the hollow square and round ones in sheds, roofs, factory frames and railings

market leader in India. they say they hold 60–65% of their market

I went through their May and August calls

one thing kept coming up. fewer tons sold, more money made on each one

₹2,114 now

dropped below its 40-week average in July, back above it in September

The good and the bad

₹5,500 operating profit a ton, up from ₹4,000

mostly a price rise from January 2025 that customers kept paying

₹1,400 Cr cash in June

they get paid by dealers before they pay the steel mills, so cash piles up

July–September: 9.63 lakh tons, up 13% on last year

after a weak April–June

April–June: 7.45 lakh tons, they had said 8.75 lakh

down 20% from January–March

price cuts on about 20% of the range

to win tons back. this is the part I’m watching

they stopped showing profit for each product line

says competitors were using it against them

What did management say

on profit per ton, they deliver

on tons, they keep missing

in May they said April–June could touch 8.75 lakh tons. it came in at 7.45

in August they aimed for 10 lakh in July–September. it came in at 9.63

for the full year they’re now firm only on 15% more tons, not 20

"I don’t think I will have any problem to cross 15% volume growth. Yes, some tailwinds will be needed to cross 20%. I cannot say that with confidence right now; I can say 15% confidently."

— Sanjay Gupta, chairman and managing director, call of 3 August 2026

two things bug me

the size of the January 2025 price rise changed between calls

May: about ₹1,500 a ton

August:

"we increased the pricing by almost INR500 per ton."

— Anubhav Gupta, chief strategy officer, call of 3 August 2026

and an analyst asked them to bring back profit per product line. the answer:

"With the competitors the more our margin was seen, we used to get a hit there. So technically we have finished it."

— Sanjay Gupta, call of 3 August 2026

fair reason. but now we see less

why the numbers moved

last 12 months (July 2025–June 2026), against the 12 before:

sales ₹20,886 Cr to ₹23,064 Cr, up 10%

profit ₹801 Cr to ₹1,229 Cr, up 53%

part of that is a weak base. July–September 2024 had OPM of just 2.9%

the rest is below

1. the price rise from January 2025

they raised prices on the regular Apollo range

profit on that range went from ₹2,000 a ton to ₹3,500

"we had increased the pricing for Apollo general segment in January of 2025, okay, by almost INR1,500 per ton. So that increase, that price hike is straightaway coming to our EBITDA, okay, for the general product."

— Anubhav Gupta, call of 4 May 2026

it held for 18 months now

gross margin, last four quarters: 15.3% to 16.6%

same four quarters a year before: 11.1% to 15.3%

I checked if this was just old steel, bought at lower prices, sold at new high prices. that kind of gain doesn’t repeat

they hold only about two weeks of spare steel, so not much room for it

"So, I can say that the free inventory we have is 13-14 days’ worth of free inventory."

— Sanjay Gupta, call of 4 May 2026

our 16-lever read rates this one real and lasting

gross margin stayed above 15% through a steel price spike and a 20% drop in tons

2. April–June: fewer tons through the same plants

tons fell 20% from January–March. they gave four reasons:

the Dubai plant almost stopped after the war in the Middle East, about 25,000 tons lost

fuel shortages in India hit roofing and rust-proof pipes, 25,000–30,000 tons lost

dealers stopped buying, waiting for steel prices to fall

their cheaper SG Premium pipes lost sales to small mills using scrap-based steel

they held prices anyway. when steel went up ₹1,000 a ton, they went up a bit more:

"If steel prices were going up by INR1,000 per ton, we tried to improve our prices for our product by plus 100 plus INR200 per ton over and above steel price increase."

— Anubhav Gupta, call of 3 August 2026

so gross profit per ton went up ₹1,000

but OPM still slipped, 8.15% to 7.34%

same staff, fewer tons, so staff cost per ton went up

"if you look at it per ton, then due to our low production, the employee cost has increased."

— Sanjay Gupta, call of 3 August 2026

April–June sales ₹5,607 Cr, down from ₹6,269 Cr in January–March

still above ₹5,170 Cr a year ago

3. dealers buying again

steel had gone up ₹7,000–8,000 a ton in January–March

dealers thought it would fall, so they emptied their stock

the people actually building kept buying about the same

"This destocking and restocking that dealers do, that always makes a difference in demand up and down. If you look at the demand at the last level, it remains the same."

— Sanjay Gupta, call of 3 August 2026

April was 2.5 lakh tons. July crossed 3 lakh

looks like that’s already passing

4. new plants, not here yet

Gorakhpur (2 lakh tons) was due to start in September, Siliguri (3 lakh) after it

the big one is Malur, 10 lakh tons, all value-added (coated pipes, roofing, heavy sections), due by December 2027

value-added is 65% of tons now. they say 75–80% after Malur

"that 1-million-ton plant of ours is a totally value-added plant where we are thinking that our EBITDA margin will be 8,000 plus."

— Sanjay Gupta, call of 3 August 2026

₹8,000 a ton against ₹5,500 now

not built yet, so I’m not counting it

P/E 47.8, usual level about 42

what I’m checking next

the price cuts on 20% of the range

they need about 4 lakh tons a month in October–March to make 15% for the year. an analyst on the call worked that out

July crossed 3 lakh. they aimed for 3.5 lakh in September

profit per ton has to hold above ₹5,000 while they push tons. they said so themselves:

"No, no, there is no point in going below 5,000."

— Sanjay Gupta, call of 3 August 2026

above ₹5,000 with more tons, the price rise really is lasting

under ₹5,000, I’ll be worried

July–September results will show both

anyone seen the Apollo name stamped on pipes at a site near you?

that’s it from me, see you tomorrow

— Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 9 October 2026 · results to Apr–Jun 2026 · business analysis from 22 August 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 14 October 2026. Full data page: https://sectoralpha.in/stocks/APLAPOLLO

they're the digital signature people

the USB tokens with your digital signature on them, and the e-sign on bank forms

over 3 lakh e-signs a day in banking alone

they also make software banks use for logins and for the security certificates behind websites

I read their May and July 2026 calls

₹570 now, after a low of ₹384 in March

back above its 40-week average, going sideways

₹519 is the level it keeps bouncing off

The good and the bad

April–June profit ₹32 Cr, up from ₹25 Cr

sales ₹191 Cr, up from ₹147 Cr

no one-off items in the quarter

OPM 26% in April–June, was 24%

more software, fewer tokens

token sales should come back

66% of sales now from outside India

own software abroad, up about 13% even without Cryptas

profit growth goal now 25%, was 25–30%

they called it unchanged

Cryptas: ₹85 Cr sales, about ₹1–2 Cr profit

the European company they bought in the year to March 2026

Europe lost about ₹4 Cr in April–June

growth without Cryptas 7–16%, goal 18%

last four quarters, with Cryptas taken out

why the numbers moved

last 12 months (July 2025–June 2026), against the 12 before:

sales ₹574 Cr to ₹745 Cr, up 30%

profit ₹93 Cr to ₹117 Cr

OPM 23% both times

sales up, OPM flat over the year

only April–June shows a clear OPM jump

1. their own software, sold abroad

outside India was 64% of sales in the year to March 2026, up 39%

66% in April–June

US product sales up 30–35%, by the chairman's number

"our product business grew by almost 30%-35% from almost 7 million to 9.5 million kind of thing."

— Venkataraman Srinivasan, executive chairman, call of 7 May 2026

part of the jump abroad is Cryptas

without Cryptas, sales outside India grew about 13%, not 39%

I'd still call this one lasting

sales were up on a year before in each of the last four quarters

2. fewer tokens, more software

OPM 24% to 26% in April–June

operating profit ₹35 Cr to ₹50 Cr

their software makes 70–75% gross margin. tokens about 10%

fewer tokens, so OPM goes up

"the margin improved slightly this quarter because token sales were lower, and token sales have a lower margin. That is one factor. The other factor is that enterprise sales were higher, while trust services were lower as a percentage, and enterprise sales have higher margins."

— eMudhra management, call of 30 July 2026

they're adding salespeople abroad, so they don't see OPM going much higher

"we may be able to maintain EBITDA at 25% and PAT at around 16-16.5%."

