#EBITDA #MARGIN

The company has project EBITDA margin at ~35% and 15%-20% in the affordable segment which presently stands at 25%-30%. Because of following project completion method, expenses are accounted in the current year itself irrespective of the project getting completed or not. The EBITDA margin for FY25 was 21.8%.

#PAT #MARGIN

The PAT margin for FY25, was 17.4%. In FY24, the PAT margin reported was 12.5%. CASE STUDY

#SECTOR #POTENTIAL

• The real estate market in India has grown by 11.3% CAGR from 2008 to 2020. It is expected to reach $1,000 bn by 2030. By 2025 end, the sector would contribute ~13% to India’s GDP. • In 2024, saleable area supply stood at 609 msf while absorption was 588 msf. In value terms, supply was ₹5.3 lakh cr & absorption was ₹5.7 lakh cr. In terms of supply of units amongst top 7 cities, MMR has an average share of 31% from 2019-2024. • The share of affordable segment (less than ₹40 lakh) has declined from 30% in 2020 to 16% in 2024. The combined share of midend (₹40-₹80 lakh) & high-end (₹80 lakh-₹1.5 cr) was 61% in 2020, which has moved down to 51% in 2024, with mid-end declining and high-end rising. The share of luxury (₹1.5-₹2.5 cr) and ultra-luxury (₹2.5 cr+) rose from 6% and 3%, respectively in 2020 to 14% and 17%. • Mumbai, being the largest real estate market in the country is set for a major boom, which will further add to the overall surge. A new coastal road, a metro rail and a trans harbor link are among the many ongoing infrastructure projects that are meant to transform India’s commercial capital into a modern and efficient city. As these projects complete over the next few years, new micro markets will open in and around Mumbai, as commuting would become easier. That will boost real estate development further. • Sales: Residential sales across India’s top 7 cities declined by 28% YoY in Q1 2025 to ~93,300 units, impacted by price resistance and geopolitical uncertainties. • Launches: New launches stood at ~1,00,000 units, down 10% YoY, with a strong tilt toward premium and luxury segments in Q1 2025. • Inventory: Despite slower sales, available inventory fell 4% YoY to ~5.6 lakh units, indicating healthy absorption in select markets Q1 2025 for top 7 cities of India.

#COMPANY #OUTLOOK

• In a significant move to address the acute affordable and mid-income housing shortage in India, IFC and Sunteck Realty are partnering to create a joint platform with a total investment of up to ₹750 cr (US$90 million) to promote the development of nearly 12,000 high-quality housing units across four to six green housing projects within the Mumbai Metropolitan Region (MMR) in the state of Maharashtra. IFC's proposed investment is for up to ₹330 cr. • The project at Burj Khalifa Community, Downtown, Dubai is likely to be launched in next 12-15 months. It has a potential of over ₹9,000 crore of gross development value (GDV). The investment in the project is ~₹250 crore for 50% of the profit share. The total cost of the project is ~₹2,000 crore. The project will be completed in 3-4 years. ft. • They are also gearing up to launch a project in Bandra West with a GDV of ₹1,000 crore. This is expected to be launched in FY26. • It will focus to grow their GDV value i.e., double this in every 3 years. In FY24, their GDV pipeline was of ₹26,465 crore which is expected to double to ~₹52,930 crore by FY27. Currently their GDV value pipeline is at ₹40,225 crore. • The company has added Nepean Sea Project - 2 with a GDV (gross developmental value) of ₹2,400 crore. This takes up the total GDV of Nepean Sea Project to ₹5,400 crore. They expect this GDV potential to grow further. The total area is 2,50,00-2,70,000 sq. • They are preparing for a new tower launch in Sunteck Sky Park at Mira Road (GDV of ₹700 crore) and Sunteck Beach Residences (GDV of ₹400-₹450 crore), Sunteck Niagaon with a GDV value of ₹350 crore in FY26. • The company aims to sustain pre-sales growth and improved margins in FY26, with plans to launch the Dubai project by late FY26 or early FY27 and formally unveil the ₹5,400 crore GDV Nepean Sea project.

