All posts by Chandresh Tripathi

IRFC Q2 FY24 Results
IRFC Q2 Results: Revenue Rises 2%, Profit Up 4% YoY; Declares ₹0.8 Dividend per Share

Company Overview

Indian Railway Finance Corporation Limited (IRFC) was incorporated on December 12, 1986, as a Public Limited Company dedicated to supporting the financial needs of the Indian Railways. After receiving a Certificate of Commencement of Business on December 23, 1986, IRFC was classified as a Public Financial Institution in 1993 and later registered with the Reserve Bank of India (RBI) in 1998 as a non-banking financial institution. Over time, it evolved into a non-deposit accepting asset finance NBFC in 2008 and was subsequently reclassified as an NBFC-ND-IFC (Infrastructure Finance Company) by the RBI in 2010.

IRFC, under the administrative control of the Ministry of Railways (MoR), operates as the dedicated financing arm of the Indian Railways, securing funds from both domestic and international markets to finance its growth. Since inception, it has been crucial in funding rolling stock acquisitions and railway infrastructure projects for Indian Railways and related entities like Rail Vikas Nigam Limited (RVNL) and IRCON.

The President of India, through the MoR, holds 86.36% of IRFC’s equity, with the remaining 13.64% owned by public shareholders, highlighting the company’s strategic importance. IRFC’s primary business is to borrow funds and finance assets that are leased to Indian Railways on long-term finance leases. It focuses on acquiring rolling stock assets—such as locomotives, coaches, wagons, containers, and cranes—and leasing infrastructure projects, thus ensuring steady financing for expansion and modernization. The leasing model typically spans 30 years, divided into a primary 15-year period where IRFC recovers the principal and borrowing costs, followed by a secondary 15-year period at a nominal lease rate.

In the 2020-21 fiscal year, IRFC financed a substantial 67.43% of Indian Railways’ capital outlay (Rs. 1,55,161 crore), contributing Rs. 1,04,369 crore to infrastructure needs, highlighting its pivotal role in India’s rail infrastructure. Notably, IRFC also supports initiatives like the Gati Shakti Multi-Modal Cargo Terminal (GCT) policy, launched in December 2021 to develop additional terminals for rail cargo, further solidifying its role in india’s logistics and transport infrastructure. Over three decades, IRFC has been instrumental in enabling capacity enhancement for the Indian Railways, helping the organization keep pace with India’s growing transportation demands.

Industry Outlook

India’s rail network is advancing at an unprecedented pace, positioning it to become the third-largest rail network globally in the next five years, with a projected 10% share of the global rail market. Two pivotal government initiatives are set to drive private investments: private passenger trains operated by private entities across the network and a comprehensive railway station redevelopment program.

These initiatives are anticipated to attract over US$ 7.5 billion in private investment in the coming five years. Under the National Infrastructure Pipeline (NIP), Indian Railways has allocated more than ₹13.67 lakh crore for investment by 2025, accounting for 12% of the total planned infrastructure investment. The Draft National Rail Plan further envisions ₹38.22 lakh crore in capital expenditure for the rail sector by 2050. With the introduction of the semi-high-speed Vande Bharat trains, Indian Railways aims to operate 75 trains over 10-12 lakh kilometers by 2025-26.

The government’s focus on infrastructure is fueling railway development, with an ambitious plan to invest ₹50 lakh crore (US$ 715.41 billion) by 2030. This emphasis, coupled with favorable policy frameworks, is expected to encourage participation from both domestic and International private players, further boosting passenger and freight transport and supporting long-term sector growth.

Business Segments

Indian Railway Finance Corporation (IRFC) continues to focus on several key business segments that align with its role as the financial backbone of Indian Railways. These segments are as follows-

  • Rolling Stock Financing: This is IRFC’s largest business segment, primarily dedicated to funding the procurement of rolling stock assets like locomotives, passenger coaches, and wagons. By supporting Indian Railways in addressing the growing transportation demand, IRFC plays a crucial role in capacity enhancement across the network.
  • Railway Infrastructure Projects: IRFC finances essential infrastructure projects, including dedicated freight corridors, multi-modal logistics parks, and station redevelopment. These efforts align with the National Infrastructure Pipeline (NIP) to strengthen logistics and connectivity nationwide, supporting economic and industrial growth.
  • High-Speed Rail Corridors and Modernization: A critical area for IRFC is the funding of high-speed and semi-high-speed rail projects. The Vande Bharat trains and other initiatives aim to establish multiple high-speed corridors by FY26, significantly reducing travel time on key routes. IRFC ensures timely funding for these transformative projects.
  • Energy and Green Projects: With sustainability as a priority, IRFC supports green energy initiatives within Indian Railways, including solar and wind power installations along rail networks. These projects align with the Indian Railways’ goal of achieving a net-zero carbon footprint by 2030, advancing India’s commitment to environmental sustainability.
  • Joint Ventures and Special Purpose Vehicles (SPVs): IRFC collaborates through joint ventures and SPVs with state entities and private players to enhance freight and passenger capabilities. These projects leverage public-private partnership (PPP) models to create backward and forward linkages within Indian Railways, boosting efficiency and innovation.

Through these key segments, IRFC strategically supports the modernization and expansion of Indian Railways, contributing significantly to national infrastructure goals and promoting a sustainable rail network.

Key Subsidiaries and Their Information

As of FY25, Indian Railway Finance Corporation (IRFC) continues to operate without any major subsidiaries directly associated with its core business operations. However, IRFC collaborates closely with various entities, particularly in public-private partnership (PPP) arrangements and special-purpose vehicles (SPVs), aimed at enhancing rail infrastructure projects and rolling stock for Indian Railways. These partnerships align IRFC with infrastructure development initiatives, especially as the government prioritizes rail network expansion and modernization across India.

Q2 FY25 Highlights

  • Revenue from Operations has been ₹6,899 crore, marking a 2% YoY increase. Net Profit (PAT) of ₹1,612 crore, showing a 4% YoY growth from ₹1,544 crore in Q2 FY24.
  • Operating Profit of ₹1,650.6 crore, reflecting a 4.5% YoY increase from ₹1,579.53 crore. Total Expenses stood at₹5,287.55 crore, reflecting a slight 1% rise compared to ₹5,217.60 crore in Q2 FY24.
  • IRFC’s net worth increased to ₹51,464.12 crore in Q2 FY25, a significant rise from ₹46,883.22 crore in the same quarter of FY24, reflecting the company’s improved financial position. The debt-equity ratio stood at 7.83 in the September 2024 quarter, down from 8.67 in Q2 FY24, indicating a slight reduction in leverage and improved financial stability.
  • Indian Railway Finance Corporation (IRFC) has set November 12, 2024, as the record date to determine the shareholders who are eligible for the interim dividend. This means that shareholders registered as of this date will be entitled to receive the interim dividend declared by the company.
  • The IRFC Board has approved the financing of 20 Bogie Open Bottom Rapid (BOBR) rakes under the General-Purpose Wagon Investment Scheme (GPWIS) of the Ministry of Railways (MoR) to NTPC for up to ₹700 crore under a Finance Lease. IRFC has entered into Memoranda of Understanding (MoUs) with RITES and IIFCL to form strategic collaborations aimed at enhancing its operational and financing capabilities for future railway projects.

Financial Summary

SWOT Analysis

Strengths:

  1. Strategic alignment with Indian Railways
  2. Strong government backing
  3. Expanding asset portfolio
  4. Solid market presence

Weaknesses:

  1. High debt burden
  2. Limited revenue sources
  3. Sensitivity to operating margins

Opportunities:

  1. Infrastructure growth
  2. Private sector collaborations
  3. Adoption of new technology
  4. Green financing potential

Threats:

  1. Regulatory compliance demands
  2. Rising competition
  3. Economic and geopolitical risks
  4. Interest rate fluctuations
Tata power Q2 earnings
Tata Power Q2 Results: Net Profit Surges 51% YoY to ₹1,533 Crore

Company Overview

Tata Power Company Limited is India’s largest integrated private power company, with a significant global presence and a legacy spanning over a century. With an installed generation capacity of 6,075 MW in India, Tata Power actively engages across all segments of the power sector, including Generation, Transmission, Distribution, Power Trading, and Power Services. The company has been a pioneer in India’s power industry, establishing numerous thermal and hydro plants since its founding in 1919. Tata Power’s historic milestones include India’s first 500 MW multi-fuel generating unit at Trombay in 1984 and successive expansions into renewable energy sources such as wind and solar. As of March 31, 2022, Tata Power’s installed capacity reached 13,515 MW, with approximately 34% derived from clean energy sources.
In the renewable energy sector, Tata Power is among India’s largest players. It developed the country’s first Ultra Mega Power Project of 4,000 MW at Mundra in Gujarat, based on super-critical technology. Tata Power also operates a diverse range of consumer-facing businesses, including solar rooftop installations, solar pumps, EV charging infrastructure, and home automation solutions. Through Tata Power Renewable Energy (TPREL), it acquired Welspun Renewables Energy, a leading solar portfolio in India, comprising approximately 1,140 MW in renewable projects.
Recently, Tata Power’s strategic expansions have included distribution network acquisitions in Odisha, the installation of microgrids, and smart energy solutions with IoT-based home automation tools. In 2023, Tata Power, through Resurgent Power Ventures, acquired NRSS XXXVI Transmission Limited and South East U.P. Power Transmission Company Limited, further strengthening its transmission assets and reinforcing its position in India’s evolving power landscape.

