#TataMotors tumbles over 8% after its Q4 results. Should you buy, sell or hold?
Get all your stock-related queries answered by our technical and fundamental guests with Alex Mathew and Smriti Chaudhary on Ask Profit. #NDTVProfitLive
Get all your stock-related queries answered by our technical and fundamental guests with Alex Mathew and Smriti Chaudhary on Ask Profit. #NDTVProfitLive
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00:00 is Alex Matthew and this show is all about your stock related queries.
00:03 So do write to us on any of our social media channels or on the WhatsApp number
00:07 that will be on your screen in just a minute. You can also write to us through the YouTube
00:11 live chat and we'll take your questions from there to our guests for today. But before we
00:16 do that, let's take a quick check on the markets. If the Nifty 50 trading half a percent down,
00:21 still below 22,000 mark today and a bit of a weak day in trade today. Let's look at some of the
00:29 constituents of the Nifty 50 as well and see what's pulling the index lower. You have the likes of
00:34 Tata Motors that's down 35 points and RIL, SBI, Infosys all in the red. On the other hand,
00:42 you have HDFC Bank, Zipla, Asian Pains slightly in the green today. HDFC Bank contributing about
00:47 12 points to the index. A bit of a and if you even if you look at the sectors as well,
00:53 most sectors in red in trade today apart from Pharma and the healthcare index, which seems to
01:00 be very high, about 12.5 percent higher, very, very volatile day for the markets today.
01:06 Okay, we'll come to Tata Motors, which is falling today in trade down about 8.5 percent as we speak.
01:16 But we'll come to that in just a minute. Let me just talk about a couple of stocks that are moving
01:21 on the back of results. You have Zipla that's gaining in trade today after the fourth quarter
01:25 results. You have something like a Serma that's down as well in trade today. Then there is ABB
01:32 that's up about over 9 percent in trade and that is also on the back of results. It's also hit its
01:39 52-week high a while ago. You have Bank of India that's down about 11 percent. This is also on the
01:46 back of fourth quarter results. However, on the Nifty 50 index, Tata Motors seems to be
01:52 the biggest loser in trade today after the fourth quarter results, Alex.
01:56 Absolutely. And I don't think it has to do with the earnings themselves.
02:00 Definitely. Look at the numbers.
02:02 Absolutely. You're seeing an expansion on the margin front. You're seeing an expansion for
02:06 Jaguar Land Rover's margins as well. So what really is the issue? We'll talk about that with
02:12 the guests that we have on the show in just a bit. But let me go across to our automotive analyst.
02:17 We've got Puneet joining in to give you some perspective as to why the street is looking
02:21 so negatively at Tata Motors right now. Puneet, what are the reasons that you picked up?
02:25 Yeah, thanks for that, Alex. So stock down roughly 8 to 9 percent eroding a market cap of roughly
02:31 27,000 crores. And there were five key reasons, according to us, that led to this fall.
02:36 The first one is that the company does not see any kind of incremental growth
02:40 in its passenger car sales for the next financial year. The company has said that over the past two
02:46 years, this segment has been really, really strong. And going forward, they are seeing
02:51 some moderation in demand as well. They are seeing that this is also due to a sharp run up post
02:58 COVID for the need of personal mobility, as well as the EV trend over the last two years has been
03:04 really strong. So going forward, they are seeing some demand momentum to be slow. The second reason
03:10 we could think is the Jaguar Land Rover, the projected sales for the next financial year is
03:14 really just like flat. According to brokerage, Ellara Securities, they see just 2 percent growth
03:20 in sales over the next two fiscal years for Jaguar Land Rover since it's going into a transition
03:26 and getting newer models as well. They see also that the competition such as Mercedes and Porsche
03:32 in this particular segment that compete with them globally will be also a key problem.
03:36 The third one we see is the commercial vehicle segment, which has been strong for Tata Motors
03:40 this year. But going forward, they see that due to elections, the first half will be slow,
03:45 while any kind of recovery is only expected in the second half of financial year 2025.
