Aether Industries, Greenpanel Industries, CAMS Q4 Results Review: HDFC Securities

HDFC Securities Institutional Equities

Aether Industries - Margins on the rise

We remain positive on Aether Industries Ltd. on the back of-

1. capacity expansion-led growth,

2. advanced research and development capabilities,

3. technocratic management,

4. market leading position in most of its products,

5. strong product pipeline, and

6. marquee customer base.

Ebitda/adjusted profit after tax were 24/33% below our estimates, mainly owing to a 23% fall in revenue and higher-than-expected tax outgo.

CAMS - Quest for green shoots continues

Computer Age Management Services Ltd. clocked in-line core revenues at Rs 2.5 billion (up 2.4% QoQ); however, the disappointment stemmed from a sharp rise in other opex (up 16% QoQ) due to higher marketing spends and regulatory audits, driving sequentially flat core income/profit after tax to Rs 0.91 billion/0.74 billion. Continued market leadership in the duopoly Registrar and Transfer agents market, sizeable entry barriers, and high switching costs position CAMS favorably; however, we are wary of SEBI’s ongoing discussion on further TER cuts that could potentially derail RTAs’ medium-term earnings.

Greenpanel Industries - Surge in low-value exports and weak ply dent margin

We like Greenpanel Industries Ltd. for its leadership positioning in the medium density fibre segment, its large retail presence (85% in FY23), superior margin, and working capital profile.

The surge in low realisation MDF export volume (+89% YoY) drove up the total volume by 10% YoY. Higher exports, rising timber prices and increased brand spending pulled down the MDF Ebitda margin by ~400/1300 bps QoQ/YoY to 22%.

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