NTPC Green Energy IPO is a book-built issue of Rs 10,000.00 crores. The issue is entirely a fresh issue of 92.59 crore shares.
About NTPC Green Energy Limited
Incorporated in April 2022, NTPC Green Energy Limited is a wholly-owned subsidiary of NTPC Limited. NTPC Green is a renewable energy company that focuses on undertaking projects through organic and inorganic routes. The largest renewable energy public sector enterprise, NTPC (National Thermal Power Corporation Limited), was incorporated on November 7, 1975. The company’s renewable energy portfolio includes solar and wind power, making it easier to generate clean energy. Additionally, the company aims to develop utility-scale renewable energy projects and projects for public sector undertakings (“PSUs”) and Indian corporations. As of June 30, 2024, the company has an energy capacity of 14,696 MW, consisting of 2,925 MW from operating projects and 11,771 MW from contracted and awarded projects. Compared to its peers, NTPC has achieved higher EBITDA margins and PTA margins in the last 2 years. The company is constructing 31 renewable energy projects in 7 states, totaling 11,771 MW. As of June 30, 2024, the workforce comprised 234 employees, and the company utilised the services of 45 contract labourers.
IPO Subscription Period
Open Date: November 19, 2024
Close Date: November 22, 2024
Allotment Date: November 25, 2024
Listing Date: November 27, 2024
Stock Exchanges: BSE and NSE
Pricing Details
Price Band: ₹102 – ₹108 per Share
Face Value: ₹10 per Share
Minimum Lot Size: 138 shares
Investment Requirement:
Retail Investors: Minimum ₹14,904 (138 shares)
Small Non-Institutional Investors (sNII): 14 lots (1932 shares) – ₹208,656
Big Non-Institutional Investors (bNII): 68 lots (9384 shares) – ₹1,013,472
Initiation of Refunds: Wednesday, November 26, 2024
Credit of Shares to Demat: Wednesday, November 26, 2024
Listing Date: Thursday, November 27, 2024
Cut-off time for UPI mandate confirmation: 5 PM on November 22, 2024
Book Running Lead Managers
Niva Bupa Health Insurance Limited has appointed prominent financial institutions as book-running lead managers for the IPO:
IDBI Capital Market Services Limited
IIFL Securities Limited
HDFC Bank Limited
Nuvama Wealth Management Limited
Kfin Technologies Limited has been designated as the registrar for the IPO.
Promoter Information
Promoter: The Promoters of the Company are the President of India, acting through the Ministry of Power, Government of India and NTPC Limited.
Shareholding:
Pre-Issue: 100%
Post-Issue: 89.01%
Financial Highlights
Revenue Growth: Increased by 11 folds from ₹170 crores (FY 2023) to ₹2037.66 crores (FY 2024)
Profit After Tax (PAT): Rose by 100%, reaching ₹344.72 crores in FY 2024
Net Worth: ₹6232 crores
Total Borrowing: ₹12796 crores
Key Performance Indicators (KPIs):
ROE: 7.39%
RoNW: 2.14%
P/BV: 9.89
EPS (Pre-IPO): ₹0.46
EPS (Post-IPO): ₹0.42
P/E Ratio (Pre-IPO): 234.97x
P/E Ratio (Post-IPO): 259.56x
IPO Objectives
The company proposes to utilise the Net Proceeds towards funding the following objects:
Investment in the wholly owned Subsidiary, NTPC Renewable Energy Limited (NREL), for repayment/ prepayment, in full or in part of certain outstanding borrowings availed by NREL
General corporate purpose
Subscription Status (As of November 19, 2024, 7:02:07 PM)
Waaree Energies Ltd. is a prominent player in the renewable energy sector and one of India’s largest manufacturers of solar PV modules. Established in 1989, Waaree Energies has built a strong presence in the solar energy value chain, encompassing manufacturing, project development, and EPC (Engineering, Procurement, and Construction) services. Waaree operates state-of-the-art solar PV module manufacturing facilities with a total installed capacity of 12 GW, making it one of the largest in India. Waaree has developed and commissioned over 600 MW of solar power projects and has a pipeline of projects across multiple geographies. In FY23, Waaree Energies achieved a revenue of approximately ₹4,000 crores, demonstrating consistent growth driven by its diversified business segments.
Industry Outlook
The Indian solar sector is projected to grow at a CAGR of 15-20% between 2023 and 2030. The solar energy industry in India is at a transformative stage, driven by the government’s ambitious renewable energy targets, favourable policies, and increasing private sector participation. As of 2024, India has achieved over 80 GW of installed solar capacity, making it one of the largest solar markets globally. The country aims to achieve 280 GW of solar capacity by 2030, as part of its broader target of 500 GW from non-fossil fuel sources. The PLI (Production Linked Incentive) Scheme for solar module manufacturing provides financial incentives to enhance domestic production and reduce import dependency, particularly on China. Initiatives like Green Hydrogen Mission and solar-based hybrid projects are creating new opportunities in the solar sector. India is targeting 40 GW of domestic manufacturing capacityby 2026 under the PLI scheme.
Financial Summary
INR Cr.
Q1 FY25
Q2 FY25
FY23
FY24
Revenue
3409
3574
6751
11398
EBITDA
552
525
836
1575
OPM
16%
15%
12%
14%
PBT
531
499
677
1734
Net Profit
401
376
500
1274
NPM
11.7%
10.5%
7.41%
11.2%
EPS
19.99
13.73
24.49
62.72
C&CE
3698
3813
1736
3779
Business Segments:
Solar PV Modules: Waaree Energies is the largest solar module manufacturer in India, with a 12 GW annual production capacity spread across multiple manufacturing facilities. It produces high-efficiency photovoltaic (PV) modules, including monocrystalline, polycrystalline, bifacial, and PERC (Passivized Emitter and Rear Cell) technologies.
Power Generation: In Power Generation business segment focuses on producing electricity from diverse sources, including renewable and conventional energy.
EPC Contracts: Provides turnkey solar solutions for utility-scale and rooftop projects. Waaree has successfully executed over 1 GW of EPC projects, including utility-scale solar farms and rooftop installations. End-to-end project management, from design and procurement to construction and commissioning.
Subsidiary Information:
Waaree Clean Energy Solutions Private Limited: WCESPL is currently engaged in the business of generating, trading, purchasing, marketing, selling, importing, exporting, producing, manufacturing, transmitting, distributing, supplying, exchanging, or otherwise dealing in all aspects of thermal, hydro, nuclear, solar, wind power and power generated through non-conventional / renewable energy sources.
Waaree Power Pvt Ltd: WPPL is currently engaged in the business of carrying out the business of generating, trading, purchasing, marketing, selling, importing, exporting, producing, manufacturing, transmitting, distributing, supplying, exchanging or otherwise dealing in all aspects of thermal, hydro, nuclear, solar, wind power and power generated through non-conventional / renewable energy sources.
Waaneep Power Pvt Ltd:WSPL One is currently engaged in the business of generating, trading, purchasing, marketing, selling, importing, exporting, producing, manufacturing, transmitting, distributing, supplying, exchanging, or otherwise dealing in all aspects of thermal, hydro, nuclear, solar, wind power and power generated through non-conventional / renewable energy sources.
Sangam Solar One Power Pvt Ltd: SSPL One is currently engaged in the business of generating, trading, purchasing, marketing, selling, importing, exporting, producing, manufacturing, transmitting, distributing, supplying, exchanging, or otherwise dealing in all aspects of thermal, hydro, nuclear, solar, wind power and power generated through non-conventional / renewable energy sources.
Waaree Renewables Technologies Ltd: WRTL is currently engaged in the business of generating, trading, purchasing, marketing, selling, importing, exporting, producing, transmitting, distributing, supplying, exchanging or otherwise dealing in all aspects of thermal, hydro, nuclear, solar, wind power and power generated through non-conventional / renewal energy sources.
Q2 FY25 & Business Highlights
Revenue of ₹3574 crore in Q2 FY25 down by 1.05% YoY from ₹3105 crore in Q2 FY24.
EBITDA of ₹525 crore in this quarter at a margin of 15% compared to 14% in Q2 FY24.
Profit of ₹376 crore in this quarter compared to a ₹321 crore profit in Q2 FY24.
Capex of 5.4GW Cell Mfg. expected to be operational by FY25, 1.6GW Module Mfg. in USA expected to be operational by FY25.
The current order book for the Company stands at approx. 20GW, and presently has 13.3 GW capacities. It has 5.4 GW Cell Manufacturing Facility at Chikli, 6 GW integrated facility at Odisha. And it has production volume of 3.3GW.
The Solar and Batteries cost has been declined by almost 80% from 2012 till now.
The order book as per geography is 27.5% domestic and 72.5% overseas. And till now, Pan India it has total 372 franchisees.
SWOT Analysis
Strengths:
Market Leadership: A dominant position in the industry ensures competitive advantage and strong market share.
Technological Edge: Advanced technologies provide an edge over competitors and drive innovation.
Strong Brand Presence: A well-established brand fosters customer trust and loyalty.
Policy Support: Favorable government policies and incentives promote growth and stability.
Weaknesses:
High Dependency on Imports: Reliance on imported components increases vulnerability to supply chain disruptions.
Limited Product Diversification: A narrow product portfolio limits the ability to tap into diverse customer needs.
Capital-Intensive Operations: High operational costs can strain resources and profitability.
