Tag Q2 Results

Waaree Energies Q2 results
Waaree Energies Achieves 17% Growth in Q2 FY25 Net Profit, Reaching ₹375.6 Crore

Company Overview

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 FY25Q2 FY25FY23FY24
Revenue34093574675111398
EBITDA5525258361575
OPM16%15%12%14%
PBT5314996771734
Net Profit4013765001274
NPM11.7%10.5%7.41%11.2%
EPS19.9913.7324.4962.72
C&CE3698381317363779

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:

  1. Market Leadership: A dominant position in the industry ensures competitive advantage and strong market share.
  2. Technological Edge: Advanced technologies provide an edge over competitors and drive innovation.
  3. Strong Brand Presence: A well-established brand fosters customer trust and loyalty.
  4. Policy Support: Favorable government policies and incentives promote growth and stability.

Weaknesses:

  1. High Dependency on Imports: Reliance on imported components increases vulnerability to supply chain disruptions.
  2. Limited Product Diversification: A narrow product portfolio limits the ability to tap into diverse customer needs.
  3. Capital-Intensive Operations: High operational costs can strain resources and profitability.
  4. Intense Competition: Fierce market competition pressures pricing and margins.

Opportunities:

  1. Rising Solar Demand: Increasing adoption of renewable energy drives growth potential.
  2. Energy Storage Solutions: Expanding into storage technology complements solar offerings.
  3. Global Expansion: Entering international markets opens new revenue streams.
  4. Backward Integration: Controlling supply chains enhances efficiency and cost management.

Threats:

  1. Regulatory and Policy Risks: Changes in regulations or government policies can impact operations.
  2. Price Volatility: Fluctuations in raw material costs affect pricing and profitability.
  3. Global Trade Wars: Tariffs and trade restrictions disrupt supply chains and market access.
  4. Economic Uncertainty: Economic slowdowns or instability could hinder growth prospects.
Swan Energy Q2 results
Swan Energy Shares Dip as Q2 PAT Declines 39% YoY to ₹51 Crore

Company Overview

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.Q2FY25Q1FY5Q2FY24Q-o-Q (%)Y-o-Y (%)
Net Sales1032.191141.741223.26-9.6%-15.6%
Other Income31.3219.826.8558.0%357.2%
Total Expenditure940.45788.36993.419.3%-5.3%
Operating Profits217.08453.34322.15-52.1%-32.6%
Interest65.6652.6358.3424.8%12.5%
PBT57.4320.57178.37-82.1%-67.8%
Tax-9.7352.8912.81-81.6%-24.0%
Net Profit67.13267.67165.57-74.9%-59.5%
Adj EPS in Rs.2.288.576.69-73.4%-65.9%

SWOT Analysis

Strengths:

  1. Strong Outlook: A robust growth trajectory driven by key projects and market demand.
  2. Pioneering LNG Infrastructure: Cutting-edge facilities, making the company a leader in LNG infrastructure development.
  3. Strong Partnerships: Strategic alliances with key players strengthen market position and operational efficiency.
  4. Diversified Business Portfolio: Operations span across LNG, real estate, and textiles, reducing dependency on a single sector.

Weaknesses:

  1. Limited Presence in Core LNG Markets: The company’s reach in major global LNG markets remains constrained.
  2. Dependence on Key Projects: Over-reliance on a few critical projects poses risks to revenue consistency.
  3. Lower Focus on Textiles: Neglected growth in the textile segment affects overall business balance.
  4. Regulatory and Environmental Challenges: Navigating stringent regulations impacts operations and costs.

Opportunities:

  1. Rising Demand for LNG: Increasing global LNG consumption creates significant growth prospects.
  2. Real Estate Expansion: Opportunities in the booming real estate sector add to revenue streams.
  3. Government Initiatives: Supportive policies and incentives offer avenues for accelerated growth.
  4. International Collaborations: Potential for partnerships with global players to expand market reach.

Threats:

  1. Market Competition: Intense rivalry in the LNG and real estate sectors may impact profitability.
  2. Economic Volatility: Fluctuations in global and domestic markets pose financial risks.
  3. Environmental Regulations: Increasingly stringent standards could escalate compliance costs and operational hurdles.
Vardhman Holdings Q2 Results
Vardhman Holdings Q2 Results: Net Sales Up 34.59%, Profit Rises 12.56% YoY

Company Overview

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.Q2FY25Q1FY25Q2FY24Q-o-Q (%)Y-o-Y (%)
Total Income7.46.630.2712.1%-75.6%
Operating Expenses2.521.280.7496.9%240.5%
Operating profit4.885.3229.53-8.3%-83.5%
Other Income0.480.440.519.1%-5.9%
PBT62.0974.468.87-16.5%-9.8%
Tax12.711.276.94900.8%83.1%
Net Profit49.3873.1361.93-32.5%-20.3%
Basic EPS (Rs.)154.73229.24194.03-32.5%-20.3%

SWOT Analysis

Strengths:

  1. Backed by a Strong Parent Group, ensuring stability and trust.
  2. A Diversified and Robust Investment Portfolio offering steady returns.
  3. Maintains a debt-free status, enhancing financial resilience.
  4. Strategic alliances that provide growth opportunities and market access.

Weaknesses:

  1. Limited revenue streams, reducing diversification.
  2. High vulnerability to market volatility affecting performance.
  3. The absence of a global presence limits international reach.
  4. Declining sales pose challenges to growth.

