#PAT #MARGIN

In FY24, the PAT margin expanded by 336 bps YoY to 6.2%. In 9M FY25, the PAT margin expanded by 214 bps YoY to 8.3%. The consolidated PAT margin including the share of profit of associates and joint ventures stood at 9.4% in 9M FY25 (v/s 7.4% in 9M FY24). Excluding the exceptional gain, the PAT margin contracted by 17 bps YoY to 6% and consolidated PAT margin contracted by 27 bps YoY to 7.1%.

ROCE

The return on capital employed was increasing from FY17, but in FY20 and FY21 it de-grew due to decline in EBIT on account of decline in overall sales, operating loss in the natural gas marketing segment and lower operating profit in LPG and liquid hydrocarbons. In FY22, the ROCE improved to 23.7% on account of increase in PBIT. The growth in PBIT was mainly driven by natural gas marketing, LPG & liquid hydrocarbons and city gas distribution segment. In FY24, the ROCE improved to ~15% because of higher PBIT.

ROE The return on equity has been increasing continuously from FY17 because of increase in net profit. In FY21, it reduced because of decline in net profit. The profit was impacted because of Covid impact in business segments. In FY24, the return on equity improved to ~14% on account of higher net profit.

#Company #Outlook

The management expects the average gas transmission volume of 129-130 mmscmd in FY25. The growth would be primarily driven by fertilizer plants, refineries and city gas distribution (CGD) entities. • In the next 2-3 years, the management anticipates to grow its gas transmission volume by ~10 mmscmd on a YoY basis. • In the gas marketing business, the management continues to maintain its EBITDA guidance of ~₹4,500 cr in FY25. Including the exceptional income, it expects ~₹7,000 cr in FY25. In 9M FY25, the company already achieved an EBITDA (including exception income) of ~₹6,128 cr. • In the petrochemical business, the management expects to generate reasonable profit before tax in FY25. The company further plans to optimize its sourcing to increase the bottom-line of the petrochemical business. • The increase in LPG transmission tariff by Petroleum and Natural Gas Regulatory Board (PNGRB) will increase profit before tax (PBT) by ~₹120 cr on an annual basis. The new tariff will increase the cost per tonne by 3.4%. • Going forward, the company expects volume growth of more than 10% in the city gas distribution business. The growth would be led by expansion in new geographical areas. • The company has successfully implemented unified tariff w.e.f. 1st April 2023 which would help in improving the gas consumption in distant areas. • The board approved laying of C2/C3 liquid pipeline from Vijaipur to Auraiya having estimated project cost of ₹1,792 cr with commissioning period of 32 months. The project will augment feedstock availability with additional polymer production at Pata petrochemical complex and shall lead to reduction in energy consumption and carbon footprint. • GAIL plans to source 7-8 MTPA of additional natural gas for its portfolio. In this regard, the company signed a contract for 1 MTPA which is going to be available from CY26. The company is also in advance stage of discussion with various suppliers.

The 500 kilo tons per annum (KTPA) propane dehydrogenation & polypropylene project (PDH-PP) plant at Usar, Maharashtra is expected to be completed by April 2025. The company expects the commercial production by October 2025. The total project cost is ₹11,256 cr. • The 60 KTPA polypropylene project (PP) at Pata, Uttar Pradesh is expected to be completed by December 2024. The total project cost is ₹1,299 cr. • The 50 KTA isopropanol unit (IPA) at Usar project cost is ₹530 cr. The completion date is 24 months after licenser selection. Currently, the company is in the process of selecting the licenser. • GAIL is exploring possibilities for expanding its footprint in renewable energy sector. • The Gail Mangalore Petrochemicals Limited (earlier known as JBF Petrochemicals Limited) with a capacity of 1,250 KTPA is expected to be completed by June 2025. The project cost is ₹4,200 cr. • The company is targeting to set up 26 compressed bio gas plants across India in the next 3-4 years • GAIL has entered into long-term LNG agreements with M/s Vitol Asia Pte Limited and M/s Adnoc LNG for an aggregate volume of ~1.53 million metric tonnes per annum (MMTPA) starting 2026. • During the year, GAIL signed an agreement with Bharat Petroleum Corporation Limited (BPCL) for a 15 year supply of propane for upcoming petrochemical plant at Usar in Maharashtra. • GAIL is setting up 10-megawatt (MW) electrolyser for production of Hydrogen in Vijaipur. • In the next two years, GAIL targets to add ~80 new CNG stations and ~1,20,000 new domestic-PNG connections.

