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

<ul>
<li>The FMCG business has been now sustaining an annualized revenue run-rate of INR 500cr+. Q4FY24 FMCG revenue was INR 135cr+, similar to Q3FY24 and a growth of 30%+ YoY.</li>
<li>
<a href="https://www.smartkarma.com/entities/firstsource-solutions-ltd" target="_blank" data-smartkarma-citation="entities:3099:1" rel="noopener">Firstsource Solutions ("Firstsource")</a> , the BPO business, has been sustaining its recovery after a lull period for two years. Its revenue grew 4.2% QoQ and 4.5% YoY in constant currency.</li>
<li>The Sports business revenue continue to be dominated by IPL. Having played three seasons now, RPSGV's IPL franchise, Lucknow Super Giants (LSG), has made its place and holds significant value.</li>
</ul>


The FMCG business has been now sustaining an annualized revenue run-rate of INR 500cr+. Q4FY24 FMCG revenue was INR 135cr+, similar to Q3FY24 and a growth of 30%+ YoY.

Firstsource Solutions ("Firstsource") , the BPO business, has been sustaining its recovery after a lull period for two years. Its revenue grew 4.2% QoQ and 4.5% YoY in constant currency.
The Sports business revenue continue to be dominated by IPL. Having played three seasons now, RPSGV's IPL franchise, Lucknow Super Giants (LSG), has made its place and holds significant value.


RPSG Ventures: FMCG Business Is Scaling Up Well

<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

India

RPSG Ventures is a diversified investment company that operates as a holding entity for high-growth businesses across various sectors, including Information Technology (IT) services, Business Process Management (BPM), Fast-Moving Consumer Goods (FMCG), Real Estate, and Sports. As a standalone entity, it provides IT consultancy and support services primarily to the power sector. The company is headquartered in Kolkata, West Bengal, and was founded in 2017.

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RPSG Ventures (RPSGVENT IN)

RPSG Ventures: FMCG Business Is Scaling Up Well

RPSGV's FMCG business is scaling up well with an annualized revenue run-rate of INR 500cr+ vs INR 400cr+, a year ago. At current valuation, RPSGV...

Ankit Agrawal, CFA

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

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