@sandeep17 : Good Day

Nice to see your portfolio.

But most of the names that i do see here is in overvalued stage from the likes of APAR, KAYNES, KPIT much more.

I would play by caution or would basically invest around second cycle.

Compiled some notes, few weeks ago:

CWD LTD

03/05/2024
Listed on BSE Sme, Lot size 100

BUSINESS OVERVIEW:

CWD stands for Connected Wireless Devices. Our Company is an Information and Communication Technology (ICT) based company that designs, develops, manufactures, and sells integrated solutions combining the power of software and electronics.
All products that are designed and developed in the company are focused on wireless technologies either on:
-Short range radio technology like NFC, Bluetooth BLE, Wi-Fi, Zigbee;
-Mid-range systems like LORA
-Long range communication systems like 5G LTE, NB-IOT, LTE CAT M1 etc.

CWD operates mainly through the segments of Consumer Electronics and Design and Development of Technology Solutions for various Enterprises and Businesses.

Our diversified product portfolio includes:

1. Smart Medical Consumer Electronics,
2. Products for Vaccine Tracking and Delivery,
3. Tracking devices for Farm Cattle that monitor both movement and health,
4. Electronics for converting Electric Power meter into a Smart Power meter,
5. Employee Safety and Identity Solutions,
6. Electronics that once embedded provide Smart Lighting capabilities to enterprises and consumers reducing their costs,
7. Bluetooth Low Energy Modules that can be used across various white goods and projects etc.

We are a fully integrated end-to-end integrated solution provider and original equipment manufacturers (OEMs) with capabilities ranging from global sourcing, manufacturing, quality testing, packaging, and logistics.
We are an innovation-driven company with strong focus on research and development, which allows us to develop new products suited to customer requirements and helping them to stay ahead of the curve.
We manufacture and supply these products to customers globally who in turn distribute these products under their own brands.

We have developed R&D capabilities that include electronics hardware designing, system architecture, mechanical and product designing, prototyping, and testing. Apart from undertaking designing, our company also assists our customers in cost reduction through product engineering.

To carry out businesses in different location within India and abroad, we have 3 subsidiaries namely:
CWD Manufacturing Pvt. Ltd. (99.98% Subsidiary) having its registered office in Mumbai, India, CWD Innovations HK Limited (100% Subsidiary) having its registered office in Hong
Kong and SDG Global Private Limited (99.98% Subsidiary) having its registered office in Mumbai, India.

PRODUCTS:

Low power 2.4 GHz + LoRa®

CWD Ltd entered into smart meters segment with a ground-breaking communication solution designed to operate on the 2.4GHz frequency.

As the Govt. focuses on initiatives like National Smart Grid and Smart Cities Missions as well as the Ujwal DISCOM Assurance Yojana, demand for reliable & cost-effective smart meter solutions is on the rise.
Read more here:

Nordic Semiconductor Partnership:

CWD is Nordic’s first Indian BLE (Bluetooth Low Energy) module manufacturer and design partner. The company’s products are also listed on Nordic’s website.

Nordic is a fabless semiconductor company in Norway and focused on low-power wireless communications devices.

SOLUTIONS:

Sound Box
A wireless payment terminal designed for smart, secure and simple payment processing by providing instant audio payment confirmation.

USE CASES:

Hospitals:
Every patient in a hospital is monitored for their vitals like body temperature every 2-3 hours. SmartTemp+ does this in an automated way and provides information that brings down the workload and ensures proper safety of the frontlines as it decreases the nurse-to-patient contact time considerably.

Self-Quarantined Patients:
The patients who are self-quarantined are regularly monitored to ensure their safety. Their movements need to be monitored too.

Frontline Workers:
With many healthcare workers working on the frontline, it is imperative that a close monitoring system needs to be in place for their health. SmartTemp+, in addition to PPE, can monitor their body temperature to ensure proper health.

Factories & Workplaces:
It is imperative to look after workers’ safety in factories and workplaces. SmartTemp+ can ensure 24×7 temperature monitoring and assist with contact tracing in case of an infection breakout in the workplace.

USE CASES:

Asset Tracking:
Simply tag your assets with the device and you’re on your way to tracking the location of your assets in real time. Applicable in a wide range of industries like logistics & warehouse, retail supermarkets, office buildings, hospitals, airports, manufacturing facilities, etc.

Inventory Tracking:
Optimise your inventory management by tagging all your valuable assets and track and monitor their movement within the premises in real time.

Activity Monitoring:
Remotely monitor the movement of your tagged assets across a wide range of industries with the help of our Asset Tracking Solution.

From Annual Report:

Industry
The Indian electronics system design and manufacturing (ESDM) sector is one of the fastest growing sectors in the economy and is witnessing a strong expansion in the country.
The Global Bluetooth Low Energy (BLE) market is estimated to reach $28 billion growing at a CAGR of 20% in the next 5-6 years.

