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22
VOLUME 22 ISSUE 1 JANUARY 2023
YEARS
Rs. 50
MAGAZINE
Seasonal www.seasonalmagazine.com
Managing Editor Jason D Pavorattikaran Editor John Antony Director (Finance) Ceena Associate Editor Carl Jaison Senior Editorial Coordinator Jacob Deva Senior Correspondent Bina Menon Creative Visualizer Bijohns Varghese Photographer Anish Aloysious Office Assistant Alby CG Correspondents Bombay: Rashmi Prakash Delhi: Anurag Dixit Director (Technical) John Antony Publisher Jason D Pavorattikaran
WHILE MARKETS SOAR, A PIECE OF MUNGER’S WISDOM THAT HAS BEATEN THE MARKET FOR 45 YEARS! Finally it happened. Jerome Powell backed off from destroying the American economy and the world economy further by not only pausing from an interest hike yet again, but by hinting that 2024 might witness up to three rate cuts. It was the perfect excuse that the Indian markets needed to move even further up. Our nation already had structural strengths due to the ongoing economic reforms and infra push, plus the booming mutual fund inflows, and this move by the US Fed is surely a long-term positive.
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But this too has become a chorus now, and everytime such a chorus is emerging, beware, a correction might just be around the corner. A 10-15% correction is a healthy norm in a bull market, but it can catch most traders and investors on the wrong foot, as this time around it may involve Nifty diving down by over 3000 points and Sensex by over 10k. In Warren Buffet’s words, yes, it is a time to be fearful. As the Oracle of Omaha said in near perfect words - “To be fearful when others are greedy and to be greedy only when others are fearful.” But such a dip too is sure to be bought in rapidly, giving you a fruitful opportunity to be greedy.
It is said that many of the quotes and wisdom that people attribute to Warren Buffett were actually from his long-term business partner Munger. One such quote where Munger likely had a great role was this - “Our favorite holding period is forever.” Such was his conviction about a unique advantage that only comes from the long-term holding of stocks - the power of compounding.
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Did someone mention long-term just now? Yes, and it was intentional, as there is now a chorus that the market will only go up and up. A little more conscientious souls are saying that only the large-caps may move up now, and not the mid or small caps, which are way too heated up already.
So, this kind of rapid buys against sharp falls is what the long-term qualifier is all about. And not that the markets will go only up and up. Of course, long-term has much more positive implications in the capital markets. Charlie Munger who passed away on November 28 was one of the best practitioners of it.
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All health related articles are for first information purposes only. Always consult your doctor before taking any decison affecting your health.
EDITORIAL
Compounding is no rocket science. At its heart, it is only middle school arithmetic. But 99% of investors in stocks and mutual funds do not get to reap its benefits. In fact, Munger excelled in it precisely because it was only basic math. Despite his towering intellectual capabilities - lawyer, architect, analyst, investment strategist, business head & thinker - he was careful to choose only simple generalized knowledge from the various domains. Munger had a well-known disdain for specialists and their too specialized knowledge. His argument was that specialists tend to focus too much on their specialized knowledge, while ignoring what a multidisciplinary approach could have easily solved, by bringing together basic knowledge from all connected domains. Anyway, compounding was one such basic skill that Buffett and Munger excelled
For this stock to double your wealth, it has to go to Rs. 100 or go up by 100%. Suppose it does that within a year or two. So now you have doubled your wealth to Rs. 20 lakhs. Now, to triple your wealth you know the stock has to triple in value, that is, become Rs. 150 per share. But do you know how much it has to grow now in percentage terms to reach Rs. 150 from Rs. 100? It has to grow only 50%, and it will triple your investment to Rs. 30 lakhs!
in, that it won’t be an exaggeration to state that this strategy had more than a 50% role in their astounding success at Berkshire Hathaway which they together grew into the world’s largest holding company worth nearly $800 billion. Munger’s appreciation for the power of compounding is evident from one of his best known quotes - “The big money is not in the buying and the selling, but in the waiting.” Indeed, what he achieved for Berkshire Hathaway by way of compounding can never be overstated. In fact, Munger’s strategies including his reliance on long-term compounding was central to Berkshire Hathaway shifting away from Buffett’s philosophy of investing in fair companies at wonderful prices (which he learned at Columbia University from his professor Benjamin Graham, the Father of Value Investing). Instead, Munger - who never attended any b-school unlike Buffett - convinced Buffett that what they should be doing is investing in wonderful companies at fair prices. Since this involved buying at higher prices than in value investing, it invariably required the power of compounding to work, and it proved to be so, as most of these companies proved to be really wonderful in the long-term! Buffett himself has gone to great lengths to credit Munger for this complete strategy shift and for creating a new blueprint for Berkshire, often saying that “it was Charlie who straightened me out” and that “listening to Charlie has paid off.” Between 1978 and 2023, that is, for 45 long years, Berkshire Hathaway grew investors’ wealth at a compounded annual growth rate (CAGR) of 20%. Most people don’t readily realize what this achieved for their public shareholders - it multiplied their wealth by 3700 times within these 45 years! It is a feat never done before and never likely to be done again in the future. This is especially so as despite this intervening period being witness to America’s largest ever economic growth, that sent its benchmark S&P 500 index over the roof at 163 times wealth creation, Berkshire Hathaway’s performance beat even this superlative returns by nearly 23 times! So, what exactly is this power of compounding in layman terms? It would be best to describe it with an example. Suppose you have Rs.10 lakhs to invest in 2023. And you invest all that in a stock priced at Rs.50, after a careful study. So you get 20,000 shares.
If it is an excellent stock in an excellent market, it will achieve that within the next year. So now you have tripled your wealth. You know that if it adds another Rs. 50 to its value, it will quadruple your wealth to Rs. 40 lakhs, that is increase it fourfold. But do you know how much that growth is in percentage terms - from Rs. 150 to Rs. 200? It is merely 33.33%! And similarly for your investment to grow fivefold - from Rs. 200 to Rs. 250 and from Rs. 40 lakhs to Rs. 50 lakhs - all it takes is a 25% up move, which can sometimes happen within a week! Now suppose you were really fortunate that your chosen stock was one of the best growth stocks in the market, maybe within the top 1% of the best small caps, that becomes a 100X multibagger by 10 years, that is, by 2033. So now your Rs. 50 stock is trading at around Rs. 5000, and your Rs. 10 lakh investment is now worth Rs. 10 crore. What happens now is the real magic. Do you realize how much your stock has to move up now for it to add one more times in return, that is to add one more 10 lakhs (your original investment), or in other words to move from 100X to 101X? If you are quick at arithmetic, yes, you guessed it right, it should just rise by 1%. Imagine, a stock moving up by merely 1%, and you adding one more times of your original investment to your wealth! This is what the magic of compounding is all about. Do you think this is a far fetched idea? Absolutely not. Even in the Indian market, there are dozens of stocks that have done this within the last 10 to 20 years, and now with the kind of better quality companies and startups hitting the IPO street, there will be hundreds of companies achieving such feats in the 2023-33 period. This is why Buffett and Munger always held seemingly boring stocks like Coca Cola and American Express in Berkshire’s longterm portfolio without ever divesting them. These stocks continue to be incredible wealth compounding machines for early investors like them, who have also used their high dividends to reinvest! And this magic of compounding is what drove this remarkable duo to state counterintuitive stuff like, “Our favorite holding period is forever” and that “The big money is not in the buying and the selling, but in the waiting.” It is a wisdom that runs diametrically opposite to the current trend of dangerous practices like only microseconds long algorithmic overtrading, futures & options and heavily leveraged bets. John Antony
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CONTENTS
VIBRANT GUJARAT 2024 ALL SET TO BE INDIA’S BEST EVER GLOBAL SUMMIT YET
PRESTIGE STARTS NEW FISCAL IMPRESSIVELY, FIRST QUARTER SALES & COLLECTIONS SOAR
HOW SAFE ARE OUR UNIVERSITIES COLLEGES AND SCHOOLS FOR OUR CHILDREN? Since 2017, self-harm by students has been on the rise, and by 2021 itself, India has been losing around 13,000 students per year to suicide, which translates to over 35 student suicides a day. And in the last two
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WHEN WILL MARKETS REALISE LIC OF INDIA’S TRUE POTENTIAL? Life Insurance Corporation of India’s stock might not have performed as per investors’ expectations after its IPO. But the underlying organisation is fighting fit as it has never been, with its renewed focus on growing its nonparticipating products, tech-led customer acquisition and premium collection, growth in its
Prestige Group has achieved a robust overall performance in the just concluded Q1. The leading Bengaluru headquartered developer has registered sales of Rs. 39,147 million, which is up by 30% yoy. Prestige achieved this by selling 2276 units in Q1 FY24, which spanned over 3.83 million sq ft. This is a remarkable achievement as it translates to 25 premium
The 2024 Edition of Vibrant Gujarat Global Summit (VGGS) is happening at a most promising juncture for the state of Gujarat as well as for the whole of India. As many as 28 countries and 14 international and national organisations have so far confirmed that they will be partners in VGGS 2024, which will be conducted under the theme ‘Gateway to the Future’, between January 10 to 12, and inaugurated by Prime Minister Narendra Modi.
KIDS DESERVE TO TAKE UP SPACE TOO Last summer, my husband and I drove with our 4-year-old and 2year-old to his hometown on the east coast of Canada. We were there to bury his parents, a memorial that had been a long time in the making because of the
BREAKFAST IS IMPORTANT, BUT YOU AREN’T HUNGRY! Never hungry in the morning? Here’s what your lack of appetite is telling you.
MAZAGON DOCK SHIPBUILDERS
THE PSU MULTIBAGGER
PSU Multibagger might sound like an oxymoron, as despite their best intentions, many listed PSU companies have traditionally struggled to emerge as multibaggers for their investors, as they try to do the delicate act of balancing their nation building
KEEPING PROMISES, WHATEVER IT TAKES Siddaramaiah had surprised almost everyone by achieving a surprise win in the assembly polls. Now, this second-time Chief Minister is surprising even his detractors by being equally deft at executing his social handholding promises and the economic development of the state.
HOW JGU STAYS AHEAD OF THE CURVE Imagine a higher education institution in India that brings together faculty from over 50 countries. No, not visiting or parttime faculty, but full-time faculty. A campus where students themselves come from 70+ countries. This
WHEN RATAN TATA HANDHOLDS How Ratan Tata helped this 21-year-old man build a Rs 500 crore company. The Mumbai-based startup has the backing of legendary industrialist Ratan Tata who was impressed by the company’s innovative model.
BALANCING INDUSTRIAL & SOCIAL GROWTH PERFECTLY IN HIS THIRD YEAR AS CM Under Chief Minister MK Stalin’s visionary leadership that entered its third year recently, Tamil Nadu is forging ahead in sectors where it is aszy a leader, including renewable energy, electric vehicles, electronics manufacturing and automobiles, even while it is excelling in
A STATE AND ITS LEADER WITH UNIQUE PRIORITIES Kerala has never been among India’s most industrialised states, and it may never emerge in such lists too, but that is because Kerala’s priorities have always been
JSSAHER IS A MATURE UNIVERSITY IN RESEARCH, ACADEMICS & RANKINGS There was a time when India couldn’t originate much worldclass medical research. Such times are slowly but surely changing, and at the forefront of ushering in this change in Indian capabilities is Mysuru headquartered leading deemed university, JSS Academy of Higher Education & Research. Under the guidance of its Chancellor Jagadguru Sri
AROUND THE WORLD ON ROAD AND RAIL Meet the man who visited every country in the world without boarding a plane. At 34, Torbjørn Pedersen embarked on a seemingly impossible journey that would take 10 years – and involve cerebral malaria and being held up at gunpoint. He reflects on the highs, the lows and the joy of getting married en route
WHY CHATGPT FAILED TO REPLACE HUMANS ChatGPT hasn’t ignited the employment apocalypse that so many predicted, proving once again that jobs are for humans.
HOW TO AVOID 5 BIG MISTAKES WHEN APPLYING FOR A JOB Keep firing out CVs and getting zilch back? You might be making one of these five common job application mistakes.
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VIBRANT GUJARAT 2024 INDIA’S BEST EVER
ALL SET TO BE GLOBAL SUMMIT YET The 2024 Edition of Vibrant Gujarat Global Summit (VGGS) is happening at a most promising juncture for the state of Gujarat as well as for the whole of India. As many as 28 countries and 14 international and national organisations have so far confirmed that they will be partners in VGGS 2024, which will be conducted under the theme ‘Gateway to the Future’, between January 10 to 12, and inaugurated by Prime Minister Narendra Modi.
hile the state assembly elections are still four years away, Gujarat will be a key state to watch for in the 2024 elections to the Indian Parliament. As the home state of India’s Prime Minister Narendra Modi, and as a state long ruled by BJP which also rules the Centre, Gujarat enjoys an enviable momentum as an investment destination. In fact, Prime Minister Narendra Modi had started the Vibrant Gujarat Global Summit series in 2003 during his tenure as Chief Minister of Gujarat with an aim to make the state an industrial leader of India, with a notable presence on the global business map. And thanks to this biennial summit, Gujarat had indeed become a preferred investment destination for domestic and foreign investors over the years. The state is already India’s third largest by Gross State Domestic Product (GSDP), only behind Maharashtra and Tamil Nadu. Prime Minister Narendra Modi is widely expected to retain power, and the 26 parliament seats from Gujarat are once again destined to be among the most sure seats for BJP. The momentum is so strong that Chief Minister Bhupendra Patel and Gujarat State BJP Chief CR Patil are known to be gunning for achieving 5 lakh victory margin in each of these 26 constituencies. A best ever performance by Vibrant Gujarat Global Summit’s 2024 Edition will go
a long way in achieving this target for the state. The Prime Minister of Czech Republic, Petr Fiala, is expected to be the Chief Guest and Guest of Honour at the high profile VGGS 2024. Besides the Czech PM Fiala, UAE President Mohamed bin Zayed Al Nahyan, Mozambique President Filipe Nyusi, and Timor-Leste’s President José Ramos-Horta, will be the Heads of State attending the two day event which will be inaugurated by Prime Minister Narendra Modi in Gandhinagar. As many as 28 countries and 14 international and national organisations have so far confirmed that they will be partners in VGGS 2024, which will be conducted under the theme ‘Gateway to the Future’. Partner countries for this 10th edition of VGGS are Australia, Bangladesh, Czech Republic, Egypt, Estonia, Finland, Germany, Indonesia, Japan, Kenya, Malaysia, Malta, Morocco, Mozambique, Nepal, Netherlands, Norway, Poland, Republic of Korea, Rwanda, Singapore, Tanzania, Thailand, the UAE, United Kingdom, Uruguay, Ghana, and Vietnam. UAE has already started the process of investing $2 billion to build food parks in India which is part of the I2U2 agreement among India, UAE, Israel and the USA, and Gujarat is expected to be the first to have food such parks with investments from the Gulf nation. International partner organisations for VGGS 2024 include the American Chamber of Commerce in India (AMCHAM India) EPIC India-University of Chicago, Indo-American Chamber
Petr Fiala Prime Minister, Czech Republic
Mohamed bin Zayed Al Nahyan UAE President
of Commerce (IACC), Indo-African Chamber of Commerce and Industry, International Solar Alliance, Japan External Trade Organization (JETRO), and Korea Trade and Investment Agency, among others. VGGS 2024 is already in unprecedented momentum with 58 MoUs for over Rs 7 lakh crore investments signed in a single day recently at an event in Gandhinagar. With this, the Gujarat Government has already signed a total of 234 MoUs, proposing cumulative investments of more than Rs 10.31 lakh crore, even before the event is set to be inaugurated on January 10! These 234 MoUs carry a potential to create employment opportunities for nearly 13 lakh people. Among the recently signed 58 MoUs in one single day are heavyweight Central PSUs including National Thermal Power Corporation (NTPC), Power Finance Corporation (PFC), Power Grid Corporation of India Ltd (PGCIL), Oil & Natural Gas Corporation (ONGC), Hindustan Petroleum Corporation Ltd (HPCL), and Indian Oil Corporation Ltd (IOCL), with a potential to create 3.70 lakh jobs. State PSUs like Gujarat Industries Power Company and Gujarat State Electricity Corporation have also come forward with major investment proposals. But this doesn’t mean the run up to the investment meet is dominated by the public sector alone. In fact, an array
of leading private sector companies have signed MoUs for investments in various sectors in Gujarat, including electric vehicles, automobiles, agro and food processing, biotechnology, cement, chemicals and petrochemicals, ports, education, engineering, healthcare, pharmaceuticals, industrial parks, IT-ITES, logistics, oil & gas, packaging, plastics, power, renewable energy, green hydrogen, semiconductors etc. For instance, Torrent Power has pledges Rs 47,000 crore investment across four projects in renewables and electricity distribution in the state.The recently signed 58 MoUs are all large sized with 17 proposals for investments of over Rs 10,000 crore, 8 proposals for investments between Rs 5,000 to Rs 10,000 crore, 12 proposals for investments between Rs 5,000 crore to Rs 2,000 crore, and 21 proposals for investments of less than Rs 2,000 crore. Among the large sized projects is NTPC Renewable Energy, which has proposed an investment of Rs 90,000 crore to create 15 GW of renewable energy. National Hydro Power Corporation has also come forward with a Rs. 4000 crore investment proposal in Gujarat. Among other proposals are an innovative and first of its kind proposal to promote submarine tourism in the state, by acquiring a submarine.
