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Defensive Stocks in red market

1⃣ ITC
Sector: FMCG

2⃣ Sun Pharmaceutical Industries
Sector: Pharma

3⃣ Hindustan Unilever
Sector: FMCG

4⃣ Tata Consultancy Services
Sector: IT

5⃣ Hindustan Aeronautics
Sector: Defence

Indigo Paints Company details

Indigo Paints was founded in the year 2000 and has a market share of ~2% in the organized paint industry. Its decorative paints portfolio constitutes emulsions, enamels, wood coatings, distempers, primers, putties and cement paint. The Company's success has been significantly propelled by its portfolio of differentiated products, featuring category-creator and value-added offerings with specialized end-use specifications and superior properties. Innovations such as metallic emulsions and tile coat emulsions have established new industry benchmarks. It acquired 51% stake in Apple Chemie for ₹29 cr and has an option to acquire balance stake by the end of three years. Apple Chemie is into construction chemicals and water proofing industry representing business to business segment. It supplies products to notable clients like L&T, Shapoorji Pallonji, B.G. Shirke, and Afcons, contributing to significant infrastructure projects such as the Pune Metro, Mumbai Metro, the upcoming Mumbai Trans-Harbor Link, and the Samruddhi Expressway from Nagpur to Mumbai. It has now extended its sales force into 8-10 regions across India, beyond Maharashtra, and has already started receiving approvals and orders from these areas. The company has a strong presence in tier III and tier IV markets, where brand penetration is relatively easy, and dealers have more power to influence customers’ buying decisions and these markets allowed the company to expand its brand and presence in the Indian market. Company has branded its products with different labels based on price points such as platinum, gold, silver, and bronze series, respectively. It is presently expanding its distribution networks in metro and tier I cities. They achieved brand recognition and strong consumer recall through persistent branding and marketing. It has 5 manufacturing units in India with a capacity of 1,60,000 KLPA for liquid based paints and 1,38,000 MTPA for powder based paints. It is expanding its manufacturing base towards both paint categories and upon completion, its total production capacity will reach ~2,62,000 KLPA for liquid-based products and 2,76,000 MTPA for powderbased paint products. As on date it has 53 depots.

#SALES #GROWTH 5 Year CAGR: 19.5%

In FY24, the net sales grew by 22% YoY to ₹1,306 cr. The value growth across cement paints & putty, emulsions, enamels & wood coatings and primers, distempers & others was 35.9%, 15%, 13.6% and 32.2%, respectively and volume growth in the aforementioned categories were 35.5%, 15.4%, 15.8% and 33%, respectively. Apple Chemie, the subsidiary, achieved a revenue growth of ~24% YoY in FY24 and contributed ₹51 cr towards revenue. In Q1 FY25, revenue grew by ~8% YoY to ₹311 cr affected by the slowdown in Kerala market. Its value growth on a YoY basis was : 8.9% in cement paints & putty, -1% in enamels & wood coatings, 28.6% in primers, distempers & others and -3.1% in emulsions. The volume growth was : 8.2% in cement paints & putty, 5% in enamels & wood coatings, 24.4% in primers, distempers & others and 0.4% in emulsions. Apple Chemie achieved a revenue growth of ~47% YoY, contributing ₹17 cr to the overall sales.

#EBITDA #GROWTH 5 Year CAGR: 34.5%

In FY24, EBITDA increased by 31% YoY and stood at ₹233 cr. The rise was on account of increased sales and softening of raw material cost. In Q1 FY25, EBITDA was down by 3.5% YoY at ₹47 cr led by increase in employee cost by ~24% YoY on account of increased sales force since Q2 FY24 and salary hike of ~12%. In FY25 and beyond, its plans include increasing A&P expenditure by supplementing TV advertising with significant investments in digital media.

#PAT #GROWTH 5 Year CAGR: 40.8%

In FY24, the net profit was ₹149 cr and expanded by 12.9% YoY, mostly backed by rise in operating profits. In Q1 FY25, PAT reported was ~₹27 cr, de-growing by 14% YoY due to the additional depreciation charge on account of commissioning of the Tamil Nadu plant in September 2023.

