#PAT #GROWTH 5 Year CAGR: 30.2%
In FY25, PAT increased by ~64% YoY and stood at โน550 cr. However, adjusting for the loss in share of associates the net profit grew by 79% to โน600 cr. Other income increased by 29% YoY, on account of gain on investments. In Q1 FY26, PAT increased by 34.6% YoY to โน153.5 cr, on account of increase in other income due to gain on investments. However, adjusting for the loss in share of associates the net profit grew by 33.9% to โน167.6 cr.
In FY25, PAT increased by ~64% YoY and stood at โน550 cr. However, adjusting for the loss in share of associates the net profit grew by 79% to โน600 cr. Other income increased by 29% YoY, on account of gain on investments. In Q1 FY26, PAT increased by 34.6% YoY to โน153.5 cr, on account of increase in other income due to gain on investments. However, adjusting for the loss in share of associates the net profit grew by 33.9% to โน167.6 cr.
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#EBITDA #MARGIN
In FY25, EBITDA margin was ~37.7%, a significant expansion on a YoY basis due to organic operating leverage, certain cost optimisation initiatives, and saving due to lower customer acquisitions. With pickup in customer acquisitions, margins are expected to normalize. In Q1 FY26, the EBITDA margin contracted by 19 bps YoY to 35.9%, due to increase in advertisement spends.
In FY25, EBITDA margin was ~37.7%, a significant expansion on a YoY basis due to organic operating leverage, certain cost optimisation initiatives, and saving due to lower customer acquisitions. With pickup in customer acquisitions, margins are expected to normalize. In Q1 FY26, the EBITDA margin contracted by 19 bps YoY to 35.9%, due to increase in advertisement spends.
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#PAT #MARGIN
In FY25, PAT margins stood at 39.7% as compared to 28.1% in FY24. However, adjusting for the loss in share of associates the PAT margin stood at 43.2%. In Q1 FY26, PAT margins stood at 41.3% as compared to 34.4% in Q1 FY25. However, adjusting for the loss in share of associates the PAT margin stood at 45%.
In FY25, PAT margins stood at 39.7% as compared to 28.1% in FY24. However, adjusting for the loss in share of associates the PAT margin stood at 43.2%. In Q1 FY26, PAT margins stood at 41.3% as compared to 34.4% in Q1 FY25. However, adjusting for the loss in share of associates the PAT margin stood at 45%.
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#ROCE
Since the company was reporting an EBITDA loss over FY14-18, hence ROCE was negative. However, from FY19 the company was able to turn profitable on account of strict cost control (primarily in the advertisement expenses). ROCE for FY25 improved on a YoY basis and stood at 36.4%, on account of improvement in operating profits.
Since the company was reporting an EBITDA loss over FY14-18, hence ROCE was negative. However, from FY19 the company was able to turn profitable on account of strict cost control (primarily in the advertisement expenses). ROCE for FY25 improved on a YoY basis and stood at 36.4%, on account of improvement in operating profits.
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#ROE
The ROE for the period improved to ~28.6%. The companyโs focus on sustaining the revenue growth by retaining customers and attracting more paying subscribers on board, along with various cost optimization drives would help aid the profitability. These would help the company remain a high ROE company as it is currently operating in the growth phase of a business cycle. A strong network effect has created circular value addition for the company. A higher number of buyers has translated into further inquiries, in turn leading to more suppliers and, hence, higher monetization.
The ROE for the period improved to ~28.6%. The companyโs focus on sustaining the revenue growth by retaining customers and attracting more paying subscribers on board, along with various cost optimization drives would help aid the profitability. These would help the company remain a high ROE company as it is currently operating in the growth phase of a business cycle. A strong network effect has created circular value addition for the company. A higher number of buyers has translated into further inquiries, in turn leading to more suppliers and, hence, higher monetization.
