Welspun Corp & Max Life Insurance In Focus | Large Trades | NDTV Profit - video Dailymotion

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- #EIH's Q3 results beat estimates, carrying the stock to its all-time high - #AxisBank stake in #MaxLifeInsurance boosts company's financials   Agam Vakil brings you the bulk and block deal highlights of the day on 'Large Trades'. #NDTVProfitLive ______________________________________________________   For more videos subscribe to our channel: https://www.youtube.com/@NDTVProfitIndia Visit NDTV Profit for more news: https://www.ndtvprofit.com/ Don't enter the stock market unaware. Read all Research Reports here: https://www.ndtvprofit.com/research-reports Follow NDTV Profit here Twitter: https://twitter.com/NDTVProfitIndia , https://twitter.com/NDTVProfit LinkedIn: https://www.linkedin.com/company/ndtvprofit Instagram: https://www.instagram.com/ndtvprofit/ #ndtvprofit #stockmarket #news #ndtv #business #finance #mutualfunds #sharemarket Share Market News | NDTV Profit LIVE | NDTV Profit LIVE News | Business News LIVE | Finance News | Mutual Funds | Stocks To Buy | Stock Market LIVE News | Stock Market Latest Updates | Sensex Nifty LIVE | Nifty Sensex LIVE

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00:00 A quick look at how things are panning out as far as markets are concerned. The Nifty is very,

00:03 very quiet, absolutely flat, no change. But within the Nifty, we are looking at a lot of traction.

00:11 So we do have State Bank of India, which is the top gainer on the Nifty at the moment.

00:15 And we have seen advances of nearly 3.5% there. GSW Steel is the other one, which is up around 2.5%.

00:23 And Britannia, which also announced its earnings, which is also advancing in trade. But that's the

00:28 constituents of the Nifty. Clearly, we have those advancing more as compared to perhaps those which

00:34 are weighing down on the indices. And a little bit of an up move for some of your insurance

00:39 companies too. HDFC Life, for example, is up around 1.9%. We also have gains in Grasim,

00:47 Altertech, Cement, Nestle, all of them up and about and advancing in trade as far as the markets

00:52 are concerned. But let's talk about earnings then. And we have earnings from Wellspan Corp,

00:58 which has in fact posted a multi-fold jump in its consolidated net profit. And it's also seen a

01:05 substantial jump as far as its revenues are concerned. Let's get in the management of the

01:10 company. We have Percy Birdy, the CFO of Wellspan Corp joining us on the show right now. Percy,

01:16 good afternoon. Thanks so much for joining in. Thank you, Adam.

01:19 Can you take us through the quarter, what's really gone so well for the company and whether

01:27 or not this level of revenue on a quarterly basis is now the new normal?

01:33 Sure. So, what's been happening in Wellspan Corp is that we are really transforming from a

01:39 mild steel line pipe company, which was basically large diameter pipes, going into just oil and gas

01:45 and water applications. We are transforming into a conglomerate of companies and businesses.

01:50 And the newest businesses that we have added in the last few quarters has been the ductile

01:56 iron pipes business, which is one of the sunrise industries. So, we put up a greenfield manufacturing

02:02 plant at our facility in Anjar in Gujarat of 4 lakh tons capacity. And this is the plant which

02:08 has been ramping up. And what numbers you are showing now in the December quarter and what

02:13 you will see in the next few quarters going forward will be coming due to the ramp up

02:18 happening at all the at the ductile iron pipes facility. In addition to that, we have also made

02:23 acquisitions. We acquired Syntex. Syntex, as you know, it's a household brand name in the water

02:29 storage tanks business. And though it's small, relatively small in value when we acquired them

02:35 one year ago, our plans for them are absolutely grandiose. So, we are going to use the Syntex

02:42 powerful brand. We are going to use their distribution network and we are going to make

02:47 it grow multifold. Of course, it is going to take three or four years for us to make this happen.

02:52 And we'll be setting up new capacities in plastic tubes as well across the pan of pan India. But

02:59 these are the two pillars of growth that you will see going forward, ductile iron pipes and Syntex.