Gail 120-155
Expected level 200
Support 95

Good morning

Hero MotoCorp Company Details Report

Hero MotoCorp is the dominant leader in the domestic market with an overall market share of 30.9% in FY24 in the Indian two-wheeler segment, while 43.2% share in the Indian motorcycles segment. Hero Moto Corp has a wide distribution and service network spread throughout the country. The company has eight manufacturing facilities across the globe including Colombia and Bangladesh and assembly lines in several other countries i.e., in Africa and Latin America with a combined installed capacity of ~94.5 lakh units of two-wheelers per annum. It has recently entered two new global destinations that includes Brazil and South East Asia. The company has developed capabilities with a pre-eminent R&D ecosystem in India and Germany. It has over 10,000 customer touchpoints across the globe. Hero MotoCorp is strategically expanding by focusing on parts, accessories, and merchandise (PAM) offerings. Its portfolio now includes oil, bike care products & accessories and aligning merchandise offerings. It entered into a partnership with USA-based Zero Motorcycles to develop premium electric motorcycle range. In the Practical segment it has models like HF deluxe, HF 100, Splendor+, Splendor+ Xtec; Executive segment comprises Passion Pro, Passion XTEC, Super Splendor, Super Splendor XTEC, Glamour XTEC, and Glamour Canvas; Performance segment includes Xtreme 125R, Xtreme 160R, Xtreme 200S 4V, Xpulse 200 4V, Xpulse 200 4V Rally Edition, Mavrick 440, and Karizma XMR; Scooters include Destini 125 XTEC, Destini Prime, Pleasure+ XTEC, and XOOM; and Electric vehicle space constitutes scooters like Vida V1 Pro and Vida V1 Plus. In Q2 FY25, it launched Hero Glamour with new features and color options, Mavrick 440 Thunderwheels, a limited edition motorcycle in collaboration with Thums Up, Hero Xtreme 160R 2V 2024 and unveiled the New Hero Destini 125 Scooter. Additionally, it has a separate portfolio of motorcycles and scooters for global operations along with motorcycle portfolio range through Harley Davidson. It collaborated with Harley Davidson in October 2020 and as per the distribution partnership, Hero MotoCorp has commenced the sale and service of Harley-Davidson motorcycles in India through a network of brand-exclusive Harley-Davidson dealers. Hero MotoCorp also sells Harley Davidson parts & accessories, general merchandise riding gear and apparels.

#SALES #GROWTH

In FY24, net sales increased by 10.6% YoY to ₹37,789 cr, supported by a ~6% volume growth, with 56.2 lakh units (of which sale in international markets were 2,00,923 units) sold during the year. Domestic market performance was strong, driven by rural demand and a robust festive period. The growth can also be attributed to better product mix backed by strong sales of Karizma XMR and Harley Davidson X440. The parts and merchandise (PAM) business continued to grow substantially and posted doubledigit increase in the past two-three years. For FY24 sales from the same stood at ~₹5,387 cr. In 9M FY25, the net sales was ₹30,963 cr v/s ₹28,172 cr in 9M FY24, and increased by 9.9% YoY. Of this, PAM segment constituted ~₹4,287 cr v/s ₹3,990 cr in 9M FY24. It sold 45.2 lakh units as compared to 42.3 lakh units in 9M FY24, an increase of 7% YoY. In the international market, it sold 1.8 lakh units. The rural sales outpaced urban sales for the company.

#EBITDA #GROWTH

In FY24, EBITDA increased by 30.7% YoY to ₹5,350 cr. The expansion has been owing to softening of raw material cost, price hikes and cost control measures adopted by the company. In 9M FY25, the EBITDA stood at ₹4,505 cr as compared to ₹3,957 cr and increased by 14% YoY. This was on account of favourable raw material prices, better product mix and cost saving initiatives.

