I have exited Man Ind post-Q2 call. Sharing the summary here but take a bit of negative bias:

1. This Q2 Revenue Breakup: 75% O&G, 25% Water and 80% Exports. Have OB of 1400 Cr. as of “Today” of which 60% is export. This OB you can say will be delivered within FY24. On top, we can do some sales from the ERW plant as well in Q4.
2. Margins were lower due to Forex Gain of Rs. 19 Cr. which is shown in other income. If you adjust this, margins have not fallen much. (Not sure what management is thinking, or it was an escape to justify this margin fall)
3. Interest cost belonging to loan taken for the ERW plant, will remain till the time ERW revenue does not come. Hence, till that time expect to remain at this level.
4. Inventory is high because of back-to-back RM booking and pending export orders. Once Export orders get delivered, you can see a drop in inventory in Q3.
5. SS Seamless Plant is on track.
6. Guidance for EBITDA in H2 will be at 10%.
7. Merino Shelter, you can assume money will be received in one month.

My assessment after the call: I was expecting pretty good revenue but margins as well. O&G as well as Exports have better margins v/s Domestic and Water. Almost 75-80% of revenue in Q2 belonged to export/O&G. Despite this margins fell too much. In the call, was particularly disappointed with management giving and escape of Forex Gain. I have been following this stock for a long and I knew management guidance and integrity have always been an issue, and at this price, I felt the margin of safety is reducing. Alternatively, I have other opportunities at better valuations.

Hence, decided to exit the stock and book in profit with my average cost being 140-around.

Regards,
Mukul Jain

Is the group created or still in process

Yes valuation is expensive and time is stretched hence some change in views. Still planning on holding but have been reducing allocation by selective selling for occasional liquidity needs.

Hello,
In My limited Understanding
Needle Rollers are typically very customized as per the different application, which causes SKP to spend very high amount of time just to onboard the different clients.
Ball Bearings though can be customized the customization is very limited (hardly 4-5 Types as per management)
Ball bearings is very Volume related game
And Just so you know that the margins at 45% utilization is near to 20%, Better cost utilization imo can take the same to 25%, as better absorption of fixed cost will happen

and also the Needle rollers are used at large in ICE Vehicles’ engine, where as Ball rollers are used at large in EV since the main characteristic of Ball rollers is that it Suppresses the Noise caused due to working of the machinery which is the main reason why Balls are used in it since EV are silent

Of-course the Blended margin will come down the same is acknowledged by management too in recent Call

And For capacity Utilization the ball Volume for H1 is up 80% odd the same isn’t Updated here, the revenue is flattish in light of ongoing downside in Textile sector and hence the new capex is stopped, halting the revenue from Other Sectors

Is this net inflows? I assume so, but wanted to confirm.