Industry Outlook

The energy industry outlook for FY25 and beyond is robust, driven by accelerating demand for renewable energy, supportive government policies, and a growing interest from industries and consumers in sustainable solutions. India’s power sector is undergoing a significant transformation, targeting 500 GW of renewable capacity by 2030. This ambitious goal creates vast opportunities for companies like Tata Power to expand their solar, wind, and hybrid capacities. Solar and wind energy are set to lead this transition, supported by cost reductions, increased efficiencies, and policy incentives. The government’s Production-Linked Incentive (PLI) schemes and focus on domestic manufacturing are expected to enhance the renewable supply chain, thereby decreasing reliance on imports for critical components such as solar cells and modules. This aligns perfectly with Tata Power’s mphasis on solar manufacturing and internal capacity expansion, positioning the company to benefit from both domestic demand and export opportunities.
Tata Power’s outlook remains strong, driven by aggressive renewable energy expansion and operational stability. The company is enhancing its solar manufacturing capabilities with a 4.3 GW facility, targeting an annual run rate of 2-2.5 GW in solar capacity while focusing on utility-scale and rooftop projects. In transmission and distribution, Tata Power is advancing critical projects with an EPC order book valued at ₹15,000 crore, including the Bhivpuri Pumped Storage Project, which is expected to boost long-term revenue by FY29.
Additionally, its Delhi distribution network benefits from a regulatory asset liquidation plan, improving cash flows. Despite temporary disruptions at the Mundra coal plant, Tata Power has shown resilience and high operational availability.

Business Segments

Tata Power operates through several key business segments that contribute to its overall growth and diversification in FY25. Here are the primary business segments:

  1. Renewable Energy:
  2. Solar Power: Tata Power has made significant investments in solar energy, with a focus on expanding its solar generation capacity. The company aims for an annual run rate of 2-2.5 GW in solar capacity, focusing on utility-scale and rooftop solar projects.
  3. Wind Power: Tata Power continues to enhance its wind energy portfolio, contributing to its overall renewable capacity. The company is committed to increasing its wind energy output as part of its sustainability initiatives.
  4. Hybrid Projects: Tata Power is developing advanced hybrid projects that combine solar, wind, and energy storage solutions. These projects are designed to optimize energy production and enhance overall efficiency.
  5. Conventional Power Generation:
  6. This segment includes the generation of electricity through coal and natural gas. Tata Power’s Mundra coal plant is a significant contributor to this segment, although it faced temporary operational disruptions due to adverse weather conditions.
  7. Transmission and Distribution:
  8. Tata Power is actively involved in expanding and enhancing the transmission and distribution of electricity across India. This includes several critical projects, such as high-voltage transmission lines and pumped hydro projects. The company is focused on improving grid reliability and expanding its network to meet growing energy demand.
  9. EPC (Engineering, Procurement, and Construction):
  10. Tata Power provides EPC services for various projects, particularly in the renewable energy sector. The company’s current EPC order book is valued at ₹15,000 crore, reflecting its strategic focus on internal project execution over third-party work. This approach aims to maximize operational efficiency and resource allocation.
  11. Electric Vehicle (EV) Infrastructure:
  12. Tata Power is expanding its footprint in the electric mobility sector by investing in EV charging infrastructure. The company is well-positioned to capitalize on the growing demand for EVs in India, which will drive increased energy consumption and grid enhancements.

Key Subsidiaries and Their Information

Here are some of its prominent subsidiaries and their functions:

  • Tata Power Renewable Energy Limited (TPREL) is a cornerstone of Tata Power’s strategy to aggressively expand its renewable energy portfolio. Specializing in solar and wind power generation, TPREL plays a vital role in helping Tata Power meet its ambitious renewable energy targets. Recently, TPREL has been increasing its solar and wind capacity across India, furthering the company’s commitment to achieving a fully renewable future.
  • Another significant subsidiary is Tata Power Solar Systems Limited, which focuses on manufacturing solar panels and providing EPC (Engineering, Procurement, and Construction) services for large solar projects. Tata Power Solar is crucial to Tata Power’s solar expansion plans, both for utility-scale and rooftop projects. The subsidiary is enhancing its production capabilities with a new 4.3 GW manufacturing facility, which will support Tata Power’s growth ambitions in the solar sector.
  • On the distribution side, TP Ajmer Distribution Limited is responsible for electricity distribution in Ajmer, Rajasthan. As part of Tata Power’s push to strengthen its distribution network, this subsidiary has been focused on modernizing infrastructure and improving service quality. Similarly, Tata Power Delhi Distribution Limited (TPDDL) is a key distribution subsidiary serving parts of Delhi. Known for its operational efficiency, TPDDL benefits from a regulatory asset liquidation plan that is expected to enhance cash flows and strengthen financial performance.
  • Maithon Power Limited contributes to Tata Power’s thermal power generation, operating a coal-based power plant that supplies electricity to the grid, thus ensuring a balanced energy portfolio. Although Tata Power has a strong renewable focus, Maithon Power provides stability and a reliable power supply within the company’s generation mix.
  • Tata Power has also made significant inroads in Odisha with TP Central Odisha Distribution Limited, TP Western Odisha Distribution Limited, TP Southern Odisha Distribution Limited, and TP Northern Odisha Distribution Limited. These subsidiaries focus on improving power distribution across various regions of Odisha, where Tata Power aims to enhance reliability and service quality in historically underserved areas.
  • Walwhan Renewable Energy Limited is another critical player in Tata Power’s renewable portfolio, managing a range of solar and wind assets across India. This subsidiary contributes substantially to Tata Power’s overall green energy capacity, supporting its shift toward renewable sources.
  • Trust Energy Resources Pte. Limited, based in Singapore, plays a supportive role by managing fuel logistics and securing fuel for Tata Power’s thermal plants, thus ensuring steady operations at its coal-based facilities.
  • Tata Power EV Charging Solutions Limited drives the company’s push into the electric vehicle infrastructure sector. As the demand for EVs in India grows, this subsidiary has been actively expanding Tata Power’s EV charging network nationwide, establishing the company as a leading player in India’s nascent but rapidly growing EV ecosystem.

Together, these subsidiaries underscore Tata Power’s multi-faceted approach, blending renewable expansion, efficient distribution, EV infrastructure development, and reliable thermal generation to create a sustainable and resilient energy business.

