Here are the updated notes:

Some Observations:

• Raymond decided to highlight the revenue numbers in the presentation as there has been a substantial growth in accounting terms. (135% YoY) 571 Cr vs 243 Cr.
• However, there has been degrowth in booking value in this quarter. (-13.5%) 562 Cr vs 650 Cr.
• While I have no clue of what led to this, chances are the month of Shraad getting extended might be the cause. May be a lot of booking may have been pushed to Q3.
• Management has reaffirmed 20-25% growth in booking value this year.

Of late, i am seeing the company is disclosing news articles related to the industry and the opportunities ahead. If you google, one would find many such articles in the public domain. Does that mean, company is required to disclose them as a press release?? I fail to understand why the management is engaged in such stunts. Two such recent examples are below.

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.bseindia.com/xml-data/corpfiling/AttachLive/d499df86-127c-4bbe-8b09-1707846ea2c8.pdf
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.bseindia.com/xml-data/corpfiling/AttachHis/6b26ad5a-8276-4383-b8bd-9ea8fec2666d.pdf

Low promoter holding is concern for me here, once wine segment grows & become big in size Sula will be potential acquisition target, PE players or existing wine industry players will love to get hold in Sula, as its leader in growing segment with focus on Niche area and strong pillars of growth

do share your views or any information about management plans

Alcoholic Beverages – Oct24_IC.pdf (4.1 MB)
good initiating coverage report by DAM capital in alcoholic beverage industry in India and major segments & players in them
Target for Sula is given 560 with below valuation basis

Revenue to grow by 13.6% CAGR over FY24-27E: Sula has strategically reduced its
focus on distribution of ‘Third-party Brands’, the contribution of which came down
from Rs1,615 mn in FY20 to ~Rs366 mn in FY24. It divested its majority stake in
PADPL, a subsidiary involved in the trading of beer, spirits, and other liquor. This led
to a rise in the contribution of its own brands to the company’s total revenue from
~64% in FY20 to ~88% in FY24. Sales from own brands grew at ~13% CAGR over
FY20-24, driven by higher sales from ‘Elite and Premium’ segment which grew at
~16% CAGR compared to 5.6% CAGR for ‘Economy and Premium’ segment. We
expect Sula to deliver ~13% growth in the own brands business driven by
14.5%/~11% value/volume growth in Elite and Premium categories over FY24-27E.
Revenue from the Wine Tourism segment has grown at a 18% CAGR over FY20-24.
Room additions and tailwinds in the hospitality sector should see a continued
momentum in the hotels sector. Going ahead, we expect the Wine Tourism Segment
to grow at a 21.3% CAGR over FY24-27E.
At a consolidated level, we estimate ~13.6% CAGR in net revenues over FY24-27E.

Q2 FY25 Concall highlights
Financial Performance:

• Q2 FY25 consolidated revenues reached ₹491 crores, a 54% year-on-year (Y-o-Y) growth.
• EBITDA for Q2 was ₹104 crores, reflecting a 57% Y-o-Y growth, with EBITDA margins at 21.27%.
• Profit After Tax (PAT) for Q2 amounted to ₹70 crores, a 64% Y-o-Y increase, with PAT margins at 15.3%.
• For H1 FY25, consolidated revenues stood at ₹853 crores, a 33% Y-o-Y growth, with EBITDA of ₹165 crores (31% growth) and PAT of ₹113 crores (36% growth).
• Standalone quarterly revenues grew by 78% Y-o-Y to ₹330 crores, with EBITDA increasing by 104% to ₹63 crores and net profit up by 99% to ₹47 crores.

Order Book and Execution:

• As of September 30, 2024, international order book stood at ₹534 crores.
• Domestic project business order book was ₹2730 crores, while domestic product business was approximately ₹401 crores.
• Project execution momentum is expected to accelerate in H2 FY25, post-monsoon, with commissioning on schedule.
• Anticipating a boost in tender activity in the second half of the financial year due to pent-up demand.

Operational Highlights:

• Strong growth in domestic product division, with revenues rising to ₹83 crores in H1 FY25 from ₹60 crores in FY24.
• Project division revenues increased to ₹431 crores in H1 FY25 compared to ₹260 crores in FY24.
• International operations remain stable with robust prospects, particularly in South Africa and Australia.
• Acquisition of Agri-5 in South Africa expected to enhance product offerings in the local water sector.

Market Outlook:

• Management sees steady growth across product and project divisions, supported by a diverse product portfolio and strong market presence.
• Positive outlook for international operations, particularly in MENA region and South Africa’s water sector.

Challenges and Headwinds:

• Management noted that delays in tendering and project execution were affected by recent elections, but expects a recovery in activity.
• The company is focused on execution rather than merely building the order book, ensuring that revenues align with execution capabilities.
• Negative operating cash flow attributed to receivables, expected to improve as projects progress.

Strategic Initiatives:

• The company is actively pursuing new contract opportunities and expects significant tender activity in the near future.
• Exploring acquisition opportunities to strengthen market presence, particularly in North America.
• Management emphasized the importance of maintaining margins between 15% to 20% and targeting high-value projects to sustain profitability.

Product Development:

• Differentiated product offerings with a focus on engineered solutions rather than commoditized products.
• The company aims to enhance its product mix, which has positively influenced margins.

Competitive Landscape:

• Competing with major players like Kirloskar in the pump segment and L&T in project execution.
• Strong brand recall and market presence serve as significant entry barriers in the industry.

Future Guidance:

• While management refrained from providing specific revenue guidance, they expressed confidence in sustaining growth and profitability based on strong order books and execution capabilities.

Excellent results must say. Also the order book is great and growing at a healthy rate, but one concern I can see is that the management is not giving any quantitative future guidance which according to me lacks clarity. They have only commented for the margins of 15%-20%. If anyone can help me clear my points or guide me through more insights of the company it would be great.

Note : Planning to invest.