— eMudhra management, call of 30 July 2026

the three quarters before were 22–24%

OPM clearly beat the year before in 1 quarter out of 4

too early to call it lasting

3. a new token rule, partners stopped stocking

the CCA wants signing tokens recertified to a new standard

old tokens expire by September

so partners stopped stocking them

token sales fell ₹5–7 Cr in the quarter

a normal quarter is about ₹8–9 Cr

"However, the profit in the token business is not much. On average, the gross margin may be 10% or something like that."

— eMudhra management, call of 30 July 2026

the main token was still waiting for approval:

"Mostly by September, the ePass token will be certified, and the token volume will increase again."

— eMudhra management, call of 30 July 2026

this one's a one-off

when tokens come back, sales go up and some of the OPM gain goes away

4. Cryptas, the European company they took over

₹20 Cr of the April–June sales

about 13% of the 28% growth in total income, by their own numbers

"Last year, Cryptas revenue was 85 crores for the whole year. And from the PAT side, almost a break-even."

— Venkataraman Srinivasan, call of 7 May 2026

and the European arm lost money in April–June:

"The 4-crore loss will predominantly be from the European subsidiary BV. Some legal expenses were incurred in BV."

— eMudhra management, call of 30 July 2026

first wins came in April–June

their software went to a German data centre and an Austrian city

the plan is to swap the American software Cryptas used for their own

unclear till Europe shows a profit

5. depreciation

₹7 Cr to ₹12 Cr a quarter, April–June against a year before

they now run data centres in the US, Europe and UAE

so profit grew slower than operating profit

What did management say

yearly sales goal, met

they said ₹700 Cr for the year to March 2026

it came in at ₹702 Cr

profit growth goal for this year:

May:

"So, top line is 18%. But bottom line may be around between 25% to 30%. Could be around 27%-28% kind of thing."

— Venkataraman Srinivasan, executive chairman, call of 7 May 2026

July:

"our guidance remains unchanged from what we shared in the previous quarter, that is, to achieve organic growth of 18% and work towards achieving PAT growth of 25%."

— Venkataraman Srinivasan, call of 30 July 2026

27–28% became 25%

April–June profit grew 28% anyway, so not sure why

US products, in May:

"we can see 25%-30% growth definitely in the US product segment, if not more."

— Venkataraman Srinivasan, call of 7 May 2026

July had no US number, only this:

"deal pipelines take some amount of time in North America, especially when you are addressing this segment."

— eMudhra management, call of 30 July 2026

Cryptas, they still say this year:

"We are not expecting the loss to continue in the current year."

— eMudhra management, call of 30 July 2026

the UAE e-sign licence was due around the end of September

nothing in what I read says it came

P/E 41, usual level about 56.6

what I'm watching next

the July–September OPM

24% or more with tokens back to normal, the software mix is real

under 24% with tokens back, the April–June jump was mostly fewer tokens

and Europe, a profit there instead of a ₹4 Cr loss

July–September results will show both

anyone here got a new signing token recently? curious if they're easy to find now

that's it from me, see you tomorrow

— Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 9 October 2026 · results to Apr–Jun 2026 · business analysis from 10 October 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 14 October 2026. Full data page: https://sectoralpha.in/stocks/EMUDHRA

okay so Tech Mahindra

two years ago it was the slow one in Indian IT

profit in April–June 2024 was ₹865 crore

in April–June 2026 it was ₹1,486 crore

and fresh results drop on 15 Oct

Crossed ₹1,604, couldn’t stay above it

₹1,604 is the line I keep watching on this chart

it broke above it 3 times since July.

came back each time

last close was ₹1,514 on 9 Oct 2026

that’s still stage 2, an uptrend, above its 40-week average of about ₹1,480

so rn it’s pulling back inside an uptrend

the floors it bounced from are ₹1,487 and ₹1,386, that one 4 times

the range over the last year is ₹1,332 to ₹1,717

Zooming out: the last 5 years

The tech team behind your phone company

they build and run software for big companies abroad

phone companies are the biggest chunk, over 32% of sales

they work with 100 plus phone operators across the world

more than 75% of revenue comes from the US and Europe

manufacturing is the fast one now, up 17.2% in April–June 2026

Watch it in under 90 seconds

The good and the bad

What’s working

Margins got fixed, quarter by quarter

OPM is operating profit as a share of sales.

it was 7% in July–September 2023.

it’s 17% now.

11 quarters up in a row

Big deals are finally landing

deal wins hit US$3.79 billion in the year to March 2026.

that’s up 42%.

April–June 2026 added another US$1.078 billion

The cash backs up the profit

operating cash was ₹6,172 crore in the year to March 2026.

profit was ₹4,806 crore.

they paid ₹51 a share in dividends, their highest ever

What’s bugging me

The market already expects a lot

P/E is how much the market pays for each ₹1 of yearly profit.

it’s 27.9 now.

its usual level is about 20.8.

so results have to keep showing up

Telecom, the biggest part, barely grew

communications grew just 1.3% in April–June 2026.

that’s over 32% of sales.

they also flagged volatility in a large US telecom client

Costs are coming back

pay hikes start from July–September 2026, in phases.

a European auto project ran early and won’t repeat.

the CFO put that hit at around 1% to 1.3% of next quarter

Did they do what they said?

mostly yes, tbh

the margin plan from April 2024 showed up every single quarter

the miss is hiring more freshers, which keeps project costs lower

in July the CFO said that shift comes "but not in this year"

“Hopefully, Kawal, you consider 15% also as high teens because then I can reassure you we will hit that number for the year.”

— Mohit Joshi, CEO, earnings call of 16 July 2026

My take: he’s joking, but he put his name on 15%.

I’ll check that number every quarter

The numbers

Revenue

revenue is just total sales

April–June 2026 was ₹15,712 crore, up about 18% on a year ago

last 12 months: ₹59,176 crore, up from ₹53,334 crore

PAT

PAT is just profit after tax

last 12 months: ₹5,163 crore, up from ₹4,518 crore

April–June 2026 alone was ₹1,486 crore, up 31.6%

OPM

over the last 12 months OPM went from 14% to 17%

that’s ₹9,834 crore of operating profit on ₹59,176 crore of sales

more of every sale stays with them now

ROE

ROE is yearly profit as a share of the owners’ money in the business

it fell to 8.8% in the year to March 2024

back to 16.9% by March 2026.

still under the 21.8% of 2022

EPS and P/E

EPS is profit per share

last 12 months it’s ₹52.41, up from ₹46.4

P/E is 27.9 vs a usual 20.8.

it hit 63 in Sep 2024, when profit had crashed

Dates to watch

margin fix mostly done. now growth has to carry it. I’m watching 15 Oct closely — Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 9 October 2026 · results to Apr–Jun 2026 · business analysis from 22 August 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 13 October 2026. Full data page: https://sectoralpha.in/stocks/TECHM

okay so ADF Foods

they make frozen naan and Indian meals for shops abroad

profit is up 30% in the last 12 months

and in June they couldn’t ship 30% of ready goods

I went through both calls so you don’t have to

Back in an uptrend and pushing higher

the stock closed at ₹289.7 on 9 Oct 2026

it’s in stage 2 rn, which just means an uptrend

the low was ₹157.89 in late March 2026

it sits well above its 40 week average of ₹263.43

in 3 weeks it climbed from ₹261.45 back over ₹277.81

the July 2026 high was ₹320.4...

no clear ceiling in the last 40 weeks

Zooming out: the last 5 years

Indian food for shelves abroad

ADF Foods makes packaged and frozen Indian food

think frozen naan, flatbreads and ready to eat meals

most of it goes abroad, to the US, UK, Europe and Australia

Ashoka is the big brand, for Indians living abroad

Truly Indian is the newer one, made for regular American shoppers

Watch it in under 90 seconds

The good and the bad

What’s working

Demand is bigger than shipping can handle

Management says the order book is the strongest it has ever been.

In June, 30% of ready goods couldn’t leave, no vessels or containers.

So some sales just moved to later months.

Ashoka grew over 30% in April–June

Ashoka is the main brand, about ₹300 crore of sales.

It grew over 30% in April–June 2026.

Big jump for a brand that size.

The new Surat plant started shipping

The frozen food plant shipped about 15 containers in April–June 2026.

At full size it can support a little under ₹300 crore of sales.

What’s bugging me

The margin got help from a refund

About ₹7 crore of a US tariff refund landed in April–June 2026.

Without it, margin was a little under 14%.

Freight costs took away about 3% of sales.

