(post deleted by author)
Posts in category Value Pickr
Shilchar Technologies – Power & Distribution Transformers – Sunrise Sector? (21-09-2024)
AR -2024
Our unique knack for understanding customer requirements, outstanding design capabilities to create customer-specific products, and our commitment to manufacturing quality products position us well to capitalise on industry trends. We have an in-house design and engineering team consisting of 15 people, including electrical and mechanical engineers. Further, I personally take a keen interest in the design function of the company. This capability enables us to serve custom-designed transformers based on client specifications, as the majority of our business is of such nature. We don’t operate with a stockand-sell model. Each product is designed specifically for each project.
Macpower CNC Machines: Manufacturing a Strong Growth? (21-09-2024)
Have recently started tracking CNC machines sector. In small caps the most important factor is promoter. Analysis beyond a point do not yield much. Rupesh Mehta seems a very confident , passionate , hungary and conservative promoter who knows his subject. The stock did not move for a long time but since last year it has gone up 5 times. A breather here would be great before the next leg of journey. Initiated a small position with intention to add at every fall.
Great articles to read on the web (21-09-2024)
Insights from Mohnish Pabrai
-
Peter said well, the three reasons you guys have been so successful is that first you’re willing to be extremely patient… The second is that you’re willing to be very decisive… and the third trait is having no concerns about being different from the crowd.
-
Charlie says that for each of us, the opportunities that would truly make us wealthy are not going to come around every week they’ll come around every so often and they come around at unpredictable times but when they do come around and when you do recognize it uh you need to act very significantly and very quickly
-
For most Investments if you can’t do the math in your head then it should be an automatic pass so there was no DCF model run
-
A lot of times in investing what happens and in fact I’m very guilty of that is we tend to look at the kind of past performance of a of security and that taints the way we look at it and actually what you really ought to do is ignore the past just focus on the future
-
Warren and Charlie like to go through long histories of these companies that they study… they read every annual report since the company was public
-
When you have businesses with great business models you end up with dumb managers who do dumb things because even when they do dumb things they look really good because the business is so good
Source:
Turning $1M to $1B+: An Investing Masterclass from the Indian Warren Buffett (Mohnish Pabrai)
Creative Peripherals (now Creative Newtech) – Micro cap with big ambitions (21-09-2024)
Brand management isnt just job of passing the product,
As Indian we have been fairly big notion that brabd management just includes trading,
But what goes behind manufacturing the brands and eastblishing it is something we steer away from understanding,
Ill say if they exceute Honeywell well, its more likely that they’ll get more business from other brands rather than less,
Its foot in the door,
Something requires second level thinking and instead of just poping 1st competition thoight this is something i think can happen in fairly long term
I.e., 2-3 brands + Cyberpower under one roof
I can be wrong though,
Its just a estimate i guess
Lotus Chocolate Company: A Tasty Affair (21-09-2024)
Hi Mohit,
Thankyou for your builds. Few pointers-
- Mondelez, Nestle & Mars have their own sources of cocoa because they own the farms hence they procure it a better price than the likes of Amul who rely on a third party to source the cocoa – in this case Lotus
- Agree with you that the recipes are different across brands – Silk & Galaxy are 100% pure chocolate while Dairy Milk , Amul etc are mix recipes – chocolate + compound (dry mix). This is exactly why you can buy a chocolate for Rs 10 in India while a chocolate costs > Rs 50 in the UK. India is a value for money market.
- Amul has increased prices by 30%. Pls don’t go by articles , pls look at the back of pack before and after.
- To your point on why prices have gone up in UK – simply because you can afford to pass on cost escalations to the consumer in that country/region as per capita chocolate consumption is 5kgs in UK but only 450gms in India. Why? – because consumers have many alternatives in India to satiate their indulgence cravings – traditional sweets – which are not available to the British. If you increase prices in India consumers will stop eating chocolates and switch to other alternatives. Hence most companies are happier taking a hit on their margins vs losing consumers altogether.
Question to answer is how long will companies like Amul be willing to take the margin hit and how will lotus make margins given escalating costs of cocoa & customer concentration risk – majorly Amul ?
Indostar Capital Finance Limited (21-09-2024)
I feel with banks now onboarded and rating stable AA-, high cost can be swapped with low cost in coming months/quarters.
Joining of Randhir Singh in July and management strategy focus seems to be now on vehicle finance and small business loans.
Management focus has been on increasing productivity and hence yields are on a positive trend and declining interest rates are only going to give more momentum on this vision.
If Indostar is able to change its market perception due to old legacy/goodwill a further rerating in coming quarters is likely. I can see early signs of management focused strategy on productivity, margins and growth. Any positives on NPA/Writebacks can further support.
