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Posts in category Value Pickr
Zomato – Should you order? (16-06-2024)
Clarification on news articles related to acquisition of Paytm’s movies and events business
be26ee30-8e27-43a0-8cfd-36205afed8c0.pdf (243.5 KB)
Aegis Logistics – Can It Be Exception? (16-06-2024)
Aegis had another good quarter and a very good full FY24, with FY24 EBITDA growing by 25% and EPS by 23%. They finally announced their ammonia expansion which should deliver 120 cr. EBITDA at full utilization and require 500 cr. investment. They are confident of growing terminaling volumes to 5mn MT in FY25 (vs 4.1 mn MT in FY24) and distribution volumes by 25-30%. Concall notes below.
FY24Q4 concall
- Pipavav
- 45,000 MTPA capacity will be commercialized by Q1FY26 (around the same time as KGPL pipeline)
- Recently commissioned LPG bottling plant
- Haldia : Added 50,000 kl of liquid capacity
- Kandla :
- Commissioned 35,000 KL of liquid tanks, taking total capacity to 970,000 MT. Additionally constructing 25,000 KL which will be operational next year
- Mangalore:
- Following these expansions, total liquid capacity at Mangalore will reach 154,000 KL and are constructing an additional 71,000 KL in liquids that will be operational in the next 12 to 15 months
- Kochi : Acquired 16,000 kl liquid capacity and expanding by 25,000 kl
- JNPT : will be commissioned in 2024
- Terminaling:
- EBITDA/ton was 1100 EBITDA/ton (vs 1000/ton earlier) due to procurement efficiencies which they get as they handle more gas volumes. Expect this improvement to continue
- Expect 5mn MT volume s in FY25
- Current price differential between LPG and LNG is 7-10%
- Distribution
- EBITDA/ton was 4500-5000 (normal margins should be around 3000/tons)
- Expect large growth in distribution business as Mangalore and Pipavav come onstream in FY26
- 40-50% of Morbi volumes are now LPG
- Expect 25-30% volume growth
- Sourcing volumes: 798,400 MT vs 895,300 in FY23
- Liquid
- Capacity was 1.9 mn kl and will increase by 300,000 kl in FY25, operated at 87% utilization
- Revenue growth was higher than volume because of some take-or-pay contracts
- Liquid contracts are 1-year and they generate 3000/CBM
- Ammonia:
- Will start construction of first terminal in Pipavav (36,000 MT capacity) which can result in throughput of 3x a month and 1.2-1.3 mn MT in a year at optimum utilization - 500 cr. investment
- Expect 3x turns, 1.2 mn MT volumes at peak utilization with 1000/ton EBITDA (i.e. 120 cr. EBITDA at peak utilization i.e. 3x asset turns). Expect slightly under 1000/ton EBITDA
- Can handle any kind of ammonia (gray/blue/green)
- Currently most users have their own terminals
Disclosure: Invested (position size here, sold shares in last-30 days)
Supreme Power Equipment Limited (16-06-2024)
Supreme Power Equipment Ltd is an India-based manufacturer specializing in a range of transformers up to 25 MVA/132 KV class. The company has established a strong presence in the electrical equipment sector with a focus on quality and service. The Indian transformer industry is projected to grow at a CAGR of 5% from 2024 to 2029, driven by increasing energy demands and expansions in transmission and distribution systems. The company is well-positioned to capture value in this expanding market.
Microcap momentum portfolio (16-06-2024)
Update for entry on 18th June 2024
50 EMA (20713) > 200 EMA (18572); hence we can continue without any change.
Based on ranking:
- KIRLOSENG
- KPIGREEN
- IFCI
- RTNPOWER
- PURVA
- KIRLOSBROS
- TECHNOE
- HERITGFOOD
- AZAD
- JYOTICNC
- CHOICEIN
- NETWEB
- GANESHHOUC
- STAR
- KESORAMIND
- TVSHLTD
- ARVIND
- HGINFRA
- MOIL
- ITDCEM
- ASTRAMICRO
- EMUDHRA
- VOLTAMP
- BASF
- WABAG
Based on A → Z for easy tracking:
- ARVIND
- ASTRAMICRO*
- AZAD*
- BASF*
- CHOICEIN
- EMUDHRA*
- GANESHHOUC*
- HERITGFOOD*
- HGINFRA*
- IFCI
- ITDCEM*
- JYOTICNC
- KESORAMIND
- KIRLOSBROS
- KIRLOSENG
- KPIGREEN
- MOIL
- NETWEB
- PURVA
- RTNPOWER
- STAR
- TECHNOE
- TVSHLTD*
- VOLTAMP
- WABAG*
Exits:
IIFLSEC, JKIL, MSTCLTD, SCI, THOMASCOOK and WOCKPHARMA make an exit.
ANANTRAJ, ELECTCAST, TIMETECHNO and TARC stay within the top 30 and hence remain.
Entries:
ASTRAMICRO, GANESHHOUC, HERITGFOOD, HGINFRA, ITDCEM and TVSHLTD make an entry.
BASF, EMUDHRA and WABAG cannot enter as there is no vacancy.
AZAD is less than 6m on the bourses and hence not considered.
Last week I had written about how I had not included AZAD as it was less than 6m on the stock exchange. I had made another mistake of including JYOTICNC. As I had not rebalanced for 2 weeks, JYOTICNC was already 2 weeks in this pf. Therefore, I have retained JYOTICNC, but still not including AZAD. When JYOTICNC goes out, 6m rule will be applied.
Microcap momentum portfolio (16-06-2024)
Sure, sir to avoid ambiguity.
Investing Basics – Feel free to ask the most basic questions (16-06-2024)
Yes, you are correct.
Let’s consider a manufacturing company, ABC Corp., that recently completed a major expansion of its production facility.
Before the expansion, ABC Corp. had a capacity of 10,000 units per month with fixed costs of Rs. 100,000 and variable costs of Rs. 10 per unit.
After the capex, the company increased its capacity to 20,000 units per month, but the fixed costs remain Rs. 100,000, and variable costs remain Rs. 10 per unit.
Scenario 1: Before Capex
- Units produced and sold: 10,000
- Revenue (at Rs. 20 per unit): Rs. 200,000
- Total Variable Costs: Rs. 100,000
- Fixed Costs: Rs. 100,000
- Operating Income: Rs. 200,000 - Rs. 100,000 - Rs. 100,000 = Rs. 0
Scenario 2: After Capex (utilizing increased capacity)
- Units produced and sold: 20,000
- Revenue (at Rs. 20 per unit): Rs. 400,000
- Total Variable Costs: Rs. 200,000
- Fixed Costs: Rs. 100,000
- Operating Income: Rs. 400,000 - Rs. 200,000 - Rs. 100,000 = Rs. 100,000
In the second scenario, because the fixed costs remain the same, the increase in production volume directly translates to a significant increase in operating income, demonstrating operating leverage.
Microcap momentum portfolio (16-06-2024)
Yes Sir. That will be great if you can post the latest updated list based on the new data.
Microcap momentum portfolio (16-06-2024)
I have updated from 3rd to 7th and now confident of the data. I will post the updated version. Shall I delete the previous update so that there is no confusion?