Adani Wilmar Ltd. fell sharply 9.2% on the last trading day (Friday) to a one-day low of ₹291 on NSE. The fall came after one of its promoters, Adani Commodities LLP, announced a sale of up to 20% holding. The company submitted an offer (OFS) in this month (January 2025).
Strategic transformation by Adani Group
The share sale is in line with Adani Group’s broader strategy to exit non-core businesses. and focus on core infrastructure businesses including airports, roads, data centers, and green hydrogen. Sales generated a revenue of approximately Rs. 485 Cr., among these key activities. It will be a repeat investment.
Parent company Adani Enterprises plans to phase out Adani Wilmar. In the first phase, 13.5% of the shares will be sold through OFS, while in the second phase, Singapore’s Wilmar International Ltd will acquire the remaining shares at a price not exceeding ₹305 per share.
Impact on the market and shareholder changes
OFS has attracted huge interest from over 100 domestic and international investors, making it one of the largest OFS transactions in the recent history of the Indian capital market. The sale announcement, coupled with pressure in the broader market, sent shares of Adani Wilmar down 10% in price.
Investor structure after OFS: Adani Group’s stake in the joint venture decreased from 43.94% to 31.06% after the transaction, while Wilmar International It is set to purchase the remaining shares by March 2025.
Compliance and Finance
The sale of Adani Wilmar’s shares ensures compliance with Sebi’s minimum public shareholding (MPS) norms, which require public ownership of at least 25% in a listed entity. After OFS, public shareholders hold shares at 25.63%, while promoters hold 74.37% of the shares.
Business overview and growth trends
Adani Wilmar, an equal joint venture between Adani Group and Wilmar International, dominates the Indian FMCG sector with its flagship brand Fortune, which produces cooking oil, wheat flour, rice, and sugar. The company posted consolidated revenue of Rs 51,555 crore last fiscal year as on date. At the last update, it also reported a market capitalization of ₹42,000 crore.
The Indian cement industry is poised for growth in 2025, expecting improved sales realizations, higher margins, and accelerated demand. This optimism is largely fuelled by government infrastructure spending and the ongoing consolidation within the industry, driven by two major players: UltraTech Cement (part of the Aditya Birla Group) and Ambuja Cements (led by billionaire Gautam Adani).
Key Developments in the Cement Sector:
Acquisitions and Capacity Expansion: Both UltraTech Cement and Adani’s Ambuja Cements are making substantial investments to expand their market share. Together, they are acquiring over 50 million metric tons per annum (MTPA) capacity for approximately USD 4.5 billion. Adani Cement, which entered the sector relatively recently, has significantly expanded its footprint by acquiring several cement companies, including Saurashtra-based Sanghi Industries and Penna Industries, and a recent agreement to acquire CK Birla Group’s Orient Cement. With these acquisitions, Adani Cement crossed a 100 MTPA capacity, and plans are in place to reach 140 MTPA by FY28, nearly matching UltraTech Cement’s 156.66 MTPA capacity.
Consolidation and Industry Leadership: The cement sector is seeing increased consolidation, with UltraTech Cement and Ambuja Cements collectively controlling a significant portion of India’s cement production capacity. In fact, the top five cement producers now account for approximately 60–65% of the industry’s total capacity. UltraTech Cement, aiming to maintain its lead, plans to reach 200 MTPA capacity by FY27, underscoring its aggressive growth strategy.
Industry Challenges and Trends in 2024:
Declining Cement Prices: The first half of FY25 saw a 10% year-on-year decline in cement prices, with the average price dropping from Rs 365 per bag in FY24 to Rs 330 per bag. This price drop reflects challenges within the industry, including moderate capacity utilization and lower sales realizations. Despite this, cement prices recovered on a month-to-month basis, rising by 2% in September 2024 compared to the previous month.
Lower Growth in 2024: Cement industry growth in 2024 slowed to around 4.5–5.5%, compared to a more robust 10% growth in previous years. This slowdown was attributed to several factors: A prolonged heatwave and labour shortages during general elections. Seasonal monsoon disruptions that affected construction activity.
Capacity Utilization and Volumes: Capacity utilization levels remained moderate at 70%, as several players struggled with underutilized capacity due to slow growth in demand and the impact of low cement prices. However, the industry’s outlook for the second half of FY25 is more optimistic, with expectations of a 4-5% increase in cement volumes driven by higher rural consumption, increased urban housing demand, and a boost in government infrastructure spending.
Outlook for 2025 and Beyond:
Government Infrastructure Push: A significant boost to the sector is expected from the government’s increased expenditure on infrastructure projects. This is anticipated to drive a rise in cement demand, especially in the housing and rural sectors. The industry’s growth is also being supported by higher capital expenditure from both the government and private sector players, which is likely to result in greater cement consumption.
