#COMPANY #OUTLOOK

• The construction of Hosur plant is in full swing. This plant is for manufacturing foam, mattress, ready furniture and sofa at a cost of ~₹150 cr. The commercial production at Hosur plant is expected to commence in Q4 FY25. This will enable the company to strengthen its position for becoming one stop furniture destination for its B2C segment. • The rigid packaging commenced production at Puducherry during the quarter. • The company will continue its investment in branding exercise including celebrity led endorsement and deepening its market presence by on-boarding new channel partners including large furniture outlet (LFO). • The company has widened its retail presence to 1,555 LFO (Large Format outlet)/MBO (Multi-Brand Outlet)/EBO (Exclusive Brand Outlet) at the end of Q3 FY25. It includes net addition of 487 In Q3 FY25. • The trial production of state-of-the-art continuous slab stock Polyurethane Foam line shall take place in FY24-25. The foam shall be company’s backward integration into mattresses & Sofas. It shall foray into manufacture technical foam for use in automotive, acoustics, footwear, leatherette backing and filter applications. At the same site, highly automated Panel processing line with the capacity of 700K boards will be installed in current financial year. • In mattress business, the company expects high growth with wide-ranging product availability, branding and increase in channel partners along with commencement of in-house production of foam during FY25. • Further, the company shall invest ~₹100 cr in its plastics and racking business. • In view of the current scenario and fast changing retail environment, the company is focusing on strengthening its E-commerce presence with better supply chain measures, warehousing and depots. • In October 2024, the company rebranded its retail vertical to "Nilkamal Homes" merging @home and Nilkamal Furniture Ideas stores into one single retail identity.

Nilkamal 1450 -1555
Expected level 1900
Support 1379

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Adani Ports Company Details Report

Adani Ports and Special Economic Zone Limited is the largest port developer and operator in India with 7 strategically located ports and terminals on the West coast (Mundra, Tuna, Dahej, and Hazira in Gujarat, Mormugao in Goa, Dighi in Maharashtra and Vizhinjam in Kerala) and 8 ports and terminals on the East coast of India (Haldia in West Bengal, Dhamra and Gopalpur in Odisha, Gangavaram and Krishnapatnam in Andhra Pradesh, Kattupalli and Ennore in Tamil Nadu and Karaikal in Puducherry), representing more than 26% of the country's total port volumes. The company is also developing a transshipment port at Colombo, Sri Lanka, and owns the Haifa Port in Israel. The port facilities are equipped with the latest cargo-handling infrastructure and offer handling services for all kinds of cargos from dry cargo, liquid cargo, crude and containers. Apart from its port operations, APSEZ is the approved developer of a multi-product SEZ at Mundra, Dhamra and Kattupalli and its surrounding areas. Through its subsidiary, Adani Logistics Ltd., APSEZ operates 132 trains, 12 MMLP (Multi Modal Logistics Park), 1.2 MMT (million metric tonne) of Grain Silos, 2.4 mn sq. ft. of ware-housing, 690 kms of rail tracks and 936 trucks as on 31st December 2024. The company’s integrated services across three verticals, i.e. Ports, Logistics and SEZ, has enabled it to forge alliances with leading Indian businesses making APSEZ an undisputed leader in the Indian port sector. The company has 161 subsidiaries and 27 joint ventures as on 31st December 2024.

#SALES #GROWTH 5 Year CAGR19.6%

In FY24, the sales grew by 28% YoY to ₹26,711 cr led by growth in ports (both domestic and international) and logistics businesses. The ports total cargo volume grew by 24% YoY to 419.9 MMT and revenue grew by 30% YoY to ₹24,124 cr led by growth in the economy. During the year, the domestic cargo volume stood at 408.4 MMT and international cargo volume at 11.5 MMT. In logistics business, the container volume grew by 18% YoY to 10.4 mn TEUs and revenue grew by 19% YoY to ₹2,079 cr. In 9M FY25, the sales grew by 14% YoY to ₹22,590 cr. The sales includes ₹603 cr gain on divestment of 49% equity stake of Adani ennore container terminal private limited. Excluding this, the sales grew by 11% YoY to ₹21,987 cr led by 12% YoY sales growth in port business, 22% YoY sales growth in logistics business. The SEZ & port development business reported sales of ₹798 cr (v/s ₹362 cr in 9M FY24). The port cargo volumes grew by 7% YoY to 332.5 MMT primarily driven by 19% YoY.

