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Had attended the Q2FY24 con call and would like to share the highlights:

On Q2FY24 Numbers:

1. GP was lower due to the higher contribution of complex equipment and higher metallurgy products. As we move forward into more complex products. GP margins are going to fall but absolute EBITDA will be higher.
2. Other expenses were lower due to a lower portion of royalty-based revenue. A broad range of other expenses achieved in Q2FY24 should be taken for the rest of the year.

Revenue & OB:

1. Won over 365cr + 243cr (October) of new OB in this FY24 till date. So, as of today, the total OB is 873cr. It is the best we ever had. Out of this OB, 590cr. to be executed in FY25 and still counting. (Meaning H2FY24 potential revenue stands at 280+ cr.)
2. Revenue growth of 25-30% with EBITDA 20%+ guidance remains for the next 2-3 years despite higher complex product contribution.
3. We should touch export revenue of 30% in FY24 and are already at a 50:50 mix between export and domestic as guided for FY25.

Kheda & It’s CAPEX:

1. Started first order in Q2 from Kheda. Happy to state that, already won >100Cr. of OB for the Kheda Plant and hence this facility will be well utilized.
2. Looking at OB winning, planned to increase 0.5 bay capacity with an investment of 15cr. This will take us to a total of 2 operational bays by Q1FY25.

Conclusion:
Looking at the pace at which OB booking is happening, the early addition of 0.5 bay than expected, a higher proportion of less competitive export OB, increase in complex equipment – all this indicates a lot of improvement compared to what Anup was a couple of years ago. Mr. D’souza is very clear in communication about driving factors of Revenue, Expenses, and Margins as well. At this pace and very comfortable potential FY25 revenue based on the current OB in hand, gives a lot of comfort to keep holding this stock. Although I have no comment on valuation but I will continue to keep this stock till the time numbers speak.

Discl: Invested.

Regards,
Mukul Jain

For sure , but its more about the time horizon. In the long run (approx 3 years or more) Vaidyanathan has given a guidance of high teens in terms of ROE(~17%, could be even higher considering his general conservative nature) . So if you look at the long term the price is still reasonable.
Banks like HDFC and ICICI are stable banks and ROE can not increase further from here. So short to medium term they look more value for money. But in the long term I still think IDFC will provide better returns.

Disclaimer – Invested

all earnings metrics were revised downward a little. Reason for the carnage?