The detailed Summary of Q2FY25 Concall of Sahana Systems

1. Financial Performance**

• Revenue:
  • Half-year (H1 FY2024-25) consolidated revenue stood at ₹52.6 crore, compared to the prior year’s full-year consolidated revenue of ₹69 crore.
  • Management expressed confidence in surpassing last year’s full-year revenue.
• Profit After Tax (PAT):
  • Half-year PAT at ₹9.8 crore; full-year PAT for the previous fiscal year was ₹15.3 crore standalone and ₹18.21 crore consolidated.
• Growth Drivers:
  • Increased contribution from defense and fintech segments, with significant upcoming orders in the pipeline.
• Operating Margins:
  • Margins are stable, supported by the company’s high-value defense contracts and operational efficiencies.

2. Margin Guidance**

• Management aims to maintain current margins, leveraging:
  • Higher-value products in the defense segment, like radar and anti-drone systems.
  • Scalable fintech solutions, particularly UPI-related projects for domestic and international markets.
• Focus on cost optimization in R&D and operations through partnerships with academia and research institutions.

3. Business Segment Performance**

Defense Technology

• Key offerings:
  • Anti-drone systems, radar systems, and electronic warfare solutions.
  • Indian Army partnership for critical projects, appreciated at the highest levels.
• Recent Developments:
  • Engagements with foreign governments for radar and anti-drone solutions, including a potential deal with a neighboring country.
• Pipeline:
  • Large-scale orders in discussion for safeguarding sensitive locations abroad.
  • Differentiator: Faster deployment and integrated software-driven solutions compared to competitors.

Fintech

• Key offerings:
  • Development of ONDC switches and interoperable UPI systems.
  • Significant projects with U.S.-based banks for end-user computing and large-scale banking transformations.
• Pipeline:
  • Collaborations with countries to implement interoperable UPI systems to revolutionize their financial ecosystems.
  • Current fintech orders include digitizing agricultural credit societies across two Indian states.

Healthcare

• Key offerings:
  • No-code AI platforms, healthcare management information systems (HMIS), and digitalization of EMR (Electronic Medical Records).
• Market Strength:
  • Long-standing U.S. customers in the healthcare sector since 2016.

Education Technology

• Smaller focus compared to defense and fintech.
• Involvement in government-led initiatives to transform India’s education ecosystem.

4. Management Guidance for the Future

• Revenue Growth:
  • Management anticipates significant growth in FY2024-25 and FY2025-26 from new projects, particularly in defense and fintech.
• Geographical Expansion:
  • Increasing international presence through government-to-government collaborations and export of fintech and defense technologies.
• Focus Areas:
  • Prioritizing defense and fintech as core growth drivers, while retaining other segments for long-term relationships and smaller contributions.
• R&D Strategy:
  • Collaborations with IITs and top researchers.
  • Investment in advanced AI/ML technologies to stay ahead in innovation.

5. Key Risks

• Competition:
  • Several players entering the anti-drone and radar ecosystem, including established defense PSUs and private firms like Zen Technologies.
  • Sahana’s edge lies in faster deployment and superior software integration.
• Dependency on Government Orders:
  • Heavy reliance on defense contracts and government approvals, which are subject to delays and budget constraints.
• Geopolitical Risks:
  • Ongoing negotiations with foreign governments could face geopolitical hurdles or regulatory challenges.
• Fintech Adoption:
  • Success in implementing UPI and ONDC systems abroad depends on the willingness and regulatory support of foreign nations.

6. Industry Trends

• Defense Technology:
  • Growing demand for indigenous and cost-effective solutions due to geopolitical tensions.
  • Focus on integrating advanced AI-driven solutions in warfare systems.
• Fintech:
  • Massive growth in UPI transactions in India, surpassing the GDP of several countries.
  • Other nations are exploring the adoption of UPI technology to modernize their financial systems.
• Healthcare and AI:
  • Increasing reliance on AI-based healthcare solutions for digital transformation in global markets.
• Education Technology:
  • Digitization of education systems gaining traction, driven by government initiatives.

Conclusion

Sahana Systems Ltd showcased robust performance in H1 FY2024-25, driven by its defense and fintech segments. The company remains optimistic about securing large-scale international contracts and maintaining margin stability. While it faces risks from competition and dependence on government orders, its strong pipeline and technological edge position it well for future growth. Management’s strategic focus on high-value segments and innovation will likely drive sustained growth in the coming years.

