Daily Investor Edge

Edition #5

Welcome to Investors’ Edge— your daily dose of business insights, trends, and updates that matter. In this space, we go beyond the headlines to explore the evolving world of companies and industries. Each day, we bring you thoughtfully curated insights, sharp observations, and key developments shaping the business landscape.

Whether it's a strategic pivot by a market leader or an under-the-radar company making waves, we break it down for you — clearly, concisely, and consistently.

Today is 16th may and we bring you great insights from multiple concalls for Q4FY25 and an interesting insights on a sector that is facing headwinds from past few years

1. Jubilant Ingrevia

Strategic Shift and Capex Focus -

“Looking ahead, to FY26 and beyond. We plan to invest in high growth projects such as multi-purpose plants for fine chemicals, new CDMO projects and human nutrition and health solutions portfolio”...."To achieve our goals, we have invested 1,745 crores in last 3 years out of the announced capex plans of 2,000 cr in FY22"....."In future years, the investment will go into high growth projects in a modular manner including multi-purpose plans for fin chemicals, dicotine, new CDMO projects and human nutrition portfolio".
— Hari Bhartia, Co-Chairman

Speciality chemicals market view -

“The global chemicals and specialty chemical sector has largely moved past the inventory restocking phase showing volume recovery in specialtity materials. Commodity segments continue to have volume under pressure though prices remain muted across segments and have stabilized at a new normal. Pharmaceuticals end use market is experiencing steady demand supported by stable pricing and consistent volume placements. Our pharma portfolio with fine chemicals business reflects these positive trends. However, we continue to face low volumes in esetile business due to low demand in the paracetamol segment. Agrochemical segment has maintained its upward momentum this quarter fueled by sales growth on both yearon year and quarteron quarter basis. Consequently, Average prices in the sector have shown signs of recovery, suggesting potential price improvements during the ensuing quarters.”
— Hari Bhartia, Co-Chairman

2. Garware Hi Tech

Product mix shift has made it stand out amongst the peers
"So on the on the second see first of all if you see overall companies margins so I mean again I will go like five years back where our Industrial product was 65% of revenues and consumer product of 35% only right as we speak we are around 65 to 70% rather 70% on consumer product division and only 30% on industrial product right so going forward again there is a big expansion which is September coming for PPF this will lead towards 80% of the consumer products only 20% for the industrial product so margins are anyways we are expecting to go better."
—Deepak Joshi, Director sales and marketing

Company wants to become more of a solution provider rather than a product supplier

"but there is now the company's vision from current product portfolio to a next line is to become a a solution provider rather than a film supplier right so these things is basically comes into architectural segment where you know you need to give the full solution to the building where the glass is handled with all the applications and with your field in that line we have announced a garware home solutions especially for the residential segment where we'd be catering all the I mean requirements of the metros to start with and then go to wherever possible"
—Deepak Joshi, Director sales and marketing

Capex to drive the next leg of growth and margin expansion for the company

"The work on the second PPF line is progressing well and remains on track for completion by Q2 FY26."...."regarding the second expansion of second capex of TPU which is expected to start in October 2020. assets. This will be mainly for the margin improvement. There will be some revenue out of it but mostly the margins I mean operating margins will improve because this will be a full backward integration for our PPF line"....."Yeah. So, we expect 1.5 to 2% betterment in the margins. I mean this is rough estimate but 1.5 to 2% margin on company level.
—Deepak Joshi, Director sales and marketing

3. Aarti Pharmalabs
   
   Company is slowly able to become more of 1st supplier proving its excellence in CDMO Business
   "wherever we are a second source, we have represented Aarti as a viable option, creating our value proposition and allowing them to shift from their other source to us. So those businesses are also as important as the first source opportunity"...."Once we are in, I think it's a long-term business and that's what we like. So instead of volatility, I think this business is going to give us more stability overall."

— Rashesh Gogri, Chairman

How the growth will inflect in the business

“guiding for an overall EBITDA growth of 12% to 15% in FY'26, which they describe as being over a "significantly high base of FY25". once we commercialize over Atali, the expense will also start adding up there and it will not add any meaningful revenue or contribution in the initial phase. For the second half of this year, I will have to expense that out also, so we have considered all that and then we have given the guidance. I think we prefer to meet the guidance and be realistic.”......”in FY27. Of course it depends on the way in which the approvals come from the CDMO market and how we are able to shift and get the newer projects for which the approvals are expected from the FDA. So on that basis I think the CDMO business will grow and I think other two businesses are anyway going to grow organically as mentioned earlier in my speech that both the businesses will have organic growth with the capacity addition in API as well as the intermediate and the Xanthine.”

4. Blue Jet Healthcare
   
   Strategic Importance of Backward Integration - Unit 3 Mahar backward integration
   "With this plant going on stream team. We strengthen our position as a credible and leading supplier of CMI to all the leading innovator companies operating in this segment. We further demonstrate our resolve to retain our leadership position in the CMI segment. We also insulate the business to significant volatility of the prices of this particular raw material which we were till date importing."

