Pocketful

Category: Case Study

  • Mukka Protein IPO: Business Model, Key Details, Financial Statements, and SWOT Analysis

    Mukka Protein IPO: Business Model, Key Details, Financial Statements, and SWOT Analysis

    Embark on an exciting journey into the aqua-culture sector with the initial public offering (IPO) of Mukka Protein Limited, a leading player in the sustainable seafood industry. 

    In today’s blog, we’ll cover the company’s business model, key details, financial statements, and SWOT analysis. 

    Company Overview

    Established in 2003 as a partnership firm by K. Abdul Razak, the company was renamed Mukka Protein Limited and became a private limited company in 2010. 

    The company’s corporate headquarters is located in Mangalore, Karnataka, India.

    The company mainly focuses on producing fish meal, fish oil, and fish soluble paste, which are used to make aqua food for fish and shrimp, pet foods for dogs and cats, and poultry feed for broilers and layers.

    The company has established production facilities around India’s prominent coastlines, with ten global fishmeal factories — four in Karnataka, four in Gujarat, and two in Oman. Each of their units has a technician for quality control management and dedicated in-house laboratories.

    fish meal

    Awards and Accreditations

    1.  India’s growth champion award by Economic Times.

    2.  Star exporter awards, by Federation of Karnataka Chamber of Commerce and Industry.

    3.  State export excellence award by the commissioner for industrial development and director of industries and commerce.

    4.  Certificate of FT High–Growth Companies Asia Pacific 2023 by financial times and statista.

    Promoters

    The company’s promoters are Kalandan Mohammed Arif, Kalandan Mohammed Haris, and Kalandan Mohammed Althaf; they own 100% of the shares.

    Details of the Issue

    The company wants to issue 8 crore new shares to raise a total of 224 crore. With a market lot of 535 shares, the IPO’s lower price band is set at 26 INR, while the higher price band is set at 28 INR per share. 

    Major details

    Face Value of Share1 INR
    Price Band26 – 28 INR
    Market Lot535 Shares
    Total Fresh Issue Size224 Crore
    Total Number of Shares8 Crore

    Timeline of IPO

    IPO Open Date29th Feb 2024
    IPO Close Date4th March 2024
    Finalization of Allotment5th March 2024
    Initiation of Refund & Credit of shares into demat account6th March 2024
    Listing Date on NSE & BSE7th March

    IPO Allotment Size

    ApplicantMarket LotShareAmount (INR)
    Retailer (Min)153514980
    Retailer (Max)136955194740
    Small High Net Worth Individual (Min)147490209720
    Small High Net Worth Individual (Max)6635130988680
    Big High Net Worth Individual (Min)67358451003660

    Objective of the Issue

    The IPO proceeds will cover the working capital requirements of the company’s associate, Ento Protein Private Limited.

    Read Also: IXIGO IPO Case Study: Business Model, Key Details, and Financials

    Key Financials of the Company

    Balance Sheet

    Particulars31st March 202331st March 202231st March 2021
    Non-Current Asset111.122105.91197.415
    Current Asset464.042286.385256.513
    Total Asset575.164392.296353.928
    Equity155.845103.07869.058
    Long Term Liability16.52012.80617.737
    Current Liability402.800276.412267.134
    (All the above-mentioned figures are in crores, unless stated otherwise) 

    Income Statement

    Particulars31st March 202331st March 202231st March 2021
    Revenue from operations1177.122770.503603.834
    Total Revenue1183.804776.145609.952
    Total Expenses1119.322741.177598.317
    Profit after tax47.52525.81911.010
    (All the above-mentioned figures are in crores, unless stated otherwise) 

    Cash Flow Statement

    Particulars31st March 202331st March 202231st March 2021
    Net Cash flow from operating activities(54.395)4.8085.949
    Cash flow from investing activities(5.258)(12.284)(13.611)
    Cash flow from financing activities74.66415.8589.324
    (All the above-mentioned figures are in crores, unless stated otherwise) 

    KPIs

    Particulars31st March 202331st March 202231st March 2021
    EBITDA Margin8.01%7.04%5.27%
    Return on Equity36.71%30%17.37%
    Debt Equity Ratio1.641.682.31
    Profit after Tax Margin4.04%3.35%1.82%
    Return on Capital Employed17.62%13.86%5.86%

    Based on the company’s EPS, the PE ratio on the lower price band will be approximately 13x, and on the upper price band, it will be 14x.

    SWOT Analysis

    Strengths

    1.  The industry in which the company works has a high barrier to entry; no new businesses can easily establish themselves in this market.

    2.  The company has a long history with many of its customers.

    3.   The business is one of India’s top producers of fish protein products.

    4.   The company’s management team has extensive business operations expertise.

    Risks

    1.  In FY23, the company’s cash flow from operations was negative. This might come across as a red flag to many investors.

    2.  The company offers a non-diversified range of products. This exposes the company to the possibility of decreased profitability during unforeseen events. 

    3.  Since the corporation sells goods to multiple nations, it may be exposed to the risk of volatility in exchange rates.

    4.  Top 10 customers provide the company with 72% of the revenue. Thus, any changes in their contracts could significantly affect their profitability.

    Read Also: Rashi Peripherals Limited: IPO Analysis

    Conclusion

    We have covered nearly every pertinent aspect regarding Mukka Protein in this IPO blog, including its background and corporate finances. The corporation may see an increase in its market share in the upcoming years due to its expansion ambitions.

    If you intend to invest in this firm, please ensure that you have carefully reviewed all of the company’s parameters and considered your risk profile.

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    Frequently Asked Questions (FAQs)

    1. When will the Mukka Proteins IPO be listed?

      The listing date of the IPO is March 7, 2024.

    2. Is Mukka Proteins a profitable company?

      Mukka Protein Ltd. is a profitable business that has consistently reported profits.

    3. Is revenue concentration a major risk for Mukka Protein?

      Yes, 72% of the revenue is derived from the top 10 customers. This exposes the company to the possibility of incurring losses if these customers alter their contracts. 

    4. How much did the revenue from operations grow for Mukka Proteins?

      Mukka Protein’s revenue from operations grew 95% in 2 years. This massive jump in top line figures indicates the company’s strive for growth. 

  • Platinum Industries IPO: Business Model, Key Details, KPIs, and SWOT Analysis

    Platinum Industries IPO: Business Model, Key Details, KPIs, and SWOT Analysis

    Platinum Industries is entering the IPO frenzy and is raising a total of INR 235.32 Crores. Today’s blog will cover the company’s business model, KPIs, and SWOT analysis.

    Company Overview

    Platinum Industries was founded in 2016 and initially adopted a limited liability partnership status and later transformed into a public limited company.

    The company operates in the speciality chemical business and produces lubricants, CPVC additives, and PVC stabilizers.

    According to a CRISIL assessment done in 2022–2023, the company boasts a 13% market share in the domestic PVC stabilizer industry. The company’s 21,000-square-foot production facility is located in Palghar, Maharashtra.

    As of December 31, 2023, it employed 97 people and served over 273 clients for the fiscal year 2023. 

    Company Promoters

    The company’s founders are Parul Krishna Rana, who holds the executive director position, and Krishna Dushyant Rana, who has the chairman and managing director positions. 

    Approximately 94.74% of the company is owned by the promoters.

    Details of the Issue

    Through a new share offering of 1.38 crore, the company hopes to raise INR 235.32 crore. With a market lot of 87 shares, the issue price’s lower price band is 162 INR, while the upper price band is 171 INR per share.

    Timeline of IPO

    Let’s have a look at the timeline of the IPO

    IPO Open Date27th Feb 2024
    IPO Close Date29th Feb 2024
    Finalization of Allotment1st March 2024
    Initiation of Refund4th March 2024
    The credit of Shares into a Demat Account4th March 2024
    Listing Date on NSE & BSE5th March 2024

    Details of IPO

    Face Value of Share10 INR per share
    Price Band162 to 171 INR per share
    Market Lot87 Shares
    Total Fresh Issue Size235.32 Crore
    Total Number of Shares1,37,61,225 Shares

    IPO Allotment Size

    ApplicantMarket LotShareAmount
    Retailer (Min)18714,877
    Retailer (Max)1311311,93,401
    Small High Net Worth Individual (Min)1412182,08,278
    Small High Net Worth Individual (Max)6758299,96,759
    Big High Net Worth Individual (Min)68591610,11,636

    A retail consumer can invest a minimum of 14,877 INR and a maximum of 1,93,401 INR, as indicated by the above table.

    Objective of the Issue

    The business plans to use the proceeds from the issuance to finance the working capital requirements of its Indian units and establish Platinum Stabilizers Egypt LLP, a PVC stabilizer production plant in Egypt.

    Read Also: Rashi Peripherals Limited: IPO Analysis

    Key Financials of the Company

    Balance Sheet

    Particulars31st March 202331st March 202231st March 2021
    Non-Current Asset38.947.756.09
    Current Asset82.22176.72126.163
    Total Asset121.16884.47932.256
    Equity71.55922.3384.47
    Long Term Liability5.5242.5092.528
    Current Liability44.08659.63225.256

    The above financial statement shows that the company’s assets have expanded greatly in the last three years. Still, its current liabilities have dropped in the most recent year compared to the FY ending in 2022.

