Management has guided for a core PPOP increase of 45-50% for FY24 and FY25. If core PPOP increases by 45% and provisions are expected to increase at a lower rate of say 27-30% then PAT will grow at a much higher rate of around 55%. Considering the extinguishment of shares from the reverse merger process, shares outstanding will be some 688-689 crs. This yields me an EPS of Rs 5.05 and Rs 7.7(based on share capital of 688 crs after merger). Once the market sees such kind of growth, rerating is very much possible.

Mauti February 2022 presentation:

1. Suzuki has setup India’s first Li-ion cell and battery manufacturing plant in JV with Toshiba and Denso (TDSG).
2. TDSG started production in 2021.

Yet, TDSG does not figure in list of subsidiaries in Quarterly report. My email to them remains unanswered. Aren’t they suppose to declare their subsidiaries?

Any idea whether DVR shareholders will also get some shares of Tata Technologies?

Pe of 5 is too pessimistic as per me, as it means the co would trade like a non growth PSU. But going by history 30x PE is also too much. So, IMO considering the execution track record (gaining market share, robust Super app) and growth rates combined with capital allocation strategy, I believe the co would be too cheap if it trades at single digit PE. Personally would be a buy in huge qty if the co comes to 11-13x PE and wouldn’t sell at 17-18x PE. I may sell if goes to 23-25x PE.
One also needs to consider that the co already started investing in people and tech for AMC, which makes the Profit margins appear lower.

The Profit margins and return ratios will improve as the clientele matures (as the Customer Acquistion cost is only for the first year) or the proportion of revenue from clients with more than 1 year goes up .

Anti thesis:

• Any factors leading to loss in market share (seems not a problem at the moment)
• Not getting AMC license (very low probability)
• Any glitches in app/ platform desrupting the customer experience
• Regulatory changes