Daily Investor's Edge

Edition - 9

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 5th June and we bring you great insights from multiple concalls for Q4FY25 and a few interesting management meet notes.

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Pennar Industries -

FY26 to be the growth year for the company

“Raebareli plant continues to scale and improve its performance. And on the back of that, we expect this business to achieve significant growth and to be a significant growth engine in this fiscal -- FY '26. Ascent, our U.S. subsidiary, their performance remains strong. It's backed also by a growing active order backlog. We also forecast double-digit increases in both revenue and PBT for the current fiscal in Ascent. Body in White is another of our prioritized views. We've onboarded key clients, including Hyundai,, Ashok Leyland and Maruti.”

— Aditya Rao (Vice chairman and MD)

Long term ROCE goal is 30%

“As you just mentioned, the ROCE and the ROE are both -- the EBIT is a very important number for us, and we continue to focus on EBIT improvements. 21.5% if we had perhaps a more normal working capital cycle, which we typically tend to have, the ROCE would have been higher. Our long-term goal for ROCE is to reach about 30%. There are voices that it should be even higher than that, but that as a blended margin of what we expect our revenue profile to be from the different geographies are presented, the different margin profile, the revenue streams come in. We are quite confident of 30% in the medium term, and that's our target”

— Aditya Rao (Vice chairman and MD)

Samhi Hotels -

Financial leverage to kick to drive the PAT growth

“We are estimating that on closing of this transaction, once the first tranche of capital is infused, this is about Rs. 604 crores. Our net debt to EBITDA would be less than 3.5x. Obviously, that depends on where we closed the last quarter. In the next 12 months, given the pace that we are seeing in terms of EBITDA growth and performance of the hotels, plus the new inventory which will come live in Holiday Inn Express portfolio, we are fairly confident to take net debt to EBITDA below 3x. And that really sets the path for an accelerated landing at that 2.5x, which we believe is a very healthy debt to EBITDA for a company like ours, which today has all long-term debt which is between 12 to 14 years.”

— Ashish Jakhanwala – MD and CEO

Demand scenario is Intact

"We are seeing demand remain 2x of supply growth in Bangalore in Hyderabad Pune and NCR we actually just are not able to see any supply. So we actually expect Hyderabad to grow fairly rapidly."....."One of the good thing about the sector is that because supply needs a hard asset to be built. It's not something that will be surprised by next year, you know. So we think we have a clear runway over the next at least 3 years before we start worrying about supply having any meaningful impact.”
— Ashish Jakhanwala – MD and CEO

Axiscades -

Ambition to become a $1bn company by 2030

“The Company is also evaluating and recalibrating its non-core businesses of heavy engineering, energy and automotive, which are till date negatively impacted by macro factors and are growth and margin dilutive to the enterprise, as has been elaborated in our investor presentation. The Company is deploying resources and costs for this transformation, which is expected to be stabilized by Q2 of FY ‘26. These costs and investments are critical to ensure enterprise readiness to progressively achieve our aspirational target of achieving $1 billion revenue by 2030.

— Shashidhar S. K (Chairman)

Pivot from Services to Product

"With effective execution of product-led strategy, by FY ‘28, the Company aims to invert its current revenue mix of 80% service revenue and 20% product revenue, which will be the key driver for non-linear margin-led growth, with the aim and objective of achieving an average of 24% EBITDA in the next 2 to 3 years."

— Alfonso Martinez (MD and CEO)

Vishnu Chemicals -

Asset-Light Export Model

“Lately, we have adopted an asset-light model that allows us to export to 50-plus countries sitting in India without the necessity of having an infrastructure in the geographies where we serve”

Drivers of Barium Outperformance

"One is regarding the Barium outperformance... Our investment into Ramadas Mineral has supported this EBITDA margin growth. And at the same time, the customer approvals in Barium Sulphate and robust demand and growth in paint industry added to it. And I can say this is not a one-off thing. Moving forward, we are going to continue seeing the growth. And definitely, the EBITDA margins would remain sustainable given where the end user industry and its outperformance in general."