    Income Statement

    Particulars31st March 202331st March 202231st March 2021
    Revenue from operations231.481188.15689.269
    Total Income232.555189.23889.530
    Total Expenses181.619165.27882.835
    Profit before tax50.93623.9606.695
    Profit after tax37.58417.7484.815
    (In crores)

    The revenue statement shows that the company’s profit after taxes increased nearly seven times, from 4.8 crores in 2021 to 37.58 crores at the end of the fiscal year 2023. This increase is also evident in the company’s revenue.

    Increasing profitability

    KPIs

    Particulars31st March 202331st March 202231st March 2021
    Current Ratio1.871.291.04
    Return on Equity90.02%132.39%138.63%
    Inventory Turnover Ratio10.8817.5315.33
    Net Profit Ratio16.24%9.43%5.39%
    Return on Capital Employed56.85%52.51%74.28%

    The company’s major metrics are listed above, and they show that, in contrast to 2021, net profit increased significantly in 2023. The return on capital employed also increased during the previous two years, while the return on equity decreased.

    Cash Flow Analysis

    Particulars31st March 202331st March 202231st March 2021
    Net Cash Flow from Operating activities38.35514.8933.276
    Cash Flow from Investing activities(36.731)(4.954)(1.309)
    Cash Flow from Financing activities0.47419.001(1.173)
    (In crores) 

    Based on the company’s EPS from the previous year, the P/E ratio is calculated to be 17.19x on the lower price band of 161 INR and 18x on the upper price band of 171 INR. 

    SWOT analysis

    Strengths

    1.  According to a CRISIL report, the speciality chemical sector in the Indian economy is predicted to increase by 8.3% C.A.G.R.

    2.  The company ranked third in India in domestic sales of PVC stabilizers.

    4.  Due to the substantial entry barriers in this industry, the risk associated with competition is minimal.

    5.  The company has more than 400 grades of products specifically designed for PVC applications, which indicates that the company is aiming for a massive increase in the market share. 

    Risks

    1.  The company presently operates a single manufacturing facility in Palghar, Maharashtra, and any disruption there will affect its profitability.

    3.  Their ability to obtain raw materials or pay more for them will affect their profitability in the future.

    4.  Sales will be impacted by the difficulties a firm faces while expanding into a new area.

    5.  Few clients account for a sizable amount of the company’s revenue; disagreements among them could cause revenue volatility.

    Read Also: IndusInd Bank Case Study: Business Model, Product Portfolio, and SWOT Analysis

    Conclusion

    While the company has a strong financial history and plans to expand into other nations strategically, its clientele is relatively small which may worry some investors. Since establishing itself in 2016 and emerging as a major force in India’s stabilizer manufacturing sector, the company has had a lengthy growth narrative.

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    Frequently Asked Questions (FAQs)

    1. What is the minimum amount required to participate in the IPO of Platinum Industries?

      The minimum investment for the Platinum Industries IPO will be 14877 INR, with a minimum market lot size of 87 shares in the upper price range of 171 INR.

    2. What is the reason behind the Platinum Industries’ IPO?

      The company intends to build a manufacturing facility in Egypt. Thus, they want to obtain money through an initial public offering (IPO) to expand its operations.

    3. What is the Platinum Industries IPO pricing range?

      The price band of the company ranges from 162 on the lower side to 171 on the upper side.

    4. Is Platinum Industries a profit-making company?

      Yes, Platinum Industries has made a substantial profit over the last three years, thus making it a profitable business.

    5. What does the cash flow statement indicate about the company’s operations?

      The company’s cash flow statement shows that the management can maintain consistent efficiency while investing the proceeds to expand further.

  • Exicom Tele-Systems IPO: Business Model, KPIs, SWOT Analysis, and FAQs

    Exicom Tele-Systems IPO: Business Model, KPIs, SWOT Analysis, and FAQs

    A pioneer in the EV charging space is leaping forward with its IPO. This marks a pivotal moment for the company and India’s existing and evolving EV landscape.

    Today’s blog will explore Exicom’s journey toward clean and sustainable transportation.

    Exicom Tele-Systems IPO Company Overview

    Exicom was founded in 1994 as Himachal Exicom Communications Limited for manufacturing DC Power Systems, and since then, it has carved out a niche for itself in the Indian market.

    Exicom Tele-Systems Limited is a company based in India that provides solutions for powering digital communication infrastructure. The company is headquartered in Gurgaon, India and has a presence in over 50 countries. They are a leading provider of power solutions for the telecom industry.

    The company faces tough competition from Amaraja Raja Batteries, Exide Industries, HBL Power Systems, Coslight India, and many others. 

    Exicom Tele-Systems IPO Business Model

    Exicom Tele-systems functions under two business verticals

    Electric Vehicle Charger Business 

    In this segment, the company offers smart charging systems with innovative technology in India for residential, business and public charging use.

    The EV Charger Business started in 2019 and provides slow, fast, and Automatic Original Equipment Manufacturer (OEM) solutions. All these products fulfil the Indian certification requirements and global standards.

    Additionally, the company aims to accelerate India’s transition to electric mobility by designing and building EV chargers for homes and businesses and laying the groundwork for widespread EV ownership.

    The customers of EV Charger Business include Reliance BP Mobility Limited and Fortum Charge & Drive India Private Limited, fleet aggregators such as BluSmart Mobility and Lithium Urban Technologies, and established automotive OEMs like Mahindra & Mahindra Limited, MG Motors Limited, and JBM Limited.

    EV (Electric Vehicle) Charger

    Did You Know?

    Exicom has deployed over 35,000 EV chargers across 400 locations in India.

    Critical Power Solutions Business

    The company designs, manufactures, and services critical digital infrastructure technology in this segment to deliver overall energy management at telecommunications sites and enterprise environments in India and foreign countries. Exicom holds a market share of 16% in the DC Power Systems under Critical Power business and is identified as a leading player in the Li-ion Batteries market.

    Furthermore, under this segment, the company offers a diversified portfolio of DC power conversion systems and Li-on-based energy storage solutions to provide backup power during grid interruptions. In this regard, Exicom is deployed in India, Southeast Asia, and Africa. These DC power systems are specially designed and customised according to customers’ preferences for use at telecommunications sites like large offices, renewable hybrid sites, base station sites, and wi-fi sites.

    Apart from the business verticals discussed above, Exicom has also established three subsidiaries outside India to capture a share of the global market.

    1. Exicom Tele-Systems Pte. Ltd. in Singapore
    2. Horizon Power Solutions DMCC in U.A.E
    3. Horizon Tele-System SDN BHD in Malaysia

    The company holds two dedicated research and development centres and three manufacturing facilities in India with a capacity to manufacture 12,000 DC Power Systems, 44,000 AC Chargers and DC fast chargers.

    The business is supported by an employee base of 1,124 in India and 43 employees at the company’s subsidiaries.

    Did you Know?

    Exicom has deployed 450,000 Li-ion batteries for use in the telecommunications sector.

    Telecom Power Supplier

    IPO Details

    1. Exicom Tele-Systems IPO is a book-built issue of INR 429 crores. The issue is a fresh issue of INR 329 crore and an OFS of 100 crore.
    2. The IPO will open for subscription on February 27, 2024, and will close on February 29, 2024.
    3. The allotment date for the IPO is fixed on Friday, March 1, 2024.
    4. The tentative listing date of the company on the stock exchange is Tuesday, March 5, 2024.
    5. The price band for the IPO is fixed at INR 135 to INR 142 per share. The minimum lot size for the application of the IPO is 100 shares.
    6. The minimum amount of investment for retail investors is INR 14,200.
    7. Monarch Networth Capital Limited, Unistone Capital Private Limited, and Systematix Corporate Services Limited are the book-running lead managers.