Opportunities:

  1. Potential for Expansion into Financial Services to Diversify Income.
  2. Leveraging the Growth of India’s Textile Sector for Increased Business.
  3. Rising Global demand for Textiles creating export opportunities.
  4. Opportunities in green investments aligned with sustainability trends.

Threats:

  1. Heavy market dependency increases risk exposure.
  2. Economic uncertainty impacts business stability.
  3. Frequent regulatory changes pose compliance challenges.
Techno Electric & Engineering Q2 Results
Techno Electric & Engineering Q2 Results: 4.88% YoY Profit Decline

Company Overview

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 FY25Q2 FY25FY23FY24
Revenue3754418301502
EBITDA527087210
OPM14%16%11%14%
PBT117105233319
Net Profit9894187268
NPM26.1%21.3%22.5%17.8%
EPS9.128.1017.3624.98
C&CE162191146137

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:

  1. Diverse business portfolio catering to multiple sectors.
  2. Robust financial stability ensures resilience.
  3. Market leadership in renewable energy initiatives.
  4. Secure long-term contracts providing consistent revenue streams.

Weaknesses:

  1. High Dependence on Government Policies Impacting Operations.
  2. Limited international footprint, reducing global market share.
  3. Concentration in specific sectors restricts growth potential.

Opportunities:

  1. Expansion in renewable energy projects to meet rising demand.
  2. The adoption of digital energy solutions enhances efficiency.
  3. Leverage the global shift toward sustainable energy for growth.

Threats:

  1. Uncertainty from regulatory and policy changes.
  2. Intense competition within the energy sector.
  3. Delays in project execution affect timelines and costs.
  4. Volatility in energy prices is impacting profitability.
Vardhaman Textiles Q2 Results
Vardhaman Textiles Q2 Results: Profit Soars 46.57% Year-on-Year

Company Overview

Vardhman Textiles Ltd. is one of India’s largest textile manufacturers, recognized for its integrated operations in yarn, fabric, and garment production. Established in 1965 and headquartered in Ludhiana, Punjab, Vardhman has grown into a vertically integrated textile conglomerate with a diverse product range. The company caters to both domestic and international markets, supplying a variety of textile products to some of the world’s leading brands. The clientele lists are GAP, H&M, Walmart, Calvin Klein, Tommy Hilfiger, etc. It is presented in 57 countries.

Industry Outlook

The global textile market was valued at approximately $1 trillion in 2022 and is projected to grow at a CAGR of around 4.4%, reaching $1.35 trillion by 2027. Valued at around $150 billion in 2022, the Indian textile and apparel market is expected to reach $250 billion by 2025 at a CAGR of 10%. Increasing disposable incomes, e-commerce expansion, and demand from emerging markets drive this growth. Rising demand for apparel, home textiles, and technical textiles are also key contributors. Many global brands are shifting sourcing away from China to South Asian countries. India, Bangladesh, and Vietnam are key beneficiaries, with India’s textile exports to the US and EU increasing by over 15% annually. Challenges such as raw material price volatility and energy costs remain, necessitating efficient resource management and technology adoption for sustained growth.

Segment Information

  • Yarn: Yarn segment includes ranges of specialised greige, dyed and recycled sustainable yarns in various materials like cotton, polyester, acrylic, viscose, and specialized fibres, along with blends. This diverse portfolio allows us to cater to a wide array of customer requirements. In this quarter Yarn segment earned revenue of ₹2454 crore. It sold about 68,461 metric tons of Yarn this quarter.
  • Fabrics: We specialize in manufacturing fabrics suitable for tops, bottoms and outerwear across kids, men and women categories. Our capabilities extend to piece-dyed, yarn-dyed and printed fabrics, catering to both casual and formal wear. Our facilities feature a mix of advanced European and Japanese machinery and technologies, enabling us to handle a vast range of products from 60 GSM to 400 GSM.
  • Garments: Vardhman Apparels outlook has always been to satisfy our customers with high quality shirts with our state of the art infrastructure and equipments accompanied by our innovative product that we offer our customers as a futuristic approach. To produce world class garments both for the international and domestic brands, offering wide range of products in all blends. It had earned revenue of ₹112 crore in FY24.

Quarterly Highlights

  • Revenue of ₹2502 crore in Q2 FY25 up by 4.38% YoY from ₹2397 crore in Q2 FY24.
  • EBITDA of ₹315 crore in this quarter at a moderate margin of 13% compared to 9% in Q2 FY24.
  • Profit of ₹197 crore in this quarter compared to ₹136 crore in Q2 FY24.

Business Highlights

  • Bangladesh is the second largest exporter player for India and even though there were issues with Bangladesh, the company’s sales or exports were not affected much and financials were remained at same levels.
  • Cotton prices are at lower side of $0.6, and the company has exhausted its inventory so it has started buying cotton from market in Q1 and start of Q2 FY25 at lower prices.
  • The EBITDA and profitability margins are in downward trend for many years and it is a negative signs as the company’s clients are reliable and strong, the sales are growing but the profits are remaining same.

Financial Summary and Ket Ratios

SWOT Analysis of Vardhaman Textiles

Strengths:

  1. Strong market position in the textile industry.
  2. Wide range of products.
  3. Focus on sustainability and eco-friendly practices.

Weaknesses:

  1. Fluctuating raw material prices.
  2. Limited B2C presence.
  3. Heavy reliance on exports.

Opportunities:

  1. Government incentives and support.
  2. Growth through e-commerce channels.
  3. Shifts in global supply chains.

Threats:

  1. Intense market competition.
  2. Economic downturns.
  3. Tightening environmental regulations.
  4. Currency exchange rate volatility.