Peers
CWD Ltd is the only listed company to play this theme. U-Blox is their biggest global competitor with around 4000 crore revenue. CWD has kept a target of replacing U-Blox and the process has already started where a German giant Osram onboarded CWD in place of U-Blox.

Management
Mr. Tejas Kothari has completed his Bachelor of Commerce from University of Bombay in the year 1992. He is a successful entrepreneur with over 25 years of experience.

Mr. Siddhartha Xavier has completed his Computer Science and Engineering from Bharathiar University, Coimbatore in the year 2000. Before becoming a director in our Company, he had worked with Reliance Communications and Globalspace Technologies limited. He has around two decades of experience in the technology Industry
OPPORTUNITIES:

1. Low penetration of products; much lower than the global average
2. Huge push from the government to become self-reliant (reduce import dependency) and to increase exports by introducing various schemes
3. Consumption in India to be serviced through the direct manufacturing route
4. Focus of brands on Branding & distribution & manufacturing is getting outsourced
5. Favourable demographic indicators like urbanisation, nuclearization of families, young aspirational population, increase in disposable income of individuals are expected to act as catalyst for growth.
6. Evolving of physical and social infrastructure, better logistics, and an expanding e-commerce industry

OUTLOOK:

India witnessed a substantial spike in demand for electronic products in the last few years; this is mainly attributed to India’s position as second-largest mobile phone manufacturer worldwide and surge in internet penetration rate. The Government of India attributes high priority to electronics hardware manufacturing, as it is one of the crucial pillars of Make in India, Digital India and Start-up India programmes.

The Electronics System Design & Manufacturing (ESDM) sector plays a vital role in the government’s goal of generating US$ 1 trillion of economic value from the digital economy by 2025. With various government initiatives aiming to boost domestic manufacturing, India has already started witnessing initial movement with increased production and assembly activities across products such as mobile phones and other consumer electronics.

Technology Risk:

The business in which CWD deals in is affected with rapid change in technology. The company has to adopt dynamic changes in technology under electronics industry. The company has to be up to date with the rapidly changing technologies.
CWD has installed measures which lead to a cost-effective way of production. Moreover, the company’s aim to emerge as a cost-efficient player and attain cost leadership will help it mitigate any global economic risks.
Company’s senior management has an average experience of more than 20 years in the industry. This allows the company to capture the right opportunities at right time.
CWD is in the industry of Information and Communication Technology (ICT).
With rise in standard of living of people, and a change in lifestyle electronics industry is expected to grow in the years to come. The industry may face a change in preference but it will never cease to exist. CWD has successfully maintained a strong relationship with its key customers. Also, CWD is constantly expanding its customer base which will help it to deal with this risk. The company has always moved ahead with changing technology. Its R&D centres is equipped with the latest technology.ORDER WINS

Fund Raise:
Pursuant to the provisions of the SEBI Listing Regulations, we hereby inform you that, the Board of Directors of the Company through Circular Resolution passed on January 13, 2024 has considered and approved the Allotment of 2,79,000 Convertible Warrants at a price of Rs. 747/- each (including face value of Rs. 10/- each at a premium of Rs. 737/- each) by way of Preferential Issue to the certain identified Non-Qualified Institutional Buyers under Non-Promoter category.

Check the name at Serial No. 3

I couldn’t find the reasons for decline in September H1 profits. No explanation is given. If anyone has any insights, Please share.

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Compiled notes from here & there 

Since writing my notes, H2 results are out and the company is back into profit.

Haha😊. All credits to you for teaching such an amazing concept and infusing confidence in this structured method of investing. It has given more confidence now. I think slight change of order in my list is due to some data update error in my file. Small cap list has come very precise and only 1 stock was in different order. I think over a period time this gets fixed.
Thanks a ton again!!

(post deleted by author)

Ganesha eco- May 2024 – concall summary

1…Textile(rPSF) v/s packaging business(rPET)

=At present, our major products is going to the textile sector. Mainly 60% to 65% we are selling to the textile sector.

= But, going forward, as we are moving ahead on the putting of more and more rPET general capacities, the major turnover, will come from the packaging industry.

=So, going forward, say, in the next one or two years, we are seeing almost 50% contribution in sales will be from the packaging sector, 50% from the textile and technical textile sector.

2…TEXTILE BUSINESS(rPSF)

=Stable margin in textile business despite sector is not performing well

=Our major products is going to the textile sector. Mainly 60%, 65% we are selling to the textile sector and the textile sector is not in good shape at all since last one year and so.

=We have seen both realizations per ton as well as the EBITDA per ton falling off further and even the demand hasn’t picked up materially.

=Past yr was started in the realm of disappointments prevailing around the downturn in the textile industry with subdued demand and sliding prices due to various global and domestic macros which shadowed the performance of our company as well along with significant drop in our
operating margins as well as profitability during the first quarter.