QUARTERLY PERFORMERS Q2NUMBERS & Q3 STOCK REACTIONS T
he one who asked ‘What is in a name?’ was William Shakespeare. Like all mysterious questions posed by the Immortal Bard, it has continued to enchant people who like to answer it either way! Similar would be the mysteries associated with any company’s quarterly numbers. Many would brush it aside, saying “After all, what is in a quarter? Isn’t what matters only the long-term performance?” While this thought about the long-term performance is so very true of the markets, equally true is what John Maynard Keynes, one of the founding fathers of modern economics wryly remarked - “In the long-term we are all dead!” Indeed, as dreary and boring
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as they often tend to be quarter after quarter, it is also true that quarterly numbers reveal a lot quite a lot - about the companies. One quarter is often enough to raise a permanent red flag about an operation that would have seemed invincible until then. And one quarter is often enough to hint at the seemingly impossible potential to perform superlatively in the future. This is why quarterly numbers and how the stocks respond to it are keenly followed by analysts and investors of all hues. This time around, two themes were visible in Q2 results and the ensuing stock reactions in Q3. Many companies that delivered above-average results corrected beyond any measure, as either they fell short of the even higher expectations, or because the headline numbers masked many issues in the fine print. Another recurring theme during these two quarters was how many companies apparently performed poorly in Q2, but how unbelievably their stocks
continued soaring, often accelerating in pace! This was visible in some general insurance stocks this time. This presents a uniquely tricky situation for investors, as often, missing to get into a stock during a quarter would mean that missing that stock forever, as the human psyche prevents investors, especially retail investors, from getting in at high levels into stocks they missed at very low levels. And as usual, the stock movers were primarily India’s booming mutual funds. But with the US Federal Reserve signalling a rate reversal cycle after a long time, the FIIs too are back and the Indian market is literally on fire. But this should really call for more caution as an overheated market can use any negative development to go in for a 1015% correction. Here is a look at some of the noteworthy performances in Q2 and the stock reactions in Q3.
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GRSE RECORDS BEST EVER PERFORMANCE IN Q2 UNDER THE LEADERSHIP OF ITS CHAIRMAN & MANAGING DIRECTOR CMDR. HARI PR (IN RET’D), THE DEFENCE SECTOR SHIPBUILDER IS CONTINUING THE INNOVATIVE MOMENTUM IN Q3, WITH A RECENT LANDMARK MOU SIGNED WITH INTERNATIONAL PARTNERS TO CONSTRUCT ELECTRIC TUGBOATS.
Kolkata headquartered defence sector shipbuilder Garden Reach Shipbuilders & Engineers (GRSE) has come up with robust growth numbers for the second quarter and the first half of this fiscal. Q2 was especially memorable for GRSE as it recorded its best ever quarterly performance in its history. Under the strategic leadership of its Chairman and Managing Director Commodore Hari PR, (Indian Navy, Ret’d) GRSE put up strong fundamental performance in all segments of operations during H1, the highlight of it being the launch of the 10 out of the 19 warships under construction in its dock. Net Sales of GRSE grew 31.66% to Rs 897.91 crore in the September 2023 quarter, up from Rs 682.01 crore in the September
Cmde PR Hari, IN (Retd.) Chairman & Managing Director 2022 quarter. The quarterly net profit growth was even more impressive at 37.48% in Q2 to reach Rs 80.74 crore, from Rs 58.73 crore in September 2022. As there was no dilution in GRSE’s equity during this past year, its Earnings Per Share (EPS) also increased proportionately by 37.48% to Rs 7.05 in September 2023 from Rs 5.13 in Q2 of last fiscal. The PSU shipbuilder’s EBITDA rose to Rs 120.32 crore in September 2023, up by 35.07% from the Rs 89.08 crore it was in September 2022. Q2 continued and bettered the growth momentum GRSE had set in Q1 of this financial year. Thus, this first half of the fiscal saw GRSE recording Rs 1,654 crore as revenue from operations, which was an increase of 31% over the corresponding H1 of the last fiscal. The warship builder earned a profit before tax (PBT) of Rs 209 crore in H1, while its profit after tax (PAT) was Rs 157 crore, a 45% rise over the first half of the previous fiscal. EPS for H1 stood at Rs 13.74, an increase of 45% over the same period in FY’23. Under the visionary leadership of its CMD Cmdr. Hari PR, GRSE is continuing its innovative momentum in the current
quarter of Q3. It recently signed a memorandum of understanding (MoU) with Shift Clean Energy, Seatech Solutions International, and the American Bureau of Shipping (ABS), to develop electric tugboats named E-Volt 50. The landmark agreement seeks to mitigate carbon emissions, enhance operational efficiency, and establish new benchmarks for performance and environmental sustainability within the fast emerging global electric tugboat industry and is a bold step towards India’s aspiration to become the global hub for green shipbuilding by 2030. While GRSE will construct the electric tugboats based on the design by Seatech, Shift will provide the energy storage solutions and ABS will oversee the construction and design process, thereby ensuring adherence to all applicable regulatory standards of safety, reliability, and compliance, in tune with global requirements. GRSE could land this agreement because it has already made significant strides towards the development of green vessels, most notably its ongoing construction of a zero-emission electric ferry for the West Bengal Government, capable of accommodating 150 passengers. Upon its completion and commissioning, this ferry will bring green travel along the Hooghly and other major river routes in the region.
BANK OF INDIA Q2 PROFIT RISES 52 ON SHARPLY BETTER ASSET QUALIT
2%, TY
Bank of India has registered a 52% rise in its net profit to Rs 1,458.43 crore in the second quarter of the ongoing fiscal, as compared to the corresponding year-ago period’s net profit of Rs 960 crore. The state-owned lender achieved this on the support of a sharp improvement in the asset quality and increase in margins. The asset quality of the bank improved sharply with gross nonperforming assets (GNPA) ratio falling to 5.84%, from the 8.51% it was in the corresponding period last year. Net NPA ratio also fell to 1.54% as on September 30, 2023, as against 1.92% in the year ago period, and 1.65% in the preceding June quarter. Provision Coverage Ratio (PCR) improved by 62 basis points (bps) year-onyear, with the PCR of BoI standing at 89.58% as on September 30, 2023, as against 88.96% in the year ago period. The net interest income (NII) of the bank in Q2 rose 13% year-on-year to Rs 5,740 crore, as compared to Rs 5,083 crore it was in the corresponding quarter. The Net Interest Margin of Bank of India inched up by 4 bps in the reporting quarter to 3.08% from the 3.04% in the yearago period, and the 3.03% in the quarter ago period.
BANK OF MAHARASH REMAINS AHEAD OF
HTRA PEERS IN Q2 PSU lender Bank of Maharashtra (BoM) has maintained its leadership among peer banks in both loan growth and deposit growth during the second quarter of the current financial year. It had earlier topped its peers in performance in Q1. Both the deposit and advances of the Pune-headquartered lender grew over 20%, making it the highest in percentage terms by any PSU lender in Q2. With a growth rate of 23.55%, BoM’s gross domestic advances rose to Rs. 1,83,122 crore in Q2. In deposits, Mahabank witnessed a 22.18% rise by raising Rs. 2,39,298 crore in Q2. Bank of Maharashtra also retained its top position in the lower-cost Current Account and Savings Account (CASA) deposits at 50.71%. Powered thus by its high growth in loans and deposits, the bank’s total business also recorded the highest growth in percentage terms, at 22.77%, to touch Rs. 4,22,420 crore.
CITY UNION BANK’S Q2 INTEREST INCOME GROWS BY 10%
Tamil Nadu headquartered City Union Bank (CUB) has registered a 10% growth in its Interest Income grew to Rs. 1,304 crore during the second quarter. The traditional private sector bank’s Non-Interest Income also grew by 5% to touch Rs. 182 crore. Based on both of these, City Union Bank’s Total Income during the July-September period increased to Rs 1,486 crore as against Rs 1,355 crore in the same quarter a year ago, which is a rise of 9.7%. However, City Union’s Net Interest Income (NII), which is the difference between the interest obtained and interest given, declined by Rs. 30 crore to Rs. 538 crore
on a YoY basis. This sluggishness in NII also resulted in City Union Bank registering only a marginal rise in net profit during Q2, to Rs. 281 crore from the Rs. 276 crore it was during the corresponding period of the last fiscal. On the asset quality front, the bank performed reasonably well with improved recovery and reduced slippages. The effect of the fresh slippages of Rs. 225 crore was offset by the cash recovery which stood at Rs. 299 crore. Post the results, City Union Bank’s MD & CEO N Kamakodi has guided the market that, going forward, the bank expects the recoveries to be more than the slippages. The bank’s net non-performing assets (NNPA) ratio declined to 2.34% from 2.69% on a YoY basis. Its gross nonperforming assets (GNPA) ratio was a mixed bag with it worsening to 4.66% of total advances from 4.36% on a YoY basis, but improving from 4.91% on a sequential or QoQ basis. The bank made a provision of Rs. 293 crore as against Rs. 402 crore in Q2 of last fiscal, with Provision Coverage Ratio (PCR) rising to 71% from 66%. Total business at City Union grew to Rs. 96,402 crore from Rs. 92,580 crore, with advances growing to Rs. 43,688 crore from Rs. 42,702 crore. Deposits grew to Rs. 52,714 crore, with Current Account & Savings Account (CASA) standing at Rs. 15,590 or 30% of all deposits. The bank is well capitalized for growth with a capital adequacy ratio (CAR) of 22.21%. Under the visionary leadership of MD & CEO N Kamakodi, the bank has successfully weathered the pandemic and NPA storms, and is now aiming for double digit business growth in the current fiscal itself, with deposit and credit growth to be in tandem.
BANDHAN BANK’S PROFIT SOAR ASSET QUALITY YET TO STABILIZ
RS, ZE
Bandhan Bank’s Profit Soars,”Asset Quality Yet to Stabilize””Private sector lender Bandhan Bank has registered a massive jump of 245% in its second-quarter profit for the financial year 2023-24. Profit after tax (PAT) stood at Rs 721 crore in Q2 FY24 as compared to Rs 209 crore in Q2 FY23. The microlender turned universal bank’s total income rose 11.77% to Rs. 2983 crore in the September 2023 quarter from Rs. 2669 crore in the year-ago period. Of this, its Net interest income has grown to Rs. 2443 crore in Q2 FY24 from Rs. 2193 crore in Q2 FY23. Its total deposits came in at Rs. 1.12 lakh crore, growing by 12.8% YoY, while its CASA (Current Account and Savings Account) ratio improved to 38.5% in Q2 FY24, up from 36 per cent in Q1 FY24. However, the Kolkata’s based bank’s asset quality is yet to improve significantly. While its Gross Non-Performing Assets (GNPA) remained steady at 7.3% as on September 30, 2023, against 7.2% in the year-ago period, on a
sequential or quarter-on-quarter basis, the bank saw a 57 bps uptick in the ratio. This followed a 190-bps spike in its GNPA ratio to 6.8 percent in Q1, making it one of the largest GNPA level among its peers. On a sequential basis, its Net NPA (NNPA) ratio also inched up sequentially. However, the the bank’s collection efficiency has improved to 98% in September and its postCovid portfolio looks much better with a GNPA ratio of just 2.6%. The pain point seems to be in Bandhan’s pre-Covid pool of unsecured loans falling under the Emerging Entrepreneurs Business (EEB) segment, which accounts for over 50% of its loan book. However, as per historical trends, the bank is expected to put up a better performance in terms of both slippages and recoveries in the ongoing quarter & H2, and the bank has a long term goal of growing its secured book to 50%. It now stands at 44%. Meanwhile, Bandhan Bank’s board has approved the reappointment of Chandra Shekhar Ghosh as MD & CEO for 3 years, and if approved by its shareholders and RBI, this will ensure continuity in leadership.
GWP OF NEW INDIA ASSURAN GROWS 6.20%, HEALTH AND MOTOR PORTFO REGISTERS GROWTH
NCE
OLIO
The Gross Written Premium (GWP) of India’s largest general insurance company increased by 6.20% in the second quarter to Rs 9397.2 crore from Rs 8848.41 crore of the corresponding quarter of the last fiscal year. However, the country’s only listed PSU general insurer registered a one-off loss in Q2 amounting to Rs 199.99 crore as compared to a net profit of Rs 33.45 crore in the year ago period, mainly due to CAT losses due to floods, as well as a rare confluence of multiple domestic and international factors. The net profit of the non-life insurance major was Rs 260.23 crore in the first quarter of financial year 2024. Since the Q2 loss was a one-off event, Chairman & Managing Director Neerja Kapur is confident of New India Assurance bouncing back soon, supported by its growing motor and health portfolios. Other factors that contributed to this quarter’s loss include higher expenses. The expenses of the general insurer jumped 20.84% to Rs 10652.83 crore in the reporting quarter from Rs 8815.39 crore yoy, mainly due to increase in the operating expenses, commissions & brokerage. Apart from the higher expenses and CAT loss due to the floods amounting to Rs 301 crore, the aviation portfolio also took a Rs. 50 crore hit. The foreign operations also reported losses of about Rs. 71 crore due to risk losses in Dubai operations and CAT losses in UK operations. Despite such setbacks, there remain many positives for New India Assurance, one being the agency channel starting to grow at a healthy pace. Shrugging off the one-off losses due to CAT issues, the market took New India Assurance stock to exponential levels in Q2 and especially in Q3 after the results were announced.