#PAT #GROWTH

In FY24, net profit increased by 38.1% YoY to ₹3,862 cr, driven by a rise in other income, decline in finance costs, and an enhancement in operating profits. PAT includes an impact of exceptional item as during Q1 FY24, it introduced a voluntary retirement scheme (VRS) and provided ₹160 cr for employees who have accepted to be part of VRS. In 9M FY25, the net profit was ₹3,439 cr v/s ₹2,845 cr in 9M FY24, an expansion of 24.5% YoY. This was led by increase in operating profits.

#EBITDA #MARGIN

In FY24, the EBITDA margin increased by 218 bps and stood at 14.2% on account of better product mix, favorable raw material prices and price hikes. In 9M FY25, the EBITDA margin stood at 14.5%, up from 14% in 9M FY24. The ICE portfolio achieved an EBITDA margin of ~16%, driven by an improved product mix, lower material costs, and LEAP savings initiatives. Investments in the EV portfolio and brandbuilding efforts contributed to the current EBITDA margin levels.

#PAT #MARGIN

PAT margin grew to 10.1% for the year majorly owing to rise in other income and decline in finance cost. In 9M FY25, the PAT margin was 11.1% v/s 10% in 9M FY24.

#COMPANY #POTENTIAL

• As per the SIAM data, two-wheeler industry (domestic) recorded sale of 1,79,74,365 units in FY24 v/s 1,58,62,087 units in FY23 and exports was 34,58,416 units in FY24 as compared to 36,52,122 units in FY23. Key factors that led to this growth were festivals & a robust marriage season, new launches and rise in purchasing power. • In 9M FY25, the two wheelers industry sales was 1,50,39,570 units v/s 1,34,70,570 units in 9M FY24 showcasing an increase of 11.6% YoY. In CY24 (Jan-Dec 2024) the two wheeler industry (domestic) reported sales of 1.95 cr units of which, of which scooters sales was 66.8 lakh units, motorcycles at 1.2 cr units and mopeds at 5.2 lakh units v/s 1.71 cr units in CY23, of which scooters constituted 55.7 lakh units, motorcycles 1.1 cr units and mopeds at 4.7 lakh units. In Q3 FY25, the two wheeler industry sales was 48.8 lakh units v/s 47.3 lakh units in Q3 FY24, a rise of 3.2% YoY. (Source: Siam) • India exported 34.6 lakh units of two-wheelers in FY24, which was a decline of 5.3% YoY. For 9M FY25, the two-wheeler exports showcased steady growth. • The EV sales in FY24 was 9,44,126 units v/s 7,28,054 units in FY23. The penetration of EV two-wheelers for the year FY24 stood at ~5%. The sales during 9M FY25 was ~7.8 lakh units v/s ~6.4 lakh units in 9M FY24. (Source: SMEV) • In 2023, the global two-wheeler market was valued at $116.82 billion in 2023 and is projected to grow to US$123.54 billion in 2024 and US$215.96 billion by 2032.

Hero MotoCorp Limited 3200-3550
Expected level 4200
Support 2900

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Nilkamal Limited Company Details Report

Nilkamal Limited is engaged mainly in
the business of furniture & home solutions, mattress, material handling solutions and allied products. It is an industry leader in the moulded furniture and material handling products with diversified product portfolio. The company caters to different industries and a large customer base including household customers, industrial customers and retail buyers. In Q3 FY25, the company has rebranded its retail division into 'Nilkamal Homes' under mother brand of 'Nilkamal’. It revised the segment disclosures to Business to Business (B2B) and Retail & e-commerce. B2B segment includes sales to industrial customers and channel partners. Retail includes sales to customer from stores operating under Nilkamal brand and e-commerce. The company is also present in the mattress and bubble-guard business, which is relatively smaller in size. The company's manufacturing plants are located at Barjora (West Bengal), Bhiwandi and Sinnar (Maharashtra), Dharuhera (Haryana), Hosur (Tamil Nadu), Jammu (Jammu and Kashmir), Kharadpada and Vasona (Union Territory of Dadra and Nagar Haveli), Noida (Uttar Pradesh) and Puducherry (Puducherry). It has 1,100 distributors, 20,000+ dealers and 42 depots across India. Brand Nilkamal has created waves not only in India, but also in the international markets. From developed and sophisticated markets of North America and Australia, to developing markets in Africa, South America and Gulf Cooperation Council (GCC), Nilkamal products are available in as many as 30 countries.

