Why RattanIndia Enterprises Share Price is Falling

India's business landscape is rapidly transforming with cutting-edge technologies, driving growth across sectors like electric vehicles, drones, and e-commerce. Companies in these fields are witnessing a broad reach and quick market expansion.

As digital adoption rises, these businesses are reshaping consumer habits and boosting India's economic ambitions.

RattanIndia Enterprises is a key player in this space. It operates across high-growth segments, including electric mobility, drones, and e-commerce, with a focus on sustainable and technologically advanced solutions.

The company has invested in future-focused ventures, aiming to lead in sectors that align with India's push towards innovation and digital expansion.

Recently, RattanIndia Enterprises' share price has attracted significant investor attention, experiencing a steep decline of 13.7% over five days following its quarterly earnings report. This sharp drop has raised questions regarding the company's performance.

To understand the reasons behind this decline, let's review the quarterly results and analyze the key factors impacting its share price.

Weak Quarterly Results

RattanIndia Enterprises faced a setback in the second quarter of this financial year, reporting a net loss despite a fivefold profit increase in the first quarter.

The company, primarily active in the energy sector, posted a consolidated net loss of Rs 2.4 billion (bn) for the quarter ending in September.

This loss contrasts sharply with the Rs 1.4 bn profit achieved in the same quarter last year. The loss stems from an unrealised notional loss of Rs 2.7 bn on its investment in shares of RattanIndia Power, attributed to fluctuating market prices.

Following Ind AS-109 standards, RattanIndia Enterprises recorded this unrealised loss in response to market price movements for its RattanIndia Power shares.

The tax impact of these unrealised losses was also factored into the consolidated results, contributing to the quarterly financial outcome.

The company reported a revenue increase of 11.5% year-on-year (YoY), totaling Rs 18 bn for the quarter ending in September.

This rise in revenue is partly attributed to growth in its Cocoblu e-commerce business, which generated Rs 17.7 bn in revenue, a 27% jump compared to Rs 13.9 bn in the same quarter last year.

Cocoblu's significant growth is evidenced by its handling of 340 million orders, demonstrating the platform's expanding market presence since its inception in March 2022.

During Q2 FY25 earnings before interest, tax, depreciation, and amortisation (EBITDA), showed a loss of Rs 2.4 bn, compared to Rs 2.2 bn in earnings from the previous year.

The drop in operating income is largely due to unrealised losses on equity investments, which impacted overall profitability.

RattanIndia Enterprises' share price decline is primarily attributed to these unrealised losses on equity investments, which weighed down its quarterly performance.

Although revenue and business segments like Cocoblu showed growth, the heavy unrealised losses overshadowed the positive earnings, resulting in investor concerns and a drop in share price.

What Next?

Moving forward, RattanIndia intends to deepen its involvement in high-growth sectors through continued product innovation and market expansion.

In the EV segment, the company plans to increase its dealership network and broaden its EV lineup to include models for various customer needs.

It aims to leverage the recently approved government subsidies, which could further stimulate demand for electric motorcycles, positioning Revolt Motors as a prominent player in the Indian EV landscape.

In e-commerce, RattanIndia's focus will likely remain on strengthening Cocoblu, expanding private label offerings, and increasing its digital reach.

The company's ability to handle large order volumes and its commitment to vendor partnerships are expected to support sustainable growth in this space.

NeoSky's initiatives in the drone sector are set to grow, with a focus on scaling up drone manufacturing, training, and service provision.

This division aims to contribute to India's ambitions of becoming a global hub for drone technology, tapping into applications in agriculture, defence, logistics, and disaster management.

What's more, the company has entered into a brand new segment - stationery.

The company recently launched Neomate, a new stationery brand offering premium products at affordable prices through its wholly-owned subsidiary Neobrands Limited. The products are now available on Amazon.in with prices starting at Rs 160.

This marks RattanIndia's entry into India's stationery market, expanding its presence in the consumer goods sector through its subsidiary Neobrands.

How RattanIndia Enterprises Share Price has Performed Recently

In the past five days, RattanIndia Enterprises share price has tumbled 13.7%. In the last month, it is down 15.6%.

In 2024, so far its share price has tumbled 19.1%.

The stock touched its 52-week high of Rs 94.9 on 8 February 2024 and a 52-week low of Rs 59.2 on 4 June 2024.

About RattanIndia Enterprises

RattanIndia Enterprises is active in a wide range of business activities.

The company is focused on businesses with cutting edge technologies which have the potential to transform the lives of billion plus Indians.

RattanIndia Enterprises comprises of tech focused new age businesses including e-commerce, electric vehicles, fintech, and drones.

It holds 18.5% stake in RattanIndia Power, which is engaged in the generation and supply of thermal power.

To know more, check out RattanIndia Enterprises' financial factsheet and its latest quarterly results.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Happy Investing.

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