#EBITDA #MARGIN

In FY24, EBITDA margin expanded by 132 bps YoY and stood at 18.2% backed by rise in gross margins. A favourable product mix, coupled with double-digit growth across all categories and a prudent purchasing policy, led to better realization and increased gross margins from 44.5% in FY23 to 47.6% in FY24. The emphasis on high-margin differentiated products has been pivotal to this growth trajectory. EBITDA margin contracted by 180 bps YoY to 15.2% in Q1 FY25 mainly on account of increased employee cost.

#PAT #MARGIN

In FY24, the PAT margin declined by 89 bps and stood at 11.9%. In Q1 FY25, PAT margin stood at 8.6%, contracting by 230 bps YoY. The reduction is mainly attributed to the higher depreciation charge resulting from the commissioning of the new plant in Tamil Nadu

#MANAGEMENT #PROFILE

Hemant Jalan is the Managing Director and Chairman of the company. He was previously associated with AF Ferguson & Co and Vedanta Group of Industries. He has done his M.B.A. from the University of Chicago, M.Sc from Stanford University and B.Tech in Chemical Engineering from the Indian Institute of Technology, Kanpur. The board has recommended reappointment of Mr. Ravi Nigam as an Independent Director, for a further term of five years, with effect from 29th March 2024 subject to approval of the shareholders of the company. There has been an appointment of Ms. Ashwini Deshpande as an additional director (non-executive independent) w.e.f. 26th May 2023, subject to the approval of the shareholders of the company.

#SECTOR #OUTLOOK

• India's paints and coatings market, spanning both decorative and industrial segments is forecasted to grow at a CAGR of 8.75% by FY33. The country's growing population and rapid urbanization are driving demand across various sectors. India's construction chemicals market ranks third globally in profitability and leads in growth, projected to reach $5.02 billion by 2030 with a CAGR of 7.24%. The commercial sector holds the highest market share, followed by the residential sector. • India's waterproofing chemicals industry has experienced significant growth due to rapid urbanization and the rising demand for resilient construction solutions. The country's climate necessitates protection against monsoons, humidity, and water damage, making waterproofing chemicals essential in construction. The market is expected to grow at CAGR of 7.4%. Government mandates and infrastructural development would further drive this growth. • India's decorative coating market is projected to grow from ₹70,000 cr in 2023 to ₹1,59,000 cr by 2032, with an annual growth rate of 9.5%. The market is divided into organized and unorganized sectors, with the organized sector accounting for ~77% (₹54,000 cr) in 2023. This sector is expected to grow at a CAGR of 9.8%, reaching over ₹1,25,000 cr by 2032. Factors driving this growth include new capacity expansions, rapid urbanization, increased preference for branded paints, and shorter repainting cycles. • Eco-conscious consumers are fuelling demand for water-based, low-VOC paints that minimize environmental impact. In response, paint manufacturers are increasingly developing eco-friendly solutions to meet the needs of this growing population of environmentally responsible consumers. • The rising disposable income of the expanding middle class is boosting demand for premium paints. These high-quality options blend aesthetics with features such as anti-bacterial properties, exceptional durability, and enhanced functionality, appealing to CASE STUDY consumers' growing preference for luxury brands.

#FUTURE #POTENTIAL

• For the past two decades, a robust network and distribution strategy has established a strong presence in small towns nationwide. Recognizing the critical role of dealers in influencing consumer choices, particularly in Tier 3, Tier 4 cities, and rural areas, maintaining strong relationships with channel partners. Significant growth opportunities have been identified in Tier 1 and Tier 2 cities. The market penetration strategy in these areas is multifaceted, involving the establishment of an extensive network of depots to bring products closer to customers in these key markets. • The putty expansion project is anticipated to be completed by November or December 2024. The commissioning of the solventbased plant is scheduled for March 2025, while the water-based plant is targeted for operationalization by the same month. the timeline by a couple of months. expected to contribute 8%-10% to sales over the next 2-3 years. However, due to recent labour availability challenges over the past two months, there is a possibility of a slight delay, extending • The company's focus on the waterproofing and construction chemicals segment is delivering positive outcomes. These products are seeing strong sales traction in many states, with expectations for further growth in FY25. The waterproofing segment is • It is targeting the installation of 1 megawatt of renewable energy via rooftop solar installations in FY25.

