The PSU shares are going thru some harmonal turmoil.
Markets keep teaching us. Momentum chasing needs very good brakes.
To me it seems that what initially started as value hunting, changed to momentum car chase. They seem to have become high-risk game now.

poor results from HEG

1. drop in realization
2. Margin compression
3. Depreciation kicking in due to added capacity.

I am trying to understand deferred taxes and deferred tax treatment better. While I understand the concept of deferred taxes, I find it hard to relate to how it shows up in the P&L. I didn’t find any specific topic here that addresses this in detail, so thought I would start a thread, and maybe we can share examples of deferred taxes from P&L statements that are unusual or interesting, and get better informed about the kind of liabilities that show up here and when/how they are reversed. Hoping this can then become a thread that has a good collection of such examples.

Here’s one example I would like to start with which I am not clear about. This is from the latest results of La Opala (Q3 FY24). There’s a deferred tax reversal of about Rs. 8.6 crores that has boosted their PAT.

When I looked at the notes, here’s what it says “Deferred tax liability reversal during the quarter/nine months period ending December 31 2023 is mainly on account of change in status of certain investments held by the company, i.e. from Short Term to Long Term as per the provisions of Income Tax Act 1961.”

Can someone who understands this topic well explain this (maybe with an example)? Is this like some equity investments for which they had originally provided deferred tax liability at 15% (short term) and have now changed it 10% (long term)? If so, when is it provided for originally? Can it be something else? Thank you!

Hope this is the right category for this post. If not, request the moderators to assign to the right category.

Q3FY24 results of all peers:

Key personal takeaways from Q3FY24 Conf Call [rephrased]:

• Expect growth rates of 15~20% for eCom and 30% for PTL segments in FY25.
• Factors that will help to grow: Service quality, reach of the network, and cost leadership.
• Focus area: Gain heavy volume. In turn, source PTL loads from across the country. Seeded salesforce in 80 cities. Will back them with enhanced marketing spend.
• Incremental gross margins continue at 50% and shall continue in the coming quarters. In the long run, it might settle at 30% – basis 12 yrs. of own historical data. In the very long run, the stable transportation margin [OPM, I think so] shall be at 16~18% plus some delta due to better network engineering.
• OS1 based DispatchOne [SaaS] offering is expected to be monetized from Q1FY25.

Overall:

As of now, the software driven logistics ecosystem of delhivery provides incremental gross margins at 50%. In future, industry players intend to pass general price increase [from inflation] to their customers whereas Delhivery would maintain the same prices, benefitting from its network efficiency. Competitors can replicate Delhivery cost structure and network efficiency only if they invest in the automation of all the core areas and fine tune their systems after spending similar amounts of time.

Disc: Have a position.