    Objective of the Issue 

    • Repay/prepay the borrowings either in part or in full.
    • Investment in research & development and general corporate purposes.
    • Partial funding for the needs of working capital.
    IPO DateFebruary 27, 2024 to February 29, 2024
    Price BandINR 135 to INR 142 per share
    Lot Size100 Shares
    Fresh Issue23,169,014 shares
    OFS7,042,200 shares 
    Issue TypeBook Built Issue IPO
    IPO TypeMain-Board IPO
    Allotment DateFriday, March 1, 2024
    Initiation of RefundsMonday, March 4, 2024
    Listing DateTuesday, March 5, 2024

    Financial Summary & KPIs

    Financial statement highlights of the company (Y-o-Y basis)

    ParticularsFY 2023FY 2022FY 2021
    Revenue From Operations707.9842.8512.9
    Total Expenses690.9809.2511.5
    Net Profit6.45.13.4
    Borrowings117.9107.7101.7
    Total Current Assets574.5433.2528.1
    Total Current Liabilities369.1277.4368.4
    EBIT Margin (in %)5.1%6.2%3%
    Basic EPS (in INR)0.690.56 0.38
    *(Above-mentioned figures in INR crores, except EPS and EBIT Margin)

    Read Also: Enfuse Solutions Limited: IPO, Business Model, And SWOT Analysis

    Key Performance Indicators (KPIs)

    KPIsFY 2023FY 2022FY 2021
    Gross profit (in INR crore)175.22179.11116.24
    Gross profit margin (%)24.75%21.25%22.66%
    EBITDA (in INR crore)52.4367.4229.51
    EBITDA Margin (%)7.41%8.00%5.75%
    Profit after Tax from continuing operations31.0230.3912.67
    PAT Margin (%)4.38%3.61%2.47%
    ROCE (in %)10.92%17.66%5.33%

    Strengths

    1. Exicom is a market leader with an early-mover advantage in the Indian EV market, with a market share of 60% and 25% in the residential and public charging domains.
    2. Exicom’s in-house R&D facilities and manufacturing units allow them to control the entire product development process, ensuring quality, efficiency and customisation capabilities.
    3. With over two decades of experience in the power solutions sector, Exicom enjoys established relationships with institutional and corporate clients, showcasing their expertise in timely delivering projects.
    4. The company has a strong track record of financials, and its recent IPO aims to raise capital for further expansion and development, indicating a positive outlook for the company.
    5. As the EV market in India continues to increase, Exicom’s diverse product portfolio catering to the diverse needs of customers positions them to capitalise on the growing demand.

    Weaknesses

    Besides its strengths, Exicom Tele-Systems also faces several risks that investors should consider before making investment decisions.

    1. The Indian EV charging market is rapidly increasing and becoming increasingly competitive, with established players from the power and automotive industries entering the segment. New startups are also eyeing for market share, thus forcing Exicom to maintain its competitive edge.
    2. The EV technology is consistently evolving with new standards and functionalities emerging. Exicom needs to continuously invest in R&D to ensure its products remain relevant and competitive in the long run.
    3. The company’s recent revenue decline and relatively low-profit margins can be points of concern. However, the company’s ability to manage debt will be crucial for future growth.
    4. The Indian government plays a significant role in shaping the EV Industry through policy decisions and subsidies. Any substantial regulation change could impact Exicom’s business model and profit margins.

    Read Also: Apply in IPO Through ASBA- IPO Application Method

    Conclusion

    Exicom possesses a firm foundation with an early mover advantage, vertical integration, and domain expertise. In the future, their diversified product portfolio and recent IPO position will help them to capitalise on the growing EV market in India. 

    Exicom Tele-Systems can be a good option for investors interested in the future of the Indian EV landscape. The company’s ability to mitigate risks and capitalise on its strengths will decide its success in the coming years.

    Frequently Asked Questions (FAQs)

    1. What does Exicom Tele-Systems do?

      The company provides power solutions and EV charging to a diversified customer base.

    2. Exicom witnessed a decline in revenue in FY23; is this a red flag in the IPO?

      The company saw a decline in revenue in FY23;. At the same time, this may seem like a major weakness of the management, the decision to invest should be taken after a thorough analysis of the company. 

    3. Why is the company going public?

      Exicom is going public to raise funds to expand its business operations and repay the borrowings.

    4. What makes the company special?

      Exicom got a head start in the EV race. They design and build their chargers through an in-house manufacturing facility and have a proven track record of being a market leader.

    5. Is Exicom Tele Systems a main-board IPO?

      Yes, Exicom Tele-systems IPO is raising INR 429 Crores, thus making it a mainboard IPO.

  • Infosys vs TCS: A Comparative Analysis of IT Giants

    Infosys vs TCS: A Comparative Analysis of IT Giants

    In the changing era of the IT sector, TCS and Infosys stand as rocks and are each other’s biggest competitors. Let’s look at how these companies are growing in the market.

    Infosys

    As of 20th February 2024, Infosys is the second largest IT company, established in 1981 in India by Narayana Murthy. In 2023, the company served 56 countries in over 234 locations. The company boasts a market capitalization of Rs 6.99 trillion (as on 20th February 2024) and has ranked second to the largest IT company in the nation, TCS.

    Infosys serves various industries, like consulting, IT service, maintenance, etc. The company invests in emerging technologies and startups for strategic solutions that will benefit its clients.

    The company’s important statistical data is represented below:

    Market Cap₹ 6,99,469 Cr.
    TTM P/E28.68
    ROCE44.60%
    Current Price₹ 1,685
    Book Value₹ 181.7
    ROE31.90%
    52 Week High₹ 1,733
    52 Week Low₹ 1,185
    Dividend Yield2.04%
    Face Value₹ 5.00
    (As on 20th February 2024)
    Digital transformation

    Tata Consultancy Services (TCS) 

    Tata Consultancy Services, or TCS, is the largest IT company in India and was founded in 1968 in Mumbai, Maharashtra. It is one of the top 10 IT companies in the world. TCS has a global presence where it provides IT services, consulting, business solutions, network solutions, data & analytics, etc. The organization serves more than 46 countries and operates in 150 locations.

    The company’s essential statistics for 2024 are shown below:

    Market Cap₹ 14,58,324 Cr.
    TTM P/E32.51
    ROCE64.40%
    Current Price₹ 4,030
    Book Value₹249.9
    ROE46.60%
    52 Week High₹ 4,185
    52 Week Low₹ 3,070
    Dividend Yield2.85%
    Face Value₹ 1.00
    (As on 20th February 2024)

    Read Also: Infosys Case Study: Business Model and SWOT Analysis

    Overview of the IT sector

    These companies are asset-light and cash-rich because they provide IT related services, such as cloud management, cybersecurity, consulting, software services, and network setup, which do not require a an extensive infrastructure network.

    As of 20th February 2024, the weightage of the IT sector in Nifty50 is 14.18%, and the average contribution of IT to the GDP of India stands at approximately 7.4%. The IT and Business Process Management (BPM) also account for 56% of the global outsourcing market.

    There are two major groups within the IT industry: software and services and technology hardware and equipment. The Indian IT business service market is expected to reach ₹34.9 lakhs crore by 2029. TCS and Infosys are not the only players who will push this number in the coming years; there are other companies also who will be playing a major role, such as L&T Infotech Ltd., HCL Technologies, Wipro, Tech Mahindra, Mphasis Ltd, and many more.

    Information technology

    Read Also: TCS vs Wipro: Comparison Of Two IT Giants

    Comparative Analysis of Infosys vs TCS

    Financial Statement Analysis

    ParticularsInfosysTCS
    Q3 – FY 2024Q3 – FY 2024
    Revenue (₹ Crores)38,82160,583
    Change in Revenue (YoY)1.30%4%
    Change in Revenue (QoQ)-0.40%1.50%
    Change in Revenue in Constant Currency (YoY)-1%1.70%
    Net Profit (₹ Crores)6,11311,097
    Change in Net Profit (YoY)-7.20%1.96%
    Change in Net Profit (QoQ)-1.70%-2.48%
    Employee Count3,22,6636,03,305
    Change in Employee-6,101-5,680

    Artificial Intelligence

    Both of the companies are extensively focused on driving the growth of AI. Infosys Topaz is an AI-first set of services, solutions and the platforms using generative AI technologies. While Infosys Cobalt is a combination of services, solutions and platforms for enterprises to enhance their cloud journey.

    According to TCS’ website, AI and Cloud led the demand across the Service line, with solid momentum sustaining Cloud migration and increasing customer interest for AI and Generative AI.

    Robotics and Artificial intelligence

    Conclusion

    The comparative analysis reveals the strengths of Infosys and TCS. While Infosys demonstrates a focus on emerging technologies and client-centric solutions, TCS maintains a dominant position (in terms of revenue and market cap) with a broad spectrum of services and a more substantial global presence. Despite facing challenges in growing net profit, both companies exhibit robust financial metrics and a commitment to AI-driven innovation.

    As the IT sector evolves, Infosys and TCS are well-positioned to navigate future trends and sustain their leadership in the competitive market.

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    Frequently Asked Questions (FAQs)

    1. How many employees work at TCS and Infosys?

      While Infosys ended the December quarter with 3,22,663 employees, TCS ended the third quarter with an employee base of 6,03,305.

    2. Who is the parent company of TCS?

      Tata Consultancy Services (TCS) is a subsidiary of Tata 

    3. How big is TCS in comparison to Infosys?

      TCS has a market cap of Rs. 14.6 lakh Crores, while Infosys has a market cap of Rs. 6.99 lakh Crores. 

    4. When did TCS and Infosys start?

      TCS started in 1968 and Infosys started in 1981.

    5. What are the top 5 IT companies in India?

      The top 5 IT companies (in terms of market cap) in India are – TCS, Infosys, HCL Technologies, Wipro, and LTIMindtree. 

  • Infosys Case Study: Business Model and SWOT Analysis

    Infosys Case Study: Business Model and SWOT Analysis

    Infosys is one of the leading global technology companies and has consistently demonstrated its prowess in the consulting space and information technology (IT). Founded in 1981 by Narayana Murthy with a team of six members in Pune and an initial capital of $250, Infosys began its journey as Infosys Consultants Private Limited before relocating to Bengaluru, Karnataka, in 1983. In this blog, we will delve into the Infosys Case Study, exploring its business model and conducting a comprehensive SWOT analysis of this tech giant.