Intense Competition: Fierce market competition pressures pricing and margins.
Opportunities:
Rising Solar Demand: Increasing adoption of renewable energy drives growth potential.
Energy Storage Solutions: Expanding into storage technology complements solar offerings.
Global Expansion: Entering international markets opens new revenue streams.
Backward Integration: Controlling supply chains enhances efficiency and cost management.
Threats:
Regulatory and Policy Risks: Changes in regulations or government policies can impact operations.
Price Volatility: Fluctuations in raw material costs affect pricing and profitability.
Global Trade Wars: Tariffs and trade restrictions disrupt supply chains and market access.
Economic Uncertainty: Economic slowdowns or instability could hinder growth prospects.
Swan Energy Ltd. (SEL), formerly known as Swan Mills Limited, was established on February 22, 1909, and underwent a major transformation in 1992 when it was acquired by the Dave and Merchant families from the J.P. Goenka Group. Today, SEL operates across three core verticals: Textiles, Energy, and Construction & Real Estate, marking its presence in sectors critical to India’s economic growth. During the 1990s, SEL faced financial challenges and was brought under the Board for Industrial and Financial Reconstruction (BIFR). The revival plan focused on reviving its spinning unit, disposing of surplus land for modernization, and resuming operations. By 1993-94, SEL achieved profitability, and in 1995, BIFR declared it financially sound. Initially, its Textile Division relied on job work operations, accounting for 80% of mill processing, and expanded into exports, supplying to Marks & Spencer, a leading European retailer.
In the Energy Sector, SEL made significant advancements with the development of India’s first Greenfield LNG Port Terminal at Jafrabad, Gujarat, through its subsidiaries Swan LNG Private Ltd. (SLPL) and Triumph Offshore Private Ltd. (TOPL). The 10 MMTPA terminal, operational since FY 2021, utilizes the Floating Storage and Regasification Unit (FSRU) ‘Vasant 1’, deployed in 2020. SEL secured long-term agreements with IOC, BPCL, ONGC, and GSPC for terminal utilization and collaborated with Mitsui OSK Lines (MOL) of Japan to enhance LNG operations. Additionally, SEL signed charter hire agreements with companies in Hong Kong and Ghana, showcasing its growing international presence in LNG. In Real Estate, SEL has strategically invested in high-value assets. In FY 2014, it acquired a 0.3 million sq. ft. IT Park in Whitefield, Bangalore, leased to MNCs. It also developed Technoya Park in Hyderabad, leasing 2.92 lakh sq. ft. to Mahataa Information India Pvt. Ltd., generating an annual rent of ₹14 crore, which was utilized to service loans. SEL has also executed significant projects, such as a ₹459 crore LNG terminal infrastructure agreement with Black & Veatch Private Limited in 2018. With a focus on infrastructure development, sustainability, and sectoral diversification, SEL has positioned itself as a key player in India’s growth and development initiatives.
Industry Outlook
Swan Energy operates in three key sectors—Energy (LNG Infrastructure), Textiles, and Real Estate—all of which are poised for significant growth. The LNG infrastructure industry, where Swan Energy is a key player, is projected to grow at a CAGR of 8-10% globally through FY25, driven by the increasing adoption of natural gas as a cleaner fuel and rising investments in Floating Storage and Regasification Units (FSRUs). In India, the LNG sector is expected to expand at a CAGR of 11-13%, supported by the government’s initiatives to enhance natural gas’s share in the energy mix from 6% to 15% by 2030, aligning with its net-zero emission goals. Swan Energy’s Jafrabad Greenfield LNG Terminal positions it to capitalize on this growth, particularly as demand for imported LNG rises due to domestic production shortfalls.
The real estate sector in India is experiencing robust recovery, with a projected CAGR of 8-9% until FY30, fueled by urbanization, increasing demand for commercial spaces, and government initiatives like Smart Cities Mission. Swan Energy’s investments in high-value IT parks and commercial properties, such as Technoya Park in Hyderabad and its Bangalore IT Park, place it in a strong position to benefit from this trend.
In the textile sector, where Swan Energy has historical roots, the Indian textile industry is expected to grow at a CAGR of 10-12% by FY25, driven by rising exports, increased consumer spending, and growing demand for sustainable fabrics. Despite Swan Energy’s reduced focus on textiles, its legacy operations provide stability and diversification.
Overall, with strong tailwinds in the LNG, real estate, and textile sectors, Swan Energy is well-positioned for sustained growth. The company’s investments in infrastructure, clean energy solutions, and high-value real estate assets align with India’s long-term economic and sustainability goals, making it a potential leader in its operating segments.
Business Segments
Swan Energy operates through a diverse range of business segments, each contributing uniquely to its overall revenue and strategic vision.
The Textile Segment forms the company’s historical foundation, focusing on the processing and manufacturing of fabrics. This segment thrives on job work operations, serving long-standing clients and generating stable revenues. Additionally, it has supported export initiatives, previously catering to high-profile clients like Marks & Spencer.
The Energy Segment represents Swan Energy’s flagship business, driving its growth in India’s clean energy transition. This segment includes the operation of India’s first Greenfield LNG Port Terminal at Jafrabad, Gujarat, managed through subsidiaries Swan LNG Private Ltd. (SLPL) and Triumph Offshore Private Ltd. (TOPL). By utilizing Floating Storage and Regasification Units (FSRUs) and partnering with major companies like IOC, BPCL, and ONGC, the energy segment plays a vital role in providing LNG infrastructure and clean energy solutions.
In the Construction and Others Segment, Swan Energy focuses on infrastructure development and construction projects linked to its real estate and energy ventures. This segment is critical for executing large-scale industrial developments, such as the LNG port. The Distribution & Development Segment complements this by handling the distribution of resources like LNG and engaging in real estate development, aligning with India’s expanding infrastructure and urbanization needs.
The Warehousing Segment supports industries requiring logistical solutions through strategically located commercial warehousing facilities. These facilities generate consistent income by attracting corporate clients with long-term leasing agreements. The Manufacturing Segment encompasses Swan Energy’s legacy fabric manufacturing operations alongside other industrial production activities, which are bolstered by modernized facilities to remain competitive.
Lastly, the Power Generation Segment focuses on sustainable energy production, supporting the company’s operations while adhering to its commitment to clean and efficient energy solutions. Collectively, these diversified business segments enable Swan Energy to maintain a balanced revenue portfolio, mitigate risks, and align itself with India’s economic growth and sustainable development goals.
Key Subsidiaries and Their Information
Swan Energy Limited operates through several subsidiaries, each contributing uniquely to its diverse business portfolio across energy, real estate, and infrastructure sectors:
Cardinal Energy and Infrastructure Private Limited (Wholly Owned Subsidiary): It focuses on energy infrastructure projects that align with Swan Energy’s mission of driving clean energy adoption.
Pegasus Ventures Private Limited (Wholly Owned Subsidiary): It is engaged in investment activities and plays a strategic role in supporting Swan Energy’s financial and operational goals.
Swan LNG Private Limited (Subsidiary): A flagship subsidiary managing India’s first Greenfield LNG Port Terminal at Jafrabad, Gujarat. It specializes in Floating Storage and Regasification Unit (FSRU) operations and has partnered with major players like IOC, BPCL, and ONGC for capacity utilization.
Triumph Offshore Private Limited (Wholly Owned Subsidiary); It is the key player in the construction and operation of LNG infrastructure, including FSRUs. Collaborates with global entities such as Hyundai Heavy Industries for shipbuilding and Mitsui OSK Lines for project execution.
Swan Mills Private Limited (Wholly Owned Subsidiary): It represents the company’s textile operations and holds legacy value, contributing to Swan Energy’s roots in fabric manufacturing and processing.
Veritas (Hazel Infra Limited (Subsidiary)It specializes in real estate development and infrastructure projects, bolstering Swan Energy’s presence in commercial and residential properties.
Swan Imagination Private Limited (Wholly Owned Subsidiary): It operates in real estate and infrastructure management, focusing on leasing and development of commercial properties.
Wilson Corporation FZE (Foreign Wholly Owned Subsidiary): It’s a foreign subsidiary based in the UAE, playing a role in international ventures and investments, though currently non-operational.
These subsidiaries form the backbone of Swan Energy’s diversified operations, enabling it to excel in clean energy infrastructure, textiles, and real estate development, while strategically exploring global opportunities.
Q2 FY25 Highlights
Swan Energy’s Q2 FY25 consolidated results reveal a challenging quarter, marked by revenue and profitability pressures.
The total revenue for the quarter stood at ₹1,032.19 crore, a decline of 15.6% YoY compared to the same period last year. The net profit also dropped significantly by 59.4% YoY to ₹67.13 crore, impacted by higher expenses and operational challenges. This contrasts with the company’s robust year-over-year growth trend in recent fiscal periods, where Swan Energy reported substantial annual revenue growth
In Q2 FY25, Swan Energy’s revenue experienced declines across key segments:
Textile Segment: Revenue fell by 54.32% year-on-year to ₹25.41 crore.
Energy Segment: Witnessed a significant 65.13% decline, reaching ₹65.99 crore.
Construction Segment: Revenue dropped to ₹25.27 crore, down from ₹37.46 crore in Q2 FY24.