03:04 Right. And Percy, from what I understand that FI25 is also where the focus will be on these

03:11 two specific segments. That's true. That's true. These are our growth pillars. All right. So,

03:16 can you tell us about investments which have been lined up and what kind of capital expenditure are

03:21 we expecting in terms of expansion with respect to these two segments? Sure. So, for ductile iron

03:27 pipes, we are expanding our capacity at Anjar, as I spoke earlier. Our capacity was four lakh

03:32 tons per annum, which we are enhancing it by another one lakh. So, it will become five lakh

03:36 tons per annum. This announcement was already made in the past. So, it's in the public domain. And

03:41 the capital expenditure on this is about estimated at about 300 crores. In addition to that, yesterday,

03:47 our board has approved a DI plant, a ductile iron plant in overseas that's in the Middle East

03:54 geography. And that's going to be another 150,000 tons of DI pipes to be set up there

04:02 at an investment of close to 500 crores. Then Syntex. Syntex is where we had made an announcement

04:10 in the past about setting up a plant in Telangana. And now it's not only Telangana we are looking at,

04:16 we are looking at setting up Syntex plants for plastic pipes, especially plastic pipes, that is

04:22 HDPE or UPVC, OPVC, these pipes and water storage tank facilities across the length and breadth of

04:29 the country. So, we'll be going to three or four locations for Syntex also in the next two years

04:36 time. So, this also will be a capex and approximately you can say these numbers put together,

04:42 Syntex as well as the DI pipes, what we have already announced, these will add up to close to

04:46 1600 crores. So, 1600 crores will be invested over a period of, I would say, two, two and a half years.

04:54 All right, Percy, in that case, if you can give us an idea about, well, going forward, what sort of

05:01 geographies are you working with? Where are you currently, well, what markets are you currently

05:07 present in? And, well, what can we look forward to going forward? Sure. So, we are currently present

05:14 in India, US and Saudi Arabia. That's in the large diameter pipes. In India, we have also ventured

05:20 into ductile iron pipes. We spoke of that a while ago and Syntex, which is in water storage tanks,

05:26 and we will get into plastic pipes using Syntex, will also be India based. However,

05:32 there is a tremendous export potential also from India. So, whether it is DI pipes, whether it is

05:37 Syntex, whether it is even the large diameter pipes, we have been exporters for the large

05:43 diameter pipes as well to markets like Middle East or Southeast Asia, Australia.

05:49 So, our physical presence, manufacturing presence is there in India, US and Saudi,

05:54 while we export to multiple geographies. Right, right. Percy, my final question then is about the

05:59 order book. What kind of orders are you working with right now? And what's in store in the pipeline

06:06 in terms of your conversations with potential clients going forward? Can you give us a picture

06:11 there as well? Sure. So, our order book, which is largely comprising of India and US, is about

06:17 575,000 tons at the end of December. And in value terms, this comes close to 7,000 crores plus.

06:24 This is without the Saudi order book. Saudi order book is phenomenal.

06:29 They have an order book which will take care of the mill bookings for the more than next two years.

06:35 So, that's absolutely fantastic position in which our Saudi associate company is.

06:41 Looking at the DI pipes in India, which is our new business and ramping up more,

06:47 there also our order book is taking care of the next 9 to 10 months of supplies. And we are going

06:54 to increase this order book as time goes along further. So, DI, as we know, it is a sunrise

07:01 sector. And we are very confident that this will fuel our growth, ductile iron pipes business in

07:07 India. Okay, okay, Percy, we leave it that. Thank you so much for joining us and taking us through

07:11 the quarters numbers as well as what we can expect from the company. Well, that's the management of

07:16 Welsman Corp and well, a significantly improved quarter where we've seen revenues double and

07:23 profits has risen manifold. But from there on, we shift focus back to large trades. And the first

07:29 one on our list is EIH. We have my colleague Anushi who's joining us to give us an update on

07:35 the same. Anushi, what's going on with the EIH? Right. So, EIH was in focus after it hit an upper

07:41 circuit today with the stock gaining over 20%. But from there on, we did see that it has cooled

07:47 off from those levels and it's currently about 15 to 16% high. So, this was on the back of the

07:53 results that came out yesterday. So, in which we see the revenues seeing about a 26% growth with

08:00 EBITDAs seeing about a 55% growth. Margins over here is a particular focus with margins inching

08:06 up to about 44% compared to 35.6% earlier and even the net profits are about a 50% rise. So,

08:14 a couple of reasons that support these sort of numbers. One is the occupancy which went up about

08:20 2% at 79% compared to 77% earlier. Even the average room rates that the hotels charging,

08:28 they are seeing overall industry-wise also there's a healthy growth with EIH recording

08:33 over a 19% growth over here at about 19,985 which has both the occupancy and ARR has resulted in a

08:41 better revenue growth for the company. Again, what I want to shift the focus on is the company's

08:47 prudent strategy on debt reduction which has resulted in about a net cash positive position

08:53 since the June 2022 trajectory. So, if you look at the right now the net cash position that is about

09:00 to a 684 crore compared to 256 crore of last year. For the future, I want to highlight some of the

09:06 key triggers that we can keep a watch out for. One is the foreign travel arrivals that have still

09:12 not inched back to the pre-COVID level. So, again, it provides some sort of a growth opportunity

09:17 here. Again, the company's expansion plan of about adding 50 hotels by calendar year 2030.

