Daily Briefs

• Swiggy (SWIGGY IN) raised around US$1.35bn in its India IPO in Nov 2024. The company now plans to raise another US$1bn worth of fresh funds.
• Swiggy is a business to commerce marketplace company offering users a platform for ordering grocery and household items and food delivery, through its on-demand delivery network
• In this note, we will talk about the deal dynamics and possible placement.

• Aequs has a strong integrated aerospace ecosystem and deep OEM ties, but consolidated margins remain weak due to low overseas utilisation and losses in the consumer vertical.
• A robust ₹4,200–4,500 Cr aerospace backlog and India cluster scale provide visibility, but working-capital stretch and customer concentration elevate execution risk.
• View: Operating-Leverage story; valuation upside (₹180–200) requires utilisation lift and margin recovery. OFS-heavy structure and promoter dilution temper near-term sentiment.

• Castrol India stands as a leading player in the Indian lubricant market, commanding a significant market share of approximately 20-22% driven by its powerful brand equity, extensive distribution network, and technological prowess inherited from its parent company, BP.
• The company demonstrates robust financial health characterized by consistent profitability, strong cash flow generation, and a debt-free balance sheet, enabling a generous dividend policy.
• While facing the long-term strategic challenge of the transition to electric vehicles (EVs), Castrol is proactively diversifying its portfolio by investing in EV fluids, auto care products, and vehicle servicing networks to mitigate future risks and capture new growth opportunities.

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• Dominant Regional Player with Diversified Revenue Streams: KSE Ltd. is a leading manufacturer of compound cattle feed in Southern India, with a growing presence in the dairy and coconut oil processing segments. This diversification provides a natural hedge against volatility in any single business line.
• Strong Financial Performance and Attractive Valuation: The company has demonstrated robust profit growth and maintains a healthy balance sheet with minimal debt. Trading at a significant discount to its peers, the stock presents a compelling value proposition for long-term investors.
• Favorable Industry Tailwinds: The Indian animal feed market is poised for significant growth, driven by rising demand for protein-rich diets, increasing livestock population, and a shift towards organized farming practices. KSE is well-positioned to capitalize on these trends.

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• PTL Enterprises operates a unique, low-risk business model, leasing its tyre manufacturing plant in Kerala to its associate company, Apollo Tyres Ltd., generating a stable and predictable rental income stream.
• The company is characterized by its high dividend yield and attractive valuation, trading at a significant discount to its book value. Its financial profile is robust, with virtually no debt and consistent profitability.
• The primary risk and key determinant of future performance is the heavy dependence on a single lessee, Apollo Tyres. The terms and renewal of the long-term lease agreement are critical to the company’s outlook.

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• Niche Player with Strong Recent Growth: Repco Home Finance has demonstrated robust growth in recent years, evidenced by a 3-year net income CAGR of 33.47%. The company focuses on the underserved self-employed and non-salaried segments in Tier-II and Tier-III cities, particularly in South India, which provides a pricing power advantage.
• Attractive Valuation with Improving Asset Quality: The company trades at a significant discount to fair value, with a Price-to-Book ratio of 0.61 and a Price-to-Earnings ratio of 4.55. Asset quality has shown marked improvement, with Gross Non-Performing Assets (GNPA) declining from a peak of 7% in FY22 to 4.1% in FY24.
• Key Risks Center on Concentration and Competition: The business faces risks from its high geographical concentration in South India (83% of its loan portfolio) and its reliance on the economically sensitive self-employed segment. Intense competition from larger banks and other Housing Finance Companies (HFCs) could pressure margins and growth.

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• Sukhjit Starch & Chemicals is a well-established player in the Indian starch industry with over seven decades of experience, making it one of the oldest and largest producers in the country. The company has a strong foothold in the maize-based starch and derivatives market, with a diverse product portfolio catering to various industries including food and beverage, pharmaceuticals, paper, and textiles.
• The company is strategically expanding its manufacturing capacities to meet the growing demand for starch and its derivatives. This expansion, coupled with a focus on high-value products and deeper penetration into Tier 2 and 3 cities, positions the company for future growth. The favorable global environment for the starch industry, due to higher corn costs in other major producing countries, presents an additional tailwind.
• Key risks for the company include the volatility of raw material prices, particularly maize, which constitutes a significant portion of its operating income. The company’s operating margins are susceptible to fluctuations in maize prices and changes in government regulations, such as the implementation of minimum support prices.

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• Ambika Cotton Mills (ACML) is a specialized manufacturer of premium compact and Elitwist cotton yarn, catering to high-end apparel makers globally, which affords it a niche position and pricing power compared to commodity yarn producers.
• The company demonstrates strong financial resilience with a historically conservative, low-debt approach, funding capacity expansions primarily through internal accruals and maintaining healthy profitability margins.
• Key risks include volatility in raw cotton prices, high dependence on a few large clients, and cyclical demand from the global textile industry, which has impacted recent financial performance.

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