#EBITDA #GROWTH 5 Year CAGR 19.0%

In FY24, the EBITDA grew by 44% YoY to ₹15,751 cr. The absolute EBITDA (excludes forex loss of ₹113 cr in FY24 vs. forex loss of ₹1,886 cr in FY23) grew by 24% YoY to ₹15,864 cr. Foreign exchange loss was due to mark-to-market adjustment on dollar denominated debt. Segment wise, the port business (both domestic and international) EBITDA grew by 26% YoY because of an increase in cargo volume & operational efficiencies and the logistics business EBITDA grew by 11% YoY. In 9M FY25, the EBITDA grew by 18% YoY to ₹13,831 cr. Excluding the gain on divestment, the EBITDA grew by 13% YoY to ₹13,228 cr. Segment wise, the port business (both domestic and international) EBITDA grew by 13% YoY and the logistics business EBITDA grew by 6% YoY. The SEZ & port development EBITDA increased to ₹731 cr (v/s ₹60 cr in 9M FY24).

#PAT #GROWTH 5 Year CAGR 15.4%

In FY24, the PAT grew by 55% YoY to ₹8,266 cr. During the year, the company reported exceptional loss of ₹374 cr (v/s ₹1,273 cr in FY23). Exceptional loss of FY24 includes expenses of ₹215.9 cr incurred with regards to one time settlement (Voluntary Retirement Plan) opted by employees of one of the foreign subsidiaries and reclassification adjustment pertaining to transfer of foreign currency translation reserve amounting to ₹157.8 cr from other comprehensive income to profit and loss account as per requirement of Ind AS framework. Exceptional loss of FY23 was due to an impairment generated by sale of Myanmar port asset. In 9M FY25, the PAT grew by 30% YoY to ₹8,065 cr. Excluding the gain on divestment, exceptional item and forex loss, the PAT grew by ~25% YoY to ₹7,875 cr. The growth was led by increase in operating profit and lower finance cost.

#EBITDA #MARGIN

In FY24, the EBITDA margin expanded by 647 bps YoY to 59%. The absolute EBITDA margin (excluding forex loss) contracted by 215 bps YoY to 59.4%. Segment wise, the domestic ports business EBITDA margin expanded by 151 bps YoY to 71.1% led by improved efficiencies and capacity utilization. The international port business margin expanded by 257 bps YoY to 10.8% supported by improved realization and operating efficiencies. The logistics business EBITDA margin contracted by 195 bps YoY to 26%. In 9M FY25, the EBITDA margin expanded by 207 bps YoY to 61.2%. Excluding the gain on divestment, the EBITDA margin expanded by 100 bps YoY to 60.2%. Segment wise, the domestic port business EBITDA margin expanded by 84 bps YoY to 72.4% led by improved efficiencies and capacity utilization. The logistics business EBITDA margin contracted by 375 bps YoY to 24.9%.

#PAT #MARGIN

In FY24, the PAT margin expanded by 532 bps YoY to 30.9%. The PAT margin excluding forex contracted by 330 bps YoY to 31.4%. Going forward, improvement in cargo volumes, increase in operating efficiency and capacity utilization in new ports will help in increasing the earning and improving the profit margin. In 9M FY25, the PAT margin expanded by 433 bps YoY to 35.7%. The PAT margin excluding the gain on divestment, exceptional items and forex loss expanded by 395 bps YoY to 35.8%.

#ROCE

In FY24, the ROCE improved to 13.3% because of increase in PBIT and decline in capital employed. Capital employed declined because of repayment of some long term borrowings. Port wise ROCE in FY24 are as follow: Mundra port 27%, Hazira port 20%, Dahej port 33%, Dhamra port 21%, Kattupalli port 7%, Krishnapatnam port 16%, and Gangavaram port 11%. The overall ROCE to improve going ahead supported by increasing contribution of maturing ports like Kattupalli and Dhamra which it acquired a few years back and the recent acquisition of Krishnapatnam, Dighi, Gangavaram Port, Haifa Port and Karaikal Port. Going forward, these ports will generate higher ROCE because of higher capacity utilization and expected improvement in operational efficiency.