Sunteck Realty 350-410
Expected level 530
Support 300

Good morning

🏪Dmart company details report

Avenue Supermarts Limited is a Mumbai-based company, which owns and operates D-Mart stores. D-Mart is a national supermarket chain that offers customers a range of home and personal products under one roof. The company offers a wide range of products with a focus on Foods, Non-Foods (FMCG) and General Merchandise & Apparel product categories. The company offers its products under various categories, such as grocery and staples, dairy and frozen, fruits and vegetables, home and personal care, bed and bath, crockery, footwear, toys and games, kids apparel, apparel for men & women and daily essentials. D-Mart was started by Mr. Radhakishan Damani and his family to address the growing needs of the Indian family. The company pened its first store in Mumbai, Maharashtra in 2002. As of 31* March 2024, the company had 365 operating stores. It has retail business area of 15.15 million sq. ft. across Maharashtra, Gujarat, Daman, Andhra Pradesh, Karnataka, Telangana, Tamil Nadu, Madhya 'radesh, Rajasthan, National Capital Region (NCR), Chhattisgarh and Punjab. The company had 39 distribution centers and 7 packing centers. Under DMart Ready (e-commerce) business, the company is now operating in 23 cities as of 31st March 2024. the company has 5 subsidiaries as on 31st March 2024, i.e., Avenue E-Commerce Ltd., Align Retail Trades Pvt. Ltd., Nahar Seth & Jogan Developers Pvt. Ltd., Avenue Food Plaza Pvt. Ltd. and Reflect Healthcare and Retail Pvt. Ltd

#Sales Growth

FY24, the sales grew by 18.6% YoY to ₹50,789 led by increase in bill cuts, like for like growth (two years and older stores) and store additions.

During the year, the total number of bill cuts increased by 17% YoY to 30.3 cr (v/s 25.8 cr in FY23) and like for like growth was 9.9% YoY. D-Mart added 41 stores in FY24.


The growth is expected to continue supported by new stores addition and maturing of older stores.

In FY23, the sales stood at ₹42,840 cr (v/s ₹30,976 cr in FY22), i.e., a growth of 38% YoY on account of low base (because of Covid 2nd wave impact in Q1 FY22), recovery In footfalls, higher price of products and supported by new stores addition.

During the year, the total number of bill cuts were 25.8 cr (v/s 18.1 cr in FY22) and the like for like growth was 24.2%


5 Year CAGR: 20.5%

#EBITDA #GROWTH

In FY24, the EBITDA grew by 12.8% YoY to ₹4,104 cr. The growth was partly offset by increase in contribution of lower margin foods business in the total sale mix, increase in employee expense
During the year, DMart continued to witness lower contribution from general merchandise & apparel (GM&A) business in the total sales mix.

In FY23, the EBITDA stood at ₹3,637 cr (v/s ₹2,499 cr in FY22), i.e., a growth of 46% YoY because of increase in scale of operation through store addition.

During the year, the FMCG and staples segment had performed better than the general merchandise and apparel segments. The general merchandise & apparel product category mainly impacted due to inflation.

5 Year CAGR: 20.2%

#PAT #GROWTH

In FY24, the PAT grew by 6.6% YoY to ₹2,536 cr. Excluding the one-time tax adjustment of prior years of ₹138.77 cr in FY23, the PAT grew by 13.2% YoY in FY24.

In FY23, the PAT stood at ₹2,378 cr (v/s ₹1,492 cr in FY22), i.e., a growth of 59% YoY. The growth was on account of higher operating profit and lower tax expenses.

The effective tax rate for FY23 stood at 22.3% as compared to 27.7% in FY22. The effective tax was lower during the year because of one-time net tax adjustment of prior year of ₹138.7 cr. The PAT after excluding the one-time tax adjustment in FY23 stood at ₹2,240 cr.

5 Year CAGR 23%

#EBITDA #margin

In FY24, the EBITDA margin contracted by 41 bps YoY 8.1% because of contraction in gross profit margin and increase in employee benefit expenses and other expenses as a percentage of sales. Gross profit margin contracted by 27 bps YoY to 14.8% mainly due to nigher sales contribution from lower margin foods business. The general merchandise and apparel segment stood at 22.37% (v/s 23.04% in FY23) of the total sales mix.

The company's purchase of stock in trade constitutes ~93% of the total expenses followed by other expenses ~5% and employee benefits expense ^2% of the total expenses.

In FY23, the EBITDA margin improved by 42 bps YoY to 8.5% because of improvement in gross profit margin from 14.8% to 15.1%. During the year, the company continued to witness lower consumer spending on general merchandise and apparel segment. The contribution of general merchandise and apparel stood at 23.04% (v/s 23.40% in FY22).

#PAT #MARGIN

In FY24, the PAT margin contracted by 56 bps YoY to 5% because of contraction in operating margin. Excluding the one-time tax adjustment in FY23, the PAT margin contracted by 24 bps YoY.In FY23, the PAT margin expanded by 73 bps YoY to 5.6% supported by improvement in operating profit margin and lower tax expenses.The PAT margin in F¥23 after excluding the one-time tax adjustment, stood at 5.2%, i.e., an expansion of 41 bps YoY as compared to FY22.

