Daily Investor's Edge

Edition - 10

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 7th June and we bring you great insights from multiple concalls for Q4FY25 and a few interesting management meet notes and one IR day notes of a 2nd largest hotelier in the country.

---

Prestige estates

Strong pre-sales guidance for the -
“We are -- see, now what has happened is we had kept a target of INR24,000 crores for fiscal '25, which, of course, we fell short of and this thing. But I think this first quarter itself will give us some INR12 crores to INR13 crores. So I believe that we should cross INR25,000 crores, maybe INR27,000 crores should be the -- if not more. But I think let's take INR27,000 crores and go along for the year.”....”In 1st quarter we should do 12000-13000cr”

— Irfan Razack (Chairman and MD)

Also strong outlook for Q1 in a management interview

“Not to say any number but I believe that this quarter will be our biggest quarter ever that we have done”

Steelcast

Operating leverage kicking in

“Our capacity utilization for FY '25 is at 45%. As per the current year's production and financial plan, we will end with 62% and hopefully we should cross 90% over the next 2 to 3 years. In terms of EBITDA margins, yes, the margins have substantially improved. I just said in my investor speech a few minutes back that we had an extra benefit of about INR12 crores, which was added to the bottom line because of lower input prices, benefits of exchange rate and cost reduction programs. While we will keep on striving for enhanced bottom line, but obviously our 32% EBITDA margin is not sustainable. One can say that maybe we might be around 25%, 26% over a longer period of time for 2 to 3 years. Regards to we have some development issues in railroad components. The efforts are on and we are quite hopeful that we should be successful over the next 90 days' time.”

— Chetan Tamboli (Chairman and MD)

Steel strips

Bullish stance by the management for the future growth

“So I think it's a great question. This year, we are forecasting at least 15% growth. Now the year after that, would definitely be in double digits. I cannot quantify yet whether it would be 20% or whether it would be 25% or 15%. So anything between 15% to 25% should be the new normal for this company going forward in the next foreseeable 3 years. So we are very bullish because we have a lot of traction in all our businesses. In fact, the CV segment, I was -- I have been talking a lot about it that the first 6 months, first 8-9 months were real dud. But the last 6 months or 4 months, I mean, they have been tremendous. In fact, our CV sales are the second best in the whole history of the company. So I really don't see any other -- any segment going down in our portfolio. We have pole position in the EV 2-wheeler business, that's also a very good business for us. We are perhaps the only one having such a market share, maybe more than 80% market share. Exports, as I told you, already growing to INR1,000 crores next financial year. The CV business, we feel that will show growth from what we are hearing from our customers like Tata Motors and Ashok Leyland. They are extremely bullish. In fact, this month should see our highest sales ever in the CV segment. So I mean, if all the good vibes that we are getting from CV, from tractor, from exports, from alloy, from knuckle, from EVs 2-wheeler, I couldn’t have asked for a better setup for my company.”

Shivalik bimetal

Gearing up for growth inflexion after last 2 years being soft

“Yes, we are. Last couple of years have been challenging, and we all know there have been many external, geopolitical as well as market related aspects which have impacted the overall growth. But if you look at the q4 performance, we had already started looking at an

upturn towards the demand for our products, and we are definitely confident that this, coming year, this financial year, is going to be a lot more promising for us, and it will bring us double digit growth, as we have been anticipating for both shunt as well as for our bimetal business”

— Kanav Anand

Value addition through forward integration

See, as far as the value addition is concerned, depends entirely on the brought product that we have. But currently, our shunt which is, which is, which is what we are producing right now, and that plays a major role for the costing. So, the bill of materials somewhere in between 15- 16 brisk. So, the rest is the market. And it also somewhere signifies when we scale up this business that can increase our margin to a certain extent. Once you are purchasing the bought-out autumn in a bulk, more or bulk, then you are also saving some cost there. So, this product where, suppose today we are selling a shunt only, where we are making 20- 23% as for our EBITDA, so tomorrow we are selling the whole product line. So there, there the estimated margin would be in the range of had this 40 to 50%.

— Rajeev Ranjan

AWFIS

How is the demand environment shaping up?

“On the demand side, we signed contracts for 13,000 new seats in Q4 FY 2025 and 53,000 new seats in FY 2025 overall, reflecting a well-diversified revenue base. Approximately 66% of our occupied seats are taken by large corporates and MNCs, 20% by SMEs, 13% by start-ups and the remaining share by freelancers. - Sumit Lakhani

Second, GCCs are accelerating their India strategy. We have almost over 1,800 GCCs already operating in India and more entering each year. So the demand for plug-and-play, scalable tech integrated workspaces has exploded. So, projections estimate that India's GCC market will expand to almost about $100-plus billion by 2030. So with the number of centers increasing to closer to about 2,500. -Sumit Lakhani.