    The Birth of Infosys

    Infosys was founded by seven engineers, who are listed as founding members: N.R. Narayana Murthy, Nandan Nilekani, S. Gopalakrishnan, S.D. Shibulal, K. Dinesh, Ashok Arora, and N.S. Raghavan, who had a vision of shaping a world-class IT service company capable of competing with the best. Later, Infosys became the nation’s first company to be listed on the NASDAQ. 

    Infosys was started with an initial amount of $250, which was lent by the founders’ spouses. After that, the company faced numerous challenges in their early stage, including lack of funds, supportive regulatory environment, and many more.

    Talking about Infosys’s annual revenue, it surpassed US$10 million in FY 1995, US$100 million in FY 1999, US$1 billion in FY 2004, and US$18.2 billion in FY 2023.

    Here is a quick overview of the company:

    Type of companyPublic
    Industry Global consulting and IT services
    Area servedWorldwide
    Key position holders Nandan Nilekani – Chairman
    Salil Parekh- MD & CEO
    Revenue₹146,767 crore in FY 2023
    Operating income₹33,606 crore in FY 2023
    Net income₹24,108 crore in FY 2023
    Total equity₹74,529 crore in FY 2023
    Number of employees343,234 in FY 2023

    Did you know? 

    Infosys, an IT company, operated without a computer until the year of 1983.

    Growth of Infosys

    Growth of Infosys

    From a small scale organization to a leading multinational company, let’s have a look at how Infosys survived and thrived in the market. 

    Initial days of the company

    During the initial decades of its establishment, Infosys mainly focused on the US and Europe for business purposes because their markets were stable. During the initial days, Infosys focused on two major points: First was Banking and Financial services, where Infosys provides manufacturing, package implementation, and application development; another sector was ADM (Application Development and Maintenance).

    The one factor that helped Infosys become a pioneer in the IT sector was that they charged a lesser premium compared to the global IT service providers such as Accenture and IBM.

    Continuous Growth

    Infosys started operations in India in the year of 1993 and the growth of Infosys was in a linear manner, which was visible in the business in terms of per capita revenue, strategic investment, attracting good clients, and many more.

    Converting their clients into partners

    Infosys adopted a unique tactic of converting clients into partners; this helps them get quality partners for their business. This tactic helped Infosys sustain in the market for the long run and gain a large profit due to the remarkable investments made by their partners. 

    Worldwide Diversification

    Infosys has spread its branches all over the globe. It has an impressive presence in the United States, India, China, Australia, Middle East, Europe, and Japan. In 2017, Infosys had 116 development centers, 84 sales and marketing offices, and 18 international offices.

    Product and Services segments

    Infosys provides services in the fields of finance, insurance, manufacturing, and many other domains. One of their key products, “Finacle” has become popular and is used as universal banking solutions. There are some more products and services that are offered by Infosys, and stated below:

    1. Next Generation Integrated AI Platform. 
    2. Infosys Consulting 
    3. Infosys Analytics Platform 
    4. Cloud Suite
    5. Engineering Services, and many more.

    Sustainable Acquisition

    One of the key factors behind the company’s rise is its strategy of sustainable acquisition, which helped the company grow and succeed. Some of the major acquisitions are: Expert Information Services in 2003, McCamish Systems in 2009, Portland Group in 2012, Panaya in 2015, Skava in 2015, and Brilliant Basics in 2017.

    Read Also: Infosys vs TCS: A Comparative Analysis of IT Giants

    SWOT Analysis of Infosys

    SWOT Analysis of Infosys

    The SWOT analysis of Infosys highlights its global brand identity, diverse client base, and innovative delivery model, while addressing weaknesses like geographic dependency and high attrition, alongside opportunities in emerging technologies and threats from intense industry competition.

    Strengths

    • Infosys has a wonderful brand identity and is also recognized globally as a leading provider of IT services and consulting. The company built a great brand reputation by delivering excellence in every aspect of its operations.
    • Infosys enjoys a diverse and strong client base, providing services in different industries like finance, healthcare, retail, manufacturing, and more. 
    • Infosys knows the psychology of its clients while meeting their needs, which helps the firm retain them.
    • Infosys Global Delivery model covers many delivery options, including onsite, offsite, nearshore, offshore delivery, etc. It is based on a solid foundation of global presence and local expertise.

    Weaknesses

    • Infosys also noticed some challenges like dependency on specific geographic regions that may limit their growth.
    • Infosys faced cultural dis-alignment due to cultural diversification and unique values because different companies have their ways of running the business. 
    • Many employees of Infosys used to leave the company because of better career opportunities, high-paying jobs, and other perspectives. This high attrition then became a norm in the IT industry in India. 

    Opportunities

    • Infosys has opportunities for new technologies such as artificial intelligence (AI), machine learning, blockchain, Internet of Things (IoT), and augmented reality (AR).
    • Infosys could upskill their employees and thus create a talent pool proficient in cutting-edge technologies and industry best practices while reducing the high attrition rate.

    Threats

    • Infosys is in the IT services business, which is very competitive and complex, with established firms and emerging startups contending for market dominance.
    • Infosys faces tough competition, which leads to a contraction in margins and a forced investment in the latest technologies.

    Read Also: Zomato Case Study: Business Model, SWOT Analysis, and Financials Explained

    Conclusion 

    Infosys’ success factors include its workforce, quality services, and global delivery model. Infosys’ growth strategy was price penetration and focus on customer acquisition for the first few years. Overall, Infosys has established itself as a reputable brand with a diverse client base and a focus on delivering excellence in its operations.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
    1Polycab Case Study: Business Model, Financials, Competitors, and Growth Outlook
    2CAMS Case Study: Business Model, KPIs, and SWOT Analysis
    3Hindustan Unilever Case Study: Business Model, Financials, and SWOT Analysis
    4Bajaj Finance Case Study: Business Model, Financials, Competitors, and KPIs
    5Eicher Motors Case Study: Business Model & SWOT Analysis

    Frequently Asked Questions (FAQs)

    1. What is the full form of Infosys?

      Infosys is a combination of two words: Information and System.

    2. Who are the seven founders of Infosys?

      The 7 founders are Narayana Murthy, Nandan Nilekani, S. Gopalakrishnan, S.D. Shibulal, K. Dinesh, N.S. Raghavan, and Ashok Arora.

    3. What is the business model of Infosys?

      The company focuses on finance, healthcare, business consulting, technology, and outsourcing services.

    4. What is Infosys’ employee attrition rate?

      At the end of the June 2023 quarter, the company’s attrition stood at 17.3%

    5. When was Infosys listed?

      It was listed on the Indian stock exchange (BSE and NSE) on June 14, 1993. It was also listed on the NASDAQ stock exchange on March 11, 1999.

    6. When was Infosys listed?

      It was listed on the Indian stock exchange (BSE and NSE) on June 14, 1993. It was also listed on the NASDAQ stock exchange on March 11, 1999.

  • Eicher Motors Case Study: Business Model & SWOT Analysis

    Eicher Motors Case Study: Business Model & SWOT Analysis

    The untold story of transformation into a powerhouse of iconic motorcycles and then venturing into the world of robust commercial vehicles. Shift your gears as we delve into the captivating case study of Eicher Motors, a name synonymous with innovation, brand loyalty and strategic partnerships.

    Eicher Motors Overview

    Eicher Motors is an Indian multinational automotive company with its headquarters in Delhi. The company was founded in the year 1948 as Good-earth Company, which imported and sold tractors in India. In the year 1959, the company partnered with German tractor manufacturer Eicher Tractor. The company has since then grown into a diversified automotive leader with a strong focus on innovation and brand building. The company was renamed Eicher Motors in the year 1982. 5,002 permanent employees

    Eicher Motors is listed on the BSE & NSE and has been part of the NSE’s benchmark Nifty 50 Index since April 1, 2016.

    Did you Know?

    Eicher Tractors Ltd. was selected as ‘Company of the Year’ for 1990-91 in the four-wheeler category comprising commercial vehicles, passenger cars, jeeps, and tractors.

    Eicher Motors Business Model

    The Company operates two major manufacturing plants in Oragadam and Vallam Vadagal and one additional establishment in Thiruvottiyur (all 3 located in Chennai) and 69% procurement of the company for raw materials is from local vendors.

    Eicher Motors Limited (EML) has subsidiaries in North America, Brazil, Thailand, United Kingdom, and Canada with a strong global sales network with accelerated customer service through dealership collaborations.

    It is a parent company of two successful businesses.

    1. Royal Enfield

    The world’s oldest motorcycle brand in consistent production, dating back to 1901. It is a global leader in the mid-size motorcycle segment with a strong brand presence in India, over 60 countries. Royal Enfield’s motorcycles are sizzling than ever, with demand exploding by 17% annually for the past 5 years. Their Chennai plant is the key to keeping up, ensuring this growth trajectory continues.