#ROCE

In FY24, the return on capital employed stood at ~19.6%.


#DEBT #TO #EQUITY

Avenue Supermarts Ltd.
The debt to equity ratio of the company is 0

#Management #comment


Dmart will continue to add larger format stores mainly in existing locations to get the benefit of operating levera focusing in the northern part of India, mainly in Uttar Pradesh (UP), National Capital Region, Punjab and Rajasthan for expansion. The company opens larger format stores just to accommodate more traffic for the longer term and to experiment more and more categories in the non-FMCG (fast moving consumer goods) space. It sees huge opportunity in Mumbai Metropolitan Region (MMR). It would acquire land in Virar, Vasai and Dombivli if prices are within the range that it has been looking for. It is focusing on private labels as a long term opportunity as the margins are relatively better in it. The company generally holds more inventories in private label products than in branded products. Avenue E-commerce Limited (DMart Ready) is more focused on groceries and fast moving consumer goods (FMCG) products. It had 519 pickup points of which ~300 were in Mumbai. Dburing the year, Dmart Ready commenced operations in Gurugram while continued to deepen its presence DMart is now present across 23 cities in India. The majority of revenue comes from Mumbai Metropolitan focus will be more dominant on the large towns of the country for expansion. The management does not expect DMart Ready to become a substantial revenue contributor in the short committed to the concept from a long term perspective.

Dmart 3500-3940
Expected level 5000
Support 3098

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1612🚀Long term level hit

Zensar Technologies company details report

NEWLEADERSHIPDELIVERYEVIDENTFROMIMPROVEDFINANCIALS

Zensar isanewturnaroundstoryunfoldingatRPGgroupledby its newleadershipteam.Thisisevidentfromstrategicchangesundertakenlike: ✓CEOManishTandonleadingZensar’sstorytobringinstabilityandagility ✓ Largedealwinsfueledbyincentivizingsalesteamstructure ✓Clientcentricityreflectedinimprovedcustomerexperiencescores Thenewinitiativesaregetting reflectedoncompany’s industry lowest attrition rates, better customerexperiencescoresand improvingprofitability,whichhas witnessed40%CAGRfromFY23-25.

FOCUSEDSERVICESASONEVALUEPROPOSITIONDIFFERENTIATES

Zensar’s focused services clubbed together as one value proposition has witnessedgrowthof8.2%YoYv/soverallTop-linegrowthof5.4%YoYinFY25. Theseservicesare resonatingwellwith largeclientsmeeting their customized needsatonego.Thisvaluepropositionisalsoleadingnon-TMTverticalstodrive double-digit growth for thecompany, further aidedbybroad-basedgeography growthstrategywithexpectedrecoveryinSouthAfricanmarket.

Zensar is putting in extra effort and focus on executing large deal closures, which it expects to be better in FY26 versus FY25. Though, the probability of RFP led large deals coming in market has stayed muted for quite some time, however, Zensar is proactively creating large deals and there the deal pipeline for Zensar remains good. This is led by the: ✓ New incentive structure- Zensar has announced new incentive structure for sales team by giving them over 100% performance-based bonus to drive large client accounts by doing more of up-selling and cross selling. New leadership designs new incentive structure to drive large deal growth Reduction in Top client dependence offset with net new wins thereby derisking model for sustainable long-term growth ✓ Newplatform for sales function– Internally, the company has established a new platform, comprising strategic alliances, pre-sales and inside sales operations. This has enabled the company to recently win a large deal from UK based Tesco Insurance. ✓ Higher net new wins– The new incentive structure is enabling higher proportion of net new wins for Zensar, which stands in range of 60-65%. This is despite of the concerning global economic outlook. Thus, we believe the company’s focus on large client accounts is reflecting in revenue growth of Top 20 clients account, while that of Top 5 & Top 10 client contributions is gradually coming off with more additions of net new wins thereby de-risking the model aiming for more sustainable growth in long-term. Reducing dependen

LEADINGTCVCONVERSION,STRONGCASH,POISESZENSARFORLEAP

StableTCVwinswith impressive industry leading revenueconversion rateof 90%buildsconfidenceonfutureexecutional capabilitiesofZensar.Moreover, it haswitnessed35%CAGRincashequivalentsfromFY19-25,withzerodebton books&Mcap/OCFratioof30x,whichretains investmentcomfort.Webelieve, Zensar’sstrong liquiditypositioncompels for strategicbuyouts/ investmentson largedeals,whichwouldhelpaccelerateitsgrowth&profitabilityinfuture.