As we said, we continue to see a very strong momentum in demand across all the sectors. Our overall operating metrics continue to improve. But what you are referring is primarily due to some non-operating nature items. So in the quarter, we had a onetime charge of INR4.5 crores due to some accelerated hits what we have taken on a few of our centers. This is as part of our strategy of continuously assessing our portfolio at the time of lease renewals. So that's a onetime charge what we have taken. Additionally, some of our properties have been renewed in Q4. This has resulted in a higher ROU and a lease liability creation in the current quarter”

— Ravi Dugar (CFO)

Genus Power

Tender ramp up is visible from current quarter

“So out of 25 crores meters, around 12 crores has been awarded, and so -- which is almost 55% of the number are still not. And this 25 crores was decided in 2016, '17. So that number has also increased, because the country is growing and with every growth, there is an electricity meter connection required. So overall, the number has increased in the country. So if you talk of the old number, only 50% has been decided. And out of that around 12 crores -- around 2 crores has been installed.

So currently, you will see already the tenders have started floating. And as on date when we are talking, there is a tender value worth INR27,300 crores is already open up, which will be quoted in next 3 months to 4 months. So yes tender pipeline is improving. Majorly right now, Madhya Pradesh, Tamil Nadu, Haryana state is coming out with large tenders. In future, we also expect a lot of tenders from West Bengal, Telangana, Kerala, Karnataka - they are all states that would be coming up.”

— Jitendra Agarwal

AWHCL

Still guiding for 20-25% CAGR over next 4-5 years after soft FY25

“So we have been guiding at 20%-25% CAGR growth on our core revene, not a year-on-year growth. As I mentioned, it is very difficult for us to maintain that kind of year-on-year growth. So if you look at a bunch of 5 years, I would say is a total CAGR growth is what we have been guiding and that is something that we feel, a 20%-25% is achievable based on the project pipeline that we have. In the current financial year, if you look at the soft-core operating revenue of 10%, that is mainly because of few of the clients escalation amounts not getting recognized in the reported period because we are still awaiting clarification and confirmation from the client. So once the same were to come, the same will be recorded in the current financial year.”

— Subramanian N. G

Suraksha diagnostic

Strong management outlook for the future

“What is the growth outlook in the revenue terms for FY '26? We are expecting around 18%-20% growth - Ritu Mittal

Next year FY '26 in terms of EBITDA margin? - We expect it to close around 36% should be the lowest EBITDA that we achieve in this year. - Ritu Mittal

Suraksha will gain in this aspect of maternal medicine and fetal tests and also the genomic lab that we are setting up, so this is like a backward integration even for that lab business. But if you look at Fetomat, we are expecting a growth of around 20%-25% every year.”

---

🤖 What if AI could analyze stocks better than most investors?

We’re teaching how to use it—step by step. From spotting frauds to writing research reports.

🎓 No experience needed.

👉 [Unlock the AI Investing Edge - Link]

---

Wealth managers

Nuvama

Breakout‐year performance driven by diversified offerings
“Client assets grew by about 24%, revenue for the year by about 41% and profits by about 65%… we closed the year with about INR 986 crores of PAT and both the cost–income ratio coming down… and the ROE substantially improved from about 23.6% to 31.5%.”

— Ashish Kehair

Leveraging GenAI for RM productivity and training

“We will move [our multi‐asset advisory platform MARS] to GenAI. I think that should help in terms of both client experience, consistency of delivery and improvement of productivity of our field force… more than 90%–95% of our training of relationship people… happens through a self-done tool, where they can… interact with the fictional clients on a product and get real-time feedback.”

Cautious capacity build‐out in private wealth amid “race to death”

“There’s some sort of madness happening in the market… the way people are building out teams and the way compensation has been dealt, I don’t know, it looks like a race to death. I think at a time when the cycle goes bad… many of these will get decimated.”

Repeatable, high‐frequency fixed-income franchise

“Fixed income… is a very repeatable market because when somebody borrows, by definition, that borrowing comes to an end and they have to re-borrow… the fees… are lower, but the repeated-ness of the business is significantly higher.”

360 one

Doubling down on recurring revenues (ARR) for durable growth
“Our ARR Revenues for the full year grew by 28.2% YoY at Rs 1,701 Crs, led by strong growth in assets across business segments. Our ARR Revenues, as a % of total revenues from operations, stood at 70%.”

Sharper cost discipline driving margin expansion

“Total Costs are up 27.3% YoY to Rs 1,218 Crs in FY25. In line with our previous comments, the cost-to-Income ratio improved to 45.9% as compared to 48.7% in FY24. We expect gradual improvement in this metric over the coming quarters as the new business initiatives and teams become more productive.”

