Disciplined capital allocation, risks, and mitigation strategies

 GALSURF’s capital allocation philosophy is rooted in prudence and a strong focus on long-term shareholder value. From FY25 to FY30, the company plans to allocate 50-60% of its operational cash flows to organic growth opportunities, including capacity expansions and digital upgrades. It has earmarked 15% for dividend payouts, balancing growth and returns. The remaining capital will be reserved for strategic acquisitions and partnerships, in line with the Vision 2030 roadmap.  Historically, GALSURF’s capex has delivered strong returns—with RoCE of 1624% in prior investment cycles, validating its ability to scale profitably. Key investments in Taloja, Gujarat, Egypt, and the US have created a globally competitive manufacturing and innovation backbone.  GALSURF operates in a dynamic industry with several evolving risks. Inflation and raw material cost volatility could lead to downtrading by consumers and exert margin pressures. The slower funding environment for D2C brands, particularly in developed markets, may affect the scale-up of niche product lines. Additionally, regulatory tightening and delays in new product approvals pose challenges.  To mitigate these risks, the company relies on its diverse market base, broad product portfolio, and proactive approach to regulatory compliance and customer engagement. Its focus on sustainability, digital enablement, and robust supply chains ensures it remains agile and resilient.

Valuation and view

 We believe that going forward, volume growth will be driven by the company’s steady focus on R&D (with an annual expenditure of INR400-500m), increased wallet share from its existing customers, and acquisition of new customers. Margin is also likely to expand gradually with an increase in the volume of premium specialty products.  We estimate a volume CAGR of 6% over FY25-27, driven by improving volumes in the Specialty Care segment across developed markets and a recovery in demand, albeit gradual, from rural and urban markets in India. The stock is currently trading at ~22x FY27E EPS of INR106 and ~14x FY27E EV/EBITDA. We value the company at 30x FY27E EPS to arrive at a TP of INR3,180. We reiterate our BUY rating on the stock.

Galaxy Surfactants Limited 2200-2500
Expected level 3000
Support 2050

Good morning

Jindal Stainless Company Details Report

Jindal Stainless Ltd is one of the largest manufacturers of Stainless Steel flat products, in Austenitic, Ferritic, Martensitic and Duplex grades in India used in a variety of industries like automobile, railways, construction, consumer goods etc.

Products and Applications

The Co is the largest manufacturer of stainless steel in 200, 300, 400 and duplex stainless steel series. The product range includes Ferro Alloys, Steel Slabs, Hot Rolled Coils, Cold Rolled Coils, Steel Plates etc.

Applications:
Architecture,Building & Construction - Roofing, Cladding, Paneling
Automobile and Transport - Exhaust, Brakes, Fuel Tanks
Railway - Coaches, Wagons, Metro
Consumer Durables - Kitchen applications, bathroom accessories
Process industry - Boilers, Water tanks, Pumps for the food and chemical industry

Strategic expansions to propel growth:

 JSL is investing INR57b to expand its upstream capacity, enhance downstream operations and diversify its product mix via 1.2mtpa steel metal shop (SMS) JV in Indonesia, which will increase its total capacity by 40% to 4.2mtpa by FY27E.  JSL is expanding its downstream operation in Jajpur and has acquired JUSL (hot 3.2mtpa and cold 0.2mtpa rolling capacity) to cater to 1.2mtpa incremental upstream capacity in Indonesia JV.  For product diversification, JSL has acquired Rathi Super Steel (RSSL) and Rabirun Vinimay (RVPL) to cater to infra demand. It has also acquired Chromeni Steels (0.6mtpa with plan to expand till 4mtpa) to increase CR share to 75% (vs. 45% currently)

Focus on cost savings via backward integration:

 Nickel accounts for ~50% of its input costs, making it a critical raw material for stainless steel (SS) production. India lacks domestic reserves and mainly relies on imports (ferronickel/SS scrap).  JSL has entered into a JV with New Yaking Pte Ltd for a nickel pig iron (NPI) smelter in Indonesia (49% stake) to secure long-term supply. This will ensure annual supply of 0.2mt NPI with 14% nickel content and reduce its exposure to nickel price fluctuations.

Downstream acquisition to support incremental melt capacity

 Jajpur capacity: To accommodate the increase in melting capacity, JSL plans to invest ~INR19b in downstream (CRAP/HRAP) capacity expansion at its existing capacity in Jajpur. In addition, INR12b will be spent on upgrading infrastructural facilities, railway siding, and sustainability-related projects like renewable energy.  Integrating JUSL operations: JSL acquired 74% of JUSL for a cash consideration of INR9.6b, making it a 100% owned subsidiary. JUSL operates a 3.2mtpa hot strip mill and a 0.2mtpa cold rolling mill, expanding JSL’s downstream capacity and catering to the incremental melting capacity.  Product diversification strategy via acquisition of RSSL and RVPL: JSL is predominantly a flat steel manufactured with limited exposure to the infra sector (~3-5%). However, with the acquisition of RSS and RVPL, the company aims to increase its operations in the infra space, which contributes ~20% of India’s total SS demand. RSSL is currently operating at 75% utilization, focusing on rebar with rolling capacity of 0.16mtpa. The company plans to reach 0.20mtpa in the next two to three years. RVPL has a downstream capacity of 50ktpa for pipes and tubes with an expansion potential of up to 250ktpa. Currently, the RVPL facility is being used for polished VAPs.