The company’s Energy segment, which includes its LNG operations, remains a core contributor to its performance. However, it faced headwinds due to market conditions and operational costs. The Textile segment contributed to stabilizing revenue streams but remains a smaller part of the overall business. The Real Estate segment, known for leasing high-value commercial properties, continued to provide recurring income
Management commentary during the results highlighted the focus on long-term growth through LNG infrastructure investments and real estate portfolio optimization. Despite the quarterly setback, Swan Energy emphasized its strategy of leveraging strategic partnerships and innovative solutions to strengthen its position in clean energy and real estate
Financial Summary
INR in Cr.
Q2FY25
Q1FY5
Q2FY24
Q-o-Q (%)
Y-o-Y (%)
Net Sales
1032.19
1141.74
1223.26
-9.6%
-15.6%
Other Income
31.32
19.82
6.85
58.0%
357.2%
Total Expenditure
940.45
788.36
993.4
19.3%
-5.3%
Operating Profits
217.08
453.34
322.15
-52.1%
-32.6%
Interest
65.66
52.63
58.34
24.8%
12.5%
PBT
57.4
320.57
178.37
-82.1%
-67.8%
Tax
-9.73
52.89
12.81
-81.6%
-24.0%
Net Profit
67.13
267.67
165.57
-74.9%
-59.5%
Adj EPS in Rs.
2.28
8.57
6.69
-73.4%
-65.9%
SWOT Analysis
Strengths:
Strong Outlook: A robust growth trajectory driven by key projects and market demand.
Pioneering LNG Infrastructure: Cutting-edge facilities, making the company a leader in LNG infrastructure development.
Strong Partnerships: Strategic alliances with key players strengthen market position and operational efficiency.
Diversified Business Portfolio: Operations span across LNG, real estate, and textiles, reducing dependency on a single sector.
Weaknesses:
Limited Presence in Core LNG Markets: The company’s reach in major global LNG markets remains constrained.
Dependence on Key Projects: Over-reliance on a few critical projects poses risks to revenue consistency.
Lower Focus on Textiles: Neglected growth in the textile segment affects overall business balance.
Regulatory and Environmental Challenges: Navigating stringent regulations impacts operations and costs.
Opportunities:
Rising Demand for LNG: Increasing global LNG consumption creates significant growth prospects.
Real Estate Expansion: Opportunities in the booming real estate sector add to revenue streams.
Government Initiatives: Supportive policies and incentives offer avenues for accelerated growth.
International Collaborations: Potential for partnerships with global players to expand market reach.
Threats:
Market Competition: Intense rivalry in the LNG and real estate sectors may impact profitability.
Economic Volatility: Fluctuations in global and domestic markets pose financial risks.
Environmental Regulations: Increasingly stringent standards could escalate compliance costs and operational hurdles.
Vardhman Holdings Limited (formerly known as Vardhman Spinning & General Mills Ltd) was incorporated in 1962 and began production in 1965. Promoted by V.S. Oswal and R.C. Oswal, it is part of the Vardhman Group, which includes notable entities like Mahavir Spinning Mills and Vardhman Polytex. Initially focused on textile manufacturing, the company has evolved into an entity engaged in lending and investing activities, with a significant presence in the capital markets.
In November 1992, the company raised Rs. 47.82 crore through a Rights Issue of 14% PCDs to fund expansion and meet long-term working capital needs. Historically, its portfolio included cotton and worsted blended yarn, cotton yarn, and fabric, serving both domestic and international markets such as the UK, Spain, Germany, Italy, Hong Kong, Indonesia, Japan, the US, and African countries. Vardhman became an Export House in 1990-91 and earned ISO 9002 certification for its textile mill, demonstrating its commitment to quality.
Key milestones include the sale of its steel unit in Faridabad to Mahavir Spinning Mills in 1995 and the commencement of Auro Textiles at Baddi, Himachal Pradesh, in 1999, in collaboration with Tokai Senko of Japan, achieving an annual capacity of 30 million meters. The company expanded further by commissioning a 100% EOU Spinning Unit in Ludhiana in 2002 and modernizing its dyeing unit at Baddi, enhancing capacity to 9 tons per day.
A pivotal transformation occurred in 2004-05 through a Scheme of Arrangement and Demerger, which transferred the textile business to Mahavir Spinning Mills Limited. The remaining assets comprised investments in group company shares, leading to its rebranding as Vardhman Holdings Limited in March 2006. Shareholders received 8 equity shares of Mahavir Spinning Mills and 2 equity shares of Vardhman Holdings for every 10 shares held. As of now, Vardhman Holdings operates primarily as an investment company, leveraging its robust financial history and strategic restructuring to deliver sustained growth and value creation.
Industry Outlook
Vardhman Holdings, as an investment and lending entity, is strongly tied to the financial health of its group companies in the textile sector and the overall investment landscape. The Indian financial and investment industry is expected to grow at a CAGR of 12-14% by FY25, supported by rising capital market participation, digitalization, and increasing institutional investments. Simultaneously, the textile industry, a core focus of Vardhman’s portfolio, is projected to grow at a CAGR of 10-12% by FY25, driven by global demand, government incentives like PLI, and a shift towards sustainable, value-added textiles. Vardhman Holdings’ low debt, efficient capital allocation, and strategic investments in high-growth segments like technical textiles and branded apparel position it well for long-term sustainable returns. Moreover, with India’s textile exports projected to contribute significantly to the industry’s target of $350 billion by FY30, Vardhman Holdings stands to benefit from portfolio diversification and growth in domestic and international markets, aligning with the broader trends in the financial and textile ecosystems.
Business Segments
Vardhman Holdings Limited (VHL) primarily operates in the investment and lending domain, managing its portfolio through two major segments:
Investment Activities: VHL’s core business involves managing its investments, primarily in group companies like Vardhman Textiles, Vardhman Polytex, and other entities in the Vardhman Group. These investments form a significant part of its asset base. The company’s strategy revolves around long-term capital appreciation through its stake in companies engaged in textiles, yarn production, and fabric manufacturing, sectors that are integral to India’s economy. Returns from these investments are a key contributor to the company’s profitability and stability, driven by dividends, interest income, and capital gains.
Lending Activities: VHL also engages in lending operations, providing short-term and long-term loans to group companies and external borrowers. The lending activities support the working capital requirements and expansion needs of its portfolio companies, ensuring smooth operations and growth. This segment generates interest income, offering a stable and predictable revenue stream to complement its investment returns.
Key Subsidiaries and Their Information
VHL has a strategic relationship with associate companies primarily within the Vardhman Group, which focus on various aspects of the textile and yarn manufacturing ecosystem. Below are the key entities and their contributions:
Vardhman Textiles Limited: It’s a flagship company of the Vardhman Group, it is one of India’s largest integrated textile manufacturers. Produces and exports cotton yarn, synthetic yarn, and woven fabrics for global and domestic markets. A major contributor to VHL’s investment portfolio, providing consistent dividend income and value appreciation.
Vardhman Spinning and General Mills Limited: Itspecializes in spinning high-quality cotton and blended yarns for the textile industry. Supplies yarns used in knitwear and woven fabrics, complementing the operations of Vardhman Textiles. Enhances VHL’s exposure to the upstream segment of the textile value chain.
Vardhman Special Steels Limited: It focuses on manufacturing specialty steel products for automotive, engineering, and industrial applications. Supplies critical steel components to automobile OEMs and precision engineering firms globally. Diversifies VHL’s portfolio beyond textiles, leveraging growth in the automotive and industrial sectors.
Vardhman Acrylics Limited: It is engaged in manufacturing acrylic fiber and blends used in textiles, home furnishings, and industrial fabrics. Supplies high-performance fibers with applications in winter clothing and upholstery fabrics. Strengthens VHL’s footprint in specialized textile segments with growth potential.
Vardhman Polytex Limited: It manufactures yarns and fabrics and caters to domestic and export markets. Produces a variety of yarns used in textiles, such as blended, dyed, and grey yarns. A niche player that supports the group’s vertical integration strategy within textiles.
These subsidiaries and associates form a diversified portfolio for VHL, allowing it to capitalize on the growth potential of the textile and specialty material industries while maintaining a low-risk, steady-income approach.
Q2 FY25 Highlights
In the quarter ended September 2024, Vardhman Holdings reported a net profit decline of 20.26% YoY, standing at ₹49.38 crore, compared to ₹61.93 crore in September 2023. The company experienced a significant sales decline of 75.55% YoY, with revenue dropping to ₹7.40 crore from ₹30.27 crore in the same quarter last year.
The Operating Profit Margin (OPM) contracted sharply, falling from an exceptionally high 97.56% in September 2023 to 65.95% in the current quarter. Similarly, Profit Before Depreciation and Taxes (PBDT) and Profit Before Tax (PBT) both declined by 10% YoY, from ₹68.87 crore to ₹62.09 crore.
Key Takeaways:
Sales Drop: The sharp decline in sales reflects weaker performance in core revenue-generating activities.
Profit Resilience: Despite reduced revenue, profitability remains relatively strong, supported by efficient cost management and investment returns.
Margin Compression: The decrease in OPM indicates lower operating efficiency or one-off impacts during the quarter.
Overall, while investment income has helped sustain profits, the significant sales decline underscores potential challenges in operational performance or market dynamics, requiring close monitoring of upcoming quarters.
Financial Summary
INR in Cr.