Federal Bank Q2 Net Up Over 3 Subsidiary Fedfina Lists Succes
35%, ssfully
Private sector lender Federal Bank has performed well in Q2 according to the guidance provided at the end of Q1. Under its MD & CEO Shyam Srinivasan’s experienced leadership, the bank is now gearing up for an even better Q3 and Q4. The ongoing third quarter also saw the successful listing of its subsidiary Fedbank Financial Services through its IPO. The bank has registered a 35.5% year-on-year surge in net profit at Rs. 954 crore in Q2, powered by multiple factors led by lower provisions. Federal Bank’s other income grew 20% year-on-year to Rs. 730 crore, and its net interest income (NII) grew 17% y-o-y to Rs. 2,056 crore in the second quarter, signaling healthy performance in its core lending business. Federal Bank maintained its profitability with net interest margin (NIM), rising one basis point QoQ to 3.16%. The traditional private sector lender noted for its conservative stance even while pushing for growth, saw its asset quality improving as its gross bad loans (GNPA) ratio dipped to 2.26%, from 2.38% in the June quarter and 2.46% in the September quarter of FY23. Federal Bank’s total provisions were at Rs. 371 crore, down 27% year on year. On the deposits and advances front, the bank continued to be a strong player in Q2. The bank’s gross advances stood at Rs. 1,96,000 crore as on 30 September, as against Rs. 1,64,000 crore on 30 September 2022, registering a growth of 20%. The bank’s wholesale book stood at Rs. 87,788 crore, and retail loans were at Rs. 1,08,000 crore. Federal Bank’s total deposits increased 23% y-o-y to reach Rs. 2,33,000 crore, of which, the Current Account and Savings Account (CASA) deposits reached Rs. 72,589 crore as on 30 September. While CASA deposits showed a growth of 5% over the same period last year, CASA ratio dipped 524 basis points to 31.17% owing to other deposits outpacing it. This is more of a reflection on how finely calibrated is the bank’s deposit interest policy to compensate for the current inflationary pressures.
CENTRAL BANK OF INDIA’S PROFIT SOARS BY 90%
S Q2
PSU lender Central Bank of India has registered an impressive 90% rise in its net profit to Rs. 605.4 crore for Q2 of this fiscal, as against Rs. 318.2 crore in Q2 FY 23.The profit jump was secular in nature, led by a robust growth in core income and bettering asset quality. During Q2, Central Bank’s total income rose to Rs. 8,412 crore from Rs. 7,065 crore in the corresponding year ago period. The bank’s gross non performing asset (GNPA) ratio improved to 4.62% in Q2 from the 9.67% it was in Q2 of last fiscal. Its Net NPA (NNPA) ratio also improved to 1.64% in the second quarter of this fiscal from the 2.95% it was in the year ago period. The bank’s interest income during the September quarter grew to Rs. 7,351 crore as against Rs. 6,155 crore in the year-ago period. Net Interest Income (NII) increased by 10.23% to Rs. 3,028 crore in the second quarter of the current fiscal as against Rs. 2,747 crore a year ago. Due to the sharp fall in NPAs, Central Bank’s provision and contingencies declined to Rs. 967 crore as against Rs. 1,125 crore in the same period osf last fiscal. However, its Provision Coverage Ratio (PCR) improved to 92.54% in the quarter from the 89.20% it was in the corresponding period last year. Central Bank’s Net Interest Margin (NIM) also edged up to 3.53% as against 3.12% last year. The large sized PSU bank’s total business grew by 11.51% to Rs. 6,02,284 crore as against Rs. 5,40,130 in the second quarter of previous fiscal. Despite strong growth in advances, its Capital Adequacy Ratio (CAR) increased to 14.82% as compared to 13.56% last year. The growth at Central Bank during this quarter was led by Retail, Agriculture and MSME sectors, which grew by 14.24%.
COAL INDIA CONTINU GROWTH MOMENTUM AND ITS SUPERIOR DIVIDEND TRAJECTOR
UES M,
RY
India’s largest coal producer Coal India Ltd (CIL) has registered a 13% increase in consolidated net profit at Rs 6,814 crore for the second quarter of this fiscal. Factors that helped Coal India’s performance include the higher power demand, especially due to the weak monsoon. Usually power demand in India peaks during Q1, but this time around, due to the weak monsoon and extreme summer heat, it remained high in Q2 too. The weak monsoon also caused a drop in hydroelectric output. CIL had reported a consolidated net profit of Rs 6,044 crore in the year-ago period. The profit growth was despite Coal India’s total expenses growing 9.4% to Rs 26,000 crore on the back of higher employee and contractual expenses. However, it benefitted from the falling raw materials cost by 15.1% and it raising the prices of non-coking coal by 8% for the higher grades. The higher prices alone are expected to add an extra revenue of Rs 2,703 crore for the remaining part of the fiscal. The coal major posted a 10% rise in consolidated revenue from operations at Rs 32,776 crore as against Rs 29,838 crore in Q2FY23. Continuing its superior dividend trajectory, Coal India announced an interim dividend of Rs 15.25 per share on face value of Rs. 10.
SOUTH INDIAN BANK'S Q2 S OVERALL HEALTHY GROWTH
SHOWS H
Thrissur, Kerala headquartered South Indian Bank (SIB) has registered a 23.3% rise in its Q2 net profit at Rs 275 crore, up from the Rs 223 crore it was during the same quarter last fiscal, mainly on better asset quality. This was the last quarter under the leadership of Murali Ramakrishnan who served as its MD & CEO for three years. The bank has appointed PR Seshadri as its MD & CEO effective from October 1, and the ongoing Q3 will be the first quarter under his leadership. PR Seshadri brings with him nearly 25 years of banking experience spanning domestic and international markets. Seshadri has held senior leadership positions at various institutions, including Karur Vysya Bank and Citigroup. Prior to joining SIB, Seshadri was KVB’s MD & CEO. The traditional private sector bank’s operating profit during the period was up by 8.2% at Rs 460 crore. The bank’s gross non-performing asset (GNPA) ratio came down by 71 basis points (bps) from 5.67% to reach 4.96% on a year-onyear basis. The bank’s net non-performing assets (NNPA) too dropped by 81 bps from 2.51% to reach 1.70%, year-on-year. Recovery and upgradation in NPA accounts increased from Rs 374 crore in Q2 FY23 to Rs 475 crore in Q2 FY24. Apart from this improvement in the portfolio quality, the bank’s net interest income (NII), net
interest margin (NIM), return on equity (RoE), return on assets (RoA) and customer addition all witnessed healthy growth during the quarter. The bank’s net interest income during the period went up from Rs 726 crore to Rs 830 crore, registering a growth of 14.3% on a year-onyear basis. Its net interest margin (NIM) increased by 35 bps from 2.98% to 3.33% on a YoY basis. The bank’s return on equity improved by 262 bps from 10.81% to 13.43% on a year-on-year basis. Its return on assets increased by 20 bps from 0.65% to 0.85% on a year-on-year basis. The bank also put up decent growth on both the deposits and credit side. The bank’s retail deposits grew 7.3% or Rs 6,337 crore from Rs 87,111 crore to Rs 93,448 crore on a year-on-year basis, while its NRI deposits grew by Rs 1,285 crore or 4.7% from Rs 27,500 crore to Rs 28,785 crore YoY. Due to being a Kerala headquartered bank, and due to the state’s strong show in overseas remittances, SIB has natural strengths in garnering NRI deposits. Its Current Account & Savings Account (CASA) segment grew by 1.8% on a year-on-year basis with growth in savings bank by 1.8% and current deposits by 1.7%. Gross advances grew 10.3% or Rs 6,984 crore from Rs 67,963 crore to Rs 74,947 crore, driven mainly by a strong show of 33.2% on a year-on-year basis in corporate loans. Percentage-wise, SIB’s personal loan book grew faster by 48.1% or Rs 684 crore from Rs 1,423 crore to Rs 2,107 crore. The gold loan portfolio another Kerala based strength - went up by 16.2% or Rs 2,087 crore from Rs 12,911 crore to Rs 14,998 crore.
ASTER DM’S Q2 REVENUE RISES AROUND 18%, DIVESTS GULF BUSINESS FOR $1 BILLION Hospital chain major in India and GCC countries, Aster DM Healthcare posted a 17.77% increase in its consolidated revenue from operations during the quarter ending on September 30, 2023, which came in at Rs 3,316.63 crore, in contrast to Rs 2,816.30 crore it was in Q2 FY23. This is largely attributed to the successful ramp-up of Aster’s new hospitals in India, initiated during the last two financial years. Aster also undertook various cost-saving initiatives, emphasizing its commitment to operational efficiency. Reflecting this, Aster’s EBITDA grew 21% on an year-on-year basis in Q2. However, the healthcare major reported a net loss of Rs 30.79 crore in Q2 of this fiscal as against a net profit of Rs 46.21 crore in Q2 FY23, due to a sharp increase in total expenses, primarily financing costs. Hence, post the publishing of the Q2 numbers, as a part of shedding debt, and focusing more on Indian operations, Aster DM divested its stake in its relatively more debt heavy GCC operations for $1 billion, with the proceeds expected to be distributed as dividend as well as being utilized for growth capital.
CAN FIN HOMES Q2 PROFIT UP BY 12%
Can Fin Homes Ltd, the housing finance associate of public sector lender Canara Bank, has registered an 11.5% year-onyear (YoY) rise in net profit at Rs. 158 crore for the second quarter of this fiscal. In the corresponding quarter last year, Can Fin Homes had posted a net profit of Rs. 141.7 crore. The housing finance specialist’s core business seems to be on a sound growth track, as seen from its Net Interest Income (NII) that jumped 26.1%, coming in at Rs 316.8 crore against Rs. 251.2 crore in the corresponding quarter of FY23. However, the HFC’s asset quality slipped slightly with its gross non-performing asset (GNPA) ratio standing at 0.76% in the September quarter as against 0.63% in the June quarter. Net NPA (NNPA) ratio came in at at 0.43% as against 0.34% on a quarter-on-quarter basis. Still, Can Fin Homes remains a top performer in asset quality compared with almost all its peers.
LIC HOUSING FINANCE’S Q2 PROFIT ZOOMS FOUR-FO
OLD
Leading housing finance company, LIC Housing Finance Ltd (LICHFL) has registered an almost four-fold jump in Q2 net profit at Rs 1,188 crore, year-on-year. The housing finance subsidiary of LIC of India, also recorded an 83% year-on-year rise in its core Net Interest Income to Rs 2,107 crore in Q2. Apart from the topline and bottomline, growth was visible on margin parameters too. Net Interest Margin (NIM) expanded to 3.04% from 1.78% year-onyear which drove up pre-provision operating profit. Improvement in NIM was led by stable credit costs, which were limited to 60 basis points. This was despite technical write-offs of Rs 925 crore during the quarter, mainly from developer loans. On the asset quality front, there was overall improvement led by LICHFL’s gross nonperforming assets (GNPA) ratio improving to 4.3% from 4.9%year on year. Net NPA (NNPA) ratio declined to 2.59% from 2.83%. There was a notable decline in Stage-3 exposed assets due to higher write-offs. LICHFL has guided the market on observed positive trends in the ongoing festival season, which should help it maintain the growth trajectory in Q3 & Q4. However, some challenges too were visible, especially the sluggish loan growth which stood at 6% year-on-year on a consolidated basis. Even when individual home loans only are considered, the loan book growth rate was only 8%. The challenge appears to be lower disbursements and higher rundown rates, which the company needs to address and provide guidance on going forward. On a sequential or QoQ basis, LIC Housing Finance’s disbursements stood at Rs 14,665 crore for the second quarter, as against Rs 16,786 crore for the first quarter. The home loan major’s total expenses also increased 12%, including an 18% rise in finance costs.
AU SFB DELIVERS HEALTHY GROWTH EVEN AMID INTENSE COMPETITION
AU Small Finance Bank has reported a Q2 net profit of Rs. 401.8 crore, 17.3% higher as compared to Rs. 343 crore reported in the corresponding year-ago period. AU SFB is the largest bank in the small banking space and its net interest income (NII) came in at Rs. 1,249 crore in the September 2023 quarter, higher by 15.3% as against Rs. 1,083.4 crore reported in the corresponding period. Asset quality performance was mixed with the gross non-performing asset (GNPA) ratio of AU Small Finance Bank improving to 1.76% in Q2FY24, from 1.91% in the preceding quarter, but with the the net NPA ratio increasing to 0.60% in the second quarter as compared to 0.55% in the June 2023 quarter. Despite the intense competition among all banks for deposits, AU SFB’s overall deposits crossed the Rs. 75,000 crore-mark, growing by 30% on a year-on-year basis and 9% on a quarter-on-quarter or sequential basis. Of this, the low-cost and attractive segment of Current Account / Savings Account (CASA) deposits grew 6% on-quarter to Rs. 25,666 crore, with the CASA ratio now at a reasonable 34%. AU SFB continued its customer acquisition momentum with new customers acquired being at 3.65 lakhs, of which 45% were onboarded digitally.
UCO BANK MARKS TURNAROUND WITH Q2 PROFIT RISING OVER 80% Qo
Q
PSU lender UCO Bank has registered an over 80% growth in its net profit to Rs. 402 crore for the quarter ended September 2023 from the Rs. 223 crore it recorded in the preceding quarter ending June 30 2023. This marks a strong turnaround in the Kolkota headquartered bank’s bottomline which had hit an atypical bottom in Q1 of this fiscal due to the confluence of multiple factors. However, the leading public sector lender couldn’t surpass the profit level it achieved in Q2 of last fiscal. UCO Bank had reported a net profit of ¹ 505 crore in the corresponding quarter a year ago, which makes the current Q2’s profit 20% down. But the Total Income of the UCO Bank during the July-September period rose to Rs. 5,866 crore from Rs. 4,965 crore in
the year-ago period. Interest Income during Q2 FY24 also rose to Rs. 5,219 crore as against Rs. 4,185 crore, signaling that the bank has started its turnaround on a yearon-year basis too, with it yet to be reflected only in its bottomline. Improving asset quality also bore witness to this turnaround, with the bank’s gross NPA (GNPA) ratio dipped to 4.14% compared to the over 6.58% it was in the previous fiscal. Net NPA (NNPA) ratio too came down to 1.11% as compared to 1.99% a year ago. Post the results, UCO Bank’s MD & CEO Ashwani Kumar has guided the market that the bank is aiming at bringing down NNPA below 1% by the end of this fiscal itself. The bank’s total provisioning for Q2 stood at Rs. 336 crore, down from Rs. 400 crore during last fiscal. Generally for banks the second half of the year (H2) witnesses better recoveries and upgrades, and UCO Bank has also followed this pattern generally. This time around, the bank is aiming for Rs 2,000 crore in recoveries and upgrades during H2FY24. During the second quarter, UCO Bank has sanctioned around Rs 14,000 crore of corporate loans with Rs. 9000 crore in disbursements, and more than topline growth the bank is now aiming for sanctions that are of better quality or in other words accretive to its current margins. UCO Bank is a key player in India’s overseas transactions and it has opened six Vostro accounts, including with five Russian banks, including large ones like Russian Regional Development Bank, Russian Universal Banking, Exobank, Moscow Bank as well as with Belarus Bank and for Gazprom.
GIC RE’S GROSS WRITTEN PREMIUM J STOCK CONTINUES STRONG UPTREND
JUMPS 32%, D IN Q3
It is said that profits move stocks up, and losses push them down into pits. But here is a gravity defying stock that shoots up when its profits are falling! General Insurance Corporation of India Ltd., more commonly known by its brand name, GIC Re, is India’s national reinsurer, besides having a substantial and ever growing global reinsurance business. Being primarily in the reinsurance business, it is highly sensitive to mass catastrophes be it pandemics or floods or earthquakes. That is how it swung to losses in FY’20, but since then it has been on a remarkable turnaround. But the advent of more recent disasters including the unprecedented Sikkim floods have taken the sheen off its profits in Q1 and Q2 of this fiscal. But the surprising fact is that it has not affected its stock price trajectory, with it getting only accelerated. In fact, the stock price had an exponential rise of over 50% in the recent months. One reason for this phenomenon is how well GIC Re has been conducting both its core business as well as its substantial investment operations. Secondly, while disasters affect profits of reinsurers, it ultimately creates more insurance policies and more reinsurance business for companies like GIC Re. For instance, GIC Re has reported a net profit of Rs 1605 crore for the quarter ended September 2023, which is a decline of 14% from Rs 1860 crore in the corresponding quarter last year.