Capacity Additions and Expected Growth: The Indian cement industry is adding 35 MTPA of capacity in FY25, with an additional 70-75 MTPA capacity expected to come online in FY25-26. Despite this, overall capacity utilization is expected to remain moderate at 70% due to a lag in demand catching up with supply. The Cement Manufacturers’ Association (CMA) forecasts that cement volumes will grow by 4-5% year-on-year, reaching 445-450 million MT in FY25.
Industry Transformation: The cement industry is undergoing a transformation, driven by a growing emphasis on sustainability, innovations, and increased demand for both housing and infrastructure. The Indian cement market, which now has a total capacity of 690 million tonnes, is expected to see improved price realizations and better capacity utilization in the coming years.
Stove Kraft Limited, headquartered in Bangalore, is a leading player in the Indian kitchen appliances market. The company designs, manufactures, and distributes a wide range of kitchen solutions, including pressure cookers, non-stick cookware, gas stoves, mixer grinders, and other small appliances. With strong brands like Pigeon, Gilma, and Black Decker, Stove Kraft has established a significant market presence, catering to both the premium and value-conscious consumer segments.
The company operates through a pan-India distribution network of over 45,000 retail outlets and exports to 14 countries, focusing on innovation, quality, and affordability to drive growth in domestic and international markets.
Key Stock Metrics
Market Capitalization: ₹2,962 crore, reflecting the company’s significant valuation in the kitchen appliances sector.
Current Stock Price: ₹896, trading near its 52-week high.
52-Week High/Low: ₹968 (high) and ₹410 (low), showcasing substantial price appreciation over the past year.
Price-to-Earnings (P/E) Ratio: 86.3, indicating a premium valuation compared to industry peers.
Book Value per Share: ₹138, reflecting the net asset value attributable to each share.
Dividend Yield: 0.28%, offering modest returns to investors through dividends.
Return on Capital Employed (ROCE): 11.3%, indicating efficient use of capital in generating returns.
Return on Equity (ROE): 8.32%, highlighting the profitability relative to shareholder equity.
Face Value: ₹10.0 per share, serving as the nominal value of the stock.
Financial Highlights
Stove Kraft Limited has achieved a remarkable financial transformation, evolving from losses in earlier years to sustained profitability since FY2019. The company’s steady revenue growth, from ₹377 crore in FY2013 to ₹1,420 crore in FY2024 (TTM), reflects strong demand for its kitchen appliances and successful market expansion. Enhanced operational efficiencies have driven an improvement in Operating Profit Margins (OPM) to 10% in FY2024, while net profits have stabilized at ₹34 crore, despite peaking at ₹81 crore in FY2021. The initiation of dividend payouts in FY2023 underscores the company’s financial stability and commitment to shareholder returns. Its balance sheet further highlights robust growth, with equity capital increasing to ₹33 crore and reserves transitioning from negative to ₹423 crore as of September 2024. Investments in fixed assets and capital work in progress (CWIP) demonstrate the company’s focus on scaling operations and infrastructure. While liabilities, particularly borrowings, have risen to ₹1,252 crore, these have been channelled toward productive growth initiatives. Stove Kraft’s ability to maintain this trajectory in a competitive market will depend on continued innovation, efficient capital utilization, and strategic expansion efforts.
Competitive Strengths
Strong Brand Portfolio: Market leadership with well-recognized brands like Pigeon and Black Decker catering to diverse consumer needs.
Wide Distribution Network: Presence in over 45,000 retail outlets ensures extensive reach across urban and rural areas.
Export Growth: Expansion into international markets with a focus on Middle Eastern and South Asian regions.
Product Innovation: Continuous R&D efforts to develop energy-efficient and user-friendly appliances.
Cost-Efficient Manufacturing: In-house production capabilities reduce reliance on third-party suppliers, maintaining competitive pricing.
Risks and Challenges
Raw Material Price Volatility: Dependency on raw materials like aluminium and stainless steel could impact margins.
Intense Competition: Competes with well-established brands like Prestige, Butterfly, and Hawkins in a highly competitive market.
Economic Sensitivity: Changes in consumer spending patterns, particularly in discretionary categories, may affect demand.
Supply Chain Disruptions: Reliance on global supply chains for certain components could pose risks during geopolitical or logistical challenges.
Growth Outlook
Domestic Market: Increased urbanization and rising disposable incomes are expected to drive demand for premium kitchen appliances.
International Expansion: Stove Kraft aims to strengthen its global footprint by entering new markets in Europe and Africa.
Product Diversification: Plans to expand its product portfolio into smart kitchen solutions and energy-efficient appliances.
E-Commerce Growth: Leveraging online platforms to enhance accessibility and cater to tech-savvy consumers.
Recommendation:
Stove Kraft Limited’s stock performance reflects strong market confidence, with its current stock price at ₹892.30, trading close to its 52-week high of ₹950, indicating sustained investor interest. The stock’s 52-week low of ₹750 highlights resilience amidst market fluctuations. With a target price of ₹970 for FY25, analysts project a potential upside driven by the company’s robust financial performance, strategic growth initiatives, and continuous product innovation. Stove Kraft’s focus on expanding its market share in the kitchen appliances sector positions it as a compelling choice for long-term investors, with significant potential for value appreciation as demand in the segment continues to grow.
