Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Email: services@yellowstoneequity.com
Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>With around 3.4% QoQ CC revenue growth in Q3FY24, the BPO business, <a href="https://www.smartkarma.com/entities/firstsource-solutions-ltd" target="_blank" data-smartkarma-citation="entities:3099:1" rel="noopener">Firstsource Solutions ("Firstsource")</a>, is recovering back to normal, after seeing cyclical dip over the past couple of years.</li>
<li>The FMCG business is scaling up well. Q3FY24 revenues came in at INR 135cr, a growth of around 12% QoQ, led by festive season demand. YoY growth was 17%+.</li>
<li>The Sports business reported muted revenues in Q3FY24 as currently the revenue stream is dominated by the IPL event which typically happens in the March to June period.</li>
</ul>


With around 3.4% QoQ CC revenue growth in Q3FY24, the BPO business, Firstsource Solutions ("Firstsource"), is recovering back to normal, after seeing cyclical dip over the past couple of years.
The FMCG business is scaling up well. Q3FY24 revenues came in at INR 135cr, a growth of around 12% QoQ, led by festive season demand. YoY growth was 17%+.
The Sports business reported muted revenues in Q3FY24 as currently the revenue stream is dominated by the IPL event which typically happens in the March to June period.


RPSG Ventures: FMCG Business Is Scaling Up Well | BPO Business Is Recovering

<ul>
<li>RPSGV's BPO business, Firstsource Solutions, is stabilizing and reported flattish QoQ revenue growth. EBIT margin has also bottomed out and is now at around 11%, an expansion of 300bp YoY.</li>
<li>FMCG Business continues to maintain an annualized revenue run-rate of INR 400cr+. The Sports business generated revenues of INR 50cr+ vs INR 15cr YoY. </li>
<li>The FMCG and the Sports businesses hold tremendous scalability potential going forward. The IPL Lucknow franchise also owns a team named Durban in the South Africa T20 league.</li>
</ul>


RPSGV's BPO business, Firstsource Solutions, is stabilizing and reported flattish QoQ revenue growth. EBIT margin has also bottomed out and is now at around 11%, an expansion of 300bp YoY.
FMCG Business continues to maintain an annualized revenue run-rate of INR 400cr+. The Sports business generated revenues of INR 50cr+ vs INR 15cr YoY. 
The FMCG and the Sports businesses hold tremendous scalability potential going forward. The IPL Lucknow franchise also owns a team named Durban in the South Africa T20 league.


<ul>
<li>Helped by the share in the incremental IPL media rights value, RPSG Venture's (RPSGV) revenue from the sports business revenue jumped to INR 590cr+ in Q1FY24 vs INR 300cr+ YoY.</li>
<li>Losses in the FMCG business narrowed to INR 63cr vs INR 90cr YoY and INR 70cr QoQ. FMCG revenues continue to be at around INR 400cr+ annualized run-rate.</li>
<li>RPSGV's BPO business, <a href="https://www.smartkarma.com/entities/firstsource-solutions-ltd" target="_blank" data-smartkarma-citation="entities:3099:1" rel="noopener">Firstsource Solutions (FSOL IN)</a> saw stabilization in de-growth and margins. Margins expanded by 375bp during Q1FY24.</li>
</ul>


Helped by the share in the incremental IPL media rights value, RPSG Venture's (RPSGV) revenue from the sports business revenue jumped to INR 590cr+ in Q1FY24 vs INR 300cr+ YoY.
Losses in the FMCG business narrowed to INR 63cr vs INR 90cr YoY and INR 70cr QoQ. FMCG revenues continue to be at around INR 400cr+ annualized run-rate.
RPSGV's BPO business, Firstsource Solutions (FSOL IN) saw stabilization in de-growth and margins. Margins expanded by 375bp during Q1FY24.