Vdeal System: Powering the Future of Smart Electrical Solutions (21-09-2024)
About the Company:
- Vdeal System is ISO 9001:2015 certified and specializes in providing solutions for:
- Smart Low Voltage (LV) panels
- Smart Medium Voltage (MV) panels
- Smart Variable Frequency Drive (VFD) panels
- Smart Programmable Logic Controller (PLC) panels
- The company offers air-insulated and sandwich busducts, supported by in-house product design, development, manufacturing, system integration, and servicing of automation solutions and smart electrical control panels.
- All products adhere to international IEC standards for quality and safety.
- Vdeal System has established business relationships with global electrical companies, and these strategic partnerships with renowned brands provide a competitive edge.
Company Highlights:
- A growing integrated electrical and automation solution provider with significant presence across multiple industries.
- Operates on a business-to-business (B2B) model, supplying products to major industry players.
- Driving the next wave of AI and ML-driven innovation by integrating IoT (Internet of Things), AI, and ML into a cloud-based Software as a Service (SaaS) model.
Industry Overview:
- The Smart Electrical Control Panels Market is projected to reach USD 10.3 billion by 2032, growing at a CAGR of 6.1% during the forecast period (2023-2032).
- The market size was valued at USD 5.8 billion in 2022.
Promoters:
- Mr. Dhiraj Kochar: A graduate of NIT Surathkal in Electrical & Electronics Engineering with 17 years of experience in power sector companies like ABB.
- Mrs. Tapaswini Panda
- Mr. Brahmananda Patra
- Reveal AI Technologies Private Limited
IPO Details:
- Vdeal System is raising ₹18 crore through a fresh issue to:
- Meet working capital expenses (₹7 crore)
- Prepay or repay secured and unsecured loans (₹4.6 crore)
- Other general expenses (remaining amount)
Financials:
- Market Cap: ₹69 crore
- P/E Ratio: 22.5
- ROCE: 42%
- D/E Ratio: 1.5x (to be reduced by 30% with IPO funds)
- Market Cap to Sales Ratio: 2.6x
Revenue (₹ crore):
- 2022: 19
- 2023: 20.4
- 2024: 26.2
EBIDTA Margin:
- 2022: 7.8%
- 2023: 10.1%
- 2024: 21%
Profit (₹ crore):
- 2022: 0.23
- 2023: 1.1
- 2024: 3.1
Margin Expansion Due To:
- Introduction of MV panel (high margin, less competition)
- Plant optimization to reduce costs
Key Company Points:
- Founder Experience: Mr. Dhiraj Kochar, a graduate of NIT Surathkal, has significant experience in the electrical power sector.
- Growth Plans: Aims to grow revenue 4x to ₹100 crore by 2027 with no additional capex, utilizing the current plant (currently at 25% capacity).
- IPO Impact: The IPO will provide fresh cash to grow the business, addressing working capital limitations and enabling operating leverage.
- Strategic Relationships: ABB approved partner, capable of designing panels to IEC6143 standards.
- Technology Use: Uses SolidWorks software to reduce manpower needs and bids only on projects with margins of 18-20%.
- Order Book: ₹26 crore in Letter of Intent (LOI) and pipeline orders, executable in six months.
- Post-IPO Ownership: Before IPO, promoters owned 99.97%. After the IPO, promoter ownership will reduce to 67%.
- Employees: The company employs 65 people as of August 20, 2024.
Risks:
- Potential Conflict of Interest:
- The promoter owns Reveal AI Technologies, which is developing IoT products for monitoring panel status and transferring data to the cloud. This could present conflicts of interest, as the company takes services from Reveal AI for asset monitoring solutions.
- Dependence on Promoters:
- The company is highly dependent on its promoters. The loss of key individuals could impact operations, financials, and growth.
- Customer Concentration:
- A significant portion of revenue comes from key customers:
- Top 5: 52%
- Top 10: 71%
- The loss of a major customer could materially affect business results.
- Supplier Dependency:
- Dependence on top 10 suppliers for raw materials creates vulnerability. Any disruption in supply or increase in input costs could impact pricing and profitability.
- Lease Risk:
- The company operates on leased premises in Orissa. Any suspension or cancellation of the lease could affect operations.
- Regulatory Risks:
- The company requires various licenses and permits to operate. Failure to renew these in time could disrupt business.
- Technological Risk:
- Rapid changes in technology could make the company’s products obsolete. Innovation is critical to keeping up with evolving industry standards and customer preferences.
- Geographical Concentration:
- A significant portion of revenue comes from Eastern India. Any regional challenges could affect profitability.
Disclaimer:
- Invested and Biased
Mayank portfolio (21-09-2024)
i cant understand there ebidta margins and how they can sustain it. this is my view plz dont go for it.