Opportunity in Strontium Carbonate

"See, I would start off by saying there's quite a bit of interest among the end user industry... As such, we don't see Chinese being very active in this product. That was the clear moat for us to start this vertical in general. And with what has happened in Mexico with one of the peers closing down due to fire... there's quite a bit of interest among the end users in India. There's a sizable demand for this product in India as well as in the export market. So with that being said, the product approval will be done in a faster pace by the end users."

Impact of Chrome Mine Acquisition

"See, I mean, I won't be able to share a number in general, but definitely, it's going to improve the EBITDA, and that will give us leverage to be more aggressive in the market and have more customer wins as well as the operating levels and also support in terms of inventory days and working capital as well moving forward."

Stylam Industries -

“It will be delayed by 2-3 months, so we put one new press in our existing plant and we are running and I think from this month, from next month you will see some growth, but from September, middle of September or maximum end of September we will start our full production in new plant.”

“Actually, plant is almost near full machinery under like you can say -- building is almost 80%, 90% complete. The installation of machine is going on. It will start definitely by end of September, but we don't know whether -- when we can get to the full capacity utilization, maybe 2 months, 3 months, 4 months because sizes are new, market is new. But something we will get in this financial year, we will get the growth sale -- growth in the sale, definitely.”

— Jagdish Rai Gupta – managing director

Domestic Pharma CMO

Innova Captab-

Jammu plant to scale up to 400cr

“During the Quarter 4 FY '25, see, our Jammu plant start commercialized operation from 14th of January 2025. And for this Quarter 4 '25, Jammu plant contributed a revenue of around INR36 crores. And coming to the next question, so as of now, we maintained our guidance of that Jammu plant is poised to achieve a revenue of around INR400 crores for this financial year FY'26.”

—Lokesh Bhasin (CFO)

"So as on date, we are very much confident that this number is achievable. And being four facility, so say, if we say, like INR400 crores, sometimes it looks quite aggressive. But if we divide in the four plants, so it's not 1 facility, but there are four block. So, it's like INR100 crores. And each quarter, if we see, then it come out to be, let's say, INR25 crores each block. So, then the number becomes smaller. So, the number has given on the fair assessment and estimation, and that's why we are giving that number, and we are very confident to achieve that."

— Vinay Lohariwala (MD)

Windlas Biotech-

Growth coming in with scaling up of Health care services in India

“Structurally, my sense is that it will -- we actually feel that more and more, the -- if you see the number of hospital beds, for example, that is growing in India today…Consumption of health services is reaching to the levels of population where it was not reaching earlier.”

— Hitesh Windlass (MD)

Strong working capital discipline

“We have maintained these kind of working capital levels for 2 years in a row. And we would love to sustain, but, of course, completely, it's not internally if there is an impact, otherwise, there is no reason why we shouldn't be able to do it.”

— Komal Gupta (CEO)

Absorbing unexpected cost pressures (e.g., minimum-wage hike) while maintaining margins

“This year was – while you correctly mentioned a couple of years ago when we had talked about this, the operating leverage for growth would – was – we are expecting, and we are seeing also. In fact, what I want to point out is that this year, the minimum wage increase in Uttarakhand was very massive, almost 25%. So that's something that was – obviously cannot be predicted. But despite that, we have increased our overall production. So we have used more manpower, right, obviously, to do that. But still we – and added Injectable opex and added Plant 2 extension opex in Q4 and still maintain our margins. So in some sense, we have actually completely accomplished what we were talking about and even absorb some of these additional impacts.”

— Hitesh Windlass (MD)

Strong Ambitions to be as big as the likes of CIPLA or ALKEM

“I don't see any reason why Windlas should also not aspire to reach the levels at which Cipla and Alkem are today. They are at INR 2,000-plus crores. So why shouldn't a good manufacturer like us who has the opportunities, who understands the products and is able to build sustainably … eventually grow to become as strong as them.”