Cash is lagging behind profit

In the year to March 2026, profit was ₹90 crore.

Cash from the actual business was only ₹58 crore.

The rest went into stock and the new plant.

Government help ends this year

PLI is a government scheme that paid half their marketing spend.

It gave them about ₹16 crore last year.

This is the last year of it, unless it gets extended.

Did they do what they said?

but the big numbers and dates keep sliding a bit

on 9 Oct 2026 they settled that case for US$1.75 million plus interest source

“Our order book is the strongest it has been in the company’s history.”

— Management, ADF Foods, earnings call of 30 Jul 2026

My take: I believe the demand part.

the open question is shipping, bc orders only count once they leave port

The numbers

Revenue

revenue is just total sales

₹718 crore in the last 12 months, up from ₹600 crore

April–June 2026 was ₹167 crore, up 25.6% from ₹133 crore

PAT

PAT is profit after tax

₹91 crore in the last 12 months, up from ₹70 crore

April–June was ₹17 crore vs ₹15 crore, slower than sales

OPM

OPM is operating profit as a share of sales

19% in the last 12 months, up from 17%

April–June showed 18%, helped by that one time refund

ROE

ROE is profit as a share of the owners’ money

16.9% in the year to March 2026, up from 14.8%

it was 21% back in March 2021

EPS and P/E

EPS is profit per share.

₹8.37 in the last 12 months, up from ₹6.39

P/E is the price paid for each ₹1 of yearly profit.

it’s 32.9 now

its usual level is about 32, so imo it’s sitting right near normal

Dates to watch

orders are there, ships aren’t yet. tbh I’m watching the next results closely — Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 9 October 2026 · results to Apr–Jun 2026 · business analysis from 22 August 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 12 October 2026. Full data page: https://sectoralpha.in/stocks/ADFFOODS

Okay so IOL Chemicals.

They make the powder inside your paracetamol.

They tripled the plant.

It’s still only about 55% full.

Profit still jumped 88% in April–June 2026.

Nearly tripled from the March low

The stock closed at ₹201.15 on 9 October 2026.

Its 52-week low was ₹68.82, on 13 March 2026.

So it nearly tripled in seven months, which is pretty wild.

It flipped into stage 2 on 29 May 2026.

Stage 2 means a steady uptrend.

The 40-week average is around ₹136 now, and the price sits far above it.

In July it hit ₹171, slipped to ₹146, then kept climbing.

It made a 52-week high of ₹209.39 on 1 October.

No clear ceiling in the last 40 weeks.

Zooming out: the last 5 years

The powder inside your painkillers

IOL makes APIs.

That’s the active powder inside a medicine.

Ibuprofen is the big one.

Paracetamol, metformin and clopidogrel are growing fast.

There’s a chemicals side too, mainly ethyl acetate and acetic anhydride.

The company turned 40 this year and ships to over 80 countries.

Exports were 28.5% of sales in April–June 2026.

Watch it in under 90 seconds

The good and the bad

What’s working

The plant is already paid for

Paracetamol capacity went from 3,600 to 10,800 tonnes a year.

Only about 55% is used so far.

So each extra tonne goes mostly to profit.

Less dependence on ibuprofen

Ibuprofen had a long slump when customers cut their stock.

Now other medicines are 43% of pharma sales.

tbh I like this part the most

New projects, paid from own cash

In September 2026 they announced about ₹500 crore of new projects.

Ibuprofen goes to 18,000 tonnes a year by December 2027.

Debt is only ₹135 crore.

What’s bugging me

P/E far above its usual level

P/E is 33.5 right now.

Its usual level is about 18.6.

That’s near the top of its own ten-year range.

One huge quarter, calmer guidance

Sales grew 37% in April–June 2026 source.

Management still only guided 15–20% for the year.

Some of it may be export shipments landing early.

Plants keep eating the cash

Over five years, plant spending used up 111% of operating cash.

Free cash was only about ₹49 crore last year.

tbh that’s thin for this much growth

Did they do what they said?

They hit the margin number and blew past the sales one.

The paracetamol plant came in late though.

It reached 55%, not 65%.

The yearly sales range also moved four times in eight months.

“Most of our products have very high capacity utilization, and I think that was the main reason for the improvement in EBITDA margins”

— Management, IOL Chemicals, call on 29 September 2026

My take: So fuller plants did most of the work.

I like that more than a one-time price bump.

The numbers

Revenue

Revenue is just sales.

Last 12 months: ₹2,523 crore.

The 12 months before that: ₹2,129 crore.

PAT

PAT is profit after tax.

It was ₹168 crore over the last 12 months.

The 12 months before, it was ₹105 crore.

OPM

OPM is the share of sales left as operating profit.

It was 12% over the last 12 months, up from 10%.

April–June 2026 alone hit 14%.

ROE

ROE is profit compared to the owners’ money in the business.

It was 7.9% in the year to March 2026, and 9.6% back in March 2023.

That’s the part I don’t love yet.

EPS and P/E

EPS is profit per share.

It’s ₹5.72 for the last 12 months, up from ₹3.58.

P/E is 33.5 now.

Back in March 2026 it was 17.5.

Dates to watch

That’s IOL for today. See you tomorrow with the next one. — Roshan, Sector Alpha

One great stock to study, every day. Follow Sector Alpha on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 9 October 2026 · results to Apr–Jun 2026 · business analysis from 10 October 2026

Sector Alpha shows what has happened in published results and market data, and explains the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and Sector Alpha is not registered with SEBI as an adviser. Data as of 12 October 2026. Full data page: https://sectoralpha.in/stocks/IOLCP

Ashiana Housing sold more homes than it promised, then reported its smallest revenue since September 2024. The gap between those two facts is the whole story.

Poked the ceiling, then slipped back

The stock closed at ₹372.55 on 9 October 2026, in Stage 2, the uptrend stage, since 17 April 2026.

₹387.7 is the ceiling it has bumped into twice over 15 weeks.

On 25 September it closed at ₹389.70, just above that ceiling, then slipped back over the next two weeks.

The floors it has reacted to sit at ₹364.85 and ₹301.2.

The longer view · 5 years

Homes for retirees, plus regular family homes

Ashiana is a ₹3,745 crore homebuilder that is lowkey India’s senior-living pioneer: gated communities for retirees, plus family homes in cities like Jaipur, Gurugram, Chennai and Pune.

The quirk: a booking counts when you sign, but revenue counts only when you get the keys.

Watch it in under 90 seconds

The good and the worries

Going well

• Bookings beat management’s own range. The guide was ₹1,050–1,100 crore for April–September 2026 (source); the actual was ₹1,192 crore. July–September alone was ₹834.40 crore across 525 units (source).

• The cash is real, no cap. Cash from operations was ₹342 crore in April 2025–March 2026, against ₹118 crore of profit.

• Senior living is becoming the main character. Senior-living bookings grew from about ₹100 crore five years ago to ₹570 crore last year. It just bought 28.55 acres in Pune for senior living.

The worries

• Revenue shows up late and lumpy. April–June 2026 revenue was ₹107 crore versus ₹293 crore a year earlier, because two projects’ certificates arrived in mid-July.

• The Bengaluru deal keeps slipping. In May 2026 management called it "99% likely", needing "another couple of months". By August it was "still in discussions".

• Margins swing, and costs are climbing. Operating margin went from 19% in October–December 2025 to 7% by April–June 2026. The delayed projects earn a gross margin in the "mid-20s", below the 30% it aims for.

Did management keep its word?

One beat, one kept, one late, one pending: a decent report card.

The ₹532 crore is the big one.

“If that occupancy certificate had come in on, let’s say, 25th of June, we would have been able to recognize the entire revenue in June itself.”

— Varun Gupta, whole-time director, 12 Aug 2026 call

My read: this is a calendar problem, not a demand problem. November will show if I’m right.

The numbers

Revenue. Revenue for July 2025–June 2026 was ₹958 crore, versus ₹699 crore the 12 months before.

PAT. PAT, profit after tax, was ₹119 crore versus ₹36 crore. Honest caveat: October–December 2025 alone brought ₹57 crore, so one big quarter does much of the lifting.

OPM. OPM, the operating margin, is operating profit as a share of revenue: 13%, up from 5%.

ROE. ROE, return on equity, is profit earned on the owners’ money: 14.5% for the year to March 2026, versus 2.3% the year before.

