Ask Profit | BikajiFoods In Focus | NDTV Profit
-#BikajiFoods In focus
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00:00 Let's look at some of the sectors as well and see what's moving there.
00:06 You have the media index that's up over a percent in trade.
00:10 There's some strength in metals again today.
00:12 Oil and gas, PSU banks, about half a percent up or thereabouts.
00:17 On the other hand, you have FMCG, healthcare, pharma, realty, all dragging in trade.
00:23 Some counters that are moving on the back of results.
00:28 One is bear crop that's down about 5.5 percent.
00:32 Fortis Health, decent results in line with estimates but still down over a percent in trade.
00:38 Then there's Interglobe, which is Indigo, that's down about 2.5 percent.
00:41 Decent results there as well.
00:43 Very well on the PAT number there.
00:46 But the focus for today is BKG Foods that's also moving on the back of fourth quarter numbers.
00:53 It's up about 4 percent right now.
00:55 To talk about those numbers and to break it down, I'm joined by my colleague Mahima.
00:59 Mahima, tell us how the results were and what are the highlights of the numbers that you could tell us.
01:07 Right, Smriti. I'll start with the revenue.
01:10 The revenue has clocked around 33 percent growth.
01:12 YOY margins have significantly improved from 13.4 to 26.2 now.
01:17 And net profits have grown almost 200 percent to 116 crores.
01:22 Now to break this down further, there was a volume growth of almost 14 percent YOY in Q4.
01:29 And overall FY24, the volume growth was clocked at around 15 percent.
01:33 The increase in margins and profits is majorly on account of a decrease in raw material prices,
01:40 cost of raw material prices, where the cost, the percentage decline in cost of raw materials has been from 66 percent to 57 percent.
01:48 The company has also recommended a final dividend of rupees 1.
01:52 And in terms of the focus markets, the focus markets in Q4 have grown by 15 percent.
01:58 And overall in FY24, they've grown by almost 23 percent.
02:02 Now in terms of direct coverage in Q4, around 19.5 thousand outlets were added by BKG Foods.
02:09 And in terms of EBITDA margins, they currently stand at 16.8,
02:14 which was led by again reduction in commodity prices, superior mix, operating leverage and effective cost management.
02:21 Now in terms of the segmental performance, the ethnic snacks, investment snacks are going hand in hand.
02:27 They're growing at a very steady pace, but something like Papad has significantly grown by 23 percent year on year.
02:35 And lastly, the company has guided that they want to touch around 3.45 outlets, 3.45 lakh outlets by FY25.
02:44 And overall, the stock had been a bit under pressure in the past six months, but the stock has recovered very well in trade today.
02:51 So this is all about how the Q4 has panned out for BKG Foods.
02:55 Thank you so much Mahima for that.
02:57 And on that note, let me introduce you to the guests for today.
03:00 We're joined by Aastha Jain, Senior Research Analyst at MFM Securities and Rajat Bose, who's a Technical Analyst for the day.
03:08 And Aastha, I'm going to come to you first on BKG Foods.
03:13 Decent set of numbers, but the factor here that has impacted the margins is the raw material cost that has led to this sort of expansion.
03:21 You see that the number as well, 910 basis points of decline in raw materials and 1290 basis points of margin increase as well.
03:31 Do you see this kind of sustaining for the longer term?
03:35 Hi, good afternoon. So talking about this counter, yes, the results were exceptional.
03:42 And when this company came up with the IPO way back in 2022,
03:46 I think in November or December 2022 at the IPO price or the issue price of Rs 300,
03:52 we have seen a strong rise from the price of 300 to the level of 556.
03:57 In fact, they have made the high of 605 also. So yes, talking about now numbers, numbers were exceptionally well.
04:04 If we have seen some sort of a strong jump in the bottom line, top line, that itself indicates that, yes,
04:10 the company's products are in the great demand, especially their ethnic segment,
04:14 because they have different segments. In fact, the papper segment has also worked well for the company.
04:19 So, yes, this fall in the raw material prices has definitely contributed to the profitability,
04:25 strong profitability of the company. Going ahead also, what we are expecting that this raw material cost,
04:31 which was really escalated a year back, now it has shown the sign of moderation.