RPSG Ventures: Strong Profitability from IPL

<ul>
<li>IPL 2023 concluded recently with record streaming views and TV viewership. This bodes well for the valuation of the IPL Lucknow franchise owned by <a href="https://www.smartkarma.com/entities/rpsg-ventures-limited" target="_blank" data-smartkarma-citation="entities:29022:1" rel="noopener">RPSG Ventures Limited (RPSGVENT IN)</a> ["RPSGV"]. </li>
<li>FMCG business is currently doing a run-rate of INR 400cr+ revenue, however, needs to scale up faster. To drive this, Too Yumm! has entered into a new category, traditional Namkeens.</li>
<li>The Firstsource Solutions business seems to be bottoming out. Operating margin has stabilized in the 11.5-12% range. FY23 revenues de-grew at -1.1% YoY as guided at -1% to -2%.</li>
</ul>


IPL 2023 concluded recently with record streaming views and TV viewership. This bodes well for the valuation of the IPL Lucknow franchise owned by RPSG Ventures Limited (RPSGVENT IN) ["RPSGV"]. 
FMCG business is currently doing a run-rate of INR 400cr+ revenue, however, needs to scale up faster. To drive this, Too Yumm! has entered into a new category, traditional Namkeens.
The Firstsource Solutions business seems to be bottoming out. Operating margin has stabilized in the 11.5-12% range. FY23 revenues de-grew at -1.1% YoY as guided at -1% to -2%.


RPSGV: Record Views of IPL Bodes Well for the Sports Business

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rpsg-ventures-limited" target="_blank" data-smartkarma-citation="entities:29022:1" rel="noopener">RPSG Ventures Limited (RPSGVENT IN)</a> ["RPSGV"] continues to scale up its FMCG business. Q3FY23 FMCG revenues saw a YoY growth of 23%. QoQ, there was some de-growth due to seasonality.</li>
<li>Excluding one-off other income, <a href="https://www.smartkarma.com/entities/firstsource-solutions-ltd" target="_blank" data-smartkarma-citation="entities:3099:1" rel="noopener">Firstsource Solutions (FSOL IN)</a> reported weak Q3FY23 earnings led by sluggish growth and weak margins.</li>
<li>RPSGV remains a deep-value holding company that is trading at a discount of &gt;85%. As its FMCG and Sports businesses scale up, the stock has potential to re-rate significantly.</li>
</ul>



RPSG Ventures Limited (RPSGVENT IN) ["RPSGV"] continues to scale up its FMCG business. Q3FY23 FMCG revenues saw a YoY growth of 23%. QoQ, there was some de-growth due to seasonality.
Excluding one-off other income, Firstsource Solutions (FSOL IN) reported weak Q3FY23 earnings led by sluggish growth and weak margins.
RPSGV remains a deep-value holding company that is trading at a discount of &gt;85%. As its FMCG and Sports businesses scale up, the stock has potential to re-rate significantly.


RPSG Ventures: FMCG Business Continues to Scale Up | Outsourcing Business Is Seeing Weak Demand

India

RPSG Ventures Limited operates as a venture capital investment company. The Company focuses on information technology, business process outsourcing, real estate, and entertainment sectors. CESC Ventures serves customers in India.

RPSG Ventures Limited (RPSGVENT IN)

RPSG Ventures: FMCG Business Is Scaling Up Well | BPO Business Is Recovering

RPSGV continues to be available at a huge discount of 80%. Even if the discount narrows to 70%, it could lead to 50% upside. RPSGV's FMCG and...

Ankit Agrawal, CFA

RPSG Ventures: Q2FY24 Earnings Update

The BPO business, Firstsource, is now bottoming out. The FMCG and Sports businesses have exponential growth potential and are doing well. Over...

Ankit Agrawal, CFA

RPSG Ventures: Strong Profitability from IPL

RPSGV's FMCG and Sports businesses have significant potential to scale up. At a holding company discount of 82%+, RPSGV is available cheap and can...

Ankit Agrawal, CFA

RPSGV: Record Views of IPL Bodes Well for the Sports Business

RPSGV is trading at a huge holding company discount of 85%. As its Sports and FMCG business scale up, the discount can narrow significantly. Even...

Ankit Agrawal, CFA

RPSG Ventures: FMCG Business Continues to Scale Up | Outsourcing Business Is Seeing Weak Demand

RPSGV is trading at a deep holding company discount of >85%. Even if this discount narrows to 70%, the stock can double. Its FMCG and Sports...

Ankit Agrawal, CFA