EPS and P/E. EPS, profit per share, roughly doubled over the last 12 months, from ₹5.67 to September 2023 to ₹11.77 to June 2026, with the big October–December 2025 quarter doing a lot of that lifting. The P/E is 32.1 now against its usual 40.4; it was 49.3 in January 2024 and spiked above 150 in 2025, when profit was low.

Dates to watch

Sold more than promised, delivered later than planned, and November's results are the receipt. — Roshan, Sector Alpha

I share one great stock to study, every day. Follow me on Instagram (@sectoralpha_india) and X (@Sectoralpha_Ind).

Prices as of 9 October 2026 · results to Apr–Jun 2026 · business analysis from 22 August 2026

I show what has happened in published results and market data, and explain the business behind it, so you can study a stock yourself. It is never a recommendation to buy or sell, and I am not registered with SEBI as an adviser. Data as of 11 October 2026. Full data page: https://sectoralpha.in/stocks/ASHIANA

Food Processing (Indian) Custom Index Returns as compared to NIFTY

If we see returns for the last 2 years, our Food Processing (Indian) custom index started outperforming NIFTY since March 23 and since Oct 22 has given returns of 101% vs NIFTY 36%

What is happening fundamentally in Food Processing Sector in Q1 25 i.e. from April 24 to June 24

When multiple companies in a sector show Increase in Sales and OPM in a quarter… it usually indicates that there are strong tailwinds in the sector. This generally results in multiple companies in that sector out performing Fundamentally and Price wise.

For Food Processing Sector

1. 16 Companies grew their Sales by 16% and Operating Profit Margins by 51% Quarter on Quarter in Q1 25 i.e. compared with Q4 2024

2. 15 Companies grew their Sales by 13% and Operating Profit Margins by 21% Year on Year i.e. compared with Q1 2024

Also you will notice that for most of the companies mentioned below (The 9 Best performing Food Processing stocks that are undervalued) -

1. 3 Profit metrics

   1. Gross Profit Margin per quarter

   2. Operating Profit Margin per quarter

   3. Net Profit Margin per quarter

   4. Started improving from March to May 23

   5. Revenues started to scale up from May 23

2. Prices of most of these companies bottomed out in March 23 and since then have been on a tear, outperforming NIFTY since March 23

The reasons for the above fundamental outperformance (sector Tailwinds) are -

1. Margin Expansion: Most companies reported improved margins due to lower input costs, especially in dairy companies benefiting from reduced milk procurement prices. This indicates a favorable cost environment for the food processing sector.

2. Volume Growth: Companies across segments (dairy, rice, aquaculture) reported healthy volume growth, suggesting strong underlying demand for processed food products.

3. Value-Added Products Focus: There's a consistent strategy across companies to increase the share of value-added products to drive both growth and profitability. This includes products like cheese, yogurt, ready-to-eat items, and premium variants.

4. Distribution Expansion: Companies are focusing on expanding their distribution reach, both in terms of geographical coverage and channel diversification (e-commerce, modern trade, etc.), to drive growth.

5. Rural Market Potential: Several companies highlighted the growing importance of rural markets, with some reporting rural demand outpacing urban growth. This indicates a broadening consumer base for processed foods.

6. Operational Efficiency: There's an industry-wide focus on improving operational efficiencies through various initiatives like automation, digitization, and supply chain optimization to enhance margins.

7. New Product Launches: Companies across the board are emphasizing innovation and new product launches to cater to evolving consumer preferences and drive growth.

8. Commodity Price Volatility: While many companies benefited from lower input costs in the recent quarter, there's an underlying theme of commodity price volatility affecting the industry, requiring companies to maintain dynamic pricing and procurement strategies.

Check out the last section of the newsletter to see which sectors will we cover next…

9 Undervalued Food Processing Stocks that were the Best Performers listed by Decreasing Market Cap

Godrej Agrovet Ltd - Market Cap 14,886+ Cr

1. Price Action - Since Oct 22, Godrej Agrovet - 49%, NIFTY 43%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin improving quarterly since Mar 2023 but revenue being consistent from July 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 10% and Profits increased by 72%

   2. Q1 25 results (YoY increase) - Sales decreased by 6% and Profits increased by 25%

3. Valuations and EPS - Below chart shows Price has grown faster than TTM EPS (EPS of last 4 quarters) leading to a PE of 40, and above historical average

   

   1. PE at 40 i.e. above historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since May 2023

4. What led to outperformance

   1. Margin Expansion

      1. Consolidated EBITDA margin improved to 10.8% in Q1 FY25 from 8.2% in Q1 FY24, driven by robust volumes and improved realization in the domestic Crop Protection business and margin expansion in Animal Feed and Dairy businesses.

   2. Animal Feed Segment Performance

      1. Segment margins improved sharply from 4.2% in Q1 FY24 to 6.8% in Q1 FY25, with EBIT/MT rising from ₹1,443 to ₹2,258, due to favorable commodity positions allowing for better cost management.

   3. Crop Protection Business Growth

      1. Standalone Crop Protection segment margins improved from 32% in Q1 FY24 to 45% in Q1 FY25, primarily due to higher realization in herbicide and pesticides categories and volume growth in Plant Growth Regulators.

   4. Dairy Segment Improvement

      1. EBITDA margins in the Dairy segment improved by 490 basis points in Q1 FY25, driven by operational efficiency gains and an improved milk spread, despite a flat top line.

   5. Cost Management

      1. Profit before tax (excluding non-recurring items) improved by 36% to ₹169 crores in Q1 FY25, reflecting effective cost control measures and improved operational efficiencies across segments.

   6. Value-Added Products Focus

      1. Value-Added Products' salience in the Dairy segment improved from 36% of total sales in Q1 FY24 to 42% in Q1 FY25, reflecting successful portfolio optimization efforts leading to higher margins.

   7. Strategic Shift in Poultry

      1. Increased focus on branded business in the Poultry segment, moving away from the more volatile live bird business, aiming to improve margin stability and reduce exposure to commodity price fluctuations.

   8. Raw Material Management

      1. Favorable commodity positions and efficient raw material management, particularly in the Animal Feed segment where the company is covered for major raw materials, contributed to margin improvements across segments

Subscribe now

L T Foods Ltd - Market Cap 14,552 + Cr

1. Price Action - Since Oct 22, L T Foods - 287%, NIFTY 41%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin improving quarterly since July 2022 but revenue scaling up from Oct 2021

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 0% and Profits increased by 15%

   2. Q1 25 results (YoY increase) - Sales increased by 16% and Profits decreased by 3%

3. Valuations and EPS - Below chart shows Price and TTM EPS (EPS of last 4 quarters) has grown at the same rate from April 2023 to Jan 2024 and from Jan 2024 price has grown at a faster rate than TTM EPS leading to PE 24 i.e. being over valued as compared to historical average of 10.

   

   1. PE has expanded to 24 i.e. above historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since May 2023

4. What led to outperformance

   1. Revenue Growth

      1. Consolidated revenue grew by 17% year-on-year to INR 2,088 crores in Q1 FY25, driven by increased sales across all segments.

   2. EBITDA Expansion

      1. EBITDA increased by 15% year-on-year to INR 258 crores in Q1 FY25, with EBITDA margin maintained at 12.4% despite input cost pressures.

   3. Profit Growth

      1. Profit before tax (PBT) increased by 18% to INR 198 crores, while profit after tax (PAT) grew by 13% to INR 155 crores in Q1 FY25.

   4. International Business Performance

      1. International business grew by approximately 17% year-on-year, indicating strong demand in key markets like USA and Europe.

   5. Value-Added Products Focus

      1. Increased focus on value-added products, with plans to double capacity for ready-to-heat products in the USA, driving higher margins.

   6. Operational Efficiency

      1. Net working capital days reduced by 8 days to 202 days compared to Q1 FY24, reflecting improved operational efficiency and working capital management.

   7. Debt Reduction

      1. Debt-to-equity ratio improved from 0.4x to 0.2x, while debt-to-EBITDA ratio improved from 1.2x to 0.8x in Q1 FY25, indicating stronger financial position.