    Royal Enfield’s premium bikes include the stylish Hunter 350, the timeless Classic 350, the Meteor 350 cruiser, the 650 parallel twin motorcycles – Interceptor 650, Continental GT 650 and the all-new Super Meteor 650, the adventure motorcycles – Himalayan adventure tourer and the Scram 411 ADV Crossover, and the Iconic Bullet 350.

    Additionally, it actively engages in organising and endorsing several motorcycling events and rides on a global scale notably including Rider Mania, an annual congregation that draws the attention of Royal Enfield enthusiasts from around the world to the scenic beaches of Goa.

    From bustling Indian cities to iconic American highways, Royal Enfield’s motorcycles are seen crossing diverse terrains. With 18 company-owned stores and more than 850 dealers in India, it caters to its domestic crowd, while its presence in over 60 countries, including well-established markets like the U.S., UK, regions of Europe and Latin America, Middle East, and Southeast Asia, showcases its global appeal.

    Did You Know?

    In 1901, the First Royal Enfield motorcycle was produced which was designed by R. W. Smith and Frenchman Jules Gotiet.

    2. VECV (Volvo Eicher Commercial Vehicle)

    In operation since July 2008, VECV has been a joint venture with Sweden’s AB Volvo and is a leading manufacturer of commercial vehicles in India.

    It includes the complete range of Eicher branded trucks and buses, VE Powertrain, Eicher’s components and engineering design services businesses, the sales and distribution business of Volvo Trucks as well as aftermarket services for Volvo Buses in India.

    In the financial year 2022-23, VECV saw a 40% growth over the previous year and outperformed the Industry recording sales of 79,623 units. The growth has been robust and consistent during the year.

    Financial Statements

    Let us have a dive into the Eicher’s financial health.

    Key MetricsFY 2022-2023FY 2021-22FY 2020-21
    EBITDA3,393.502,113.561,786.51
    Profit After Tax (PAT)2,622.591,586.221,329.70
    Operating Cash Flows2,807.111,570.001,674.31
    Net Worth12,886.9010,794.579,705.00
    Net Revenue14,44210,2988,720
    *(the figures mentioned above are in INR crores).

    Read Also: Havells Case Study: Business Model and SWOT Analysis

    Both revenue and profits have witnessed an impressive growth of 40% Y-o-Y, reflecting strong demand for both bikes and commercial vehicles, indicating financial stability and efficient operations.

    Financial Ratio Analysis

    Key RatiosFY 2022-2023 (%)FY 2021-22 (%)FY 2020-21(%)
    ROCE22.716.815.1
    Returns on Equity21.213.812.9
    Profit Margin16.316.315.4
    EBITDA Margin24.120.920.7

    An ROE of 21.2 indicates good profitability and efficient use of shareholders’ funds along with a healthy profit margin over the years, demonstrating effective cost management and pricing strategies.

    Interesting Facts

    Performance in FY 2022-23

    • 8,24,066 Motorcycles sold
    • 88.2% Market share in India’s mid-size (250cc – 750cc) motorcycles segment
    • 79,623 Commercial vehicles sold.
    • Strong presence in the Bus segment with a 24.1% market share and 31.5% Market share in India’s light & medium duty (5 – 18.5 tonnes) CV segment.

    Read Also: Paytm Case Study: Business Model and Marketing Strategy

    SWOT Analysis

    Strengths

    1. EML established itself as one of the finest brands in India, with an extensive distribution network.
    2. Focussed approach for international expansion and embarking on global launch of products in international destinations.
    3. Operating in two different segments of motorcycles and commercial vehicles reduces the company’s dependence on any single product and helps mitigate risks.
    4. Eicher Motors consistently invests in research and development, which keeps the company competitive and leads to technological advancements.
    5. The company boasts a strong and healthy financial position with consistent revenue growth and profitability.

    Weakness

    1. Royal Enfield caters mainly to the mid-size motorcycle segment, which limits the market reach when compared to other strong players.
    2. A significant portion of the company’s revenue comes from India, making the company vulnerable to economic fluctuations.
    3. Both segments of the company face intense competition from domestic as well as international players, requiring constant innovation and brand differentiation.

    Opportunities

    1. Royal Enfield could explore larger and smaller motorcycle segments to fulfil the needs of broader consumers, while VECV could tap into newer vehicle categories.
    2. Leveraging digital platforms for sales, marketing, and customer service can enhance the market reach and efficiency.
    3. Investing in electric vehicle technology could open new markets and cater to growing environmental concerns.
    4. Deepening collaboration with other brands could lead to further expansion of business operations and joint product development.

    Threats

    1. Supply chain disruptions such as shortage of semiconductors and parts can delay production and increase input costs, which will eventually impact profitability.
    2. The Company faces the threat of the brand becoming outdated, and any change in consumer sentiment and market segmentation can impact the sales.
    3. Stringent emission regulations or shifts towards electric vehicles could lead to necessary adaptations for both the commercial and bike segments.
    4. New entrants in the automotive industry could pose unforeseen challenges.
    5. Environmental and legal regulations in India and International markets can impact the business and sales.

    Read Also: Zepto Case Study: Business Model, Financials, and SWOT Analysis

    Conclusion

    From its humble beginnings as an agricultural equipment importer to its current position as a leading player in the Indian automotive industry, Eicher Motors’ journey provides a compelling study of successful business transformation and sustained growth.

    The company has capitalised on opportunities and navigated challenges. Furthermore, it is well-positioned to continue its growth trajectory and intensify its position as a leader in the global landscape.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
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    4Wipro Case Study and Marketing Strategy
    5Coca-Cola Case Study and Marketing Strategy

    Frequently Asked Questions (FAQs)

    1. How did Eicher Motors start?

      EML began its operations in the year 1948 as Goodearth Company. A partnership in the year 1959 with Eicher Tractor Company marked their shift to the automobile.

    2. What is EML’s secret sauce?

      The company holds a strong brand identity and continuous diversification through partnerships.

    3. How many awards did EML win in the FY 22-23?

      The company got 18 awards in the FY 22-23 for the new product launched.

    4. How do you see EML evolving in the future?

      The company has immense potential to lead the Indian automotive industry with a growing global presence and embracing new technologies.

    5. Is Eicher Motor going electric?

      They are levelling up for the future! Eicher is actively investing in EV technology with the intention of capturing the market.

  • Tech Titans of India: A Comprehensive Guide to India’s Top IT Stocks

    Tech Titans of India: A Comprehensive Guide to India’s Top IT Stocks

    The Indian IT industry is a global powerhouse, contributing to the nation’s economic growth. With the digital revolution accelerating, this industry has the potential to offer exciting opportunities for investors. But with several IT companies eying for attention, exploring the technology landscape of the economy can be challenging.

    Indian IT stocks are consistently attracting increasing interest for prominent reasons, including a robust expected CAGR of 11-12% in the coming years and a solid global footprint catering to clients across continents.

    In today’s blog, we will uncover some of the Top IT stocks in India and do their comparative analysis to gain valuable insights. 

    Tech Titans of India

    Tata Consultancy Services (TCS) 

    About

    Tata Consultancy Services is an Indian multinational IT services and consulting company. TCS is headquartered in Mumbai, India, with 614,000 trained consultants in 55 countries.

    The company was founded in 1968, when Mr. Fakir Chand Kohli, known as the Father of the Indian IT industry, brought together a young team of IT professionals to create a demand for computer services.

    TCS offers a range of IT services, which include – helping clients with business transformation, strategy and design thinking, integrating different IT systems and applications, IT outsourcing services to clients, including application development and business process outsourcing, and providing cloud-based services such as infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS).

    TCS Performance Analysis

    Key MetricsAs on 31st March 2023
    (FY2023)    		As of 31st March 2022
    (FY2022)
    Revenue2,25,4581,91,754
    Net Profit42,30338,449
    Fixed Assets20,51521,298
    Borrowings7,6887,818
    EPS115.19104.75
    Investments37,16330,485
    ROCE (%)59%54%
    Note – The figures are in crores, unless stated otherwise.

    Infosys  

    About 

    Infosys is a global IT services and consulting company that offers digital services and consulting. The company was established in 1981 in Pune by N.R. Narayana Murthy with a capital of $250 and is currently operating with 322,000 employees in over 56 countries to navigate global transformation. It is headquartered in Bangalore, India.

    Initially, the company focused on providing software consulting and development services to US clients. With time, the company pioneered the Global Delivery Model (GDM), which allowed remote execution with cost advantage. The tech giant went public in the year 1992.

     Services offered by Infosys are as follows

    1. Infosys helps clients navigate their digital journeys through AI-powered solutions, agile development and cloud implementation.
    2. The company offers consulting services in areas like business strategy, enterprise resource planning (ERP), and customer relationship management (CRM)
    3. Apart from this, it also provides a range of IT services, including application development, infrastructure management, and security solutions
    4. Infosys offers outsourcing services for businesses looking to optimize costs and improve efficiency.

    Did You Know?