Q2FY25
Q1FY25
Q2FY24
Q-o-Q (%)
Y-o-Y (%)
Total Income
7.4
6.6
30.27
12.1%
-75.6%
Operating Expenses
2.52
1.28
0.74
96.9%
240.5%
Operating profit
4.88
5.32
29.53
-8.3%
-83.5%
Other Income
0.48
0.44
0.51
9.1%
-5.9%
PBT
62.09
74.4
68.87
-16.5%
-9.8%
Tax
12.71
1.27
6.94
900.8%
83.1%
Net Profit
49.38
73.13
61.93
-32.5%
-20.3%
Basic EPS (Rs.)
154.73
229.24
194.03
-32.5%
-20.3%
SWOT Analysis
Strengths:
Backed by a Strong Parent Group, ensuring stability and trust.
A Diversified and Robust Investment Portfolio offering steady returns.
Maintains a debt-free status, enhancing financial resilience.
Strategic alliances that provide growth opportunities and market access.
Techno Electric & Engineering Company Limited (TEECL) founded in 1963 with headquarters in Kolkata, is a leading Indian company specialising in Engineering, Procurement, and Construction (EPC) services for the power sector. It also has a strong presence in Renewable Energy through its wind power generation segment. It has expertise in developing power transmission, distribution, and substation projects and focuses on the efficient execution of turnkey solutions for high-voltage substations and industrial electrification. Operates wind energy projects with an installed capacity of 129.9 MW spread across Tamil Nadu. Techno Electric aims to expand its portfolio in renewable energy and smart grid technology while also focusing on digital transformation in the power sector. The company is strategically positioned to benefit from India’s push for green energy.
Industry Outlook
India’s power demand is expected to grow at a CAGR of 6-7% over the next decade due to population growth, industrial expansion, and increasing per capita energy consumption. India’s power sector is the third-largest in the world in terms of installed capacity, standing at 425 GW (as of 2024). Renewable energy accounts for 40% of the total installed capacity, with solar and wind energy playing pivotal roles. Thermal Power still dominates the generation capacity but is witnessing a decline due to environmental regulations and rising fuel costs. Renewable energy capacity is projected to reach 500 GW by 2030, aligning with India’s commitment to achieving net-zero emissions by 2070. Smart grid technology is expected to grow at a CAGR of 10%+ in India. Companies like Techno Electric are well-positioned to benefit from this transformation due to their focus on renewable energy and smart grid solutions.
Financial Summary
INR Cr.
Q1 FY25
Q2 FY25
FY23
FY24
Revenue
375
441
830
1502
EBITDA
52
70
87
210
OPM
14%
16%
11%
14%
PBT
117
105
233
319
Net Profit
98
94
187
268
NPM
26.1%
21.3%
22.5%
17.8%
EPS
9.12
8.10
17.36
24.98
C&CE
162
191
146
137
Business Segments:
Power Generation: TEECL offers turnkey solutions for captive power plants, specializing in the balance of plant and flue gas desulphurization (FGD).
Transmission & Distribution: The company excels in EHV substations up to 765 kV, advanced metering infrastructure, and STATCOM installations, ensuring robust transmission and efficient distribution networks.
Data Centres: TEECL provides comprehensive solutions for data centers, encompassing design and engineering, civil and structural works, fire protection systems, water and allied systems, and plant electrical and illumination systems.
Industrial Sector: In the industrial domain, TEECL offers MEP works, procurement of long-lead equipment, and solutions for power-intensive industries. The company specializes in executing less capital-intensive projects with a high risk-reward ratio, including captive waste heat recovery and conventional power plants of up to 200 MW on a turnkey basis.
Subsidiary Information:
Techno Infra Developers Pvt Ltd: It focuses on Renewable energy development and infrastructure projects. Owns and operates wind energy assets that contribute to TEECL’s clean energy portfolio. It facilitates the expansion of renewable energy capacity for long-term sustainability.
Techno Green Energy Ltd: Manages wind farms in Tamil Nadu, supporting TEECL’s clean energy initiatives. Contributes to steady cash flows through Power Purchase Agreements (PPAs) and it focuses on wind energy projects for the parent company.
Techno Wind Power Pvt Ltd:It focuses on the development and operation of wind energy farms and its role is to expand TEECL’s renewable energy capacity in high-wind potential regions.
Techno Power Transmission Ltd:It implements power transmission projects in partnership with utilities. And focuses on EPC and power transmission. Enhances TEECL’s ability to secure and execute high-value contracts.
Techno Renewable Energy: It manages solar and wind energy assets to align with the renewable energy push and focus on renewable projects for the parent company. Positions TEECL as a significant player in India’s green energy transition.
Q2 FY25 & Business Highlights
Revenue of ₹441 crore in Q2 FY25 is down by 4.51% YoY from ₹462 crore in Q2 FY24.
EBITDA of ₹70 crore in this quarter at a margin of 16% compared to 17% in Q2 FY24.
Profit of ₹94 crore in this quarter compared to a ₹74 crore profit in Q2 FY24.
We have already received 4 sites from Adani and Power Grid, and we are confident to make it up in batch 2 as we have a robust order book and clear visibility of additional opportunities in the T&D sector.
There has been delay in handing over of sites by various clients like Power Grid, IndiGrid, Apraava or Adani.
The current investment and cash are around INR 2600 crores, about INR2.25 per share.
The present peak growth demand is about 240 gigawatts or more, and this is likely to be 400 gigawatts by 2030. Thus, per capita consumption will be no less than 1,700 units by 2030 as against 1,200 units today.
We have an extremely robust order book of around INR 9725 crores as of September 2024 and ₹642 crore as booked in this quarter.
SWOT Analysis:
Strengths:
Diverse business portfolio catering to multiple sectors.
Robust financial stability ensures resilience.
Market leadership in renewable energy initiatives.
Torrent Power Ltd. is a leading integrated power utility in India, engaged in generation, transmission, and distribution of electricity. The company is part of the Torrent Group, a major business conglomerate. Known for its focus on efficiency and sustainability, Torrent Power operates across the power value chain, offering a diversified mix of thermal, renewable, and gas-based energy generation. Torrent Power’s generation portfolio includes a growing share of renewables, aligning with India’s green energy goals. It has more than 8200 employees working for the success of company. Torrent Power has a significant footprint in Gujarat, Maharashtra, Uttar Pradesh, and Madhya Pradesh. With India’s increasing focus on renewable energy, urban electrification, and energy efficiency, Torrent Power is well-positioned to capitalize on these trends. The company aims to increase its renewable capacity to 2,500 MW by 2025and enhance its digital and operational capabilities in power distribution and transmission.
Industry Outlook
India’s power industry is a vital component of its infrastructure, supporting the country’s rapid economic growth and urbanization. With growing demand for reliable and sustainable energy, the industry is evolving to address supply constraints, improve efficiency, and embrace renewable energy sources. The Central Electricity Authority (CEA) projects India’s power demand to reach around 817 GW by 2030, up from 416 GW in 2023, fuelled by increased residential and industrial consumption. India aims to achieve 500 GW of non-fossil fuel-based energy capacity by 2030 and Net Zero emissions by 2070. The Revamped Distribution Sector Scheme (RDSS) introduced in 2021 focuses on improving DISCOM performance with a ₹3 trillion investment, aimed at reducing AT&C losses to below 15% by 2025. Despite renewable energy growth, coal continues to account for 57% of India’s energy mix.
Financial Summary
INR Cr.
Q1 FY25
Q2 FY25
FY23
FY24
Revenue
9034
7176
25694
27183
EBITDA
1858
1207
4789
4596
OPM
21%
17%
19%
17%
PBT
1315
689
3041
2583
Net Profit
996
496
2165
1896
NPM
11.09%
6.91%
8.42%
6.97%
EPS
20.23
10.01
44.06
38.14
C&CE
423
446
344
419
Business Segments:
Transmission & Distribution: The Company is a licensed operator for electricity distribution in Ahmedabad, Gandhinagar, Surat, Dahej SEZ, etc. aggregating to 2,050 sq. km of area. It distributes nearly 30 billion units of power to over 4.13 million customers. The company operates 355 km of 400 kV and 128 km of 220 kV double circuit transmission lines and is building two new transmission assets of 104 km 400 kV for Rs. 1,300 Cr.
Thermal Power Generation: The Company has an aggregate installed thermal power generation capacity of 3,092 MW, including 2,730 MW of gas-based and 362 MW of coal-based power plants.
Renewable Power Generation: The Company has a solar power generation capacity of 2,091 MWp including 403 MWp operational and 1,688 MWp under development, further, it has a wind power generation capacity of 2,260 MW, comprising 921 MW operational and 1,339 MW under development.
Subsidiary Information:
Torrent Power Grid Limited (TPGL): It is currently operate 354 km of 400 kV double-circuit transmission lines and 128 km of 220 kV double-circuit transmission lines for the transmission of power generated at our gas-based power plants to various off-take centres.
Solapur Transmission Ltd: Power transmission, specifically the development and operation of transmission infrastructure in and around Solapur, Maharashtra. Itplays a crucial role in improving grid reliability and supporting the transmission of electricity in the region, enabling Torrent Power to deliver efficient services. The work includes setting up, managing, and maintaining transmission lines and substations to ensure stable electricity supply and reduce transmission losses.
Torrent Pipavav Generation Ltd:It is a subsidiary of the company and a joint venture between the Company and Gujarat Power Corporation Limited (“GPCL”), had made payments in nature of compensation for the acquisition of private land as per the court orders in Amreli, Gujarat for the purpose of developing a coal-based power plant of 1,000+ MW.
