Emerald Finance Partnership, Balu Forge Industries Fund Raise And Digikore Studios Agreement

Emerald Finance

Recent filing: (PARTNERSHIP) Emerald Finance has partnered with Digikore Studios, to offer its Early-Wage-Access program to the employees of the Company. Digikore is the first Indian studio to secure contracts for Virtual Production on any marquee North American project.

SUMMARY: 6y Operating Profit uptrend | 4q Operating Profit uptrend | PE 28.2x (Sector PE range 20-40) | Excellent Jun-24 results | Strategic Partnerships | Fund Raise | Institutional entry | NBFC

FUTURE OUTLOOK: Company anticipates its book size to grow by 8 to 10 times over the next three years.

  • MCap of INR 141 Crore (share price = INR 46.6 / share) (as on 16th Jul ‘24)
  • TTM PE 28.2x (as on 16th Jul ‘24) Retail float = 6.6% (Mar-24)

FOOD FOR THOUGHT: MSME loan default risk.

What are the products and services of Emerald Finance?

Incorporated in 1983, Company’s business model is centered around granting of loans & advances. As an NBFC, it provides loans to customers. Company is also engaged in providing ultra short-term loans (tenor up to 15 days) with a ticket size ranging from INR 1,000 to INR 20,000 targeting youth salaried individuals.

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Balu Forge Industries Ltd.

Recent filing: (FUND RAISE) BoD of Balu Forge has approved the issuance of 45L equity shares and 93L warrants at INR360/each, aggregating to INR 497 Cr. Subscribers include Ebisu Global Opportunities Fund, Nova Global Opportunities Fund, Ovata Equity Strategies Master Fund, Perennial Emerging Growth Fund and Promoter Group.

SUMMARY: 3y Operating Profit uptrend | 7q Operating Profit uptrend | PE 45.5x (Sector PE range 30-50) | Excellent Mar-24 results | Capacity expansion | Fund raise | Promoter Buying | Ace Investor | Institutional Entry | Auto Ancillary

FUTURE OUTLOOK: As per FY24 concall, Company expecting Revenue to conservatively grow in the range of 40%-45% in FY25 and EBITDA margins are expected to be in the corridor of 23%-24% in the upcoming quarter.

  • MCap of INR 4,257 Crore (share price = INR 415 / share) (as on 16th Jul ‘24)
  • TTM PE 45.5x (as on 16th Jul ‘24) Retail float = 9.7% (Jun-24)

FOOD FOR THOUGHT: Large working capital cycle | Volatility in raw material cost.

What are the products and services of Balu Forge Industries?

Company is engaged in the manufacturing of fully finished and semi-finished crankshafts and forged components. It has the capability to manufacture components conforming to both New Emission Regulations & the New Energy Vehicles.

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Digikore Studios

Recent filing: (AGREEMENT) Digikore Studios has signed an agreement with CBS Studios to deliver VFX and Virtual Production on their global media franchise STAR TREK. Start Trek is a marquee project and a global blockbuster franchise. Company is the first Indian studio to secure contracts for Virtual Production on any marquee North American project.

SUMMARY: 3y Operating Profit uptrend | PE 35.2x (Sector PE range 30-60) | Ace investor | VFX

FUTURE OUTLOOK: As per FY24 concall, Company is aiming to achieve INR 100 Cr revenue in FY26. Company has expansion plans in North America and Canada to achieve revenue target of \$ 25 Million (~ INR 200+ Cr) within 2 years’ time. Company focus is on grabbing \$25 million out of the \$10 billion global VFX market in the next two years.

  • MCap of INR 356 Crore (share price = INR 530 / share) (as on 16th Jul '24)
  • TTM PE 35.2x (as on 16th Jul '24) Retail float = 19.8% (Mar-24)

FOOD FOR THOUGHT: 70% of business comes from outsourced work from major VFX studios in North America, which could face challenges due to AI advancement, Company transitioning towards direct projects from production houses

What are the products and services of Digikore Studios?

Digikore, established in 2000, is a VFX studio based in India. Its core specialization lies in delivering top tier Visual Effects (VFX) services tailored for a diverse array of media projects, encompassing films, web series, TV series, documentaries, and commercials. Company got listed on the NSE Emerge platform on 4th Oct 2023.

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