09:25 Overall, stock performance-wise the company has seen about a 143% gain in just one year

09:30 and if you look at the volumes, volumes were high about 9 times its 30-day average now. So,

09:35 that's all on EIH for today. All right, Anushi, thanks so much for getting us that update on EIH.

09:42 Of course, it's running today and largely on account of volumes for the many reasons that

09:46 Anushi has already mentioned. But there is another stock which is also doing very well in trade today

09:52 and that's action construction equipment which is also up and about. But this time we have Mehika,

09:59 who's going to give us an update on this one. Mehika, what do you have for us?

10:03 Yeah, so the stock has hit an intraday high of 18.14% and year-to-date also the stock has shown

10:09 strength. It's up 32%. Now, volumes were over 8 times its 30-day average with the total volumes at

10:14 21.1 lakh and the buyers were almost one and a half more times than the sellers. Now, the

10:21 surge in price is mainly due to the quarter 3 earnings. Revenues were up 35.6%. EBITDA was also

10:27 up 64%. Margins expanded up around 230 basis points and the net profit was up 98%. The revenue

10:34 growth was driven by higher volumes, better product mix and the company's focus to procure

10:40 more high-value equipment orders. Significant growth in their cranes and construction equipment

10:46 segment while there was a degrowth in the agri equipment segment. And they had a 228 basis

10:51 point margin expansions due to better operating leverage, cost efficiency and expansion. Now,

10:58 key sectoral growth drivers for the stock from the medium to long term is one, the PM Gati Shakti

11:03 plan which is going to influx around 100 lakh crores towards the national infrastructure.

11:08 Also, the allocation of 1.4 trillion US dollars under the national infra pipeline which ranges

11:13 from FY19 to FY25. Now, this higher allocations will help the sectors that the company does cater

11:19 to. This includes infrastructure, railways, roads, ports and agriculture. Additionally,

11:25 it has also has some targets in terms of opportunities. It does want to tap into

11:29 the defence sector, also improve and export contribution to total revenues as well as

11:34 increase the utilisation levels. All right, Mehika. Thanks for getting us that insight as

11:40 far as action construction equipment is concerned. And it's been surging for many, many reasons as

11:46 Mehika has elaborated. But on that note, it's time to slip into a short break. But on the other side,

11:51 we get you another management and also more stocks. Stay tuned in.

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15:15 Welcome back. And now we talk about Max Insurance Company, which has received an approval from the

15:21 Insurance Regulatory and Development Authority of India for an infusion of about 1600 odd

15:27 dollars by Axis Bank. But moreover, we also have the earnings from the company coming in and it

15:33 certainly looks like a very strong quarter coming through because of which we are seeing advances

15:37 today. But we have with us Prashant Tripathi, CEO and Managing Director at Max Life Insurance at the

15:43 moment. Prashant, good afternoon. Thank you so much for joining in. I want to start by taking a look

15:49 at the quarter gone by. And while we are looking at a lot of strength, can you tell us what's driving

15:55 growth for you and will that continue to be in well around mid-teens? It's a part of chosen strategy.

16:03 Actually, thank you for having me. Part of our chosen strategy since the beginning of the year,

16:07 we have been telling that we are making investment in growth and we will try to drive EP growth. So

16:15 we have been working with our property channels especially and a large part of our growth is

16:21 actually coming from prop channels. If you look at our agency, our direct sales force, our e-commerce

16:27 channels, all of them are just firing at an unprecedented pace. For the quarter, for example,

16:33 our agency grew upwards of 50 percent, our direct sales force sales grew by more than 40 percent,

16:40 e-commerce sales grew by more than 60 percent. That's been a big vehicle for growth. But in

16:45 addition, we also have been working to enhance the number of partnerships we have got. We signed up

16:53 this year about 25 new partners, six of them being banks. So they have also started to turn numbers.

