I was a long term investor (holding for over 5 years) in the company as I was a believer in the long-term prospects of the gaming industry. However, I exited all my positions as soon as the GST levy on deposits was introduced, as this raised significant questions about my rationale for investing in the business.

The key event for the company is, if the levy is removed or substantially diluted from current levels. As a person who understands this industry, if the govt. does not announce any relief in March 2024, the industry will slowly and surely die as the cost structure for the participants is unsustainable. In the online business despite Adda bearing the entire 22% cost (effective GST levy), which means that the company has been losing money (transaction cost being more than margins), the footfalls have been falling and they are forced to give more incentives for people to come on their platform.

The venture into real estate to me makes sense and I think they have understood that the sector will always be vulnerable to draconian regulations. They had planned to develop an offshore casino in Goa, but with these recent developments, any fresh expansion in gaming seems imprudent. Exploring avenues in hospitality like hotels etc. makes sense and the recent partnership with Peninsula is a step in that direction, which I think makes sense.

Best Regards
SJ

How about compressors? Isn’t that required in Hydrogen processing chain?

This is from Kirloskar Pneumatics concall

“Now, the next question you asked is on green hydrogen. Now, we do not specifically look at
whether it’s green, blue, gray hydrogen because we are agnostic to it. What we do is, we make
compressors for handling hydrogen. At the moment, we have reciprocating compressors for
handling hydrogen at the refineries. This has been running for quite some time, and they are
basically used in diesel refining. Now, the new compressors that we are developing is for
higher pressure storage, which will go anywhere between 350 bar to 700 bar pressure, which
means this hydrogen after compression can be stored and transported. Now, this compressor is
under development with, IIT Bombay. First phase has been completed in terms of mechanical
scoping. We are now getting into building the prototype and hopefully we should have a
modular design where we can make for pressure anywhere from 300 bar going up to 700 bar
and we should have this in the next 18 months.”

Yeah seriously! There’s not even a dignified MD&A section.

Demerger proposal was to be submitted for Board’s approval in Nov’23 which has not happened. A lackluster performance for the stock in this over charged bull market.

Decent production growth seen in Q3 which should get reflected in the results in Q3 & Q4 with zinc prices back on rise and silver holding the ground firmly for a takeoff soon.

Betting on its immense potentials for sustained growth for many years to come…

Disc: Invested