04:37 So going ahead also, we expect raw material price to continue to show moderation,
04:41 and that will be going to positively impact the bottom line going ahead also.
04:46 So we are positive on this counter and are recommending buy as well as hold.
04:51 So for the target of buy, our target is around 605 to 610.
04:57 And in fact, if someone has the stock in their portfolio, they can remain invested into this counter.
05:02 Again, the price target is going to be same, that is 605 to 610.
05:06 Fair point. The first query that we have is from Prasanthi, who is writing in from Sydney.
05:13 They say that they have already bought a counter, Mindacorp, and they bought it at a price of 386 rupees.
05:22 It's fairly above that, closing trade to 416 rupees right now. Rajat, I am going to come to you on this one.
05:31 Would you suggest holding on to this counter from a short to medium term perspective?
05:36 Or the question here is that should you maybe exit and then buy a Zomato or a HAL at the current prices?
05:44 So various sectors here, but would you suggest getting out of Mindacorp and getting into Zomato or HAL?
05:52 If Mindacorp were to fall below 400, then definitely one should seek an exit.
06:01 Otherwise, it is not warranted from a technical point of view to seek an exit from Mindacorp.
06:07 But now coming to the other two choices that you made, the thing is that HAL has moved up considerably.
06:16 It has been more of a vertical kind of a run, not just parabolic. The run is somewhat vertical.
06:23 So there would be some kind of a correction at some point in time.
06:27 Once there is a significant correction, then one can enter into HAL from an investment point of view.
06:36 I'm not talking about the traders. Regarding Zomato, first, I might disclose it that I personally hold Zomato in my long term portfolio.
06:45 Zomato and Mindacorp charts are somewhat similar.
06:49 So whether you get into Zomato or you would remain in Mindacorp from a technical point of view, there is not much difference.
06:58 But if you are looking for an FMCG kind of related to FMCG service provider, then you get into Zomato.
07:10 Otherwise, stay put in Mindacorp because this stock is also a pretty good stock in my belief.
07:17 So one can stay put here and put a stop loss below 400 on closing price basis.
07:24 Next counter is Cervain Life Sciences. This one's from, I don't think we have the name here.
07:32 Ashish has written to us on Cervain Life Sciences. They say they have bought the counter at a price of Rs. 115.
07:38 It is currently trading below that price. Asha, this is from a longer term perspective.
07:43 Are you constructive on this counter? It seems to have done well in the last one year, but a little bit of a downturn in the stock.
07:54 Yes, a little bit of downturn in the stock. But I think one can remain invested in the counter because what we are expecting from this counter is to post strong numbers going ahead.
08:06 Right now it is quoting Rs. 100, but going ahead, what we are expecting from this counter to show a rise of around 10% from here that might turn into 110-115.
08:18 Although I think the cost price is a little higher because I really forget the cost price.
08:23 But my stance here is to hold because we are expecting this counter to move 10-15% up from here.
08:29 The next counter is Indigo. Aastha, I am going to come back to you on this one. This is specifically for the longer term.
08:37 Now we have seen the fourth quarter numbers as well. Based on that, what is your… positive numbers there actually.
08:45 But from a longer term perspective, do you see this sort of sustaining these levels?
08:50 You look at the PAT number, above estimates definitely. Would you see these levels sustaining?
08:59 Yes, we are expecting these levels to sustain. Although the reason for fall in the prices is can be attributed to a sharp rise, which we have already seen in the stock before the announcement of results.
09:11 So maybe a healthy profit booking, which we can say about this counter is going on right now.
09:18 So numbers are good and we all know that Indigo is having a strong market share. It is one of the market leader in its space.
09:26 And with the fall in the prices of ATF especially, we are expecting the counter to show again a strong bottom line going ahead.
09:35 And one thing more which is positive about this counter, the record demand, which we are seeing in the air traffic.
09:41 So definitely that all will help the company in showing continuously these strong numbers going ahead also.
09:48 So we are positive on this counter. Right now profit booking is going on. So there is no need to enter into this counter at the present moment of a time.
