So two large acquisitions as expected by the market. Key Aspects i wanted to analyse and drive deeper.

Chings Secret is bought out at 5100 Mcap with approx. 150 cr Ebitda for 2024. Thats 32-34x editda multiples. Looks fair but depends on TCPL to turbocharge growth by pumping the products across its distribution network.

Organic India not yet sure what to make of it. Will take a year to figure out. Overall not excited by the portfolio.

MIT bought 1.43% stake in GLS in Q3FY24. That is an interesting development.

Promoter sold 5.11% of their holdings in March 2023 quarter. Does anyone know the reasons?

What’s the need for a separate thread ? Skipper Ltd., (Power and Water) a moat in making?

Skipper Ltd

Established in 1981,Skipper Ltd. has today evolved into one of the world’s leading manufacturers for Transmission & Distribution Structures(Towers & Poles) in it’s Engineering Products segment, a leading and respected brand in the Polymer sector as well as trusted partner for executing critical Infrastructure EPC projects. Skipper’s market reach spans across 40+ countries around the globe from South America, Europe, Africa,the Middle East, South and Southeast Asia and Australia. Within India, we are a preferred manufacturer of choice for our customers pan India, from J&K to Tamil Nadu and from North East India to Gujarat.

Product Segments

1. Engineering
2. Infrastructure
3. Polymer

Engineering

• Transmission Towers
• Telecom Towers
• Poles
• Fastners & tower accessories
• Hot Rolled Structure
• Railway Electrification Structures

With a history of almost 35 years in manufacturing a vast range of valued added Engineering products, Skipper Limited is today not just among India’s largest Power Transmission & Distribution (T&D) structure manufacturing companies but also amongst the top 10 largest manufacturers Globally. With an installed T&D Structure capacity of over 265,000 MTPA, Skipper has the unique advantage of producing 100% of its prime raw material – Mild Steel & High Tensile Angles in-house. Skipper is a complete integrated player offering our customers the advantage of sourcing Towers, Fasteners, Accessories as well as EPC construction from the same company. We are also a leading exporter of T&D Structures, with export footprints in 25 countries across South America, Europe, Africa, the Middle East, Southeast Asia and Australia.

T&D Structures are highly critical for manufacturing because almost every project has its own unique design for structures and products are 100% made-to-order only. This throws up immense Engineering and Supply Chain challenges before Manufacturing can commence. Some projects require as many as 50 different types of structures with as many as 10,000 Unique parts. At Skipper, we understand these unique requirements of each project and our dedicated team of Project Managers and Co-ordinators through a high involved level of planning, ensure that 100% of customer requirements are met on time, every time.

Design & Manufacturing Facility:

Skipper Limited has 4 state-of-the-art PGCIL approved manufacturing units in Uluberia and Junglepore, near Kolkata in West Bengal, India. All units are ISO 9001, ISO 18001 and ISO 14000 certified. We follow best practices for ensuring the Health & Safety of our workers. Also, strict adherence to Environment and Pollution norms is an established company practice.

Infrastructure

• EPC
• HDD
• Castings
• Test station & R&D Centers

Skipper Limited is engaged in manufacturing of all kinds of Power Transmission line Towers, Monopoles, Telecommunication Towers and Railway Infrastructure Structures.

The company is also engaged in EPC Projects in Power Transmission & Distribution, Telecom infra and Railway Structures in various parts of the country along with other geographies. It has got specialized teams for live line works,Retro fitting works,Power Evacuation solutions. It has expert teams for Project management services, Inspection Services, Construction management, Restoration works and live line stringing. Within a very short span of time SKipper Limited has footprint in more than 40 + Countries. With continuous efficient pre & Post Sales-Services,Skipper establishes itself as a long-term partner across all major leading Infrastructure companies. We study the clients requirements sharply to understand the specifications and technical & documentation requirements of different countries and fulfill their requirements with utmost quality, quantity, and in time.

Polymer

We make PVC pipes using the most modern and state-of-the-art extrusion machines and processes that ensure consistent quality, long lasting and tough strength pipes. The ingredients and additives used are acquired using stringent quality control. The pipes are extruded and tested to meet industry-standards for durability and endurance.

