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Zee-Sony Merger Collapse: What It Means For The Future Of Zee

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dr.vikas

Growth was slower this quarter, printer sales have come down as they are prioritizing customers who can give higher consumable business. Concall notes below

FY24Q3

• Printer base of 18,000+ (sold 630 printers in Q3 vs 814 in Q3FY23). Have been more selective about their customers, preferring those who give higher consumable business
• Main focus is on increasing sales, margins can fluctuate depending on SG&A expenses. Gross margins have been maintained in a range
• Market is very positive currently
• Revenue breakup: printers (16%), consumables (62%), spare parts (7%), service (14%)
• V-shapes: looking to reduce costing on a per sachet basis. Currently only pharma sector can afford this
• Life of a printer is 10-12 years

Disclosure: Invested (sold shares in last-30 days)

Company sold a lot of premium projects (24k) which has caused a huge jump in realizations. Reported nos will be subdued until FY26, and management expects current projects to start getting recognized in FY27/28 when the real economics should be reflected on P&L statement. Concall notes below

FY24Q3

• Volume declined by (-13%) in Q3, realization increased by 20% due to higher sales of 24k projects. Price realization has increased by 5-15% across projects

• In next 2 project launches in Life Republic, realizations will be 6,500/sq.ft (vs 4,800/sq.ft 2 years back)

• Will reach 20-25% EBITDA margins by Q4FY26

• Construction scaleup will not be a problem, they were earlier doing 2.5-3mn sq.ft which has now increased to 4mn sq.ft. Can handle 1.5-2x of earlier volumes (material procurement is centralized, labor for construction is outsourced)

• Life Republic minority stake buyout (stake increase from 95% to 100%) – paid 60 cr.

• In low margin projects, gross margin is 25%. For projects sold in last 2-years, are making 25-27% EBITDA margin

• Make 18–20% EBITDA margins in redevelopment projects but much higher IRRs

• 9MFY24

  • Business development of 4,000 cr. (guidance of 8,000 cr.)

  • Launched 3,200 cr. projects (guidance of 5,200 cr.)

  • Presales of 2,080 cr. (guidance of 2,800 cr.)

• Will launch 1,800 cr. (2 mn sq.ft) of projects in Q4FY24 of which Life Republic will be 1,000 cr.

• Will launch 7,000 cr. projects in FY25 (8mn sq.ft)

• Business development of 3,000-4,000 cr. over next 3-4 months and 8,000-10,000 cr. in FY25

• Reported revenues guidance: 1,500 crore in FY24, 1,600-1,700 cr. in FY25 & FY26

• FY25 guidance: Presales of 3,500 cr. & launches of 7,000 cr.

Disclosure: Invested (position size here, no transactions in last-30 days)

Sir will it not be risky for zomato to offer credit line/loans to restaurants as the failure rates of restaurants are high?

Anticipating good results based on management commentary during Q2 earnings call and also in late December. Invested.