   8. Market Expansion

      1. Entry into new markets like Saudi Arabia and plans to launch Daawat Jasmine rice in India, providing potential for further growth and operating leverage.y

Zydus Wellness Ltd - Market Cap 12,481 + Cr

1. Price Action - Since Oct 22, Zydus Wellness - 18%, NIFTY 39%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin following similar cyclical pattern showing consistent recovery in recent quarters

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 7% and Profits increased by 23%

   2. Q1 25 results (YoY increase) - Sales increased by 20% and Profits increased by 11%

3. Valuations and EPS - Below chart shows Price and TTM EPS (EPS of last 4 quarters) has moved at the same rate from April 2023 to Jan 2024 and from Jan 2024 price has grown at a faster rate than EPS leading to PE at 40, i.e. overvalued from historical average of 35.

   

   1. PE ratio is at 40, above historical average of 35

   2. TTM EPS (EPS of Last 4 quarters) - relatively stable from July 22 to Nov 23, then slight decrease and then a jump in the latest quarter.

4. What led to outperformance

   1. Revenue Growth

      1. Consolidated net sales grew by 20% year-on-year, with 17.1% volume growth, indicating strong demand across categories.

   2. Category Performance

      1. Personal Care segment grew 41.8% year-on-year, while Food & Nutrition segment grew 15%, showing robust growth across key segments.

   3. Margin Expansion

      1. Gross margin improved by 314 basis points year-on-year and 114 basis points sequentially, driven by favorable product mix and commodity cost management.

   4. EBITDA Growth

      1. EBITDA grew by 33.3% year-on-year to INR 1,553 million, outpacing revenue growth and indicating operating leverage.

   5. New Product Launches

      1. Launched several new products across categories, with plans for 4 more innovations in coming quarters, potentially driving future growth.

   6. Market Leadership

      1. Maintained or improved market share across key categories like Everyuth, Nycil, Glucon-D, and Sugar Free, providing pricing power.

   7. Distribution Expansion

      1. Implemented hub-and-spoke model for suppliers, strengthening supply chain capabilities to support growth.

   8. Debt Reduction

      1. Repaid debt in full, deleveraging the balance sheet while maintaining a strong cash position, providing financial flexibility for future growth

Avanti Feeds Ltd - Market Cap 8,445+ Cr

1. Price Action - Since Oct 22, Avanti Feeds - 26%, NIFTY 39%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin improving quarterly since July 2022 but revenue scaling up from July 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 17% and Profits increased by 37%

   2. Q1 25 results (YoY increase) - Sales decreased by 3% and Profits increased by 20%

3. Valuations and EPS - Below chart shows Price has grown at the same pace as TTM EPS (EPS of last 4 quarters) from April 2023 to Jan 2024 and from Jan 2024 price has grown faster than TTM EPS leading to PE being slightly overvalued from historical average of 20.

   

   1. PE ratio has remained relatively stable around 15-25 since March 23.

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since Mar 2023

4. What led to outperformance

   1. Revenue Growth

      1. Consolidated gross income grew by 16.7% quarter-on-quarter to INR 1,541 crores in Q1 FY25, driven by increased feed sales volumes.

   2. Profit Growth

      1. Consolidated profit before tax (PBT) increased by 19.2% quarter-on-quarter and 14.64% year-on-year to INR 180 crores in Q1 FY25.

   3. Feed Division Performance

      1. Feed division PBT grew by 29.67% quarter-on-quarter to INR 153 crores, primarily due to higher sales volumes and better overhead absorption.

   4. Processing Division Outlook

      1. Company expects shrimp exports to increase to around 16,000 metric tons in FY25 compared to 13,443 metric tons in FY24.

   5. Capacity Utilization

      1. Feed sales volumes increased to 158,591 MT in Q1 FY25 compared to 122,278 MT in Q4 FY24, indicating improved capacity utilization.

   6. New Business Initiatives

      1. Company is diversifying into pet food and pet care products, with trading operations planned to start before March 2025.

   7. Government Incentives

      1. Company is availing production-linked incentives and grants from government schemes, which can support profitability.

   8. Market Leadership

      1. Company maintains strong market position in key categories like shrimp feed, providing pricing power and scale benefits.

Dodla Dairy Ltd - Market Cap 7,803+ Cr

1. Price Action - Since Oct 22, Dodla Dairy - 149%, NIFTY 43%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin improving quarterly since Mar 2023 and revenue scaling up from Mar 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 16% and Profits increased by 68%

   2. Q1 25 results (YoY increase) - Sales increased by 11% and Profits increased by 57%

3. Valuations and EPS - Below chart shows price has grown at the same pace as TTM EPS from April 2023 to October 2024 leading to PE stabilising between 30 and 40 i.e. slightly overvalued from historical average of 30

   

   1. PE at 40 i.e. above historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since July 2023

4. What led to outperformance

   1. Revenue Growth

      1. Revenue from operations grew by 10.8% year-on-year to INR 912 crores in Q1 FY25, driven by growth across all key segments including India, Africa and Orgafeed.

   2. Margin Expansion

      1. i. Gross margin improved by 543 basis points year-on-year to 29.1% in Q1 FY25, driven by lower procurement costs and favorable revenue mix.

   3. EBITDA Growth

      1. EBITDA increased by 75% year-on-year to INR 105 crores, with EBITDA margin expanding by 420 basis points to 11.5%.

   4. Value-Added Products

      1. Value-added products accounted for 35.4% of total revenues in Q1 FY25, up from 32.1% in Q1 FY24, indicating improving product mix.

   5. Procurement Efficiency

      1. Average daily milk procurement increased by 10.9% year-on-year to 17.6 lakh liters in Q1 FY25, improving operating leverage

   6. Capacity Utilization

      1. Newly added capacities in Kenya and Orgafeed are expected to reach 60-65% utilization by FY26, providing room for growth.

   7. International Business

      1. Africa business revenue expected to grow from INR 218 crores in FY24 to INR 360 crores in FY25, almost doubling.

   8. Operational Efficiency

      1. Company focusing on improving operational efficiency through automation and digital initiatives.

Subscribe now

Heritage Foods Ltd - Market Cap 5,842+ Cr

1. Price Action - Since Oct 22, Heritage Foods - 295%, NIFTY 43%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin improving quarterly since July 2022 and revenue also scaling up quarterly from July 2022.

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 9% and Profits increased by 220%

   2. Q1 25 results (YoY increase) - Sales increased by 12% and Profits increased by 214%

3. Valuations and EPS - Below chart shows Price has grown faster than TTM EPS (EPS of last 4 quarters) from March 2023 leading to PE at 40, i.e. being slightly overvalued from its historical average of 25.

   

   1. PE at 40 i.e. above historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since March 2023

4. What led to outperformance

   1. Revenue Growth

      1. Consolidated revenue grew by 12% year-on-year to Rs. 1,033 crores in Q1 FY25, crossing the Rs. 1,000 crore quarterly revenue mark for the first time.

   2. Margin Expansion

      1. EBITDA margin expanded significantly to 9.08% in Q1 FY25, compared to 4.36% in Q1 FY24.

   3. Value-Added Products

      1. i. Value-added products revenue grew 20% year-on-year to Rs. 423 crores, contributing 41.5% of total revenue compared to 38.6% in Q1 FY24.

   4. Procurement Efficiency

      1. Average milk procurement increased 6.66% year-on-year to 1.62 million liters per day, while procurement costs decreased 7.75%.

   5. Sales Volume Growth

      1. Milk sales volumes grew 4.26% year-on-year to 1.13 million liters per day.

   6. New Product Launches

      1. Launched new variants of lassi, ice creams, long shelf-life milk, and healthy laddus to drive growth.

   7. Subsidiary Performance

      1. Heritage Nutrivet Limited saw 29% revenue growth and 363% profit growth year-on-year.

   8. Cost Optimization

      1. Company focusing on operational excellence initiatives like automation and logistics optimization to reduce costs further.

Vadilal Industries Ltd- Market Cap 2,851+ Cr

1. Price Action - Since Oct 22, Vadilal Industries - 48%, NIFTY 42%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin improving quarterly since Aug 2020 and revenue also scaling up from Aug 2020. Big jump in Revenue and Profit margins seen from Dec 2022.

