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Posts in category Value Pickr
PSP Projects – Construction Company (14-05-2024)
Thanks,
You are right that we need to reward merit. That being said I became a bit skeptical looking the growth of PAT and growth in comp. Shouldn’t performance be linked to PAT ?
On my other point though I am not worried about inequality but rather the incentives for others to perform.
Shilchar Technologies – Power & Distribution Transformers – Sunrise Sector? (14-05-2024)
Shilchar focusses a lot on exports. Shilchar does not rely on any government orders where there are pricing pressures to be at the bottom. Shilchar focusses more on RE sector largely for clients that are setting up their own captive plants - these clients value a lot on performance and are willing to pay the extra price. Shilchar has lot of experience and credentials in this space - as client priority is more of reliable performance, they generally give higher price. Shilchar will continue to maintain 25 - 30% range as long as this demand continues which should continue for few more years.
Disc : No recent transactions - invested since much lower levels and views can be biased
Shilchar Technologies – Power & Distribution Transformers – Sunrise Sector? (14-05-2024)
As per the concall transcript, there are various types of transformers. Shilchar is into renewable transformers. Which is a niche market. There are virtually no big organized player (at least bigger than them). Then there’s a entry barrier as well. No idea if margins will continue to be the same or will increase or decrease.
Not a buy or sell recommendation. Invested. May be biased.
Shilchar Technologies – Power & Distribution Transformers – Sunrise Sector? (14-05-2024)
Listen to the oddlots podcast on Bloomberg or apple
Odd Lots: Lots More on America’s Electrical Components Crisis on Apple Podcasts
The last few years shortage of electrical components from switchgears to transformers to trans oil is now coming to parity and should be resolved in two years.
So components companies may do well till then. Then margins will come to parity at maybe higher rate but nowhere close to 20-30%. 10-14% will be new normal for most companies.
Thats the play. But market is giving PE as if current margins will sustain into eternity.
Discl: Do not own any transformer company except for CGPower which is more of a wider industrial play.
PSP Projects – Construction Company (14-05-2024)
No stock becomes multi-bagger by adding 5-10 Cr to the annual bottom line by cutting CEO’s salary.
What matters to me is that the company has done 3X net profit in 5 years. If PS Patel can deliver 4X in next 5 years, shareholders might be happy to further compensate him.
However, if you are bringing in inequality angle between him and his employees, then it begs a different discussion and different forum. Also, I believe ESOPs should be offered to select employees, who are key for company’s success and to retain them.
Piccadily Agro Industries Ltd (14-05-2024)
@Metalhead44 - Piccadily currently has 40,000 plus casks maturing in their warehouses. They have enough stock to meet demand for the next 4 or 5 years. This capacity expansion is required to maintain the current rate of supply at current rate of demand. If they do not start capacity expansion right now, they will have to cut down the rate of bottling 3 or 4 years down the line. Cutting down supply is not a good marketing strategy for a brand that is aiming for a dominant position in the market.
Discl : Invested.
Adani Ports – Leader in ports (14-05-2024)
Guidance for FY25 vs Audited FY24
Cargo : 500 MMT vs 420 MMT
Revenue : Rs 30000 Cr vs 28210 Cr
EBITDA : 18700 Cr vs 17363 Cr
ROCE : 20% vs 18%
Net debt to EBITDA : 3.0-3.5X vs 2.3X
Key Highlights from Concall:
Targeting 1,000 MMT cargo volumes in 2030
Current domestic port capacity at ~627 MMT, capacity expansion at existing ports being guided by cargo demand
Domestic port volume growth >2x the country’s cargo growth rate.
Acceleration in growth driven by newly introduced trucking segment, supported currently through asset light model approach
Trucking and container rake segments combined to contribute over 2/3 rd of the revenue of the entire logistics segment
EBITDA margin supported by growth of agri logistics, bulk trains and warehousing
Ramp up at all ports and particularly the ones acquired in the last few years; commissioning of Vizhinjam Port, India and WCT, Sri Lanka
Asset additions continues across various sub-segments of logistics business; new trucking segment launched, likely to be the largest revenue contributor for logistics in two years
Healthy transformation of EBITDA to operating cashflows averaging over 90%
Average turnaround time (TAT) for ships at ~0.7 days vs other ports in the India minimum 2 days
Shilchar Technologies – Power & Distribution Transformers – Sunrise Sector? (14-05-2024)
I think Transformers, and renewable energy space is atleast 5 years story, if not more.
And Shilchar’s export orders, and relationship with overseares customers from developed countries -should ensure the margin to sustain for a very long time.