Q2 FY25 Highlights

  • Revenue: Q2 FY25 revenue saw a marginal 1% YoY decline (₹15,247 crore vs. ₹15,442 crore in Q2 FY24), indicating stable demand but possibly some short-term challenges. However, H1 FY25 revenue grew by 5% YoY (₹32,057 crore vs. ₹30,446 crore in H1 FY24), reflecting steady growth over the half-year.
  • EBITDA Growth: Tata Power achieved impressive 23% YoY EBITDA growth in Q2 FY25 (₹3,808 crore vs. ₹3,087 crore in Q2 FY24) and 17% YoY growth in H1 FY25 (₹7,158 crore vs. ₹6,092 crore in H1 FY24). This improvement suggests enhanced operational efficiency and cost management, as well as possibly favorable contributions from higher-margin business segments.
  • Profit After Tax (PAT): PAT increased substantially by 51% YoY in Q2 FY25 (₹1,533 crore vs. ₹1,017 crore in Q2 FY24) and by 41% YoY in H1 FY25 (₹2,721 crore vs. ₹1,924 crore in H1 FY24). This robust growth in profitability, despite flat revenue, indicates strong financial health, likely driven by effective cost control, better pricing strategies, and growth in high-margin segments.
  • Robust Order Book: Solar EPC business has a well-diversified order book of ₹15,900 crore.
  • Installed Capacity Growth: Total installed generation capacity surpassed 15 GW, with a clean and green portfolio of ~12.9 GW (6.4 GW operational, 6.5 GW under construction).
  • Expanding Transmission Portfolio: Transmission assets now cover 7,049 CKm, with 4,633 CKm commissioned and 2,416 CKm under construction.
  • Consistent Profit Growth: Achieved its 20th consecutive quarter of PAT growth.
  • Significant Capex Investment: Incurred ₹5,200 crore in Q2FY25 and ₹9,100 crore in H1FY25 towards growth, targeting a full-year capex of ~₹20,000 crore.
  • S&P Global upgraded Tata Power’s rating to BBB-/Positive from BB+/Stable.
  • Added 62 bus chargers and over 11,500 home chargers this quarter.
  • Signed an MoU with Tata Motors to establish 200 fast-charging stations for electric commercial vehicles in major metropolitan cities across India.
  • Tata Power’s market cap has exceeded ₹1.5 trillion.

Financial Summary

INR in Cr.Q2FY25Q1FY25Q2FY24Q-o-Q GrowthY-o-Y Growth
Total Revenue15,69817,29415,738-9.23%-0.26%
Selling General Admin Expenses (Total)1,0411,0149952.67%4.61%
Depreciation/ Amortization9879739261.42%6.57%
Total Operating Expense13,53015,16413,869-10.77%-2.44%
Operating Income2,1682,1301,8691.78%15.96%
Net Income Before Taxes1,7731,4901,23118.96%44.06%
Net Income927971876-4.57%5.83%
Diluted Normalized EPS3.173.032.744.63%15.70%

SWOT Analysis

Strengths:

  1. Robust Renewable Portfolio – Strong presence in the renewable energy sector.
  2. High Profitability and Financial Growth – Consistent financial performance and profitability.
  3. Diverse Order Book – A wide range of projects contributing to stability.
  4. Strong Brand and Legacy – Established reputation and trust in the industry.

Weaknesses:

  1. High Debt Levels – Significant debt may pose financial risks.
  2. Dependence on Coal Assets – Reliance on coal could impact sustainability efforts.
  3. Complex Subsidiary Structure – Multiple subsidiaries may complicate management and oversight.

Opportunities:

  1. Expansion in Renewable Energy – Potential for growth in the renewable sector.
  2. Growing EV Infrastructure – Increasing demand for electric vehicle infrastructure presents new avenues for growth.
  3. Government Support for Green Initiatives – Favorable policies and support for green initiatives enhance growth prospects.
  4. Global Expansion – Opportunities to enter new markets internationally.

Threats:

  1. Regulatory and Environmental Compliance – Navigating complex regulations can be challenging.
  2. Competitive Market – Intense competition in the energy sector may impact market share.
  3. Economic and Geopolitical Risks – External factors may affect operational stability.
  4. Interest Rate Volatility – Fluctuating interest rates could impact financing and investment costs.
Sterlite-Technologies-Q2
Sterlite Technologies Q2: ₹14 Crore Loss, 5.42% Revenue Drop

Company Overview

Sterlite Technologies Limited (STL) is a global leader in end-to-end data network solutions. The company designs and deploys high-capacity fiber cables and wireless networks, collaborating with telecom companies, cloud providers, citizen networks, and enterprises to build and manage cloud-native networks. Founded in 2000 after a demerger from Sterlite Industries, STL has expanded its manufacturing presence across Aurangabad, Pune, Silvassa, and Haridwar. Since its inception, STL has advanced through innovation and strategic acquisitions. In the early 2000s, it significantly increased fiber optic and copper cable capacities and launched several broadband and network access products. STL was recognized as one of India’s fastest-growing technology companies.
The company’s global reach expanded through acquisitions, including stakes in Sterlite Infrastructure, Jiangsu Sterlite Tongguang Fiber (China), and Sterlite Conduspar (Brazil). In 2015, it acquired the power transmission business and later demerged it as Sterlite Power Transmission Ltd. in 2016. From 2018 to 2023, STL acquired Metallurgica Bresciana (Italy), IDS Group (UK), and Optotec S.p.A. (Italy), bolstering its role in data networks and optical products. In 2022, STL streamlined its portfolio by divesting assets like IDS Group and telecom software business. The launch of Fiber-to-the-Room (FTTR) services in 2023 reinforces its commitment to delivering high-speed data infrastructure solutions globally.

Industry Outlook

The fiber optics and data network solutions sector is set for robust growth in FY25, driven by the rising global demand for high-speed connectivity, propelled by 5G, AI, IoT, and expanding data centers. Sterlite Technologies Limited (STL) has a promising outlook with multiple key growth drivers across its core markets and product lines. STL anticipates sustained demand for fiber as global clients continue to expand network infrastructure. Analysts project a solid 7% demand growth (excluding China) in the coming years, with North America and India expected to see accelerated growth. With the rapid rise of AI and data centers, STL is well-positioned to benefit from increased fiber requirements. Modern, GPU-dense data centers need up to 36 times more fiber than traditional CPU-based centers. STL’s focus on compact, high-density optical fiber solutions provides 70% more fiber per unit than standard installations, targeting this specific need. The company aims to capture a share of the $5.7 billion investment anticipated in the data center market. At IMC 2024, STL launched its AI-DC portfolio, supporting the “Make in India” initiative and addressing the increasing demand for advanced data center infrastructure. STL is targeting 25% of its revenue from data center and enterprise products in the medium term, aligning with its strategy to leverage the AI and data revolution. Additionally, a growing emphasis on sustainable, energy-efficient infrastructure, in line with ESG standards, is shaping the sector. Increased investments in digital infrastructure and advanced network solutions are expected to propel growth, benefiting companies like STL.

Business Segments

Sterlite Technologies Limited (STL) operates across several core business segments, focusing on comprehensive data network and digital infrastructure solutions.

  • Optical Fiber and Cable Solutions: STL is a leading provider of high-capacity optical fiber cables and solutions, essential for telecom and network infrastructure. This segment includes high-density, compact fiber cables, which cater to growing data demands, particularly in 5G networks and data centers.
  • Network Services: STL offers network design, deployment, and maintenance services for telecom operators, cloud companies, and large enterprises. This segment focuses on building and managing end-to-end network infrastructure, including wireless networks, fiber-to-the-home (FTTH), and other network expansions.
  • Data Center Solutions: This segment includes STL’s newly launched AI-DC (Artificial Intelligence-Data Center) portfolio, which supports the increasing data needs of modern, GPU-dense data centers. STL provides high-density fiber solutions specifically designed for data centers, aiming to capture a significant share of the growing data center market.
  • Enterprise Network Solutions: STL serves various enterprises by providing tailored digital network solutions, including cloud-native, software-defined networks, which help optimize network performance and scalability for corporate clients.
  • Digital and System Integration: STL’s digital and integration services support clients in deploying and managing advanced network solutions, integrating software-defined networking (SDN), network function virtualization (NFV), and cloud infrastructure.
  • Sustainability and ESG-Focused Solutions: STL incorporates energy-efficient, sustainable infrastructure solutions across its offerings, aligning with Environmental, Social, and Governance (ESG) standards.

Key Subsidiaries and Their Information

Sterlite Technologies Limited (STL) has a global footprint with several key subsidiaries that support its operations in network solutions, digital transformation, and manufacturing across various regions. Here are some of its prominent subsidiaries and their functions:

  • Sterlite Tech Cables Solutions Limited – A core subsidiary focused on manufacturing advanced fiber-optic and cable solutions, catering to STL’s global network deployment needs.
  • STL Digital Limited – Engages in digital solutions and services, playing a critical role in STL’s diversification into digital transformation and enterprise services.
  • Sterlite (Shanghai) Trading Company Limited – Supports STL’s operations and sales within China, a significant market for optical fiber and telecom solutions.
  • Sterlite Tech Holding Inc. (USA) – This U.S.-based subsidiary enables STL to expand in North American markets, providing optical and digital solutions to local clients.
  • Metallurgica Bresciana S.p.A. – An Italian subsidiary specializing in high-end optical and metal cables, acquired to bolster STL’s manufacturing capabilities and expand in Europe.
  • STL Optical Interconnect S.p.A. – Based in Italy, this subsidiary focuses on optical interconnect products essential for data centers and high-speed networks, enhancing STL’s position in advanced optical solutions.
  • Sterlite Technologies DMCC (Dubai) – Supports the Middle Eastern and African markets, aligning with STL’s global expansion strategy for network and digital solutions.
  • Clearcomm Group Ltd (UK) – Acquired to strengthen STL’s services portfolio in the UK, focusing on network deployment and management services for European clients.
  • Jiangsu Sterlite Fiber Technology Co. Ltd. (China) – A joint venture that manufactures optical fiber solutions, providing STL with a competitive edge in the Asian market.