Torrent Solargen Ltd:It focuses on renewable energy, specifically in the domain of solar power generation. It plays a crucial role in Torrent Power’s strategy to diversify its energy portfolio and enhance its presence in the renewable energy sector. It aligns with India’s renewable energy goals under government policies like the National Solar Mission.
And there are other subsidiaries for city wise production and distribution like in Bhiwandi, Surat, Ahmedabad, etc. and Torrent Urja subsidiaries for renewable and solar energy distributions.
Q2 FY25 & Business Highlights
Revenue of ₹7176 crore in Q2 FY25 up by 3.09% YoY from ₹6961 crore in Q2 FY24.
EBITDA of ₹1207 crore in this quarter at a margin of 17% compared to 18% in Q2 FY24.
Profit of ₹496 crore in this quarter compared to a ₹543 crore profit in Q2 FY24.
The thermal generation segment had a revenue of ₹1833 crore in Q2 FY25 vs ₹1963 crore in Q2 FY24.
The Power Transmission and Distribution segment had a revenue of ₹6596 crore in Q2 FY25 vs ₹6352 crore in Q2 FY24.
The Thermal Generation segment had a revenue of ₹291 crores in Q2 FY25 vs ₹366 crores in Q2 FY24.
The company has installed a total capacity of 4850 MWp but by adding the pipeline the capacity increases to 7559 MWp.
The Solapur Transmission project (in the new SPV) for the evacuation of 1,500 MW RE power was won by the company through the Tariff-Based Competitive Bidding (TBCB) process, and the expected project cost is ₹470 crore.
Sites/projects of 8.4 GW are under the planning stage in the states of Maharashtra and Uttar Pradesh and received LOA from MSEDCL for a 2,000 MW/16,000 MWh pumped hydro storage project in Raigad District with energy storage capacity for 40 years.
One of the reasons for low PAT is due to an increase in finance & depreciation costs due to capex & commissioning of additional renewable generation capacity.
SWOT Analysis: A Closer Look at Key Business Dynamics
Strengths:
Efficient Distribution: Demonstrates robust supply chain and energy delivery mechanisms.
Integrated Operations: Combines generation, transmission, and distribution for seamless functionality.
Strong Financial Position: Solid financial health supports sustained growth and investment opportunities.
Weaknesses:
Geographic Concentration: Limited presence in diverse markets may restrict growth potential.
Regulatory Changes: Vulnerable to shifts in government policies and regulations.
Debt Levels: Higher borrowing could pose financial strain.
High Project Expenditure: Significant investments required for infrastructure and expansion.
Opportunities:
Renewable Energy Expansion: Growing focus on sustainable energy solutions presents untapped potential.
Grid Modernization: Technological upgrades and innovation in grid systems can enhance efficiency.
Global Collaborations: Partnerships with international players can open new avenues for growth.
Threats:
Competition: Intense rivalry in the energy sector can impact market share.
Coal Supply and Price Fluctuation: Dependence on coal exposes the business to supply and cost volatility.
Climate Risks: Environmental challenges and stricter climate regulations may pose operational hurdles.
Zydus Lifesciences Ltd. (formerly known as Cadila Healthcare Ltd.) is one of India’s leading pharmaceutical companies, known for its diverse portfolio in both generics and specialty medications. Established in 1952, Zydus has a strong presence across multiple therapeutic areas, including cardiovascular, gastroenterology, pain management, diabetes, oncology, and dermatology. The company is also a significant player in bio similar, vaccines, and novel therapies, catering to both domestic and international markets. Operates across 50+ countries, with a significant focus on the U.S. and Indian markets. It is among top 5 pharmaceutical companies in India, with a share of around 4-5% in the Indian pharma market. It operates 25+ manufacturing facilities worldwide, including U.S. FDA and WHO-GMP certified plants, ensuring compliance with international quality standards.
Industry Outlook
The Indian pharmaceutical industry is one of the largest globally, with India positioned as a major supplier of generic medicines worldwide. The industry, valued at approximately $50 billion in 2023, is expected to grow at a compound annual growth rate (CAGR) of around 10-12%, driven by increasing healthcare needs domestically and sustained demand for affordable generics in international markets. Healthcare expenditure is increasing, with the government aiming to raise public health spending to 2.5% of GDP by 2025, which will benefit the pharma sector. India is the largest provider of generic medicines, supplying around 20% of global generics. With over 3,000 pharma companies and 10,000+ manufacturing facilities, India continues to dominate in terms of affordable drug exports, particularly to the U.S., Europe, and other emerging markets. The Government of India has introduced the Production Linked Incentive (PLI) scheme. Increased competition from both Indian and global players is intensifying in generic and speciality segments. Mergers and acquisitions are common as companies seek to scale and expand product portfolios.
Financial Summary
INR Cr.
Q1 FY25
Q2 FY25
FY23
FY24
Revenue
6208
5237
17237
19547
EBITDA
2084
1461
3860
5384
OPM
34%
28%
22%
28%
PBT
1900
1271
2585
4832
Net Profit
1482
920
2092
3973
NPM
23.9%
17.5%
12.1%
20.3%
EPS
14.11
9.06
19.37
38.36
C&CE
1238
1594
573
1105
Business Segments:
India Formulations: It is a branded prescription business in categories of therapies like Pain, Anti-infective, Respiratory, Oncology, and many other segments. It has 7 brands which were ranked among world’s top 300 brands. 37 brands had value between ₹25-₹50 crore, 21 brands between ₹50-₹100 crore and 10 were having yearly ₹100+ crore.
Consumer Wellness: The Company has many successful brands in the consumer wellness segment like Glucon-D, nycil, Sugar-Free, Complan, etc. And a skincare brand called Everyuth naturals. It is in category of personal care and food and nutrition and has recently acquired Naturell Pvt Ltd. A leading player in the healthy snack category.
US Formulations: The company predominantly operates in the generics and specialty segments of the market through its wholly-owned subsidiary, Zydus Pharmaceuticals USA Inc. In this quarter company had filed 8 ANDA and received approvals of 9 ANDAs. It has entered into an exclusive licensing and supply agreement with Viwit Pharmaceuticals for 2 Gadolinium-based Magnetic Resonance Imaging (MRI) injectable, contrast agents.
International Market Formulations: In the emerging markets space, the Company predominantly operates in the branded generics segment with Cardiology, Diabetology, Neuro-Psychiatry and Pain Management being the focused therapeutic areas. The Company keeps on evaluating partnership opportunities with local players in select geographies as it looks to expand its footprint in different emerging market countries
Subsidiary Information:
Zydus Wellness Ltd: The Company’s subsidiary spearheads the group’s operations in the wellness space. ZWL operates in two different segments viz. personal care segment and food and nutrition segment and has a portfolio of category-leading health and wellness products. Five out of the six brands of the Company continue to hold leadership positions in their respective categories
Zydus Pharmaceuticals (USA) Inc.: It operates as Zydus’s main subsidiary in the United States, focusing on manufacturing and marketing generic formulations approved by the U.S. FDA. A significant contributor to Zydus’s international revenue, given the high demand for generics in the U.S. market.
Zydus Healthcare Ltd: It manages Zydus’s branded formulations business in India, catering to a wide range of therapeutic areas such as cardiovascular, gastrointestinal, pain management, and oncology. A major revenue driver for Zydus in the Indian domestic market.
Zydus Animal Health and Investments Ltd: It provides animal health products across livestock, poultry, and companion animals, including treatments, nutritional supplements, and anti-infectives. It expands Zydus’s reach into veterinary and animal health segments, which are growing markets in India and internationally.
Zydus Biosimilars Ltd: A dedicated unit for biosimilars, developing and commercializing biosimilars for therapeutic areas like oncology, immunology, and nephrology. Positions Zydus as a key player in biosimilars, targeting high-growth opportunities in biologics.
Simayla Pharmaceuticals (South Africa) Pty Ltd.: Operates in South Africa, focusing on providing affordable generic and branded pharmaceuticals across a range of therapeutic areas. Extends Zydus’s market presence in Africa, catering to regional healthcare needs with affordable solutions.
Q2 FY25 & Business Highlights
Revenue of ₹5237 crore in Q2 FY25 up by 19.27% YoY from ₹4369 crore in Q2 FY24.
EBITDA of ₹1461 crore in this quarter at a margin of 28% compared to 26% in Q2 FY24.
Profit of ₹920 crore in this quarter compared to a ₹803 crore profit in Q2 FY24.
India branded formulations business posted double-digit growth and outpaced the market growth both in the chronic and acute segments. Consumer Wellness business delivered robust double-digit growth aided by strong volume uptake.
The US formulations business continued its upward journey with robust YoY growth driven by volume expansion and new product launches. International markets business grew in double-digit on the back of strong performance across key markets.
Capex for this quarter has been done by internal accruals and cash from the company worth ₹302 crore, for acquisition and patents.
India Formulations launched 12 new products (incl. line extensions) with 4 first-in-India launches. In the consumer wellness segment, growth was largely driven by strong 8.4% volume growth.
In Biotech and Vaccine R&D the company has completed patient recruitment for Phase III clinical trials for one of the biosimilars and follow-up has been completed and completed Phase II clinical trials for Hepatitis E vaccine.
Forayed into animal free fermentation-based protein business by forming a JV with Perfect Day Inc. through acquisition of 50% stake in Sterling Biotech Ltd (SBL).