09:55 Let the counter fall more, maybe around the level of 4100 to 4150 are the decent level to enter into the stock once again.
10:03 All right. Hope this answers your question, Suresh, who is listening to us from Hyderabad on Indigo.
10:09 Next one is Apollo Tyres. This one's from Amir Ali. They say they bought the counter at a price of Rs. 492, slightly elevated levels, Rajat.
10:19 But this is specifically from a shorter term point of view. Do you have any sort of targets from a short to medium term perspective?
10:27 You see, in the recent past, it has actually tested 500 to about 520 kind of levels.
10:35 And each time it tried to get past this range between 500 and 520, supply pressure put it down.
10:45 So what I would say is that if one wants to remain invested, then put a stop loss below 460.
10:52 And if you are looking for a trading opportunity, this is in the mid range, current price of 484.
10:58 So either you buy around, say, 470 with a stop loss below 460, or you get out of this counter around, say, 500 level.
11:09 But at current levels, you are doing nothing. Right.
11:13 The next two counters that we're talking about is Cochin Shipyard and Mazagon Dock.
11:18 This is from Naman Deora, who's writing in from Kolkata. The question here is, Rajat, this is a short term strategy from 30 to 45 days perspective.
11:27 We've seen these two counters run up quite a bit. Would you suggest buying at the current levels from a 30 to 45 days perspective?
11:37 Well, here, Shruti, what I would like to say here is that there are lots of stocks of this kind that has actually moved up in a parabolic fashion.
11:49 If you are planning to take a short term trade, I would say a major event is awaited on June 4, the election results.
11:59 After that, whatever be the outcome, the current dispensation remaining and forming the government, or there is some other possibilities.
12:12 If the best possibility that the market wants, the current dispensation remains, then you will see some kind of an upside.
12:19 But there will be profit taking. And if there is a disappointment, then there would be a major correction.
12:26 So right now, a stock that has these stocks, both Masgow Dock and Cochin Refinery, the way they have moved up, I would say reframe from getting into any kind of a position here.
12:39 Wait for the election results and then take your decision accordingly.
12:44 All right. So a bit of volatility can be there, especially in these counters. However, look at the run up they've had.
12:51 720% up a Cochin shipyard in the last one year. What a phenomenal rally these counters have seen.
12:58 But we're going to take a short break right now. Aastha and Raja, do stick with us.
13:04 And viewers, we'll take more questions on the other side. Stay tuned.
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16:17 Welcome back. You're tuned into Ask Prophet. Let's dive into the queries again.
16:21 This one's on HBL power and Cummins. There's another counter that they have mentioned Cochin shipyard.
16:27 But we've spoken about that. Rajesh, who's writing in from Bangalore, asked, I'm going to come to you on these two counters.
16:34 So, Cummins India, do you have coverage on this and what's the long term view?
16:39 So, talking about Cummins India, yes, we do cover Cummins India, not HBL power.
16:44 So, long term view on the Cummins India is still positive, recommending a hold on this counter.
16:49 Because what we are seeing that all the engineering sector based company are performing very strongly.
16:55 Their results are coming exceptionally well because we have seen them performing strongly on the bottom line front,
17:01 as well as revenues are also increasing. Their order books are continuously increasing.
17:05 And so is the case with this company. So, we are positive on this counter.
17:09 Cummins India recommending a hold. Price target ultimate can be more than 4000.
17:14 But initial price target can be attributed to this counter to around 3950.
17:19 Right. The next counter is DMart. And this one's from Sameer, who's writing in from Kolkata.
17:28 They say they bought the counter at a price of 4000 rupees, trading close to 4700 rupees.
17:36 Sameer, what's the stop loss and target on this counter? It's under pressure today, down about 1% right now.
17:45 Is it for me, Sreeti? Yes, Rajat.
17:51 OK, I'm so sorry I interpellated you wrongly earlier. It's all right.
17:59 OK, what I would say is that here one can enter. Actually, it is looking quite good.
18:08 It would acquire more bullish traction once it crosses, say, 4875.
