In today’s briefing:
- Tata Steel: Strategic Announcements Boost Long-Term Positioning; Valuation Still Balanced
- Diffusion Engineers: Betting on High-Margin Heavy Engineering Through Historic, Doubled Capex
- ICICI Prudential AMC – Reasonably Priced for the Longer Term.
- Shadowfax Technologies Pre-IPO: Strong Revenue Growth, but Margins Remain Depressed
Tata Steel: Strategic Announcements Boost Long-Term Positioning; Valuation Still Balanced
- Recent strategic announcements improve pellet security, downstream mix, and low-carbon readiness, strengthening Tata Steel’s long-term positioning.
- Balance sheet can fund near-term projects, but upstream expansions require careful sequencing amid non-linear cyclical earnings.
- Valuation remains balanced at ₹165–185/share, with Europe performance the key swing factor for re-rating.
Diffusion Engineers: Betting on High-Margin Heavy Engineering Through Historic, Doubled Capex
- Diffusion Engineers (DIFFNKG IN) is India’s integrated engineering solutions provider specializing in welding consumables, wear plates/parts, and heavy engineering equipment for core industrial sectors.
- The company is targeting to double its top-line in 3 to 4 years with a sustainable EBITDA margin range of 15% to 17%.
- The most critical growth trigger is the INR 70 crore capacity expansion at the Nimji and B33 facilities, which is designed to double production capacity and drive internal cost efficiencies.
ICICI Prudential AMC – Reasonably Priced for the Longer Term.
- Ipru AMC, the largest AMC with high active AUM share and 60+% of Equity AUM boasts of one of the best operating metrics in the industry.
- The IPO is being priced in line with peers based on FY25 accounting PE (40x vs 40-44x), however, based on Core PE the relative valuations stands at 40x vs 48/52x
- We are bullish on the industry/company from a long-term perspective, although near-term valuations may look fully priced in light of regulatory tightening of profit pool and intensifying competition.
Shadowfax Technologies Pre-IPO: Strong Revenue Growth, but Margins Remain Depressed
- Shadowfax Technologies (1310315D IN) is looking to raise US$225m in its upcoming India IPO.
- Shadowfax Technologies third-party logistics (3PL) company that leverages a unified platform to facilitate digital commerce across India.
- In this note, we look at the company’s past performance.
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