=But even though we are not doing very bad in our textile business, we are still maintaining our margins of over 11% except the quarter one and two when the prices dropped off quickly and we suffered. So, after that we have come back and now we are earning more than 11% EBITDA
margin and historically, we are on 11% plus band in legacy business.

=We are looking for the recovery in the textile sector which seems to be happening around July and August month.

3…WARANGAL PLANT

=We achieved a very good set of numbers from our Warangal plant where we achieved operating profits of more than 22% during the quarter on the back of improved capacity utilization of existing Rpet granule plant as well as the start of the operations in the RPSF production line and the second production line of rPet granules.

=At Warangal unit, RPSF line as well as 2nd rPET Granule Line started with effect from 1st March 2024 and both the lines are operating at over 80% capacity utilization during 1st month
of operation.

= 3rd line is also expected to be operational by June end

4…rPET- HUGE OPPORTUNITY

A…Govt regulations for rPET
=As of now ,there is much clarity on the ground for the implementation of the rules from the April 25 onwards.

= Even the Ministry of Environment has notified the penalties also for default in using these recycling stuff in packaging products.

=The regulation was notified in May ’22 to be effective from April 25. And this timeline is intact. So, they have made some changes in between regarding the penalties and all those things. But the timeline is intact.

=As per the EPR guidelines from FY ’26 onwards, the company will have to use 30% of the recycled product

B…We want to gain 25% market share in the rPET granules. And somewhere it’s quoted around 1 million tons would be the total capacity which would be needed.

C…Our capacity for rPET granules

=rPET granules current capacity is 28,000 tons

=And another 14,000 tons of capacity is going to get commissioned in June of 2024

=It takes about 15 months to 18 months’ time to commission the new facility fully operational

D…Competitiors

=There are a couple of players who are coming up with capacities. The existing fiber recycling players, some of the bigger players like JB
Ecotech Alliance, VLS etc., have also announced their rPET capacities as well.

=Each of them are coming up with one line capacity currently. And other than that, in terms of big players,
Indorama is also coming up with capacity for rPET in the coming up years.

=So, as of today, the current expected capacity for the rPET industry by FY ’25 end would be around 200,000 to 250,000 tons, which is currently under installation.

5…STRONG NETWORK FOR RAW MATERIAL COLLECTION

=We are already in this field since last 30 years. We are having quite a grassroots level sourcing network. So, you see, we are already collecting more than 150,000 tons of material
on a yearly basis. And with the ramp-up of our capacity in Warangal, we have already put the
network in place for getting the raw material

6…DEBT REDUCTION

=Qip funds raised at the recent QIP as well as preferential warrants issue, we have set off entire working capital borrowings as well as repaid term debt of the holding company

=Debt in our book is around INR400 crores as of now.

= We are already having the
cash of INR180 crores with us and also all the units have started to contribute towards the cash profits.

=So, we don’t see any uptick in the borrowings in near future,

7…CAPEX

=We have spent over about INR600 crores on our Warangal unit and almost all the plants have been operating, except this rPET granule line, which is expected to be operational by end of next month.

=For future expansions, we are elaborating and discussing in-house. And, once the project is approved by the board, we will come out with that numbers

8…REVENUE AND MARGIN GUIDANCE

=For Fy 2025 ,we are looking for a sales turnover of over INR1500 to INR1600 crores on consolidated
basis and margins should be now to 16% on blended basis.

9…HDPE and PP BUSINESS

=We are slowly moving up in this business , but we are not very fast and now we are focusing on the rPET granule side.

=So, we are not very much aggressive on that front, but of course, we are moving ahead with that slowly

=The reason behind going slow with HDPE, PP or I should say non-PP segment is that the regulation for approval from FSSAI for food safety of HDPE, PP is still pending. The FSSAI
and EFSA both are not very much clear. It is still the EFSA, European Food Safety Council has
also not decided the particular process with which we can obtain the food grade materials.

=For non-food grade HDPE, PP
recycling we are having a very vast unorganized sector which is recycling these materials in India and for a corporate organization like us the food grade is a better sector where we can
expand faster and we can serve the big brands who are using food grade PP and HDPE granules.

So, at one side, the regulation is still going very slow and the second side we are also working on the supply chain system because a proper traceable supply chain system is still in the emerging stage for HDPE, PP and all other non-PP plastic.

=So, these are the two things which
are slowing down the pace for development in this non-BT segment.

10…FORWARD INTEGRATION INTO FABRIC BUSINESS

=We are not having any plan

=Our core focus is now on the recycling only and mainly on the rPET
granules.

=So, we are not having an immediate plan in going into the yarn or the fabric business in Ganesha Ecosphere.

11…FORWARD INTEGRATION INTO rPET BUSINESS

=We have no plan is there for the going ahead into moving further in the rPET business.

=But yes, it is not ruled out completely. Whenever we will get any opportunity or any business proposition, we
may move it from the rPET granules to further value addition

Disc…invested