03:50 The fourth reason we see is the order book for JLR is declining to roughly one lakh thirty three
03:55 thousand units for and has declined from the previous quarter by roughly 10 to 12 percent.
04:00 They also see that, you know, for going forward, the volumes will be flat for this year, as we
04:05 mentioned, and also on the investment. They are going to spend roughly three point five billion
04:10 pounds in financial year 2025, which will lead to negative free cash flow for the company as well.
04:15 And finally, the post fame environment. Now, do know that the fame scheme, the fame scheme has
04:21 ended on March 31st. And now we are in the new EMP scheme where the subsidies have been reduced
04:26 by roughly 50 percent. The company highlighted in the conference call that they will be seeing the
04:31 trend, how the buyers are reacting on the lower incentive schemes. But overall, we see that these
04:37 are the really like the five key reasons which should be a key problem for the company going
04:41 forward. And that's kind of reflecting in the stock as well. Absolutely. Thanks so much, Puneet,
04:44 for wrapping that up for us. If you look at the year to date and I'm talking about 2024 itself,
04:50 the stock is still up over 20 percent despite today's drop. But let's get our expert. We've
04:55 got Sameer Dalal from Natwarlal and Sons joining in and we will soon have Rajesh Palvi. OK,
05:00 we already have Rajesh Palvi joining in. Thank you so much, gentlemen, for taking the time and
05:04 good morning to you. Sameer, I'll come straight to you on Tata Motors. Hopefully, you've heard
05:08 what my colleague had to say about what he thought the key reasons were. What do you make of it,
05:13 though? And would you say that this is enough of a drop to contemplate getting into the stock if you
05:19 don't have it or averaging your cost? So, good morning. So, let's first talk about the results.
05:25 The results were really good, right? Let's avoid the fact that they had the tax right,
05:31 I mean, deferred tax right back. So, even if we eliminate that, the profitability was extremely
05:36 healthy. This is on the back of volume growth. You see the operating leverage for the company
05:42 played out. Now, two things you got to factor in. One, the management has given a slightly subdued
05:48 guidance saying that growth may be a little tapered in the current financial year. And maybe,
05:53 you know, in FY26, we might see some amount of better growth. But if I look at it on an overall
06:00 basis, when a company delivers a strong operating margins, and even if I expect vehicle sales to be
06:08 relatively flattish, I think the profitability will still remain there. It may not grow at the
06:13 pace that probably the market wants to grow. So, that has been one of the reasons the stock has
06:18 taken a knock, given the fact that growth will slow down. But even when I look at it compared
06:23 to other players, valuations are cheaper, but they had moved up quite significantly.
06:29 So, you know, it was kind of like you can say the stock was priced really well. And, you know,
06:35 given the fact that people are expecting slower growth, the stock has come up. Now, my personal
06:40 take is, yet valuations are not very, very attractive, where I would say that you can go
06:46 out, go and say, you know, even after this 78% fall, go out and buy the stock right away. I
06:52 think you will get opportunities. You might see in a one or two quarters where numbers come a
06:57 little subdued with the fact that sales numbers are lower or flattish, and that could probably
07:03 pull the stock down closer to the 850 or levels. At 850 levels, I would definitely be a buyer in
07:09 Tata Motors. But for the time being, you know, given the fact that the guidance given by the
07:15 management is not very positive, there's no real trigger to pull the stock up. So, whether you're
07:20 an investor or a trader, the near term upside to some extent may get capped. But on downsides,
07:27 from a long term investor, I would definitely be a buyer.
07:30 Okay, fair point. All right. So watch out for, so buy on dips kind of an approach.
07:34 Rajesh, good morning, coming to you on where you see the benchmarks heading. It's a tough question
07:40 to answer because of the kind of volatility we've seen. But what are the key levels in
07:44 your opinion to watch? So, yeah, good morning. So,
07:49 definitely there is a high volatility. India Weeks is at an elevated level. So that clearly
07:54 giving a sign that yes, volatility is going to remain in the system for some more time
07:59 as we are now trading at 20 level of India Weeks. For Nifty, 21,800, that almost we have
08:09 touched that low. So that is coincide with the 100-day moving average. So 21,800 around
08:16 is the important support area based on the put concentration at this juncture.