18:14 After that, you can expect 5200 to about 5400. And here you need to put a stop loss below, say, 4550.
18:24 Because this stock gyrates quite, you know, pretty volatile manner.
18:30 So you have to have a kind of a 5% stop loss if you are entering into this.
18:35 But possibility of it's going up is pretty high. All right.
18:41 The next counter we're talking about is Vodafone Idea.
18:44 It's buzzing in trade today, was up about 10%.
18:48 This is from a longer term perspective. This one's from Channa Krishna Reddy.
18:52 There's a UBS upgrade on this one, Aastha.
18:56 They've given a target price of 18 rupees, which is the highest till now.
19:00 But from a longer term perspective, what's your view?
19:03 Longer term, we are positive on this counter because when FPO came, I think two months back, it was at around 11 rupees.
19:10 From there, we have seen a strong jump.
19:13 So we are positive on this counter from the longer term perspective.
19:16 There are two, three main factors behind it. First of all, a strong subscriber base is what is making this counter attractive.
19:25 Secondly, the way they are expanding on the 5G rollout as well as on the 4G things.
19:32 I think that will really help the company in showing strong financial performance going ahead and increasing their subscriber base more.
19:40 So overall, long term is looking positive for this counter.
19:43 But in the short term, we may see some sort of hiccups, maybe some sort of news based price movement can be seen.
19:50 But in the long term, we are recommending hold on this counter.
19:53 Our initial price target is 16.5 at the current juncture.
19:58 Not 18, but still 16.5 to 17, we are positive on this card.
20:02 All right. The next counter is Polytex. This one's from Ushata from Mumbai.
20:07 I was just looking at the charts, Rajat, here. The stock has given returns of 183 percent in the last one year, but it's a 9 rupee stock.
20:16 What's the short term view? Should you buy it from a shorter term perspective?
20:23 When you are buying a penny stock, if you are planning for short term, then actually you could be short changed.
20:33 But the chart pattern from a weekly chart point of view is very positive.
20:38 So I would suggest instead of looking at short term, one should be looking at medium term.
20:43 In that case, the minimum target is about 12 and it could even go up to, say, 1420 kind of levels.
20:51 So put a stop loss below 7.5 and you can get into this stock right now.
21:00 All right. Fair point. The next question is on Balkrishna Industries.
21:04 This one's from Astha. No, this one's from Kalpana from Mumbai.
21:09 They're talking about Balkrishna Industries. They bought shares at a price of 700 rupees.
21:16 Wow. Astha, for somebody who's bought in shares at 700, the price is over 3000 rupees.
21:23 We saw the results of Balkrishna Industries as well. Would you suggest taking some money off the table at this point?
21:30 Maybe a partial profit booking can be recommended, but not the full quantity should be booked at the present moment of the time.
21:37 Strong results and the markets have given thumbs up to those results, which is reflected from the stock price momentum also.
21:46 Seen strong uprise. So I think since the prices have risen so much and now the valuations are a little bit going ahead of industry P/E or industry average.
21:58 Therefore, we are recommending a small profit booking, but not the whole quantity, maybe partial or one fourth of the quantity.
22:06 So a profit can be booked, but remaining one should remain invested on this counter because we are recommending a hold on this counter also.
22:14 Maybe price target can be set at the initial level of around 3200 to 3250.
22:19 Rajat, this one's for you. There are two counters. This one's from Sriram, who's writing in from Bangalore.
22:26 They're talking about Paytm. That's the first counter from a short to medium term perspective.
22:31 Do you have any targets? We've already seen the fourth quarter results on this one. The next one is Centum Electronics.
22:37 It's under a bit of pressure today. Do you have any targets on these two counters?
22:44 First one is Paytm, right? Yes. Paytm target is on the downside.
22:51 If it were to go further down and fall below 310, then it can go much further down, something like 260, 270 kind of range it might seek.
23:05 This is one stock people who have bought at very high levels are hoping that there would be a recovery.
23:12 At least technically speaking, there are no signs of a recovery.
23:15 So I would not suggest getting into this a fresh if somebody is holding it, if it were to fall below that level, which I just mentioned, one should get out of it.