These subsidiaries are pivotal in driving STL’s growth strategy, enhancing its capabilities in manufacturing, digital services, and global market outreach.

Q2 FY25 Highlights

  • In Q2 FY25, Sterlite Technologies Limited (STL) reported a revenue of INR 1,413 crore. While optical fiber cable (OFC) volumes decreased on a year-on-year basis, there was an improvement in both volumes and revenues when compared quarter-on-quarter. This reflects a positive trend despite the annual decline in volumes.
  • EBITDA margin of 10.7%. This decline in margins was attributed to lower optical fiber cable (OFC) volumes on a year-on-year basis. However, there was a positive shift, with improved margins observed when comparing quarter-on-quarter performance. This indicates a recovery in operational efficiency despite the annual volume challenges.
  • Company reported PAT (Profit After Tax) loss of INR 13 crore, showing improvement as losses reduced on a quarter-over-quarter basis. This indicates the company is making progress, likely through cost optimizations or revenue improvements, signaling a move towards profitability.
  • As of H1 FY25, the company’s Net Debt stands at INR 2,169 crore, with a Debt-to-Equity ratio of 0.74. This ratio reflects the company’s current leverage and financial stability at the mid-year mark.
  • Sterlite Technologies Limited (STL) has secured large orders from a leading American customer and a major UK telecom operator for optical connectivity and fiber solutions. Additionally, the company is working with an Indian private telecom player to enable Fixed Wireless Access (FWA) deployment, alongside securing long-term contracts for fiber cable supply from another large Indian telecom provider. STL has also achieved significant deals in Italy for optical fiber cables and specialty cable products.

Financial Summary

INR in Cr.Q2FY25Q1FY25Q2FY24Q-o-Q(%)Y-o-Y(%)
Revenue*1,4131,2181,49416.01%-5.42%
EBITDA*1519321662.37%-30.09%
EBITDA %00038.96%-25.69%
Depreciation8382851.22%-2.35%
EBIT*6811131518.18%-48.09%
Finance Costs84719518.31%-11.58%
Exceptional Items–––
PBT* (Before share of Associates and JV)-16-603673.33%-144.44%
Tax-3-131276.92%-125.00%
Net Profit* (After minority Interest & share of JV)-13-472872.34%-146.43%
Profit (loss) from discontinued operations-1-160.00%-116.67%
Net Profit-14-483470.83%-141.18%
Diluted Normalized EPS-0.26-0.970.7173.18%-136.71%

SWOT Analysis of Sterlite Technologies

Strengths:

  • Global presence and integrated business model
  • Strong focus on innovation and R&D
  • Robust order book

Weaknesses:

  • Heavy reliance on telecom sector
  • Profitability pressures and high debt
  • Limited vertical integration in some areas

Opportunities:

  • Growth from 5G rollout and government digital initiatives
  • Rising demand for data centers and new tech diversification

Threats:

  • Intense competition and regulatory risks
  • Technological disruptions and forex fluctuations

Welspun Enterprises Q2 Results
Welspun Enterprises Q2FY25: Net Profit Declines 11% to ₹61.56 Crore

Company Overview

Welspun Enterprises Ltd, originally known as MSK Projects (India) Ltd, is an Indian company specializing in civil construction contracts and infrastructure projects. Founded on December 20, 1994, the company initially operated as a partnership under the name M.S. Khurana since 1976, before being rebranded as MSK Projects (India) Ltd in 1995. The company later went public in 2004 with an IPO, listing its shares on the BSE, NSE, and VSE. In 2010, it was renamed Welspun Projects Ltd and eventually became Welspun Enterprises Ltd.
Welspun Enterprises engages in a broad range of civil construction projects, such as residential townships, multi-story buildings, industrial plants, and infrastructure development. The company has executed large-scale industrial projects for sectors like petrochemicals, fertilizers, pharmaceuticals, and mining, primarily through Build-Operate-Transfer (BOT) models. It has also expanded into water distribution and surface transport projects, with a significant water supply project underway in Dewas, Madhya Pradesh.
Welspun Enterprises has formed strategic subsidiaries, including MSK Projects (Himatnagar Bypass) Pvt Ltd, Super Infrastructure & Toll Bridge Pvt Ltd, and MSK Projects (Kim Mandvi Corridor) Pvt Ltd, for infrastructure and toll projects. The company has secured notable contracts with Bharat Oman Refineries Ltd and Indian Oil Corporation for extensive civil and structural work across various pipeline and refinery projects.
In 2010, the company also diversified into the energy sector, marking a significant expansion into renewable energy by securing large-scale solar projects and establishing manufacturing facilities, including a 350,000 MTPA LSAW plant in Anjar, India, and an ERW plant in the United States. Welspun Enterprises is widely recognized for its work on the Delhi-Meerut Expressway project, underscoring its leadership in major infrastructure initiatives across India.

Industry Outlook

The Indian infrastructure sector is on a solid growth trajectory for FY25 and beyond, fueled by extensive government initiatives, increased private sector investments, and the demands of urbanization. Programs like PM Gati Shakti are catalyzing sector growth with ambitious projects, including the construction of 2 lakh km of national highways by 2025, along with expressways and urban infrastructure enhancements. The sector is anticipated to grow at a CAGR of 8-10% over the next five years, with highways projected to expand at over 10% annually. This growth extends to airports, ports, and railways, with high-impact projects such as the Delhi-Mumbai expressway and 12 new greenfield airports underway, boosting logistics efficiency and economic progress​.
In line with this growth, Welspun Enterprises Ltd. (WEL) is advancing its “Growth & Green” strategy through the DGT Project, which focuses on the collection, treatment, and repurposing of wastewater from Dharavi for reuse—an initiative underscoring sustainability and water reuse. WEL’s board recently approved an additional 9.99% stake in Welspun Michigan (WMEL), bringing ownership to over 60%. This acquisition supports a collaboration with Smart-Ops Water UK to introduce SABRE technology—a cutting-edge wastewater treatment process aimed at addressing untreated sewage in India.
With a consolidated order book of ₹15,200 crores and a rich pipeline of projects, Welspun Enterprises is positioned to drive execution and create long-term value across its verticals, capitalizing on the expanding infrastructure opportunities in India.

Business Segments

Welspun Enterprises Ltd operates primarily through two key business segments, contributing significantly to its overall portfolio.

  • Infrastructure: This segment focuses on the engineering, procurement, and construction (EPC) of infrastructure projects, particularly in roads, water supply, and urban development. The company engages in both Build-Operate-Transfer (BOT) and traditional EPC contracts. Some notable projects include the construction of major highways, rural water supply projects under the Jal Jeevan Mission, and various urban infrastructure initiatives. The infrastructure segment has seen robust growth, with sales reaching on TTM basis approx. to ₹32.27 billion in Q2FY25​. This segmentation has further diversifications such as water treatment, tunnelling, road constructions, etc.
  • Oil and Gas: In addition to infrastructure, Welspun Enterprises is involved in oil and gas exploration activities. This includes participation in the upstream oil and gas sector through a joint venture with Adani, focusing on a gas-based economy. The company also undertakes water transmission and distribution, alongside water and wastewater treatment services​.

The strategic focus of Welspun Enterprises on sustainable infrastructure development positions it well within India’s growing market, especially with government initiatives aimed at enhancing infrastructure across the nation. The company is actively participating in projects that address critical areas such as water management and urban development, which are pivotal for future growth​.

Key Subsidiaries and Their Information

Welspun Enterprises has several key subsidiaries that enhance its infrastructure portfolio. It also operates through various Associates and Joint Ventures.