SWOT Analysis:
Strengths:
Strong presence in the domestic market
Broad and diverse product portfolio
Advanced research and development capabilities
Significant global market footprint
Weaknesses:
Heavy reliance on the U.S. market
High expenditure on R&D
Exposure to patent litigation risks
Opportunities:
Expansion into biosimilars and specialty drugs
Government initiatives like the PLI scheme
Growth potential in the healthcare and wellness sectors
Threats:
Challenges in regulatory compliance and security
Pricing pressures in the market
Increasing competition from domestic and global players
Vinati Organics Limited (VOL), established in June 1989, is a prominent manufacturer in the specialty chemicals sector, with a global presence across 35 countries. With over 30 years of experience, VOL has evolved from a single-product manufacturer to a diversified, integrated business supplying chemicals to major industrial and chemical companies in the United States, Europe, and Asia. The company operates two state-of-the-art manufacturing units in Maharashtra (Mahad and Lote Parashuram), producing key products like Isobutyl Benzene (IBB), 2-Acrylamido 2 Methylpropane Sulfonic Acid (ATBS), IsoButylene (IB), and Butyl Phenols—crucial raw materials in the production of ibuprofen, a widely used pharmaceutical drug.
VOL went public in November 1991 to fund its manufacturing base in Mahad and began commercial production of IBB in 1992. It has benefited from a technical collaboration with Institut Français du Pétrole (IFP), France, which helped bolster its refining and petrochemical processes. Over the years, VOL expanded by acquiring land at Lote in 1999 to produce fine chemicals like Sodium Methallyl Sulfonate (SMAS) and Acrylamido Methylpropane Sulfonic Acid (ATBS), becoming the third company globally to produce ATBS. The company further diversified in FY 2014-15 with the launch of High Purity Methyl Tertiary Butyl Ether (HPMTBE), expanding into industries like pharmaceuticals and organic metallic compounds. By FY 2015-16, VOL also introduced N-Tertiary Octyl Acrylamide (TOA), used in personal care products and enhanced oil recovery. VOL improved its financial position by repaying long-term debt in FY 2017 and financing a Rs. 200 crore capex from internal accruals.
In recent years, VOL has invested Rs. 300 crores in projects like the Butyl Phenols plant and expanding ATBS capacity, which became operational by FY 2020, driving revenue growth. The company earned recognition, such as the STAR SME of the Year and Company of the Year in Chemicals awards in 2019. In 2020, VOL expanded by acquiring Veeral Organics Pvt. Ltd. as a subsidiary and embraced renewable energy, commissioning several solar power plants in Maharashtra. This strategic growth highlights VOL’s commitment to innovation, sustainability, and global expansion.
Industry Outlook
The specialty chemicals sector in India, where Vinati Organics (VO) operates, is witnessing strong growth driven by rising domestic and global demand across various end-use industries like pharmaceuticals, agrochemicals, personal care, and electronics. India’s specialty chemicals industry benefits from an ongoing global shift in manufacturing away from China due to environmental concerns, cost pressures, and geopolitical factors. Indian companies, like Vinati Organics, are capturing market share as international players seek alternative suppliers with reliable production and cost-effective solutions. This shift is expected to propel India’s specialty chemicals market, projected to grow at a double-digit CAGR over the next few years.
Globally, the specialty chemicals industry is poised for steady growth, supported by the expanding applications in sustainable products, renewable energy, and advanced technologies. Demand is strong in developed economies like the US, Europe, and Japan, which are increasingly adopting eco-friendly and efficient specialty chemicals, driven by regulatory and sustainability goals. Additionally, emerging markets in Asia-Pacific remain critical growth areas due to increasing industrialization and urbanization.
For Vinati Organics, this industry tailwind is favorable as the company is strategically expanding into high-demand areas like ATBS, antioxidants, and new product lines (e.g., MEHQ and guaiacol). The company’s ongoing projects, such as the ATBS capacity expansion and the launch of new antioxidants, align with increasing global demand, positioning Vinati Organics to benefit from rising industry trends. The strong focus on R&D and product diversification enables VOL to capture emerging opportunities in global markets.
India’s position as a leading hub for specialty chemicals production is strengthened by supportive government policies, investment incentives, and infrastructure improvements under Make in India and PLI schemes. As a result, Indian specialty chemical firms are well-positioned to compete globally, benefiting from competitive costs and robust manufacturing capabilities. Consequently, Vinati Organics is expected to achieve steady growth, supported by rising domestic and export demand, expanding its portfolio, and seizing global market opportunities in the specialty chemicals sector.
Business Segments
Vinati Organics Limited (VOL) operates across several key business segments in the specialty chemicals industry, each serving critical applications across multiple sectors. Here’s a breakdown of VOL’s primary business segments:
Acrylamide Tertiary Butyl Sulfonic Acid (ATBS): ATBS is VOL’s flagship product and a significant revenue contributor, accounting for around 36% of the company’s total revenue as of recent quarters. This product is used extensively in industries such as water treatment, adhesives, oil recovery, and construction chemicals. As one of the world’s largest ATBS producers, VOL has continually expanded its ATBS capacity to meet rising global demand, making it a cornerstone of the company’s portfolio.
Isobutyl Benzene (IBB): IBB is a critical raw material used in the manufacture of ibuprofen, a widely used pharmaceutical ingredient. VOL is one of the largest global manufacturers of IBB, enabling it to secure long-term contracts with pharmaceutical companies worldwide. This product supports VOL’s footprint in the pharmaceutical chemicals market.
Antioxidants: The antioxidants segment is a rapidly growing area for VOL. These antioxidants are used primarily in the food, polymer, and lubricant industries to prevent oxidation, prolonging product shelf life and stability. VOL’s revenue from this segment is expected to double in FY25, reflecting strong demand growth.
Butyl Phenols: VOL has expanded into Butyl Phenols, which are derived from Isobutylene and are critical in the production of various plasticizers, resins, and stabilizers. This product segment diversifies VOL’s offerings and supports demand in sectors like automotives and consumer goods.
Isobutylene (IB) and Specialty Derivatives: Isobutylene is a versatile chemical used as an intermediate in specialty chemicals, polymers, and fuel additives. VOL’s production of isobutylene and its derivatives, including products like High Purity Methyl Tertiary Butyl Ether (HPMTBE) and N-Tertiary Octyl Acrylamide (TOA), supports applications in personal care, adhesives, and enhanced oil recovery.
MEHQ and Guaiacol: VOL recently launched MEHQ (Monomethyl Ether Hydroquinone) and Guaiacol, used in pharmaceuticals and chemical intermediates. Commercial production started in 2024, and these products are currently being sampled with customers. They are expected to contribute significantly to VOL’s revenue from FY26 onward.
These diversified segments underscore VOL’s strength in delivering specialized chemicals across critical industries, positioning it as a reliable supplier with a broad portfolio tailored to meet varied industrial needs.
Key Subsidiaries and Their Information
Vinati Organics Limited (VOL) has a key subsidiary, Veeral Organics Private Limited, which plays a strategic role in VOL’s expansion and diversification efforts. Here’s an overview and recent developments related to Veeral Organics and VOL’s other key operational moves.
Veeral Organics Private Limited, established in October 2020 as a wholly-owned subsidiary of Vinati Organics Limited (VOL), enhances VOL’s specialty chemical capabilities by expanding into high-demand chemical segments. The subsidiary focuses on developing antioxidants, advanced intermediates, and custom chemical solutions with applications across pharmaceuticals, agrochemicals, and personal care industries. Recent advancements include new product trials such as MEHQ (Monomethyl Ether Hydroquinone) and Guaiacol, which have gained traction in the pharmaceutical sector. To streamline operations, VOL initiated an amalgamation of Veeral Additives Private Limited in February 2021, supporting its growth in core and specialty intermediates.
VOL’s ongoing capital expenditure of around Rs. 300 crore focuses on expanding ATBS production and setting up new capacities, with Veeral Organics contributing to the rise in antioxidants and intermediates production. Sustainability efforts include renewable energy projects, with significant solar installations in Maharashtra. Veeral Organics’ products are projected to impact revenues notably by FY26, aligning with VOL’s goal of doubling its revenue in the coming years. This expansion strengthens VOL’s market position as a leading global specialty chemicals manufacturer with a diverse, high-growth product portfolio.
Q2 FY25 Highlights
Strong YoY Topline Growth: Both standalone and consolidated revenue reached Rs 553 crore (a 19.5% YoY increase and 5.4% QoQ growth), meeting analysts’ expectations (projected at Rs 547 crore). The H1 FY25 revenue showed a 19.5% growth compared to H1 FY24, signaling healthy expansion. The gross profit margin remained stable at 45.8% YoY, with a slight sequential improvement, due to a moderate reduction in raw material costs. Key contributors to revenue included ATBS (36%), Butyl Phenols (21%), IBB (11%), and Antioxidants (11%), with other products making up the remaining 21%.
EBITDA Margin Increase: The company’s EBITDA rose by 27.9% YoY and 7.1% QoQ, amounting to Rs 134 crore. The EBITDA margin (EBITDAM) improved to 24.2% in Q2 FY25, up by 160 basis points YoY and 40 basis points QoQ, reflecting the company’s operational efficiency. These margins exceeded projections, which were set at 23.5%.
