What is it with Ethos suddenly reducing their stake in Silver City? That recent notification was really perplexing, and the market doesn’t seem to like it either? Anyone got any clue kn this?
Posts in category Value Pickr
Shivalik Bimetal Controls Ltd (SBCL) (14-03-2024)
Q3FY24 update from Dalal & Broacha.
Shivalik Bimetals_Q3FY24_Dalal&Broacha.pdf (481.7 KB)
Disc: Invested
Sandhar Technologies – An emerging market leader (14-03-2024)
Few thesis pointers which look interesting:
- Sitting on operating leverage with a good order book and visibility.
- Management has guided for a strong Q4.
- Margins are on the improving trajectory and shall gradually move towards 12-13% in the next few quarters.
- Company is slowly deleveraging as well.
- Solar power integration for cost savings.
- Plant consolidation for cost savings and efficiency.
- Topline growth of 16-20% with gradual margin improvement may lead to a PAT of around 250-300Cr
- Exit multiple in the range of 25-30x is a reasonable expectation
- If the numbers play out then the odds do seem to be good at the moment
Disc: Invested and biased
Vaidya Sane Ayurved Laboratories Ltd (Madhav baug) (14-03-2024)
@Varun_K my thoughts to your pointers,
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Fully agree with you. To me this remains the biggest monitorable. The execution will make or break this investment. Hoping Dr. Sane delivers and lives up to his promise.
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Hmmm, well all this is anecdotal. For me the proof of the pudding will be in the numbers the company posts. India is a vast country with a lot of people needing treatment for various ailments. As long as they post close to the projected numbers, I don’t think we need to worry about this. At least not at this stage where the company itself is so small.
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Yes, awareness is key to their growth and the acceptance of Ayurveda. It’ll be good to see how the company progresses on this front.
Not sure about your query about Mukul Agarwal’s stake. Maybe he is yet to exercise the warrants or maybe there is some issue with screener. Let’s see if the March 2024 update shows his stake in the company. If it doesn’t we can check with the company.
DroneAcharya Aerial Innovations – a new age business (14-03-2024)
Has the company’s website changed? None of the links on their website are working…
Goodluck India Ltd (14-03-2024)
The recent correction seems to have brought back the odds in favour. If the management manages to achieve a topline of 4000Cr in FY25 and 4600Cr in FY26 with a slight margin improvement – it should do a PAT of around 250Cr in FY26. An exit multiple of 18-20x (which is not an unrealistic expectation in my opinion) can produce more than decent outcomes.
Disc: Invested. Not a recommendation
Dharmaj ready to benefit from high demand for agrochemicals (14-03-2024)
The company didn’t conduct concall for the last quarter, transcript for November concall is uploaded on screener.
https://www.screener.in/company/DHARMAJ/
Sejal Glass – Turnaround (14-03-2024)
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SKM Egg Products – thinking out of the shell (14-03-2024)
What I meant was repeating the performance of last quarter for next 3 more quarters, Forward PE becomes 12.
Present market cap → ~600 Cr
Net profit → 12 X 4 = 48 Cr, Fwd PE will be ~12
Also, looking at performance for upcoming quarters would be important when making a definite call on this.
The net profit of this company was 16 and 7 Cr in FY21 and FY22 respectively. The sudden increase to 76 Cr in FY23 and 105 Cr in TTM brought much positivity to the stock. From Dec 22 to Sep 23, the company delivered a 30 Cr net profit run rate. However, this profit run rate came down to 12 Cr in last quarter, which is exactly same to net profit in Sep 2022 (Before start of 30 Cr run rate)
So the question arises – What is the steady state net profit of this company? Is it 12 Cr a quarter or 30 Cr a quarter, or is it even less? Difficult to answer this without any good commentary from the company itself.
However, one should make their own decision. I am just laying my hypothesis.
In general, cyclicals work opposite to normal stocks. When PE is high at a steady level, that is the time to buy. Because when profits shrink (Cycle ends), PE looks exorbitant. When PE becomes low, it is time to sell in cyclical because your profit becomes very high and the stock price hasn’t caught up with that.