However, in the same period it registered a 32% increase in gross written premium to Rs 10762 crore, from the Rs 8106 crore it was in the corresponding quarter last year. There was also a slight decrease in the combined ratio by 1.75%, which reveals an improvement in the underwriting and operational efficiencies. Investment Income of GIC Re for the first half year of this fiscal was Rs 5,590.37 crore as compared to Rs 5,111.19 crore for the corresponding half year of last fiscal. GIC Re’s net worth too is on an upswing, with H1 net worth being Rs 36,498.86 crores as against Rs 31,091.00 crore in H1 of last fiscal. There has been a topmost level leadership change at GIC Re recently, with it appointing Ramaswamy Narayanan as Chairman and Managing Director, effective from October 1. Narayanan had joined GIC Re as a direct recruit officer in 1988 and has since managed a full spectrum of non-life insurance classes, including Fire, Engineering, Miscellaneous, Motor, Liability, Aviation, Marine, and Agriculture. Earlier, he had also headed GIC Re’s UK branch, where he played a key role in the establishment of the Lloyds syndicate of GIC. The ongoing Q3 will be the first reporting quarter under the new CMD’s leadership.
INDUSIND BANK Q2 NET RISE PLANS AFOOT TO IMPROVE M
ES 22%, MF PORTFOLIO New generation lender IndusInd Bank has registered a 22% year-on-year rise in its Q2 standalone net profit to Rs. 2,181.5 crore. The main drivers for the profit growth this quarter was lower provisions and of course higher income, which were achieved under the experienced leadership of its MD & CEO, Sumant Kathpalia. The private sector bank’s total provisions stood at Rs 974 crore in Q2, which was down 15% compared with the corresponding year-ago period. The core metric of Net Interest Income (NII) stood at Rs. 5,077 crore, up 18% y-o-y. IndusInd Bank could also maintain its relatively high Net Interest Margin (NIM), a key profitability metric, at the previous quarter’s 4.29%. The stability seen in this kind of relatively high NIM reflects the balance sheet and operational strengths of IndusInd Bank. For instance, the bank’s cost of deposits increased by 23 bps sequentially, but the lower borrowing costs and effective asset side management helped ease the pressure on NIMs. IndusInd has performed according to the guidance it has given for NIM, to range between 4.2% to 4.3%. On the advances and deposits fronts, the bank put up healthy performances. IndusInd reported a 21% y-o-y growth in overall
advances at Rs. 3,20,000 crore , while its deposit base saw a 14% y-o-y growth to Rs. 3,60,000 crores despite the intensifying competition for attracting deposits. The lending side saw healthy disbursements across segments including vehicle, microfinance, consumer products as well as corporate loans especially to small corporates. On the asset quality front, IndusInd Bank witnessed a slight improvement as compared to the June quarter. Its gross bad loans (GNPA) ratio stood at 1.93% of its total advances, down 1 basis point sequentially. Its Net NPA (NNPA) ratio stood at 0.57%, also down 1 basis point from the June quarter. The bank could have performed better if not for its microfinance portfolio which saw bad loan ratios increasing. But the bank is confident of turning around the microlending portfolio with consistent focus on recoveries and upgrades. The bank is also well capitalized for now with a Capital Adequacy Ratio of 18.21%, with no immediate requirement for raising capital. IndusInd’s stock price is on a strong uptrend during the past 12 months and it will be taking a shot at its all time high eventually if the current momentum in profit growth holds.
JYOTHY LABS’ Q2 NET RIS STOCK CONTINUES ITS DR
ES OVER 59%, REAM RUN FMCG major Jyothy Labs has registered a consolidated net profit of Rs 103.98 crore for the second quarter, which is up 59.1% from the Rs 65.35 crore it was in the corresponding period last year. At a time when many FMCG majors are struggling to grow revenue, the owner of leading brands including Ujala, Exo, Pril, Margo etc also registered a 11.09% year-on-year rise in consolidated revenue from operations at Rs 732.34 crore compared with Rs 659.20 crore year ago. EBIDTA for the quarter was at Rs 135 crore growing by 69%, driven mainly by EBIDTA margin expanding to 18.5% percent from 12.1% in the year ago period. The performance speaks volumes about the leadership prowess of MR Jyothy, Managing Director, Jyothy Labs. Under her guidance, Jyothy Labs has focused on continuously
expanding their distribution footprint, which has resulted in consistent growth in revenues and profits. The Jyothy Labs stock too has been on an upswing, and in the recent quarters the stock price growth has turned exponential, doubling in this fiscal itself. Of its various product segments, fabric care sales increased by 10.6%, dishwashing products by 10% and the personal care segment, which includes body soap and toothpaste, witnessed an impressive 22.3% growth year-on-year. The weakest growth was in household insecticides, including mosquito repellent coils, liquid vaporizers, and incense sticks, where sales increased only by 3.4%. Overall, Jyothy Labs under the dynamic leadership of MR Jyothy has managed impressive feats like zero debt and a return on equity above 15%.
KALYAN JEWELLERS STOCK REMAINS IN S
Q2 HEALTHY, STRONG UPTREND Kalyan Jewellers has delivered yet another quarter of strong growth. For the second quarter, the Thrissur, Kerala headquartered jeweller with a pan India presence, as well as a sizable footprint in the Middle East, recorded a consolidated revenue growth of over 27% YoY. The consolidated net profit for the quarter grew 27.6% from Rs. 105 crore to Rs. 134 crore YoY. For the first half of the ongoing financial year. Kalyan posted a revenue growth of 29% YoY. Kalyan Jewellers’ stock has been on a strong uptrend in the recent quarters with it more than tripling in value during the past 12 months.Kalyan’s India operations performed better than the overseas business, with it clocking a revenue growth of 32% on account of healthy same-store-sales growth across key domestic markets as well as the launch of new shops in the non-South regions. For the first half of the current financial year, the domestic revenue growth was 33%, when compared to H1 of last fiscal. Kalyan had successfully forayed into franchised showrooms, and while this has been a driver of revenue growth, it has also resulted in the blended gross margin declining both YoY and QoQ. Kalyan has traditionally been a South India based jeweller, but this is fast changing with non-south markets recording higher revenue growth due to the greater number of showrooms launched in that region over the last twelve months. Kalyan Jewellers added 13 new branded showrooms across non-south markets during the second quarter. Keeping to its guidance given earlier, Kalyan is continuing a fast-paced showroom rollout plan. Coming to its overseas business, revenue growth for Q2 was around 4% YoY, while for the first half taken together, it stood at 13% YoY. In Middle East too, Kalyan has begun its franchised showroom model, with the first such showroom getting launched during Q2. Middle East contributed 14% to Kalyan’s consolidated revenue for the quarter.
NBCC’S EBITDA & MARGINS UP IN Q2
NBCC, the construction and real estate development major, has registered a mixed set of numbers for the second quarter. The PSU firm’s Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was up 8% at Rs 95.5 crore, while its margin was up at 4.7% percent, both YoY. However, the revenue growth of the company in the second quarter was flattish, just up by 1.2% at Rs 2,053.3 crore, as against Rs 2,029.7 crore, YoY. Also, the company posted a 16.7% fall in its second quarter net profit at Rs. 79.6 crore as against Rs 95.5 crore in the same quarter last year. The fall in profit was mainly due to higher provisioning against a Gurugram project that has run into trouble, and with the company undertaking to refund the advances from homebuyers there. The said project is a residential real estate project, NBCC Green View, for which the company has since then followed technical directions from IIT Delhi for corrective measures, and is now in the process of amicable settlement
with homebuyers under the aegis of the National Consumer Disputes Redressal Commission (NCDRC). But on the orders front, NBCC continued to register reasonably strong order wins. In the first month of the ongoing Q3, the construction major won an Rs 80-crore order from the Visakhapatnam Port Authority. The order is for the renovation and refurbishment of office buildings located at Visakhapatnam Port. It also won an order worth Rs 25.19 crore from Ali Yavar Jung National Institute of Speech and Hearing Disabilities (Divyangjan), AYNISHD, Mumbai, for the construction of a permanent building of their newly approved composite regional center at Chhatarpur, Madhya Pradesh. NBCC is also planning to monetise some of its commercial and residential projects across the country to raise around Rs 600 crore by the end of 2024. The company’s stock has soared by more than 2.5 times during the last 12 months, even though it is yet to scale its previous highs.
SKM EGG PRODUCTS DELIVERS A STRONG QUARTER, STOCK CONTINUES MULTIBAGG PERFORMANCE
, GER
SKM Egg Products Export (India) Limited, the leading egg powder exporter from India has registered a strong set of growth numbers for the second quarter of this fiscal. The Tamil Nadu headquartered egg processor revenue was up by 9.5% at Rs. 170 crore, on a year-on-year basis. SKM Egg Products’ profit margin surged to 16% in the second quarter from the 7.6% it was in the corresponding period of last fiscal. Driven by revenue growth and margin expansion, the net profit soared 134% year-on-year to touch Rs. 28.41 crore. The Earnings Per Share of the listed player also shot up by an identical percentage, as there was no dilution during these intervening 12 month period. Earlier, in Q1, SKM Egg Products had delivered an even higher set of numbers, making this H1 one of the best ever performances from this unique player in egg processing exports. In the first quarter, SKM’s revenue had shot up over 61%, while its profits and EPS had went over the roof to the tune of 417%. Still, when the Q2 results came, this egg processor that exhibits some amazing capabilities in the egg processing industry, demonstrated growth on a sequential or quarteron-quarter basis too. While revenue was up by over 11%, net profit had managed to spike over 18% QoQ. With such stunning fundamental performance during the past 12 months, the firm led by industry pioneer and veteran SKM Shree Shivkumar as Managing Director & Chief Executive Officer, had a dream run in the bourses, appreciating by over 4.6 times during the past 52 Weeks.
MAZAGON DOCK SHIPBUILDERS
THE PSU MULTIBAGGER PSU Multibagger might sound like an oxymoron, as despite their best intentions, many listed PSU companies have traditionally struggled to emerge as multibaggers for their investors, as they try to do the delicate act of balancing their nation building mandate with the kind of returns that markets appreciate. However, in recent years, spurred on by the government’s focus on defence manufacturing, a few state-owned defence stocks have turned multibaggers in the market, and leading this niche pack is India’s largest defence shipbuilder Mazagon Dock Shipbuilders.
Sanjeev Singhal
SEASONAL MAGAZINE
On October 12, 2023, Mazagon Dock Shipbuilders Ltd (MDL), completed three years as a listed entity. After a blockbuster IPO that was oversubscribed by over 157 times, Mazagon Dock Shipbuilders started trading on October 12, 2020, opening at around Rs. 215 in NSE as against its final issue price of Rs. 145, and saw hectic trading before closing at around Rs. 172 levels. The irony of the stock market is that both the buyer and the seller in any stock at any level are hoping that their decision is the right one. Obviously, only one of them can be right, and the other will be sorely wrong. In the case of October 12, 2020 and MDL, it was a date and counter that the sellers would badly regret for the rest of their lives. Because, MDL stock has appreciated by over 17 times from its IPO price within three short years! While most brokerages and analysts had advised to subscribe to MDL’s IPO, and the market had heeded that call too, it is clear that almost none of them could have predicted Mazagon’s march from Rs. 145 to as high as Rs. 2484 within less than 36 months. This was especially so, as the MDL public issue happened when the pandemic was raging on, and there were big uncertainties surrounding how this manufacturing business will cope, as shipbuilding can’t be done remotely or on a work-from-home basis! What is actually driving MDL’s stupendous march on the bourses? It is not an easy answer in any way. Several factors have come together synergistically to catapult the market value of MDL from just Rs. 2693 crores during the IPO time to over Rs. 45,783 crores now. But to cut a long story short, Mazagon’s rise is both a case of incredible revenue and profit growth, as well as an incredible rerating it received due to that growth, like how the best and unbelievable multibaggers are made. MDL’s annual revenue had soared from Rs. 4047 crores in FY’21 to Rs. 7827 crores by FY’23. And its annual profit had surged even higher, from
Rs. 453 crore in fiscal 2021 to Rs. 1046 crore in fiscal 2023. In terms of compounded annual growth rate, this translates to a three-year revenue CAGR of 26.33% and a three-year net profit CAGR of 66.54% And that was not all. If the quantum of growth was this impressive, its quality was even more astounding to the market. MDL’s return ratios were very good during its IPO time itself, with its FY’20 consolidated Return on Equity (RoE) being 15.00%, its Return on Capital Employed (RoCE) being 23.86% and Return on Assets (RoA) being 2.25%. But during the next three years, all these three core ratios surged further, with FY’23 consolidated RoE being 25.97%, FY’23 RoCE being 32.70% and FY’23 RoA being 3.78%. This kind of high quality growth from a complex manufacturing industry was rare in the market, and especially so in the public sector. There were other quality factors too that were unique to MDL. For one, it was a zero debt company during the IPO time, and it has remained a zero debt company despite delivering an unbelievable quantum of growth during these three years. Secondly, Mazagon Dock Shipbuilders has consistently worked on bettering its margins, and has come across as a strong winner in this regard too. While MDL’s Gross Profit Margin (EBIT) has improved from 15.26% in FY’20 to 18.00% in FY’23, its Operating Profit Margin has fared even better, rising from 3.69% in FY’20 to 9.15% in FY’23. But it is in its Net Profit Margin that MDL has really stunned the market, with NPM surging by 49.03%, from 9.59% in FY’20 to 14.30% in FY’23. This kind of blistering performance is something the whole MDL team and especially its top management can be proud of. MDL has almost always enjoyed a high quality of leadership, and this has turned even better in recent quarters. From February 1 2023, its Director (Finance) and Chief Financial Officer (CFO), Sanjeev Singhal was given the Additional Charge of being
Chairman & Managing Director of MDL. Sanjeev Singhal is a veteran finance professional with over 35 years of experience in PSUs including as Director Finance at Mishra Dhatu Nigam Limited and prior to that at Steel Authority of India Limited. A Cost Accountant by profession from the Institute of Cost Accountants of India, Sanjeev Singhal has been associated with MDL since its IPO days as he was chosen by the firm in January 2020 to helm the IPO among other responsibilities. This CMD & CFO is ably assisted by a core team of full-time Directors who are all thoroughbred defence & engineering professionals in their respective fields. They include Cdr. Jasbir Singh, IN (Retd.), an alumnus of NDA / JNU, who is the Director in charge of MDL’s Submarine & Heavy Engineering Division; Mr. Biju George, an alumnus of IIT Kharagpur, who is the Director in charge of the company’s Shipbuilding Division; and Cdr. Vasudev Puranik, Indian Navy (Retd.), an alumnus of INS Shivaji / JNU / Pune University, who heads MDL’s Corporate Planning & Personnel Departments. The beauty of the stock market is that when a company outperforms itself under the leadership of such veteran professionals, the market doesn’t stand still, waiting for the earnings to grow, but rewards it by re-rating it to a higher valuation. As mentioned earlier, that is how unbelievable multibaggers are made within the shortest possible time, and the case of MDL too was not different. Still, in the case of MDL it was a bit surprising, as such rapid re-rating is usually seen in the case of bluechip private sector companies. But then, MDL’s performance on most metrics were even better than the best of the private sector manufacturing leaders. When MDL went in for its IPO, its promoter the Government of India, acting through its Ministry of Defence, had asked for only modest valuations. The MDL IPO was offered at a price-toearnings (P/E) multiple of just 6.39 times SEASONAL MAGAZINE
on a fully diluted post issue basis on its FY’20 earnings. While this may sound grossly underpriced by today’s standards, this was not so, considering the fact that the market was reeling from the pandemic onslaught back then, and MDL’s comparable peer group consisting of Cochin Shipyard, GRSE & Reliance Naval were trading only at an average P/E of 7.5 times. The issue was also reasonably priced at a price-to-book-value (P/BV) of 0.95 times based on its Net Asset Value (NAV) or Book Value Per Share (BVPS) of Rs. 152.17 per share as on June 30, 2020, and as calculated based on the upper limit of the price band. But as of FY’23, Mazagon Dock Shipbuilders’ BVPS stands at Rs. 207.13. While this is a healthy appreciation within 3 years, it is obvious that it alone was not enough to propel the stock’s exponential growth during the last three years. And this is precisely where the magic of rerating kicked in. From an IPO time P/E of 6.39 times, MDL now trades
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at 40 P/E and from a P/BV of 0.95 times during its public issue, MDL now commands a P/BV multiple of nearly 11 times. Most investors, especially retail investors, fail to understand the power of this kind of rerating when it is coupled with earnings expansion too. As an old tongue-in-cheek remark in the stock market goes, price is nothing but the result of earnings multiplied by priceto-earnings. But there is hidden wisdom in that joke, as price skyrockets only when both these multiplicative factors soar. Mazagon Dock Shipbuilders’ stock is now taking a breather after its blistering rise, especially during the past 12 months when it soared over 6 times from a 52-Week Low of Rs. 411 to a recent 52-Week High of Rs. 2484. This breather is much in line with almost all other defence stocks, both in the private and public sectors, that have run up. But most analysts don’t expect MDL to lose its momentum as the fundamental business remains as strong as ever, and
with new opportunities emerging too for it. MDL has recently signed a master ship repair agreement (MSRA) with the US Government, represented by US Navy’s NAVSUP Fleet Logistics Center (FLC) Yokosuka. While this is a non-financial agreement, the agreement is expected to open-up voyage repairs of US Navy Ships at MDL. Currently apart from MDL, only one private sector shipyard in the country has signed an MSRA with the US Government. Mazagon Dock Shipbuilders continue to perform well on a quarterly basis. For the most recent published quarter ended June 2023, MDL reported a 39.84% YoY jump in consolidated net profit at Rs 314.34 crore, and 30.51% YoY jump in EBITDA at 404.35 crore, while revenue was flat, falling 2.58% percent to Rs 2,172.76 crore. The sluggishness in revenue and EBITDA signals execution challenges before the company, as shipbuilding is a complex and time consuming affair. Some of Mazagon Dock’s core
Cdr. Jasbir Singh, Director (Submarine & Heavy Engineering)
Shri Biju George Director (Shipbuilding)
products like the highly specialised ships and submarines with large project size, take years to execute.
