FIIs and DIIs started increasing the stake
Posts in category Value Pickr
Stylam- Decent Fundamentals with Cheap Valuation (09-02-2024)
Stylam came with lower sales (-8%) and improved margins leading to good growth in EPS (30%). They are facing headwinds in domestic markets and in Europe, and are very bullish on USA exports. Concall notes below.
FY24Q3
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Lost 20 cr. sales due to Israel war. Shipments to Europe affected, not much impact on USA exports
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Strong visibility with healthy enquiries for sourcing from global OEM (added many new OEM customers)
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Greenlam has global offices and Stylam doesn’t have any global office
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Expect US to become larger than Europe. Europe is currently very slow
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Domestic laminate business is taking time to scale up fast due to stiff competition. Have been weak in domestic markets
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Acrylic:
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5.4 cr. in Q3; 20 cr. in 9MFY24 (11 cr. domestic + 9 cr. exports). Utilization level is <10%
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Focus has been to sell under own Granex brand vs OEM sales which has delayed scaleup
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Expect Government to impose antidumping duty on imports of acrylic surface from China, and this will be a huge boost for them (700-800 cr. annual imports)
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Capex
- 150 cr. brownfield expansion is now increased 200-250 cr. (added one more production line from 3 to 4 now). Likely operational in 3QFY25. Revenue potential is 600 cr. (vs 500 cr. earlier) and expect a fast scale up as ~50% capacity is already booked from export customers
Disclosure: Invested (position size here, no transactions in last-30 days)
Schneider Electric Infrastructure: A global company with advantage of a industry tailwind: (09-02-2024)
May be offsetting due to previous years losses but paid 3% in q3fy24 first time.
Disclosure: Invested
Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains! (09-02-2024)
Balrampur Chini’s results were very good. Q4 will be even better taking the annual EPS to 31-32 levels. Hopefully they will come with buyback again next year which can take the stock back to 500 levels!! ( Disclaimer – Please note this is not a recommendation to invest.)
Next year all sugar companies will do better due to restoration of ethanol. FY 25 will see sugar as one of the better performing sectors. Risk-return is quite favourable at current prices.
PayTM (One 97 Communications Ltd) (09-02-2024)
The following is my assessment of the situation.
- It is excessive to think that Paytm is lost without its own Payments Bank. Paytm’s most competitors do not have Payments Bank license. For example, PhonePe tied up with Yes Bank to provide UPI VPA (@ybl) and GPay with HDFC (@okhdfcbank), ICICI (@okicici), Axis (@okaxis?), etc.
- Tieing up with multiple banks helps with diversification in UPI. Next time, if a partner bank gets into trouble, Paytm wouldn’t have similar difficulties. This is a very good lesson for Paytm not to rely on any single entity for its various verticals. This realization will help the company in the long run.
- What about the challenge of migrating away from Paytm Payments Bank? These difficulties are of very much temporary in nature. The management conveyed the same. They estimate at most 3 months for the operations to be back to normal. RBI clarified that this is action against Payments Bank and NOT Paytm super app.
- Getting rid of Paytm Payments Bank helps Paytm app stay clear of long-standing threat of regulatory overhang. Paytm app is coming out of this problem now, which I see it as positive. Yes, there are bound to be bruises. But the lessons from this will strengthen the company in the long run.
- Since the beginning, there is one aspect of the company that I was counting on is the execution skills on the ground. None of us can forget their swift action during demonetization. Then came their innovation of sound boxes. More than the innovation, the success of their sound box is due to the field agents and their execution skills. I even think that paytm’s field agents to be the company’s durable strength over its competitors. Some of us believe that Payments Bank was Paytm’s edge. But in the hindsight, it is actually paytm’s main weakness. The edge remains to be the field agents and the execution skills. So in my view the edge remains intact, and the weakness is forced away.
- What about the credibility loss? I admit, this is the main setback from this fiasco. I keep in mind Nestle’s Maggi fiasco and Pepsi & Coca Cola’s fertilizer traces fiasco. These were equally, if not much more, serious that affected credibility. These companies came out of these successfully. I think it is very much possible Paytm will do the same, considering their execution skills. I suspect this setback is temporary in nature. It’s a matter of paytm’s field agents communicating with their merchants. RBI even conveyed their commitment to minimize the inconvenience to paytm customers. Once paytm makes everything work well again, there is no reason why merchants would avoid paytm. Yes, some ground will be permanently lost to the competition. But the rate at which paytm is growing, the lost-ground is not worrying me.
- What about the hesitation by the potential partners due to regulatory action? RBI clarified that tieing up with Paytm is purely business decision by the banks. I don’t think any more clarity can be expected from RBI in regard to this. Bottom line is, RBI is not discouraging potential partners. I believe the partners would sense the business opportunity here.
In short, a lot depends on the execution skills of paytm. There are reasons to believe the company would come out strongly from this difficulty. I also don’t see anything that would negatively impact paytm for the long run.
Disc: Invested. I always consider myself as a novice investor. No recommendations here. I welcome opposing views, which would help me keep my thinking unbiased.
WPIL Ltd – Global Water Pumps (09-02-2024)
The WPIL Q3 numbers have disappointed the markets, perhaps due to a decline in profitability. On closer look, this is largely due to lesser other income, something that should be ignored, even when it is high to get a better view of the picture. The other reason for declining profits is the sharp increase in employee remuneration. The mgt mentioned that the environment is pretty robust it is gearing up for bigger volumes for which there has been fresh hiring, not only in India, but also overseas. There is always a lag time before volumes start coming in.
The mgt expects a good Q4, which is always the biggest, volume wise. The current year 23-24 is more of a consolidation year after a 50% growth in Sales last year 22-23. This is only to be expected though there should still be nominal growth. I expect the coming year starting in about a month & a half from now see the Co. graduate to the next level.
The stock has corrected sharply & to my mind is already attractively valued. The pendulum we know swings rather wildly to both extremes of optimism & pessimism n it is up to us investors to benefit from this!!
Menon Bearings: Gaining Traction both operationally and stock wise (09-02-2024)
Any idea what they are doing here?
https://www.bseindia.com/xml-data/corpfiling/AttachLive/132fc1e2-cec1-4c1a-8707-925111027a24.pdf
Uni Abex Alloy Products (09-02-2024)
Q3 results are out.
Good improvement in margin YOY and sustaining on QOQ basis.
Tracxn Technologies (09-02-2024)
Please refer to the RHP of the company. I am attaching it. Go to Page 133.
As can be seen from the below image the total revenue that private market data providers can earn annually is in the ballpark of 2.5 Billion USD. Tracxn’s revenue share in the market is less than 1% of the available market.
But I think your question was specifically asking about the number of customers available to capture. Look at the screenshot below. It mentions that as of now the penetration of data service providers in the industry is 50%. This means that Tracxn has 50% of the market available today and these customers are not using any data provider at all.
Please do note that these estimates should be taken with a pinch of salt. I am trying to figure out another data source which can validate the size of this market.
RHP_20221004195631.pdf (6.8 MB)