Zero doubt on the sector & future.

Only question – is the CMP a bit high (also considering the recent run up) for a fresh entry?

Request those who are tracking closely and know the financials to kindly opine.

Really want to add this to the LT PF but somehow feels like the boat has sailed. Not sure. emphasized text

Gratitude.

Current Demand and Trends

1. Data Centre
2. Renewable Energy
3. Digital Consumption Growth
4. EV

All these would pile up to battery demand, before going ahead with new industry growth.

Lithium would continue to do well in near to medium term i think or at least 2-3 years… Then Sodium might take the lead…
However here are few things to consider.

1. Battery needs Fluoro chemicals
2. Solvents
3. Electrolyte Salts
4. Graphite
5. Electrolyte additives
6. Soda Ash

Niche area : Salts, Additives, Fluorochem

Yes, but be careful – that metric is equivalent to order book in a manufacturing company. The company needs to execute against that order to recognise that revenue into its topline.

I would like to add a few points which could be useful to readers here:

1. An increase in ATP will mostly flow to the bottom line. As costs are somewhat semi-fixed. Now, with inflation both ticket prices and costs will increase but just imagine who could afford to spend 2k-3k/day on a full-day adventure? Especially when other adventure costs are growing crazy and there is a rise in per capita income.

2. F&B offerings will experience higher income along with a higher proportion. As footfalls increase, the increase in number of restaurants will be at a lesser pace. Also, if space is given for rent then the company can easily charge higher rent.

3. There are optionalities in terms of how many agreements they do in the asset-light model. Goa, Gujarat, MP, etc. all are ready to give out leased land. Imagine, Odisha took 100cr. to build a park with potential footfall of 5-6lkh i.e. on 800/ticket it goes to 40-48cr. Now tweak the assumption and add F&B offerings. Give comfortable margins as well here. Even if 30% OPM is achieved in Odisha it can generate decent ROI.

4. Chennai Park has very high CAPEX and I think this could only be a concern as ROI will be lower for years. So, temporarily (maybe 2 years) we have to face the pain of worsening return rations.

For years, the company had only 3 parks. Now it will soon have 5. If at all the pace of park addition continues this itself will be a trigger for sustaining valuation either at current levels or slightly higher valuations from here. (I have no comment on valuation as it is always subjective).

Hope it helps.
Invested at lower levels and hence following momentum-based approach to protect gains, so might not remain invested if price falls!

Regards,
Mukul Jain

Covers mosts aspect as current, except that C-Molasses procurement price has been raised significantly, apart from ISMA’s continued over-projections.

Despite the flip-flops and some uncertainty for further ethanol capacity investment perspectives, some of the sugar domain expert friends are saying this situation is actually – even better than before. Will try and capture here as I understand more