  • Welspun Projects (Himmatnagar Bypass) Private Limited focuses on road infrastructure development, specifically the construction and management of bypasses to improve traffic flow.
  • Welspun Projects (Kim Mandvi Corridor) Private Limited is dedicated to developing vital highway corridors that enhance regional logistics.
  • Dewas Water projects Works Private Limited specializes in sustainable water supply infrastructure for urban areas, while
  • Welspun Buildtech Private Limited is involved in the construction of residential and commercial buildings.
  • Additionally, ARSS Bus Terminal Private Limited focuses on transportation infrastructure by developing bus terminals to improve public transport services.
  •  Grenoble Infrastructure Private Limited supports a wide range of urban and rural development projects.
  • DME Infra Private Limited works on diverse infrastructure projects across various sectors.
  • Welspun Sattanathapuram Nagapattinam Road Private Limited handles critical roadway construction and maintenance.
  • Welspun Aunta-Simaria Project Private Limited is engaged in project management, ensuring timely completion and quality oversight of construction projects.
  •  Welsteel Enterprises Private Limited supplies steel products and services for construction needs.
  •  Welspun – Kaveri Infraprojects JV collaborates on large-scale infrastructure initiatives.
  • Welspun EDAC JV Private Limited is involved in significant joint venture infrastructure projects, combining expertise from partners.
  • Welspun Michigan Engineers Limited provides engineering services and contributes to various construction projects, solidifying Welspun Enterprises’ capability to address multiple segments of the infrastructure market.

Q2 FY25 Highlights

  • Revenue from operations surged by 22.1%, reaching ₹788.5 crore, compared to ₹645.7 crore in the same quarter last year. Total income increased to ₹837.92 crore from ₹692.65 crore year-over-year, while expenses rose to ₹736.33 crore from ₹595.61 crore. Highest-ever H1 Income of ₹ 1,798 Crores achieved in period ending September 2024.
  • The company’s EBITDA grew by 21.7%, totaling ₹100.5 crore, up from ₹82.6 crore in the previous year. However, the EBITDA margin slightly decreased to 12.7%, down from 12.8% year-on-year.
  • Consolidated net profit for the September quarter of FY25 fell by approximately 11% to ₹61.56 crore, primarily due to higher expenses. Abhishek Chaudhary has been appointed as the new Chief Executive Officer (CEO), effective November 4, 2024.
  • The consolidated order book of the company stood at ₹15,200 crore at the end of September 2024.
  • The board approved the acquisition of an additional 9.99% stake in Welspun Michigan from Patel Engineering for around ₹100 crore.
  • Welspun Enterprises secured a significant design and build contract worth ₹1,989 crore from the Brihanmumbai Municipal Corporation (BMC). This contract involves designing and constructing a tertiary treated water conveyance tunnel from the Dharavi Wastewater Treatment Facility to the Ghatkopar WWTF.

Financial Summary

SWOT Analysis

Strengths:

  1. Diverse portfolio of projects.
  2. Strong financial backing.
  3. Proven expertise in infrastructure development.
  4. Robust order book with ongoing contracts.

Weaknesses:

  1. High capital expenditure leading to increased debt.
  2. Dependence on government contracts for revenue.
  3. Limited international presence.
  4. Risk of project delays.

Opportunities:

  1. Growing infrastructure sector in India.
  2. Potential for public-private partnerships (PPP).
  3. Expansion into renewable energy projects.
  4. Adoption of technological advancements in project execution.

Threats:

  1. Intense competition in the infrastructure space.
  2. Challenges related to regulatory and environmental compliance.
  3. Rising input costs affecting profitability.
  4. Economic slowdowns impacting project viability.

sbi cards & payment services ltd. q2 results
SBI Card Q2 Results: Profit After Tax Falls 33% to Rs 404 Crore Amid Rising Bad Loan Provisions

Company Overview

Incorporated as a private limited company in New Delhi on May 15, 1998, SBI Cards and Payment Services Limited is a prominent subsidiary of the State Bank of India (SBI) and became a public limited company in August 2019. It specializes in issuing credit cards and functions as a corporate insurance agent, offering policies to cardholders. Currently, it is the second-largest credit card issuer in India, managing over 1.79 crore active credit cards. Since its inception, SBI Cards has leveraged SBI’s trusted brand to become a reliable provider of diverse credit card products, supporting cashless and digital transactions in India. The company’s growth has been notable, achieving higher-than-market expansion in terms of credit card numbers and spend. Between March 2017 and March 2019, its credit card spends grew at a CAGR of 54.2%, outpacing the overall industry’s growth. This success is attributed to India’s economic and demographic trends, such as rising incomes, increasing consumer demand, and e-commerce expansion.
With a robust customer acquisition network, SBI Cards utilizes over 32,000 outsourced sales personnel in 145 cities, operating through physical outlets and digital channels, including its website and mobile app. SBI Cards also benefits from SBI’s network, accessing its vast customer base via 21,961 branches, enhancing its reach. SBI Cards has established a robust position in India’s credit card market by diversifying its products, expanding partnerships, and leveraging SBI’s brand and network. The company’s forward momentum continues with its focus on digital expansion and innovative offerings tailored to India’s evolving consumer needs.

Incorporated as a private limited company in New Delhi on May 15, 1998, SBI Cards and Payment Services Limited is a prominent subsidiary of the State Bank of India (SBI) and became a public limited company in August 2019. It specializes in issuing credit cards and functions as a corporate insurance agent, offering policies to cardholders. Currently, it is the second-largest credit card issuer in India, managing over 1.79 crore active credit cards. Since its inception, SBI Cards has leveraged SBI’s trusted brand to become a reliable provider of diverse credit card products, supporting cashless and digital transactions in India. The company’s growth has been notable, achieving higher-than-market expansion in terms of credit card numbers and spend. Between March 2017 and March 2019, its credit card spends grew at a CAGR of 54.2%, outpacing the overall industry’s growth. This success is attributed to India’s economic and demographic trends, such as rising incomes, increasing consumer demand, and e-commerce expansion.
With a robust customer acquisition network, SBI Cards utilizes over 32,000 outsourced sales personnel in 145 cities, operating through physical outlets and digital channels, including its website and mobile app. SBI Cards also benefits from SBI’s network, accessing its vast customer base via 21,961 branches, enhancing its reach. SBI Cards has established a robust position in India’s credit card market by diversifying its products, expanding partnerships, and leveraging SBI’s brand and network. The company’s forward momentum continues with its focus on digital expansion and innovative offerings tailored to India’s evolving consumer needs.

Industry Outlook

India’s credit card industry is experiencing rapid growth, driven by digital adoption, increased consumer spending, and favourable economic conditions. The value of credit card transactions is expected to reach INR 51.72 trillion by FY 2027, growing at a CAGR of 39.22% since FY 2022, while transaction volumes are anticipated to grow at a CAGR of 26.43%. This growth aligns with a broader shift toward cashless payments, supported by rising incomes, urbanization, and the integration of digital financial services.
Technological advancements like fintech innovations, co-branded cards, and improved digital infrastructure—particularly Unified Payments Interface (UPI) and contactless payment technology—are further encouraging credit card adoption. Although digital wallets and UPI present strong competition, credit cards maintain a unique advantage with benefits such as reward programs and EMI options, appealing to consumers seeking flexible credit.
SBI Cards is well-positioned to capitalize on these trends, focusing on expanding its RuPay network for UPI-linked credit transactions, which now make up approximately 10% of its card portfolio. Additionally, it is leveraging partnerships, launching new products, and utilizing a broad customer acquisition network across digital and physical channels. This approach aligns SBI Cards with shifting demographics and rising demand for credit services, solidifying its position in the expanding credit card market.

Business Segments

SBI Cards and Payment Services operates primarily in two business
Segments.

• Credit Card Issuance: The core of SBI Cards’ business involves issuing credit cards tailored to a diverse customer base, from first-time users to premium customers. This segment offers value-added products ranging from lifestyle and cashback cards to co-branded options with partners across industries like travel, fuel, and retail. The company continues to expand its digital footprint and strengthen partnerships with networks such as RuPay for UPI credit transactions, aiming to adapt to the evolving digital payment landscape.

• Corporate Insurance Agency Services: SBI Cards also serves as a corporate insurance agent, providing policies to cardholders. Although a smaller segment compared to credit card services, it offers a complementary revenue stream by cross-selling insurance products, such as health and accident coverage, tailored to cardholders’ needs.