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 85% and Profits increased by 55%

   2. Q1 25 results (YoY increase) - Sales increased by 13% and Profits decreased by 4%

3. Valuations and EPS - Below chart shows Price has grown almost at the same rate as TTM EPS (EPS of last 4 quarters) from May 2023 leading to PE stablising at historical average of. 30

   

   1. PE consistent at 30 i.e. at historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since May 2023

4. What led to outperformance

   1. No concalls published

Parag Milk Foods Ltd - Market Cap 2,643+ Cr

1. Price Action - Since Oct 22, Parag Milk Foods - 73%, NIFTY 42%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin improving quarterly since May 2022 and revenue also increasing quarterly from July 2022

   

   1. Q1 25 results (QoQ Increase) - Sales decreased by 4% and Profits increased by 77%

   2. Q1 25 results (YoY increase) - Sales increased by 1% and Profits increased by 37%

3. Valuations and EPS - Below chart shows Price and TTM EPS growing at the same rate leading to PE stablising around the historical average of 30

   

   1. PE at 30, slightly above historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since May 2023

4. What led to outperformance

   1. Volume Growth

      1. Overall volume growth of 10% year-on-year in Q1 FY25, with ghee volumes growing 15% and cheese volumes growing 12%.

   2. Margin Expansion

      1. EBITDA margin expanded to 8.1% in Q1 FY25 compared to 6.5% in Q1 FY24.

   3. Profitability Growth

      1. PBT grew by 77% year-on-year and PAT grew by 27% year-on-year in Q1 FY25.

   4. Value-Added Products

      1. New age business volumes grew 51% year-on-year, indicating shift towards higher-margin products.

   5. Cost Optimization

      1. Milk procurement prices decreased 16% year-on-year and 4% sequentially, supporting margin expansion.

   6. Operational Efficiency

      1. Company focusing on digitization of plants & operations and data analytics to drive business transformation.

   7. Distribution Expansion

      1. Aims to reach 13-15 lakh retail touch points by 2027, up from current 4.6 lakh touch points.

   8. New Product Launches

      1. Launched new products across categories to drive growth.

   9. Capacity Utilization

      1. Has 3.4 million liters/day milk processing capacity, indicating room for volume growth with existing assets.

Mishtann Foods Ltd - Market Cap 1,500+ Cr

1. Price Action - Since Oct 22, Mishtann Foods - 38%, NIFTY 42%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin improving quarterly since Dec 2022 and revenue scaling up massively from July 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 13% and Profits increased by 50%

   2. Q1 25 results (YoY increase) - Sales increased by 30% and Profits decreased by 23%

3. Valuations and EPS - Below chart shows TTM EPS has grown much faster than Price from Dec 2023 leading to a PE derating from 40 to 5

   

   1. PE below historical average of 4

   2. TTM EPS (EPS of Last 4 quarters) - Growing massively QoQ since Dec 2023

4. What led to outperformance

   1. No concalls published

Subscribe now

The next 2 sectors that we will be covering will be

1. Chemicals

2. Pesticides / Agrochemicals - Indian

Wealth Management Custom Index Returns as compared to NIFTY

If we see returns for the last 2 years, our Wealth management custom index started outperforming NIFTY since July 23 and since Sept 22 has given returns of 167% vs NIFTY 55%

What is happening fundamentally in Wealth Management Sector in Q1 25 i.e. from April 24 to June 24

When multiple companies in a sector show Increase in Sales and OPM in a quarter… it usually indicates that there are strong tailwinds in the sector. This generally results in multiple companies in that sector out performing Fundamentally and Price wise.

For Wealth Management Sector

1. 12 Companies grew their Sales by 28% and Operating Profit Margins by 16% Quarter on Quarter in Q1 25 i.e. compared with Q4 2024

2. 16 Companies grew their Sales by 56% and Operating Profit Margins by 6% Year on Year i.e. compared with Q1 2024

Also you will notice that for most of the companies mentioned below (The 10 Best performing Wealth Management stocks that are undervalued) -

1. 3 Profit metrics

   1. Gross Profit Margin per quarter

   2. Operating Profit Margin per quarter

   3. Net Profit Margin per quarter

   4. Started improving around Q3 2023 i.e. from Aug 22 to Sept 22

2. Revenues started to scale up massively from July 23

3. Prices of these companies bottomed out in March 23 and since then have been on a tear, outperforming NIFTY since July 23

The reasons for the above fundamental outperformance (sector Tailwinds) are -

1. Robust AUM Growth: The industry is witnessing strong growth in Assets Under Management, with most players reporting double-digit year-over-year increases, driven by both market performance and net inflows.

2. Rising Retail Participation: There's a significant increase in retail investor participation, evidenced by growth in SIP inflows and new demat account openings, indicating a broader base of investors entering the market.

3. Shift to Financial Assets: Indian households are gradually shifting from traditional assets like real estate and gold to financial assets, creating a long-term structural growth opportunity for wealth management firms.

4. Digital Transformation: Companies are heavily investing in digital platforms and technologies, enhancing customer experience and expanding reach, particularly in Tier 2 and Tier 3 cities.

5. Product Diversification: Firms are expanding their product offerings beyond traditional mutual funds, venturing into areas like AIFs, PMS, and offshore investments to cater to evolving client needs.

6. Regulatory Support: Favorable regulatory environment and initiatives aimed at increasing financial inclusion and literacy are supporting industry growth.

7. Increasing HNI/UHNI Segment: The growing number of High Net Worth and Ultra High Net Worth Individuals in India is creating a lucrative market for personalized wealth management services.

Check out the last section of the newsletter to see which sectors will we cover next…

10 Undervalued Wealth Management Stocks that were the Best Performers listed by Decreasing Market Cap

HDFC AMC - Market Cap 94,000+ Cr

1. Price Action - Since Oct 22, HDFC AMC - 138%, NIFTY 55%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin improving quarterly since July 2022 but revenue scaling up from July 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 11% and Profits decreased by 1%

   2. Q1 25 results (YoY increase) - Sales increased by 35% and Profits increased by 3%

3. Valuations and EPS - Below chart shows Price has grown faster than TTM EPS (EPS of last 4 quarters) from April 2023 to Jan 2024 and from Jan 2024 both have grown at the same pace leading to PE stablizing at 45

   

   1. PE consistent at 45 i.e. above historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since April 2023

4. What led to outperformance

   1. AUM Growth

      1. i. Total AUM surpassed INR 7 trillion, with equity-oriented assets increasing to 64.3% of total AUM

   2. Market Share Gains

      1. Overall market share increased 24 bps QoQ and 93 bps YoY to 8.20%

   3. Revenue Growth

      1. Revenue from operations increased by 35% YoY to INR 7,752 million, while operating profit grew by 40% YoY

   4. Client Acquisition

      1. Unique investor count reached 10.7 million, with 23% penetration in unique investor base

   5. Systematic Investments

      1. Systematic transactions for June 2024 stood at INR 32.1 billion, showing strong recurring inflows

   6. Product Portfolio

      1. Total number of products increased to 100, up from 43 in March 2021, expanding offerings across active and passive strategies

   7. Distribution Channels

      1. Strengthening relationship with HDFC Bank, capturing 30% of their mutual fund book, and growing presence in fintech channels

   8. Cost Management

      1. Maintaining cost discipline while investing in growth opportunities, with controlled expense growth of 12-15% annually

Motilal Oswal Financial Services Ltd- Market Cap 48,351 Cr

1. Price Action - Since Oct 22, Motilal Oswal- 331%, NIFTY 44%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin improving quarterly since July 2022 but revenue scaling up from July 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 7% and Profits increased by 34%

   2. Q1 25 results (YoY increase) - Sales increased by 54% and Profits increased by 8%

3. Valuations and EPS - Below chart shows TTM EPS has increased massively and Price has grown almost at the same rate. In the last few months price increase has been faster than EPS leading to EPS stabilising at 17.

