They have developed some of the products for many years, so have capitalized most of the costs. So that’s the intangible part that we see. They are slowly writing it off through P&L. As per the management most of the heavy development will be over by Q4FY24. So next should be in terms of both P&L and intangible assets addition slowdown. They have already started investing into sales people.
I will add more details once I have. Have recently started studying the company.
Another point which is the most important is the Saving rate of large population, which has dropped from 23% to about 19% in the past decade. It is one of the lowest in 30+ years which gives an impression that, people at large are not earning enough to save & invest.
If this issue is addressed, people will start saving more and also investing more in Mutual Funds.
India can grow at more than 8% to 9% in terms of Real GDP, and that should enhance people’s income, savings and huge money will flow into Equity MF(s).
I do not see this happening in near future, which is a negative for any AMC not only HDFC AMC.
SBI AMC is growing because large portion of EPF (About 10% to 15% every year) is being invested in Nifty based ETFs, through SBI MF if I know correctly. This does not reflect their efficiency or fund management excellece.
I am also concerned about restricted growth of HDFC AMC AUM and PAT, but just highlighting other parts which also need to fall into place for AUM and AMC growth in India.
I may be biased as invested in HDFC AMC, but my expectations are moderate.
Update to portfolio:
After the Q3 results, there has been some level of churning in the portfolio. The churn has mostly been attributed to both better opportunities and a better understanding of the business.
Exit: SSWL, Skipper, and GMM Pfaudler.
Skipper faces order constraints due to capacity limitations; awaiting Q4 capex plans and guidance. Will reconsider Skipper if favorable. Exited GMM Pfaudler and SSWL for better opportunities.
Entry: MCX, Zen Tech, Man Inds, Sandhar, and GPIL.
Added: Equitas, JSL, Pennar
| Instrument | Allocation |
|---|---|
| NIFTYBEES | 28.92% |
| ARMANFIN | 7.61% |
| SENCO | 7.02% |
| Cash | 6.05% |
| SOUTHBANK | 5.45% |
| NUVAMA | 5.25% |
| EQUITASBNK | 4.83% |
| GOODLUCK | 4.72% |
| ZENTEC | 4.50% |
| JSL | 4.42% |
| MANINDS | 3.56% |
| MCX | 3.36% |
| PRICOLLTD | 3.36% |
| PENIND | 3.04% |
| ICIL | 2.83% |
| SANDHAR | 1.86% |
| GPIL | 1.68% |
| MARATHON | 1.56% |
Disclaimer: The content provided here is not investment advice. It reflects solely my personal opinions, and I could very well be wrong about any of them. Before making any investment decisions, it is advisable to consult with your financial advisors.
Emami Ltd –
Q3 FY 24 highlights –
Sales – 996 vs 983 cr
EBITDA – 314 vs 294 cr ( margins @ 32 vs 30 pc )
PAT – 261 vs 233 cr
Domestic business was flat on a YoY basis – mainly impacted by delayed onset of winter. Non winter products grew 5 pc, Winter products de-grew by 9 pc
International business grew 8 pc
Gross and EBITDA margins expanded by 290 bps and 170 bps YoY due reduced RM inflation
Brand wise performance –
Navratna range – grew by 7 pc
Zandu / Emami pain management – grew by 3 pc
Zandu Healthcare – flat ( because of the weakness in the winter dependent Chavanprash category )
Boroplus range – degrew by 9 pc
Kesh King – degrew by 13 pc
7 in 1 oil – degrew 5 pc
Fair and Handsome + He Deodorants – degrew by 6 pc
The Man Company + Brillaire ( strategic investments ) – grew by 80 pc
New product launches – Mahabrigraj hair Oil, Dantveer Toothpaste, 7 in 1 oil in international Mkts
Company believes that they have a winner on their hands wrt Dantveer because of its unique formulation
Company believes that Kesh King’s de-growth is a one off and it should be back on growth path from Q4
The Man Company is now an EBITDA positive category for the company. In Brillaire, the EBITDA margins are now at minus 20 pc vs minus 40 pc YoY. Both these improvements have happened due to increased scale iro these brands
RM prices continue to be benign
Company continues to be bullish on their Healthcare business
Company is sitting on a cash balance of 400 cr
Disc: hold a small tracking position, biased, inclined to buy more once the volume growth picks up, not SEBI registered
Will that affect TANLA negatively? What if the platform the video is talking about will have tanla wisely as interface
Thanks For Quoting Management Thought Process about This situation, need to check some data points of Vaibhav particularly In UK Geography, whats the selling Price of Vaibhav VS competitors In UK and how come vaibhav Becomes cheaper option for Consumers in Times of Recession.
Notes from screener for Q32024 conference call:
Financial Performance:
Operational Updates:
Future Growth Strategies:
Challenges and Mitigation:
Overall Outlook:
Crown lifters has recently done QIP in which Niveshaay has also participated, thanks to your research was able to build some position in it.
Hi Utkarsh,
Thanks for the report and it is very helpful.
Curious to know if you are anyways related to Promotors of the company. Asking this because your surname is same as the Promotors and most of the info is from Annual reports published by the company.
Thanks,
Suresh
(post deleted by author)