    Infosys was the first IT company from India to be listed on NASDAQ.

    Infosys Performance Analysis 

    Key MetricsAs on 31st March 2023
    (FY2023)    		As on 31st March 2022
    (FY2022)
    Revenue1,46,7671,21,641
    Net Profit24,10822,146
    Fixed Assets29,22525,800
    Borrowings8,2995,474
    EPS58.0852.56
    Investments19,47820,324
    ROCE  %40%37%
    Note – The figures are in crores, unless stated otherwise.

    Read Also: List Of Best IT Stocks in India 2025

    HCL Technologies 

    About 

    Earlier known as Hindustan Computers Limited, it is another crucial player in the Indian technology industry. The company is headquartered in Noida, India, and currently operates with a staff strength of over 225,944.

    HCL Technologies offers a range of tech services which includes

    1. Navigating the digital journeys of clients with a focus on cloud, AI, automation, and security
    2. Engineering designs, development, and testing services for several industries
    3. Providing cloud migration, management and optimisation solutions.
    4. Helping clients protect their data and systems from cyber threats
    5. Managing and supporting IT infrastructure for businesses.

    HCL Technologies Performance Analysis

    Key MetricsAs of 31st March 2023
    (FY2023)    		As of 31st March 2022
    (FY2022) 
    Revenue101,45685,651
    Net Profit14,85113,523
    Fixed Assets34,61935,077
    Borrowings4,7946,343
    EPS54.7349.74
    Investments5,4956,351
    ROCE  %28%25%
    Note – The figures are in crores, unless stated otherwise.

    Did You Know?

    HCL is the top-ranked company globally in the Professional Service Sector in Forbes’ List of “World Best Employers”.

    Wipro  

    About

    Wipro is a leading technology services and consulting company that focuses on building innovative solutions addressing clients’ most complex digital transformation, needs with over 245,000 employees serving across 65 countries. Wipro boasts a global presence and diverse portfolio of catering to clients.

    The company was founded in 1945 by M.H. Hasham Premji and initially emphasised consumer goods and vegetable oils. In the late 90s, Wipro diversified its business operations into the IT business under the leadership of Azim Premji, who is still a respected figure in the Indian IT industry and one of the top investors in India.

    Wipro offers a range of IT services which includes:

    1. Helping businesses migrate to the cloud and leverage its benefits for scalability and efficiency.
    2. Providing consulting and implementation services to help companies adapt to the digital age.
    3. Creating and maintaining custom software applications for several needs.
    4. Developing and implementing AI-powered solutions and integrating robotic automation for advanced functions.
    5. Managing and optimising non-core business processes for cost savings and improved efficiency.

    Wipro Performance Analysis

    Key MetricsAs of 31st March 2023
    (FY2023)    		As of 31st March 2022
    (FY2022)
    Revenue90,48779,312
    Net Profit11,36612,243
    Fixed Assets44,75737,990
    Borrowings17,46717,593
    EPS (in INR)20.6822.31
    Investments33,07326,154
    ROCE  %18%21%
    Note – The figures are in crores, unless stated otherwise.

    Tech Mahindra 

    About

    Just like the other tech companies mentioned here, Tech Mahindra is a leading Indian multinational provider of information and technology services. The company offers innovative and customer-centric digital experiences that enable enterprise, associates, and society value creation.

    Tech Mahindra is a part of the Mahindra Group, which was founded in the year 1945. Currently, the company employs 260,000 employees with presence in over 100 countries

    The company offers a range of services, which include:

    1. Designing, creating, and scaling pluggable and extensible digital products for powering development in silicon, storage, and platform engineering
    2. Delivering convincing experiences and implementing a modern digital backbone to provide future-proofing technology to provide services-as-a-service (SaaS), cognitive IT, and modernization.
    3. Delivering superior experiences, value, and growth by focusing on customers.

    Tech Mahindra Performance Analysis

    Key MetricsAs of 31st March 2023
    (FY2023)    		As of 31st March 2022
    (FY2022)
    Revenue53,29044,646
    Net Profit4,8575,630
    Fixed Assets14,93214,784
    Borrowings2,7402,618
    EPS (in INR)49.6057.27
    Investments3,3884,884
    ROCE  %22%26%
    Note – The figures are in crores, unless stated otherwise.

    Top IT Companies –  A Comparative Analysis

    Return on Equity (ROE)

    Company Name10 Years5 Years3 Years
    TCS39%41%43%
    Infosys26%28%29%
    HCL Technologies24%23%22%
    Wipro19%18%18%
    Tech Mahindra21%20%19%

    Comparison on multiple metrics 

    ParticularsTCSInfosysHCL TechnologiesWiproTech Mahindra
    Market Cap (In INR Crores)15,12,2316,98,8114,40,4282,56,2311,27,933
    Current Market Price (In INR)4,1331,6841,6234901,311
    PE Ratio (In times)33.18x28.63x28.31x22.63x45.52x

    Note – The figures are as on 9th February, 2024. 

    Growth Prospects – Indian IT Sector

    Below are some key points that can fuel the growth of the Indian tech industry in the coming years.

    • India’s rapid digitalisation and demand for IT services across industries consistently boost domestic growth.
    • Investments in AI, cloud computing, and cybersecurity are preparing them for future trends and market leadership.
    • India’s large pool of tech talent offers a cost-efficient and continuous supply of competent individuals. 
    • Many IT companies in India have a strong global presence, fulfilling the requirements of international clients and mitigating economic risks.
    • These factors promote innovation in the industry, which is extremely important for its growth. 

    Read Also: List of Stock Exchanges in India

    Conclusion

    Having explored the top IT stocks, you now have a solid foundation in the Indian IT sector.

    With its impressive growth trajectory, diverse offerings, global presence, and talented workforce, this industry holds immense potential for growth!

    Frequently Asked Questions (FAQs)

    1. What are the most important factors to consider when investing in IT stocks?

      Consider factors like revenue growth, profitability, liabilities, and earnings per share to grasp the companies’ operating efficiency.

    2. How can I stay informed about the Indian IT stocks?

      Keep yourself updated with the industry news, and do your research and analysis.

    3. How do these IT companies attract and retain talent?

      Top Indian IT companies offer competitive salaries, invest in employee training and development programmes, and foster an innovative work culture that eventually attracts employees.

    4. Which IT stock is best for long-term investors seeking growth?

      Every stock has its own set of strengths and weaknesses. So, the investors should do a thorough analysis before investing their hard earned money.

    5. How are Indian IT companies preparing themselves for the future?

      They are upskilling their workforce with a significant focus on automation and AI, and adapting to remote work models. 

  • What exactly happened to Paytm Payments Bank & why has the RBI banned it?

    What exactly happened to Paytm Payments Bank & why has the RBI banned it?

    If your go-to option for UPI payments is Paytm, then today’s blog is for you.

    PPBL, Paytm Payments Bank, once a rising star in India’s digital payment space, finds itself amidst a controversy. Though not completely banned, the RBI imposed crippling restrictions on its business operations and sent shockwaves to the entire fintech industry. 

    Paytm Payments Bank Overview

    Paytm Payments Bank is an Indian payments bank founded in 2017 and is headquartered in Noida. PPB is a scheduled bank that offers a wide range of services, including issuing credit cards and offering loans. However, Paytm Payments Banks does not offer full-fledged banking services.

    Paytm Payments Bank Limited (PPBL) is an associate and an independently operated subsidiary of One 97 Communications, which also owns Paytm. The Company holds 49% of the paid-up share capital of PPBL.

    PPBL offers services such as Savings accounts, current accounts, fixed deposits, UPI, Fastag, IMPS, NEFT, RTGS, and net banking. It also provides several benefits to the consumers, including no minimum balance requirement, all free digital transactions, 2% interest per annum on savings accounts and up to 7.50% interest per annum on fixed deposits.

    PPBL only invests the deposits in government bonds and does not convert deposits into risky assets.

    RBI’s ban

    On January 31, 2024, RBI imposed many crippling restrictions on the bank’s operations due to non-compliance with regulations and supervisory concerns.

    Below-mentioned is the stepwise breakdown of what happened:

    1. The RBI issued a notice directing PPBL to suspend onboarding new customers, stop offering cash-back incentives for transfers from wallets to bank accounts and restrict other essential services like bill payments and transfers.
    2. This action was followed by an external audit report that highlighted persistent non-compliance issues and sustained concerns about the bank’s operations.
    3. The report flagged that the accounts at the bank were created without proper identification, and there were irregularities in implementing KYC (Know Your Customer) norms, which made the business vulnerable to misuse.
    4. Some reports also suggested concerns about questionable transactions between PPBL and the Paytm Wallet, which raised red flags about money laundering.
    5. The RBI had previously also issued warnings and penalties to PPBL for non-compliance, denoting repetitive issues.
    6. In March 2022, RBI barred Paytm Bank from onboarding new customers and mandated thorough audits of the technical system.
    7. RBI has also imposed restrictions on the lending arm of Paytm’s Payment Bank, including suspension of deposits, fund transfers, credit transactions, and pauses in operation such as wallets, Fastags, and National Common Mobility Cards.