— SHIVEN ARORA, Managing Director

What are the tailwinds in the CDMO space
"As a country, we are experiencing significant tailwinds in the CDMO business. Most of the changes are structural and should stay. Given the propensity to remedy the dependence on China and postcoid imperative to build supply chain resilience, all MNC's are looking at India as an alternative option. We also in the backdrop of these changes are witnessing a quantum increase in RFPs that we are receiving to be able to capitalize on this opportunity. We are additionally building a multi-purpose plant MPP in Mahad and a state-of-the-art R&D center in Hyderabad."
— SHIVEN ARORA, Managing Director

Detailed Insight into Cardiovascular Molecule's Market Dynamics (Nexletol and Nexlizet)
"Today there are 9,000 cardiologists in the US who are prescribing this and this has become the primary line of treatment. Earlier it was the secondary line of treatment. because of the label update and label expansion both in the US and Europe. I think you know the addressable market of this has you know grown. grown seven times of what it used to be. So I think it's it's a blockbuster, a very big opportunity and still protected by a patent. And I'm not sure if you people have seen that Espirion has done a settlement with a generic companies that they will not one or two generic companies not all that they will not enter with a generic till 2040. So this is a indirect prolongation of the life of the patent."
— SHIVEN ARORA, Managing Director

5. Apar Industries

Bullish Outlook supported by aggressive capex
”post this expansion, we would expect a turnover to be able to be generated from that complex which would take the business up to about 10,000 crores of capacity that we would have from what we've executed this year which is close to 5,000 crores. So it's essentially being able to double the capacity of the of the business. We are looking looking at adding about 300 crores of capex to the conductor business and that includes some of the rods which need to be produced for our cable business as well. we are also expecting to spend about 200 crores in the oil business where we are building a brand new storage terminal in the JNPT port so that we can cut down the supply chain costs.”
— Kushal Desai, Chairman and Managing Director

Even after the tariff scenario seeing US to be strategically important one
"We would continue to see the US as being an important and a strategic market. The gap remains so high that the only way that the electrification can continue is with import of product.".... "If this tariff overhang wasn't there, I think we would have been looking at a very very substantial runway and growth there. But we are optimistic that this thing will also get get resolved."
— Kushal Desai, Chairman and Managing Director

Non US markets are impacted by the Chinese competition
"outside the US and India the rest of the markets were weak for us because the Chinese competition was very aggressive so this is the situation for the quarter which has just got over as well and even for the the you know future also the immediate future we see the situation continuing it's a domestic market which is doing well in India"....."In fact the Chinese competition is hurting us in non-US markets. They're not so worried about China in the US market. We have to compete with them in in in other non- US markets."
— Kushal Desai, Chairman and Managing Director

6. Neuland laboratories

The inherent nature of the business is volatile
"Our business is uneven due to the inherent nature of the CDMO business as well as the specialtity GDS business which is focused on small volume products. As a result, evaluating Neuland's trajectory on a three-year block basis is perhaps a more accurate measure than comparing quarter to quarter or even an annual basis"
— Sucheth Davaluri, Vice chairman and CEO

Customer interest is increasing
"we continue to see increased interest in customers wanting to partner with Neuland as they look to bring in their innovative medicines to patients. And I think in many ways this can be attributed to three factors. First is that our reputation is continuing to grow as a result of the work we've done over the last couple of decades, especially on the CDMO business. Second is that our business development teams who are also seeking new relationships are getting increasingly focused on finding the right opportunities that actually fit our long-term strategy... Third is that the macroeconomic factors... have also been favorable to us"
— Saharsh Davaluri, Vice Chairman and MD

Neuland is making strategic investments in large-scale manufacturing capabilities that did not previously exist within the company
"I think for over 15 years. We have lab scale and pilot scale facilities and... the company decided that we would like to capitalize on these large scale opportunities. So the 300 cr investment is actually directed towards creating very large scale manufacturing capabilities which currently do not exist in Newland and these facilities are being created in unit one"
— Saharsh Davaluri, Vice Chairman and MD

A new, "relatively high volume" CMS molecule is expected to begin commercial supplies in FY26
"what I can share is that it is a it is a commercially approved drug... Newland is getting added as a second source... and we are very excited. I think the reason for the excitement is also that it is a relatively high volume product"... He also expects this to be a "steady business which means that it's not just going to start in FI26 but we expect it to continue for a long period"
— Saharsh Davaluri, Vice Chairman and MD

Neuland expects to have "commercialized opportunities commercializing almost every year"
"if you look at you know FY 25 26 27 28 29 looking at this pipeline we do believe that we will have commercialized opportunities commercializing almost every year and and and big molecules commercializing every year"

7. Hero Motocorp
   

Positive Industry Outlook Driven by Economic Factors
"With regards to the two-wheeler industry riding on the wave of a positive economic momentum, two-wheeler demand is shaping up nicely, boosted particularly by a strong marriage season in May and June."..... “The industry is expected to see volume growth: "overall this year we expect the industry country to grow in the region of around 6 to 7%."
— Niranjan Gupta, CEO