#ROE

In FY24, the return on equity improved to 16.45% because of higher increase in profit. The newly acquired ports (Dighi port, Gangavaram port, Haifa port and Karaikal Port) will further improve the port business profit and improve the return ratios.

#COMPANY #POTENTIAL

• The port sector plays a crucial role in the country’s economic empowerment. According to the ministry of shipping, around 95% of India’s trading by volume and 70% by value is being carried out through maritime transport. (Source: Sagarmala, Ministry of shipping). • India is the sixteenth largest maritime country in the world, with a coastline of about 7,517 km. Most cargo ships that trade from East Asia to Europe, America, Africa pass through Indian territorial waters. • The Indian ports and shipping industry plays a vital role in sustaining growth in the country’s trade and commerce. India has 12 major and 205 notified minor and intermediate ports. Under the National Perspective Plan for Sagarmala, six new mega ports will be developed in the country. • The Indian government plays an important role in supporting the port sector. It has allowed Foreign Direct Investment (FDI) of up to 100% under the automatic route for port and harbour construction and maintenance projects. • It has also facilitated a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports.

#COMPANY #OUTLOOK

• The company expects cargo volume to be in the range of 460-480 MMT in FY25. The management target to meet annual cargo volumes of 1 billion tonnes by FY30. • In FY25, the management anticipates revenue of ₹29,000-₹31,000 cr. • In Q3 FY25, it increased its FY25 EBITDA guidance to ₹18,800-₹18,900 cr from the earlier guidance of ₹17,000-₹18,000 cr. • The company expects cargo volume of ~820-850 MMT from domestic market and ~140-150 MMT from international market by FY29-30. The international market volume growth would be led by Haifa port, Tanzania port and transshipment port at Colombo. • The company is focusing on new growth commodities like LPG (Liquified petroleum gas), LNG (Liquified natural gas) etc. In Dhamra LNG (Liquified natural Gas) terminal, the company expects volume of ~4-4.5 MMT in FY25. • The growth is expected to continue as Gopalpur port has started contributing significantly from October 2024. • In Q3 FY25, Vizhinjam port commenced commercial operations, post extensive trials. During the trial period, the port handled 70+ vessels and 147,000+ containers. • Colombo terminal received financing commitment of $553 million from the US International Development Finance Corporation (DFC). It is expected to commission before the end of current financial year. It holds 51% stake, John Keells Holdings owns 34% and the rest is held by state-run Sri Lanka Ports Authority. The container terminal at Colombo is still under construction. It is expected to commission by the end of this financial year. • It entered into a strategic partnership with Mediterranean Shipping Company (MSC) by forming a joint venture for Ennore Container Terminal.

Adani Port 1050-1190
Expected level 1500
Support 890

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Blue Star Limited Company Details Report

Blue Star Limited incorporated in 1943, headquartered in Mumbai, is a leading heating, ventilation, air conditioning and commercial refrigeration (HVAC&R) company, and a major player in the mechanical, electrical, plumbing, and fire-fighting (MEP) space with a network of 31 offices, 7 modern manufacturing facilities – 2 at Himachal Pradesh and one each at Dadra, Ahmedabad and 2 in Wada and one at Sri City. It has 4,120 channel partners. The Company has 7,500 stores for room ACs, packaged air conditioners, chillers, cold rooms as well as refrigeration products and systems, along with 1,172 service associates reaching out to customers in over 900 towns. The Wada plant has an installed production capacity of 3L deep freezers and 1L water coolers, while the Ahmedabad plant has a dedicated capacity for deep freezers of 1L units. The Wada plant also manufactures cold room panels, evaporating units, and condensing units. The Company’s integrated business model of a Manufacturer; Engineering, Procurement and Construction (EPC) services provider; and an after-sales service provider; not only enables the company to offer end-to-end solutions to its customers across building, industrial, and infrastructure segments, but also facilitates delivery of these offerings in an agile manner. It exports AC&R (air conditioning & refrigeration) products and Original Equipment Manufacturing (OEM)/Original Design Manufacturing (ODM) businesses for globally recognized brands such as Danfoss and Rheem and solutions to 19 countries across the Middle East, Africa, SAARC and ASEAN regions. Through its joint ventures in Qatar and Malaysia, the company also undertakes MEP projects for residential, commercial and infrastructure in those markets. The company is a market leader in the product categories of modular cold rooms, deep freezers and storage water coolers and estimates their market share, both the residential segment and institutional segment put together, to be 13.5%. In volume terms they are marginally higher than 10%, in value terms are at 13.75%. It crossed ten lakh units during FY24 in RAC segment.