   

   1. PE consistent at 17 i.e. above historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since July 2023

4. What led to outperformance

   1. AUM Growth

      1. Total Assets under Advice (AUA) crossed Rs. 5 lakh crores, with Wealth Management AUA growing 105% YoY to Rs. 265,000 crore

   2. Market Share Gains

      1. Cash market share increased by 186 basis points YoY to 8.0%, and Futures & Options premium market share grew by 225 basis points YoY to 9.5%

   3. Revenue Growth

      1. Consolidated operating net revenue up 32% YoY to Rs. 1,133 crore, with consolidated profit after tax growing 52% YoY

   4. Client Acquisition

      1. Acquired around 150,000 new clients in Q1, with coverage expanding to 2,500+ business locations encompassing 98% of India's PIN codes

   5. Systematic Investments

      1. SIP AUM stood at Rs. 14,606 crore, with 5.7 lakh new SIPs added in Q1FY25 and SIP flows of Rs. 1,198 crore for the quarter

   6. Product Portfolio

      1. Expanded offerings with new products in asset management, including growth in AIF AUM crossing Rs. 12,000 crore mark

   7. Distribution Channels

      1. Robust network of 2,000 internal relationship managers and over 8,800 external wealth managers, with Private Wealth RM count growing 37% YoY to 576

Nippon Life India Asset Management - Market Cap 41,000+ Cr

1. Price Action - Since Oct 22, NAM - 147%, NIFTY 55%

   

2. Operational metrics performance - Below chart shows Gross, Operating and Net Profit Margin improving quarterly since July 2022 but revenue scaling up massively from July 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 8% and Profits decreased by 1%

   2. Q1 25 results (YoY increase) - Sales increased by 43% and Profits increased by 10%

3. Valuations and EPS - Below chart shows Price has grown faster than TTM EPS (EPS of last 4 quarters) from April 2023 to Jan 2024 and from Jan 2024 both have grown at the same pace leading to PE stablizing at 35

   

   1. PE consistent at 35 i.e. around historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since April 2023

4. What led to outperformance

   1. AUM Growth

      1. Mutual Fund QAAUM grew 12% QoQ & 54% YoY to reach INR 4.84 trillion

   2. Market Share Gains

      1. Overall market share increased 24 bps QoQ and 93 bps YoY to 8.20%, with increases across all asset categories

   3. Revenue Growth

      1. Revenue stood at INR 5.05 bn, up 43% YoY and 8% QoQ

   4. Client Acquisition

      1. Largest base in the Mutual Fund industry with 17.5 mn unique investors, over 1 in 3 mutual fund investors

   5. Systematic Investments

      1. Monthly systematic book rose by 11% QoQ to INR 25.8 bn for June 2024

   6. Product Portfolio

      1. Passive AUM, including ETFs and Index Funds, crossed INR 1.5 trillion

   7. Distribution Channels

      1. Digital purchase transactions rose to 2.82 million in Q1 FY25, up 170% YoY

   8. Cost Management

      1. Maintaining cost discipline while investing in growth opportunities, with controlled expense growth of 12-13% annually

360One - Market cap 34,000 Cr+

1. Price Action - Since Oct 22, 360One - 118%, NIFTY 47%

   

2. Operational metrics performance - Below chart shows Operating and Net Profit Margin improving quarterly since July 2022 but revenue scaling up massively from July 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 7% and Profits increased by 8%

   2. Q1 25 results (YoY increase) - Sales increased by 48% and Profits increased by 10%

3. Valuations and EPS - Below chart shows Price has grown faster than TTM EPS (EPS of last 4 quarters) from April 2023 and is currently at 40 higher than historical average

   

   1. PE at 40 i.e. above historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since April 2023

4. What led to outperformance

   1. AUM Growth

      1. Total ARR AUM increased to Rs 2,21,287 Crs, up 34% YoY, with strong growth across Wealth and Asset Management segments

   2. Revenue Growth

      1. Total Revenues up 60.6% YoY at Rs 697 Crs, driven by ARR growth and strong transactional income

   3. Cost Management

      1. Total Costs up 25.9% YoY to Rs 265 Crs, growing at a slower pace than revenue

   4. Improved Efficiency

      1. Cost-to-income ratio declined to 38% from 48.2% in Q4 FY24, leading to 71.8% YoY growth in operating profit

   5. Client Acquisition

      1. Onboarded 150+ new clients with Rs 10 Crs+ ARR AUM, expanding total client base to 7,400+

   6. Net Flows

      1. Strong overall net flows of Rs 5,549 Crs, with significant contributions from both Wealth and Asset Management

   7. Retention and Yields

      1. Overall ARR retentions remained strong at 72 basis points, indicating client stickiness and pricing power

   8. Diversified Revenue Streams

      1. Focus on increasing ARR revenue share while capitalizing on transactional opportunities in private markets

Authum Investment and Infra - Market cap 30,000 Cr+

1. Price Action - Since Oct 22, Authum - 591%, NIFTY 46%

   

2. Operational metrics performance - Below chart shows massive increase in Revenue, Operating and Net Profit Margin from Oct 2023 but it is not stable margins came down in latest quarter

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 60% and Profits remained the same

   2. Q1 25 results (YoY increase) - Sales increased by 2300% and Profits decreased by 6%

3. Valuations and EPS - Below chart shows TTM EPS (EPS of last 4 quarters) has grown much faster than price leading to a PE derating and current PE being 7.2. This is good thing only if this growth in EPS sustains.

   

   1. PE derated to 7.2 i.e. below historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing massively QoQ since Dec 2023

4. What led to outperformance - No concalls published

Share

Nuvama Wealth Management - Market cap 21,000 Cr+

1. Price Action - Recently IPOed… Since Oct 23, Authum - 120%, NIFTY 26%

   

2. Operational metrics performance - Below chart shows Revenue, Operating and Net Profit Margin consistently increasing from July 2022

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 2% and Profits increased by 31%

   2. Q1 25 results (YoY increase) - Sales increased by 47% and Profits increased by 16%

3. Valuations and EPS - Below chart shows TTM EPS (EPS of last 4 quarters) has grown much faster than price leading to PE being around 29 which is the long term average.

   

   1. PE at 29 i.e. around historical average

   2. TTM EPS (EPS of Last 4 quarters) - Massive growth in July quarter

4. What led to outperformance

   1. AUM Growth

      1. Total client assets grew 50% YoY to INR 3,89,000 crores

   2. Market Share Gains

      1. Increased market share in institutional equities and investment banking segments

   3. Revenue Growth

      1. Total revenue up 60% YoY to INR 668 crores

   4. Client Acquisition

      1. Added 200 families in Nuvama Private, taking total count to 3,900 families

   5. Systematic Investments

      1. Garnered INR 1,400 crores in net new money in MPIS, 11% higher than FY24 quarterly average

   6. Product Portfolio

      1. Expanded offerings in asset management with new products like commercial real estate and private equity funds

   7. Distribution Channels

      1. Added about 350 Relationship Managers over last 12 months, including 60+ in Q1

   8. Cost Management

      1. Cost-to-income ratio improved from 68% in Q4 to 66% in Q1, despite significant RM additions

UTI AMC - Market cap 15,000 Cr+

1. Price Action - Since Oct 2022 UTI AMC - 65%, NIFTY 43%

   

2. Operational metrics performance - Below chart shows Revenue, Operating and Net Profit Margin consistently increasing from Jan 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 27% and Profits increased by 37%

   2. Q1 25 results (YoY increase) - Sales increased by 13% and Profits increased by 4%

3. Valuations and EPS - Below chart shows TTM EPS (EPS of last 4 quarters) has grown much faster than price from May 23 to May 24 leading to PE bottoming around 16. Post May 24 Price has started move at a faster pace leading to PE increasing to long term average of 20

   

   1. PE at 20 i.e. around historical average

   2. TTM EPS (EPS of Last 4 quarters) - Consistent growth since May 2023

4. What led to outperformance

   1. AUM Growth

      1. Total AUM grew 20% YoY to ₹19,36,107 crore, including strong growth in MF QAAUM and other business segments

   2. Market Share Gains

      1. Overall MF QAAUM market share increased to 5.27% in Q1 FY25 from 5.76% in Q1 FY24, with notable improvement in passive funds

   3. Revenue Growth

      1. Total revenue from operations up 13% YoY to ₹529 crore, with core revenue (sale of services) growing faster at 19% YoY

   4. Client Acquisition

      1. Total live folios stood at 1.25 crore as of 30th June 2024, supported by ~69,390 empaneled distribution partners

   5. Systematic Investments

      1. SIP AUM increased 44.84% YoY to ₹36,095 crore, with monthly SIP book rising 11% QoQ to ₹25.8 billion for June 2024

   6. Product Portfolio

      1. Expanded offerings with new products in asset management, including commercial real estate and private equity funds

   7. Distribution Channels

      1. Digital purchase transactions rose 33.19% YoY to 37.84 lakh, complemented by presence across 698 districts in India

   8. Cost Management

      1. Operating profit margin improved from 14 bps to 16 bps of AAUM YoY, with core PAT growing 39% YoY, outpacing revenue growth

DOLAT ALGOTECH LTD - Market cap 2,314 Cr+

1. Price Action - Since Oct 2022 Dolat Algotech - 85%, NIFTY 47%

   

2. Operational metrics performance - Below chart shows Revenue, Operating and Net Profit Margin consistently increasing from July 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 5% and Profits increased by 13%

   2. Q1 25 results (YoY increase) - Sales increased by 344% and Profits increased by 31%

3. Valuations and EPS - Below chart shows TTM EPS (EPS of last 4 quarters) has increased massively since Nov 2023 and price has also grown at the same pace leading to PE stablising at 10.