Strategic expansion to strengthen global leadership
JSL’s three-pronged investment strategy, totaling INR57b, focuses on capacity expansion, downstream enhancement, and diversification: The investment (~INR57b) will increase the consol. installed capacity by 40% to ~4.2mtpa by FY27 from ~3mtpa currently. With the completion of ongoing capex, JSL is set to become one of the top five SS manufacturers globally. A) Indonesia JV a low-cost investment vs. greenfield expansion  JSL has entered into a JV to set up and operate a 1.2mtpa SMS in Indonesia, which is progressing well and expected to be commissioned by mid-FY26. This will increase JSL’s total melting capacity by 40% to 4.2mtpa. The total capex outlay is expected to be ~INR14.5b, with JSL’s share at ~INR7.1b, which translates into ~USD143/t as compared to global average of ~USD220-230/t for an equivalent greenfield expansion globally.

Volume growth with enhanced margins to drive earnings

 The merger with promoter holding company, strategic JVs, and acquisition of key assets have resulted in increased capacity, enhanced backward integration, and downstream product diversification/value addition.  We believe these measures will help JSL deliver a 10% CAGR in volumes and 4% CAGR in NSR over FY25-27, driving a similar 14% CAGR in revenue. With a better cost structure and higher share of value-added products (VAP), we anticipate EBITDA/t of INR20,500 to INR22,000 over FY26-27E.  With stable capex intensity and healthy OCF of INR62b during FY26-27E, we believe JSL’s net debt will remain at a comfortable level and JSL would comfortably fund the ongoing capex.

Valuation and view

 The SS industry is poised for strong growth as India’s SS consumption is expected to reach 7.3mt by FY31 and 12.5-20mt by 2047, backed by rising adaptability across sectors like infrastructure projects, manufacturing, automotive, consumer durables, and growing new-age sector. We believe JSL is well placed to realize this robust demand outlook, with higher VAP supporting margins.  From being solely a flat SS producer to a diversified long SS player, JSL has expanded into rebar, wire rods, and others, unlocking significant infrastructure opportunities. Additionally, its focus on value-added CR SS has strengthened its position in both domestic and export markets.

Jindal Stainless Limited 570-670
Expected level 860
Support 500

4300+💥Long term level hit

2782🚀Long term level hit Jackpot

Good morning

Bajaj Auto Limited company details report

Bajaj Auto Limited is the world’s leading manufacturer & seller of motorcycle, three-wheeler & quadricycle. The company holds a market share of 18% in the motorcycle segment (Source: Siam). Till date, it exports to over 90 countries. The company operates manufacturing plants in Waluj, Chakan, and Pantnagar, with a total annual capacity of 71.1 lakh units, including 9.3 lakh commercial vehicles. Towards, the two-wheeler space, in the 100-110cc segment, the company holds a 10% market share with its CT and Platina brands. In the 125cc and above category, which includes Pulsars, Dominars, KTMs, Husqvarnas, Avengers, and Triumphs, it commands a 24% market share. Following years of collaboration, Bajaj Auto launched two new Triumph models, the Speed400 and Scrambler400X. These modern classics cater to the large bike segment. The distribution network for Triumph in India has expanded to 78 showrooms across 56 cities. Bajaj Auto's Probiking division focuses on KTM and Husqvarna motorcycles, offering models in 125cc, 200cc, 250cc, and 390cc categories nationwide. It has reintroduced its scooter as an electric vehicle under the Chetak brand, now available across over 4,000 touch points. In the electric vehicle space, the company’s portfolio includes four models: Chetak 3501, Chetak 3502, Chetak 3503 and Chetak 2903. In the three wheeler space, the company continues to enjoy by far the dominant market share in ICE category. It recently introduced electric three wheelers in passenger and good carrier segment. Electric three wheelers is currently sold in over 60 cities in India. BACL (Bajaj Auto Credit Limited) received RBI’s certificate to operate as NBFC in Aug 2023, and thereby it commenced business on 1st January 2024. The company has two Indian subsidiaries, viz. Chetak Technology Ltd. and Bajaj Auto Credit Ltd. and five overseas subsidiaries, viz. PT Bajaj Auto Indonesia, Bajaj Auto International Holdings BV, Netherlands, Bajaj Auto (Thailand), Bajaj Auto Spain, S.L.U. and in Spain.

Revenue mix

Sales Volume year wise

#SALES #GROWTH

In FY25, the net sales was ₹50,995 cr and increased by 13.7% YoY. It sold 39.8 lakh units of two wheelers (23.1 lakh units in domestic an increase of 3% YoY and 16.7 lakh units in export market and rose by 13% YoY) and 6.7 lakh units of commercial vehicles (4.8 lakh units in domestic market and grew by 3% YoY and 1.9 lakh units in export market and expanded by 19% YoY). Revenue from exports grew by ~8% YoY. On a YoY basis, Chetak (EV) recorded revenue of ~₹5,500 cr and saw an increase of ~900 bps in its market share. In FY24, the net sales of the company was reported at ₹44,870 cr (of which exports was ₹14,575 cr) a rise of 23% majorly attributed to robust domestic sale in two-wheelers and three wheelers. Two wheelers (domestic) posted sale of 22.5 lakh units (~24% increase) followed by three-wheelers sale of 4.6 lakh units. Exports de-grew by 10% for twowheelers to 14.8 lakh units and by 11% YoY for threewheelers to 1.6 lakh units. Chetak sales was ~1.2 lakh units.

#EBITDA #GROWTH 5 Year CAGR15.5%

In FY25, the EBITDA was ₹10,468 cr and grew by 19.5% YoY. This was led by better product mix, favorable raw material cost, improved dollar realization and operating leverage benefits. Bajaj Auto demonstrated an EBITDA increase of 35.8% YoY and stood at ₹8,762 cr in FY24. This rise was owing to softening of raw material prices, better product mix and operating leverage benefits. Besides, there were certain cost control measures adopted by the company which augured well for EBITDA growth as well.