Paras Defence and Space Technologies Limited (Paras Defence) is a leading Indian company specializing in the design, development, manufacturing, and testing of defense and space engineering products and solutions. Headquartered in Navi Mumbai, the company plays a critical role in supporting India’s defense and space sectors with cutting-edge technologies.
Founded in 2009, Paras Defence operates in highly specialized areas such as optoelectronics, defense electronics, and electromagnetic pulse (EMP) solutions. With a focus on indigenization, the company aligns with the Government of India’s “Make in India” and “Aatmanirbhar Bharat” initiatives. Paras Defence collaborates with global and domestic organizations, making it a key player in India’s strategic sectors.
Shareholding Pattern
Business Segments and Products
Paras Defence operates through the following key business segments:
Defense and Space Optics: Offers high-precision optics for satellites, drones, and defense surveillance applications. Supplies lenses and mirrors for electro-optic systems.
Defence Electronics: Specializes in manufacturing rugged electronic systems for defense applications. Provides displays, consoles, and power distribution units for naval and land defense.
Electromagnetic Pulse (EMP) Solutions: Designs EMP protection systems for critical defense and infrastructure installations. Ensures operational continuity during electromagnetic attacks.
Heavy Engineering: Engages in the manufacturing of high-complexity components for defense and aerospace systems.
Additive Manufacturing and 3D Printing: Supports rapid prototyping for defense and aerospace applications using advanced 3D printing technologies.
Financial Performance
Paras Defence has demonstrated consistent growth, driven by its specialization in niche markets. Key highlights include:
Revenue Growth: Revenue has seen an upward trajectory due to increased defense spending and new contract acquisitions. The company has also expanded its footprint in the global space systems market. Q2 FY25 revenue stood at ₹87.09 crore, reflecting a 42.05% YoY growth. Annual revenue for FY24 reached ₹254 crore, marking a 13.87% YoY increase.
Profitability Metrics: Paras Defence’s EBITDA and net profit margins are reflective of its high-value offerings and operational efficiency. Net profit margins are strong at 13.72% for FY24. The company has shown consistent revenue and profit growth, positioning it for long-term stability.
Market Metrics: The current market capitalization of Paras Defence is ₹4,423 crores, and the company generates approximately ₹7.53 lakhs in revenue per employee, demonstrating strong operational efficiency.
Order Book: The company boasts a robust order book, providing visibility for sustained growth over the next few years.
Technological Capabilities
Paras Defence has established itself as a technology-driven company with strong capabilities in:
Optoelectronics: Expertise in optical components critical for surveillance and reconnaissance.
Indigenous Manufacturing: Pioneering solutions aligned with India’s defense modernization goals.
Advanced Testing Facilities: State-of-the-art facilities for testing components under extreme environmental conditions.
R&D Focus: Significant investment in research and development to maintain technological superiority.
Recent Developments and Market Position
Strategic Partnerships: Collaborations with DRDO (Defence Research and Development Organization), ISRO (Indian Space Research Organization), and other leading entities enhance Paras Defence’s market standing. Partnerships with international firms for technology transfers and co-development projects.
IPO Success (2021): Paras Defence raised funds through a successful IPO, signaling investor confidence in its business model and future prospects.
Global Expansion: Increased export of defense systems and components to international clients.
Government Initiatives: Active beneficiary of policies promoting indigenization of defense production.
Future Outlook
Market Trends: The Indian defense sector is projected to grow significantly, with increased budget allocations and a focus on reducing import dependency. Paras Defence is poised to benefit from these trends.
Growth Drivers: Expansion into newer segments like unmanned aerial systems and space-grade components. Participation in mega-projects like India’s lunar and Mars missions.
Challenges: Competition from global defense giants and stringent regulatory frameworks.
Comparative Analysis
When benchmarked against peers like Bharat Electronics Limited (BEL) and Data Patterns, Paras Defence has carved a unique niche with its focus on EMP solutions and optoelectronics. However, its smaller scale and dependency on government projects could be potential constraints compared to larger players.
Metric
Paras Defence
BEL
Data Patterns
Revenue Growth
Higher in niche
Moderate in broad base
High in electronics
Technological Expertise
Specialized
Diverse
Moderate
Export Contribution
Growing
Established
Emerging
Stock Performance and Target
Recent Performance: The stock is currently trading at ₹1,078 (as of December 2024), with a 52-week high of ₹1,592.7 and a low of ₹610. YTD gain: +52.68%, showcasing strong investor confidence.
Target for FY25: Analysts predict a moderate rise of 0.41% to 1.12% by year-end, with targets between ₹1,102 and ₹1,110. Long-term potential: Analysts remain optimistic about the company’s prospects, supported by robust government defense spending and export growth.