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#COMPANY #POTENTIAL
โข According to Economic times, the global B2B e-commerce market held a market value of USD 8,523.3 billion in 2021 and is projected to reach USD 18,771.4 billion by the year 2027. The market is anticipated to grow at a CAGR of 14.1% from 2022 to 2027. As per Ken Research. The Indian B2B market is expected to grow at a CAGR of ~20% during the period FY19-FY25. โข With less than 20% of Indiaโs MSMEs using the Internet for business purposes, as against 54% in the US and 89% in China, there is substantial growth potential for the e-classifieds market. Online classifieds offer businesses a chance to connect with consumers at a low cost and get a measurable return on investment. โข The government of India has planned to increase contribution of micro, small and medium enterprises to 50% of Indiaโs GDP over the next five years (~29% currently). This is likely to act as a key catalyst for the industry. up payment transactions. โข This coupled with growing internet adoption by MSMEs would push down the costs of communication, advertising, and rentals (since these small and medium businesses can set up digital storefronts rather than physical ones) and would also help to speed โข The huge significance of digitalization was driven home like never before due to COVID-19 as the lockdowns hit businesses that could not be categorised as โessential servicesโ. With work from home and social distancing measures possibly to stay in place, going online to increase their visibility is the need of the hour for SMEs. โข The B2B platform under the classified space have a lower risk of disruption from the likes of Google (horizontal search engines). Success and sustainability of these platforms is dependent on higher organic searches.
โข According to Economic times, the global B2B e-commerce market held a market value of USD 8,523.3 billion in 2021 and is projected to reach USD 18,771.4 billion by the year 2027. The market is anticipated to grow at a CAGR of 14.1% from 2022 to 2027. As per Ken Research. The Indian B2B market is expected to grow at a CAGR of ~20% during the period FY19-FY25. โข With less than 20% of Indiaโs MSMEs using the Internet for business purposes, as against 54% in the US and 89% in China, there is substantial growth potential for the e-classifieds market. Online classifieds offer businesses a chance to connect with consumers at a low cost and get a measurable return on investment. โข The government of India has planned to increase contribution of micro, small and medium enterprises to 50% of Indiaโs GDP over the next five years (~29% currently). This is likely to act as a key catalyst for the industry. up payment transactions. โข This coupled with growing internet adoption by MSMEs would push down the costs of communication, advertising, and rentals (since these small and medium businesses can set up digital storefronts rather than physical ones) and would also help to speed โข The huge significance of digitalization was driven home like never before due to COVID-19 as the lockdowns hit businesses that could not be categorised as โessential servicesโ. With work from home and social distancing measures possibly to stay in place, going online to increase their visibility is the need of the hour for SMEs. โข The B2B platform under the classified space have a lower risk of disruption from the likes of Google (horizontal search engines). Success and sustainability of these platforms is dependent on higher organic searches.
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#SECTOR #Outlook
โข Paying subscribers retention remains a key monitorable: Increased business transaction in the post covid period is a huge opportunity for the company to grow its sales and increase the number of paid subscribers. The company is even looking forward to grab this opportunity and increase its investments to elevate its sales. โข Indiamart has reduced investments towards customer acquisitions as they are not witnessing improvement in churn rates. Instead they are trying to find out which industry or geography is having an impact and trying to resolve that. โข Going forward, further increase in employee base over the next year will be in line with the growth in the number of customers at IndiaMART as well as other businesses. They have commenced building an in-house sales team and plan to expand this over the next few quarters, to reduce their dependence on a completely outsourced sales function. โข Management commentary: They are trying to acquire quality customers into their platform. The growth in FY25 is largely ARPU driven and customer acquisition continues to remain a challenge. They guided the collections growth to moderate to ~10% from the previous levels. They plan to hire couple of industry specific people to cater to a particular category. โข Threat from Udaan: UDAAN was incorporated in 2016 and with its unique business model and services, it has acquired huge response from the market. With its efficient logistic services and other facilities, the company has won trust from its customers. However, the company is currently running under losses and has not been able to reduce its operating expenses. โข Strategy towards Busy: The company successfully acquired 100% stake in Busy infotech for โน500 cr. As of now, for a year or two, they would still continue to focus on growing Busy first before looking at these cross-sell opportunities for IndiaMART coming in from Busy. They would run this business at breakeven levels for some time.
