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After 2+ years of consistently sharing insights on X, we received several inquiries about launching our own research services.
So, we decided to go ahead, get SEBI Registered, and launch our dedicated Research Desk, focused on uncovering high-growth opportunities in the Smallcap & Midcap space.
We're now also live on Smallcase!
There’s been a lot going on in the background over the last few months.
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Good Example of How Real Estate Accounting Works!
One of the most important things to understand about real estate companies is that pre-sales do not immediately translate into reported REV & profits
Take Max Estates as an example!
In FY26, the company reported REV of just 199 Cr
However, 15,650 Cr of embedded REV & an estd 4,800-5,700 Cr of embedded PBT from sold units & launched projects, yet to be recognized in the P&L (Starting from FY28 onwards)
Under Ind AS 115, REV is recognized when the applicable conditions are met & control is transferred
This is why looking only at the current P&L is misleading for real estate developers
Strong Commentary from Kalyan's Concall! 💎
Management indicated that Navratri, Dhanteras & the subsequent weekends witnessed excellent demand!
The first 40 days of Q3 have been particularly strong, with healthy volume growth despite the high base of last year
Coming to guidance! Management continues to use 25% REV growth & 10% SSSG as its baseline expectations
Management explicitly expressed confidence in exceeding its targeted REV growth!
Another encouraging aspect is that growth is not entirely driven by rising gold prices
Management explained that most customers visit jewellery stores with a predetermined budget rather than a fixed quantity of gold
When gold prices soften, customers generally purchase more grammage within the same budget
Coming to margins, management indicated that underlying Q2 PBT margins remained stable after adjusting for the impact of customs duty & the previous year's silver & platinum gains
More importantly, management expects H2FY27 PBT margins to be better than H1FY27
Stock has almost doubled from its July lows! (gave a good opportunity😀)
Overall, management's tone was extremely positive!
Huge Capital Flowing into India's Financial Services Sector! 🔥
Blackstone is set to invest 5,000 Cr in IIFL Finance
Total capital raise of 6,414 Cr, including 1,264 Cr from promoters
This is one of the largest primary private equity investments in a listed Indian NBFC!
Kalyan Jewellers Q1FY27 Key insights
Cons. REV excluding bullion grew 38% YoY to 10,008 Cr, while PAT increased 32% to 349 Cr
India remained the key growth driver, with REV increasing 38% to 8,503 Cr & PAT growing 25% to 321 Cr
Demand remained healthy despite temporary weakness during Adhik Maas
Candere delivered a strong turnaround, with REV more than doubling to 141 Cr & PAT turning positive at 2.1 Cr versus a loss of 10 Cr
Management expects Candere to remain profitable through FY27, with the focus shifting towards improving throughput at existing stores
Recycled gold contributed more than 46% of Q1 REV & crossed 55% in June. Management aims to maintain this share at 55-60%, reducing dependence on imported gold
Higher old gold exchange temporarily diluted margins by around 20-30 bps
However, the company is scaling up its cash for gold business, where gold is purchased below the spot price, making it margin accretive & helping offset the exchange related dilution
India PBT margin moderated to around 5.1% from 5.5-5.6% earlier. Management remains confident of maintaining FY26 PBT margins for the full year
Customs duty benefit was 40 Cr in Q1, with another 60 Cr expected in Q2. A meaningful portion of this benefit is being passed on to customers through exchange offers
It launched a new Tamil Nadu focused regional brand, Akshaya Thanga Maligai. The first showroom will open in Chennai on August 21, followed by four additional stores over the next few months
Non GML debt is expected to be fully repaid by the end of September
Store expansion remains on track. The capital light FOCO model continues to support expansion & improving return ratios.
Kalyan Jewellers Q2FY27 - Strong Set!