23:26 Or if I were in their position, I would have got out right away. That's for Paytm.
23:32 And regarding Centrum, what I would say is this, that you said Centrum Electronics.
23:40 Centrum Electronics is testing its 200-day exponential moving average.
23:53 Very close to that, the moving average is now around 1560.
23:58 If it were to fall below that and sustain there, then it can go further down and initial target would be roughly about 1400.
24:07 So if any, and the moving averages are suggesting that there could be further fall here after this muted correction that is happening.
24:17 So one can get out of it. This is not the time to enter.
24:21 If you have to enter, enter around say 1540 kind of levels.
24:28 All right. Now we're out of time on this edition of Ask Prophet.
24:32 Thank you so much, Aastha and Rajat for joining in on the show today and for answering questions for us.
24:37 And viewers, if you were not able to take your questions today, we'll take them on Monday.
24:42 But don't go anywhere. We have lots more lined up for you on MTV Prophet.
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28:31 Welcome. This is NDTV Prophet. We are taking stock of how markets are faring at the moment.
28:36 And we are looking at another good day of trade for a whole lot of counters out there.
28:44 Now, while the Nifty remains flat and we are looking at the Nifty conquering the mark of 23,000 on an intraday basis.
28:52 Its sustenance above or around that mark is of course going to be important.
28:57 But what is more important is the strength that remains. Now, as we move into the last, you know, couple of hours,
29:04 last three hours, three and a half hours of trade, what will also be crucial is for the Nifty to perhaps consolidate around these levels.
29:12 That would in fact give a lot of bulls more confidence in order to place bets towards the long side.
29:19 The Nifty at the moment is just shy of the 23,000 mark. Sure, it did move above that briefly.
29:25 And as far as the Nifty, Bank Nifty is concerned, that's where we are looking at a substantial up move as far as the Bank Nifty goes.
29:33 And, you know, as far as that particular index is concerned, we are now looking at that moving towards the mark of 49,000.
29:40 What's really going to be crucial, what everyone is keeping an eye on in fact is actually the Bank Nifty moving above the mark of 50,000
29:48 and that perhaps should be crucial. But let's talk about a handful of counters which are actually moving.
29:55 Firstly, let's start off with the contributors for the Nifty. And, you know, in terms of that, as far as your pull in push is concerned,
30:03 we do have a little bit of weakness as far as ICICI Bank is concerned, but that's been cancelled out by gains in HDFC Bank.
30:10 Again, L&T and Bharti Airtel up and about. But what's really keeping the indices in check is also TCS, Arial and ITC as well.
30:20 So a mixed sort of a day as far as the benchmark is concerned. But what does continue to move upwards is Adani Enterprises.
30:28 Now, Adani Enterprises is now at around 3400 and 23 rupees per share.
30:36 And that, of course, is a positive for all those who are invested in Adani Enterprises.
30:42 But I'm going to stop right there and bring in my colleague Anushi to tell us about the latest as to what's going here.
30:49 Anushi, well, some levels conquered, a lot of milestones coming through for Adani Enterprises since that sharp turn that we saw last year.
30:59 Tell us more. Right. So Adani Enterprises is now at its 52-week high. The stock is gaining today.
31:07 And again, one interesting fact over here, it has beat the Hindenburg hit job that had happened last year in January 24.
31:14 So from that level, it has recouped all its losses and that were over about $30 billion post the whole saga which had happened.
31:23 The stock, if you take or compare it with its 52-week low, also the stock is up about 60% from that level.
31:30 Now, just the percentage change that we are looking at, again, the stock has completely recovered.
31:35 There's a 0% change over here, while it is still about 17.8% away from its life high as we are looking at going forward.
31:43 Now, this was on the stock performance. But let's also look at how the company has fared over the fiscal year.
31:48 So if you compare it with FY24, the revenue growth, though the revenue has seen about a degrowth of 24%,
31:55 the PAT has seen about a 31% of a growth, while the EBITDA margins have moved upwards from 7.7% to 13.4% level.