Fund houses and wealth managers are raising concerns about the rising trend of investors purchasing international exchange-traded funds (ETFs) trading at significant premiums to their net asset value (NAV). The caution comes amidst a surge in interest among Indian investors seeking exposure to global markets, particularly the U.S., following Donald Trump’s recent victory in the U.S. Presidential election.
International ETFs, designed to provide investors with access to foreign markets, are seeing a mismatch in demand and supply due to regulatory restrictions on the creation of new units. This imbalance has caused many ETFs, especially those tracking U.S. markets, to trade at premiums well above their NAVs. Experts warn that such buying behaviour could lead to disappointing returns when the premium diminishes, and the ETF’s market price aligns with its underlying NAV.
What Are ETFs, and Why the Premium?
ETFs are passively managed investment instruments that track indices, commodities, or baskets of securities, offering low expense ratios compared to mutual funds. They are traded on exchanges like stocks, allowing investors to enter or exit positions throughout the trading day. Fund houses typically appoint market makers to provide liquidity, and large investors can approach fund houses for unit creation or redemption.
However, a demand-supply mismatch has emerged due to regulatory limitations on fresh unit creation in international ETFs. This has led to existing units being in short supply, driving up their prices on exchanges relative to their NAV.
Industry Experts Weigh In
Prateek Bhardwaj (hypothetical name), an experienced wealth manager, explained the risk: “Investors need to understand that paying a premium over NAV is essentially overpaying for the asset’s intrinsic value. When the market price converges with the NAV, it could result in losses or reduced returns. This is particularly risky for investors eyeing short-term gains.”
Another mutual fund executive noted, “The current premiums are a result of pent-up demand for global diversification, especially in the U.S. market, where optimism has risen post-election. However, without new units being created to meet this demand, the price distortion will persist.”
The Risks of Buying at a Premium
Purchasing ETFs at a premium means that investors are essentially paying more for the same value of underlying assets. Over time, as supply stabilizes or investor interest wanes, the ETF’s market price may decline to align with the NAV. This convergence can erode investor returns, particularly for those who bought during periods of inflated demand.
What Should Investors Do?
Wealth managers and fund houses recommend a cautious approach:
Monitor NAV and Market Price: Investors should ensure that they are not overpaying for ETFs by comparing the market price with the NAV before making a purchase.
Evaluate Long-Term Goals: International ETFs are best suited for long-term diversification. Short-term investments, especially during periods of price premiums, could result in suboptimal returns.
Be Patient: Experts suggest waiting for market corrections or fresh unit creations to stabilize prices, reducing the risk of buying at inflated levels.
Seek Professional Advice: Investors uncertain about their strategies should consult financial advisors to assess the suitability of international ETFs for their portfolios.
Why the Renewed Interest in U.S. ETFs?
The U.S. market has attracted renewed attention from Indian investors due to its robust economic performance, diversification benefits, and perceived growth potential following the recent political changes. ETFs tracking major U.S. indices, such as the S&P 500 or Nasdaq-100, are seen as effective vehicles for accessing these opportunities.
However, experts emphasize that such investments require due diligence. While the demand for global diversification is a positive trend, overpaying for these instruments during times of supply constraints could undermine the very benefits they offer.
Conclusion
International ETFs offer a valuable opportunity for Indian investors to diversify their portfolios and gain exposure to global markets. However, the current scenario of ETFs trading at a premium to NAV calls for restraint. Investors must prioritize research and avoid impulsive decisions driven by market trends. By focusing on long-term strategies and understanding the dynamics of ETF pricing, investors can maximize their returns while minimizing unnecessary risks.
Bharat Earth Movers Ltd. (BEML), headquartered in Bengaluru, India, is a leading public sector undertaking under the Ministry of Defence. Established in 1964, BEML has evolved into a diversified engineering powerhouse, catering to critical sectors including defense, railways, and construction. The company plays a pivotal role in India’s infrastructure and defense development. BEML is a key supplier of military equipment to the Indian armed forces, producing high-mobility vehicles, tank transporters, and missile launchers. BEML offers a comprehensive range of heavy-duty machinery for mining and construction projects, including dump trucks, bulldozers, excavators, and loaders. BEML has a strong domestic footprint and is steadily expanding its international presence, with exports to over 68 countries.
Return Summary
YTD
1 Month
6 Month
1 Year
2 Year
3 Year
5 Year
57.82%
9.05%
10.47%
82.19%
190.46%
129.85%
353.97%
3 Year Return: BEML v/s NIFTY50
Result & Business Highlights
Revenue for YoY and QoQ is at increasing phase at Q2 FY25 revenue of ₹860 crore with a moderate EBITDA margin of 8% at ₹73 crore.
Business segments contribution is Defence & Aerospace 19%, Mining & Construction 43% and Rail & Metro 38%.
BEML exports over 1400+ equipment to 72 countries; railway products are exported to the SAARC region.
Export turnover in FY20 was ₹463 crores, which is now over ₹1066 crores in FY24 and is ₹196 crore in Sep 2024.
Major accomplishment of BEML are 350 armoured vehicles, 3560 military wagons, 2000 metro cars and 18000 rail coaches.