Hello everyone… Any views on Jyoti Structures Ltd… Benefitting from the Govt. PLI Schemes… Govt. Investment of Rs. 9.20 Lakh Crores in the sector…
Does it have some legs for long run or is it a pump and dump story…

Awaiting replies. Thanks in advance.

Some months back I tried to sell my used couch in OLX and quickr. All I got were scam calls that too some 10 calls within 30 min. I would never go back to these platforms which could not curb scamsters.

One of the references:
https://www.reddit.com/r/IsThisAScamIndia/comments/1dwutxe/olx_army_scam/?rdt=37849

Can any financial expert work out future equity increase required after bonus issue?
You can get some input from page 2 of bonus filling done with exchanges.
Consider Telangana project cost @ 3000 Cr. Assume D/E ratio for textile industry.
Why my question…there can be QIP and/or right issue and/or Direct FII/institutional placement.

Disclaimer – Invested @ 4 year back, still holding.

Concall summary . Q2-2025. (nov 2024)

Rev/Ebidta/pbt
1…Bathware @360cr/35cr/3cr
2…pipe@ @187/13/-3
3…Consumer@ 83/-7/-16

1…BUILDING PRODUCTS

=Due to restructuring, sales are affected which is temporary

=We have underperformed in this period with the other competitors(cera) which has declared the results. I don’t think it’s a permanent kind of a loss. I think it’s a temporary blip .

=The reason behind
underperformance is our restructuring process. We deal with 400
distributors and these 400 distributors put the product in the market. The consumer demand from
the outlets remains very similar. However, because of the internal changes of restructuring which we have made, our primary dispatches to these customers have actually got impacted. I personally believe it
would basically be a recovery more sooner than later.

=By the end of the year, we should be very close to the numbers of the competitor in this
financial year

=Unfornunately, restructuring is happening when market condition is not good
=While overall demand remains subdued, we are encouraged by some positive momentum in the faucets category

=We’ve done lots of good work around a Six Sigma project, which basically
has increased what we call our first-time throughput. So first time right, basically, which was operating at about 76%. So if I’m casting 100 pieces, we were getting 76 pieces as the final
output. Now that number has moved from that to about 84-85, so basically 8-odd percentage
improvement.

2…PIPE

= TRUFLO continued strong
volume growth and reported 11% year-on-year increase in H1 FY25.

=We are also diversifying our product offerings, introducing premium high-value products to
meet our evolving customers’ needs. We have launched foam core products for underground
drainage applications this quarter and will introduce double wall corrugated pipes and fire
sprinkler systems in the coming FY25.

=Further, construction of our Roorkee facility is progressing on schedule with plans of its operation by the end of FY25, i.e. Q4FY25

=We had a volume growth of 11% for H1. But value-wise, we were flat because of the down prices of the raw materials

C…CONSUMER

=This business is also affected due to sluggish demand

=Elica’s numbers as well, which is in a similar category in kitchen, which was negative in quarter 2. So that has
impacted our overall margins there

=On a profitability side, we have 1 or 2 more quarters of stress, but we are
very sure that the business will come out good in terms of profitability as well as revenue growth.

=Profitability is our first focus for consumer business

= We have a very healthy margin in the kitchen business. We have a 42%, 43% gross margin in the kitchen business. And we believe that if we focus on that and try to get more
revenue out of that, it will also aid our profitability objective. So that’s where my focus is.

= I’m not going to be focusing on our seasonal businesses as much as I’m going to focus on my kitchen
business

=On a profitability side, we have 1 or 2 more quarters of stress, but we are
very sure that the business will come out good in terms of profitability as well as revenue growth

= So for us, the steps which we have taken is basically we have cut out a lot of our categories, and retail
SKUs where our margins are lower. We are cutting it out on a very aggressive basis

4…RESTRUCTURING

=In our Bathware business we’ve done a bit of restructuring. We have kind of merged our sanitary and faucet teams. And we have also done a bit of restructuring between our Consumer business and Bathware business, where our back-end operations have combined into a single operating
unit. S

=This will increase out profitability

Disc…invested since 3yrs
Seen huge volatility in results and stock price