Today got a notification in my screener alert on new pipeline tariff to be applicable for GSPL starting new month. At first reading it seems tariff has been revised downwards but wanted to check from the others if they have the same understanding. If there is a downward revision how much impact can it cause on GSPL topline.

Here is the link to new tariff order.

https://pngrb.gov.in/pdf/orders/TO_20042024.pdf.

Sir, the interview link given below came just 2 weeks back. Company has orders for FY25 and have been stating it time and again, like you said. Last orders of 93 cr. from MoD came about 2 months back. The story is good. Price, like you said may have run up little ahead of numbers. But is it actionable ? I mean, is it at a level where one should sell and get out of the story completely or sell & wait for significant dips to add again ?

Fundamentally one would do good to read up the document “Framework for Simulators in armed forces”. Attaching below. My sense is, the opportunity in air force & navy (in addition to ground forces combat simulation) is huge, company needs to work hard to meet those requirements. The company has laid a solid foundation on which it can build further. One of the few companies which has done the tough task of R&D for so many years from it’s own pocket when the attitude from their primary customer (govt.) was to ignore them. Now the tide has changed, they are actively encouraged.

If they have to meet their FY24 guidance of 450 cr. topline, they have to post about ~150 cr. topline and around 50 cr. bottom line in Q4. That would make the PE multiple close to 50-55 times trailing. Given their guidance of doubling the nos. in FY25, it’s 20 odd times of current year. Market is perhaps waiting for delivery on what has been guided in FY24. some slight miss here & there may be forgiven and strong delivery may make the market believe it’s guidance for FY25 and i think good chance of market maintaining the current multiples. So you can work out the numbers.

Listened to the con call again

• for the tax, all companies can claim 30% of tax benefit on the manpower expenses done for <25k per month as per Section 80JJAA
  They will be claiming the ~30% tax benefit every year for the next 3 year which will show in Deferred Tax

Thanks for pointing out the profit mistake
The margins in this business are supposed to be wafer thin, you can compare it with Teamlease they are even lesser, 1%
I employ two bug agencies in my professional life and we pay them in the same range as their job is to hire offrole manpower on our behalf and manage the attendance and salary process only

For the tax point it isn’t deferred, they have a benefit from Govt of India which he had mentioned in the con call I will put the exact reason soon