The company has won new contracts worth ₹136 crore and ₹83 crore from the Ministry of Defence.
Shareholding Pattern
Return Comparison with Peers
COMPANY
1 Year
2 year
3 Year
5 Year
BEML
82.19%
190.46%
129.85%
353.97%
Hindustan Aeronautics
66.55%
241.84%
612.54%
1123.19%
Bharat Dynamics
78.41%
156.77%
501.51%
750.86%
Paras Defence
58.46%
81.63%
53.49%
–
MTAR Technologies
(23.53%)
3.52%
(27.29%)
–
Contribution to Industry Size
The Indian defence manufacturing sector is valued at approximately $12 billion, with a goal to reach $25 billion by 2025 under the government’s “Make in India” initiative. BEML is a critical supplier of high-mobility vehicles, tank transporters, missile launchers, and ground support equipment. The company supports over 40% of the market for high-mobility military vehicles, positioning it as a key enabler of indigenous defence manufacturing. The Indian mining and construction equipment market is valued at around ₹25,000 crore (~$3 billion), with steady growth driven by infrastructure investments. The Indian railways and metro rail systems are part of a $20 billion industry, with significant investments in urban transit expansion. It holds a dominant position in metro coach manufacturing, supplying vehicles for major cities like Delhi, Bengaluru, and Mumbai.
Balance Sheet Analysis
Reserves are stable at ₹2038 crore from FY21 to ₹2650 crore with high revenues and efficient management operations to ₹4054 crore in FY24.
Borrowing has reduced year on year, makes no worry.
Trade receivables are increasing makes a worry for company in collection of income form government.
Cash Flow Analysis
Cash flow from Operations is ₹560 crores in FY23 and ₹458 crores in FY24.
The Company has purchased fixed assets worth ₹101 crore in FY24, shows a great sign of expansion.
Company is paying dividends continuously every year to its shareholders, shows a positive sign of stable company.
Max Healthcare Institute Ltd. (MHIL) is one of India’s leading providers of healthcare services, known for its comprehensive and integrated approach to healthcare. Established in 2000 and headquartered in New Delhi, MHIL operates a network of hospitals and healthcare facilities that deliver world-class medical services. The company has a significant presence in North India and offers a wide range of services across multiple medical disciplines. MHIL operates 17 healthcare facilities, including tertiary and quaternary care hospitals, primary care clinics, and specialized centers. Its flagship hospitals include Max Super Speciality Hospitals in Saket, Patparganj, and Shalimar Bagh in Delhi-NCR. Max Healthcare aims to continue its leadership in the Indian healthcare sector by expanding its capacity, investing in cutting-edge technology, and enhancing its presence in underserved markets.
Return Summary
YTD
1 Month
6 Month
1 Year
2 Year
3 Year
5 Year
59.84%
5.01%
33.4%
60.59%
150.66%
189.16%
–
3 Year Return: MAXHEALTH v/s NIFTY50
Result & Business Highlights
Revenue for YoY and QoQ is at increasing phase at Q2 FY25 revenue of ₹1707 crore with moderate EBITDA margin of 26% at ₹451 crore.
Average Revenue per Occupied Bed (ARPOB) for Q2 was ₹76,100, with a growth of 7% for existing hospitals.
Newly operational Max Dwarka hospital reported revenue of ₹33 crore, EBITDA loss of ₹18 crore, 41% occupancy, and ARPOB of ₹80,000; expected to break even before year-end.
Acquisition of Jaypee Hospital, Noida, valued at ₹1,660 crore, anticipated to enhance presence in the National Capital Region; plans to increase operational bed capacity from 376 to 430 by March 2025.
Ongoing expansions include 140 beds at Nagpur, 268 beds at Nanavati, 400 beds at Max Smart, 155 beds at Mohali, and 501 beds at Sector 56 Gurgaon, all on schedule.
Max Home reported a revenue of ₹53 crore, a growth of 24% YoY, offering 14 specialized service lines across 12 cities.
Max Lab generated gross revenue of ₹47 crore, reflecting a strong growth of 21% YoY, with over 1,100 collection centers
Shareholding Pattern
Return Comparison with Peers
COMPANY
1 Year
2 year
3 Year
5 Year
Max Healthcare
60.59%
150.66%
189.6%
–
Apollo Hospitals
30.37%
52.24%
33.91%
390.48%
Fortis Healthcare
78.88%
141.12%
143.11%
403.41%
Aster DM Healthcare
20.4%
111.31%
151.8%
212.8%
Narayana Hrudayalaya
8.35%
73.5%
129.73%
341.5%
Contribution to Industry Size
Max Healthcare is one of the largest healthcare companies, contributed a lot to its industry and to India. The underpenetration of hospital beds and demand supply gap is reduced and the insurance penetration in healthcare sectors is rising from 32% in FY17 to 41% in FY24. The operations or any surgery procedure cost in India is approximately 70% – 90% discount to average global cost. The increasing use of latest technology in the treatment process has benefited the healthcare industry be efficient and useful in cost cutting also. The occupancy of Max Healthcare is approx. 75%, while others in industry are at average of 65%.