PAT Margin Expansion: The standalone Profit After Tax (PAT) was reported at Rs 106.1 crore, representing a 46.4% YoY growth and 23.5% QoQ increase. The PAT margin expanded by 300 basis points sequentially, reaching 19%, driven in part by a significant 140% rise in other income to Rs 22.2 crore.
The ATBS production capacity is on track to increase from 40,000 MTPA to 60,000 MTPA by H2 FY25, which is expected to further boost revenue. Revenue from antioxidants reached Rs 100 crore in H1 FY25, with the target of Rs 200-250 crore by FY25. Management maintained a 20% revenue growth forecast for FY25.
In summary, Vinati Organics demonstrated robust YoY and QoQ growth across revenue, EBITDA, and PAT, supported by volume increases, a stable cost structure, and product mix expansion. The planned ATBS capacity increase and introduction of new antioxidants position the company for continued revenue growth and market expansion in FY25.
Britannia Industries Ltd., one of India’s leading FMCG companies, has established a prominent position in the food and beverages sector, primarily focusing on bakery products. Known for its vast portfolio of biscuits, bread, cakes, dairy products, and other snacks, Britannia enjoys high brand recognition and consumer trust across India and in various international markets. Britannia is best known for its biscuit brands, commanding over 30% market share in India. Britannia has established a strong distribution network of 30000, reaching both urban and rural markets, helping it maintain a leading position in India’s competitive biscuits market. Britannia has a growing international presence, operating in over 70 countries, including the Middle East, Africa, North America, and Southeast Asia. Britannia has 13 manufacturing facilities across India, producing a wide range of products with a focus on quality and efficiency. It also has an extensive network of third-party manufacturing units. Britannia’s robust portfolio, brand strength, extensive distribution, and continuous innovation place it at a strong position within India’s FMCG sector.
Industry Outlook
The Indian Fast-Moving Consumer Goods (FMCG) industry is one of the most robust and dynamic sectors, driven by strong demand, population growth, rising income levels, and increased urbanization. The Indian FMCG sector is projected to grow at a CAGR of 10-12% over the next five years, driven by rural market expansion, rising incomes, and a favourable demographic dividend. As of recent estimates, the FMCG market in India is valued at over $110 billion, making it the fourth-largest sector in the Indian economy. Rural demand now contributes to 45-50% of total FMCG sales and is expected to continue growing. Rising disposable incomes are shifting consumption patterns toward premium and value-added products. Online FMCG sales have grown rapidly, particularly in urban areas, and are expected to account for 10-12% of FMCG sales by 2025.
Financial Summary
INR Cr.
Q1 FY25
Q2 FY25
FY23
FY24
Revenue
4250
4668
16301
16769
EBITDA
753
780
2831
3167
OPM
18%
17%
17%
19%
PBT
681
715
3033
2913
Net Profit
505
532
2316
2134
NPM
11.8%
11.4%
14.2%
12.7%
EPS
20.99
22.06
96.39
88.84
C&CE
215
250
198
446
Business Segments:
Bakery Business: It involves many sub segments in it, Biscuit is a major part of this segment and is continued to grow. Cakes are in category continuous to grow in of ₹5-10 price points products and large priced products are having substantial growth. Rusk is having some tough competition from its strong new entrants. In bread category, it is having a great growth as more demand from consumers with over turnover of ₹450 crore.
Dairy Business: It involves cheese and drinks like Lassi which is showing a healthy double digit growth. Packaged liquid milk remains a key growth driver of the industry, healthy demand and growth is also expected in cheese, yogurt and other value added dairy products.
Adjacent Business: This segment has Wafers which is highly fragmented market of ₹1000 crore. Croissant is also a product of Britannia in this segment, able to achieve good growth in urban areas. Salted snacks or packets is a growing at double digit rate and is most profitable and high volume category.
International Business: International Business for the Company is largely centered on Middle East, Americas, Africa and Asia Pacific. The business environment in these geographies is highly competitive with the presence of large local and international players. And exports contribute around 6% in the revenue.
Subsidiary Information:
These are majorly big subsidiaries of Britannia Industries established in India and all over the world. But, there are total over 25+ subsidiaries under it.
Manna Foods: Manna Foods allows Britannia to tap into the health and wellness market, expanding its footprint in the packaged foods segment. The yearly turnover for this subsidiary is ₹367 crore, It provides traditional and health-focused foods like millet-based products and ready-to-cook items.
AI Sallan Food Industries: This subsidiary helps Britannia access new markets and diversifies revenue streams outside of India. It manufactures and distributes bakery products, primarily in Oman and the Middle East. It had a main focus of international expansion and it has a turnover of ₹ 231 crore in FY24.
Britannia Nepal Pvt Ltd: This entity manufactures and distributes Britannia’s core product lines in Nepal, catering to local demand and establishing a stronger footprint in South Asia. Enables Britannia to reduce logistics costs and gain market share in Nepal’s packaged food sector.
Strategic Foods International Co. Ltd: It is based in Dubai have product categories of biscuit, cookies and cakes. Predominantly in the Middle East and Africa, where it taps into a growing demand for packaged food and snacks. It plays a key role in diversifying Britannia’s revenue streams beyond India, supporting the company’s goal of becoming a global food brand.
Q2 FY25 & Business Highlights
Revenue of ₹4668 crore in Q2 FY25 up by 5.29% YoY from ₹4433 crore in Q2 FY24.
EBITDA of ₹780 crore in this quarter at a margin of 17% compared to 20% in Q2 FY24.
Profit of ₹532 crore in this quarter compared to a ₹586 crore profit in Q2 FY24.
Metro FMCG growth rate is lower compared to Urban and Rural regions of India.
Adjacent Businesses are doing really well in cake, wafers, Rusk, Cheese and Drinks.
Commodity prices of Sugar, Cocoa, Flour Oils, etc. are increasing due to inflation, which will affect the profitability.
Capex of ₹450-₹500 crore is planned to use in FY25, through internal accruals, long-term debts and cash and use it to expand in India and International markets.
SWOT Analysis:
Strengths
Established brand with strong recognition.
Wide-ranging product portfolio.
Broad and effective distribution network.
Weaknesses
Heavy reliance on the biscuits segment.
High sensitivity to input cost fluctuations.
Opportunities
Expansion into dairy and health food categories.
Potential growth in untapped rural markets.
Opportunities for mergers, acquisitions, and partnerships.
Threats
High levels of competition in the market.
Volatility in raw material prices.
Potential impacts from economic slowdowns.
Rising health consciousness shifting consumer preferences.
Divi’s Laboratories Ltd., a major global API (Active Pharmaceutical Ingredients) manufacturer, was founded in 1990 as Divis Research Center, focusing initially on Research & Development. Today, it stands as one of the largest API companies worldwide, specializing in Intermediates, Nutraceuticals, and custom synthesis for innovator pharmaceuticals. It has a significant export-oriented business, with a presence in over 100 countries, supplying around 160 diverse products. Divi’s Laboratories Ltd. has achieved significant milestones in its growth and operations. In 1995, the company established its first manufacturing unit in Choutuppal near Hyderabad. Over the years 1997-2001, it earned ISO-9002 and OHSAS-18001 certifications, underlining its commitment to quality and safety standards. By 2002, Divi’s expanded further with a second manufacturing facility at Chippada, Visakhapatnam, which later became an Export Oriented Unit (EOU), enhancing global reach.
In 2006-2008, the company developed Divi’s Pharma SEZ in Visakhapatnam for Nutraceutical production, expanding its custom synthesis and Nutraceutical portfolio to meet rising export demand. In 2011, Divi’s launched the DSN SEZ Unit at Visakhapatnam, increasing production capacity in generic and custom synthesis segments.
From 2014-2018, Divi’s Laboratories passed multiple international regulatory inspections, including from the US FDA and COFEPRIS (Mexico), establishing EIR status for Unit-II, Visakhapatnam, which addressed previous regulatory concerns. The company invested ₹1200 crore in 2019-2020 in brownfield projects, creating DC SEZ and DCV SEZ units that became fully operational in FY2021. These projects boosted Divi’s role in generic and big pharma markets. In 2023, Divi’s launched Unit-III in Kakinada, Andhra Pradesh, further expanding production capacity.
In line with its dedication to innovation and compliance, Divi’s has research centers in Hyderabad and at manufacturing sites, focusing on custom synthesis and process innovations. With two subsidiaries—Divi’s Laboratories (USA) Inc. and Divi’s Laboratories Europe AG in Switzerland—the company enhances its reach in Nutra product markets. Divi’s continued investments in R&D, global regulatory compliance, and strategic expansion reinforce its commitment to high-quality pharmaceutical solutions, positioning it as a prominent player in the global API market.
Financial Overview
Industry Outlook
The Indian pharmaceutical sector is experiencing both near-term challenges and long-term growth potential driven by strategic expansions, cost efficiency, and new market opportunities. Key factors impacting the sector include pricing pressures in generic products and logistics challenges due to disruptions like the Red Sea crisis, which has extended shipping times and increased costs. Many companies are proactively managing inventory and supply chains to mitigate these impacts, such as advancing shipments and diversifying supply sources.
In the generic business, pricing pressure remains a challenge, but there is healthy volume growth in base businesses. Companies are expanding their portfolio to address loss of exclusivity (LOE) for several drugs, projected for 2026, which opens opportunities to capture market share in high-value molecules. This trend aligns with the pharmaceutical sector’s increasing focus on specialty and complex products and API (Active Pharmaceutical Ingredient) markets, which are seeing robust demand.