multipurpose support vessels, water tankers, tugs, dredgers, fishing trawlers, barges, and border outposts. Jackets, wellhead platform main decks, process platforms, jack up rigs, and other products have also been manufactured and delivered by MDL.
But MDL is gearing up for faster execution by planning a capex of Rs. 500 crore for a new floating dock, among other such infrastructural expansion. This would help the company to construct eight nextgeneration destroyers for the Indian Navy.
Cdr Vasudev Puranik IN(Retd) Director(Corporate Planning & Personnel)
MDL has acquired a strong order book, which provides robust revenue visibility till fiscal 2025. The current order book size stands at Rs 39,117 crore, which is almost 5 times its annual revenue. The order pipeline too has been good. MDL has submitted bids for six submarines, tying up with the Germany-based TKMS. It is also expecting three add-on submarines that are part of the Scorpene platforms. MDL’s trackrecord in delivering complex ships and submarines over the past few decades will keep it in good stead. Its current product portfolio encompasses a diverse range of products for both domestic and International clientele. During its chequered existence since 1960 when it was nationalised, MDL has built a total of 801 vessels, including 27 warships, ranging from advanced destroyers to missile boats as well as 7 submarines. For both national and global clientele, MDL has also provided cargo ships, passenger ships, supply vessels, SEASONAL MAGAZINE
MANAPPURAM FINANCE
THE REWARDS OF D With a pan India network of over 5200 branches on a consolidated basis and over 45,000 employees, Manappuram Finance is bigger than most small finance banks and even a few universal banks in the country. Over 2.4 million active customers have entrusted their household gold jewellery, amounting to 59 tonnes of gold, to Manappuram Finance, as collateral for gold loans. The company has been India’s first listed player in the gold loan sector, with its IPO happening way back in 1996. Manappuram has several firsts to its credit in the gold loan business, like online gold loans and the cellular vaulting mechanism. It is one of the strongest NBFCs operating in India by way of capitalization with its Tier 1 Capital Adequacy Ratio at 30.5%, strong Asset Liability Management and access to diversified source of funds. Yet, around 10 years back, under the guidance of its Founder, MD & CEO, VP Nandakumar, Manappuram Finance embarked on a diversification spree, which now stands at an inflection point, due to the proposed Rs. 1500 crore IPO of its subsidiary Asirvad Microfinance Ltd. Its other diversifications too have been faring well with its vehicle financing and home financing operations growing at a CAGR of 27% and 23% respectively since the last 5 to 6 years. Once regarded as one of the Indian market’s fastest wealth creators, growing 30X between FY’08 & FY’12, Manappuram stock has since then been consolidating, and the Asirvad IPO may be the trigger it has been waiting for, for a breakout.
Mr. V.P. Nandakumar Managing Director & CEO SEASONAL MAGAZINE
DIVERSIFICATION
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Most investors choose companies and stocks based on their graphs. This is true of retail investors who don’t know the nitty gritty of valuation metrics, as well as institutional investors who know all that stuff but still prefer to choose graphs that keep on soaring northwards. The reason for this behaviour is simple. All kinds of investors migrate from fixed income instruments to equities in the hope of making a quick buck. If a stock is consolidating and consolidating with no end in sight, this ambition of making fast money is not fulfilled, and hence the forever flight to northward graphs. But a sobering fact is that practically no company in the world can keep on satisfying investors, especially new investors who come to own its shares, every passing year. This is true of even highly prospective biggies like Reliance Industries or Bajaj Finance or Eicher Motors or midcap companies like Page Industries or Dr Lal PathLab. More often than not, even the most wellperforming companies will pass through a phase in which the companies would seem to be doing nothing special to pursue growth, when looking from the investors’ angle. But the billion dollar question is whether this is really true, or whether the company is strategically repositioning itself through diversifications and other such means. Discerning institutional investors understand this game well and either enter such companies during such seemingly lacklustre spells or stick with those companies through such phases.
Foreign Institutional Investors in Manappuram include Bank of America Securities, BNP Paribas and APG Emerging Markets, and domestic mutual fund majors include SBI MF, Axis MF & DSP MF.
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Classic examples are how discerning mutual funds continue to back Reliance Industries, Bajaj Finance & Eicher Motors, without these stocks doing anything spectacular for some time now. Manappuram Finance is another such company from India’s smallcap space. Historically one of the biggest wealth creators in the country’s listed realm, Manappuram’s stock has been consolidating for the last four years or more, neither registering a positive nor negative breakout from its long-term trading range. Still, a clutch of marquee institutional investors have either entered or continued to hold Manappuram stock during this seemingly lethargic phase. They include overseas institutions including Bank of America Securities, BNP Paribas and APG Emerging Markets, as well as domestic mutual fund majors including SBI MF, Axis MF & DSP MF. What is making such discerning and high quality investors remain invested in Manappuram? While the long answer to that question is the subject of this story, the short answer is without doubt Manappuram’s earnings yield and dividend yield. In this overheated bull market where yields are running quite thin, Manappuram enjoys an earnings yield of over 14%, which is double than that of some of its peers and most fixed income instruments. Its dividend yield now stands at 2.14%. Earnings yield is the rate of return of earnings you get when you buy a stock at a specific price. It is calculated as earnings-per-share (EPS) divided by current price (E/P) and can thus be thought of as the reciprocal of the commonly used price-to-earnings (P/E) ratio. Discerning institutional investors always look for the earnings yield, as ultimately that is the return ratio to which they get locked-in at their investment price for that stock. If the earnings or the numerator improves, the yield becomes even more attractive, and it will invariably drag the price or denominator up, and such patient investors win. On the contrary, even if the price or denominator only
Shailesh. J. Mehta, Chairman
improves without the earnings improvement, they are the winner as even though the earnings yield comes down, the price is moving up. In other words, a high earnings yield provides a greater margin of safety. For instance, if the price increases without matching earnings rise, and Manappuram’s earnings yield falls to 10%, it is still way above most of its peers. Now, to the long story why Manappuram has been ticking all the right boxes in the strategic and sustained growth of the organisation. But to appreciate this, you will have to first understand how Manappuram became a rapid growth story between FY’08 to FY’12, resulting in 30 times wealth creation for its equity investors within these four years that led to the forever high expectations from the company’s stock. Gold prices had nearly tripled between FY’08 and FY’12. Being a primarily gold loan focused NBFC back then, Manappuram used this window of opportunity to grow its branch network exponentially. From just 436 branches in FY’08, which were all mainly in Kerala and South India, Manappuram rapidly spread across all of India to register 2,908 branches by FY12!
With such rapid growth in its branch network, Manappuram’s Assets Under Management (AUM) also soared at over 90% CAGR during those four years, propelling its stock to grow by 30X in value. But such a hectic growth phase for the industry was sure to attract stricter regulations, and that is what happened when RBI decided to control the gold loan industry by removing its priority sector status as well by limiting the Loanto-Value Ratio to 60% for NBFCs like Manappuram. All gold loan companies took a hit from this move, and it was soon followed by
a sharp correction in gold prices, which proved to be a double whammy. Manappuram registered around a 30% reduction in gold loan AUM and tonnage during the next two fiscals, with stability coming back only by the beginning of FY’15 with gold prices stabilising and RBI removing some curbs. Manappuram did grow healthily on the gold loan front ever since, but it could never be at the scorching pace witnessed during those four years. To ensure that only high quality growth is pursued, Manappuram turned
Dr. Sumitha Nandan, Executive Director
extremely judicious in its branch expansion, and this can be seen from the fact that it added only 692 branches during the next 9 years, from 3293 branches in FY’14 to 3985 branches in FY’23. The gold loan branches now stand at 4039. Now, this phase marked a clear divergence in strategy by Manappuram Finance vis-a-vis most of its peers. While most of them waited out the lull in gold prices and the regulatory hurdles, and while some of them also pursued their public listing and other such stages, Manappuram being a listed entity for long, and being far ahead of the curve, decided to branch out bravely into diversifications including in home loans, microfinance, MSME credit, vehicle loans and more. This vision was personally led by Founder and Chairman of the Group, VP Nandakumar, who also took back the executive reins of Manappuram Finance into his own hands as its Managing Director and CEO during this period. For Nandakumar, a postgraduate in science and a career banker earlier, navigating the vagaries of gold price as well as the sectoral regulations on an adhoc basis was too much of a long-term risk, especially as the company was answerable to its public investors. Having 100% of its AUM in gold loans didn’t come across as a sound strategy for Nandakumar, as then the company would remain a slave to gold prices and the ever changing gold loan regulations. Nandakumar strategised that diversifying its AUM or loan book with at least 50% participation by other buzzing credit sectors like home loans, microfinance, MSME and vehicle loans would hugely de-risk Manappuram Finance for the long-term. While some industry observers felt that it was practically not possible within a few years, Manappuram under Nandakumar’s detailed vision, did prove that it was an eminently workable solution. By the end of Q1 of this fiscal, which ended June 30, 2023, Manappuram’s gold AUM had come down to 55.53% from the nearly 100% it was when this diversification drive began almost a SEASONAL MAGAZINE
decade back. The non-gold AUM is led by microfinance at 25%, vehicle loans at 8%, MSME credit at 6%, housing finance at 3% and on-lending at 2%. While these figures - except for microfinance - may appear small, some of them like vehicle finance and housing finance have been growing at a quick pace.
some of its bigger peers have grown during this period, there is a possibility that Manappuram too would have fared better in absolute growth metrics if it had remained with only gold loans. But then, Nandakumar knows that for a company of the size of Manappuram, the challenge is never to win a sprint, but a marathon.
Now, one obvious question is whether Manappuram Finance would have fared better if it had stuck to its original core competence in gold loans without any such diversifications. Looking at the way
Corporate strategies come in different shapes and sizes, and their objectives too differ. While some strategies are geared for the continuous achievement of topline and bottomline growth, some others sacrifice short-term growth for the
even-greater future potential. Both models can’t be criticised, as their objectives differ. For instance, when Reliance Industries created Jio in 2016 with a hefty initial investment of Rs. 1.5 lakh crore, many analysts were sceptical of the eventual returns, as the telecom sector had this reputation for sinking huge investments without any kind of meaningful returns. But today, Jio is the crown jewel of RIL, valued at over Rs. 5 lakh crore, with its demerger or IPO one of the most eagerly awaited events in the Indian capital markets. Another such jewel in the RIL crown is Reliance Retail. Manappuram and its investors are also likely to reap rich dividends from one of its crown jewels, Asirvad Microfinance, a company that it acquired in 2015 to jumpstart its microfinance business. After nearly 8 years of mentoring and nurturing by Manappuram, Asirvad Microfinance has scaled its business to be the country’s largest microfinance institution in the NBFC sector (MFI-NBFC) by geographic reach and the third-largest by AUM, and has recently filed the Draft Red Herring Prospectus (DRHP) for its IPO. Asirvad Microfinance’s Rs 1,500 crore IPO will feature issue of 100% new shares by the company, with no Offer-
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For-Sale (OFS) component by the promoter, Manappuram Finance, which now owns 98.61% stake in Asirvad with the rest 1.39% belonging to the earlier promoter. Hence, the entire proceeds from the IPO will be used to augment the capital base of the firm to meet future business requirements. With it already being well capitalised as far as regulatory norms are concerned, Asirvad is obviously eyeing a surge in future credit growth. Leading domestic and overseas investment banks including JM Financial, Kotak Mahindra Capital, Nomura and SBI Capital are the bookrunning lead managers for the IPO. Asirvad’s IPO filing comes at a time when the microfinance industry has emphatically come out from the Covid blues, and also when the regulatory winds are blowing once again in favour of NBFC-MFIs. Until last year, banks and NBFCs active in the microfinance space have been regulated separately with the norms being tougher for NBFC-MFIs. But now the regulator of the sector, RBI, has harmonised regulations for microfinance as an asset class, across both banks and NBFCs, and this augurs well for players like Asirvad. As mentioned earlier, Asirvad Microfinance is the absolute leader
among NBFC-MFIs when it comes to geographic reach, with the firm present in India’s 450 districts across 22 states and 4 UTs through a network of 1684 branches. Apart from being the third largest player by AUM, it is also the third largest NBFC-MFI by clients, with over 3.25 million active borrowers now. During FY’23, Asirvad Microfinance had an AUM of Rs 10,041 crore as against Rs 7,002 crore for the previous fiscal. Its Profit After Tax stood at Rs 218.13 crore in FY’23 as compared to Rs 15.26 crore in FY’22. This performance by Asirvad in FY’23 made it the second-best microfinance institution in terms of yearly growth among its peers. While Asirvad Microfinance is the first major subsidiary which will witness huge unlocking of value, some of Manappuram’s other businesses too are fast approaching inflection points. Its vehicle loans business had grown rapidly at 27% CAGR from FY’17 to FY’22. Around 62% of Manappuram’s auto loans are for commercial vehicle purchasing, 18% for two wheelers and the remaining 20% for passenger vehicles. The housing finance business of Manappuram is an equally compelling growth story. It focuses on the mid to low income self-employed customers, with nearly 90% of its home loan customers being self-employed, which is a segment that many housing finance companies are not focusing on due to perceived risks, but having better
During FY’23, Asirvad Microfinance had an AUM of Rs 10,041 crore as against Rs 7,002 crore for the previous fiscal. Its Profit After Tax stood at Rs 218.13 crore in FY’23 as compared to Rs 15.26 crore in FY’22. profitability. Thanks to this strategy, its home finance AUM has grown at a CAGR of 23% during the same period. In its core gold loan business, Manappuram has been the company to unleash innovation after innovation. It was the first company to start online gold lending in 2015, and online gold loans account for 50% of its overall gold loans now. Manappuram has been the country’s second largest gold loan player among lenders with gold loan as the core product. Apart from its diversifications, due to its diversified borrowing pool too, Manappuram has a de-risked business model. Its borrowing pool includes approximately 23% from bonds and NCDs, 53% in the form of term loans, 23% from working capital and cash credit facilities, and 1.1% from ECBs and commercial papers. Recently, it has hit the market with two bonds maturing in 539 days and 724 days to raise Rs 600 crores. SEASONAL MAGAZINE
When Will Markets Realise LIC of India’s True Potential? LIFE INSURANCE CORPORATION OF INDIA’S STOCK MIGHT NOT HAVE PERFORMED AS PER INVESTORS’ EXPECTATIONS AFTER ITS IPO. BUT THE UNDERLYING ORGANISATION IS FIGHTING FIT AS IT HAS NEVER BEEN, WITH ITS RENEWED FOCUS ON GROWING ITS NON-PARTICIPATING PRODUCTS, TECH-LED CUSTOMER ACQUISITION AND PREMIUM COLLECTION, GROWTH IN ITS BANCASSURANCE CHANNELS, AND BETTER RETURNS FROM ITS HUGE INVESTMENT PORTFOLIO. LEADING THIS CHANGE AT THE LIFE INSURANCE GIANT IS CHAIRMAN SIDDHARTHA MOHANTY, GOVERNMENT NOMINEE DIRECTOR SUCHINDRA MISHRA,AND MANAGING DIRECTORS M JAGANNATH, TABLESH PANDEY AND R DORAISWAMY. LIC REMAINS THE MASTER OF INNOVATIVE PRODUCT DESIGN AS IS EVIDENT FROM ITS NEW JEEVAN KIRAN PRODUCT THAT NOT ONLY COVERS YOUR LIFE, BUT REIMBURSES THE FULL PREMIUM ON MATURITY. WITH INDUSTRY LEADING PERFORMANCE ACROSS ALL METRICS THAT MATTER - REVENUE GROWTH, PROFIT GROWTH, PROFIT MARGINS AND RETURN ON EQUITY - AND AT THE SAME TIME WITH THE LOWEST PRICE-TO-EARNINGS BASED VALUATION, IT IS ONLY A MATTER OF TIME BEFORE LIC OF INDIA GETS POSITIVELY RE-RATED BY THE MARKET.