— Hitesh Windlass (MD)

Akums Drugs-

On prioritizing volume growth despite margin headwinds

“What we expect in FY '26 is that we'll have a single-high-digit volume growth. On top of it, if the API prices stay same, then we'll have a similar revenue profile. If the API prices continue to move up to their average levels, which are currently very low, we'll have a better revenue growth.”

— Sahil Maheshwari (HEAD, STRATEGY)

Consolidating the loss-making Trade-Generics segment

“So now we are in the process of consolidating this business or at least to maintain that these losses should not go to the next year forward… The portion which is positive in this and profit making, that portion only we will keep with us.”

— Sandeep Jain (MD)

Strategic importance of the €200 million CDMO contract

“We took noteworthy steps toward becoming a global CDMO by signing an approximately €200 million contract with a global pharma company. We have already received part consideration, that is €100 million, in April ’25. The supplies for this will commence in 2027.”

— Sandeep Jain (MD)

Management meet notes - SOIC Research

Arvind Smart Spaces

1. Sales & Launch Pipeline

• FY-26 pre-sales guidance: ₹1,800 – 2,200 cr on launches worth ₹4,000 cr plus ₹1,500 cr of sustenance inventory. Target conversion 40-50 % at launch.

• Launch mix this year: Bangalore ₹2,000 cr, Ahmedabad/Surat/Baroda ₹1,000 cr, Mumbai ₹1,000 cr; an additional ₹800 cr of Bangalore projects not yet in the ₹9,000 cr multi-year pipeline.

• Portfolio EBITDA margins run 27-28 % (vertical 25 %, plotted 30 %+).

2. Geographic Re-weighting

• Bangalore becomes the single-largest market this year, overtaking Ahmedabad; Mumbai is expected to dominate over the next few years.

• Strategy: build depth in three clusters—Bangalore, Mumbai, and the Gujarat triangle—before entering new cities.

3. Product-Mix Evolution

• Moving from a horizontal-heavy book to a balanced 50 % vertical / 50 % horizontal mix to sustain 30-35 % growth and protect blended margins.

• This shift may slightly impact blended margins as vertical properties typically have lower margins. However, it will enable the company to propel its revenue towards the next level of scale over the long term.

4. Business Model & Capital Allocation

• Preference for asset-light JDAs/BMIs; earmarked ₹1,000 cr for new deals but leverages landowners’ willingness to partner (only ₹300 cr cash deployed for ₹4,450 cr GDV last year).

• Comfortable leverage < 0.7×; enabling resolution for a QIP in place, to be exercised only against clear deployment avenues.

5. Financial Outlook

• FY-25 construction spend jumped to ₹200-220 cr; Operating cash flow guided to ₹350-450 cr over the next two years.

• ~₹2,500 cr of unrecognised revenue to flow through P&L in the next 3-4 years, translating to net cash of ₹3,000-4,000 cr.

• Liquidity: ₹1,000 cr dry powder (₹350 cr internal, ₹500 cr HDFC platform, balance pool redraw).

6. Regulatory & Market Environment

• Bangalore approvals slowed by new dual-stage process and digitisation of khatas; company steering clear of MOEF land to de-risk.

• National trend of double-digit price hikes continues: latest phase launches command 14-18 % premiums over prior phases.

• Listed developers’ share of Indian residential sales now > 20 %, aiding brand premium.

7. Operational Risks & Mitigation

• Key open issues: clearing Bangalore approval backlog, executing ₹1,000 cr deployment plan, and tackling high labour churn.

• To hedge cost inflation: sell 30 % of vertical and 50 %+ of horizontal inventory at launch.

Conclusion

It covers diverse sectors, including Pennar Industries focusing on FY26 growth and ROCE targets, Samhi Hotels discussing financial leverage and demand scenarios, and Axiscades aiming for $1 billion revenue by 2030. The report also includes updates from Vishnu Chemicals, Stylam Industries, domestic pharma CMOs like Innova Captab, Windlas Biotech, and Akums Drugs, and concludes with management meet notes for Arvind Smart Spaces, detailing their sales pipeline, geographic strategy, and financial outlook.

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