Hi Jiten Sir,

I’ve been looking into Vidhi Speciality recently and observed their fixed assets have nearly tripled in the last quarter, rising from ₹47cr to ₹121cr, alongside a reduction in debt from ₹52cr to ₹40cr. However, the demand appears to remain subdued. I would really appreciate your insights on this situation.

Hi,
I do not filter 25% stocks, as I am not sure if past performance will sustain or not.
I buy stocks where 50 dma and 200 dma are rising, any pattern breakout and hold them till

1. Stock falls below 50 dma,
2. The dma’s start flattening/ falling.

Once a stock is short listed for investment

I do read the recent news/ information on the stock I choose to ride. I look for fund raise/promoter buying etc.

BR//
Jai

As far as I understand there is no revenue from defence segment yet. Industrial fibre division contributes to 21.64% (which would perhaps include defence).

Check this out:

My takeaways from Q2FY24 earnings call:

Revenue growth
Immediate growth is expected to be flattish. In long term, the mgmt expects to double the visitors in 8 years, which would be about 8-9% growth YoY. On top of this, ARPU growth is around 10%, which would give a sustainable revenue growth of about 15-20%.
Hyderabad had a slight degrowth. The mgmt mentioned that they will be focussing on being more aggressive for Hyderabad.
Expansion across regions should add more to topline.

Margins
Margins seem to have recovered back. EBITDA margin is at 55% and PAT margin is at 36%. There might be a slight dip going forward as the company implements more aggressive marketing and customer acquisition activities.

Capacity expansion
There are continuous capacity additions planned for existing parks, including new rides & attractions. Bangalore capacity is expected to go up in the next 1.5 years.
On new projects, 48 and 113 Cr is spent in Odisha and Chennai respectively. Odisha is expected to come live by June 24 and Chennai by Aug 25.
Just signed an MOU with Gujarat govt.
Talks are also going on for MP, UP and Punjab.
At current rate, one park will be added every 18 months going forward.

Key risks

• Natural disasters / pandemics etc.
• Accidents that would negatively impact the image (risk increases with increase in capacity)
• Economic slowdown (seems unlikely as of now)

Investment hyopothesis

• Trust worthy and investor friendly management
• Sustainable revenue growth of 20-30% can be expected as baseline
• Secular growth story as middle income group grows
• Margins would keep improving as more parks are added
• IMO, the scope of marketing is not yet tapped. So, need to watch their marketing activities and spend (google trend is slightly inching upwards). If it is unlocked, then they will be able to deal with lean periods more effectively.

Disc: Invested

roughly 50% of USA sales is bridal jewellery and green shoots are there… https://www.cnbc.com/2023/12/05/signet-ceo-engagement-rings-are-in-demand-again-after-covid-trough.html
From latest Concall:
Anmol Bhansali: So our largest retail, our largest customers are all very well established traditional retail
houses. So we work with the largest retailer in the US, the largest jewellery retailer in the US,
which is a listed US company called Signet Jewelers. We work with many large, very well
established department stores, wholesale clubs and specialty regional retailers and large
wholesalers as well.
So fairly well established, you know, dominant customers, retail customers that have been
around for at least a decade, if not much, much more. In terms of our revenue contribution, our
top five customers would probably be, I don’t have the exact figure with me, but they would be
in that range of 50% to 55% of our overall revenue.
Our direct office, Goldiam USA, which is 100% subsidiary, targets selling to these large major
retailers, as I mentioned and gave an overview of. In general, about 50% of sales would be
bridal, with the balance being fashion jewellery, which is earrings, pendants, bracelets,
necklaces.