“M
arkets can remain irrational longer than you can remain solvent,” remarked John Maynard Keynes, the Father of Macroeconomics, during the Great Depression of the 1930s. Due to the wry humour and the great experiential truth embedded in this quote, this has been requoted often by numerous luminaries including Warren Buffett in the modern age. Keynesian economics is credited with pulling the Western nations from the Great Depression, and though its popularity waned by the 1970s, the world revisited and relied on it again in
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the aftermath of the Global Economic crisis of 2009, with leaders including Dr. Manmohan Singh and Barack Obama calling for a return of the policies of John Maynard Keynes. While the specific quote mentioned above is most often used by Buffett and other celebrity investors to discourage retail investors from taking on excessive leverage, expecting the market to start behaving rationally regarding a stock, there is also a reverse wisdom hidden in it. This wisdom is nothing but the long-term observational insight that one day markets are going to behave rationally, that is, value
life insurer and its peers fare in growth. The second largest player SBI Life Insurance has a 3 year profit growth rate (CAGR) of 9.99%. For HDFC Life, the profit CAGR for the same period is 2.69%, and for ICICI Prudential Life the 3-year profit growth rate is -12.68% (profit degrowth).
something as per its real value. Look no further than the stock of Life Insurance Corporation of India to see a modern day example. LIC is the sector leader, being the largest life insurance company in the country, by a good measure. Usually, sector leaders command the most premium valuation when compared with peers. But when it comes to LIC of India, it trades at an unbelievably low price-to-earnings multiple of just 9 times. While 9 is an attractively low P/E by any measure, wait till you hear how LIC’s
peers are valued. India’s second largest life insurance company by revenue and profits, SBI Life Insurance, trades at a P/E of 70 times. The country’s third largest, HDFC Life Insurance, trades even higher at a P/E of 96 times, making it the second most valuable life insurer by market cap, above SBI Life. And the fourth largest life insurer, ICICI Prudential Life Insurance, trades at a P/E of over 95 times. The knee jerk reaction of almost anyone reading this would be to put the blame on either LIC’s profit growth or its return ratios. Let us first see how India’s largest
Now, coming to LIC, you will have to hold your breath before hearing the 3year profit CAGR. It is over 266%. Coming to return ratios too, LIC is way ahead of all its peers by a good margin. Against SBI Life’s Return on Equity of 13.21%, HDFC Life’s RoE of 10.53% and ICICI Prudential’s RoE of 8.09%, LIC’s Return on Equity is simply breathtaking - 79.69%. While critics may cite that it is a one-off performance in FY’23 due to LIC’s exceptional profit in the last fiscal, the correct way to look at this is whether peer insurance companies’ RoE in the fiscal year before this, is any match to LIC’s RoE. Here too, there is no comparison in performance, as the best performer, SBI Life’s FY’22 RoE was only SEASONAL MAGAZINE
12.95% as against LIC’s 38.84% recorded in that fiscal. What is even more interesting is that this FY’22 RoE of LIC was its lowest in the last 5 years, but which was over 70% higher than the best RoE performance recorded by any of its peers during these last 5 years, which was the 22.64% RoE achieved by HDFC Life in 2019! When it comes to revenue growth too, LIC exhibits a predictable and steady growth, whereas most of its peers are struggling to register a meaningful topline growth, whereas some like ICICI Prudential is witnessing steady degrowth. Profit margins are another area where LIC outshines and outperforms all its peers by an unbelievable margin. LIC’s Gross Profit Margin, Operating Profit Margin and Net Profit Margin are 5.57%, 5.51% & 4.05% respectively. For SBI LIfe, these figures are 2.54%, 2.54% & 2.13%, whereas for HDFC Life it is even poorer at 2.12%, 2.01% & 1.94% during the last fiscal. ICICI Prudential fares better than SBI Life & HDFC Life in Gross & Operating Profit Margins with 3.17% & 3% respectively, but in Net Profit Margin fares worse at 1.64%. From the above apple-to-apple comparison, it should be clear that LIC stock’s underperformance in the market since its IPO days is a case of the market not awarding it its due valuation. And the even stranger fact is that it is not an apple-to-apple comparison really, but an apples-to-golden-apple comparison. LIC is not just India’s largest life insurer, but its largest institutional investor in equities and debt. This makes LIC a double-engined locomotive, an advantage which the company is yet to fully demonstrate to the market, and hence something the market is not accounting for now. Market returns from its massive equity investments are never going to be a linear source of growth, but when it starts coming in, expect LIC to deliver outsized returns to investors. The market got a whiff of it in Q1 when its equity portfolio yielded substantial profits. LIC is continuing its investment strategy of making incremental investments in SEASONAL MAGAZINE
both equity and debt, with the stated objective of creating enhanced value for all its stakeholders. While its total equity portfolio is Rs 10 trillion, its total investment portfolio is Rs 46 trillion, with the majority being in debt, including central and state government securities. This structure gives LIC’s portfolio great stability as well as deep pockets to draw from during any emerging market opportunities. When it comes to its core business of Life Insurance, LIC’s stature is not just national but global. It is the fifth-largest life insurer in the world in terms of life insurance gross written premiums (GWP). LIC is also the tenth-largest insurance company in the world by total assets.
When compared to the second-largest life insurer in the Indian market, SBI Life, LIC has the largest market share margin among all market leaders in the top 7 markets worldwide. The company has 13.35 lakh agents and services policies worth Rs 27.80 lakh crore, making it the third strongest insurance brand globally. With LIC’s core performance and relative valuations with peers being such, what exactly is preventing LIC from attaining its rightful position in the Indian equity markets? Some market analysts attribute it to LIC’s product mix, and this may be partly true. Conventionally, LIC's product portfolio has been largely dominated by the socalled participating products, where
rules, the promoter holding needs to be brought down to 75% eventually, which means the supply of LIC shares to the market may surge in the future via an OFS or FPO.
WITH LIC’S CORE PERFORMANCE AND RELATIVE VALUATIONS WITH PEERS BEING SUCH, WHAT EXACTLY IS PREVENTING LIC FROM ATTAINING ITS RIGHTFUL POSITION IN THE INDIAN EQUITY MARKETS? SOME MARKET ANALYSTS ATTRIBUTE IT TO LIC’S PRODUCT MIX, AND SOME OTHERS TO THE HIGH PROMOTER HOLDING THAT MAY NEED PARING.
profits are shared as dividends and bonuses with policy holders. But since its public listing, and its newly assumed responsibilities to its public shareholders, LIC is now concentrating more on increasing premium contributions from its non-participating products. In the first quarter of FY'24, the proportion of non-participating premiums in LIC's total annualised premium equivalent (APE) was 10.22%, as compared to 7.75% for the same period in the previous financial year, and it also marked the first time LIC has gone above a double-digit non-participating APE. This will definitely benefit its margins, which is already at double of its peers. Another overhang on the stock might be the exceptionally high promoter holding of 96.5% by the Government of India. This must be troubling to the market, as according to market regulator SEBI’s
But the Government is highly unlikely to offload such a huge stake in one go due to the insurmountable practical difficulties involved in such a huge share sale, and will approach it in a phased and highly calibrated manner. Meanwhile, LIC continues to be a high return investment for the Government. Recently, LIC Chairman Siddhartha Mohanty and a core team had visited Finance Minister Nirmala Sitharaman to hand over a dividend cheque of Rs. 1831 crore. LIC’s dividend yield is now only 0.46%, and if LIC improves its dividend payout policy much like some of its peer PSUs, the dividend income itself will be a major source of return for its shareholders including the Government of India. Several PSUs, ranging from Coal India to Oil India to ONGC are known to pay hefty dividends with yields going above 8-6%. The Government on its part has been supporting LIC and its commendable work force consisting of employees and its unique agent army. Recently, the Finance Ministry had unveiled a series of welfare measures for the benefit of agents and employees of LIC of India. The measures are related to the amendments to LIC (Agents) Regulations, 2017, enhancement of the gratuity limit, and uniform rate of family pension among others. More than 13 lakh agents and more than 1 lakh regular employees, who play a pivotal role in the growth of LIC are expected to benefit from these welfare measures. Under the visionary leadership of Chairman Siddhartha Mohanty, LIC is pursuing a three pronged strategy of fortifying its agents, bancassurance and digital channels, to boost its growth and margins. Towards this, it has already initiated an ambitious project for a technology overhaul, which should boost product sales and enhance the customer experience. Strategic changes in terms of product
mix and distribution are also eyed. A comprehensive digital transformation project is underway at LIC, which is aimed at transitioning all processes to a digital mode. A digital customer onboarding project is scheduled to take effect from December this year. Even now, LIC collects 52% of its premiums digitally, but with such a tech overhaul in place, this percentage will move even higher up, resulting in faster growth and better profitability. LIC will also continue with its often stated objective of matching or even slightly exceeding the overall life insurance industry’s growth rate. In FY'23, it had achieved a growth of 16.47% in New Business Premiums (NBPs), which is one of the overall industry’s best ever performances. The fact that all of its three major competitors - SBI Life, HDFC Life & ICICI Prudential - are banking majors is not lost on LIC. It has rightly understood the importance of the bancassurance channel, and is now emphasising the promotion of premiums through such tie-ups. Innovative product design is another area where the insurance giant is focusing on. LIC had recently launched a new product, Jeevan Kiran, the design of which sent competitors scrambling for cover. It has been well received by consumers and not without reason. Jeevan Kiran is an innovative product that provides not only coverage for life risk, but at the policy’s maturity, the total premium is refunded. Thus it offers a risk cover at no cost, as the total amount paid is reimbursed.With such innovations and growth strategies in place, LIC of India’s stock is likely to get re-rated eventually by the market. John Maynard Keynes who wryly commented on the time it may take for markets to do such things, was not just an economist, but an astute investor himself who kept on outperforming the overall market by 8%, for several years. His strategy was simple - picking undervalued stocks like LIC. Decades later, Buffett and several other celebrity investors continue to follow this timeless principle. SEASONAL MAGAZINE
NITTE DEEMED UNIVERSITY
OVER FOUR DECADES OF CONSISTENT PROGRESS IN ACADEMIC EXCELLENCE Under the visionary leadership of its Founder Chancellor N Vinaya Hegde, Pro Chancellors Vishal Hegde and Prof. Dr. Shantharam Shetty, and Vice Chancellor Dr MS Moodithaya, Nitte Deemed-tobe University has been ranked among India’s Top 100 universities for the 5th consecutive year in the NIRF rankings, and it has also jumped 10 ranks this year to the 65th position. Two of Nitte’s eminent scientists Dr Indrani Karunasagar and Dr Iddya Karunasagar have also bagged top ranks of 11 and 13 respectively in the field of microbiology by Research.com. Nitte alumni like Vidya Kamath Pailodi and Dr. Saritha Arunkumar have brought global accolades to the university recently, while on the national stage two of Nitte students have won the 1st and 6th rank in the Joint CSIR-UGC NET Examination under the Life Sciences category.
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iebel Scholars program needs no introduction among cutting-edge universities in the world and their graduate students and startup entrepreneurs. Established by the Thomas and Stacey Siebel Foundation in 2000, the Siebel Scholars program selects around 90 graduate students each year from some of the finest universities in the world to be a Siebel Scholar. So far only 1800 Siebel Scholars have been selected and they form an elite club of researchers, entrepreneurs, engineers, scientists and top rung of managers.
N Vinaya Hegde Chancellor
There are only 16 universities from which Siebel Scholars have so far been selected and they include prestigious names like Harvard, Stanford, John Hopkins, MIT, Princeton, UC Berkeley, University of Chicago, Wharton, and University of Illinois Urbana-Champaign, which is also incidentally the alma mater of billionaire businessman Thomas Siebel, one of the world’s most successful tech entrepreneurs who founded Siebel Systems which was later acquired by Oracle. Recently, the Siebel Scholars Foundation announced its 2024 Class of Siebel Scholars, honouring 83 exceptional graduate students from top universities around the world in the fields of bioengineering, business, energy science, and computer science. Five Computer Science students from the University of Illinois Urbana-Champaign were named to this year’s class, and among them is Vidya Kamath Pailodi, a second-year graduate student working with Professor George Chacko to explore the field of Computational Scientometrics. Before arriving at the University of Illinois Urbana-Champaign, Vidya worked as a software engineer in the thermotechnology department at Robert Bosch Engineering and Business Solutions in Bengaluru, India. This was shortly after Vidya graduated as a Gold Medalist in ECE from the NMAM Institute of Technology in Nitte, India where she earned an undergraduate degree in Electronics and Communication Engineering. Vidya’s achievement is something about
which Nitte Deemed University can be proud of as Nitte Mahalinga Adyanthaya Memorial Institute of Technology (NMAMIT) is a constituent engineering college of Nitte Deemed University. This achievement is all the more impressive as 4 out of the 5 students from University of Illinois who won this prestigious scholarship are from India, from prestigious institutions including IIT Indore, IIIT Hyderabad & Manipal Institute of Technology.
