Thanks sir for your beautiful insights. I am tracking this counter and in my personal opinion the products are at par with other fmcg majors such as britannia, itc etc however what i want to ask about is valuation, is the current valuation justified?
Britannia has decades of presence and a good brand to show for itself hence it commands a PE of 50 however cremica is much newer and still commands similar PE to britannia despite the fact that britannia has a well established B2C business while cremica has just started building it and has a long way to go. Your thoughts on this plz. Also what according to you would be a right entry point in this stock if one has a horizon of at least 5 years?

Here are some key takeaways from the transcript of JM Financial’s earnings conference call for Q2 and H1 FY ’24:

• Record revenue: JM Financial reported its highest ever quarterly revenue of INR 1,214 crores, driven by strong performance in fees, commission, brokerage, advisory, investment banking, wealth management, and distribution businesses.
• Diversified loan book: JM Financial’s consolidated loan book grew by 8% year-on-year to INR 15,808 crores, with a balanced mix of wholesale, direct retail, and indirect retail segments. The wholesale mortgage book, which constitutes 50% of the loan book, registered an 8% growth year-on-year.
• Improved asset quality: JM Financial’s gross NPA ratio improved from 5.1% in Q1 FY ’24 to 4.8% in Q2 FY ’24, while the net NPA ratio improved from 2.6% to 2.3%. The SMA 2 ratio also declined from 1.9% to 0.5%. The company has taken additional provisions of INR 126 crores in the wholesale mortgage lending business and expects the NPA cycle to peak this year.
• Strong capital position: JM Financial’s consolidated net worth, excluding minority interest, stood at INR 8,364 crores, translating into a book value of INR 87.6 per share. The debt-to-equity ratio was at 1.5x, with 77% of the borrowings from long-term sources. The company raised INR 1,388 crores through long-term borrowings in H1 FY ’24.
• Positive outlook: JM Financial is optimistic about the future prospects of its businesses, as it leverages its diversified and integrated platform, digital capabilities, market insights, and customer relationships. The company expects to grow its wholesale mortgage book at 18-20% annually, double its investment banking profit in 4 years, and achieve 25-30% growth in its retail and FIFG businesses. The company also aims to pursue newer possibilities and harness emerging opportunities in the financial sector.

Bristol Myers bought Karuna Therapeutics in $14 Billion deal for $330 per share

@rkothuri – Thanks for the detailed view. Like to add some of my data points.

I was following the company for quite a few months ago and tried to collect and connect some available data.

Some data points are from google and AI platform…

SGRL – Chemistry and Industries…

Human health & veterinary health – chiral chemistry.

Chiral chemistry – to synthesize new drugs & improve existing ones by modifying their stereochemistry.

Polymer industry & textile industry – polymerization & olefin metathesis, – produce synthetic materials

polymerization – create plastics, fibers, rubbers, & coatings,

olefin metathesis – create new polymers with different structures & functionalities.

examples of polymers – polyethylene, nylon, polyester, & polypropylene

Agro chemical industry – halogenation & Grignard chemistry.

• example, halogenation – pesticides, herbicides, & fungicides,
  • grignard chemistry- create alcohols, ketones, carboxylic acids, & esters.
• Aroma industry – Friedel Crafts chemistry, – can modify the smell & flavor of the aromatic compounds.
  • Example, used to synthesize artificial fragrances, flavors, & essential oils.

Electronics industry – cross coupling chemistry & reduction through hydride salts.

• Example,
• cross coupling chemistry – synthesize organic semiconductors, light-emitting diodes (LEDs), & solar cells.
• Reduction through hydride salts – synthesize organic batteries & capacitors.

SGRL – Clients & What they do for them….

• Dipharma – global CDMO & API manufacturer – chemical, biotech & pharmaceutical industry.

  • Chemistry – nitration, halogenation, cyanation, hydrazine chemistry, hydride reduction, organometallic chemistry, oxidation & heterocycle synthesis.
  • APIs – cardiovascular, CNS, oncology, anti-inflammatory & anti-infective applications.

• Dr.Reddy’s – manufactures & markets generic drugs, biosimilars, vaccines & APIs for the global healthcare industry.

  • chemistry – cross coupling reactions, hazardous reactions, chiral chemistry & high-pressure chemistry.
  • formulations – gastrointestinal, cardiovascular, respiratory, pain management, oncology, dermatology, urology, nephrology & diabetes.

• IOL Chemicals & Pharmaceuticals Limited – industrial chemicals & bulk drugs.

  • chemistry – chlorination, bromination, hydrogenation & oxidation.
  • products – APIs for anti-inflammatory, anti-diabetic, anti-platelet & anti-viral applications.

• Zydus – APIs, formulations, wellness & animal health products.

  • chemistry – halogenation, Grignard chemistry, Friedel Crafts chemistry, reduction through hydrogenation & hydride salts, chiral chemistry & cross coupling chemistry.
  • products – formulations – gastrointestinal, cardiovascular, respiratory, pain management, cancer, inflammation, neurology & women’s health applications

• BASF – German multinational chemical company – chemicals & materials – industrial applications.

  • chemistry – intermediates, performance materials, polyamides raw materials, monomers, dispersions & resins & performance chemicals.
  • Products – chemicals – agriculture, automotive & transportation, construction, electronics & electric, energy & resources, furniture & wood & packaging & print applications.

• Dottikon – Swiss performance chemicals manufacturer & supplier – specializes in hazardous reactions for the chemical & pharmaceutical industry.

  • chemistry – azide chemistry, bromination, chlorination, cyanation, diazotation, hydrazine chemistry, hydride reduction, iodination, nitration, nitroaldol reaction, organometallic chemistry, oxidation, thiophosgenation, heterocycle synthesis, high-pressure chemistry, low-temperature chemistry & metalorganic transformations.
  • products – intermediates & APIs for cardiovascular, CNS, oncology, anti-inflammatory & anti-infective applications.

