I am travelling this weekend with limited access to internet. With the update done, I find stocks changing in the list randomly. I will need some more time to check what is going on; just be something to do with Google Finance.
Not planning any update today or tomorrow.
Posts in category Value Pickr
Smallcap momentum portfolio (09-06-2024)
PI Industries – Superior Business Model (09-06-2024)
PI had a softer quarter, with sales growing by 11% and EPS by 32%. They are guiding for 15% sales growth in FY25 with similar margins but higher tax rates which might keep EPS muted in FY25. Besides that, they have grown very well in this downturn and have clearly differentiated themselves from other agchem/chemical cos. Concall notes below.
FY24Q4
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Targeting 15% sales growth in FY25 and higher growth (18-20%) starting FY26; 49-50% gross margins and 26% EBITDA margins
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70% of CSM growth in FY24 came from new molecules commercialized in past 3-years
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New products: 7 (domestic), 6 (CSM); 8-10 in CSM in FY25
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6% revenue drop in domestic agchem in FY24 (29% growth in biologicals)
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Higher tax rate in FY25 (24%)
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Weaker pharma revenues due to deferral of customer orders (315 cr. vs 563 cr. In FY23). Investments will happen for the next 1.5 years after which EBITDA margins will increase
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FY24 capex : 1080 cr. (including 490 cr. for pharma acquisition); Plan 800 cr. In FY25
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Order book increases to $1.75bn
Disclosure: Invested (position size here, no transactions in last-30 days)
MIDHANI : Niche high valued added domestic alloy company (09-06-2024)
MIDHANI in collaboration with BARC and Hindustan Aeronautics Limited to manufacture T100 carbon fibre with applications in defence, Hydrogen and construction.
Krishna Defence & Allied Industries Ltd – SME play on Shipbuilding (09-06-2024)
What has led in the sudden rise in share price from last week of May? I didn’t see any news regarding new launches or orders.
Does the market know something not in press?
Aaron Industries Ltd- The Elevator Play (09-06-2024)
Capex Update:
As per the recent quarterly results of Mar’24, we have noted the CWIP of Rs 26.90cr, which is more than the double of current net asset block. The majority of the capex is allocated to the Greenfield project at Unit 3 in Block No.251, Plot No.B-2, Royal Industrial Park, Vill. Moti Pardi, Ta. Mangrol, Surat - 394120, Gujarat, India. This unit is outfitted with machinery purchased from Salvagnini particularly for the manufacture of elevator components. This advanced equipment is currently in the installation phase.
The company has also engaged in brownfield growth, including upgrades to existing machinery. These changes are designed to boost productivity and operational efficiency.
The unit 3 is expected to be operational by July 24 and remaining capex will be completed within next 2 months.
Two new branches opened in 2023-2024, one in Ahmedabad and the other in West Bengal. These new branches are now in the early stages of expansion, and their performance is expected to significantly impact the company’s results in the current fiscal year 2024-25.
Reason for drop in elevator segment margins:
In the latest quarterly results, we saw compression in the margins of elevator segment, with the operating margins dropping from 47% to 36%. As per the management, below are the primary facts underlying the drop in margins:
Inventory Management: Company has proactively removed dead stock, which while necessary for operational efficiency, impacted their short-term margins.
Optimized Inventory Levels: To improve their inventory cycle and avoid tying up finances, company has adopted a strategy of maintaining lower inventory levels. This strategic shift, though beneficial in the long term, has contributed to the margin reduction in the short term.
Going Forward:
Post completion of capex by Ju’24; the company is expecting a significant improvement in top and bottom-line. Further company has no requirement of further debt in FY 24-25. Their main focus remains on efficiently managing their existing resources and ensuring the successful completion of Unit 3.
Nuvama Wealth Management: Proxy to Affluent India (09-06-2024)
yes, they have said the flywheel effect will start as scaling will happen… like you said and may be like in US there may be many winners.
Sunflag Iron & Steel (09-06-2024)
Some questions which I have for the management
- As the arbitration awards value (now shares of lloyds metals) has grown more than 3x, what does the management plans to do with this corpus?
- The Daido corporation (sunflag’s partner) uses Electric arc furnace to make steel, does Sunflag plans to expand or switch to electric arc furnace?
- How much % of portfolio is going to be Special alloy steel ?
Indiabulls Housing – A compounder from here? (09-06-2024)
2019-2020 was a different world for them, it was a different business model and cant be compared. That dividend proposition was based on party going on, which eventually stopped after ILFS. And most of their developer loans got stuck.
Hence cleanup, and change of business model.
Great articles to read on the web (09-06-2024)
Interesting article on the rise in power demand due to AI and data Centers. “ It requires 10x more power to run a simple query in AI vis-a-vis google search “
Gulshan Polyols(GPL) – Business by FMCG and Valuation by Commodity (09-06-2024)
As per the June 23 filling, the MP plant was supposed to be put to use at 45 days after June 23 which would around H2FY24 end