Building resilience through strategic partnerships

“360 ONE WAM and UBS AG have entered into an exclusive strategic collaboration… Clients from both institutions will have access to their onshore and offshore wealth management solutions… a joint apex committee with senior leadership from both UBS and 360 ONE has been formed.”

Calibrated talent strategy amid market “madness”

“There’s some sort of madness happening in the market… the way people are building out teams and the way compensation has been dealt, I don’t know, it looks like a race to death. I think at a time when cycle goes bad… many of these will get decimated.”

Samhi Investor Day - Notes

• Management and Company Identity

  • SAMHI Hotels is led by a professional management team that has built the company over 14-15 years.

  • The team has a long tenure, with key members having worked together for 12 to 18 years.

  • The founder sees the company as a trust company, managing assets on behalf of capital providers and shareholders. This approach contrasts with traditional promoter-driven companies.

  • The company aims for greatness by first protecting the downside, a motto borrowed from legendary investor Sam Zell.

• Investment Philosophy

  • The strategy is to focus on trend lines rather than short-term headlines. Key trend lines include India's economic growth, urbanization, growth in office space, and aviation traffic.

  • Travel and tourism are expected to outpace India's GDP growth.

  • The team has learned to stay away from forecasting the future and instead focuses on decisions based on current, hard data.

  • Patience is a key aspect of investing in assets, as mistakes cannot be quickly undone like trading stocks.

• Core Business Strategy: Acquisition and Turnaround

  • A core strategy is the acquisition of underappreciated assets rather than greenfield development.

  • Greenfield development is generally avoided because "in development whatever may go wrong will go wrong" and it is not seen as how value is created for institutional investors.

  • Acquisitions allow for a very quick capex-to-revenue cycle, ideally 15-24 months, compared to 4-5 years or more for new builds. This allows the company to see returns within their forecasting period.

  • Approximately 87% of the company's inventory has been acquired and turned around, demonstrating a proven track record.

• Location, Product, and Brand

  • The company is unapologetic about remaining committed to high-density locations in key business cities.

  • They do not speculate on location because it cannot be changed post-acquisition; they rely on hard facts like office space and airline data to identify suitable markets.

  • An acquired asset must present a clear opportunity for product differentiation and significant upgrade. They would not buy an already perfect hotel like a Trident Nariman Point because there's no obvious upside beyond market movement.

  • Strong brands are considered the "holy grail" as they act as a bridge to the customer, helping to fill rooms repeatedly.

  • SAMHI has a dominant share of leading global brands in India, such as Fairfield by Marriott, Holiday Inn Express, Marriott, and IHG operated hotels.

• Growth Strategy

  • Growth is driven by three pivots: same store performance (mature assets), execution of the pipeline (assets where capital is committed but not yet stabilised), and deploying investable surplus generated from operations and capital recycling.

  • The company identifies growth opportunities by potentially having different price points (midscale, upper midscale, upscale) in different micro-markets within key cities.

  • The leasehold model is viewed as a highly capital-efficient structure that helps accelerate growth and outperforms freehold assets in terms of Rossi. The goal is to increase the contribution of this model.

  • Future trends being watched include discretionary spending on experiential leisure and branded residences.

• Capital and Balance Sheet Strategy

  • SAMHI has a history of working with high-quality institutional investors, including GTI Capital, Equity International (Sam Zell), IFC Washington (World Bank Group), Goldman Sachs, AIA Capital, and GIC (Government of Singapore sovereign wealth fund).

  • Capital recycling is a key strategy to monetise value created in mature assets and free up capital for new investments. The GIC partnership facilitated this by acquiring a minority stake in two existing assets.

  • A major focus has been on deleveraging the balance sheet to reduce risk, especially after lessons learned during COVID.

  • The company is committed to maintaining a disciplined net debt to EBITDA ratio, targeting below 3 times and eventually stabilising around 2.5 times.

• Technology Platform (SID)

  • SAMHI has developed an in-house data and analytics platform, formerly called Sami Intel and now rebranded as SID.

  • SID is built on a decade of asset management know-how and allows for data-driven decision making and performance analysis across the portfolio.

  • It helps in evaluating new acquisition opportunities by comparing them to existing assets.

  • The platform has potential to be offered to the broader market in the future, leading to its rebranding to remove the 'Sami' name.

• Leisure vs. Business Hotels

  • The current focus remains on business hotels because it is within the team's circle of competence and offers more predictable trends tied to urbanisation and business activity.

  • Leisure is seen as having potential but also greater volatility and a higher reinvestment cycle, making it less aligned with the desired asset profile. The company is watching this space but has not yet developed the specific competence or strategy for it.