Bad nos continue from the export side of agchem due to very high inventory, falling AI prices and lower demand. Sharda reported 38% decline in revenues and was able make 11% EBITDA margin, which is quite good compared to its peers like UPL (1% margin), NACL (1% margin), Meghmani (losses), Astec (losses), etc. Concall notes below.

FY24Q3

• Q3 inventory hit: 7 cr. (91 cr. in 9MFY24)
• Q3 overall growth breakup: (-)38%; volume (-)20.8%, price & product mix: (-)19.4%, currency exchange +2.3%
• For Q3, agchem volume reduced by (-21%) and non-agchem volume reduced by (-16%)
• Q4 Gross margin breakup: EU (36.4%), NAFTA (12%), LATAM (31%), ROW (25%)
• Q3 Volume: EU (-13%), LATAM (19.3), NAFTA (-35.3%), ROW: 5%
• NAFTA has hurt them the most, both in terms of volumes and realizations
• Debtors have reduced from 1830 cr. in Q4FY23 to 890 cr. in Q3FY24 (same as Q2FY24)
• Q3 net cash: 370 cr
• Droughts in Europe and storms in USA have affected demand, expect gradual recovery
• Expecting 4th quarter to be better but demand is bad currently
• Engage 300+ consultants outside India (18.5% increase YOY), professional charges have increased by 48.4%
• Inventory levels are very high, some Chinese companies have reduced production and those with multiple plants have closed some plants. Customers are not overstocking because inventory is in abundance
• Most of non-agchem business is replacement business from resellers
• 9MFY24 capex: 276 cr. (expect 350-400 cr.)

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

SMIFS has given a Buy Rating post Q3 results.

https://twitter.com/SmifsLimited/status/1753687525015838748?t=nyfb0IfeT1RLPENuVuKUdg&s=19

I believe of a large group of investors/traders to exist that believes that their stock selection (like the one above) will now start rallying again due to a bull run in Indian markets.

But this habit could easily lead you to underperform the market indices both over short and long term.

Its always better to trade and invest in economically conducive sectors/industry groups/pockets of markets than to chase for fallen stocks in hope for a decent return in it rallying back to its previous ATH’s.

For more context please refer this video.

@Shakti_Srivastava

What you refer to as the recent budget was just a vote on account which is usually the case before any impending central govt election . It does not carry the full significance of a regular budget.

The other aspect of this question is about the impact of the announcement on various sectors. Regarding this I would like to narrate an anecdote which establishes the importance of not giving too much importance to announcements and news out in the public domain.

We were lucky to attend Howard Marks lecture at Mumbai few years ago. He narrated the incident as follows. According to Howard, one day his son came very excitedly to him and mentioned that he should buy shares of a particular automobile company because he read it in the newspapers that its latest model was selling like hotcakes.

Howard next asked his son “WHO DOESN’T KNOW IT?” If the news is out in the newspapers it is probably baked into the price, or atleast the bulk of it is built into the price. Similar is the thing you are asking, Who doesn’t know whatever is mentioned in the (so called ) budget announcement?

In this day and age of very quick transmission of news/rumours its futile to react to these kind of stuff. Instead its better to go through the old grind of tracking companies, doing detailed research and then take a call.

Maximum and quickest money is made when we can catch a company in transition at an early stage. That transition can be a laggard company entering growth phase, or a turnaround company heading towards successful times, finding sectoral tailwinds, a chart breakout, or chart breakouts in companies of the same sector, so on and so forth. We at VP are lucky that there are a lot of noble hearted folks who share their research and that too at an early stage of a stock’s journey. That is the time for us to buckle up and do full research to either accept or reject the idea.

Amit both Shyam Metallics and GPIL have very different business model and profit drivers. GPIL profits are largely driven by iron ore prices while Shyam Metallics is driven by conversion margin and value addition. Will post more details once we have done more detailed comparison.