“Preferential issue and allotment of 29,79,579 equity
shares having a face value of Rs. 10/- each for an
aggregate amount of Rs. 10,79,27,80,032.75 (Rupees
One Thousand Seventy-Nine Crore Twenty-Seven
Lakh, Eighty Thousand Thirty Two and Seventy Five
Paise Only).”

https://nsearchives.nseindia.com/corporate/E2E_05112024091652_Reg30OutcomeCleansigned.pdf 1079 crore at 3622/- for 15% stake by LnT

Good set of results. YoY Q2 revenue is almost 4x (242 Cr v/s 66 Cr) and profit is ~4.5x (63 Cr v/s 14 Cr). Half year revenue has already surpassed the revenue for FY24. Looks like they are on track to more than double the revenue and profit in FY25. The MD has previously said that FY25 revenue will be about 900 Cr, which is about 2x of FY24 revenue of 441 Cr. So the management is walking the talk.

However the order book is a big worry. It stands at about 1000 Cr right now. Based on the management guidance, I am guessing that orders worth 500 Cr will be delivered in Q3 and Q4 FY25. So essentially for FY26 the company right now has an order book worth only 500 Cr. To justify the lofty valuations (TTM PE is ~80), the company needs to get additional orders worth at least 1300 Cr, which will help it double the revenue in FY26. We are already about 8 months into the financial year and it doesn’t look like this is going to happen. So it looks like the revenue growth will moderate a bit.

The MD has previously mentioned that the margins will moderate as well. I think we have seen a peak OPM of 41% in FY24. Expecting it to be around 35% in FY25 and 32% in FY26. A combination of lower revenue growth and lower margins will see the earnings growth moderate by much more than the revenue growth. So I don’t see a lot of upside from these price levels (~1880). A couple of big orders will change this, so need to keep an eye out for that.

Been invested in this company for very long now, thought of sharing some interesting observations:

Quant mutual fund had bought a large qty of about 5.2% of the company, the fund has sold all of it in just 1 quarter and the whole of it got absorbed in open market without much impact on stock price. The stock price remained stable in this correction in small/mid cap space and came back to its highs

If one observes nos, last qtr saw some good growth after a long dull period of many qtrs.

The core numbers/profitability has remained to be very strong and so have been the cash flows. Infact co is becoming a cash cow and perhaps need to find avenues to deploy the cash flows in good areas else they might start becoming a drag in couple of years.

Ayush

Thanks for your continuous/crisp updates @harsh.beria93. It seems that the co has been doing very good volume growth now…infact if one looks at the longer-term track record, they have been really consistent and perhaps best/better vs the more popular names

After Dwarikesh, Dhampur Bio has also come with losses. Only Balrampur and Triveni will be positive…

Dwarikesh has come down 50% from peak of about 120 to 60. Dhampur Bio at 50% down from 220 will be 110… others will follow suit.

But those who invest at lower levels in sugar companies can make good money if they hold for 6 months to a year. broader markets are anyway correcting.