08:20 But looking at the breakdown, which we have witnessed in the previous week, that is very
08:27 critical for the market to recover from here onward. 21,000, 150, 21,200 are the major
08:33 challenging level based on the call concentration area. So I think till 22,200, not taken out by
08:43 the Nifty in the coming trading session, that may remain as a challenge for the market. Until
08:49 these levels are not taken out, there would be pressure in the market. 21,800 and then
08:55 if it breaks, then 21,650 could be the next level on the downside. For Bank Nifty,
08:59 47,000 is the key challenging level on the downside. If it breaks below those levels, then
09:06 this fall may extend further towards 46,700 also on the higher side. 47,600
09:13 is the major supply zone for the Bank Nifty at this juncture.
09:16 All right. Let's start with the questions now. And first question is from Subodh. They are
09:23 talking about FedBank Financial Services. They bought the share at the current price of 125.
09:28 It's not moving in trade at all today, absolutely flat. But this is from a longer-term perspective.
09:34 Sameer, I'm going to come to you on this one. They are yet to come out with their earnings now.
09:40 And if you look at the stock performance, it hasn't done too much in the last one month.
09:45 Even in the last six months, it's down actually about 11% in trade.
09:50 What's the long-term view on FedBank Financial? So we don't have this stock under active coverage.
09:57 But what I can tell you about the entire NBFC space is, to some extent, borrowing costs are
10:03 starting to have moved up, of course, already. And they're continuing to remain elevated.
10:08 Now, the point is, if FedBank is able to pass on any of these elevated borrowing costs,
10:14 then I think that they will continue to do well. But I think we do have Federal Bank under
10:18 coverage. And for us, the way I would like to play any of these is, why not buy Federal Bank,
10:23 who has a stake in this as well? And you can get a play on both the banking operations as well as
10:28 the NBFC operations. So Federal Bank would be my play, but I have no active coverage,
10:32 so I won't be able to comment on FedBank's election.
10:35 The next counter that we're talking about is Kirloskar Oil Engines Limited. If I'm not
10:40 mistaken, this is BSE listed. I'm coming to you on this one, Rajesh, if you can pull up the chart.
10:45 We've got Rohit from Delhi, who's got 100 shares that he's bought at levels of 1075,
10:50 and he's looking for a short-term perspective. It's on NSE as well. It's up as much as 6% in
10:56 trade today, and his buy price is 1075. So he's still a little away from his buy price. What
11:03 should his short-term strategy be? I think he should hold on the position.
11:07 The way stock is moving across all time frame, stock is holding the ground on the near-term,
11:13 short-term structure also. Stock is almost trading near to its all-time high trajectory
11:17 series of higher water formation. So that clearly shows that there is a sustained buying action is
11:22 taking place. We have seen a brief consolidation of two weeks and again, fresh breakout has taken
11:28 place in the stock after today's move. So I think he should hold the position,
11:34 keep stop-loss at around 1040 and possible upside we can see in short-term towards
11:40 1160 to 1200 kind of zone for the Kirloskar Oil Each.
11:45 All right. The next question is from Prasanthi from Sydney. They say they want to buy out of
11:53 these three stocks, one stock from a longer-term perspective, they are all shipbuilders. So,
11:57 Cochin Shipyard, Mazagon Dock and Garden Reach are the three counters that they are currently
12:01 looking at. They want to know if this is the right time to enter either of these stocks. Now, Sameer,
12:07 you look at the counters in the last one year and the kind of rally they have had.
12:12 Cochin and Mazagon definitely, they have doubled, at least doubled in the last one year itself. And
12:19 Garden Reach, if you look at the one-year counter, it's up over 80%. Would you suggest buying at any
12:26 of these counters at the current levels? So, at the current levels, no. Given the
12:31 fact that they have gone up a lot in valuations and moved up. I'm not saying they're expensive,
12:35 but you see there's many a slip between the cup and the lip. And these are very long gestation
12:41 projects that they get, these shipbuilding projects. It's not like you get the order and
12:46 within three months, four months, you finish it and you get the revenue flow. So you've taken
12:50 orders based on certain price points. Now, if, for example, certain product prices change,
12:56 you're able to pass on some amount of it, some amount of it, you have to absorb yourselves.