#SALES #GROWTH

In FY24, the sales grew by 2.1% YoY to ₹3,196 cr. The growth was mainly driven by 3% growth in plastic business. The @home business declined YoY due to drop in footfall at its physical stores. Under plastic business, the racking business reported degrowth YoY due to slump in demand from its large e-commerce customers along with the delay in civil projects of lndustrial customers. The mattress business reported sales of ₹125 cr (v/s ₹122 cr in FY23). The sales from e-commerce business grew by 22% YoY to ₹144 cr. In 9M FY25, the sales grew by 2.4% YoY to ₹2,419 cr (v/s ₹2,362 cr in 9M FY24). Segment wise, the business to business (B2B) segment grew by 4% YoY to ₹2,149 cr while, the retail & e-commerce segment declined by 8% YoY to ₹269 cr. In Q3 FY25, the sales grew by 6.3% YoY to ₹854 cr led by B2B segment. In value term, it grew by 8% YoY while in volume term, it declined by 1% YoY. The mattress business grew by 46% YoY to ₹34 cr.

#EBITDA #GROWTH

In FY24, the EBITDA declined by 6% YoY to ₹290 cr. During the period, the decline in raw material prices was partly offset by an increase in employee benefit expense and other expenses. On the operating front, plastic segment declined by 2% YoY to ₹206 cr and the @home segment reported loss of ₹7.6 cr (v/s profit of ₹5.8 cr in FY23). The key raw materials used for moulded plastics are high-density polyethylene (HDPE) and polypropylene (PP). The prices of these raw materials are linked with the crude oil price. In 9M FY25, the EBITDA declined by 5.6% YoY to ₹197 cr due to increase in employee benefit expense and other expenses. Other expenses was higher due to increase in advertisement and sales promotion. In Q3 FY25, the advertisement and sales promotion expense stood at ₹30.9 cr (v/s ₹19.4 cr in Q3 FY24).

#PAT #GROWTH

In FY24, the PAT declined by 10% YoY to ₹113 cr. During the year, other income increased to ₹13.3 cr (v/s ₹11 cr in FY23). The effective tax rate during the year was at 25.2% as compared to 25.4% in FY23. The share of profit of joint venture company, i.e., Cambro Nilkamal Private Limited increased by 20% YoY to ₹9.3 cr in FY24 from ₹7.7 cr in FY23. In 9M FY25, the PAT declined by 17% YoY to ₹66 cr. The share of profit of joint venture company stood at ₹6.5 cr (v/s ₹7.2 cr in 9M FY24). Nilkamal continued its focus on the three key verticals i.e., moulded furniture, ready furniture and mattress business by leveraging the strength of its distribution network and synergizing the logistics & marketing efforts.

#EBITDA #MARGIN

In FY24, the EBITDA margin contracted by 76 bps YoY to 9.1%. During the year, the company witnessed decline in raw material prices which improved the gross margin by 243 bps YoY to 42.2%. However, this was partly offset by increase in employee benefit expense and other expenses as a percentage of sales. The company’s cost of material consumed constitutes ~45% of the total expenses followed by other expenses ~28%, purchase of stock in trade ~18%, and employee benefits expense ~9%. In 9M FY25, the EBITDA margin contracted by 69 bps YoY to 8.2%. Segment wise, the B2B business reported operating margin of 6.9% as compared to 7.3% in 9M FY24. The retail & E-commerce business continued to report operating loss.

#PAT #MARGIN

In FY24, the PAT margin contracted by 49 bps YoY to 3.5%. The consolidated PAT margin including the share of profit of JV contracted by 45 bps YoY to 3.8%. In 9M FY25, the PAT margin contracted by 64 bps YoY to 2.7%. The consolidated PAT margin including the share of profit of JV contracted by 68 bps YoY to 3%.