Given market buoyancy and positive feedback received, EAAA may also explore IPO/listing – more update in next quarter

Punjab saw 14% decline in sales which resulted in 39% decline in EPS. Demand still is sluggish and they are hoping it to turnaround this year. They have done well on gross margins and have been adding new chemistry capabilities during this downturn. Concall notes below

FY25Q1

• Maintained volumes and marginal decline is due to lower prices. Inventory is still high in the market and demand is sluggish, expect revival by Q3FY25 along with pricing increase

• Maintained 38%+ gross margins despite pricing pressure

• Freight costs increased by 2.5-3 cr.

• Commercialized 2 specialty chemical intermediate products, one shipped in Q4 and other in pilot plant stage. Lalru plant utilization will improve to ~65% in FY25

• Derabassi is at 79% utilization, it can reach 82-85% (so not much headroom)

• Added BASF and a new Japanese client as new customers

• Newer molecules contributing 6-8% of revenues which should increase to 20% in next few years, these are higher priced molecules ($100/kg+). Most products are $150-250/kg priced with 40-80 tons/year demand

• One of expenses and freight costs depressed EBITDA

• New chemistries added: Freon reaction, cryogenic reaction, butyl-lithium reaction

• Net working capital: 87 days (reduced from 98 days in Q4)

• FY25 capex: 35-40 cr. maintenance. Will put growth capex after having signed contract

• Current setup can generate 1300-1400 cr. sales

Disclosure: Invested (recently increased position size and bought shares in last-30 days)

There are several insightful snippets related to banking/lending industry in this old research report on Ujjivan Financial Services / Ujjivan Small Finance Bank

Example:

A variety of factors make JLG a superior Microfinance model to SHG
Firstly, in the SHG model, a group of about 20 members are required to
accumulate savings for a period of 6 months before taking a loan is
considered. This is step that consumes time and resources and makes the
process unattractive from a borrower perspective. Secondly, the loan
processing time for SHG as long as 4 months compared with just 1 week for
JLG again making things unattractive from borrower perspective. Thirdly,
the repayment frequency is monthly for SHG compared with weekly for JLG
making asset quality control more difficult for the former compared with the
latter, ceteris paribus. Decision making regarding loan quantum to all
members rests with the group leader, which is not something that would be
appreciated by the rest of the borrowers. Last but not the least, there is a
lack of robust information database in the case of SHGs in comparison to
the JLG lenders, who have access to Credit Bureau databases which
makes credit appraisal more challelnging for the former compared with the
latter

Attached report here so that it remains accessible even if link stops working.
Ujjivan Financial Services Nuvama Wealth research report.pdf (667.9 KB)

Could be helpful for penetration of insurance

@Mahesh Shah, a good exploration and walk through of Flavours and Fragrance @ Camphor & Allied products. I have had the patience (Hero Honda’s Punch line- Fill it and Forget it) to stay with the company right from IPO, when the greens stripes etc were predominantly decorated on the white paper in share certificates which are still available with me at my residence (temporarily I am abroad on a visit). I recall CAP was involved in producing natural products from MInt like – Mentha Oil, Menthol, and (maybe some derivatives like Cornmint Oil, Menthone, and Menthyl Acetate) apart from extracting turpentine oils etc (not forgetting Camphor made organically from Natural products).; until it was given competition from the industries which produced Mint flavours and products artificially. Organic chemistry and organic produce have a competition always ( Viz Mangalam Organics
Ltd since 1981); and the AR’s of CAP cited constraints to support their dismal performance, and cover denial of say – Dividends.
Since I was never impressed with performance of Mangalam Organics Ltd most of times, never considered switching.