32:03 So almost the double of what it had clocked in last year. Again, on possible triggers for what the stock has been doing today,
32:11 in today's trade as well as yesterday, it was up. So one is the Canta report which came,
32:16 which was its latest trigger in which they have maintained an overweight target for Adani Enterprises,
32:20 giving it a price target of about Rs. 4,338, which is a 40% upside compared to the previous close.
32:27 Now, do note that the target they have given is also higher than the life high of Rs. 4,190 for the stock.
32:35 So they have a couple of reasons on which why they are bullish on the stock.
32:38 One is they believe that the valuations do not fully reflect the company's current portfolio.
32:44 Also, the second is the strong industry growth that we are looking at.
32:48 So the Indian economic growth remains as a standout factor for the company.
32:52 Another is the business growth, the de-merger to result in shares accurately reflecting the sum of the PAT's valuation going forward.
32:59 However, the key risk also we need to keep a watch out on the government reliance on the macro related uncertainty and some other factors as well.
33:06 But again, there is a second trigger as well, which I would like to highlight,
33:10 that is its possibility to be included in the Sensex semi-annual review, which is going to take place today.
33:16 So now with the addition of Adani Enterprises over here, the expected inflows is about $118 million.
33:23 But if Adani is to be included, on the other hand, Wipro, there are reports suggesting by IIFL Alternative Research that Wipro might be excluded,
33:33 seeing an outflow of about $56 million. So again, that remains on a watch out.
33:38 So these are the key reasons why we are seeing the stock up in trade today and how the stock has recouped all its losses since the whole Hindenburg report that came out last year.
33:48 There you have it, that's an update on Adani Enterprises, continues to be one of the top movers in today's year of trade.
33:57 Of course, we have already put out that disclaimer as well when it comes to the Adani Group.
34:01 We will continue to give you updates with respect to Adani Enterprises in general.
34:05 But let's shift focus to earnings now and we have Team Lees, which is in the spotlight at the moment.
34:11 We have Ramani Dutty, CFO of Team Lees, who is joining us on the show. Ramani, good afternoon.
34:17 Thank you so much for joining in. It's been a fairly steady quarter if I consider the year-on-year growth in terms of your top line, in terms of your bottom line.
34:27 And this is perhaps despite a lot of challenges with the churn that we've seen over the course of the year, specifically with a handful of your larger sectors.
34:37 I just want you to give us your assessment of the quarter gone by as well as what we can expect as we move into the new financial year.
34:46 Sure. So firstly, it's been a mixed bag for us because while the general staffing business is doing extremely well in terms of new headcount edition, new logo edition,
34:56 and across all non-IT sectors, be it FMCG, GD, FMCD, pharma, e-commerce, telecom.
35:04 So we are seeing very good traction. So what is kind of offsetting the profit expansion for us is on the specialized staffing,
35:11 because for us it's mainly the IT services vertical that gives the maximum margin across all the entities, all the verticals that we have,
35:19 and that has been sluggish for the last five, six quarters. That has impacted the margins and expansion of margins at overall group level.
35:28 Going forward, FY25 as well, we believe that general staffing business will continue to grow on volume 20% with margin expansion happening on a quarter-on-quarter basis.
35:41 However, specialized staffing at this stage, the recovery seems to be still kind of delayed while we have initially expected that maybe by end of Q1,
35:52 that we can see some green shoots. Looks like as of now within IT services, we are not seeing any major pickup.
35:59 However, the good news is we are able to maintain the run rate in IT staffing with a lot of demand coming in from GCCs,
36:06 both from the new GCC acquisitions that we are doing as well as organic growth within the existing GCC clients that we have.
36:15 Right. And on an overall basis, yeah, sorry. No, no, please go on. Please complete your point. Yeah.
36:21 I'm saying on an overall basis for FY25 at group level, we are expecting the top line growth to be anywhere between 20 to 23% with a decent profit expansion
36:34 and margin expansion can be reflected only after Q1 because Q1, we have impact of employee annual salary appraisal and seasonality coming from our HR services.
36:45 So I understand. My question then is in what sectors are you seeing increased traction?
