In today’s briefing:
- PayTM Block – US$242m Secondary Block Deal a Small One to Digest
- The Beat Ideas: KDDL- Precision Engineering with Luxury Retail
- BEL: Earnings Firepower in Place, Rerating Looks Done
- Tata Steel: Strategic Pivot in Capital Allocation
- Sula Vineyards Q4FY25: What Is Hidden?
- Belrise Industries Pre-IPO – Expansion Plans and Related Party Risks
- Deep Industries Q4 FY25 Update: Strong Topline Growth Amid One-Time Clean-Up
- Novelis: Cautious Outlook Amid Heavy U.S. Capex and Scrap Volatility
PayTM Block – US$242m Secondary Block Deal a Small One to Digest
- Antfin (Netherlands) Holding B.V. (Antfin) is looking to raise up to US$242m via selling a 4% stake in Paytm (PAYTM IN).
- Antfin has been selling off its stake since it pared around 12% in its Nov’21 IPO. As of date of writing, it had a 9.85% stake remaining in the firm.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
The Beat Ideas: KDDL- Precision Engineering with Luxury Retail
- KDDL’s precision engineering division, Eigen, is expanding its manufacturing capacity with a new facility and further upgrades planned, aiming to capture high-growth sectors like aerospace, automotive, and medical devices.
- This expansion enhances KDDL’s competitive edge in precision engineering, a high-margin segment, and aligns with the company’s goal of making Eigen a significant revenue contributor, targeting 40-50% of manufacturing revenue.
- The focus on precision engineering and premium retail through Ethos positions KDDL for sustained growth, balancing stable manufacturing revenue with high-margin luxury retail.
BEL: Earnings Firepower in Place, Rerating Looks Done
- Strong Execution: 3-yr PAT CAGR of ~22% with ₹80,354 Cr order book offers 2–4 years of revenue visibility from high-margin defence programs.
- Growth Levers: Expanding in seekers, EW, AI, and smart infra; 5 new units and key contracts like Akash, LRSAM, and Shakti drive forward pipeline.
- Valuation Stretch: Trading at ~45x FY25E P/E vs 3-yr average of 32x; pricing reflects peak sentiment and leaves little room for error.
Tata Steel: Strategic Pivot in Capital Allocation
- Tata Steel reported resilient India performance in Q4 FY25 with strong volumes, though consolidated margins remained under pressure due to ongoing European losses.
- The Kalinganagar CRM line and Ludhiana EAF are progressing toward completion. The company’s $2.5 billion infusion into its overseas arm marks a strategic pivot, potentially weighing on returns.
- We apply a lower EV/EBITDA multiple of 6x (vs. 7.5x earlier) to reflect the weaker capital allocation stance, flattish steel price outlook, and relatively subdued growth versus peers.
Sula Vineyards Q4FY25: What Is Hidden?
- In a surprising turn of events, the management of Sula Vineyards (SULA IN) has cancelled earnings call for Q4FY25 citing Indo-Pak conflict after posting bad quarterly numbers.
- Receivable cycle has further elongated to all time high since the company became public.
- Revenue growth yet remains muted post company became public in 2022.
Belrise Industries Pre-IPO – Expansion Plans and Related Party Risks
- Belrise Industries (9156339Z IN) is looking to raise about US$255m in its upcoming India IPO.
- Belrise Industries is an automotive component manufacturing company based in India offering a diverse range of safety critical systems and other engineering solutions for two-wheelers, three-wheelers, four-wheelers, commercial and agri-vehicles.
- In this note, we talk about the company’s historical performance.
Deep Industries Q4 FY25 Update: Strong Topline Growth Amid One-Time Clean-Up
- Deep Industries (DEEPI IN) reported 39.7% YoY revenue growth in Q4 FY25; EBITDA margins stood resilient at 36.1% despite a INR 251 crore exceptional loss due to asset clean-up.
- New offshore contracts (INR 281 crore barge deal), and Oil & Natural Gas Corp (ONGC IN) PEC, and a growing INR 2,960 crore order book reinforce the company’s revenue visibility.
- Despite one-off noise in Q4, Deep’s core operations are intact. FY26 guidance of 25–30% revenue growth looks achievable, backed by execution tailwinds.
Novelis: Cautious Outlook Amid Heavy U.S. Capex and Scrap Volatility
- Novelis posted $1.8B EBITDA on 3.76Mt volume, with weakness in North America offset by aerospace and packaging recovery in Europe and Asia.
- Management withheld guidance citing demand uncertainty; Bay Minette capex rose to $4.1B with commissioning now in 2H FY26.
- Scrap supply tightness and tariff pressures may hit margins; company expects prolonged impact despite mitigation efforts underway.
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