โข Paying subscribers retention remains a key monitorable: Increased business transaction in the post covid period is a huge opportunity for the company to grow its sales and increase the number of paid subscribers. The company is even looking forward to grab this opportunity and increase its investments to elevate its sales. โข Indiamart has reduced investments towards customer acquisitions as they are not witnessing improvement in churn rates. Instead they are trying to find out which industry or geography is having an impact and trying to resolve that. โข Going forward, further increase in employee base over the next year will be in line with the growth in the number of customers at IndiaMART as well as other businesses. They have commenced building an in-house sales team and plan to expand this over the next few quarters, to reduce their dependence on a completely outsourced sales function. โข Management commentary: They are trying to acquire quality customers into their platform. The growth in FY25 is largely ARPU driven and customer acquisition continues to remain a challenge. They guided the collections growth to moderate to ~10% from the previous levels. They plan to hire couple of industry specific people to cater to a particular category. โข Threat from Udaan: UDAAN was incorporated in 2016 and with its unique business model and services, it has acquired huge response from the market. With its efficient logistic services and other facilities, the company has won trust from its customers. However, the company is currently running under losses and has not been able to reduce its operating expenses. โข Strategy towards Busy: The company successfully acquired 100% stake in Busy infotech for โน500 cr. As of now, for a year or two, they would still continue to focus on growing Busy first before looking at these cross-sell opportunities for IndiaMART coming in from Busy. They would run this business at breakeven levels for some time.
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IndiaMart InterMesh Ltd 2000-2325
Expected level 2900
Support 1880
Expected level 2900
Support 1880
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Balrampur Chini Mills Limited company details report
Balrampur Chini Mills Limited incorporated in 1975, is one of the largest integrated sugar companies in India. The allied businesses of the company comprise of manufacturing of downstream products like ethanol, power (co-generation), alcohol, molasses and bagasse. Its products include sugar, molasses, alcohol, ethanol, bagasse and power. It sells its products within India and export as per the government quota allocation. The company has identified sugar and distillery as its distinctive operating segments. The company presently has 10 integrated manufacturing units of sugar, ethanol and co-generation located in Eastern and Central Uttar Pradesh (India), having an aggregate sugarcane crushing capacity of 80,000 TCD (tons of cane per day), distillery capacity of 1,050 KLPD (kilolitres per day) and 175.7 MW (megawatt) saleable co-generation capacity. It has grown its capacity by well-planned capacity expansion projects and the acquisition of existing companies over recent years. The SS (sugar season) in India is from October to September and the ethanol supply season is from December to November.
Balrampur Chini Mills Limited incorporated in 1975, is one of the largest integrated sugar companies in India. The allied businesses of the company comprise of manufacturing of downstream products like ethanol, power (co-generation), alcohol, molasses and bagasse. Its products include sugar, molasses, alcohol, ethanol, bagasse and power. It sells its products within India and export as per the government quota allocation. The company has identified sugar and distillery as its distinctive operating segments. The company presently has 10 integrated manufacturing units of sugar, ethanol and co-generation located in Eastern and Central Uttar Pradesh (India), having an aggregate sugarcane crushing capacity of 80,000 TCD (tons of cane per day), distillery capacity of 1,050 KLPD (kilolitres per day) and 175.7 MW (megawatt) saleable co-generation capacity. It has grown its capacity by well-planned capacity expansion projects and the acquisition of existing companies over recent years. The SS (sugar season) in India is from October to September and the ethanol supply season is from December to November.
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#SALES #GROWTH 5 Year CAGR 5.5%
In FY25, net sales was ~โน5,415 cr, down by ~3% YoY. Revenue growth from the sugar segment grew by 4% YoY while revenue from the distillery segment degrew by 15% YoY. The revenue decline was primarily driven by lower ethanol production & sales due to regulatory restrictions and stagnant prices. Additionally, reduced sugar output owing to reduced cane availability and lower recovery rates contributed the decline in sales. In Q1 FY26, net sales was ~โน1,542 cr and it grew by 8.5% YoY. Revenue from sugar segment was โน1,168 cr and it increased by 3% YoY while revenue from distillery segment grew by 9% YoY and stood at โน461 cr. owing to higher volumes and better realization. During the quarter, the company crushed 21.78 lac quintals of sugarcane and it declined by ~66% YoY.