36:51 Also, if you could give us an idea about demand from IT, what kind of trends are you witnessing here going forward as well as,
37:02 you know, perhaps an idea on pay scales and salaries going in? How are things expected to shape up out here?
37:11 Sure. Let me start with the general staffing verticals first. So there we are seeing demand coming across all segments.
37:18 So we are not seeing any concentration with one or two specific segments.
37:23 So across consumer verticals, retail, telecom, e-commerce, BFSI, across all verticals, we are seeing very good momentum in the hiring demand.
37:33 And also in the past, almost 70 to 80% of the demand used to come only from metros and tier 1 cities.
37:41 But now we are seeing an increased demand coming from smaller cities and towns as well, especially at entry level jobs, at junior profiles.
37:50 In the organized space, we are seeing a lot of new demand coming up.
37:54 And BFSI, while for the last couple of quarters was a little slow because of the RBI restrictions on unsecured loans,
38:02 it went a little slow, but by end of Q1, looks like we can have full pickup and recovery in BFSI as well.
38:11 Coming to your point on IT, within IT, as I mentioned earlier, GCCs are giving us very good volume
38:19 and they continue to grow for the rest of the year, FY25 as well.
38:23 However, within IT services at this stage, we are not seeing any momentum barring the backfilling for the action.
38:31 We are not seeing any net growth in the headcount within IT services segment.
38:36 In terms of skill set, the traditional skill sets mainly into coding and engineering still take like 50 to 60% share.
38:45 However, there is a higher demand for niche skill set, be it in AI, ML, those kinds of new age technologies.
38:51 We are seeing a higher demand and also a higher pay scale in those profiles.
38:57 Overall, in terms of salary inflation, post-COVID, within IT pay scale, we have consistently seen upwards of 15 to 20% increase in salaries for two years in a row.
39:09 But looks like now that got corrected to a single low-digit number, again, within IT services as well as GCC.
39:17 So, we are not seeing any unusually high salary inflation trends as far as IT professionals are concerned.
39:25 Alright. And in terms of the upcoming year, are you anticipating any sectors which could actually lead hiring and lead growth for the company as well?
39:37 What is your expectation coming in?
39:41 Sure. For the upcoming year, we are still waiting on BFSI and consumer.
39:47 These two would be the topmost sectors for us in terms of headcount addition.
39:51 However, we are also focusing on building the manufacturing vertical.
39:56 So far, we have an exposure between manufacturing and industrial all put together.
40:00 We have so far about 10% exposure, but we believe this can be increased substantially in the next couple of years.
40:07 And we are targeting a lot of new companies which are in the space of smartphone manufacturers, chip manufacturers, electronics, EVs.
40:18 These kind of new-age companies also we are targeting, and there the demand for entry-level jobs and contract employees is very high.
40:26 Alright. A final question then is actually to do with your margins coming in.
40:33 I want to understand better the profitability because what I am seeing is that EBITDA margins stand at around, well, if I am not mistaken, 1.2% for general staffing and 1.6% on a year-on-year basis.
40:48 And I am talking about the annual numbers.
40:49 When it comes to specialized staffing as well, we have seen a little bit of a contraction in margins.
40:53 It is the other HR services which have actually seen an improvement on a year-on-year basis.
40:59 Is there a scope for further improvement in your overall group margins going in?
41:05 If that is the case, where would that impetus come from?
41:09 Yeah. No, definitely. From Q2 onwards, we have a clear path and plan to margin expansion.
41:17 Because the main impact that we had in our staffing business as far as EBITDA margins is concerned is coming from the withdrawal of an apprenticeship program called NIEM.
41:26 We had close to 40,000 trainees under that program and we have to release all of them over a period of 5 to 6 quarters, with the last quarter happening to be the current one, Q1 FY25.
41:37 So, with that last leg, we will be completely out of the NIEM loss which is impacting the staffing margins.
41:45 And within specialized staffing, we used to maintain an EBITDA margin of upwards of 8%.
41:51 But because of the overall drop in headcount, it is now hovering around a little short of 7%.
41:57 But once we see the volume getting picked up by mid of this year, we are confident of taking the margins back to 8%.