13:00 And because of all of those difficulties that happen during these long gestation periods,
13:05 what you will see is at some points, a couple of quarters down the line, you will see some
13:10 amount of margin contraction, or you will see some amount of pain point in your numbers.
13:15 Now, those will be the right time. So we're not denying the fact that these companies are great
13:19 long-term wealth creators and will probably continue to remain wealth creators given the
13:23 fact that the order flows will remain strong. There are limited number of players. India is
13:28 becoming a key player in the global shipbuilding industry. We are a very, very small player. I
13:33 think the opportunities are very large. So we agree on all of those facts, but I would wait
13:38 for correction. My preferred pick in all of these is Cochin Shipyard, but like you rightfully said,
13:43 it's more than a hundred percent up in the last one year. So wait for the correction. Maybe if
13:47 you get 10 to 15% lower, that would be a great point out of the three, I would recommend the
13:51 Cochin Shipyard. Okay. So, incidentally, we've got a follow-up, I guess, or a separate question,
13:59 in fact, on Cochin Shipyard, and I'll take the opportunity to go to Rajesh on this one.
14:03 We've got a viewer Swastik who bought at levels of 805, 500 shares and sold 250 of them at levels
14:13 of 1300. The stock is down about 3.8% today and it's at 1183. So the viewer is still holding on
14:22 and is making profit. Rajesh, should he sell the rest is the question or should he buy more at the
14:28 current juncture? I think if he's holding this stock for long-term perspective, I think he should
14:37 use this decline as again, buying opportunity as long-term structure for the Cochin Shipyard is on
14:42 the bullish side. Though there is some weakness has taken place in the near-term structure,
14:48 stock now is below to 20, but long-term structure is still bullish. So I think if you get any
14:54 opportunity around 1150, 1160 zone, it's again, a good level again to re-enter in this stock.
15:01 And we believe that if 1150 holdout in this decline, then again, the stock will start
15:08 showing some buying interest. And once the stock manages to cross over 1240, then again,
15:14 there is a high possibility that the stock may regain to its again, new all-time high trajectory
15:19 also. So buy on dip should be your strategy. 1150 is a level where again, you can re-enter
15:24 in the stock in this decline. All right. We'll slip into a short break now,
15:29 but we'll be back and we'll take more queries on the other side. Stay tuned.
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18:47 Welcome back. You're watching Ask Profit and we're speaking with Sameer Dalal as well as Rajesh
18:52 Palviya. Rajesh, this next one's for you and this is a question coming in from Tanya Bakshi. She's
18:57 asking about Angel One, which she's wondering whether to get in at the current market price
19:02 at 2423 for the next six months or so. What's the view on the charts?
19:09 So there is a sustained supply pressure in the stock and in this corrective move,
19:16 stock is making a lot of lower bottom formation. Stock is now slipped below to 200 day moving
19:21 average also. So that is giving us some sign of further more bearishness for some more time we
19:27 can see in this stock. We have seen this is the fourth, fifth consecutive month where stock is in
19:34 corrective mode. Though stock is now approaching towards its major important support area,
19:40 which is placed at around 2350-2300 kind of zone. So if you get further more dips towards 2350
19:48 or 2300 kind of level, then you can buy some stocks around those levels in staggered manner
19:54 because still as you want to buy this stock because looking at the technical, again,
20:01 it's a contra buy. So I think wait for further more dips. 2350 would be the attractive level
20:08 again in this decline. Keep your stop loss around 2280. In the pullback, if the stock manages to
20:15 cross above 2650, then only we can see some more recovery in the stock and then possible target
20:22 2800 could be there. But at this moment, wait for another fall towards 2350, then initiate some buy.
20:28 All right. Next counter we're talking about is KPIT. And this one's, KPIT Technologies,
20:36 this one's from Akshay. They say they bought the shares at a price of 945. It's currently trading
20:43 above 1400 levels. Sameer, on something like a KPIT, they have guided for a strong FY25 growth.