Despite being a late entrant Skipper Pipes is the fastest growing Polymer Pipes & Fittings Company in India. Our strong product portfolio of pipes, including CPVC pipes and SWR pipes makes us a major player across rural agricultural and urban plumbing segments.

Industries Served

• Plumbing
• Sewage
• Borewell
• Agriculture

Products

• UPVC Pipes & Fittings
• CPVC Pipes & Fittings
• SWR Pipes & Fittings
• Rigid Pipes & Fittings
• Casting Pipes
• Column Pipes
• Ribbed Strainer Pipes

Q3 – FY24

• Skipper Limited registered its best ever revenue quarter of Rs.772 Crores, with a growth of 57% compared to the previous year’s quarter.

• Engineering segment revenue increased by 57% to Rs.595 Crores, polymer segment revenue increased by 58% to Rs.112 Crores, and infra segment revenue increased by 490% to Rs.64.2 Crores.

• Engineering export sales accounted for 35% of overall engineering segment revenue.

• Skipper’s polymer business achieved its best ever half revenue performance, with revenue increasing by 51% to Rs.240 Crores.

Order Book and New Orders:

• The company secured new orders in excess of Rs.2,744 Crores during the year, with the current order book standing at Rs.6,074 Crores, the highest ever in the company’s history.

Market Outlook and Opportunities:

• The domestic T&D environment is showing signs of a strong rebound, and the company is committed to leveraging the potential of India’s transmission sector.

• Skipper is witnessing a surge in global inquiries and is benefiting from the China plus one trend.

• The company expects good traction in the international transmission line market and plans to tap into emerging opportunities in sectors aligned with the government’s interests.

• The domestic transmission tower market is expected to see robust demand, driven by government initiatives for renewable energy generation.

• The company expects to target higher margin orders in the future.

• Skipper expects to see continued growth in the polymer segment, with a similar growth rate expected in the second half of the year.

Recent Scuttlebutt – December 2023

• Order execution in full flow
• Logistics booking being initiated for deliveries
• Weight counted in over lac-MT+++++……
• Bidding ongoing for new tenders Dom & Exp
• New orders in pipeline may be disclosed soon
• H2 may be better than guided/expected

There is a 2.5lakh CR budget for the new RE grid to generate power. For every rupee invested in generation an equal rupee needs to be invested in transmission & distribution. Skipper suggests it’s a 1:1 ratio, but some other literature I’d read suggests it may be a 1:0.5-0.75 ratio. Even if we consider the lower end at 1:0.5 – that’s still a massive budget to yet to be spent on transmission & distribution ~ where Skipper is the market leader.

Above is only domestic and only related to the RE grid. There are other domestic needs as well.

There is an uptick in international demand as well, again, where Skipper is one of the leading players and world’s only Integrated T&D company having its own Structure rolling, manufacturing, Tower Load Testing Station & Transmission Line EPC

Their polymer business is rapidly growing and their appointment of MS Dhoni as the brand ambassador is rewarding them handsomely.

Guidance

Management is very confident of 25% CAGR for the next 3 years. In fact, in recent interviews the MD has hinted at better than guidance numbers looking feasible

Market cap is 2900CR, order book is 6000+ CR, bidding pipeline is 12,000++CR.

Fund Raise

• Recent entry by the genius, Ajay Upadhyay starting June 2023. Currently holds 1.46% basis public data
• Recent Intimation of a 1-on-1 meeting with Ashish Kacholia
• Upcoming raise of 199 CR via rights issue

PR

Over the past 4 weeks, those tracking may have noticed a lot of PR activity. Lots of interviews, articles, coverage by news channels, money control etc. Also 3rd year in a row ‘great place to work’ certified, plus sponsoring of a local marathon. The company is making noise for all the right reasons.

Heavily Invested

Around 10% of my net worth is in Skipper Ltd. I plan to hang on tight for the next 3-5 years*

I expect the T&D business to outperform and surprise everyone. I also expect their rapidly growing Polymer sector to continue excessive growth.

Am actively tracking every update. I will update this thread with the latest announcements, updates, and further scuttlebutt based information.

*Disclaimer: I invest on management depth, market leadership, sector growth & demand. My holding periods are long, and I’m alright with drawdowns, as long as corporate & business hygiene is intact. NOT an expert, just a dreamer