42:05 HR services, yes, we are growing the margins year on year at a rate of 30% kind of growth rate and this kind of trend can be continued into future as well.
42:18 Alright, Ramani, we will leave it at that. Thank you so much for joining us and while taking us through those many details with respect to team leads.
42:26 Well, of course, that's the management talking to us about what FY25 can potentially look like for the company.
42:33 But from there on, we talk about the telecom sector. Just very quickly want to address what's happening with Vodafone Idea.
42:40 It's one of the top movers in today's day of trade and we do have an upgrade from UBS.
42:46 So, what's really happened is that UBS upgraded Vodafone Idea to a buy with placing a price target of about Rs.18 per share.
42:58 And that does entail a little bit of an up move even from current market levels as you can see.
43:03 It's already moved up by a rupee. It's up around nearly 8% in today's day of trade.
43:07 What UBS is suggesting is that there is a focus on relief on government dues.
43:13 This in fact is one of the biggest concerns on the street when it comes to Vodafone Idea.
43:19 Moreover, market is pricing in about 15% to 20% increase in terms of prices over the next 12 to 24 months.
43:28 Now, this is another anticipation for the entire sector. The potential improvement in the pricing environment right now.
43:35 It's something that Vodafone's peer has also spoken about, Sunil Bharti Mirtal specifically in this case.
43:43 But it remains to be seen as to when those tariff hikes do come into the picture.
43:49 Of course, UBS also says a relief through AGR reduction by Supreme Court or equity conversion by government is very likely.
43:57 And along with that, there's a possibility of 50% to 75% of AGR dues which may be cancelled.
44:03 But with the focus on the word probability, a possibility. We don't know if that is in fact going to come through.
44:11 But that is what UBS is banking on. And the company is looking at AGR dues of about $5 billion annually from FY26.
44:20 That's something that is also being priced in as far as the share price is concerned for Vodafone Idea.
44:26 So, a handful of these aspects which are potentially playing out as far as sentiment for Vodafone Idea is concerned.
44:32 So, we'll continue to keep an eye on some of these aspects going in.
44:37 And with that, it's time to slip into a short break. And on the other side, we get you the management as well.
44:45 Fortis Healthcare, where we will be talking to the company about the upcoming financial year and what the future holds in store.
44:53 Stay tuned in.
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47:10 Hello and welcome to Earnings Edge. I am your host, Varsha Chandranani.
47:19 And Fortis Healthcare is in focus today. We are going to discuss its Q4 FY24 results and a pretty good set of numbers, especially on the margin side.
47:29 So, to discuss more about these numbers, I am here joined by Mr. Ashutosh Raghuvanshi, who is MD and CEO of the company.
47:38 Welcome to the show, Mr. Raghuvanshi.
47:41 Thank you so much for having me.
47:43 So, good set of numbers. Revenue was up almost 9%. EBITDA, if you see margins, margins were 21% versus 16% last year.
47:53 So, what stood out for us in this quarter, considering your Q2 and Q4 are the best quarters?
48:00 Yes. So, this is as in line with our expectations. We had expected that the fourth quarter we would achieve good revenue and profitability in the hospital segment.
48:17 And this segment, this quarter's results are primarily influenced by the good performance in the hospital side, where the EBITDA margin is about 22.4%.
48:31 There were some one-offs, but still it is more than 21%. So, the profitability was led by the hospital segment.
48:39 The diagnostic segment was, we did not see that much growth. It's true that there is some seasonality in the healthcare sector.
48:50 Typically, the second, fourth quarters are the good quarters, but we expect that this level of profitability and this kind of growth will be sustained in the coming year as well.
49:04 What early trends of occupancy we are seeing in the month of April and May indicate so.
49:11 So, also Mr. Ashutosh, if you see here, now talking about the margins, we saw the margins of 21%. Now, was this because of divestment of Malar that we have done? If yes, how much did it contribute to margin?
49:28 Yeah, so those two units were definitely pulling down our margins a little bit. The change which it has led to is about 0.8%, which is definitely significant.
49:43 But essentially, this has been led by a better growth in the RPOP. You would notice that the RPOPs have grown quite significantly.