16:59 And overall, the momentum that is there in the business is very strong as a result of which

17:05 for the quarter, our adjusted sales growth was about 18 percent, which is double the growth rate

17:12 of private average of 9 percent. A number of policies are growing so far 20 percent. So large,

17:19 all of growth is coming quite secularly from the number of policies that we are writing.

17:24 In addition, the group business is also growing quite robustly. The credit life business is growing

17:32 last quarter more than 100 percent, YDD 56 percent. So all in all, very good momentum.

17:37 Right. Prashant, I want to talk a little bit about your margins as well. And I understand,

17:42 if I understand correctly, a lot of that will depend on your product mix.

17:46 Your margins, of course, have been within a certain range. But can you tell us about what we can

17:52 expect going forward based on your product mix? Can we expect the company to maintain these margins as well?

17:58 So, you know, I always mention that last year was an aberration because of certain product type,

18:04 non-part, non-part being the most important product that's sold in the industry.

18:10 But this year we were expecting to fall back to the 2000 FY 2022 range, which was close to 27.

18:17 Very happy to share that by every passing quarter, our margin profile is enhancing.

18:22 We finished the quarter as at about 27.2 percent. And the forecast that I've been giving was in the range

18:30 of about 27 percent. So we are around about there. We are not anticipating a margin about 30 percent.

18:36 We are not going to be in that range. Actually, it has to be a balance between growth as well as margin.

18:42 And looking forward, you know, we definitely expect that YDD margin should get enhanced,

18:48 should definitely fall in the range of 26 to 27.

18:51 Right. And can we expect the value of new business to grow at the rate of 20, 25 percent over the course

18:57 of the next three to five years? Absolutely. You know, I think, you know, for last many,

19:05 last few years, we were growing our VNB because of growth in margin.

19:10 And, you know, the margin once it retails at around 27, 28 percent, it grows very little from here.

19:17 A large part of that will happen because of AP growth. And we are seeing unprecedented good momentum

19:23 in the AP growth. Our AP growth is 23 percent, perhaps highest amongst the top 10 players.

19:28 And the objective is to continue to grow AP. There are many other initiatives which have not come to fruition now.

19:35 And with some momentum building in our banker space, we are reasonably sure that we should be in the range of

19:41 high teens to 20 plus kind of AP growth as well as VNB growth.

19:46 OK, just a quick question on AXIS Bank as well. I believe that this is about one percent,

19:53 you know, additional stake left for them to be, well, you know, for them to be being acquired.

19:59 Any, you know, would you like to diversify beyond AXIS in a big way?

20:04 I know that there is a huge ownership now already, but, you know, can you give us an idea about how you are looking to diversify here?

20:12 So basically, firstly, in terms of equity ownership diversification, we are not anticipating beyond this.

20:18 So AXIS will go up to 20 percent if they get regulatory permission, maybe at some future stage.

20:24 But that's not known at this point in time. So for the time being, AXIS will go up to about 20 percent.

20:29 So 19 with this injection and they will do further injection to go up to 20 percent.

20:34 And, you know, from sales diversification perspective, you know, right now, close to about 51 percent of our sales comes from AXIS Bank.

20:43 We're definitely acquiring new partners so that we are able to diversify more and more beyond AXIS Bank.

20:48 And that's quite likely we will be able to do that. Right. So actually, you know, my question,

20:52 my next question was to do with AXIS contributing to your overall banker channel going forward.

20:58 And also, if the infusion would mean anything to your solvency as well going forward?

21:05 Absolutely. The second question for the solvency will improve because we are going to take 612 crores.

21:11 It's a primary. So it comes in the company and our solvency will move up by 35 percentage points.

21:17 So it will go up to, you know, from the current level of about 180.

21:21 You know, I expect that to go in the 215 kind of range, which is good.

21:26 And it will give us enough fuel for growth. As you know, we are growing quite, quite expeditiously with respect to AXIS contribution in the business.

21:33 We expect that to remain robust. AXIS has been a large partner for us.

21:37 And, you know, the color of the relationship has changed now. They are promoters.

21:42 They sit in our board. They're part of our strategy. And as growth revives at AXIS Bank with respect to insurance sales,

21:49 we expect to be in the range of about 65 to 70 percent of their counter.

21:54 So it's a matter of time. And, you know, I'm very hopeful that as the next quarter comes, this quarter, we will start to see growth at AXIS Bank.

22:01 OK, Prashant, we leave it at that. Thank you so much for joining us and taking us through the quarter's numbers as well as what we can expect going forward.