• These segments allow SBI Cards to capture a broader customer base through a mix of financial and insurance services, supporting its growth strategy in India’s expanding credit market

Key Subsidiaries and Their Information

SBI Cards and Payment Services Limited, a subsidiary of the State Bank of India (SBI), specializes in credit card services across India, serving both individual and corporate clients. Benefiting from SBI’s broad network and strong brand presence, SBI Cards has access to a large customer base, allowing it to deliver customized credit card solutions for a range of needs.

For individual users, SBI Cards offers a variety of retail credit cards, including co-branded cards in partnership with brands like IRCTC and Tata. These co-branded options provide customers with targeted rewards, such as travel benefits and retail discounts, which appeal to various spending preferences.

In the corporate segment, SBI Cards supports businesses with business credit cards designed to manage expenses efficiently. These corporate cards come with features such as customizable credit limits, travel perks, and expense tracking tools, making them highly suitable for companies with frequent business-related spending.

Q2 FY25 Highlights

  • Total Revenue increased by 8% year-over-year to ₹4,556 crore from ₹4,221 crore in Q2 FY24, indicating a stable expansion in revenue streams, possibly due to higher transaction volumes and credit card adoption.
  • Profit After Tax (PAT) declined sharply, falling to ₹404 crore from ₹603 crore in Q2 FY24, suggesting higher operational or credit-related costs.
  • Return on Average Assets (ROAA) decreased to 2.7% from 4.9% in the previous year, while Return on Average Equity (ROAE) dropped to 12.5% from 22.3%, pointing to reduced profitability and efficiency in asset and equity returns.
  • Capital Adequacy Ratio (CAR) remains robust at 22.1%, with Tier 1 at 16.3%, ensuring compliance with regulatory standards and providing a cushion for credit risk.
  • Cards-in-Force saw a 10% YoY growth, reaching 1.96 crore as of Q2 FY25 compared to 1.79 crore in Q2 FY24, indicating successful customer acquisition and retention.
  • Market Share for Cards-in-Force stands at 18.5% (down from 19.2%) and for spending at 15.7% (down from 18.0%), yet SBI Cards holds its position as 2nd in Cards-in-Force and 3rd in spending across the industry.
  • Credit Card Receivables grew by 23% YoY to ₹55,601 crore in Q2 FY25 from ₹45,078 crore in Q2 FY24, indicating increased credit usage or delayed repayments.
  • Customer Spending rose by 3% YoY, reaching ₹81,893 crore versus ₹79,164 crore in the previous year, showing stable customer spending despite modest growth influenced by economic conditions.

Financial Summary

INR in Cr.Q2FY25Q1FY25Q2FY24Q-o-Q(%)Y-o-Y(%)
Interest Income                        2,290       2,243       1,9022.10%20.40%
Non-Interest Income
(Fees, Commission Income & Others)		                        2,131       2,115       2,1860.76%-2.52%
Total Revenue from Operations                        4,421       4,359       4,0871.42%8.17%
Total Other Income                           135          124          1348.87%0.75%
Total Income                        4,556       4,483       4,2211.63%7.94%
Finance Costs                           788          767          6052.74%30.25%
Operating Costs                        2,011       1,816       2,06610.74%-2.66%
Earnings before credit costs                        1,757       1,900       1,551-7.53%13.28%
Impairment Losses & Bad Debts                        1,212       1,101          74210.08%63.34%
Profit Before Tax                           545          799          809-31.79%-32.63%
Profit After Tax                           404          594          603-31.99%-33.00%
EPS(Diluted)                          4.25         6.25         6.35-32.00%-33.07%

SWOT Analysis

Strengths:

  1. Strong brand recognition
  2. Wide range of product offerings
  3. Significant market share
  4. Extensive digital and physical presence

Weaknesses:

  1. Reliance on SBI’s network
  2. Focus primarily on urban markets
  3. High operating expenses
  4. Limited international presence

Opportunities:

  1. Expanding digital economy
  2. Potential for product and service innovation
  3. Increasing consumer spending
  4. Opportunities for partnerships and alliances

Threats:

  1. Regulatory hurdles
  2. Cybersecurity vulnerabilities
  3. Credit risk exposure
  4. Economic downturns

Patanjali Foods Q2 Results
Patanjali Foods Q2 Results: Net Profit Surges 21% to Rs 309 Crore Amid Strong Performance

Company Overview

The Patanjali Group, founded by Baba Ramdev and Acharya Balkrishna, is a prominent Indian conglomerate known for its focus on natural, Ayurvedic, and wellness-oriented products. Initially centered on Ayurveda and herbal health, the group rapidly expanded into diverse sectors, including FMCG, healthcare, food products, personal care, and education. Key brands like Patanjali Ayurved and Patanjali Foods offer a wide range of products, from food items and supplements to cosmetics and home care products. With a mission to promote traditional Indian medicine and healthy living, the Patanjali Group has become a household name, emphasizing quality, affordability, and a focus on sustainable practices.
Incorporated in 1986, Patanjali Foods Limited is a leading FMCG company in India, known for its presence across edible oils, food & FMCG, and wind power generation sectors. Originally known as Ruchi Soya Industries Limited, the company has established a strong portfolio of brands, including Patanjali, Ruchi Gold, and Nutrela, offering products at various price points to meet diverse consumer needs. Patanjali Foods is engaged in processing oil seeds, refining crude oil, and producing a variety of food products, such as biscuits and nutraceuticals. It also has a significant focus on renewable energy with wind power generation operations and maintains an extensive network of manufacturing plants across India.

Industry Outlook

For FY25, the industry outlook for Patanjali Foods appears promising, driven by growth in the FMCG and health foods sectors, a rising demand for natural and organic products, and increasing health consciousness among Indian consumers. The edible oil segment, a major contributor to Patanjali Foods’ revenue, is expected to grow due to increased consumption and demand for healthier oil alternatives. The health and wellness segment, particularly nutraceuticals, is also gaining momentum as consumers prioritize immunity and preventive health.

According to recent market reports, the FMCG sector in India is projected to grow at a compound annual growth rate (CAGR) of around 12-14% through 2025. The edible oils market, specifically, may see a CAGR of 9-10%, while the nutraceutical segment, where Patanjali Foods is expanding, is estimated to grow at a CAGR of 15-17%.

These growth rates align with Patanjali Foods’ strategy to diversify its product portfolio and increase its market share across segments. With its focus on affordable, natural, and Ayurvedic products, Patanjali Foods is well-positioned to benefit from these industry trends in FY25.

Business Segments

Patanjali Foods operates in two main business segments: Edible Oils and Food

          & FMCG.

  • Edible Oils: This segment is the largest contributor, accounting for

 approximately three-fourths of Patanjali Foods’ total revenue. In Q2 FY25,

 the Edible Oils segment experienced a 10% increase in revenue, reaching

 ₹5,939 crore, largely supported by stable demand. Branded edible oils played

 a significant role, contributing nearly 74% to this segment’s revenue. This

steady demand helped drive the overall revenue for the company to

₹8,154 crore for the quarter, reflecting an overall growth of about 4%

compared to the previous year.

  • Food & FMCG: The Food and FMCG segment, though smaller, accounted for around 25% of the total revenue in Q2 FY25. However, the segment faced challenges, with a 7% decline in revenue, attributed to sluggish demand in the broader industry. Despite this, staples like rice, pulses, and wheat performed better, with sales reaching ₹1,032 crore. The segment’s EBITDA for Q2 FY25 was ₹234 crore, reflecting some impact from the softer demand for other FMCG products​.
  • Wind power generation: Although smaller in scale, this segment generated revenue of ₹14 crore, showcasing Patanjali Foods’ commitment to sustainable energy by fulfilling 20% of its energy needs through renewable sources.

Key Subsidiaries and Their Information

Patanjali Foods Limited has several key subsidiaries that enhance its operations and product offerings, particularly in the FMCG sector and edible oils. Here are the main subsidiaries as of FY25:

  • Ruchi Soya Industries Limited: This is one of the largest subsidiaries, focusing on edible oils and food products. It significantly contributes to Patanjali Foods’ revenue through its various brands, including Ruchi Gold and Nutrela. Following its acquisition by Patanjali in 2021, Ruchi Soya has been integral to the company’s operations.
  • Patanjali Ayurved Limited: This subsidiary plays a crucial role in providing a range of Ayurvedic and herbal products. Patanjali Foods has expanded its FMCG offerings by acquiring the food business from Patanjali Ayurved, which includes a variety of consumer-focused products.
  • Patanjali Natural Biscuits Private Limited: This subsidiary is involved in the production of biscuits and snacks, further diversifying Patanjali’s product range in the FMCG sector.
  • Patanjali Wind Energy Private Limited: Engaged in wind power generation, this subsidiary contributes to the company’s sustainability efforts by utilizing renewable energy sources. In Q2 FY25, it generated revenue of ₹14 crore from this segment​.