20:52 But the stock is in a bit of a pressure today. What should somebody who has a longer term view
20:58 on the counter should do? Definitely, hold on. So,
21:04 the segment that KPIT caters to in the technology space is the auto companies.
21:09 The kind of software, the kind of technology that is going into all of these companies is
21:15 only increasing. You're getting even in some of the, I would say, how do I put it, the lower end
21:22 models, you're getting more and more technology inputs. And KPIT comes in with a lot of that,
21:27 apart from the information systems and the music systems and all of that, it comes with a lot of
21:33 other things. So, as the penetration for this keeps increasing, as the further increase in
21:38 battery operated cars increases, I think the opportunity for companies like KPIT, Tata
21:45 Technologies is quite significant. So, I would definitely hold on to that. Your viewer is making
21:50 a good amount of money. I think he will probably get higher rates one year to two years down the
21:55 line. So, I'll hold on to this. Sameer, did I interpret your wry smile at the
22:03 question on the guidance right? Because they've managed to beat their guidance and people have
22:07 questioned them in the past, but they've not got it right. But maybe I interpreted your smile right.
22:13 MapMyIndia is the next question that we're taking or the next talk that we're taking.
22:17 And this is Pallumi's question. She's bought 33 shares at an average price of 1,995,
22:24 which is slightly elevated. She's lost a little bit of ground. She's asking if she can hold for
22:28 the next six months or so. Rajesh, since it's a short-term query, should she hold on?
22:33 I think already stock has corrected. I think she can hold on the position as stock is now trading
22:42 near to the important support area of 1740. So, I think she can hold on. If stock not breaks below
22:49 1740, then possible pullback we can see towards 1840 to 1900 kind of zone. So, keep at this moment
22:57 stop loss at around 1740. Alright. The next counter is Hoodco. This one is from Naman from
23:03 Kolkata. They say they bought the share at an average price of 219 rupees. It's below that
23:09 price. And Rajesh, this is from a perspective of three months. Now, something like a Hoodco that
23:16 has rallied so much in the last one year, it's gained over 200%. Do you see more upside into the
23:24 counter? I think long-term structure is bullish. Yes. Stock is correcting in line with the market.
23:30 And I think now still stock is holding above 20-day, 50-day moving average. That clearly giving
23:36 a sign that yes, stock is holding the ground at higher level and strength is there for near-term
23:41 to short-term structure also. Yes, definitely one should look to buy Hoodco in this correction.
23:47 190 should be your stop loss to buy for positional perspective. On the higher side,
23:52 once the stock is able to take out 225, then this really can extend to 250 level also. So,
23:58 we are bullish for Hoodco with stop loss of 190. Dinesh has got the next question. Two counters
24:04 that he has identified, Cummins as well as Ingersoll Rand. And he is doing an SIP in these
24:10 two stocks. Or you can say that he is acquiring over a period of time on an ongoing basis.
24:16 The question, Sameer, is should he continue to do this or should he stop this strategy?
24:22 Time being, I think the stock, Cummins at least has run up quite significantly and one can take
24:28 a pause. So, you see, Cummins used to trade at much cheaper valuations in the engineering space
24:34 compared to a lot of the other competitors. Now, the valuations to some extent have bought up. Of
24:39 course, it is still trading cheaper. As an MNC, it is still trading cheaper than a lot of the others.
24:43 But you might continue to retain that discount because Cummins does not have the same kind of
24:48 profitability margins that some of the other engineering companies do have. Also, you got
24:54 to realize that Cummins is also to some extent dependent on what happens in the global markets,
24:58 because we do export from here. Cummins India does export to Cummins International as well.
