I suppose the charts are of Ovobel?
Posts in category Value Pickr
SKM Egg Products – thinking out of the shell (31-05-2024)
So, grateful, this is really exhaustive.
Solex Energy – High Growth Potential (31-05-2024)
We have existing thread on Solex. Move content there as this thread will be deleted in a day.
Krsnaa Diagnostics – what is the diagnosis? (31-05-2024)
I am very optimistic about this business for following reasons. I am looking for opposing views on my thesis and what’s the downside if we invest in it. (I am already an investor and looking to increase my holding).
The company is cheaply valued compared to all its peers. One of the obvious reasons is return ratios. Both can be seen in the below table.
Company | Mcap Rs. Cr. | ROCE | ROE | PE | PB | P/Sales | |
---|---|---|---|---|---|---|---|
Dr. Lal Pathlabs | 21,861 | 25.2% | 20.4% | 61.1 | 11.8 | 9.8 | |
Metropolis | 9,873 | 15.4% | 12.3% | 77.2 | 9.0 | 8.2 | |
Vijaya | 8,317 | 21.6% | 20.0% | 69.1 | 12.7 | 15.2 | |
Thyrocare | 3,253 | 18.6% | 13.8% | 45.7 | 6.3 | 6.2 | |
Krsnaa | 1,837 | 10.1% | 7.5% | 31.4 | 2.3 | 3.1 |
Source: Screener
Now the return ratios are poor because the company is new and in high-growth phase. There is huge setup cost for diagnostics centre and income start coming with a lag. So, operating leverage kicks in after 2-3 yrs of operations.
Below is the chart from Q4 FY24 investor presentation. It can be seen only 37% of net block (centres) are mature. They are generating very good ROCE. Once, the newer investments mature, ROCE for them will increase too.
Additionally, the company has huge order bank and they are establishing more centres on an ongoing basis. All the details are available in investor presentation and concall, so not going to flood my post with the same.
They are also venturing into non-PPP segment, i.e. B2B and B2C. I understand this is a competitive segment, but they already have capex (diagnostics centre) in place. They just have to juice it out with more customers which can be fetched through non-PPP route too.
As centres mature, it will increase there ROCE / ROE / Op margin. As they add more centres, business will also growth. So, there is a case of increase in margins and return ratios and also increase in profits. Isn’t it a right scenario to invest in a stock? For e.g. Lal pathlabs is already big. It will be tough for them to grow at 25% via – a – via. Krsnaa for whom it will be relatively easier. Lal pathlabs also has good ROCE / ROE so there is limited upside. For Krsnaa, this upside is also huge.
Look at the below table. Mature centres has 33% EBIDTA margin. Let us assume Rs. 234 cr is matured now. They will also have 33% margin instead of 8% margin. i.e. addition of Rs. 58 cr more EBIDTA. This Rs. 58 cr will directly go to PAT, doubling PAT from Rs. 57 cr to Rs. 115 cr. Just the maturity of existing centres can double the PAT. It will also improve ROCE and ROE. PE will reduce to 16 (Rs. 1844 cr mcap / Rs. 115 PAT).
Please provide counter points.
Disc: Invested
Den Networks – Company selling for free? (31-05-2024)
I agree. Den Network’s Dividend distribution policy is pretty vague and general as expected. That’s the problem I guess. I am not sure when will this extra cash reflect as real gain to shareholders. But then again, this is certain that at some future point, this is bound to come to shareholders in one way or other, so why not factor it in valuation from now itself?
Basilic Fly Studio Ltd (31-05-2024)
brijyot_chawla Agree with you. From Highflier to dusted due to result error, which obviously cause concern about management integrity.
However, stock is under pessimism due to:
- Concerned Management integrity.
- Competition in VFX Field.
- AI threat ( In my understanding it is perceived, Any field always have threat related to new technology)
Future triggers:
- As guided, 30 to 50% revenue growth with similar margin.
- New aquation/partnership.
- Acceleration on order book from current 75 cr.
- Management proves integrity by demonstrating that they are clean and fair.
- If we see growth and integrity coming in few results, valuation is very supportive. TTM PE is 20. Where growth expected is 40%.
- Government support which is announced.
In Nutshell, management has to demonstrate growth and integrity.
D: Invested.
SmallCap Hunter : Trying to find the dark horses with triggers (31-05-2024)
Does anyone track Trust Fintech
See the bright Sun: Aditya Vision (31-05-2024)
Emkay revises target upwards to 5150. Growth intact.
Systematix revises target downwards to 4900
Nuvama’s target is 4000 based on Dec 2023 report.
Looks like best play on white goods growth in hinterland as best white goods companies are not listed. Easy to understand business mode. Long runway of atleast a decade. Valuations are ok based on growth anticipated and execution so far.
Gabriel India Ltd. – Shock free ride? (31-05-2024)
Sunroofs segment is coming along nicely as per Q4 call. 58 cr revenue in Q4 ramping up to 400-500 cr revenue in 2026.