Q2 FY25 Highlights

  • In Q2 FY25, Patanjali Foods Limited reported robust performance despite a challenging environment in both the Food & FMCG and Edible Oils segments. The company’s revenue from operations reached ₹8,154.19 crore, marking a 4.25% year-on-year (YoY) growth.
  • Patanjali Foods achieved its highest-ever EBITDA of ₹493.86 crore, reflecting a 17.81% YoY improvement. The EBITDA margin also expanded by 70 basis points to 6.06%.
  • Gross profit rose significantly from ₹1,021.26 crore to ₹1,292.81 crore, primarily due to favorable pricing scenarios in the market. The PAT increased by 21.38% YoY to ₹308.97 crore, with a corresponding margin improvement of 53 basis points.
  • There has been a noticeable shift in consumer preferences from traditional General Trade channels to modern trade, e-commerce, and quick commerce, leading to higher inventory levels among traditional partners. The company exported products to 21 countries, generating ₹34.55 crore in revenue from exports during the quarter.
  • The wind turbine power generation segment contributed ₹14.35 crore in revenue, with the company sourcing approximately 20% of its energy needs from renewable sources​.
  • During the quarter, Patanjali Foods significantly increased its advertising and sales promotion expenses, surpassing ₹130 crore, which brought the total for H1 FY25 to over ₹185 crore. The company launched various marketing campaigns across print, social media, TV, and radio, promoting specific products. Notably, celebrities such as Shilpa Shetty, Shahid Kapoor, and Khesari Lal Yadav were engaged to endorse Nutrela-branded soya chunks, edible oils, and nutraceuticals, respectively.
  • In addition to celebrity endorsements, Patanjali initiated the Rural Connect Program and Nutrela Operation Thunder to enhance brand visibility and distribution in rural, underserved markets. The brand also collaborated with popular YouTube channels like Rajshri Foods and Get Curried, featuring star chefs who showcased enticing recipes using Nutrela product.

Financial Summary

INR in Cr.Q2 FY25Q1FY25Q2FY24Q-o-Q
Growth		Y-o-Y
Growth
Total Revenue81547173782213.68%4.25%
Selling/ General/ Admin
Expenses Total		1301179110.94%43.59%
Depreciation/
Amortization		565760-0.90%-6.07%
Total Operating
Expense		77626824748713.73%3.67%
Operating Income39334933512.63%17.15%
Profit Before Tax41735933516.13%24.42%
Profit After Tax30926325517.46%21.23%
Diluted Normalized EPS8.537.267.0317.49%21.34%

SWOT Analysis

Strengths:

  1. Wide range of products
  2. Strong brand reputation
  3. Extensive reach in both rural and urban areas
  4. Solid financial performance

Weaknesses:

  1. Heavy reliance on edible oils
  2. Limited international presence
  3. High costs of raw materials

Opportunities:

  1. Rising consumer interest in health and wellness products
  2. Growth in online and modern retail channels
  3. Potential to expand into underserved rural markets

Threats:

  1. Intense market competition
  2. Regulatory hurdles
  3. Economic downturns

Persistent Systems Q2FY25
Persistent Systems Q2FY25 Earnings: Profit Rises by 23.45% YoY

Company Overview

Persistent Systems, incorporated in 1990, is a global software and technology services company specializing in product engineering and digital transformation. The company has demonstrated expertise in emerging technologies, focusing on IoT products, platform development, and strategic partnerships with leading product companies. With a strong presence across sectors like industrial machinery, healthcare, Smart City, and smart agriculture, Persistent delivers solutions that span the entire product lifecycle. In its recent quarter, the company reported $345 million in revenue, marking 18.4% year-on-year growth and 5.3% sequential growth, with key contributions from Healthcare and Life Sciences (up 71.2%) and BFSI (up 15.3%). Persistent continues to drive growth, leveraging advanced technologies like AI and maintaining 18 consecutive quarters of growth.

Industry Outlook

The outlook for the IT sector in FY25 looks promising, with macroeconomic headwinds expected to subside, leading to improved earnings visibility. After outperforming the Nifty in the previous year, the IT sector is likely to maintain its momentum, benefiting from a lower base and easing headwinds. For Persistent Systems (PSL), the company is well-positioned to seize growth opportunities in digital technologies, thanks to its strong product development capabilities and early recognition of digital trends. Management is optimistic about achieving industry-leading revenue growth in FY24, driven by broad-based demand across various sectors, robust deal bookings, new client additions, and incremental revenue from acquisitions. PSL’s leadership in outsourced product development, long-standing client relationships, and end-to-end service offerings position it to capitalize on emerging opportunities effectively. With a strong presence in North America, Europe, and other regions, Persistent is expected to benefit from global digital transformation trends. Its focus on capability-led acquisitions, particularly in Europe, may help it capture new opportunities in consolidating markets.
Persistent aims to maintain industry-leading growth while optimizing margins by 200–300 basis points. Its focus on scaling advanced services, such as AI, and leveraging its robust pipeline suggests a strong performance in FY25.

Business Segments

  • Healthcare and Life Sciences:
    • This segment has experienced significant growth, with a year-on-year increase of 71.2%.
    • The growth is driven by expanding digital transformation initiatives in healthcare, including IoT applications and data analytics.
  • Banking, Financial Services, and Insurance (BFSI):
    • The BFSI sector recorded a 15.3% year-on-year growth. Persistent’s focus on AI adoption and digital services in financial operations is enhancing customer experience and operational efficiency.
  • Technology and High-Tech:
    • Although growth in this segment has been relatively slower, management expects an uptick in the next few quarters as demand increases. Investments in innovative technologies and strategic partnerships are expected to drive future growth.

Key Subsidiaries and Their Information

Persistent Systems has multiple wholly owned subsidiaries, with presence in over 20 countries.

  • Persistent Systems Inc.:
    • This North American subsidiary plays a critical role in driving growth, especially in the healthcare and BFSI sectors. The company is focusing on enhancing its digital offerings and has been successful in securing large deals.
  • Persistent Systems UK:
    • Focused on the European market, this subsidiary has been pivotal in expanding Persistent’s presence in Europe. It emphasizes product engineering and digital transformation services, catering to various industries, including automotive and finance.
  • Acquisitions and Partnerships:
    • Persistent has made several acquisitions to bolster its technology stack. For instance, the acquisition of MetaLogix has strengthened its capabilities in data management and analytics. Partnerships with leading technology companies enhance its service offerings, particularly in AI and cloud services.
  • Focus on Emerging Technologies:
    • Persistent’s subsidiaries are investing in emerging technologies like IoT, AI, and blockchain to enhance their service offerings and provide innovative solutions to clients. The company employs a global delivery model that leverages talent from various regions, ensuring cost efficiency and high-quality service delivery. With macroeconomic challenges easing and increased demand for digital transformation services, subsidiaries of Persistent Systems are well-positioned for sustained growth. The management is optimistic about capturing a larger market share in the digital services landscape, particularly with their strong track record in OPD.

