q2 Fy25 results consolidated
Revenues ₹ 28862cr vs 26672cr up 8.2% yoy
And ₹ 28862cr vs 28057cr up 2.8% qoq
PAT ₹ 4237cr vs 3833cr up 10.54% yoy
And ₹ 4237cr vs 4259cr down .005% qoq
The Board of Directors has declared an Interim Dividend of Rs. 12 /- per equity share of Rs. 2/- each
of the Company for the Financial Year 2024-25.
disc -invested, not buy/sell recom
I think the slow down in top line is apparent – although if I wanted to give the management the benefit of doubt, then there may be several one-offs in Q1 and Q2 FY25 that may have resulted in sluggish numbers – as explained below
In any event, these could also be excuses – but thought of at least presenting the other side as indicated by the management.
Looking at the numbers in the table below more closely – I am only focusing on Own Brand sales here – as a general conclusion, growth has slowed at the Total Own Brands level .
| Q1 FY24 | Q2 FY24 | Q3 FY24 | Q4 FY24 | Q1 FY25 | Q2 FY25 | |
|---|---|---|---|---|---|---|
| Own brands revenue by categories (Rs mn) | 1,017 | 1,268 | 1,928 | 1,129 | 1,146 | 1,272 |
| Elite | 751 | 932 | 1,485 | 848 | 814 | 1,018 |
| Premium | ||||||
| Economy | 266 | 336 | 443 | 281 | 332 | 254 |
| Popular | ||||||
| Own brands revenue growth by categories | 29.9% | 11.9% | 3.9% | 9.1% | 12.7% | 0.3% |
| Elite / Premium | 39% | 15% | 7.4% | 14.3% | 8.4% | 9.2% |
| Economy / Popular | 10% | 4% | -6.3% | -4.0% | 24.7% | -24.3% |
However, there is a difference between the segements – Premium / Elite is still growing – e,g. it was 9% YoY in Q2 FY25. This is much less than the suggested mid-teens growth guided in Premium / Elite (please see excellent youtube video from @amit151190 above). If the headwinds highlighted above are fair, then perhaps they may be able to pick up growth again. This is a clear amber flag.
The Economy / Popular segment is gyrating in a far more dramatic fashion: +25% in Q1 and -25% in Q2! This is something to understand better after the results are out / Q2 conference call. If I had to hypothesise, this could be related to the change in distribution approach. Since they appointed a third party distributor for Economy / Popular in Q1, they may have pushed extra volumes in that quarter and are normalising in Q2. The H1 FY25 growth for Economy / Popular is -3% – so this still looks challenging (perhaps exacerbated by the headwinds mentioned above?)
There could be a positive note on the financials for Q2 though – as the Elite / Premium contributed 80%, there should be a bump in margins? So the EPS growth may not be as flat. Still to be seen when results are out though.
In conclusion, several warning flags are flashing – but for me they are more amber than red at this stage – however, they do merit tracking. Numbers are not great – but probably not as bad as they may appear at first glance?
Anyone with alternate interpretations of the numbers?
Disc: Invested with a near full position so likely to be biased. Not a SEBI registered advisor and not investment advice
Did anyone attend the AGM, if yes can you please share some of the key takeaways from the meet? Thanks.
the process is the same. BSE just collects all data/ information and sends to SEBI.
some HNI wealth management firms have started covering this company for their private clients. in a few months there will be research reports in public domain also. after that there will be more institutional interest in this stock.
Pharma exports is such a huge market that any company with right products can grow multiple times… this is what is happening with Kwality pharma also…
Thank you for sharing. Appreciate your efforts brother 
My visit on 13th October, Sunday –
Even though, it is clearly mentioned on Google that the tech park remains closed on Sunday which is quite obv. but still I decided to visit them on a Sunday because the data centers are supposed to be running 24/7.
Well guess what, the whole tech park was empty, only 2-3 security guards were there at the main gate and not even a single employee because of Sunday holiday and the day before was also a holiday because of Dusshera. The suspicion was right that there are no employees working in the data center right now. They told me that work at the data center is still going on and is not yet completed.
Now a few questions arise –
- Is the company reporting false rentals from its data center because there are no employees operating it?
No, whatever capacity they’re claiming is operational and running in the data center in automated mode.
- How is the data center operational without emplyees?
There is no requirement of employees YET, because the operational capacity is very small and does not require 24/7 monitoring and maintenance.
- When are they planning to hire the employees to monitor and maintain the data center?
They’ve already started the hiring process, everyone can check that on LinkedIn.
Furthermore, there was one more guy (not a guard) in a uniform who told me that more capacity would be operational from 1st November. He also mentioned the entire facility inside is secured by 15 guards, and asked me to visit them the next day (today) and he’ll get me in contact with the senior employees there.
Now, I’m contemplating whether to visit them this week again or the next month when more capacity would be operational as it takes quite a lot of travel for me. It would be really great if someone living near Gurgaon side could make a visit and share it with us.
Important note – I found this guy, running his own Equity firm, claim that he has visited Anant Raj data center. I tried to contact him but there was no response from his side, if anyone with contacts can reach out to him then please do.
Just sharing the exterior snapshots of the infrastrusture until my next visit.
An order win at long last. I had almost given up on them ever announcing one! 
Hopefully, they win 1-2 more soon enough.
Unlike software service companies, product companies have the advantage of operating leverage to play out. In my view Newgen has the probability to play out operating leverage if they get pie of share from US market and Trade Finance product is a bonus if it clicks out.
