@kartik_bhat @ranvir
Do this company get affected by the spot charter rates?
Do you guys have any particular specific target?
Posts in category Value Pickr
Seamec Limited: formidable player in niche space; in a dull & boring sector (28-06-2024)
The SME portfolio (28-06-2024)
Anyone tracking GP Eco Solutions. They are making strides in organized distribution, driving India towards a sustainable future through their robust solar business.
Company Overview
GP Eco Solutions specializes in delivering solar energy products. Their goal is to make top-tier global solar products readily available in the Indian market through a network of Solar System Integrators, Channel Partners, and Installers. They offer three main products:
- Solar Panels
- Solar Inverters
- Storage Solutions
Discussion Points
- Valuation: Given the current P/E ratio of 118, how do you all perceive the valuation of GP Eco Solutions? Is it justified based on their growth potential and financial performance?
- Financial Stability: Looking at their operating margins and net profits, do you think they have the financial stability to sustain and grow in the long term?
- Market Position: How well do you think GP Eco Solutions is positioned against other players in the solar energy market in India?
Hitesh portfolio (28-06-2024)
Thanku sir I have ordered that…I just started porfolio for trial basis before putting all money and some of my stocks are already running quite good to 30%…is this what is called first luck or I have found something good…some stocks are Sharda motors (I felt undervalued when bought) , Likhita infrastructure , mahindra resor and club , netweb.
Virtuoso Optoelectronics Ltd – A promising micro Cap (28-06-2024)
Thanks to @GourabPaul and @saurabhved for their help in collaborating on this post
Virtuoso Optoelectronics
Background
Company started in 2015 as an EMS company that manufactures drivers and circuit boards for LED lights. Soon they forward integrated into making LED lights. Started IDU assembling unit in 2019 for Voltas and after this they started backward integrated in manufacturing of the components. They added ODU and water dispensers in 2023.
Virtuoso is promoted by Mr Sukrit Bharati. His education background is Masters in Science - Engineering Technology from BITS Pilani Diploma / Certification courses in Management subjects from Harvard Business School and NMIMS, Mumbai.
Products:
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LED - it produces various products like LED downlights, panels, lamps, and street lights. Current capacity is 40mn units with a capacity utilisation of 70%. It is undertaking an expansion to 60mn units. This business has 12% EBITDA margins. Panasonic is the anchor customer for Virtuoso. It has recently added Great White and Gold Medal as customers. Lighting is roughly 20% of the sales.
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IDU - it produces IDU for Voltas. IDU has a capacity of 8 lac units with 75-80% capacity utilisation. Here the margins are around 9% with 75% backward integration. Company has backward integrated into plastic injection molding, heat exchangers, sheet metal, copper tubing, cross flow fans, wire harness and remotes. Further the company plans to integrate BLDC motors and brass components. Currently Virtuoso accounts for around 20% of Voltas’ sales of IDUs.
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ODUs - It has a capacity of 4 lac units of ODU and plans to scale it unto 6 lac units this year. ODU has a lower margin of 6%. This is because it has a lower value addition as it is only 50% backward integrated. It is currently operating at 50% utilisation and expects to ramp up the sales this year. It accounts for roughly 10% of Voltas’ sales of ODUs.
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Water Dispenser and Toys - Virtuoso started selling water dispensers as the capacity is fungible with ODUs. It will manufacture them during lean season to better utilise ODU capacity. Currently sales are very small however it expects to reach 100cr sales in a couple years. Virtuoso is also qualified as a tier 2 supplier to Hasbro for manufacturing Toys. Both toys and water dispenser put together have 10cr sales.
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Commercial Refrigeration - Virtuoso is putting up a new plant to manufacture commercial refrigerators with a Capex of 80crs. It expects asset turns of 5-6 times with a margin of around 12% at peak utilisation. It is planning to onboard 2 anchor customers for this plant. It should commence production in 2nd half of this year with a capacity of 1.5 lac units. It aims to make this segment 30-35% of its sales.
Why it looks interesting:
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Aggressive growth plans - company intends to grow 35-40% for the next few years. It has already done Capex to take its turnover to 1100cr. Growth will come from market growth of products, increase in backward integration and addition of new products.
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Superior margins compared to peers - It has better margins than peers as a result of better capacity utilisation in plants and lower overhead costs despite having lower scale. Virtuoso takes land on long term lease to keep overhead costs low.
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Focus on working with quality customers - Virtuoso believes in working with quality anchor customers as it leads to predictable sales and growth. Voltas and Panasonic are its anchor customers. This has allowed it to scale the business quickly.