Q2 FY25 Highlights

  • Revenue growth: PSL reported $345.5 million in revenues, up 5.1% q-o-q in constant currency (CC) terms beating our estimates of $342 million. Revenue in USD terms was up 5.6% q-o-q/18.4% y-oy while revenue in rupee terms stood at Rs. 2,897 crores, up 5.8% q-o-q/20.1% y-o-y. Growth was led by Healthcare & Lifesciences and BFSI verticals. Persistent reiterated its aspiration to achieve $ 2 billion revenue target by FY27. Management would endeavor to maintain utilization at 83-85%.
  • EBIT margins: EBIT margins was flat q-o-q at 14% slightly beating our estimates of 13.9%. Margin headwinds comprising of wage hike (-210 bps), absence of policy rationalization present in Q1 (-130 bps), Incremental impact of fresh ESOP issuance in Q2(-60 bps) and lower earnout credit (-60 bps) was neutralized by margin tailwinds comprising of Utilization (+120 bps), Sub contractor cost reduction (+70 bps), lower resale business (+50 bps), Pricing and right shoring (+130 bps), favorable currency (+30 bps) and absence of H-1B visa cost (+60 bps).
  • Order bookings: In the latest performance metrics, Persistent Systems reported a Total Contract Value (TCV) of $529 million, reflecting a 14% increase quarter-over-quarter (q-o-q) and a 10% increase year-over-year (y-o-y). The company achieved a book-to-bill ratio of 1.5x, up from 1.4x in Q1 FY25. New Business TCVs were particularly strong, reaching $389.8 million, which marks a 25% increase q-o-q and a 24% increase y-o-y. The Annual Contract Value (ACV) totaled $348.3 million, showing a modest 3% increase q-o-q and a more robust 10% increase y-o-y. Additionally, New Business ACV reached $218.6 million, reflecting a 10% increase q-o-q and a 19% increase y-o-y. These figures indicate a healthy growth trajectory for Persistent Systems, driven by strong demand and successful business strategies
  • Top clients & Client additions: Revenue from the top-5 clients, top-10 clients, top-20 clients, and top-50 clients grew 7.7%/ 5.3%/5.7%, and 5.4% q-o-q, respectively. Persistent added two clients in the $10mn+ and four clients in the $1mn+ revenue category sequentially.
  • Headcount & attrition: Net headcount additions declined by 282, taking total headcount to 23,130. TTM attrition inched up by 10 bps q-o-q to 12%. However, utilization improved 270 bps q-o-q to 84.8%.
  • Cash generation & DSO:  Cash & investments stood at Rs 1791.6 crore, down 6.2%       q-o-q. DSO stood at 68 from 67 in Q1FY25. Operating cash flows to PAT for Q2FY25 was 108.3% compared to 49.3% Q1FY25.

SWOT Analysis of Persistent Systems: Key Insights for Strategic Growth

Strengths:

  1. Expertise in Digital Transformation – Persistent Systems excels in cutting-edge digital transformation services, providing a strong competitive edge.
  2. Consistent Growth – The company has demonstrated steady revenue growth, reinforcing its position in the global market.
  3. Robust Deal Wins – Regular success in securing high-value contracts underscores its reliability and industry relevance.
  4. Global Presence – A well-established presence across North America, Europe, and other key regions, giving it a broad market reach.

Weaknesses:

  1. Dependence on BFSI and Healthcare – Heavy reliance on these sectors may limit diversification, posing a potential risk in times of industry slowdown.
  2. Smaller Size – Compared to some industry giants, Persistent Systems operates at a smaller scale, which may impact market dominance.
  3. Flat Margins – Margins have remained relatively stagnant, highlighting the need for cost optimization and efficiency improvements.
  4. Integration Challenges from Acquisitions – Ongoing acquisitions pose potential hurdles in seamless integration, impacting short-term operational efficiency.

Opportunities:

  1. Rising Demand for AI and Digital Transformation – The increasing adoption of AI and digital services presents lucrative growth opportunities.
  2. Healthcare and BFSI Expansion – Expanding its footprint in the rapidly growing healthcare and BFSI sectors can drive significant revenue.
  3. Focus on Cloud and IoT Solutions – With businesses globally shifting to cloud and IoT platforms, Persistent is well-positioned to capitalize on this trend.
  4. European Expansion – The company’s increasing focus on Europe offers new market opportunities, especially in digital transformation and engineering services.

Threats:

  1. Global Economic Uncertainty – Economic fluctuations could negatively impact client spending and growth projections.
  2. Competition from Industry Leaders – Larger competitors with greater resources and market share could pose a threat to Persistent’s expansion efforts.
  3. Currency Fluctuations – Persistent’s global operations expose it to currency exchange risks that could affect profitability.
  4. Cybersecurity Threats – As digital services grow, so do cybersecurity risks, requiring constant vigilance and investment to safeguard client data.

L&T Finance Holdings Q2 FY25
L&T Finance Q2 FY25 Results: Net Profit Rises 2% to ₹696 Crore, Revenue Jumps 17%

Company Overview

L&T Finance Holdings, part of the Larsen & Toubro Group, is a key player in India’s financial sector, offering a wide range of services across rural, housing, and infrastructure finance. Through its subsidiaries, it provides products like microfinance, two-wheeler loans, farm equipment finance, and home loans. The company is also involved in financing large-scale infrastructure projects.

L &T Finance emphasizes digital transformation, using data analytics and AI to enhance customer experience and streamline operations. It has adopted a strong Environmental, Social, and Governance (ESG) framework, ensuring sustainable business practices. In recent years, it has improved asset quality by reducing non-performing assets (NPAs) and focusing on cost optimization. With a focus on retail and rural finance, L&T Finance is committed to long-term, responsible growth in India’s financial ecosystem.

Industry Outlook

India’s economy is projected to grow by 7% in FY25, driven by strong private consumption and credit demand. This growth is set to significantly boost the financial sector, particularly non-bank financial companies (NBFCs), which are expected to see increased profitability despite higher funding costs. Credit demand is likely to expand, especially in infrastructure, housing, and microfinance sectors, with NBFC loan growth projected to increase by 15%, fueled by strong performance in key consumption areas. Infrastructure lending is poised for substantial growth due to large investments in energy and urban development. L&T Finance plans to expand its infrastructure portfolio by over 20% to capitalize on these opportunities. Additionally, the company is focused on improving asset quality, aiming to reduce its Gross Non-Performing Assets (NPAs) to below 3.0%, down from 3.1% in FY24.  L&T Finance is also expected to enhance its sustainability efforts by increasing   its allocation towards ESG projects.

Business Segments

  • Rural Finance: This includes microfinance, farm equipment finance, and two-wheeler loans, primarily catering to rural consumers. It plays a key role in driving financial inclusion in India’s rural economy.
  • Retail Finance: L&T Finance offers home loans, loans against property, and other personal loans, targeting individual consumers in urban and semi-urban areas.
  • Infrastructure Finance: The company has a significant presence in financing large-scale infrastructure projects, such as energy, transportation, and urban development, supporting India’s infrastructure growth.
  • Mutual Funds and Wealth Management:  Through L&T Investment Management, the company manages a wide range of mutual funds and wealth management products for retail and institutional investors.

Q2 FY25 Highlights

  • L&T Finance reported a Profit After Tax (PAT) of ₹696 crore, reflecting a 17% increase compared to the previous year. This growth is a strong indicator of the company’s profitability and overall financial health.
  • The company maintained a stable Return on Assets (RoA) at 2.60%, up 18 basis points year-over-year. With 96% of its loan book now in retail financing, it is advancing its “retailization” strategy to reduce corporate loan dependence and improve asset quality.
  • L&T Finance’s retail loan portfolio grew 28% YoY to ₹88,975 crore, driven by strong demand for home loans, vehicle financing, and microfinance. The consolidated book grew 18% YoY, the highest since Q1FY20.
  • L&T Finance improved its Net Interest Margin (NIM) to 8.94%, up by 32 bps YoY, while reducing its Weighted Average Cost of Borrowings (WACB) to 7.80%, down by 5 bps. Credit cost remained stable at 2.59%, and the collection efficiency for the rural segment stood at 99.45%.

Financial Summary

INR in Cr.FY25 Q2FY25 Q1QoQ (%)FY24 Q2YoY (%)
Total Operating Income401937846.20%321425.10%
Total Expenditure (Excl Depreciation)157514826.20%133118.30%
Operating Profit (PBDIT) excl Other Income244423026.20%188229.90%
Other Income502.00%268-98.30%
Operating Profit (PBDIT)244923026.40%215113.90%
Interest147613519.20%132511.40%
Depreciation332817.10%2817.50%
Profit Before Tax9409221.90%79717.80%
Tax2432372.50%20319.60%
Net Profit6976851.70%59417.20%
Share in Profit of Associates000.00%00.00%
Minority Interest1-0.43-523.10%1-223.60%
Consolidated Net Profit6966861.50%59516.90%

SWOT Analysis

Strengths:

  1. Strong Family Background
  2. Wide Range of Products
  3. Effective Retaliation Strategy
  4. Significant Presence in Rural Areas

Opportunities:

  1. Expanding Rural Market
  2. Government Investment in Infrastructure
  3. Growth in Digital Services
  4. Potential for Cross-Selling

Weaknesses:

  1. Heavy Reliance on External Borrowing
  2. Legacy Issues with Corporate Loans
  3. Non-Performing Assets (NPAs)
  4. Delay in Digital Transformation

Threats:

  1. Changes in Regulations
  2. Economic Slowdown
  3. Increasing Competition
  4. Fluctuations in Interest Rates