Electro - Mechanical Projects and commercial air conditioning system – This business segment covers the design,manufacturing, installation, commissioning and maintenance of central air conditioning plants, packaged/ducted systems and Variable Refrigerant Flow (VRF) systems, as well as contracting services in mechanical works, electrification, plumbing and fire-fighting, and water distribution. It also comprises after-sales services such as revamp, retrofit and upgrades, which covers a wide repertoire of operation and maintenance services for efficient functioning of electro-mechanical utilities. Unitary Products – The company offers a wide variety of contemporary and highly energy-efficient room air conditioners for both residential as well as commercial applications. It also manufactures and markets a comprehensive range of commercial refrigeration products and cold chain equipment. Besides, the company has water purifiers, air purifiers and air coolers in its product portfolio. This segment is seasonal in nature. Professional Electronics and Industrial Systems – Exclusive distributor in India for many internationally renowned manufacturers of professional electronic equipment & services, as well as industrial products and systems. This business is managed by the company’s wholly owned subsidiary, Blue Star Engineering & Electronics Limited.

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Lemon Tree Hotels Company details report

Lemon Tree Hotels (LEMONTRE) reported strong revenue growth of 23% YoY in 3QFY25, led by significant improvement in occupancy (OR) to 74.2% (up 830bp YoY) and healthy growth in ARR (up 7% YoY). OR improvement was primarily led by the ramp-up of Aurika Mumbai. Further, operating leverage resulted in an EBITDA margin improvement of 350bp YoY.  With a robust performance in 9MFY25 (revenue up 23%), we expect FY25 to end on a strong footing with healthy performance in 4Q. The continuous ramp-up of Aurika Mumbai and favorable demand-supply dynamics coupled with renovations (boosting ARR and OR) will be the key drivers.  We broadly maintain our FY25/FY26/FY27 EBITDA estimates and reiterate our BUY rating on the stock, with an SoTP-based TP of INR190 for FY27.

Revenue grew 23% YoY to INR3.6b (in line), and occupancy rose 830bp YoY to 74.2%, reflecting the ongoing ramp-up at Aurika Mumbai and higher ARR of INR6,763 (up 7% YoY). Management fees increased 23% YoY to INR184m.  EBITDA rose 32% YoY to INR1.8b (in line). EBITDA margin expanded 350bp YoY to 52% (est. ~50.3%) driven by favorable operating leverage. Adj. PAT increased 71% YoY to INR625m (est. INR664m).  During the quarter, LEMONTRE signed 13 new management and franchise contracts, which added 766 new rooms to its pipeline, and operationalized one hotel, which added 38 rooms to its portfolio.  As of 31st Dec’24, the total operational inventory comprised 112 hotels with 10,317 rooms, and the pipeline comprised 88 hotels with 6,068 rooms.  In 9MFY25, revenue/EBITDA/adj. PAT grew 23%/24%/37% YoY to INR9b/ INR4.3b/ INR1.1b.

Highlights from the management commentary

 Guidance: The company expects mid-teen RevPAR growth through optimizing ARR and occupancy. It is also targeting to reach 20,000 rooms (operational and pipeline) ahead of FY27, i.e., within 12 to 15 months vs. the current 16,385 rooms (operational – 10,317; pipeline – 6,068).  Aurika: The company expects Aurika Mumbai to stabilize by 2HFY26, with ARR reaching ~INR11.5-12.5k and occupancy stabilizing over 85%. The hotel is already doing ARR/OR of ~INR9,500/85% in Jan’25. Additionally, the company is close to signing Aurika in Varanasi, which is expected to have an ARR five times higher than the other Aurika properties.  Aurika Shillong: LEMONTRE received a Letter of Award from the Directorate of Tourism, Government of Meghalaya, to redevelop Shillong’s Orchid Hotel as Aurika under a PPP model, featuring 120 rooms. The company will invest INR1.2b for all 120 rooms supported by a 5% interest subvention. It received the land for a 1% revenue share plus INR10-20m annually. The initial annual EBITDA from this hotel is expected to be ~INR150m.