Balance Sheet Analysis
Reserves have increased very significantly from FY21 with high revenues and efficient management operations to ₹7436 crore in FY24.
Borrowing has increased year on year but in significant manner, makes no worry.
The cash on balance sheet is enough to pay dividends regularly and carry on every day operations easily.
The fixed assets has increased to ₹9506 crore, as company is investing a lot in expanding beds, medical equipments, land acquisitions for new hospital branches.
Cash Flow Analysis
Cash flow from Operations is positive for many years and in FY24 it is ₹1122 crore.
The Company has purchased fixed assets worth ₹786 crore in FY24, shows a great sign of expansion.
Max Healthcare has now started paying dividends to its shareholders as it has now enough cash reserves.
State Bank of India: A Leading Multinational Banking Institution
Established on July 1, 1955, following the nationalization of the Imperial Bank of India, the State Bank of India (SBI) is India’s largest multinational public sector bank, headquartered in Mumbai. Formed with the Reserve Bank of India initially acquiring a 60% stake, SBI has grown into a cornerstone of the Indian financial system.
SBI offers a comprehensive range of financial solutions through four primary segments: Treasury, Corporate/Wholesale Banking, Retail Banking, and Other Banking Business. Its extensive network, consisting of over 22,000 branches across India and 227 international offices in 30 countries, supports global financial operations from hubs like New York, Tokyo, and London. As a leader in digital innovation, SBI has introduced initiatives like SBI e-tax for online tax payments and the Virtual Debit Card, enhancing customer security and convenience.
The bank has experienced significant growth and expansion through strategic acquisitions, notably the 2017 merger with five associate banks and the Bharatiya Mahila Bank, which solidified its domestic dominance. Internationally, SBI has forged global collaborations, including a Payments Bank partnership with Reliance Industries and ventures with Visa and Elavon for merchant acquiring services. Its subsidiaries, such as SBI Life Insurance, a joint venture with Cardif S.A., and SBI Funds, recognized as ‘Mutual Fund of the Year,’ underscore its excellence in insurance and asset management.
SBI actively supports national development initiatives through specialized products like the Defence Salary Package and senior citizen loans. By leveraging technology-driven services, it ensures seamless financial solutions for customers across both urban and rural areas. With its strong domestic foundation and growing international presence, SBI continues to cement its role as a leader in the global banking sector.
Returns Summary
YTD
1 Month
6 Month
1 Year
2 Year
3 Year
5 Year
33.02%
4.01%
-5.72%
49.33%
40.56%
80.46%
154.00%
Result Highlights
State Bank of India (SBI) demonstrated a strong performance in Q2FY25, showcasing growth in profitability, business expansion, asset quality, and digital transformation. The bank reported a Net Profit of ₹18,331 crores, reflecting robust earnings. Key profitability metrics like Return on Assets (ROA) at 1.13% and Return on Equity (ROE) at 21.78% for H1FY25 underscore efficient capital utilization, while the Net Interest Margin (NIM) of 3.18% (3.31% domestic) highlights sustainable profitability.
SBI’s business growth remained impressive, with deposits crossing ₹51 trillion, up 9.13% YoY, and advances exceeding ₹39 trillion, registering a 14.93% YoY growth. This reflects balanced expansion across deposits and credit segments, positioning SBI for competitive market share growth. Asset quality improved significantly, with Gross NPA at 2.13% and Net NPA at 0.53%, supported by a Provision Coverage Ratio (PCR) of 75.66%, rising to 92.21% when including AUCA. Additionally, the bank maintained conservative provisioning, setting aside ₹31,084 crores, equivalent to 153% of Net NPAs, ensuring resilience against potential losses.
SBI’s digital transformation continues to lead, with >98% of transactions via alternate channels and over 8.13 crore users on its YONO app. Notably, 61% of savings accounts were opened digitally in Q2FY25, highlighting the platform’s pivotal role in customer acquisition and engagement. The bank’s liability franchise benefits from its 22% market share in deposits, with 10.05% YoY growth in current account balances, and a credit-to-deposit ratio of 67.87%, reflecting healthy lending activity.
To support future growth, the Central Board approved raising up to ₹20,000 crores in long-term bonds in FY25. This capital infusion, through public or private placement, will enhance the bank’s capital base, supporting its strategic goals of credit expansion and financial stability, while sustaining a balanced credit-to-deposit ratio. These initiatives position SBI for stable, long-term growth in a competitive banking landscape.