REV 🔼31% - 10,323 Cr
EBITDA 🔼30% - 644 Cr
PAT 🔼64% - 427 Cr
Profit before exceptional items grew 39% YoY
Reported PAT includes an exceptional gain of ~73.5 Cr from the sale of non-core real estate assets & ~52 Cr benefit from the import duty hike
India business delivered 27% REV growth (excluding bullion), largely driven by healthy SSSG of ~20%, while B2C REV grew ~23%
Non-South markets delivered 31% REV growth compared to 23% in South India. Non-South now contributes ~55% of India's REV
Another major positive is company has become non-GML debt free
Management remains optimistic about the festive & wedding season, with encouraging trends during Navratri & Dhanteras
50 Stocks Trading Close to Their 52 Week Highs!
Sona BLW
Aurobindo Pharma
ICICI Bank
Marico
TVS Motor
Ather Energy
South Indian
Westlife Foodworld
Kotak Bank
Anand Rathi
Eternal
Adani Ports
Uno Minda
Phoenix Mills
Laurus Labs
Entero Healthcare
NSE
Mankind
Nykaa
Navin Fluorine
Glenmark
Piramal Pharma
MCX
JSW Steel
Asahi India
Sansera Engineering
KDDL
Dr Reddy
Gland Pharma
Divi's Lab
Punjab National Bank
Groww
LG Electronics
Tips Music
Shyam Metalics
DLF
SG Mart
Knowledge Marine
Hindustan Aeronautics
Motilal Oswal
IGIL
Dr Lal PathLabs
Anthem Biosciences
Rolex Rings
Sai Life
PVR Inox
PDS
Saregama
Titan
These companies largely belong to sectors such as pharma, auto anc, banking, capital markets, consumption & select industrials
Thangamayil once top gainer in Jewelry sector
Stock has witnessed over 40% correction
P/E have come down from 65x to 33x
PAT is flat YoY, despite 40% growth in REV, margins have witnessed significant compression
Suddenly, the sentiment around Nifty is turning bullish after the sharp recent upmove!
Citi has raised its Nifty target to 28,000, HSBC has upgraded India to Overweight, and Jefferies has also increased its India allocation
The real irony is that the same market which looked unattractive a few weeks ago suddenly becomes a compelling opportunity
Diagnostics Sector - Solid Q2FY27🧪
1. Dr Lal PathLabs - Reported its strongest quarterly REV growth in the last five years, with REV increasing 20% YoY! Management has upgraded its FY27 growth outlook to the high teens. Company has not taken any direct price hikes in last 4 years!
2. Metropolis Healthcare - Organic REV growth has accelerated from its historical 12-13% to 15-16%, without any price hikes during H1FY27! Management expects continued margin expansion, supported by improving network productivity, a higher specialty testing mix & operating leverage.
3. Thyrocare Technologies - Pathology REV grew 27%, supported by an equally impressive 27% increase in test volumes! Company also recorded its strongest quarterly franchise additions in 3 years. It has now consistently delivered over 20% growth for the last 9 quarters, with growth accelerating to over 25% in the last two quarters! Management has upgraded its FY27 REV growth expectations from the mid to high teens to the early 20s!
4. Vijaya Diagnostic - Delivered the strongest REV growth at 27%, with EBITDA growing 38%! Existing centers delivered 20% growth. Management now expects at least 20% REV growth in FY27, with EBITDA margins of at least 42%.
CGHS tariff revisions contributed 2-3% to Lal PathLabs' growth & around 3% to Vijaya's growth. These benefits will eventually normalize going ahead.
Interesting data highlighting earnings growth trends across the Nifty Midcap 150 & Nifty Smallcap 250, excluding commodity companies
One thing to note - this data only covers earnings up to Q1FY27
Based on the Q2FY27 results reported so far, earnings momentum is even stronger this quarter!
src : Alchemy
Crazy Momentum in CDMO Stocks
Many are now trading above 50x EV/EBITDA!
At these valuations, it feels like street is pricing in FY30 earnings
Let's see how far this momentum takes them!
Happy Diwali! ✨
May this auspicious occasion bring prosperity, happiness, good health & wealth to you & your family!
Wishing everyone a prosperous Samvat 2083! 🪔
Amid All the Market Chaos, Berkshire is trading at ATH
Just look at the returns:
Nasdaq : 54%
Berkshire : 99%
Almost double the returns!
A good reminder that you don't need to chase the latest market trends or the most exciting sectors to create wealth