IDFC FIRST Bank, LIC Cards and Mastercard Collaborate to Launch a Co-branded Credit Card to Meet the Financial Needs of India

https://theprint.in/ani-press-releases/idfc-first-bank-lic-cards-and-mastercard-collaborate-to-launch-a-co-branded-credit-card-to-meet-the-financial-needs-of-india/1885937/?fbclid=IwAR3OCng9j6VP4LdShgraZOodTg6bq88VpnpsnhLHrEwQqOFd1qH5I4L-s7M

It’s been more 1 and half months since I’ve shared my PF update. Let me share the updated PF here

Most of the portofolio is intact. There are some new entries and also exits. Weightage reduction and increase

New Buys: Mayur Uniquoters with SIgnificatn weightage, Shree Pushkar Chem, SAIL, DCM Sriram, Laurus Labs, Ambika Cotton

Complete Exits: Goodluck India, DODLA, IGPL,

Rationale:

1. Mayur Uniquoters: This co didn’t give any returns after 2014. Now I expect things to turn around with Export to Auto OEM to ramp up. They have orders in place for this high margin business. WIth this I expect the PAT to compound at >20% CAGR for next 3 years and ROCE to improve leading to slight rerating. Dividend yield/buyback yield of 1-2% is extra
2. Shree Pushkar Chemicals: Co is sitting on big capacity and can make upto 1400 cr revenue with this capacity against current revenu of 700 cr. If the cycle turns around the profit could be ~140 cr. Current market cap is ~700 cr. So, expect the stock to double in next 3 years (If I can patiently hold it)
3. SAIL: Expect the steel cycle to pickup and the co. to rerate to 0.9x P/S from current 0.4x currently. 2x returns in 3 years time (In <2 years is possibliility)
4. DCM Sriram: Co is going through demerger. Expect 2x from current price as the Chemical and Industrial Fabric business rerates
5. Laurus Labs: Wrote a post here . I expect the Sales and margins to improve as the base is favorable and I respect that Dr. Chava has built 20000cr market cap business in 18 years

May add SAIL, DCM sriram to with Priority. GTT order set for Ambika Cotton (but no funds ) (Ambika Cotton is a Cyclical play ). Laurus is not too attractive valuation wise but Pharma sector is in uptrend, so may or may not add

6. Sold Goodluck and Dodla as I thought valuations are not attractive anymore. I See Goodluck India to be a business that can make 600 cr profit by Fy2030 and market cap of 15k cr (currently 2.5k). Although my estimates are optimistic, I don’t think my estimates are too aggressive
7. Sold IGPL as I don’t have patience to hold this stock at the bottom of cycle. Although the reasonable thing to do is to hold for the cycle to turn and make 2x-3x money in 3 years, I don’t have the discipline to do this. I get swayed away by other available opportunities and sure Need to work on this.

If anyone is interested I can explain the thesis of any of my investments in a few lines. Feel free to quiz me

Thanks for reading the post
Praveen

Disc: No reco to buy or sell. I myself am a learner

Latest Credit Rating [ Revised HIL’s Outlook to IND]AA/Negative from [IND]AA/Stable] of the Company – Link
Noteworthy Points:

• HIL’s revenue from 4 business segments in FY23: flooring, roofing, polymer and building contributed 38%, 32%, 15%, and 15%, respectively (FY22: 44%, 30%, 15% and 11% respectively).
• Roofing solutions business EBITDA contribution has reduced to 55%-65% in FY23 (FY19: 72%)
• Risks Associated with Asbestos: With asbestos sheeting contributing to a significant portion of its revenue and profits, HIL is exposed to regulatory risk with regard to its usage. Asbestos mining is banned in India, and its use is permitted in asbestos-cement products only. Although the company operates within the approved levels, an adverse policy decision in the segment is likely to have a negative impact… Any adverse regulations in source countries could also affect supply of asbestos fibre. When there was a temporary ban on asbestos mining in Brazil in 2017, HIL managed to develop alternate, albeit less cost-effective, suppliers in Russia and Kazakhstan. Supplies from Brazil resumed in FY21, leading to an improvement in its profitability.
• Susceptibility to Fluctuations in Input Prices and End-user Industry Demand: Expenses incurred to procure raw materials (asbestos fibres, fly ash, cement, coal, among and others) comprise 55%-60% of the total revenue. Hence, volatility in input prices impacts profitability. However, the company has been able to partly mitigate the impact of the same through periodic price hikes. Moreover, demand is dependent on monsoons as most of HIL’s customers are individual home builders in rural areas.

Senior management resignation*

Business head & President – R&D -API

6c01b27b-09bc-491b-a1c1-e927e4e83a76.pdf (730.3 KB)

Aditya Vision –

H1 and Q2- FY 24 highlights –

H1 financials –

Sales – 954 vs 698 cr, up 37 pc
EBITDA – 86 vs 68 cr, up 27 pc
PBT – 62 vs 48 cr, up 29 pc
PAT – 47 vs 38 cr, up 24 pc

Same store growth @ 19 pc
Total billing – 4.1 vs 3.2 lakh
Avg selling price – Rs 22.5 vs 22.2 k

Store count on 30 Sep 23 vs 30 Sep 22 – @ 130 vs 88 , up 48 pc

Largest white goods retailer in Bihar, Jharkhand

Gross and PAT margins have moved up from 16 to 10 pc and 1 to 5 pc from FY 19 end to end of FY 23

State wise store count –

UP – 13
Bihar – 97
Jharkhand – 20

Zero store closure since inception

Own App – AdityaSeva for customer care solutions, AdityaSuraksha for extended warranty

Q1 and Q3 drive 30 and 28 pc of revenues. Q2 and Q4 are relatively slower @ 18 and 24 pc of revenues

Aiming to grow @ 20-25 pc CAGR for next 3-5 yrs

Aiming to expand to neighbouring Hindi heartland states

Electricity consumption in UP, Bihar, Jharkhand has gone up by 2X in last 8 yrs !!!

Entire festive season shifted to Q3 this yr vs its start in Q2 in last FY.Still, the company grew its topline from 260 to 313 cr

Conducted loan melas at 125+ locations across the 3 states which helped garner popularity for the Retail chain – Aditya Vision

Aim to open another 10-15 stores in H2 to take the total store count to 140-145 by end of Mar 24

At present, 30 of company stores are < 6 months old. As they ramp up / mature, there shall be a jump in profitability

Company intends to dominate UP mkt (in future) as it is dominating the Bihar mkt. This can be a huge development if it materialises

Q3 is likely to be robust. Oct demand has been very good. Nov is likely to be even better

Marquee investors like HDFC AMC have entered the company’s shareholders list. Some other Mrs have also entered

Benaras, Prayagraj stores doing very well right from inception

Company likely to stick to Hindi heartland due – under-penetration and blue sky kind of growth potential that’s avlb there

Blended borrowing cost for the company at around 8.5 pc

Company is likely to list on NSE in next

No plans to get into a private label selling / building own brand name

Disc: invested, may add on dips, biased, not SEBI registered