   

   1. PE at 10 i.e. around historical average

   2. TTM EPS (EPS of Last 4 quarters) - Consistent growth since Nov 2023

4. What led to outperformance

   1. No con-call available

5Paisa Capital Ltd- Market cap 1,643 Cr+

1. Price Action - Since Oct 2022 5Paisa - 50%, NIFTY 41%

   

2. Operational metrics performance - Below chart shows Operating and Net Profit Margin consistently increasing from Jan 2022 while there is a consistent revenue increase from Jun 2023.

   1. Q1 25 results (QoQ Increase) - Sales decreased by 9% and Profits increased by 43%

   2. Q1 25 results (YoY increase) - Sales increased by 21% and Profits increased by 20%

3. Valuations and EPS - Below chart shows TTM EPS (EPS of last 4 quarters) consistently increasing from July 2022 to Nov 2023 and then dipping a bit. The price did not move as fast as the EPS growth leading to PE derating to 30

   

   1. PE at 30 i.e. below historical average

   2. TTM EPS (EPS of Last 4 quarters) - Consistent growth since July 2022 till Nov 2023 and then dips a bit

4. What led to outperformance

   1. AUM Growth

      1. Mutual fund AUM reached ₹1,124 crore, a 90% growth YoY

   2. Market Share

      1. Overall market share stood between 2% - 2.5% for both cash and F&O segments

   3. Revenue Growth

      1. Total revenue up 21% YoY to ₹102 crore, with broking revenue growing 11% YoY to ₹40 crore

   4. Client Acquisition

      1. Total customer base reached 44.7 lakhs, with 2.34 lakh new customers acquired in Q1, reflecting 116% growth YoY

   5. Trading Volumes

      1. i. Average Daily Turnover (ADTO) grew to ₹3.67 trillion, a growth of 27% YoY

   6. Product Portfolio

      1. Enhanced features for option traders, including straddle chains and bulk order placement. Introduced new FnO 360 product for derivatives trading

   7. Technology Improvements

      1. Revamped mobile app for iOS and Android to be available by end of Q2 FY'25 . Trade Station 2.0, a revamped web platform, now accessible to all users

   8. Financial Performance

      1. Achieved highest ever PAT of ₹20.1 crore, a growth of 248% QoQ and 39% YoY. PAT margins improved to 20%

Wealth First Ltd- Market cap 1,410 Cr+

1. Price Action - Since Oct 2022 Wealth First - 404%, NIFTY 47%

   

2. Operational metrics performance - Below chart shows Revenue, Operating and Net Profit Margin consistently increasing from Jan 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 44% and Profits increased by 34%

   2. Q1 25 results (YoY increase) - Sales increased by 82% and Profits increased by 13%

3. Valuations and EPS - Below chart shows TTM EPS (EPS of last 4 quarters) increasing consistently since April 2023. For the first few quarters price grew at the same pace as TTM EPS but in the last quarter grew faster than TTM EPS leading to PE stablising at 30

   

   1. PE at 30 i.e. above historical average

   2. TTM EPS (EPS of Last 4 quarters) - Consistent growth since April 2023

1. What led to outperformance

   1. AUA Growth

      1. Total AUA grew 36% YoY to ₹11,417.8 crore, including strong growth in MF+PMS AUM and other business segments

   2. ARR AUM Growth

      1. Assets under Recurring Revenue (ARR AUM) increased by 65% YoY to ₹5,448.3 crore

   3. Revenue Growth

      1. Total revenue from operations up 55% YoY to ₹21.6 crore, with trail base revenue growing faster at 76% YoY to ₹11.2 crore

   4. Client Acquisition

      1. Total client base increased to 19,887, which is a growth of 6% YoY

      2. Total client families increased by 9% YoY to 5,996

   5. Systematic Investments

      1. Strong momentum in SIP inflows, with industry SIP inflow for the quarter ended June 2024 witnessing an inflow of ₹625 Bn, a growth of 45% YoY

   6. Market Conditions

      1. Strong market recovery following the general elections, resulting in significant inflows into equity funds

   7. Operational Efficiency

      1. Improved profitability with PAT jumping by 66% YoY to ₹14.0 crore ii. PAT margin improved from 60.5% in Q1 FY24 to 64.9% in Q1 FY25

Subscribe now

The next 2 industries that we will be covering will be

1. Food processing Indian

2. Chemicals

NIFTY Pharma Returns as compared to NIFTY

If we see returns for the last 2 years, NIFTY Pharma started outperforming NIFTY since July 23 and since Sept 22 has given returns of 82% vs NIFTY 47%

What is happening fundamentally in Pharma (Bulk Drugs and Formulations) in Q1 25 i.e. from April 24 to June 24

When multiple companies in a sector show Increase in Sales and OPM in a quarter… it usually indicates that there are strong tailwinds in the sector. This generally results in multiple companies in that sector out performing Fundamentally and Price wise.

For Pharma (Bulk Drugs and Formulations) - Out of 46 Companies over the market cap of 1000 Cr

1. 20 Companies grew their Sales and Profits by 5% Quarter on Quarter in Q1 25 i.e. compared with Q4 2024

2. 6 Companies grew their Sales and Profits by 15% Year on Year i.e. compared with Q1 2024

Also you will notice that for most of the companies mentioned below (The 10 Best performing Pharma stocks that are undervalued) -

1. All 4 metrics

   1. Revenue per quarter

   2. Gross Profit Margin per quarter

   3. Operating Profit Margin per quarter

   4. Net Profit Margin per quarter

   5. Started improving around Q4 2023 i.e. from Jan 23 to March 23

2. That is the same time we saw the Price of these companies also starting to move upwards with Company fundamentals

The reasons for the above fundamental outperformance (sector Tailwinds) are -

1. Strong US market growth driven by complex generics and specialty products

2. Expanding biosimilars pipeline and increasing launches in regulated markets

3. Growing opportunities in emerging markets, diversifying revenue streams

4. Improving profitability through better product mix and operational efficiencies

5. Increasing CDMO/CMO business opportunities, particularly in the global context

Check out the last section of the newsletter to see which sectors will we cover next…

Subscribe now

10 Undervalued Pharma Stocks that were the Best Performers listed by Decreasing Market Cap

Cipla - Market Cap 1,30,000+ Cr

1. Price Action - Since Sept 22, CIPLA - 60%, NIFTY 46%

   

2. Operational metrics performance - Below chart shows Revenue, Gross, Operating and Net Profit Margin improving quarterly since Feb 2023

   

   1. Q1 25 results (QoQ Increase) - Sales increased by 9% and Profits increased by 16%

   2. Q1 25 results (YoY increase) - Sales increased by 6% and Profits increased by 9%

3. Valuations and EPS - Below chart shows Price and TTM EPS (EPS of last 4 quarters) have grown at the same speed since March 23 leading to valuations consistent at 30 PE

   

   1. PE consistent at 30 i.e. historical average

   2. TTM EPS (EPS of Last 4 quarters) - Growing consistently QoQ since Dec 2022

4. What led to outperformance

   1. US Business -

      1. North America reached all-time high quarterly revenue of $250 million, up 13% YoY

   2. India Business

      1. Branded prescription business grew 10% YoY

   3. Gross Margin

      1. Improved to 67.2%, up 226 basis points YoY due to better product mix

   4. R&D Expenses

      1. Currently at 5.3% of revenue, lower than usual

   5. Product Portfolio

      1. Launched generic version of Lanreotide injection; Albuterol market share increased to 17%

   6. Manufacturing & Regulatory

      1. Patalganga and Kurkumbh facilities classified as VAI by US FDA

   7. Future Pipeline

      1. Multiple peptide launches planned in coming quarters