22:08 We wish you the best for the future. Thank you very much.

22:11 That's the management of Max Financial Services. And of course, the core focus is insurance.

22:17 But from there on, we shift focus back to all that is buzzing in trade.

22:22 And one of the stocks that we are mentioning and focusing on now is Vmart, which is also up and about.

22:29 Let's get in my colleague Mahima to give us an update on this one. Mahima, good afternoon.

22:33 Good afternoon, Agams. As you rightly mentioned, it's been buzzing in volumes today.

22:38 The volumes are at 22.08 times its 30 day average. And it did touch an 80 day high of almost 15 percent.

22:45 Now, this is on the back of very good Q3 results. Vmart has now come back to profitability after three consecutive quarters where they incurred net losses.

22:56 If we talk about revenue, revenues have been up 14 percent, EBITDA has been up around 15 percent and net profits have jumped over 40 percent.

23:04 Now, what has led to this growth is because of good festive demands and because of which their footfall grew by over 23 percent.

23:12 Also, the like for like sales have seen a growth of over 4 percent.

23:16 And if you talk about the key highlights of the Q3 results, they added 20 new stores in this quarter.

23:23 Their Lime Road stores net losses have also reduced by 29 percent sequentially.

23:28 And their other expenses have gone up by 25 percent.

23:31 However, their working capital has improved and their inventory has decreased by 20 percent.

23:37 So overall, it has been a very good quarter three for Vmart.

23:41 Definitely. And the price reaction speaks for the kind of quarter that a lot of the investors are making of it.

23:49 Mahima, thank you for getting us that update on the results as well as the volumes which are certainly buzzing as far as Vmart is concerned.

23:59 And from there on, we talk about the chemical sector.

24:02 We have Navin Fluorine where it's been under a tad bit of pressure in today's trade.

24:08 So Navin, how do you get in Varsha to perhaps give us a better explanation of why that is so?

24:14 Varsha, good afternoon. Good afternoon, Agam.

24:16 So as you rightly said, the stock is down 5 percent in trade today.

24:20 And if you see last one year, company has given negative returns to shareholders.

24:25 We all know what is happening with specialty chemical companies.

24:29 Now, if you see the volumes are trading at over 9X is 30 day average.

24:34 Stock is under pressure. This is led by the earnings. So company posted weak earnings.

24:40 So if you see a profit did beat estimates. Now we'll see in a bit why profit beat estimates.

24:45 But if you see, revenue was down 10 percent.

24:47 Now this was on the back of the revenue was impacted due to slower ramp up in HFO plant and pricing pressure in R22.

24:54 R22 is a gas which is used in ACs.

24:57 And the other reason why the revenue was impacted was deprol of campaigns and inventory destocking in specialty chemicals.

25:05 Also, there was postponement of sales for key molecules in CDMO business.

25:09 Now, CDMO business is a kind of lumpy business.

25:13 So this lumpiness was actually expected for Navin Florin also.

25:18 Now, if you see, revenue was down 10 percent. EBITDA was down 50 percent.

25:24 Net profit was down only 26 percent. Now, this is on the back of exceptional items.

25:29 So company did sell and land for 52 crore.

25:32 This is the reason why net profit was only down 26 percent while EBITDA was down 50 percent.

25:39 Now, if you see the CAPEX, they have approved CAPEX of almost 288 crore for the new GMP facility and 84 crore for expansion of HFC capacity.

25:48 While FY25 would deliver strong earnings on the back of deferrals from previous year and new project.

25:55 And company is really good when it comes to complex Florin issues.

25:58 But near term commissioning delays and no clarity on leadership would be a near term overhang on the stock.

26:07 There are two brokerage views for Navin Florin.

26:10 So if you see, Jefferies have a hold rating while Citi has a buy rating.

26:14 And both of these brokerage has reduced the target price.

26:17 Now, this is on the back of the expected delay in delivery schedules in speciality chemical.

26:22 Also, growth priorities of new MD is to be awaited.

26:26 Right. So a lot of challenges are very evident as far as Navin Florin is concerned.

26:31 Varsha, thank you so much for getting us all those details around this particular chemicals company.

26:37 But with that, we will completely run out of time on the show.

26:40 So, well, signing out for now. But don't go anywhere.

26:44 We have lots more lined up, specifically India markets close on the other side of this break.

26:48 Stay tuned in.

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Welspun Corp & Max Life Insurance In Focus | Large Trades | NDTV Profit

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