#EBITDA #GROWTH

In FY24, EBITDA witnessed an improvement of ~6% despite lower sales. This was driven by improvement in AMD business. In Q4 FY24, the textile business witnessed higher volumes on a YoY basis. In Q2 FY24, the inventory correction cycle bottomed out among the key export customers. In October 2023, the customers started placing orders in small lots, closer to the actual demand. During Q4 FY24, the EBITDA includes sale of land of ₹6 cr. In FY23, there was contraction in EBITDA mainly on account of higher raw material prices. The average cotton prices stood at ₹214 per kg for FY23 as compared to ₹140 per kg for FY22. However, it was partially offset by good performance in the AMD segment. 5 Year CAGR: 3.4%

#PAT #GROWTH

In FY24, the net profit declined by 15%. It was impacted due to high base effect on account of exceptional item in FY23. In H1 FY24, the net profit was subdued on a YoY basis due to unfavorable consumer demand. Effective tax rate for FY24 stood at ~24%. In FY23, the net profit after tax stood at ₹415 cr, up by 56% YoY reflecting the lower tax outgo on account of losses due to sale of subsidiary shares and migration to the 25% tax regime. Effective tax rate for FY23 stood at ~15% v/s 36% in FY22. 5 Year CAGR: 8.2%

#EBITDA #MARGIN

In FY24, the margin improved for both textile and AMD business. In Q4 FY24, the textile margin improved on a YoY basis on account of softening of input cost, efficiency gains in garmenting and better product and customer mix. In FY23, EBITDA margins remained flat at ~10% levels. The textile margins stood at 9.8% as against 10.7% in FY22. It was impacted due to slightly lower volumes as well as the fact that raw material prices were higher. The capacity utilization of garments & denim segment were low which impacted the absorption of the fixed overheads expenses. AMD continued to deliver strong growth in margins. EBITDA margins for this business improved to 13.2% as compared to 12.5% FY22.

#ROCE

In FY24, ROCE witnessed increased marginally. It was on the back of higher contribution from AMD segment as compared to FY23 which governs higher ROCE. In FY23, the company has reported ROCE of 14.4% compared to 13.1% in FY22.

Company FUTURE OUTLOOK


The management is focusing on achieving ROCE of 20% from textile business in the coming period. It stood at 11% in FY24. • The company expects AMD margins to be 17%-18% in the next few years. In FY24, they reported EBITDA margin for AMD of 15.6%. • The garmenting business is expected to have low double digit margin on the back of capacity addition in the coming period. In FY25, garmenting will grow significantly by about 25%. • The capex in FY25 will be ~₹400-₹450 cr towards AMD and garmenting segment. • In Q1 FY25, the garmenting business might get impacted due to absenteeism on account of elections and heat waves in some parts of the country. • They expect H1 FY25 to be 40% of the business plan and H2 FY25 to be 60%. • The company envisages AMD to contribute 30%-32% to the total revenue in the next 3 years. In FY24, it contributed 18% to the revenue from operations. • The garments business has a capacity ~45 million and is planning to increase it to 60 million in 3-year period. In FY24, it grew by 25% from 32 million to 40 million full garment. The new capacities will come online more towards H2 FY25. • The Mass Transportation factory went live in Q4 FY24 and is expected to generate revenue of ₹200 cr in coming period.

Arvind 330-384
Expected level 500
Support 280

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DIIS increased their stake, Change in DII holding >5%

👉Mphasis Ltd

👉Sharda Motor Industries Ltd

👉Ami Organics Ltd

👉Keystone Realtors Ltd

👉Gland Pharma Ltd

👉Prudent Corporate Advisory Services Ltd

👉Sansera Engineering Ltd

👉Anlon Technology Solutions Ltd

👉Shilpa Medicare Ltd

👉PSP Projects Ltd

👉ZF Commercial Vehicle Control System India Ltd

👉Styrenix Performance Materials Ltd

👉Macfos Ltd

FIIS increased their stake, Change in FII holding >5%

👉Indus Towers Ltd

👉Allcargo Gati Ltd

👉Timken India Ltd

👉Aurionpro Solutions Ltd

👉KFin Technologies Ltd

👉Rathi Steel & Power Ltd

👉Hazoor Multi Projects Ltd

👉Cosmic CRF Ltd

👉Hi-Tech Pipes Ltd

Crompton Greaves Consumer 380-435
Expected level 500
Support 348

CG Power signed definitive agreements to acquire a 55% stake in G G Tronics Pvt Ltd, for ₹319.38 Crore

Key Highlights:
➡️Acquisition Details:
🔹Stake Acquired: 55% of G G Tronics
🔹Consideration: Up to ₹319.38 Cr
🔹Method: Combination of purchasing equity shares from GGT Promoters & subscribing to Compulsorily Convertible Preference Shares

➡️Strategic Impact:
🔹GGT, HQed in Bengaluru, specializes in designing & installing Electronic Safety Embedded Signalling Systems for the Railway Transportation segment.

🔹Notable offerings include the Train Collision Avoidance System (#TCAS) and Automatic Train Protection Systems (IRATP/ #KAVACH).

➡️Financial Strength:
🔹Turnover: ₹98.13 Crores (FY23)
🔹PBT: ₹10.84 Crores (As of March 31, 2024)

This acquisition aligns with CG’s strategy to enhance its Railway product portfolio and leverage synergies between the companies.

Budget based picks for beneficial or Positive and Negative

Positive

EMS
ION Exchange
WABAG
SPML
Kaynes Tech
ITC
TBZ
Titan
Indus TOWER
Hind Unilever
Protean E Gov
Antony Waste
NCC
PowerMech
Titan
Dixon
Map my India
Genesys
Team lease
Quess corp
Kalyan jewellers
Titan
Nelco
Tata communications
PG ELECTROPLAST

Negative

Real estate sector
EV automobile sector
Tourism & Hospitality sector

𝐑𝐞𝐜𝐲𝐜𝐥𝐢𝐧𝐠 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐢𝐧 𝐈𝐧𝐝𝐢𝐚.

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▪️GRP Ltd - Tyre Recycling
▪️Tinna Rubber & Infrastructure Ltd - Tyre Recycling
▪️Indag Rubber Ltd - Tyre Recycling
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▪️Eco Recycling Ltd - E-waste Recycling
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