Very good insights from con call.
I am very much convinced with the management guidance this time with good breakup and very low (35%) exposure to bloom energy.
They are expecting other verticals could contribute good amount of revenue in FY25 with decent margins.
Electrolyzers revenue is not included in the revenue projection of 900Cr, but i feel there will be some contribution of this vertical as well.

Summary of Concall Q3 FY 24:

*Growth Guidance *
~15-17% growth for the next 3 years (Composite 30%, Established 10-12%.)

*Composite Guidance *
~500 Cr current year, 800 Cr next year & 1500 cr 2 year down the line.
~ CNG cascade capacity to expand from 480 to 1080 nos by next year, can give 850 cr revenue after expansion

*Valu added *
~Right now-26%
~Will increase 3-4% per year.
~Can become 36% in 3 year down the line ( Ebitda margin can go to 16% by then)

*ROCE *
~Nine Month ROCE is 15.6% against 13.6% in FY 23.
~ To improve by 2% every year.
~ Can become 20% three year down the line.

*Capex *
~ Nine month Capex 144Cr (63 Maintenance, 81 Composite & IBC)
~Full year Capex to be 175 Cr ( Reduced from 200 Cr)

*Restructuring *
~ Approved- 50% disinvestment of Middle Asea for 25 million $ ( 200 Crore), to be completed in 90 days.
~ Middle Asea contributes 7.5 % (Around 350 Cr) of total consolidated revenue.
~ As 2023 numbers are better than 2022, they may do re-exercise by taking 2023 numbers for balance disinvestment of USA, South Asea.
~No desperation for selling, will sell only when they get good value.

*Non Core Asset *
~ 125 Cr NCA to become Zero by March’25.
~Sell of 26.5 Cr land & building in South region to be completed in 90 days.
~ Proceed to be used for Debt reduction.

*Debt *
~ Target to become Debt free in next 3 year
~ By March’25 debt to be reduced to 450 cr from current 800, interest cost can go down to 60-70 from current 100.

*Entry into Automobile *
~No capacity right now, may consider it after next year’s capacity expansion

*Working Capital *
~Targeting to reach 90 days in 6 months, against 112 days last year.

*Disc *- Invested & Biased

ALKEM LABS –

Q3 FY 24 concall highlights –

Revenues – 3323 vs 3040 cr, up 9 pc
Gross margins @ 61 vs 59 pc YoY
EBITDA – 707 vs 599 cr, up 18 pc ( margins improved 160 bps to 21.3 pc )
PAT – 604 vs 460 cr, up 30 pc

R&D expenses @ 111 cr, 3.3 pc of sales ( on the lower side – imho )

India sales @ 2232 cr, up 12 pc
International sales @ 1024 cr, up 3 pc

Domestic business grew strongly led by GI, Anti-Diabetic, Vit-Minerals segments. Trade generics also grew strongly

Company’s rank in various therapeutic areas-

Anti-Infectives – 1st
Vit-Minerals – 2nd
GI – 3rd
Pain/Analgesics – 3rd

Company is an emerging player in Diabetic, Neuro, Derma, Cardiac segments

US sales @ 683 vs 761 cr, down 10 pc due very strong base in the previous FY. 9M US sales are up 12 pc

Non-US international ( Australia, EU, LATAM ) sales @ 340 vs 230 cr, up 47 pc !!!

Company has launched 7 biologics in the domestic market via its subsidiary – Enzene ( doing sales of around 200 cr/yr )

Company holding a cash surplus of around 3500 cr

Chronic sales as a percentage of India sales @ 17 pc ( still quite low for the company ). Should be able to take it to above 20 pc in 3 yrs or so

LATAM growth continues to be strong – plus its a healthy EBITDA margin business

Guiding for a full year EBITDA margins of around 17 pc as Q4 is a weak Qtr for Alkem Labs

Looking at deploying cash on balance sheet for growth – ie – acquisitions, organic projects

Anti-Diabetic, Respiratory are strong focus areas for the company in IPM

Enzene ( Biosimilars – subsidiary ) likely to break even this FY

As the Chronic sales in India, RoW sales pick up – margins should improve ( beyond the current annual run rate of 17 odd pc at EBITDA level )

Going fwd – Intend to spend 100-150 cr / yr on R&D related to Biosimilars

Acute portfolio on an avg has 10-15 pc lower Gross Margins vs the Chronic portfolio

Remain bullish on RoW mkts. Should continue to grow well in LATAM, EU

Aim to keep increasing EBITDA margins by 100 bps / yr for the foreseable future

Expecting tax rates of 10-12 pc for next 2-3 yrs for the company. Tax rates will go into the 20s range post FY 27

Around 30 pc of company’s portfolio falls under NLEM

Expecting Q4 EBITDA margins @ 12 pc or better

US business’s economics is now far better vs previous 2-3 yrs

Disc: hold a tracking position, biased, not SEBI registered

https://www.business-standard.com/companies/news/vedanta-s-parent-may-sell-1-billion-worth-shares-to-gqg-partners-report-124021401662_1.html

Vedanta Resources, the parent of Indian miner Vedanta Ltd, may sell about $1 billion worth shares in the company to investment firm GQG Partners via block deals, television channel ET Now reported on Wednesday citing sources.

Vedanta did not immediately respond to a Reuters request for comment.

Saddled with $6.4 billion in outstanding debt, including a $4.5 billion payment due by fiscal 2025, Vedanta Resources has been attempting to shore up its finances, including through a recent debt restructuring.

Group Chairman Anil Agarwal has made several bids to trim debt, including an unsuccessful attempt to take the company private in 2020 and plans to split Vedanta into six companies.