JULY 2024 Monthly Update Aionion.01

"Time is the friend of the wonderful company, the enemy of the mediocre"
– Warren Buffett
Monthly Update – July 2024
S.No. Company Name

1. ITC
2. Karnataka Bank
3. Manappuram
4. Tata Motors - DvR
1. ITC
 ITC Ltd has surpassed Britannia Industries to become the second-largest listed packaged foods
company by sales in India, behind Nestle.
 ITC's foods business posted consolidated sales of ₹17,194.5 crore for the fiscal year ending March
31, 2024, which includes both domestic sales and exports.
 ITC's food business sales in FY24 grew by 9% from the previous year, while Britannia's growth
was slower at 2.9%, improving ITC's ranking.
 The CCI has approved the demerger of ITC Ltd.’s hotel business into a separate entity, and the
decision was also approved by ITC shareholders on June 6, 2024, to unlock its potential.
 Following the demerger, shares of the newly formed ITC Hotels Ltd will be listed on stock
exchanges, with ITC shareholders receiving one ITC Hotels share for every 10 ITC Ltd shares held.
ITC Ltd will retain a 40% stake in the new hotel entity.
 Growing interest among property owners has boosted ITC's lead generation and management
contracts. The 'asset-right' strategy added 24 managed hotels out of 25 opened in the past 24 months.
2. KARNATAKA BANK
 Karnataka Bank is led by an experienced management team with a proven track record in the banking
industry, providing strong leadership and strategic direction.
 The bank has managed to maintain healthy asset quality with a declining trend in Net NPA from
1.70% to 1.58% in March 2023, reflecting prudent risk management practices.
 Karnataka Bank has been investing heavily in digital banking initiatives, enhancing customer
experience and operational efficiency through advanced technology solutions.
 Karnataka Bank reported a Q4 net profit of ₹274.24 crore for 2023-24, a decrease of 22.48% from
₹353.75 crore in Q4 2022-23. The board has approved a dividend of ₹5.5.
 The profit decline was attributed to a one-time staff cost of ₹152.2 crore due to increased actuarial
provisions from the 12th bi-partite settlement.
 The annual net profit for 2023-24 increased by 10.68% to ₹1306.28 crore from ₹1180.24 crore YoY.
 The bank maintains a strong capital adequacy ratio and a CASA ratio of 31.97%, ensuring it has a
solid buffer to absorb potential losses and meet regulatory requirements.
 The bank has successfully raised ₹1,500 crore in capital within six months, demonstrating strong
investor confidence.
3. MANAPPURAM
 In the last week, Manappuram Finance stock surged 9% to hit a 52-week high of Rs.214, marking a 66%
increase over the past year.
 Company MD and CEO V.P. Nandakumar cited anticipated interest rate cuts and geopolitical tensions
as positive factors for gold rates, while the shift to organized business supports strong demand for gold
loans. High gold prices benefit the gold loan business by allowing loans with less gold pledged.
 Post-Covid, demand for gold loans has risen, particularly among middle-income groups, with an
average loan size of Rs 70,000-75,000 for three months.
 The planned IPO of Asirvad Microfinance is expected in the next 2-3 months, which may potentially
unlock value for Manappuram Finance.
 However, increased borrowing costs due to higher risk weights on bank term loans to NBFCs may
compress Manappuram Finance's net interest margin (NIM).
 Manappuram reported a Q4FY24 net profit of ₹562 crore, a 36% YoY increase, with revenue up 33%
to ₹2,359.77 crore. The Board approved an interim dividend of ₹1 per share.
 Net Interest Income (NII) grew 32% year-on-year to ₹1,494 crore, and consolidated Assets under
Management (AUM) rose 18.7% to ₹42,070 crore.
 The Vehicle and Equipment Finance division's AUM rose 69% to ₹4,111 crore, while Manappuram
Home Finance Ltd. saw a 38% increase in AUM to ₹1,510 crore.
4. TATA MOTORS DvR
 Tata Motors' demerger into commercial and passenger vehicle entities aims to optimize cash flow and
focus on growth strategies.
 The commercial vehicle unit, historically profitable, will reinvest cash flows strategically. The
passenger vehicle business targets 10% EBITDA margins across combustion and electric vehicles.
 Debt allocation will be based on asset proportions, with CV business holding 60% of assets. Completion
of the demerger is expected in 12 months, with Jaguar Land Rover anticipated to become net debt-free.
 Tata Motors also plans to enhance electric vehicle adoption by bundling cars with rooftop solar in
collaboration with Tata Power.
 JLR, has increased its five-year investment plan by £3 billion to £18 billion. The initial investment plan
was £15 billion for fiscal years 2024 to 2028.
 JLR and China's Chery Automobile Company have signed a letter of intent to license the Freelander
brand to their joint venture, CJLR, to develop electric vehicles in China.
 CJLR will produce electric vehicles based on Chery’s EV architecture exclusively under the Freelander
name.
 The Freelander brand will offer a range of mainstream electric vehicles initially sold in China, with
plans for export over time.
 The vehicles will be built at CJLR’s existing manufacturing facility in Changshu.
 The design will be a collaboration between Chery and JLR’s creative teams to position the brand in the
growing China mainstream New Energy Vehicle market.
 Tata Motors achieved a double-digit return on capital in FY24, with a ROCE of 18.7%, marking a nine-
year high and indicating enhanced efficiency and shareholder value creation.
 Tata Motors Finance, a wholly-owned subsidiary, will merge into Tata Capital following approval from
regulators such as SEBI, RBI, and NCLT. In return, Tata Capital will issue equity shares to Tata Motors
Finance shareholders, resulting in Tata Motors holding a 4.7% stake in the combined entity. The merger
process is expected to take 9-12 months to complete.
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"Time is the friend of the wonderful company, the enemy of the mediocre"

Monthly Update – July 2024

S.No. Company Name

 The vehicles will be built at CJLR’s existing manufacturing facility in Changshu.

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