Shareholding Pattern
Return Comparison with Peers
Company
ROCE
6 Months
1 Year
3 Year
5 Years
State Bank of India
6.16%
4.53%
43.59%
21.75%
20.49%
Bank of Baroda
6.33%
-5.34%
21.77%
42.16%
20.01%
Punjab National Bank
5.46%
-12.86%
28.92%
41.02%
11.63%
IOB
5.41%
-18.30%
32.48%
37.16%
39.38%
Union Bank of India
6.55%
-12.79%
10.39%
39.99%
16.74%
Canara Bank
6.63%
-10.92%
23.11%
36.54%
19.29%
Indian Bank
5.92%
6.88%
41.61%
59.60%
36.32%
SBI Outlook and Contribution to Industry
State Bank of India (SBI) stands as a cornerstone of the Indian banking sector, with a ₹52 lakh crore balance sheet and a 22% market share in deposits. It dominates segments like home loans (26.5%) and auto loans (19.8%), supported by its 22,000 domestic branches and operations in 30 countries. SBI’s YONO digital platform drives innovation, handling 66 crore transactions annually, reflecting its leadership in technology-driven banking.
The industry outlook for FY25 and beyond is positive, with GDP growth at 6.7% in Q1 FY25, stable global conditions, and robust banking sector projections of 11-12% deposit growth and 12-13% credit growth. SBI leads this momentum, achieving ₹51.17 trillion in deposits and 14.93% credit growth YoY, backed by a strong capital adequacy ratio of 13.76% and high asset quality (Gross NPA at 2.13%).
Digital transformation remains a key driver, with over 8 crore digital users and 61% of savings accounts opened digitally in Q2 FY25. Its subsidiaries, such as SBI Life Insurance and SBI Funds, diversify its revenue streams, bolstering financial stability.
SBI’s focus on sustainable growth, digital innovation, and robust asset management positions it to capitalize on India’s economic momentum, ensuring long-term leadership and enhanced shareholder value.
Balance Sheet Analysis
SBI’s balance sheet from FY20 to FY24 shows steady expansion in key financial areas. Deposits grew from ₹32,74,160.63 crores to ₹49,66,537.49 crores, reflecting the bank’s strong customer base and competitive edge in attracting funds. Simultaneously, advances saw a significant rise, from ₹23,74,311.18 crores to ₹37,84,272.67 crores, driven by robust growth across corporate, retail, and MSME sectors. The bank has also shown consistent growth in reserves, increasing from ₹2,50,167.66 crores to ₹4,14,046.71 crores, indicating a strong capital base to support long-term sustainability. Borrowings grew from ₹3,32,900.67 crores to ₹6,39,609.50 crores, signifying
SBI’s use of external funding to drive its growth. While this increase reflects SBI’s expansion, effective asset-liability management remains critical. Investments and other assets also rose significantly, supporting SBI’s diversified portfolio. The net block remained stable, reflecting a balanced approach to capital expenditure in fixed assets. With strong asset growth and prudent liability management, SBI is well-positioned for continued market leadership in India’s banking sector, strengthened by its digital transformation through platforms like YONO.
Cash Flow Analysis
SBI’s cash flow analysis from FY2013 to FY2024 reveals significant fluctuations in its operational, investing, and financing activities. Operating cash flows have been largely positive, with notable spikes in FY2017 (+₹77,406 crores) and FY2022 (+₹89,919 crores), reflecting strong operational efficiency. However, negative flows in FY2018 and FY2023 highlight challenges such as higher provisioning for bad loans. In terms of investing activities, cash flows have consistently been negative, with the bank investing heavily in growth, technology, and acquisitions. A rare positive period in FY2018 likely reflects asset disposals. Financing activities show volatility, with positive cash inflows in certain years due to capital raising and negative flows in others, such as FY2024, likely reflecting debt repayments and a focus on capital strengthening. Despite these fluctuations, SBI has managed to maintain positive net cash flow in key years, ensuring liquidity for growth. Overall, SBI’s cash flow patterns reflect strategic financial management, including debt reduction and investment in expansion, positioning it for long-term growth.
Sonata Software Ltd. is a leading global IT services and technology solutions company based in India. It provides a wide array of IT services, software solutions, and digital transformation offerings to enterprises worldwide. With a focus on innovation and customer-centricity, the company caters to industries such as retail, manufacturing, travel, ISV (Independent Software Vendors), and BFSI (Banking, Financial Services, and Insurance). It has business segments in IT services, platformation, Product Engineering, and software Distributors. It has a global presence with operations in over 35 countries, serving more than 500 clients.
Return Summary
YTD
1 Month
6 Month
1 Year
2 Year
3 Year
5 Year
(15.73%)
4.75%
15.07%
(0.15%)
113.87%
111.02%
444.02%
3 Year Return: Sonata Software v/s NIFTY
Result Highlights
Revenue for YoY and QoQ is at increasing phase at Q2 FY25 revenue of ₹2527 crore with moderate EBITDA margin of 7% at ₹176 crore.
The target revenue company want to achieve is ₹12,000 crore by the end of 2027, and strengthening its client partnerships with Microsoft, AWS and other significant players.
In this half year company has closed 6 large deals, and in active pipeline 49% are large orders.
The cash reserves on balance sheet has reduced from ₹700 crore to ₹500 crore, because of dividend payouts and acquisitions.