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Focus on backward integration - company has backward integrated into the various manufacturing process required for its products like plastic injection molding, heat exchangers, sheet metal, copper tubing, powder coating, cross flow fans, wire harness and remotes. This has helped it to increase its sales, improve margins and quality. It continues to use its R&D to further improve its backward integration into BLDC motors and brass components.
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PLI - Virtuoso will receive benefits for localisation of manufacturing in India. It is awarded PLI of 50 crs for backward integration of AC components. Further VOEPL is eligible for incentives under Electronics Policy of Maharashtra which it has applied for.
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White goods as a sector is under penetrated in India and this gives a long runway for growth. This year has been extremely hot leading to good sales of ACs and Refrigerators in India. Many manufacturers have had production issues as demand was higher than expectations and few of the parts are imported with significant lead times. This gives good visibility for growth in the near term.
Risks
- commodity prices - prices are revised quarterly for them. Thus sharp rise in commodity prices can lead to temporary reduction in margins
- under-utilised capacity or slow ramp up after finishing refrigeration capex can lead to losses for this unit
- Customer concentration risk
- ability to raise equity and debt to support business growth
Disclosure: invested and biased
RSWM LTD (Ascending triangle + Multiyear break out ) (28-06-2024)
(post deleted by author)
Cupid Ltd – Helping the world play safe! (28-06-2024)
Want to know if it is wise to remain invested in cupid when the prices are going downwards for quite sometime now
Shilchar Technologies – Power & Distribution Transformers – Sunrise Sector? (28-06-2024)
Amazing observation!
Investment journey of a late starter (28-06-2024)
Since my last general portfolio update here at the end of 2023, the portfolio is up by about 33% in past 6 months. Since the portfolio has grown at about 60% CAGR. for 2 years. I have taken the decision to became a little defensive and accordingly increased the percentage of low beta investments like large caps ( Larsen & Toubro, Tata Motors, cg power - Asian paints etc.), power grid invit etc.
Portfolio churn has increased of late and only 15 stocks out of 40 has been with me for longer than 6 months . However, those 15 stocks are worth more than 50% of the portfolio .
Because of the volatility of late , I had decided to book when profit was there to be taken and triggers were not in near future.
As a result , at present I don’t have a few stocks that I consider good for long term but I intend to buy those back later .
I have let go of almost all so called long term bets like AEGIS( sad sad mistake), SIRCA, HBL ,Shivalik ,Indigo paints , AngelOne , INTELLECT etc. While Aegis has tripled once I sold it after running in circles for 2 years , the rest have not gone anywhere but backwards mostly.
I have added CMSINFO(avg 400), SHARDA MOTORS(avg 1578),BKT(avg 3015 ), NATCO(avg 1202)BOMBAYDYEING(175) , ANURAS(772) etc. in past 2 months along with riskier and smaller bets like WPIL(3680), EIMCO(1575), PGEL(2520), WALCHANDNAGAR(220), SHILCHAR(4500) and
THOMASSCOTT(260) etc.
Once one has got a 20 bagger like Piccadily , it’s impossible to resist the urge to find another like it . It’s also true that one can’t know beforehand . So pick 5 and hope one makes it worth it .
One thing I am struggling with is allocation larger amount to a single stock in proportion to rising portfolio value . Hope I get better at it soon .
Rishi Laser- A Precision Fabricator (28-06-2024)
Thanks @venkatesan - This was helpful.
Will start tracking the same.
@rk1771 - Have you ever interacted with the management or visited their plant? You seem to be tracking this for 13 years now. Can we get further information from contacting them?
Shilchar Technologies – Power & Distribution Transformers – Sunrise Sector? (28-06-2024)
Recently CareEdge has upgraded Credit Ratings of Shilchar on account of improved performance.
One interesting point I found in the ratings report is hidden guidance of 700 revenue by the management.
To dig deeper if we check these credit reports of last 3 years we can clearly see the number given in those reports is matched or exceeded by the company
In 2021-22 they did 180 crores against guidance of 175 crores in credit report. Similarly, in
2022-23 280 crores against guidance of 250 crores and in
2023-24 397 crores against guidance of 400 crores.
Surprisingly, management is guiding for 700 crores revenue despite delay in capex by four months for phase-1 and one month for phase-2. But again, the company has so far over delivered on every front and have been quite no-nonsense and that gives confidence.
In my opinion if they achieve this 700 crores, in ideal world this could be approximately 100 crores, 150 crores, 200 crores and 250 crores for Q1, Q2, Q3 and Q4 respectively with some hits and misses.