Oscars of Engineering.
Vidya’s and Nitte Group’s achievement in this regard is by no means a one-off phenomenon on the world stage. Recently, Dr. Saritha Arunkumar who holds the position of IBM’s Public Cloud World Wide Technical Leader in Security, in the United Kingdom, won the prestigious award, The Princess Royal Silver Medal, often called the
Earlier, Dr. Saritha has been recognised as an IBM Master Inventor, an IBM Super Hero, Financial Times' Top 100 BAME Technology Leaders Award, and The Inc Magazine’s Top 10 Business Women to Follow in 2022. Her achievement of winning the The Princess Royal Silver Medal is regarded as an achievement for India, and of course for Nitte Group as
Bestowed by the United Kingdom’s Royal Academy of Engineering, the award was presented to Dr. Saritha by none other than HRH Princess Anne, Sister of King Charles, in London. The award was in recognition of this leading cyber-security expert’s invaluable and critical contributions to shaping security in emerging areas such as the cloud, blockchain, and biometrics.
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Dr. Saritha had graduated from the NMAM Institute of Technology in 2000 as an Electronics & Communication Engineer, and was also the topper of her batch. Vidya’s and Dr. Saritha’s education and grooming at NMAM Institute of Technology happened much before it became a constituent college of Nitte University. But this only goes on to add further sheen to the farsighted vision and care accorded by Nitte Educational Trust led by its Chancellor N Vinaya Hegde, years or even decades before it became a formal university. Nitte Deemed University is a part of Nitte Group run by Nitte Education Trust, which was founded in 1979 by Justice Kowdoor Sadananda Hegde, former Chief Justice of the Supreme Court and former Speaker of the Lok Sabha. Offering education in diverse areas of learning, Nitte today offers a total of 130+ programs including medicine, engineering, management, hospitality, allied health sciences, dentistry, pharmacy, nursing, physiotherapy, speech and audiology, media & communication and architecture. The Trust has established 40+ institutions spread across three campuses at Nitte, Mangalore and Bangalore and has over 20,000+ students and 4500+ faculty in its campuses. Equipping its students for outperformance continues even to this day at Nitte University. In the national level Joint CSIR-UGC National Eligibility
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Vishal Hegde Pro Chancellor Test (NET) exam conducted a few months back, a total of 78,168 students had appeared under the Life Sciences category. NET exam is conducted to determine the eligibility for Junior Research Fellowship (JRF) and Lectureship (LS) / Assistant Professor post in Indian universities and colleges. Among these over 78,000 students who appeared under the life sciences category, there were students from the Nitte University Centre for Science Education & Research (NUCSER) too. And guess who won the national level top ranks? Twin sisters, Rhea Kishore and Reena Kishore, MSc Biomedical Science students at NUCSER, achieved the 1st
Prof. Dr. Shantharam Shetty Pro Chancellor
and the 6th Rank nationally! It was an incredible performance by these Nitte students as Rhea scored a total percentile of 99.94 whereas Reena scored 99.66. Both of them were mentored at the university by Dr. Akshath US, Scientist G-II, and Dr. Anirban Chakraborty, Professor & Director of NUCSER, and the achievement of these twin sisters has become another proud moment in these recent times for Nitte University. Such mentoring in both the academic and leadership aspects is a culture that permeates the entire university starting from the very top rungs. Vice Chancellor
there were only three to four orthopaedics, including myself, in Mangaluru, while at present, there are over 200 orthopaedics in the city, which is a tremendous growth in this field. Yes, we all want to earn money but always remember to serve your patient first and then think of money. Practice for need and not for greed,” added Dr Shantharam Shetty.
N Vinaya Hegde and Pro Chancellor Vishal Hegde have been known to intervene for the student community at every appropriate forum. Such an instance happened during the university’s 2022 convocation, when Vinaya Hegde requested UGC Chairman and Chief Guest Prof. Mamidala Jagadesh Kumar to upgrade the Mechanical, Civil and Electrical Engineering courses with components from computing and electronics to make them relevant at the changing workplace. NMAMIT that produced winners like Vidya and Dr. Saritha today offers both conventional and advanced engineering branches like Artificial Intelligence & Machine Learning, Robotics & AI, Biotechnology, Civil, Computer & Communication, Electrical & Electronics, Electronics & Communication, Information Science, Mechanical Engineering etc. Pursuit of values is another dimension where the Nitte University leaders excel, starting right from the Chancellor. Recently, pioneering orthopaedic
Dr MS Moodithaya Vice Chancellor surgeon and Pro Chancellor of Nitte University, Prof. Dr. Shantharam Shetty, who was the Chief Guest of OASISCON 2023, a 3-day Conference Of Orthopaedic Associations Of Six South Indian States Hosted By Karnataka Orthopaedic Association, delivered such a value based lesson for fellow orthopaedic surgeons. Said the Nitte Pro Chancellor, “During those years (when I started my practice),
Startup incubation is another domain where Nitte University is starting to make impressive gains. Recently, an innovative betel leaf tea bag product was developed by young startup entrepreneur Sandeep Eshanya with the support of Nitte University’s DST Technology Enabling Center and Dr Mamatha BS, an expert in food technology and faculty at Nitte University Center for Science Education and Research. While the nutritional value of betel leaf is noteworthy, being rich in fibre, vitamins A, B, C and minerals like calcium, iron and potassium, it was an arduous and time-consuming process that took several iterations of laboratory studies and consumer acceptance trials to ready a process for preparing tea bags from betel leaves without losing nutrients, medicinal properties and in the original flavour as well as incorporating additional flavours as per user preference. Entrepreneur Sandeep Eshanya was all praise for Nitte University’s support, when he said, “NITTE University boosted my confidence when I pitched my idea. They have been a constant support to convert my dream into reality. I have now sent samples to 10 countries such as Sri Lanka, United States, UK and many more.” There is more to Nitte University’s support for such startup entrepreneurs than in product development. Under the guidance of Prof. Dr Iddya Karunasagar, Advisor - Research and Patents, at Nitte University, the process of producing the betel leaf tea bags has been protected by a shared patent, and Nitte University has authorised Eshanya Beverages, the concerned start-up to commercialise the technology through an agreement, so that the product is effectively made available in the Indian and overseas markets. SEASONAL MAGAZINE
Nitte Deemed University also has a robust research program that offers Fulltime and Part time Ph.D Course in the faculties of Medicine (including PreClinical, Para-Clinical & Clinical), Dentistry, Pharmacy, Physiotherapy, Allied Health Science, Nursing, Biological Sciences, Speech & Hearing, Engineering, Commerce & Management, Applied Sciences, Business Administration and Humanities. Meritorious Full Time candidates receive Nitte PhD Fellowships of Rs. 20,000/- per month as per the University’s guidelines. Nitte takes the quality element of its PhD program quite seriously, and there is an impressive lineup of Research Guides, and the selection of candidates is based on a national-level entrance test, statement of purpose and personal interview. Nitte University organises various workshops and seminars to bring industry experts right into the campus. A similar workshop to mark the World Food Safety Day was organised by Nitte DST Technology Enabling Center in association with CII, FSSAI & KCCI, and was moderated by Nitte faculty Dr. Indrani Karunasagar. She emphasised the need to understand the basis for food safety standards and the best practices that food business operators from farm to plate need to follow to comply with the standards. The discussions covered improving food hygiene and food safety in all segments of the food industry including street vendors, quality control, certifications and accreditations required by food
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testing laboratories. Nitte is also forever forging meaningful tie-ups with select industry majors in training and certification for the employability of its students. A few months back it forged such a tie-up with upGrad Campus, the higher education arm of upGrad, one of Asia’s largest integrated career skilling, workforce development & placement companies.Under this collaboration, UpGrad Campus will support Nitte BTech students with one of the hottest coding skills today - Full Stack Development (FSD) - so that they are adept with the tech requirements of the modern day workplace. Spread over a period of 4 years, the FSD specialisation begins in the first year integrated within the university
curriculum and has been designed for engineering aspirants who aim to build a career in the Information Technology domain. It will cover around 1400 hours of learning content with over 300 live sessions, 11 projects and case studies, in sync with the B.Tech syllabus to ensure learners get higher experiential learning. It will also encourage live & interactive faculty engagements, alumni networking, and industry-specific sessions/simulations to enhance the overall subject understanding to further enable them with the expertise required to succeed in the said industry. The tieup is aimed at making Nitte students stand out from the lakhs of Engineering students in India. Management education is another domain where Nitte Deemed University is a force to reckon with, thanks to its longstanding experience through its Justice KS Hegde Institute of Management (JKSHIM). This highly ranked MBA institute recently welcomed its 26th batch of MBA students, with a unique value-add. A guest of honour at the event was former alumni Sajan Murali, who is now the CEO of Turtle Wax Media Ltd. Sajan belongs to the 1999-2001 batch of MBA at JKSHIM, and called upon the current batch of MBA aspirants to focus on imbibing the soft skills.
JKSHIM which recently celebrated its Silver Jubilee, had Dr. Debashis Chatterjee, Director, IIM Kozhikode, delivering the Silver Jubilee lecture on the theme of ‘Leadership Challenges'. Noting that Nitte Founder Justice KS Hegde was a visionary with values, Dr. Chatterjee said, “Principle and value centred leadership is the need of the hour. Life has no meaning without values and principles. Integrity is the hallmark of life. These virtues need to be imbibed during schooling and college days.” Bengaluru based Nitte Meenakshi Institute of Technology (NMIT), which is promoted by Nitte Education Trust, but which is not technically part of Nitte Deemed University yet, recently hosted its 1st International IEEE conference on ‘Networks, Multimedia and Information Technology’, NMITCON 2023. Sponsored by the AICTE, the conference brought together experts and enthusiasts from across the domain of information technology, including AICTE Chairman Dr. T. G. Sitharaman, Dr. David Camacho from the Technical University Of Madrid, Spain, and Ms. Namrata Dutta, Senior IT Auditor, from Mumbai, whose keynote addresses at the event was a great source of inspiration to the participants. Authors from countries including the USA, the UK, and Germany, and also from premier Institutions like IISc., IITs, IIITs,
and NITs presented their papers at this Conference. Also marking the occasion was the inauguration of the AICTE-IDEA Lab by Dr. T. G. Sitharaman. The focus of the lab is to encourage students to apply Science, Technology, Engineering, and Mathematics (STEM) fundamentals on ideas for enhanced hands-on experience and even product development. The AICTE has also sanctioned Rs.15 lakh to NMIT to help establish the lab. Nitte Institute of Communication (NICO), another constituent college of Nitte Deemed University, is also acing its game above peers with international industry certifications. Recently, it received the prestigious Godox Certification under which Godox, a world leader in professional and studio
quality lighting, will conduct workshops on lighting for students, where they will learn from the Godox Team about latest lighting techniques and practices. With this tie-up, NICO has become India’s Only Godox Certified Training Centre. Besides the Godox partnership, NICO also hosts workshops by experts in photography, feature writing, video editing, VFX, and short filmmaking. These workshops give students exposure to real-world challenges and opportunities in the media industry. Besides offering five comprehensive programs in media and communication, the institution also organises the Nitte International Film Festival (NIFF), which is one among the few student-managed film festivals in the country. Nitte communication students thus get an opportunity to interact with filmmakers, technicians, actors, cinematographers, scriptwriters who participate in the festival, which is so characteristic of the way Nitte Deemed University grooms all its students. With such initiatives across the campus and all its constituent colleges, it is no wonder really that MNCs and large Indian corporates have been placing students from Nitte Campus. These include renowned names like Mercedes Benz, Toyota Kirloskar Motors, Hitachi, ABB Power Grids, Juniper Networks, Intel, Novo Nordisk, L&T Technology Services, Syngene International, JSW Group, Prestige Construction, JK Cement etc. SEASONAL MAGAZINE
EMBASSY GROUP
EVOKING AWE IN EVERYTHING IT DOE Different leaders evoke different emotions in their followers as well as competitors. Some evoke respect, some evoke fear, yet others envy, and so on. But there are a very select group of leaders who evoke awe in everyone else, in everything they do. Jitu Virwani belongs to this select club of leaders. Embassy Group which he founded in 1993 is today one of India’s largest real estate conglomerates with a broad portfolio of over 1700 acres land bank, over 70 million sq. ft. of prime commercial, residential, retail, hospitality, services, and educational spaces across NCRDelhi, Bengaluru, Chennai, Pune, Mumbai, Noida and Trivandrum, as well as Serbia in the international market. Embassy is also the sponsor of India’s first publicly traded REIT and Asia’s largest REIT by area, the Embassy Office Parks REIT with a market capitalization of over Rs. 29,000 crores now.
ES
Embassy Group is by no means India’s largest real estate developer yet. But those who have observed Jitu Virwani’s moves so far know very well that he will take a shot at it eventually. He may or may not win in that, but the industry knows that either way Embassy Group will evoke further awe, even in a partially successful move.
This kind of strategy dates to Embassy’s very first deal under Jitu Virwani in the office space segment, decades back, in 1993 to be precise.
For this first project in Bengaluru’s Infantry Road, that was mostly taken up by Kirloskar Group companies, instead of paying out and eliminating the landowner from the project as most developers would have done, Virwani made him a partner in the project by giving him 50% of the developed square feet in lieu of getting to keep half of the land cost for completing the project!