    Impact of RBI’s action

    1. As a result of the same, after February 29, 2024, PPBL’s existing customers can continue to use their accounts, but for limited services like withdrawalbs from existing balances. Furthermore, PPBL will not accept deposits or top-ups in any customer account, including wallets and Fastags, post 29th February 2024. The restrictions will impact Paytm’s overall business model because PPBL was a key partner in offering financial services.
    2. The news also affected Paytm’s stock prices significantly, which crashed almost 40% in two days..
    3. The restrictions by the RBI are expected to significantly impact PPBL’s profitability as many income-generating services will now be suspended.
    4. The action has also raised concerns about PPBL’s compliance practices and corporate governance, significantly damaging its reputation and trust among customers and shareholders.
    5. While the license has not been revoked, the future of PPBL is still being determined.
    6. The RBI’s action has also brought increased regulatory scrutiny to Paytm’s entire business ecosystem.

    Currently, Paytm is contesting the restrictions and seeking regulatory approvals to resume full operations, and the impact on existing customers and Paytm’s future are still unfolding every day.

    Read Also: Paytm Case Study: Business Model and Marketing Strategy

    Future of Paytm Payments Bank

    Possible routes ahead for Paytm Payments banks can be as follows.

    1. In the future, successfully sticking to regulatory norms and resolving concerns identified by the RBI will be crucial for PPBL.
    2.  PPBL must obtain necessary approvals from the RBI to lift restrictions and resume full operations.
    3. The RBI might lift partial restrictions, allowing PPBL to offer some services. Thus alleviating some of the concerns of PPBL. 

    An uphill war awaits PPBL and only time can tell if it will survive this storm or succumb to its might.

    Conclusion

    RBI’s action harmed Paytm Payments Bank and Paytm. However, the long-term consequences are still uncovering and it depends on PPBL’s ability to address compliance issues and regain regulatory approval. The situation has highlighted the importance of adhering to regulations and maintaining strong governance practices in the financial sector. 

    Frequently Asked Questions (FAQs)

    1. What do the restrictions imposed by the RBI mean for existing customers?

      Existing customers’ accounts are safe. However, after 29th Feb 2024, they can use their accounts for withdrawals only. Additionally, PPBL cannot onboard new customers.

    2. Why did the RBI restrict PPBL?

      The RBI quoted non-compliance with regulations and supervisory concerns without disclosing other details.

    3. Is PPBL completely banned?

      No, but restrictions are stringent and severe.

    4. What will happen to my account after 29th Feb, 2024?

      You will be able to use your account for withdrawals without any restrictions.

    5. Is my money safe?

      Absolutely yes, the RBI’s action does not affect your existing balances in your account or wallet and your money is completely safe and secure. 

  • IPO Alert: Vibhor Steel Tubes Limited

    IPO Alert: Vibhor Steel Tubes Limited

    Vibhor Steel Tubes Limited IPO is generating buzz in the market, but is all of the hype justified? 

    In today’s blog, we will be uncovering the key IPO details and delving deep into the company’s financials and the business model of this red-hot IPO! 

    Company Overview

    Vibhor Steel Tubes Limited is India’s leading manufacturer of high-quality steel products. The company deals with high-end mild steel tubes and pipes, ranging from galvanised pipes to welded black tubes and pipes used in the domestic, agricultural, and industrial sectors.

    It was founded on April 16, 2003, and is headquartered in Hisar, Haryana. It has a strong distribution network in India and exports its products to over 20 countries.

    Some of the major competitors of the company are APL Apollo Tubes, Rama Steel Tubes, Hi-tech Pipes, Hariom Pipes, Venus Pipes, and Swastik Pipes.

    Business Model

    VSTL manufactures multiple products. Let’s have a look at its portfolio.

    Products Portfolio

    The company offers a diverse range of products including ERW Pipes, hot-dipped galvanised pipes, hollow section pipes, primer-painted pipes, and crash barriers.

    The top customers of the company are Jindal Pipes, G.B.M Building Equipment, Kruthika Traders, and Bansal Pipe. The raw material is provided to the company by SAIL, JSW Steel, Amex Resources, and some dealers of Hindustan Zinc.

    The basic raw materials include HR Coils and Zinc. They are procured based on market availability, pricing, and quality through domestic suppliers such as steel manufacturers. 

    The major raw materials suppliers of Vibhor Steel are JSW Steel and SAIL. Apart from this, the company also has an in-house IT system that helps in various business functions, including materials management, inventory management, etc. 

    Recent Developments

    In February 2023, VSTL announced plans to set up a new manufacturing plant in Gujarat with an expected capacity of 100,000 tonnes annually.

    In March 2023, Vibhor Steels entered into a joint venture with Jindal Steel and Power Limited to manufacture and supply steel pipes, which is expected to start in 2024.

    Read Also: IPO Alert – Capital Small Finance Bank

    IPO Details

    1. Vibhor Steel IPO is a book-built IPO; the entire issue is a fresh issue of INR 72 crore.
    2. The issue will open for subscription on February 13, 2024, and close on February 15, 2024.
    3. The allotment is expected to be finalised on Friday, February 20, 2024.
    4. The Vibhor Steels IPO will be listed on the NSE and BSE on Tuesday, February 20, 2024 (tentative).
    5. The IPO price band for the company is set at INR 141 to INR 151 with a minimum lot size application of 99 shares.
    6. The net proceeds of the IPO will be utilised for funding the working capital requirements of the company and general corporate purposes.
    IPO DateFebruary 13, 2024 to February 15, 2024
    Price BandINR 141 – 151 per share
    Listing DateTuesday, February 20, 2024
    Issue TypeBook Built Issue
    IPO TypeMainboard IPO
    Initiation of RefundsMonday, February 19, 2024

    Financial Highlights

    Key MetricsAs of March 31, 2023As of March 31, 2022As of March 31, 2021
    Total Assets293.63248.53172.93
    Total Liabilities200.43176.56112.44
    Revenue1114.38818.48511.51
    Expenses1086.15803.12507.35
    Net Profit21.0711.330.69
    PAT Margin (%)1.89%1.39%0.13%
    EBITDA Margin (%)4.21%3.69%3.90%
    Debt-to-Equity Ratio (x times)1.631.771.23
    ROCE (%)16.48%12.09%9.90%
    Basic EPS (Rs.)14.857.990.49
    (Figures are in Crores, unless stated otherwise)

    VSTL has displayed remarkable growth in terms of revenue and profit. The existing distribution network ensures efficient product reach to the customers. Improvements in operational efficiency have led to cost savings and thus contributed to higher margins.

    Strengths

    1. Expanding business – Healthy expansion plans for oil & gas pipeline infrastructure, government push on infrastructure development, and an increase in budgetary allocation towards infrastructure, railways, etc. will help the company expand its business operations in the coming years.
    2. Government Support – Government initiatives such as ‘One nation, One gas grid’, ‘Jal Jeevan mission’ and ‘Pradhan Mantri Awas Yojana’ will help the company boom. 
    3. Consumer Demand – Healthy demand from end-user segments such as real estate, water infrastructure, automobiles, railways, capital goods, etc.
    4. Increasing Export – Revenue from export sales has been growing and is expected to increase in coming years due to global demand for cheaper products. 
    5. Established Distribution channels – The company holds multiple developed distribution channels across the country, making it easy to supply products.
    6. Profitability – Vibhor Steel maintains strong financial discipline with a good and profitable track record

    Risks

    1. Price – Volatility in steel prices could affect the profitability of the business.
    2. Inflation – Persistent inflation may result in low demand for products and cause delays in the execution of projects.
    3. Supplier concentration – 90.2% of the supply comes from only two suppliers – Steel Authority of India Limited and JSW Steel. Any changes in contracts with these entities could significantly damage to the company’s profitability. 
    4. Revenue concentration – 92.66% of the revenue comes from just 1 entity, Jindal Pipes Limited. Although an agreement is in place with the entity, failure to continue this agreement beyond the tenure would cause significant effects to the company’s topline figures. 

    Read Also: Rashi Peripherals Limited: IPO Analysis

    Conclusion

    The decision to invest in the IPO should be made after a careful consideration of your risk profile and financial objectives. VSTL has revealed strong revenue and profit growth in recent years, depicting a promising trajectory. However, the threat of negative surprise still looms as the industry is fragmented, and large players could use underhanded tactics to earn greater profits. 

    Frequently Asked Questions (FAQs)

    1. What is the issue price for Vibhor Steels IPO?

      The issue price of the Vibhor Steels IPO ranges from INR 141 to INR 151 per share.

    2. What is the minimum investment amount for the retail investors?

      The minimum investment amount for retail investors is INR 14,949.

    3. What is the issue size for the Vibhor Steel IPO?

      The issue size of the IPO stands at INR 72.17 crore.

    4. Who are the competitors of the Vibhor Steel?

      The company faces tough competition from major players like APL Apollo Tubes, Rama Steel Tubes, Hi-tech Pipes, Hariom Pipes etc.