25:03 And if you see a bit of a slowdown going forward in some of the western countries, then the order
25:10 in flow and the growth may not be as significant as market participants are expecting. So, given
25:16 the fact valuations are a bit stressed compared to its own historical, I think it is time to
25:24 probably stop doing the SIP. These are great long-term stories again. Maybe if the stock
25:29 corrects at that point, one can restart the reinvestment. But for the time being, I am asking
25:34 to stop. All right. The next counter we are talking about is Widget Diagnostic. This one
25:38 is from Rosemary. They want to buy into this counter. However, Rajesh, this counter has
25:43 doubled in the last one year. Would you suggest buying at these levels or should you wait for
25:48 some correction? I think the way the stock is moving, I think he should hold on as overall
25:56 long-term structure for the stock is on the bullish side. The stock is almost trading near
26:00 to its all-time high trajectory, though there is some correction from higher level. But I think
26:05 still the stock is holding above 7.30, 7.25 level. Trend is likely to remain on the bullish side.
26:12 So, I think he should hold on the position. Once the stock again manages to cross above
26:18 7.90-8.00 zone, then these really can extend to 8.60-9.00 also. So, hold with stop-loss of 7.25.
26:26 Got it. Unfortunately, we are completely out of time on this particular edition of Ask Profit.
26:30 Sameer as well as Rajesh, thank you so much for joining in, for answering all the questions that
26:34 you did. Viewers, hopefully the conversation that we have had today and the stocks that we have
26:38 discussed have benefited you, even if your specific question may not have been answered.
26:43 And we will be back tomorrow at 11.30 to take even more of your questions. So, do stay tuned for
26:47 that. Meanwhile, lots more coming up over the course of the day from Smriti, myself and the
26:51 team that put the show together. Thank you so much for watching. Do stay tuned. This is NDTV Profit.
26:55 Thank you.
27:00 Thank you.
27:16 Thank you.
27:22 Thank you.
27:35 Thank you.
27:49 Thank you.
28:06 Thank you.
28:23 Thank you.
28:41 Thank you.
28:55 Thank you.
29:11 Welcome back to NDTV Profit. And today, we have the QSR sector in focus and particularly,
29:24 Sapphire Foods, who recently posted their Q4 results. And to talk about the company and the
29:28 future outlook, we are joined by Mr. Sanjay Purohit, who is the whole-time director and
29:32 Group CEO at Sapphire Foods. Good morning, Mr. Purohit.
29:35 Good morning, Mehikha. It's great to be on your show.
29:40 Yes. So, first, let's start about what's your outlook. And just tell us a little bit about
29:45 how the quarter went by for the company. So, the last five or six quarters, in general,
29:52 we have seen a muting of consumer demand. And this is not only in the QSR segment, but I think
29:59 right across consumer product companies. This quarter, we grew at 13%. Our adjusted EBITDA was
30:07 down 3%. And our overall EBITDA was up by 7%. So, a muted quarter. When I look at the year in total,
30:19 within the QSR segment, perhaps Sapphire Foods has been the outlier performer when I put in
30:26 all aspects into consideration, which is revenue scale, revenue growth, EBITDA margin percentage
30:33 growth, and net new additions. So, we have grown restaurant sales by about 16%. We have grown
30:41 adjusted EBITDA by 3%. And we have had about 120, 130 new restaurant additions. Apart from that,
30:50 Sapphire KFC has perhaps been the number one brand in the QSR industry. We have grown revenue by 18%
30:59 and profit margins have actually grown by 30 basis points. So, it's been a strong quarter
31:07 for Sapphire. And plus we've had other big wins. For example, we are the number one QSR on the Dow
31:14 Jones Sustainability Index. We are one of the top three franchises for young brands on both KFC and
31:22 Pizza Hut from a consumer and operating metrics perspective. So, while the numbers are slightly
31:30 muted, the underlying muscle has undoubtedly grown much stronger during the year for us.
31:38 Yes. Before I go on to the company specifics, could you maybe give us a demand outlook for
31:44 FY25? Could there be sparks of demand revival in the second half of the current financial year?