Clients and Industry –

• Dipharma , Dr.Reddy’s, Zydus, LAURUS Labs & SUN PHARMA INDUSTRIES – human health & veterinary health.

• BASF & Lonza – polymer industry, agro chemical industry, aroma industry & electronics industry.

• IOL Chemicals & Pharmaceuticals Limited & Dottikon – agro chemical industry & human health.

• Cambrex – human health.

Some Q&A i had in mind and answer from google.

Which is more capital intensive?

Top – High, bottom – Low

• Olefin metathesis/polymerization
• Reduction through hydrogenation
• Cross coupling chemistry
• Chiral chemistry
• Grignard chemistry
• Friedel Crafts chemistry
• Reduction through Wolff-Kishner
• Reduction through hydride salts
• Photo halogenation
• Bromination
• Chlorination

Which is more complex?

Top – High, bottom – Low

• Cross coupling chemistry
• Chiral chemistry
• Olefin metathesis/polymerization
• Grignard chemistry
• Reduction through Wolff-Kishner
• Friedel Crafts chemistry
• Photo halogenation
• Bromination
• Chlorination
• Reduction through hydride salts
• Reduction through hydrogenation

Which is highly regulated?

Top – Low, bottom – High

• Photo halogenation
• Friedel Crafts chemistry
• Grignard chemistry
• Chiral chemistry
• Cross coupling chemistry
• Olefin metathesis/polymerization
• Chlorination
• Bromination
• Reduction through hydrogenation
• Reduction through Wolff-Kishner
• Reduction through hydride salts

Which is very less produced in India & capacity?

• Reduction through hydrogenation (20 kilo tons)
• Bromination (15 kilo tons)
• Chlorination (10 kilo tons)
• Reduction through hydride salts (ND)
• Grignard chemistry (ND)
• Friedel Crafts chemistry (ND)
• Chiral chemistry (ND)
• Cross coupling chemistry (ND)
• Olefin metathesis/polymerization (ND)
• Photo halogenation (ND)
• Reduction through Wolff-Kishner (2.5 kilo tons)

Connection between Technologies & chemistry

• Batch reaction – chlorination, bromination, photo halogenation, Grignard chemistry, Friedel Crafts chemistry, reduction through Wolff-Kishner & chiral chemistry.

  • These processes are suitable for small-scale production, high-value products, or complex reactions that require precise control of the reaction conditions.

• Continuous reaction – reduction through hydrogenation & olefin metathesis/polymerization.

  • These processes are suitable for large-scale production, low-value products, or simple reactions that require less control of the reaction conditions.

• High pressure reaction – reduction through hydride salts & cross coupling chemistry.

  • These processes involve the use of high pressure (above atmospheric pressure) to increase the reaction rate, shift the equilibrium, or enable reactions that are otherwise not possible at normal pressure.

• Cryogenic reaction – photo halogenation & chiral chemistry.

  • These processes involve the use of very low temperatures (below -150°C) to decrease the reaction rate, preserve the reactants or products, or enable reactions that are otherwise not possible at normal temperature.

• Exothermic reaction – chlorination, bromination, photo halogenation, Grignard chemistry, Friedel Crafts chemistry & olefin metathesis/polymerization.

  • These processes involve the release of heat as a product of the reaction. Exothermic reaction can be used to generate heat, power, or light for various applications.

• High vacuum distillation – reduction through Wolff-Kishner & chiral chemistry.

  • These processes involve the separation or purification of liquids that have very high boiling points or are thermally sensitive. High vacuum distillation can be used to produce lubricating oils, waxes or pharmaceuticals.

• Fractional distillation – reduction through hydrogenation & olefin metathesis/polymerization.

  • These processes involve the separation or purification of liquids that have similar boiling points or are miscible. Fractional distillation can be used to produce gasoline, diesel, kerosene or ethanol.

• Short path distillation – reduction through hydride salts & cross coupling chemistry.

  • These processes involve the separation or purification of liquids that have very low volatility or are highly viscous. Short path distillation can be used to produce essential oils, fragrances or cannabinoids.

• Flash distillation – Grignard chemistry & Friedel Crafts chemistry.

  • These processes involve the separation or purification of liquids that have different vapor pressures or are immiscible. Flash distillation can be used to produce fresh water from seawater, alcohol from fermented mash or steam from hot water.

• Wiped film distillation – photo halogenation & chiral chemistry.

  • These processes involve the separation or purification of liquids that have high boiling points, low volatility or high viscosity. Wiped film distillation can be used to produce fatty acids, glycerol or vitamins.

Some from Twitter: Ajay Surya on X: “A detailed on Shree Ganesh Remedies Limited (SGRL) Disclosure: Invested, Holding and Biased #multibaggers #investing #StockMarketindia” / X (twitter.com)
Niveshaay –

Some comparison with aether industries

Shree ganesh remedies vs Aether Industries.
Technolgies

Chemistries

From Aether DRHP –

These are high value and Low Volume business. Moat in this these types of business is their Niche chemistry and see the R&D team.
Aether R&D Team

Shree ganesh

The Number of chemistries they are trying to do and the complexity.

AGM Notes:

Risks:

1. Customer Concentration.
2. Competition from China and Europe.
3. Raw materials
   From DHRP
   
4. Sector wise revenue concentration
   Aether industries 2023 PPT
   

   Concall

   
5. Scaling of business – long term risk.

Sorry in advance if something is wrong. These are some of the Notes i have prepared.
Note: i am not expert in chemical or any other industry.

Today’s Specialty is tomorrow’s commodities.

what is you’re take on valuation gap between irdea vs rec/pfc?