Custom synthesis continues to drive growth, with rising demand from both new and existing customers. Many companies have expanded into contrast media manufacturing, particularly iodine- and gadolinium-based molecules, which present a growing opportunity in global diagnostic markets with an annual growth rate of around 10-15%.
The API sector is well-positioned for sustained growth as global companies look for reliable alternative suppliers due to changing procurement strategies. With recent capacity expansions across SEZ units in India, companies can leverage low input costs in areas like raw materials, freight, and power to enhance profit margins. As inflation moderates globally, Indian pharmaceutical companies may also benefit from cost rationalization strategies, improving their competitiveness.
Divi’s Laboratories and other Indian firms are positioned to capitalize on the long-term trend of increased API demand and are exploring new opportunities in contract media and GLP-1 products. As the global addressable market for contrast media grows (estimated at USD 4-6 billion), firms expanding in this space can anticipate sustained demand for innovative and cost-effective solutions. Meanwhile, backward integration and advanced R&D capabilities are key strategies, enabling companies to streamline production costs and strengthen market positions over the long term.
In summary, while near-term challenges like pricing pressure and logistics disruptions persist, the pharmaceutical sector’s shift toward specialty products, cost-efficiency, and expanded capacities paints a promising outlook for the long-term. Indian companies’ strategic investments in innovation, compliance, and operational efficiency will likely enable them to maintain double-digit revenue growth while meeting the increasing demands of the global pharmaceutical market.
Business Segments
Divi’s Laboratories has demonstrated strong segmental performance across several key areas, including generic APIs, custom synthesis, peptides, contrast media, and ongoing capacity expansions at strategic units. Each of these segments reflects the company’s focus on meeting growing demand while managing industry challenges such as pricing pressures and supply chain disruptions.
Generic APIs: Divi’s generic business has experienced healthy double-digit volume growth, although pricing pressure persists across the industry. Despite the pricing environment, Divi’s has expanded its market share in smaller API molecules, highlighting the company’s resilience and strategic positioning in the generic segment. Emerging generic products have also shown robust performance, underscoring Divi’s adaptability in a competitive space.
Custom Synthesis: There is a notable increase in demand for Divi’s custom synthesis services from both new and existing clients. The future pipeline for this segment appears strong, with a robust set of products advancing through various stages of development. Key contributions from this segment are expected to start from FY26, aligning with the company’s long-term growth vision.
Peptides: Divi’s Laboratories has placed significant emphasis on GLP-1 compounds within the peptide segment, focusing on solid-phase synthesis to meet customer-specific requirements. The company is also expanding capacities for these peptide products, especially for solid-based peptides used in GLP-1 fragments, a growing therapeutic area. This focus enhances Divi’s specialty offerings, enabling it to cater to high-demand, niche markets.
Contrast Media: The contrast media segment has delivered impressive results, with volume growth of 20-30% YoY. Divi’s engagement with major clients in this area is progressing, with various projects moving to advanced stages. The company is actively working on iodine-based molecules (some nearing commercialization) and gadolinium-based molecules (in qualification stages, with potential for commercialization by FY26/27). Increased RFPs (Request for Proposals) from customers in this segment underscore the growing demand for Divi’s contrast media products.
Kakinada Unit (Unit-III): Divi’s Greenfield expansion at Kakinada is progressing as planned, with Rs. 11.8 billion spent as of H1 FY25. Production is set to commence in December 2024 in a phased manner. This unit is part of Divi’s strategy to expand capacity for both regulatory and custom synthesis products, supporting future growth in demand.
Logistics and Supply Chain: Divi’s has been proactive in managing inventory and logistics challenges, particularly those arising from the Red Sea disruptions that increased transit times to 70 days. The company has addressed these challenges by advancing shipments by 3-4 weeks and maintaining higher safety stock to minimize supply interruptions.
Key Subsidiaries and Their Information
Divi’s Laboratories operates through two major subsidiaries, Divis Laboratories (USA) Inc. and Divi’s Laboratories Europe AG. These subsidiaries play a strategic role in the company’s global expansion and focus on specialized markets for pharmaceutical ingredients, particularly in custom synthesis and nutraceuticals.
Divis Laboratories (USA) Inc.: This subsidiary caters primarily to the North American market, focusing on the distribution and marketing of nutraceutical products and custom synthesis services. It helps Divi’s Laboratories establish a strong presence in the US, one of the largest pharmaceutical markets globally, and aligns with Divi’s mission to support local customer requirements while meeting stringent regulatory standards. It contributes significantly to the company’s nutraceutical portfolio growth and has enhanced relationships with major pharmaceutical clients by providing reliable supply chains and custom synthesis offerings tailored to local industry needs.
Divi’s Laboratories Europe AG (Switzerland): This subsidiary focuses on European markets, providing nutraceutical and pharmaceutical ingredients and supporting custom synthesis projects for clients in Europe. Divi’s Laboratories Europe AG serves as a critical hub for European operations and facilitates compliance with EU regulatory standards. It also strengthens Divi’s supply chain resilience by creating a local presence in Europe, enhancing service delivery and customer support. In FY25, Divi’s Laboratories Europe AG has seen robust demand in nutraceuticals, particularly for ingredients with high-quality standards essential for the European market. This subsidiary plays a key role in Divi’s market penetration in Europe, contributing to the company’s overall revenue growth.
These subsidiaries support Divi’s Laboratories’ strategic goals of expanding its global footprint and catering to diverse regional needs in the pharmaceutical and nutraceutical industries. They also provide a platform for Divi’s to directly engage with key markets, ensuring regulatory compliance, effective supply chains, and tailored customer support, aligning with the company’s vision of global operational excellence.
Q2 FY25 Highlights
Divi’s Laboratories reported consolidated total income of ₹2,444 crore, a 22.5% increase compared to ₹1,995 crore in the same quarter of the previous year. For the half-year ended 30th September 2024, Divi’s Laboratories posted a consolidated total income of ₹4,640 crore, up by 20.4% from ₹3,854 crore in the same period of the previous year. This consistent revenue growth reflects the company’s ability to expand its product portfolio and global footprint.
Profit Before Tax (PBT) for the quarter was ₹722 crore, a substantial rise of 54% from ₹469 crore in the corresponding period last year. This increase in PBT highlights improved profitability driven by efficient operations and cost management. The PBT for the half-year was ₹1,326 crore, up from ₹961 crore, marking a 38% increase.
Profit After Tax (PAT) for the quarter stood at ₹510 crore, showing a significant 46.6% growth compared to ₹348 crore in the previous year. This reflects the company’s strong bottom-line performance, driven by both operational growth and improved cost efficiencies. PAT for the half-year was ₹940 crore, a significant 33.5% increase from ₹704 crore in the corresponding period of the previous year, reflecting robust operational performance and better margins.
The company also reported a foreign exchange (forex) gain of ₹29 crore for the quarter, which is a notable increase from the ₹1 crore gain recorded in the same quarter of the previous year. The company also recorded a forex gain of ₹28 crore for the half-year, compared to ₹14 crore in the previous year, further contributing to the positive financial results. The forex gain likely provided additional support to the bottom line.
Greenfield expansion at Kakinada Unit(III) is progressing as planned, with Rs. 11.8 billion spent as of H1 FY25. Production is set to commence in December 2024 in a phased manner. This unit is part of Divi’s strategy to expand capacity for both regulatory and custom synthesis products, supporting future growth in demand.
Divi’s has been proactive in managing inventory and logistics challenges, particularly those arising from the Red Sea disruptions that increased transit times to 70 days. The company has addressed these challenges by advancing shipments by 3-4 weeks and maintaining higher safety stock to minimize supply interruptions.
Financial Summary
INR in Cr.
Q2FY25
Q1FY25
Q2FY24
Q-o-Q (%)
Y-o-Y (%)
Revenue from Operation
2,338
2,118
1,909
10%
22%
Other Income
106
79
86
34%
23%
Total Income
2,444
2,197
1,995
11%
23%
Total Expenditure
1,622
1,496
1,430
8%
13%
Operating profit
716
622
479
15%
49%
Other Income
106
79
86
34%
23%
Interest
1
0
1
0%
0%
Depreciation
99
97
95
2%
4%
PBT
722
604
469
20%
54%
PAT
510
430
348
19%
47%
EPS (Rs.)
19.2
16.2
13.11
19%
46%
SWOT Analysis: Key Insights
Strengths
Market Leadership: Strong foothold in the industry with a leading market position.
Robust Manufacturing: Advanced manufacturing capabilities that ensure high-quality production.
Research Focus: Commitment to R&D fuels innovation and keeps the company competitive.
Outstanding Performance: Consistently strong financial and operational performance.
Weaknesses
Regulatory Risks: Exposure to regulatory changes can impact business operations.
High Dependency on API: Reliance on active pharmaceutical ingredients (API) poses risks.
Limited International Reach: Lack of significant presence in global markets limits growth potential.
Opportunities
Rising Global Demand: Increasing demand for pharmaceutical products worldwide.
New Product Development: Expanding product lines can capture new market segments.
Technological Innovations: Leveraging technology to enhance production and product quality.
Threats
Price Pressure: Competitive pricing in the market can impact profit margins.
Intense Competition: Facing stiff competition from both domestic and international players.
Supply Chain Vulnerabilities: Disruptions in the supply chain could affect operations.