And this same win-win model Virwani would follow in many of his later projects, giving him an
JITU VIRWANI, CMD
unmistakable edge in the market in both conceiving and executing even large-scale projects faster than most of his peer developers could dream of. Even in some of his larger projects like Embassy GolfLinks Business Park, this same model was followed initially, together with Virwani’s another unique skill in stitching up huge land parcels patiently. This is one developer who loves land so much that he says the lands that he previews almost talk back to him. Virwani says he instantly imagines what is possible with that land at first sight, and that the land concurs! That is how Embassy GolfLinks grew from an initial plan of 5 acres to over 70 acres when completed. His passion for land made him one of the earliest and largest landowners in the North Bengaluru region, long before all the developers made a beeline for it. For more than a decade, Jitu Virwani would stitch up and amass a formidable land bank for Embassy in North Bengaluru, and while doing it he almost went down in debt owing to such purchases. But fortunately for him, his bets played out just in time, when North Bengaluru eventually emerged as the most buzzing hotspot in India’s Silicon Valley. One of the mega projects of Embassy Group that has benefited directly from this farsighted vision of Jitu Virwani is Embassy Springs. Being designed and constructed as Bengaluru’s biggest and best-planned city, Embassy Springs, is the epitome of urban planning, spread across 288 acres. This self-sustainable township offers residents an exquisite living experience amidst nature, even when situated in the hotbed of North Bengaluru, complete with a worldclass school, retail and commercial spaces, and more. Embassy Springs features 32 community parks and link
parks, a 55-acre man-made lake, 3.5 lakhs sq. ft. private club house, 22 bus bays, an 18 km internal road network, an 8 km cycling track and 45+ acres of green spaces. This is, in fact, something that differentiates Jitu Virwani from most other real estate developers operating at this scale. The Embassy Group founder has never been averse to taking on debt but makes sure that he takes it on only if the cash flow can service it. In fact, for the last few years now, Embassy has been on a significant drive to pare its debts, with much of it already neutralized. Yet another factor that keeps Jitu Virwani and his life’s work, Embassy, in industry’s awe, is his people skills. From his very first customer for office space, Vikram Kirloskar in 1993, Virwani has exhibited a passion for never letting go of a friendship. This has resulted in almost all of Embassy’s Fortune 500 clients to end up as repeat customers, while with some like the Kirloskar family, things have progressed to co-developed projects. His people skills are so strong even inside the Embassy Group that the loyalty he evokes is legendary. Even amid a corporate culture where spending more than a couple of years in a company is looked down upon as stagnation, many in Virwani’s core team have been with him for more than a decade, some even two. This includes Narpat Singh Choraria, Director (from inception of Embassy in 1993); S Chandra Das, Independent Director (since 2010); Reeza Sebastian Karimpanal, Executive President - Residential Business (for more than 15 years); Rajesh Bajaj, Executive Director, Corporate Affairs (for last 25 years); Maria Rajesh, Chief Human Resources Officer (since 2006); and Rajesh Kaimal, CFO (for last 6 years). It also includes Embassy’s heads of subsidiaries or divisions like Pradeep
Lala, MD & CEO, Embassy Services (since 2013); Giulia Baima Bollone, Director, Embassy Interiors (since 2017); and Kahraman Yigit, CoFounder & CEO, Olive by Embassy (since its inception). The mutual loyalty of this team is unique that Jitu Virwani has remarked that in case he is starting anything new, outside of Embassy Group, he would be taking this core team along! At its heart, Embassy Group is a family business. Also, Jitu Virwani’s elder son, Karan Virwani, who had long shadowed his father as his Executive Assistant at Embassy, has since then been heading the joint venture WeWork India as its CEO. Unlike in the US, the home of the collaborative working space giant WeWork, its Indian JV with Embassy has continued to gain good traction under Karan’s strategic leadership, which has positioned it as a dynamic and fast-growing startup in India. With its leading space-as-a-service platforms and 7 million+ sq. ft. of assets and 84,000+ desks across 50 locations pan-India, WeWork India cultivates creativity, boosts productivity, and reimagines the workplace for everyone, from freelancers to Fortune 500 companies. Younger son Aditya Virwani has been working as the Chief Operating Officer (COO) of the Embassy Group and is a board member of Embassy Office Parks REIT. Aditya was mentored for this role by Jitu Virwani for 2 years before he took up the role as Group COO. He was also a member of the team that successfully filed India’s first REIT. Aditya holds a bachelor’s degree from the University of San Francisco and is the winner of a bronze Duke of Edinburgh Award. Embassy Group’s greatest strength remains Founder & Group Chairman Jitu Virwani’s flair for staying ahead of the curve. He has repeatedly demonstrated this, right from his start
KARAN VIRWANI, CEO, weWork India
in 1993, by expanding from residential real estate to office spaces, just when the outsourcing wave was gathering momentum in Bengaluru, buoyed by the country’s economic liberalization of the 1990s. Years later, Jitu Virwani would rightly predict the industry’s major shift to leased office spaces, instead of outright selling, as many US based companies had internal policies that prevented office space purchases in other countries. This switch proved to be the gamechanger for Virwani as suddenly Embassy Group started to have a healthy cash flow unlike most of its peers. Jitu Virwani’s magnum opus so far is of course how he de-leveraged the Group significantly by tying up with Blackstone for office spaces and taking this company public as India’s first listed Real Estate Investment Trust (REIT). Today, Embassy Office Parks REIT owns and operates a 45 million square feet portfolio of eight large scale office parks and four city centre office buildings in India’s best-performing office markets of Bengaluru, Mumbai, Pune, and NCRDelhi. Home to 234 of the world’s leading companies, its portfolio also comprises strategic amenities, including four operational business hotels, two under construction hotels, and a 100 MW solar park supplying renewable energy to tenants. Embassy Office Parks REIT is headed by Aravind Maiya as CEO. A Chartered Accountant by training, Aravind has 22 years of experience in real estate, capital markets, audit and consulting, of which 3 years were with Embassy REIT itself earlier as its CFO. In recent years, Jitu Virwani has again proved his flair for staying ahead of the curve, by expanding its residential offerings, correctly sensing the resurgence in this segment. Embassy’s residential projects are breathtaking in scale and opulence and have taken the market by storm under the towering vision of Jitu Virwani and the execution capabilities of a high achiever like Reeza Sebastian Karimpanal, its Executive President for Residential Business. Embassy Lake Terraces at Bengaluru exemplifies this momentum in design, execution and sales. Redefining luxury standards in not only Bengaluru, is the Infinite Series at Embassy Lake Terraces. Delivering breathtaking views of Hebbal and Nagavara lakes, these ultra-luxury
ADITYA VIRWANI, COO, Embassy Group
condominiums are really mansions once you get inside. Starting from Rs. 5.40 crore, the Infinite Series is ready to move in, with the OC received. As the cherry on the cream, there is a GST benefit too if you decide fast enough. Located at the epicentre of growth in Hebbal, North Bengaluru, these limited-edition collection of 3bedroom condominiums offer not only expansive indoor spaces but equally impressive balconies, across its 3,913 sq ft and 4,189 sq ft options. Embassy Lake Terraces also offers Sky Blocks that offer a brilliant perspective, Garden Blocks that deliver nature inspired luxury and Signature Residences of bespoke luxury. These options range from 4BHKs of 4440 sq ft to single-orduplex mansions of 9156 sq ft. In residential real estate, Embassy is active in four segments - Luxe Collection, Premium Residences, Integrated Townships and Senior Living. Some of the Group’s major projects include Embassy Springs,
Four Seasons Private Residences at Embassy One, Embassy Grove, Embassy Edge @ Embassy Springs and Serene Amara by Seattle based Columbia Pacific at Embassy Springs. With an anticipated continued upcycle in the residential market and to meet the current demand for homeownership, Embassy Group is reinventing its residential portfolio by migrating towards the premium segment. They have a 5 million sq. ft. pipeline and Rs. 3,000 crores of inventory ready to be launched in the current and upcoming financial year. With over Rs. 2,000 crores of OCcompliant projects ready for possession this year, it is targeting unlocking its existing inventories as well as launching new projects and activating their land bank. The Group is also actively looking for jointventure partnerships in other cities and micro markets. A pioneer in co-working spaces through WeWork India, Embassy has also pioneered the hybrid hospitality segment in India by starting Olive by
Embassy in 2019 itself, targeted at young working professionals and students. Now spanning 1,764 keys, Olive combines short and long stays with vibrant communities and the best of experiences, events, and culture,
located in India’s top destinations. Embassy’s hospitality division is a full-fledged operation running hotels, clubs, restaurants, and event management. Embassy’s hotel properties are managed by world leaders in hospitality including Hilton and Four Seasons. Embassy also runs a renowned Interiors division, as well as Embassy Services Pvt. Ltd., an integrated facility management services company that has outgrown its mandate of serving Embassy’s facilities, by attracting several clients from outside the Group too, thanks to its superior and consistent services. Embassy Services now manages 130+ million square feet of real estate assets across the commercial,
residential, co-working, airport, retail, hospitality, energy, education, industrial, and warehousing segments. In addition to ISO, CII, BSI, and other certifications for globally acceptable standards and benchmarks, they are recipients of the prestigious ‘Sword of Honour’ from the British Safety Council and manage some of the largest business parks carrying LEED, WELL, GRESB, and IGBC Platinum certifications, among others. Apart from real estate development, Jitu Virwani is also passionate about education and sports, especially equestrian. Embassy Group’s flagship project in education is the Stonehill International School of North Bengaluru. Italian-born Stefano De
Napoli, postgraduate electronics engineer and former corporate sector leader, is presently the Chairperson of the Stonehill International School Governing Council. Founded in 2008, Stonehill International School is the only school in South India offering all three International Baccalaureate programs - the Primary Years Programme, the Middle Years Programme, and the IB Diploma Programme. With a highly trained international faculty from across 35 nationalities and world-class infrastructure spread across a 34-acre campus, Stonehill is one of the most preferred international institutions in Bangalore. Embassy Group is also working on establishing the Embassy Academy,
a new progressive K-12 co-education day-school offering the CBSE Curriculum to students of the age group 3-18 years, at Embassy Springs, one of the best-planned townships in the North of Bengaluru. Coming up on its own 5.3-acre campus, the school will feature extensive facilities hitherto unseen in city based CBSE schools and will be home to 1350 students in its first phase, with the first batch intake planned for the academic year 2024-25. The Group also runs the Embassy International Riding School, which is headed by Italian-born Silva Storai, India’s only professional woman jockey and the only woman jockey in the world to have won two Derbies. Under Virwani’s vision, Silva runs Embassy International Riding School with unsurpassed
dedication and attention to detail and has already produced national and international level champions for India. A firm believer in giving back to the society around its properties, Jitu Virwani has a deep held conviction that education can change the lives of communities and generations to follow, and that giving back to the community is the way forward for this. Sharing this vision with his father, COO Aditya Virwani today directs Embassy’s support for 73 government schools and rural schools, offering holistic education to over 42,000 children. Additionally, Embassy Group also drives positive change by providing several infrastructure-based solutions to uplift basic amenities around Embassy communities.
BRIGADE ENTERPRISES
EYEING EXPONENTIAL GROWTH NOW On October 11 this year, Brigade Enterprises completed its first full year of operations under its new leaders - Managing Director Pavitra Shankar and Joint Managing Director Nirupa Shankar. While taking over the reins of the Rs. 14,000 crore Brigade empire from her father and legendary real estate developer, MR Jaishankar, there was something that the new MD Pavitra Shankar said that caught the market’s attention. Among other objectives like pursuing Brigade Group’s unique set of values, Pavitra Shankar said that the firm will now be working towards achieving exponential
M.R. JAISHANKAR Executive Chairman
growth. Though one year is too little a period for assessing whether this objective has been met, Managing Directors and sisters Pavitra and Nirupa have definitely progressed along this path, first by achieving a positive turnaround to profits after two years when Brigade Enterprises achieved Rs. 218 crore in net profit for FY’23, as against a loss of Rs. 67 crore in FY’22 and a loss of Rs. 98 crore in FY’21. The markets were quick to cheer Brigade’s rapid change in fundamentals, and the stock has appreciated by 51% during these past 12 months. Two things had obviously helped Pavitra and Nirupa achieve this remarkable turnaround. Firstly, despite resigning as Managing Director, MR Jaishankar has continued to be available for Brigade’s new leadership by continuing as its Executive Chairman and Director. Secondly, despite their relatively young age, Pavitra and Nirupa have been old hands at Brigade, having led many of its key initiatives for many years now. They also bring a wealth of knowledge and experience from their professional higher education and previous stints. Pavitra holds a Bachelor’s Degree in Economics & Mathematics from the University Of Virginia, USA,
and a Masters In Business Administration in Real Estate & Finance from Columbia Business School, USA. Before joining Brigade, Pavitra established and oversaw Legion Real Estate in Menlo Park, California. Currently, she is responsible for Brigade’s residential business strategy and growth, with a strong focus on customer experience and data analytics. Nirupa holds a Bachelor’s Degree in Economics from the University Of Virginia, USA and has done her Masters of Management In Hospitality from Cornell University. She currently oversees Brigade’s Hospitality, Office & Retail Ventures, Human Resources (HR), Public Relations (PR) and Innovation Functions. Going forward, however, pursuing exponential growth will prove to be challenging for the real estate sector including Brigade, as its Q1 results show, when revenue fell by over 27% and net profit shrunk by over 56%, both on a YoY basis. Pavitra and Nirupa are however game for a challenge, and have chalked out an impressive growth plan that has rightly identified premium land acquisitions as the game changing strategy for Brigade that can usher in exponential growth. In recent quarters and months, under their watchful eyes, Brigade has executed a few major land deals that will strengthen its position in the market. Recently, it acquired a 5 acre land PAVITRA SHANKAR Managing Director
NIRUPA SHANKAR Joint Managing Director
parcel in Yelahanka, in the buzzing hub of North Bengaluru, for Rs 123.50 crore from Bangalore Ceramics, where they plan to construct a residential project of nearly 1 million sq. ft. with a revenue potential of around Rs. 800 crore. Earlier, in Q2 itself, Brigade had acquired a 6.54-acre land parcel in Chennai from Pfizer Healthcare India for Rs. 139 crore. This land parcel is located on Rajiv Gandhi Salai (Old Mahabalipuram Road) in the booming Sholinganallur area, and will also feature a residential development of over 1 million sq. ft. With these latest two acquisitions, Brigade Group now has 455 acres in its land bank, of which Bengaluru accounts for the highest share at 340 acres, followed by Chennai at 85 acres, and the rest divided between Mysuru, Hyderabad & Kochi. While Brigade has already lined up 7.87 million sq. ft of residential launches across all these markets already for the next 3 to 4 quarters, the vision of Pavitra and Nirupa is to achieve 10 million sq ft of new launches every year, as soon as possible, which will drive the exponential growth they aim for. There are already strong indications that the market believes that the duo can eventually pull this off, with multiple brokerages and analysts preferring Brigade as a choice pick from the realty sector. Here is a detailed look at the Brigade projects and initiatives under Pavitra & Nirupa that will make this vision a reality.
KARUR VYSYA BANK
KVB EMERGES AS A SUCCESSFUL BLEND OF TRADITION & INNOVATION
When it comes to banking stocks, the ongoing result season which coincided with a sharp correction in the markets, has been a telling time. Before the correction set in, almost all banking stocks were on an upward spiral. And the banking sector results too were almost all good, propelling the stocks further up. But when the swift and painful correction set in, the stocks of even many of the well performing banks in Q2 tumbled down sharply. That led analysts to look more deeply into the numbers, beyond what the headline figures suggested. And the truth was there in the fine print for all to see. One of the best performing stocks even during the overall correction was Karur Vysya Bank (KVB). Under the proactive leadership of its MD & CEO, Ramesh Babu, the bank’s net profit grew a robust 51% to Rs.378 crore for the quarter ended September 30, compared with Rs.250 crore in the corresponding year-ago period. The bottomline was also up sequentially, over Q1. The bank’s Net Interest Income (NII) grew by 11% to Rs. 915 crore from the Rs. 821 crore it was in the corresponding year-ago quarter. The Non Interest Income or the Fee Income for the September 2023 quarter rose even faster at 40% to Rs.339 crore as against Rs.242 crore. While all these growth numbers were quite good, the reasons why Karur Vysya Bank could put up an impressive price performance during the market rout were something else - including its asset quality, its overall business momentum and its attractive valuations. KVB’s Gross NPA ratio declined sharply to 1.73% during the September 2023 quarter compared with 4.02% a
year ago and 1.99% in the June 2023 quarter. Net NPA too fell impressively to 0.47% compared with 1.38% in the year-ago quarter and 0.59% in the preceding quarter. This kind of performance on the asset quality front was missing in most of the banks that fell sharply during the recent correction. One reason why KVB has been able to perform this well on the asset quality front, is its cautious stance on the booming segment of unsecured loans. As a 107-year old private sector bank, KVB is quite conservative when it comes to diversifying into such new age products that come with high growth prospects but immense risks. But that doesn’t mean that KVB won’t bite the bullet ever when it comes to unsecured loans, but it will do so only at its own terms and timing. The bank, which has become increasingly tech savvy over the past decade, has acquired the capabilities to analyze digital surrogate data on customers, based on which better decisions can be taken in products like unsecured loans. Secondly, it is planning to test the waters with its existing customers, like its current account customers who still don’t have a loan product with KVB. And thirdly, the bank is planning a careful and well planned foray into the domain of unsecured business loans in the MSME segment, where the bank already has tremendous expertise. With this Q2, the bank has crossed Rs.1,50,000 crore in total business, which may not come across as a big number when compared to new gen private banks, but for a prudent and high quality bank like KVB, it is remarkable to say the least. And all these achievements still come at attractive valuations, with KVB still available at a TTM P/E multiple of 8.84 times and a P/B of just 1.41 times, which is way more safer than most comparable private sector banks now.