Recovery continues for Alembic with them growing sales by 8% and EPS by 17%. Finally they seem to be getting closer to 20% EBITDA margins and have commercialized large number of products (27 in FY24, 25 planned in FY25). Concall notes below.

FY24Q4

• 7 products launched in Q4 in USA (27 launches in FY24). Expect to launch 25 products in FY25

• Expect quarterly US sales of $50mn (lower than $55mn earlier guided) as there were one time opportunities in 3QFY24

• Gross margins increased to 75% due to increased US sales in the US, R&D and other cost optimizations. Expects GMs to be 70%+

• Expect 20% growth in ROW business. International business is now 40% of order book vs 20% earlier

• API is regulated market business and higher margin than corporate margins

• FY25 capex: maintenance (300 cr.)

• R&D will increase to 550-600 cr. in FY25 (vs 480 cr. in FY24)

Disclosure: Invested (position size here, no transactions in last-30 days)

Can Identity Change Potentially Lead to Re-rating of a Finance Company?

Check out my post on linkedin:

Today let us deep dive into one of the listed SME stock that is FAALCON CONCEPTS LTD.

1. Faalcon Concepts Limited deals with planning, designing, fabricating, and installing façade systems.
2. The company offers facades resistant to UV rays, acid rain, dust, noise, and other influences.
   Now , you must be thinking what exactly facade means…right?
   A facade is the exterior wall or face of a building, and it usually involves design elements like deliberate placement of windows or doors. Depending on architectural style, these elements have a certain order to them.

What we usually see outside India…those big buildings with exterior glass walls. This is normal right in other countries.
You know what in our country how real estate is booming right? Infra companies coming up with so many buildings…so this facade is directly proportional to real estate means more buildings more growth of facade industry.
Still you did not get what facade is? watch this video you will get more clarity

2. FUNDAMENTALS

3. Promoter holding more than 65%

4. ROCE : 71%

5. ROE : 79%

6. Co. has a total order book of 50 Crs as of March 24 which is 3x+ its FY23 sales.

7. Equity capital = 0.02

8. FEW NEGATIVES TO LOOK AT

9. Trade receivables has increased.

10. Cash conversion cycle has increased.

11. TECHNICALS

12. IPO Breakout is possible. Once it breaks the trend line we can see good movement

Sources : screener , tradingview

DISCLAIMER
My videos, presentations, and writing are only for educational purposes and are not intended as investment advice. I cannot guarantee the accuracy of any information provided.
I am not SEBI-registered.
Trading & Investing in stocks, options or equities involves risk & are not suitable for all investors

Sula and KRBL Similarities

Ageing is critical for both the businesses.

Longer you age grape – Better the wine, better the pricing.

Longer you age basmati – Longer product better aroma, better the pricing.

KRBL Cons inventory Days 2023 – 404 Days
Sula Cons Inventory Days 2024 – 540 Days

In their best of days 2014-15-16 (ROE) for KRBL was touching 30% when the working capital (Inventory being aged ) was funded by debt.

When the company went debt free inventory was funded by retained profits / equity and that started hurting ROE.

Because equity has been cheap for Sula it has been funding wine ageing from equity.

Ideally these business require some sort of LEVERAGE for good ROEs in my opinion.

Only exception would be when the end product is AAA in quality / niche so the company has very strong pricing power.

If Sula wants to Scale up and become the kingfisher of wines without compromising on ROEs then I think they may have to –
Outsource ageing of Grapes
Reduce inventory days (compromise product quality?)
Fund working capital with debt
Somehow manage to get high pricing power with economies of scale

PS – I have not worked in depth @ Sula…these are just observations I made. I was invested in KRBL but was seeing a serious ROE drop due to competition & Promoters unwilling to take debt. Hence Exited.