31:51 So, we've been calling out that consumer demand has been constrained from perhaps
31:58 quarter four of FY23. So, now it's been nearly five, six quarters where we've seen this demand
32:05 slow down. And it's vetted by the private final consumer expenditure metric that the government
32:15 puts out in addition to the GDP. And that metric has seen the lowest growth over the last five,
32:24 six quarters over the last 20 years perhaps. So, undoubtedly there is pressure. And
32:31 interestingly, there is pressure at the lower and the middle class segment. What seems to be
32:40 doing well in these pockets is still the premium segment and upper end. So, generally, I don't see
32:49 consumer demand reviving dramatically over the next one or two quarters. Perhaps after the
32:55 monsoons, there might be some revival. Having said that, the most important thing that we can do
33:02 is be in control of our destiny, which means that how do we make our brands more relevant,
33:07 focus on innovation, advertising to drive occasions of consumption,
33:14 increase marketing expenditure, and the consumer and operating standards lift them continuously.
33:22 So, we are focused on what we can control and improve that for the consumers. Everything else
33:29 will take care of itself. Okay. And in terms of, given the backdrop of muted demand, what is the
33:38 capacity addition in terms of stores that the company is guiding 5-5-25? And how would it be
33:44 distributed quarter-wise? So, in December 21, after our first results post our IPO and listing,
33:57 we had called out saying that we should be able to double our stores in three to four years.
34:03 Now, we feel that KFC should be able to double its store count by the end of this year, so which
34:09 is in three years. In the case of Pizza Hut, our restaurant EBITDA margins have come down to single
34:15 digit. And when it is single digit, then it doesn't meet our internal hurdle rates on ROCE.
34:23 And therefore, we are going to be a little more cautious on our expansion. Once we get to the
34:29 double digit territory is when we will restart expansion. In Sri Lanka, we are seeing continued
34:36 cautious expansion there as the economy is reviving. So, it's a mixed bag. KFC continues as
34:43 it is. Pizza Hut, we are cautious still profitability and indeed sales improve. And in
34:53 Sri Lanka, we are cautious but we are continuing to expand there. So, would there be any store
35:00 expansions in Q1 for any of these segments? Yeah. So, typically, I'm loath to give a quarter-by-quarter
35:08 guidance because much can happen during the quarter. But I think the general outlook that
35:15 I've given stays. Okay, got it. And in terms of growth for the overall company, top line and
35:21 bottom line, for FY25, is it our expectations to be flat or could we see double digit growth as well?
35:28 So, again, our first guidance was to say we aspire to grow revenue by 25% and EBITDA by about 30%.
35:38 And double the store count, as I said earlier, in three to four years' time. It's been three years
35:45 since we listed and our three-year scorecard suggests that we have blown those aspirations
35:52 perhaps out of the water. We have grown revenue by 37%, EBITDA has grown significantly, and we're
35:59 more or less on course to double the store count in three to four years. That's our going forward
36:05 aspiration. However, again, I'm quite loath to give a quarter and a specific year guidance because
36:14 much can happen in the Indian economy and there would be ups and downs. But over a longer-term
36:20 trend, this continues to remain our aspiration. Revenue by 25%, EBITDA by about 30%.
36:26 Okay, got it. Now, first coming to Pizza Hut, now margins were effectively negative 2.7%.
36:34 When does the company foresee to at least reach the EBITDA break-even level? Could it be this
36:39 financial year? Yeah. So undoubtedly, the last four or five quarters on Pizza Hut have been tough.
36:46 I've said in a muted economic environment, heightened competition also has taken its toll
36:53 on the brand and a number two brand perhaps suffers a little more. And therefore, we have said
37:00 we are going to aggressively push the agenda of the brand. The brand holds a tremendous amount
37:06 of equity in the consumer's mind even today. I mean, it's finally a brand that all of us have
37:12 grown up on, it's 25 years old, and therefore it's quite powerful. But we have got to actualize that
37:17 mind, the power that it exists in the consumer's mind, we've got to actualize it from a wallet
37:25 perspective. So what we called out one or two quarters ago is that we want to up our innovation
37:31 game. We've taken in marketing investment further. And I'd called out last quarter that we should see
37:40 innovation in the next one or two quarters. I'm quite happy to say that we launched Melts in March.