Major wins in Q2 are Collaboration with a US technology giant for AI, cloud, and data services. A multi-year data modernization program with an Australian wholesaler. Strategic partnership with a leader in food safety systems for consumer-facing automation platforms
Shareholding Pattern
Return Comparison with Peers
COMPANY
1 Year
2 year
3 Year
5 Year
Sonata Software
(0.15%)
113.87%
111.02%
444.02%
Tata Elxsi
(19.7%)
(1.86%)
14.26%
734.5%
KPIT Technology
(8.12%)
91.47%
196.3%
1341.6%
Newgen Software
75.56%
560.6%
319.2%
1176.5%
Birlasoft
(3.44%)
97.15%
25.32%
745.02%
Contribution to Industry Size
The great partnership for 30+ years of Sonata with Microsoft in the AI industry has helped Sonata grow significantly. It is helping Microsoft with 400+ clients across the globe generating Microsoft’s $650+ million revenue per annum. It has 3500+ teams on Microsoft Technologies, contributing in the industry of healthcare, retail, manufacturing, and Telecom. For corporates, it has made its own AI called Harmoni. AI with Microsoft and AWS as partners.
Balance Sheet Analysis
Reserves have been increasing gradually with high revenues and efficient management operations.
Borrowing has increased year on year to fulfil the expansion and partnerships with clients for projects.
The cash reserves are enough to pay the borrowed debts and acquisitions of companies to grow inorganic way.
The balance sheet is strong and efficient in industry aspects.
Cash Flow Analysis
Cash flow from operations is ₹281 crore in FY24 and is positive for many years.
The acquisitions have increased in the past 2-3 years because of high demand in the industry, showing great strength in the company.
The borrowing has been stable and is very low, maintaining its debt-to-equity ratio.
The company is paying its dividend every year constantly with good payouts to its investors.
UltraTech Cement Ltd., a flagship company of the Aditya Birla Group, is India’s largest manufacturer of grey cement, ready-mix concrete (RMC), and white cement. Established in 1983, the company has a strong presence across India, UAE, Bahrain, and Sri Lanka. UltraTech operates 23 integrated manufacturing units, 28 grinding units, and 7 bulk terminals, making it a leading player in the global cement industry. It has installed cement manufacturing capacity of approximately +140 million tonne per annum and has employee strength over 23000 in FY24. UltraTech is a pioneer in sustainability initiatives, with a focus on reducing carbon emissions, renewable energy adoption, and circular economy practices. It is committed to achieving carbon neutrality by 2050.
Return Summary
YTD
1 Month
6 Month
1 Year
2 Year
3 Year
5 Year
4.58%
-0.97%
7.91%
25.87%
59.37%
48.54%
155.7%
3 Year Return: UltraTech Cement v/s NIFTY
Result Highlights
Revenue of ₹15,635 in Q2 and EBITDA of ₹2017, which is multi quarter low because of monsoon season, election pressure and high cost compared to revenue.
UltraTech Cement’s capacity utilization at 68% with 3% growth in volume terms for Q2 FY25.
The high-cost fuel contracts are at end and by Q3 the prices will further go down and costs dropping to ₹1.84 per Kcal, down 8% QoQ.
Government focus on Metros, Roads, and Housing schemes will benefit cement companies.
The company will be expanding its capacity by 8 million tons reaching 158 million tons capacity.
The Kesoram Cement acquisition at ₹7500 crore, and it will strengthen and expand the south market footprint and will reach the target of total capacity of 200 million tons by 2028.
Shareholding Pattern
Return Comparison with Peers
COMPANY
1 Year
2 year
3 Year
5 Year
UltraTech Cement
26.03%
59.57%
48.72%
156.08%
Ambuja Cement
18.97%
(9.75%)
37.77%
150.30%
Shree Cement
(2.00%)
9.05%
(1.54%)
20.58%
JK Cements
16.05%
37.46%
27.79%
258.90%
JK Lakshmi Cements
(1.39%)
15.34%
23.17%
173.19%
Contribution to Industry Size
Being the largest cement company in Cement industry, UltraTech Cement with ₹318,000 crore market capitalizations having 24% market share of the industry. Expanding its footprint and having highest market share in North, South, West and East of India. Promoting the use of renewable energy resources for its production process and reducing the use of coal and pet coke. The company extensive operations include 23 integrated plants, 28 grinding units and 7 bulk terminals, enabling to serve the market efficiently.
Balance Sheet Analysis
Reserves, fixed assets and capex is increasing every year, showing a great sign of growth.
Company has debt on its balance sheet but has enough cash to pay it, hence it is net debt free.
The excess cash is used to acquire new business to have more growth through inorganic way as business is at mature stage to grow fast.
Cash Flow Analysis
Cash flow from Operations is ₹10,898 crore in FY24 and is positive for more than 10 years.
Purchase of fixed assets is in increasing trajectory every year on year, showing a great sign of expansion and growth of company.
The borrowing has been stable and is very low maintaining its debt to equity ratio.