In FY25, net sales was ~โน5,415 cr, down by ~3% YoY. Revenue growth from the sugar segment grew by 4% YoY while revenue from the distillery segment degrew by 15% YoY. The revenue decline was primarily driven by lower ethanol production & sales due to regulatory restrictions and stagnant prices. Additionally, reduced sugar output owing to reduced cane availability and lower recovery rates contributed the decline in sales. In Q1 FY26, net sales was ~โน1,542 cr and it grew by 8.5% YoY. Revenue from sugar segment was โน1,168 cr and it increased by 3% YoY while revenue from distillery segment grew by 9% YoY and stood at โน461 cr. owing to higher volumes and better realization. During the quarter, the company crushed 21.78 lac quintals of sugarcane and it declined by ~66% YoY.
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#EBITDA #GROWTH 5 Year CAGR 2.7%
In FY25, EBITDA stood at โน704 cr, reflecting a 10.4% decline YoY. The companyโs profit in the distillery segment was impacted due to rising input costs and stagnant realization rates while in the sugar segment they witnessed reduced sugarcane availability due to adverse weather conditions and crop disease. In Q1 FY26, EBITDA stood at โน134 cr and it declined by 19.2% YoY owing to fall in sugar production and under absorption of fixed overhead due to the shortened season. During the quarter, the company produced 2.48 lac quintals of sugar as compared to 7.16 lac quintals of sugar in Q1 FY25.
In FY25, EBITDA stood at โน704 cr, reflecting a 10.4% decline YoY. The companyโs profit in the distillery segment was impacted due to rising input costs and stagnant realization rates while in the sugar segment they witnessed reduced sugarcane availability due to adverse weather conditions and crop disease. In Q1 FY26, EBITDA stood at โน134 cr and it declined by 19.2% YoY owing to fall in sugar production and under absorption of fixed overhead due to the shortened season. During the quarter, the company produced 2.48 lac quintals of sugar as compared to 7.16 lac quintals of sugar in Q1 FY25.
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#PAT #GROWTH
In FY25, PAT was โน402 cr, a decline of 21% YoY. This was mainly due to the decision of the government to keep ethanol prices unchanged despite the usual FRP (fair remunerative price) linked hike. Additionally, reduction in net sugar recovery rate recovery impacted the performance of this segment. In Q1 FY26, PAT was ~โน42 cr and it declined by ~34% YoY
In FY25, PAT was โน402 cr, a decline of 21% YoY. This was mainly due to the decision of the government to keep ethanol prices unchanged despite the usual FRP (fair remunerative price) linked hike. Additionally, reduction in net sugar recovery rate recovery impacted the performance of this segment. In Q1 FY26, PAT was ~โน42 cr and it declined by ~34% YoY
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#ROCE
In FY25, the companyโs operating profitability declined while its capital employed increased which led to a reduction in ROCE.
In FY25, the companyโs operating profitability declined while its capital employed increased which led to a reduction in ROCE.
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#ROE
In FY25, the metric declined as the company's bottom line deteriorated while the net worth increased.
In FY25, the metric declined as the company's bottom line deteriorated while the net worth increased.
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#COMPANY #POTENTIAL
โข Indiaโs net sugar production for the SS (sugar season) 2025-26 season is estimated to be ~30.4 MMT (million metric tonnes), a growth of 16.5% YoY. This is based on early estimates from satellite imagery, rainfall data and field reports. The increase is attributed to favorable monsoon conditions and improved crop health, despite only a marginal increase in the overall sugarcane area. โข The industry expects a diversion of ~4.5 MMT of sugar to ethanol and ~2 MMT for exports. This will ensure market stability and prevent pricing pressure on sugar. โข FRP (Fair & Remunerative Price) of sugarcane for SS 2024-25 has been revised to โน340 per quintal and is linked to a basic recovery of 10.25%. โข The company is actively pursuing policy support from the government for revisions to ethanol pricing and MSP (minimum sale price) of sugar. A potential increase in the State Advised Price (SAP) for sugarcane is likely, which could help increase crushing and provide raw material for ethanol. The company is hopeful that ethanol prices will increase in FY26. โข The central government has approved the national policy on biofuels aimed at achieving 20% blending of ethanol in petrol. In ESY (Ethanol Supply Year) 2024-25, the country achieved ethanol blending of 17.98%. โข The National Policy on Biofuels allows the use of food grains for biofuel production during surplus phases. It also promotes the use of feedstock such as corn, rotten potatoes, damaged or unfit food grains and agricultural residues for ethanol production. โข A reduced GST (goods and service tax) of 5% will be applied to ethanol, while ENA (Extra Neutral Alcohol) will be exempted from GST.