    5. What is the expected listing date?

      The tentative listing date for the Vibhor Steels IPO is Tuesday, February 19, 2024

  • IPO Alert: Entero Healthcare Solutions Limited (EHSL)

    IPO Alert: Entero Healthcare Solutions Limited (EHSL)

    The Indian healthcare industry is booming, and in this dynamic landscape, EHSL has emerged as a major player in healthcare product distribution. The ongoing IPO subscription has drawn significant attention from investors and has sparked questions about their growth potential in the highly competitive market.

    In today’s blog, we will explore the company and dive deep into the business model and the key IPO details. 

    Company Overview

    The company was incorporated on January 10, 2018, as Entero Healthcare Solutions Private Limited by Prabhat Agarwal and Prem Sethi to create an organised, technology-driven, pan-India distribution platform for integrated healthcare products.

    Entero is one of India’s largest and fastest-growing healthcare distribution platforms, with an operational presence across 495 districts through physical warehouses in 37 cities in 19 states and union territories.

    Over the Financial Years 2021 to 2023, the company saw consistent growth, initially serving 39,500 retail and 1,600 hospital customers. By 2022, these numbers rose to 64,200 and 2,500, respectively. Furthermore, in 2023, they expanded their reach to 81,400 retail and 3,400 hospital customers, illustrating a steady increase in customer engagement.

    Currently, the company operates in cities like Amritsar, Dehradun, Lucknow, Gurgaon, Jaipur, Guwahati, Hyderabad, Bombay etc. 

    IPO Details

    1. Entero Healthcare Solutions is a book-built issue of INR 1600 crore. 
    2. The issue is a combination of a fresh issue of 1000 crore shares and an Offer For Sale (OFS) of 600 crore.
    3. The bidding for the IPO opened for subscription on February 9, 2024, and will close on February 13, 2024.
    4. The allotment is expected to be finalised on Wednesday, February 14, 2024.
    5. The temporary listed date is fixed as Friday, February 16, 2024, with a price band of INR 1195 to INR 1258 per share.
    6. The minimum lot size for an application is 11 shares with a minimum investment amount for retail investors standing at INR 13,838.
    7. The issue includes a reservation of up to 70,625 shares for employees offered at a discount of Rs 119 to the issue price.
    8. The company will utilise the IPO proceeds from the fresh issue.
    • To partially or fully repay or prepay the borrowed amount.
    • Fulfill the working capital requirements.
    • General corporate purposes.
    1. ICICI Securities, JM Financial, and Jefferies India Private Limited are the book-running lead managers.
    IPO DateFebruary 9, 2024 to February 13, 2024
    Expected Listing Date16th February, 2024
    Price BandINR 1195 to INR 1258
    Total Issue Size1,27,18,600 shares
    Employee DiscountINR 119 per share
    Listing atBSE and NSE
    IPO TypeMainboard IPO
    Issue TypeBook-Built Issue
    Initiation of refundsThursday, February 15, 2024

    Business Model

    The company operates under the two lines of business. 

    1. Primary Business

    It involves distribution of healthcare products to retail pharmacies, hospitals, and healthcare clinics in India.

    The company periodically buys the products in bulk from product manufacturers and then curates and offers a diverse product portfolio to retail pharmacies, hospitals, and healthcare clinics based on their requirements through its distribution network.

    Healthcare Product Distribution – provide distribution and logistics services for healthcare products to retail pharmacies, hospitals and healthcare clinics in India. Such products are sourced from healthcare product manufacturers and sold to pharmacies, hospitals and clinics at margins over the cost of the products. The product range offered includes pharmaceutical products, medical devices, surgical consumables, OTC, nutraceuticals and vaccines.

    Furthermore, the healthcare products distribution channel consists of retail distribution and hospital distribution. 

    Retail Distribution – the company’s retail distribution channel involves distributing healthcare products to pharmacies, who then sell these products to end customers. Supply a wide range of healthcare products, including pharmaceutical, nutraceutical OTC products, and medical devices, to pharmacies through a distribution network. 

    Hospital Distribution – EHSL distributes healthcare products to hospitals and healthcare clinics across India through the hospital distribution channel . The prices of the products are pre-determined in the contract between the hospitals and the suppliers.

    Entero also supplies healthcare products to customers based on their orders, which are placed through the Entero Direct application or other order-taking applications or which have been communicated through salespeople or call centre representatives.

    2. Ancillary Business

    The segment can be broadly categorised into 2 further classifications.

    1. The provision of complete and integrated commercial solutions, including sales, marketing and supply chain solutions to pharmaceutical companies and healthcare product manufacturers.
    2. The sale of private label products and medical devices under their private label, Entero Surgicals.

    Private Label Products 

    Entero Surgical comprises brands such as Carent, Entros, Entair, Safent and Glovent. The product categories under the private label products business entail homecare medical devices, surgical consumables, and rehabilitation products and devices. Furthermore, key private-label products include nebulizers, hygiene and surgical consumable products, homecare medical devices, gloves and mobility equipment.

    Read Also: How to Cancel Mutual Fund SIP?

    Future Outlook

    The Indian healthcare market is expected to grow significantly in the coming years, driven by several factors like rising disposable income, increasing awareness about healthcare and an ageing population. Entero is well-positioned to capitalise on this growth with its strong business model, vast network and technology focus. 

    As of FY23, Entero Healthcare had a market share of 1.24% while making a revenue of 3,300.2 Crores. This indicates that the potential for growth is huge, and the company is poised for success if it continues to provide value to the end consumer.


    Financial Highlights

    ParticularsAs of March 31, 2023 (FY23)As of March 31, 2022 (FY22)As of March 31, 2021 (FY21)
    Total Assets1,308.731,125.98833.79 
    Total Liabilities711.07562.77346.73 
    Total Borrowings342.45247.90141.70 
    Revenue3,305.722,526.551,783.67
    Net Profit/(Loss)-11.10-29.44-15.35 
    Revenue from Operations3,300.212,522.071,779.74 
    Expenses3,309.412,546.361,794.51 
    EBITDA21.5524.4464.01 
    EBITDA Margin1.21%0.97%    1.94%
    ROCE1.88%1.49%6.05%
    Note – In Crores, unless stated otherwise

    EHSL has shown impressive revenue growth, which indicates a healthy financial track record, and its turnaround from losses, which have narrowed over the past three years, highlights improvement. The debt level might be a concern, but the company seems to be managing it effectively.

    Strengths

    1. Benefit of consolidation – The company operates in a large and highly fragmented Indian healthcare products distribution market. This could prove beneficial for EHSL if they can consolidate such a fragmented industry.
    2. Growth – Entero is one of India’s largest and fastest-growing healthcare product distribution platforms with a major focus on network expansion and cost efficiency, catering to the needs of a wide range of customers.
    3. Large reach – In a matter of just 4 years, EHSL has reached 37 cities and employs 3040+ people. This indicates that it is no longer a small player. 
    4. Industry growth – The healthcare market in India is expected to grow at 11% p.a. in the next 5 years. This opens up a long list of opportunities for EHSL to grow. 

    Risks

    1. High short-term borrowing – The majority of EHSL’s borrowing exists for the short term. This may not be a good sign, as failure to meet these payments could be catastrophic for the company. 
    2. Competition –  There are many players in the industry, and any of the behemoths can enter the industry and cause substantial damage to the bottom line figures. 
    3. Negative Cash Flows – Historically, the company has had negative cash flows, and this trend could continue for some more years. 

    Awards & Recognitions

    • ‘Best Healthcare Brand of 2021’ – Economic Times
    • ‘Outstanding Performance’ Award for FY 2022-23 – Mankind Ltd.
    • ‘Outstanding Performance’ – JB Chemicals Ltd.
    • Recognised as ‘Maximiser 2022’ by Pfizer for improving access to quality medicine.
    • Received ‘Outstanding Contribution’ Award – Alkem Laboratories Ltd.

    Read Also: Rashi Peripherals Limited: IPO Analysis

    Conclusion

    Entero Healthcare Solutions boasts rapid growth, a sizable customer base and a well-established distribution network. The company’s turnaround from losses to profitability (11.6 Crores in 2Q24) highlights financial improvement over the years. 

    It is important to consider the risks and uncertainties before drawing any definite conclusions. The performance of the stock after listing will depend on various factors, including the overall market conditions and Entero’s competitive landscape. It is important to conduct your research and analysis before investing in any IPO.

    Frequently Answered Questions (FAQs)

    1. What is the expected use of proceeds from the IPO?

      The proceeds from the IPO will be used to repay the borrowings and fulfill the working capital requirements.

    2. Who are the major competitors of the EHSL?

      The company faces tough competition from Mankind Pharma, Max Healthcare, and Apollo Pharmacy.

    3. What is the minimum investment amount for the IPO?

      The minimum lot size is 11 shares, with an investment amount of INR 13,838.

    4. What are the risks of investing in EHSL?

      Some analysts consider the pricing aggressive, and the company has a relatively short track record compared to other established players.

    5. Should I invest in EHSL?

      This depends on your individual risk tolerance and investment goals, and do your research before investing.

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