Indigo Paints Limited1350-1465
Expected level 1700
Support1209

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Stocks Shifted to T Group

Reliance Infra
Reliance Power
PC Jewellers
Aarti Surfactants
Epack Durable
HCL Info
Motisons Jewellers
Optimus Infra
Panacea Biotech
Sequent Scientific
Zaggle Prepaid
Zee Media
Zenotech Lab

Stocks out from T Group

Atul Auto
Black Box
BPL
Dredging Corp
Exicom
IFB Agro
Moschip
Prime Focus
Wockhard
Websol Energy

💥PRIVI SPECIALITY CHEMICALS LIMITED COMPANY DETAILS

Prigiv Specialities Private Limited (Prigiv), a Joint Venture company of Privi Speciality Chemicals Limited, (Privi) a leading aroma chemicals manufacturer from lndia and Givaudan SA, (Givaudan) a world leading multinational company in the Fragrance, Beauty, Taste and Wellbeing industry, today announced that it has commenced operations at its greenfield facitity in Mahad in the state of Maharashtra.

This greenfield facility is a state-of-the-art manufacturing unit, custom-built to produce small volume fragrance ingredients of medium to high complexity exclusively for Givaudan. The total capital expenditure incurred for this project is approximately Rs.178 crore, funded through equity contributions from both partners and loan financing from Givaudan. Privi holds 51% equity stake in the joint venture with Givaudan holding the remaining 49%. The JV initially targets to manufacture a broad portfolio of value added products with a progressive ramp up in activities over the next two to three years. The Commercialization of operations further solidifies the partnership between the two companies, who have had a long-standing relationship.

The joint venture's infrastructure has also been expanded with an additional 5-acre area, adjacent to the existing 4-acre site, laying the foundation for significant future growth.

PRIVI SPECIALITY CHEMICALS 1380-1480
Expected level 1800
Support 1200

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Thermax

Thermax Ltd. is prepared for large-scale capex to set up a solid oxide electrolysers manufacturing unit in India, the company’s Chief Executive Officer Ashish Bhandari said.

Recently, the Indian multinational engineering conglomerate announced a partnership with UK-based Ceres Power Ltd. for green hydrogen production with large-scale solid oxide electrolysis cell manufacturing in India.
The two companies have entered into an agreement for Thermax to manufacture, sell and service stack array modules based on Ceres' advanced solid oxide electrolysis cell technology.

Thermax also plans to establish a manufacturing facility for the electrolysers, develop the supply chain, and localise critical components over the next two years.
“The investment (towards indigenisation of the project) will change depending on the success that we get at each stage but we are prepared for hundreds of crores of investments on setting up full-scale manufacturing capability for solid oxide electrolysers,” Bhandari told NDTV Profit.

The Thermax CEO said that hydrogen as a technology for the future will be important for India’s many hard-to-abate industries like steel, refining, petrochemicals, and fertilisers

“I think solid-oxide technology for electrolysis is a key tech that can make this change happen faster,” he said.

The company is focusing more on green technology, which is reflected in the breakup of its Rs 10,500-crore order book, Bhandari noted.

“Right now, we are running about 70% of what we call as green (energy) and 30% of traditional fossil fuel,” the top executive said.
With the new opportunities towards green transition, Bhandari said that he expected the margins of the company to improve.

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📊 Leading Solar Module Manufacturers 📊

1⃣ Adani Enterprises
1 Year Return: 34%

2⃣ Premier Energies
1 Year Return: 35%

3⃣ Tata Power
1 Year Return: 84%

4⃣ Solex Energy
1 Year Return: 234%

5⃣ Websol Energy System
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EPL Limited Company details

EPL Limited formerly known as Essel Propack Limited is the largest specialty packaging global company, manufacturing laminated plastic tubes catering to the Beauty & Cosmetics, Pharma & Health, Food, Oral and Home.

The company was acquired by the Blackstone group on Aug – 2019 from the Essel group of companies. The Blackstone Group is one of the leading investment firms in the world with an AUM of around USD 511 billion across sectors like private equity, real estate, hedge fund solutions and credit businesses. The Group also has an exposure in the packaging industry through acquisition of varied companies such as the USA based Graham Packaging, Owens-Illinois Inc, Ohio and China based packaging firm ShyaHsin.

EPL functions in 11 countries through 21 facilities employing 3500+ people.