Need to consider the fact that mgt commentary has been all over the place.

At the time of IPO, the commentary was gross margins are very stable and business will only compound.
Then the second quarter post listing, margins start to increase and mgt maintains it will be able to maintain these increased margins.

It was Mgt responsibility to point out seasonality in margins in earlier calls itself. Cant be that only in 1Q24 have they realised that there is timing difference as to when lounge operators raise their prices and Dreamfolk will take 2 quarters to pass it on.

The commentary in this call has broken the thesis that Lounge Operators will be price takers and hence Dreamfolks can continue to keep a higher share of the amount paid by Banks.

If there was one-time charges in a quarter, why were they not quantified in that very quarter itself.

Also, when Plaza Premium lounges in Hyderabad, Delhi and Bangalore were shut in November last year (for almost a month), which impacted a significant part of their business, mgt did not inform exchanges. Rather, it was vaguely pointed in earnings call that the quarter was impacted by lounge operator transition.

KAMO Paints : I like their revenue Guidance of 1000 crore by FY28 and currently they are doing revenue of 260 odd crores now investing is the game of probability do weigh your risk and probabilities accordingly.

260 odd crores revenue now with 5x growth in next 5 years in no brainer for me, but again I might be wrong.

Portfolio has come to a size about 22-25 numbers, Whereas i did commit to stay between 10-15

SUVEN has 2 molecules in Phase-3 now and likely SUVN-502 may pass the Phase-3 test, if they do then there will be huge runway for Suven. So SUVEN LIFE SCIENCE are into research and SUVEN PHARMA is into CONTRACT MANUFACTURING – so given which side of the coin is much heavier :

Most of the research based companies such as SUVEN LIFE : has demerged from the main company SUVEN PHARMA to value unlock – because the research expense are considered to be expense than asset.
So SUVEN LIFE sciences focuses on research or on contract research
Most of the value unlocking happens on SUVEN PHARMA for manufacturing and distribution.

I think Rajesh export is a in Deep value category. its PE is 10.5 (at price of 520 as on today 22/8/23)

SADHANA NITRO CHEM

STRUCTURAL IMPORT SUBSTITION story, Green Chemistry via Nitro Benzene

PAP Stands for Para-Amino Phenol PAP is the raw material for manufacturing of Paracetamol – You know the Paracetamol is used Pain Relief and Fever.

Opportunity size for PAP :
The World demand for PAP before Pandemic has been at 1,60,000 TPA. Out of which 1,50,000 TPA (i.e. 94% of Total World demand of PAP) is sourced from CHINA. In India, there are players like Valiant Organics who make PAP but its not via Green Chemistry.

Sadhana Nitro got Process Technology using GREENER Technology(that means it is SUSTAINABLE in Future)

PAP Can be Produced using 2 Routes
1.PNCB Route (Valiant Organics exists)
2.NB Route(Sadhana exists)

Sadhana has been Awarded PLI Scheme by Indian Govt for PAP Plants of 36,000 TPA

They have completed all capex on the month of June 2023, and they will start commercial supply soon.

Now Granules is one of their clients and recently promoter has pledged his shares to issue warrants.

Not a good company to own. Here’s why:

It’s cheap on valuation, but

1. Industry::Textiles is a cyclical industry, presently with high cotton (raw material) prices and muted export demand. The conditions are a strong deterrence to both earnings growth and multiple re-rating probabilities;

2. Company:their business is in a very competitive industry – they have had great double-digit margins bc. of their loyal customer base (compared to Nitin Spinners and so on), not their exceptional operational ability (i.e. page industries). This is an advantage they can lose easily, given brands do not particularly have high supplier loyalty.

3. Lastly, the management: is old and conservative. That is not necessarily a bad thing. But in an industry which is hyper-competitive and extremely vulnerable to demand and supply trends, I want to see management which strives for sectoral leadership by taking bold steps. The survival rates for textile mills are among the lowest (funeral homes being the highest). Thus, if they do not snatch market share, their share will always be eaten away by other sharks. Moreover, in an industry which has immense potential to draw investment out of China, Bangladesh, Vietnam and into India (mainly bc. India has close proximity to cotton as a raw material domestically and from Pakistan + cheap labour), I just do not see the management of Ambika taking the risk and trying to grow. They have been and always will be in survival mode.

In conclusion, the stock presents a limited downside due to cheap valuations and a strong balance sheet but does not present multi-bagger-like growth opportunities. Expect 10-15% earnings growth and equivalent share price growth.