37:46 And Melts is quite a unique pizza concept. It's a folded pizza concept. More importantly,
37:52 takes pizza consumption into newer territory, the snacking territory as against meal territory.
37:59 So we put in significant amount of marketing investment. So you see the quarter for negative
38:06 2.7% is largely because of the higher marketing that we put in. Without that, the brand is
38:13 actually at break even. So and as we've gone from Jan, Feb, March into April, May, June quarter,
38:21 we are seeing a better than normal sequential uplift. Now, I'll be still cautious to say,
38:28 let me have a look at it over the next couple of months. But the game plan is quite clear.
38:36 Market relevant innovation backed by significantly higher marketing investment. And on the consumer
38:42 and operational metric side, I think we have made big improvements. We launched Dragon Tail,
38:48 which is a very unique kitchen planning tool. If you see our ratings across our 300 plus stores
38:56 on Google, Swiggy, Zomato, all of them have seen marked improvement over the last one year.
39:02 So this is what we can control what is in our hands, make the brand again,
39:08 strong and revive consumer interest behind it.
39:12 Got it, Mr. Puruv. And you know, you mentioned the food aggregators and delivery platform.
39:17 Now, pizza is a generally preferred delivery category. And it's also reflected in your
39:21 channel sales distribution for pizza at 50%. Is the strategy to focus on delivery
39:26 or are you going to continue dining?
39:29 Oh, no, not at all. We've always said that the best way for a food brand to operate in the
39:38 country is through an omni-channel model. 70% of the investment behind a store goes into the
39:44 kitchen. And therefore, why would we stop the consumer from accessing the brand across every
39:50 single channel? So for us, we are channel agnostic. In fact, we say we are omni-channel.
39:56 Dine-in is very important. Takeaway is very important. Own delivery, aggregator delivery,
40:02 right across. I think we focus on all channels. And that's the only way I believe to be profitable
40:09 in the foods segment.
40:12 So what's the targeted mix? Is there an optimum mix that Sapphire Food aims to go to?
40:20 Very well. So the mix is slightly different in the case of KFC and Pizza Hut. Post-COVID,
40:26 we have come to in the region of 60% dine-in takeaway on KFC and 40% on delivery. In the case
40:35 of Pizza Hut, it is 50-50. We are seeing reasonable consistency on this contribution over the last,
40:46 perhaps, 18 months or so. So it's not changed dramatically at all.
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43:01 The RBI clamps down on Kotak Mahindra Bank. Sources tell us that the bank's IT spends may not have
43:11 been the problem after all. The problem was bigger and lay in the prioritizing this budget. Pragati
43:18 brings us more details on this exclusive story. Pragati, over to you.
43:22 Right, Amina. Thanks so much. Yes. So Kotak Mahindra Bank is still in the news after RBI
43:27 clamped down on 24th April. Now, a little bit of more digging deep and we got to know that sources
43:33 told us that while RBI pointed out issues in the IT infra or in the tech spends and all our eyes were
43:41 on how much the bank is spending on its tech, that may not have been issue because the bank,
43:46 while it spent about 1600 to 1700 odd crore in FY24, the prioritization of these spends as to
43:53 the fact that these spends were not going towards actually solving the problems was the issue. Now,
43:59 sources told us, I'm going to list down four to five points for the benefit of our viewers,
44:04 is that first, the IT funding or the budget was pretty solid for Kotak Mahindra Bank,
44:09 but the budgeting of the spending was the issue. The priority was not being laid on solving the
44:17 technical loopholes, especially in the legacy infrastructure of the bank. Now, sources told
44:22 us that the bank was using legacy infra and these systems were not being updated or upgraded as per
44:29 the latest models. And that is why it could not handle the volume of the online payments that
44:34 could happen and hence the significant outages that were reported in the system. The next that
44:40 we have to see is the lack of employee costs at Kotak Mahindra Bank. Now, what we know is that
44:45 the way an IT budget is planned at Kotak Mahindra Bank, about 20% of the funds are going towards
44:50 employee costs or the employee expenses. But sources told us that this was not sufficient
44:57 because despite the bank having a huge workforce of about 1200, despite the bank having a huge