โข Indiaโs net sugar production for the SS (sugar season) 2025-26 season is estimated to be ~30.4 MMT (million metric tonnes), a growth of 16.5% YoY. This is based on early estimates from satellite imagery, rainfall data and field reports. The increase is attributed to favorable monsoon conditions and improved crop health, despite only a marginal increase in the overall sugarcane area. โข The industry expects a diversion of ~4.5 MMT of sugar to ethanol and ~2 MMT for exports. This will ensure market stability and prevent pricing pressure on sugar. โข FRP (Fair & Remunerative Price) of sugarcane for SS 2024-25 has been revised to โน340 per quintal and is linked to a basic recovery of 10.25%. โข The company is actively pursuing policy support from the government for revisions to ethanol pricing and MSP (minimum sale price) of sugar. A potential increase in the State Advised Price (SAP) for sugarcane is likely, which could help increase crushing and provide raw material for ethanol. The company is hopeful that ethanol prices will increase in FY26. โข The central government has approved the national policy on biofuels aimed at achieving 20% blending of ethanol in petrol. In ESY (Ethanol Supply Year) 2024-25, the country achieved ethanol blending of 17.98%. โข The National Policy on Biofuels allows the use of food grains for biofuel production during surplus phases. It also promotes the use of feedstock such as corn, rotten potatoes, damaged or unfit food grains and agricultural residues for ethanol production. โข A reduced GST (goods and service tax) of 5% will be applied to ethanol, while ENA (Extra Neutral Alcohol) will be exempted from GST.
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#COMPANY #OUTLOOK
โข Going forward, the company expects the government to restore FRP linked ethanol pricing, which would improve margins and support blending targets. โข It anticipates cane availability to be ~15%-20% higher in the current sugar year. Its cane development initiatives are likely to lead to an improvement in both cane availability and recovery for the next year. Further, the dependency on the red rot affected Co0238 variety has been reduced to ~6% thereby lowering disease risk and aiding stable sugar recoveries. โข Over the next 2-3 years, it expects to witness steady growth in cane availability with improved varieties. It is developing an inhouse high yielding variety of sugarcane. โข They envisages sugar sales in FY26 to exceed 10 lakh tonnes backed by higher inventory and planned liquidation. โข The management highlighted that due to delayed planting in 2-3 factories, they may experience slightly lower cane availability as the yields will have less months to grow. โข The company anticipates a positive year for cane production, with yields looking better due to favorable rain distribution. In FY26, they are hopeful for an increase in crushing and recovery compared to FY25 levels. โข The management anticipates that the crushing season to start early in SS 2025-26 backed by festival timings and favorable weather conditions. โข They anticipate higher diversion of sugarcane towards ethanol if prices are revised upwards. โข Going forward, the PLA facility would generate revenue of ~โน2,000 crore with an EBITDA margin of ~35%. Further, this facility is expected to be commissioned in Q3 FY27. CASE STUDY
โข Going forward, the company expects the government to restore FRP linked ethanol pricing, which would improve margins and support blending targets. โข It anticipates cane availability to be ~15%-20% higher in the current sugar year. Its cane development initiatives are likely to lead to an improvement in both cane availability and recovery for the next year. Further, the dependency on the red rot affected Co0238 variety has been reduced to ~6% thereby lowering disease risk and aiding stable sugar recoveries. โข Over the next 2-3 years, it expects to witness steady growth in cane availability with improved varieties. It is developing an inhouse high yielding variety of sugarcane. โข They envisages sugar sales in FY26 to exceed 10 lakh tonnes backed by higher inventory and planned liquidation. โข The management highlighted that due to delayed planting in 2-3 factories, they may experience slightly lower cane availability as the yields will have less months to grow. โข The company anticipates a positive year for cane production, with yields looking better due to favorable rain distribution. In FY26, they are hopeful for an increase in crushing and recovery compared to FY25 levels. โข The management anticipates that the crushing season to start early in SS 2025-26 backed by festival timings and favorable weather conditions. โข They anticipate higher diversion of sugarcane towards ethanol if prices are revised upwards. โข Going forward, the PLA facility would generate revenue of ~โน2,000 crore with an EBITDA margin of ~35%. Further, this facility is expected to be commissioned in Q3 FY27. CASE STUDY
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