We are confident to gain market share
"we have a good monsoon prediction. we have a good marriage season after a long time and the initial signs are already visible. we we've seen some income tax relief that should put in more money in the hands of consumers. There's a lot of government spending that's happening. I mean the inflation is lower. So we expect the industry to be better that way."..... "We are very confident that we'll outpace the industry growth and gain share."..... "we are gaining bahan share for the last four months in a row."
— Niranjan Gupta, CEO

8. Chalet Hotels
   
   Strategic Bet on Goa's Long-Term Potential
   "look, we believe Goa is a very deep market and it has both very strong mid and long-term potential and that's why we're betting bit big". They are positioning this new property at the upper upscale luxury segment, expecting to compete in the 18,000 to 21,000 rupees average room rate range based on current competitive market data, and are willing to invest a "slightly higher capex here per key in order to give the right product positioning"
   — Sanjay Sethi, MD & CEO
   
   

Leveraging Industry Tailwinds and Focusing on Luxury/Upscale
“The company sees the Indian hospitality sector benefiting from strong favorable conditions, including high average room rates (ARRs) and healthy occupancies, driven by factors like increased domestic air traffic, business travel demand, and experiential consumption. Chalet's focus on the luxury to upscale segment positions them to capitalize on these trends. They reported achieving their "highest ever average room rate or ARR of rupees 14,345 at portfolio level with a robust 21% increase year on year".

— Sanjay Sethi, MD & CEO

9. Quick Service Restaurants - Is the tough time over?

Jubiliant Foodworks (Dominos)

Implementing the free delivery model to leverage the next leg of growth
"We took the bold step of implementing free delivery, a move that has reshaped the competitive landscape. Simultaneously, we ramp our regional office and commissary infrastructure to support our ambitious growth plans. These strategic moves have helped us in accelerating growth in FY25 and will continue to do in the in the coming quarters. While the initial impact of pre-ely led to a reduction of our average ticket price, we successfully absorbed this impact and we are now seeing the ticket price grow upwards again. This has led to a record high new customer acquisition which we know compounds over the next couple of years in increased sales and importantly despite the increase in our delivery mix we managed to increase Domino's India a bida broadly in line with revenue growth holding firm our margins"
— Hari S. Bhartia

Now you will get your pizza in 20 mins with a free delivery
"See our focus on delivery and then therefore pushing the boundaries on 20 minute delivery is structural and we believe that will allow us to gain share going forward. ... these are structural because we are operating in a very large market which is largely unorganized. So if we keep that um lens will continue to penetrate grow more as long as we stay true to these five structural in initiative that we are drawing"
— Hari S. Bhartia

Dining-in is showing an unexpected uptrend
"I'm relatively more bullish on dining to be honest. Now onremise sale um to the extent we get the data because because the um we break the onremise sale into two parts dining and takeaway. When I joined the company takeaway was bigger than dining in now. Dining is bigger than takeaway and and dining in per se is growing very rapidly.". "So again is the focus on great value to customers with with superior dining conditions and um with the new design of stores I feel very very good about the having a large cohort or a or a base of customers which may want to go out and eat"
— Hari S. Bhartia

Chicken is the new vector of growth
"Chicken is one adjacency which is an important vector. So customers order pizza when they're craving for cheese and when they want to share. So chicken wings chicken poppers the the bites range that we have and the fried chicken that boneless fried chicken that we've launched. Right. It is exceeding our expectation."
— Hari S. Bhartia

Sapphire Foods India Limited (KFC, Pizza Hut, and Taco Bell)-

Tight Demand Situation and Competitive Pressure
"Yes. So, the demand situation continues to be neutral. It's not improved or it is not worsened off over the last three or four quarters. So, it's still a tight demand situation and then coupled with heightened competitive pressures has meant that growth has been difficult to come by.". "The current trend is flattish SSSG. That's the current trend which we are experiencing."
— Sanjay Purohit, Group CEO

It will take time for Pizza hut to catch up
"You have talked about the longer horizon required in terms of reviving the brand. So, is the visibility on even early double-digit margins deferred given that attaining the 50,000-55,000 ADS threshold would be difficult in the medium term?". "So, in the next 12 months I don't see this EBITDA moving beyond low single digit number."
— Sanjay Purohit, Group CEO

Westlife Food World Limited (McDonald's India) -
Second Consecutive Quarter of Positive Comparable Sales
"Our same store sales growth stood at 7% and adjusted SSSG excluding the leap year impact was 1.7% in Q4. This marks our second consecutive ative quarter of positive comparable sales reinforcing our confidence in sustaining this momentum into the new financial year."
— Surabh Kalra, MD

Tough Times Consolidate Industry Leaders
"Tough times often lead to consolidation, but they also allow companies with strong brand equity, robust business models, and superior operational execution to solidify their foundations for future growth."
— Akshay Jatia, Executive Director

Dining in is gaining traction
"In Q4, our on-premise business grew by 8% , outpacing the off-remise business, which increased 5%. Although quarterly growth strengths vary due to multiple factors, as an omni channel brand, we strive to deliver exceptional consumer experience across all touch points, driving simultaneous growth across all channels."
— Surabh Kalra, MD