As it happens in most of the acquisitions, I think they will retain core team of the acquired company to run the business as usual.
Posts in category Value Pickr
Phillips Carbon Black (30-11-2023)
I guess , PCBL is trying to diversify the product folio as they are iterating on to explore in speciality chemicals + battery chemicals .
The HS Portfolio (30-11-2023)
Succumbed to buying Cochin Shipyard Limited at 1190 today. Purely Short Term Play.
The Fundamentals are sound. Good Order Book and decent execution capabilities.
The trigger is chatter about IAC2 coming through and maybe Defence Acquisition Council Announces in next round of meeting.
Long term investment strategy (Buy, hold but don’t forget) (30-11-2023)
But we forget one thing here. Most Small Cap and Mid Cap Promoters take anywhere between 1-5% of Revenues/Profits as Consulting fees in addition to salaries. In some cases its 10% of profits. Look at the Marans of SunTV.
They also have other indirect sources of taking money out legally thorugh related party transactions. So all this needs to be considered.
Phillips Carbon Black (30-11-2023)
ACPL as a company is good, 53% of their revenues come from Phosphonates and ACPL ranks as the second largest producer of the same, globally along with 31% gross margins and around 20% EBITDA margins.
That’s a big thing.
However, this is completely unrelated to the existing business of PCBL. They have no expertise in running it. They would have to carry on the existing management of ACPL and then learn from them how to run it.
Yes, the valuations at which they acquired are good but what’s the point if you don’t know how to run it. Isn’t it diworsification?
IFB Industries – Can it Deliver! (30-11-2023)
Revenue de-grew in the recent quarter, ACs are priced at a premium as compared to market, is that a reason for slow off takes of sales in that category, reviews seem good online.
PayTM (One 97 Communications Ltd) (30-11-2023)
In their recent concall they mentioned that they do not grow personal loans and other credit offering as they see it risky so in that case is soundbox only their only focus area?
PayTM (One 97 Communications Ltd) (30-11-2023)
https://x.com/HereWorks/status/1729758135529980079?s=20
Looks like it is user to user first time transaction do not know on what basis will the transaction be reversed.
Investment Learning (30-11-2023)
What about Intangibale asset in Balance sheet company when it write off ?
Apex Frozen Foods (30-11-2023)
Apex Con Call summary Q2 2024:
- The company experienced a 22% decline in net revenue, attributed to a 13% decrease in volume and a 10% reduction in realization.
- Reduced volume was linked to low demand in the USA.
- In contrast, sales in the European market saw a significant increase of 63% YoY and 100% QoQ, constituting 40% of total sales.
- YoY realization decreased to Rs 738 per kilo in Q2 FY24 from Rs 820 per kilo in Q2 FY23. Prices, however, showed a sequential increase of 6% compared to Q1 2024.
- EBITDA margin improved by 300 basis points to 8.1% QoQ, attributed to cost-cutting measures and stabilization in shrimp prices.
- Debt decreased by 7 crore due to surplus cash flow utilization.
- The company anticipates improved sales in the USA post-clearance of inventory backlog during the upcoming holiday season.
- Approval for Ready to Eat/Cook products in Europe is pending deliberation between the Indian government and the European council.
- The company awaits a free trade agreement between Europe and India for exporting high-margin products.
- Exporting Ready to Eat/Cook products to Europe is expected to enhance margins.
- Slow demand in China is anticipated to revive post the Chinese New Year 2024.
- While supply from Ecuador is a concern, their focus is not on high-margin Ready to Eat/Cook products.
- India holds a competitive advantage over Ecuador in terms of cost and availability of skilled labour, especially with value-added products like Ready to Eat/Cook.
- A petition to impose countervailing duties on India, Ecuador, Vietnam, and Indonesia, still it would be level playing field as it is for all markets while Ecuador and Indonesia also face antidumping duties.
- The removal of a diesel subsidy in Ecuador which was 10% of the cost may impact farm viability and lead to cost escalation, with the full impact becoming clear in calendar year 2024.
- EL Nino can have adverse impact of Ecuador shrimp production, but extent of it can not be quantified as of now.
Disclosure: Have a position in Apex around 200. No recent transactions.