Analysis is good but how come exit PE of 17 is considered the norm ? Almost no pharma company trades at that PE even during this downturn of pharma/ api companies and it did not during the last upturn phase in 2020 - 2021.
Posts in category Value Pickr
Black Box: Building infrastructure for the AI revolution (03-07-2024)
- Basic businesses do make money but there has to be some moat protecting their castle - branding, regulations, deep technical expertise (low barrier), upfront capex, long contracts, etc. The fact that their primary moat is global presence, execution record and probably low price means that their margins will always be capped + I am not sure what premium you would pay for the first 2 things
SaaS players in US, you will notice that the reasons company is throwing around for delay in execution and in decision making is actually true and echoed by many.
But the companies main clients for data centers are hyperscalers, large social media companies, etc. both of which aren’t slowing down. So, this is probably a contract thing
No. of hyperscale data centers are doubling every 4 years, meaning ~18% CAGR growth which is not present here.
Black Box: Building infrastructure for the AI revolution (03-07-2024)
- Basic businesses do make money but there has to be some moat protecting their castle - branding, regulations, deep technical expertise (low barrier), upfront capex, long contracts, etc. The fact that their primary moat is global presence, execution record and probably low price means that their margins will always be capped + I am not sure what premium you would pay for the first 2 things
SaaS players in US, you will notice that the reasons company is throwing around for delay in execution and in decision making is actually true and echoed by many.
But the companies main clients for data centers are hyperscalers, large social media companies, etc. both of which aren’t slowing down. So, this is probably a contract thing
No. of hyperscale data centers are doubling every 4 years, meaning ~18% CAGR growth which is not present here.
Sirca Paints India Limited (03-07-2024)
Apoorv clearly mentioned 25-30% growth in wood segment so that alone will be about 370 cr + wall paint and decorative paint about 60 cr + welcome brand 50 to 100 cr so its quiet likely they can hit 500 cr in fy25 with 20-22% ebitda they can easily do 70 cr profit in fy25.
With regards to cagr growth post fy25 there were 2 different statements…to 1 participant he mentioned 25-30% growth and in final closing question he mentioned 40% cagr for next 3 yrs…
looking at the current outlook on paint industry after birlas entry even 30% growth is quiet satisfactory.
Disc
Invested and will be adding on further declines
Sirca Paints India Limited (03-07-2024)
Apoorv clearly mentioned 25-30% growth in wood segment so that alone will be about 370 cr + wall paint and decorative paint about 60 cr + welcome brand 50 to 100 cr so its quiet likely they can hit 500 cr in fy25 with 20-22% ebitda they can easily do 70 cr profit in fy25.
With regards to cagr growth post fy25 there were 2 different statements…to 1 participant he mentioned 25-30% growth and in final closing question he mentioned 40% cagr for next 3 yrs…
looking at the current outlook on paint industry after birlas entry even 30% growth is quiet satisfactory.
Disc
Invested and will be adding on further declines
Black Box: Building infrastructure for the AI revolution (03-07-2024)
There is no reason to believe that basic businesses don’t make money. Infact the most basic businesses are generally that ones that are cash cows.
Agree to your commentary of client concentration risk. But management has time and again said that they are preferred by their customers due to their execution record and their global presence. Business is a game of risk, hence there is always a risk of loosing client, contracts, business etc.
Given that they are just setting up the basic networking infrastructure, the deal size seems fair to me.
I agree to the notion that $2 billion revenue target a bit too much, hence not evaluating the business with that guidance in mind.
Also if you read commentary by SaaS players in US, you will notice that the reasons company is throwing around for delay in execution and in decision making is actually true and echoed by many.
Agree that 250-260ish level offer much more margin of safety!
Black Box: Building infrastructure for the AI revolution (03-07-2024)
There is no reason to believe that basic businesses don’t make money. Infact the most basic businesses are generally that ones that are cash cows.
Agree to your commentary of client concentration risk. But management has time and again said that they are preferred by their customers due to their execution record and their global presence. Business is a game of risk, hence there is always a risk of loosing client, contracts, business etc.
Given that they are just setting up the basic networking infrastructure, the deal size seems fair to me.
I agree to the notion that $2 billion revenue target a bit too much, hence not evaluating the business with that guidance in mind.
Also if you read commentary by SaaS players in US, you will notice that the reasons company is throwing around for delay in execution and in decision making is actually true and echoed by many.
Agree that 250-260ish level offer much more margin of safety!
Gujarat Themis Biosyn Ltd – Bulk Drugs growth momentum (03-07-2024)
Very nicely explained
Time technoplast (03-07-2024)
Time Techno as you also mentioned is from inception a plastics/polymer company.
I meant Time Techno going after enterprise customers like BPCL still using Type-1, and asking them to replace with Type-4.
BPCL will have huge scale to support the initial higher price of Type-4 cascades which will anyway be more than offset operationally by lower weight & higher pressure.
Time technoplast (03-07-2024)
As per my opinion they have made one of the best decisions by not entering into it type 1 cascade & have following points to support it:
- Time Techno has expertise in Polymer & Composite wherein Type 1 Cascade doesn’t have any of this, is purely made from Steel/Aluminium.
*Type 1 Cascade doesn’t have any moat, it’s very commodities business where you don’t any control over margin, just check margin fluctuations of EKC who has more than 50% market share of type 1 Cascade.
*Time Techno have risen well beyond rivals by concentrating on composite cylinders at an early stage wherein type 1 manufacture still figuring how to crack type 4 cascade.
Disc- Invested & Biased