NCLT date got moved to 10/07/2022.
Refer: https://nclt.gov.in/case-details?bench=Y2hhbmRpZ2FyaA==&filing_no=MDQwNDExNjAwMjkzMjAyMg==
Posts in category Value Pickr
Indiabulls Real Estate Ltd and Embassy Group Scheme of Amalgamation (09-09-2022)
Sandur Manganese (09-09-2022)
Announcement under Regulation 30 of SEBI (LODR) Regulations, 2015- Allotment of Equity Shares on Rights Basis
Vineet Jain portfolio (09-09-2022)
Fresh additions / Add backs
Vadilal Industries (3%), Allcargo Logistics (2%) and Affordable Robotics (2%). Added back Indiabulls Real Estate (2%) and Equitas Holdings (4%).
Vadilal Industries (Buy price about 2215): I happened to meet the management of the international business last month in the US and understood the business well. They have an amazing distribution network in the US and have great relations with the largest Indian retailers. I saw the prominence that their products enjoy on the shelf and the extensions and new categories they have gotten into, from frozen foods and vegetables to RTEs to Indian sweets. The US business should continue to grow fast, and the growth may spill over to other international geographies as well.
The stock has been on a tear for the past few months though, but I bit the bullet and got in. It is still not expensive though, considering the growth I see in the international business over the next few years - trades at under 2 rimes overall sales.
I would like to buy more than 3% of the PF but will do that on consolidation or when future numbers continue improving. Also Ice-cream sales in India is seasonal so may get opportunities to add in the winter.
Allcargo logistics (buy price 305): A special situation play. They will demerge into three businesses. The real estate business carries most of the debt and has the lowest contribution to sales, so post demerger the main business should be nearly debt free, asset light and fast growing. Presently trading under 10 times FY22 earnings. Even if earnings taper with reducing global freight costs, it is still easily the cheapest listed logistics company in India. I regret not taking a larger position - this seemed like quite a full toss and looked great on charts as well. It is already up 25%from my buy price in less than a month. I may add some on consolidation or post the demerger if it has not run up a lot.
Affordable Robotics and Automation(buy price 133): This is a micro-cap startup in the robotics and automation space. Vijay Kedia owns 15% of the business. This alone is enough for me to take a small position as a boom or bust start-up like position. Bought it after weeks of consolidation.
These guys have been in the parking automation space for a while. ARAPL has various solutions to incorporate tens to hundreds of cars in very limited space. Check out their website for videos - they’re pretty cool. They have been selling these solutions to residential and commercial establishments. The potential demand in the land and parking starved cities in India is huge.
Off late they have also developed a warehouse automation and management solution. They claim this will help ecomm companies in better service operations by automating their warehouses for faster and more accurate deliveries. I guess this can be extended to FMCG, pharma and other industries in the future. Why I find this interesting is that it is much more scalable and asset light. If they can crack this for a couple of warehouses of say a Big basket, they can scale across the chain very quickly.
Lastly they also have a Ed tech solution which claims to use AI augment learning methods. They say the capital deployed for this is very small. I am not a big fan of Ed Tech in general, and treat it as an optionality, so long as they stick to not deploying too much money here.
In summary, ARAPL is in a whitespace with huge runway for growth. If their solutions click with a few customers, they can click with many very fast. If not, the small position size will protect me.
Indiabulls Real Estate (buy price 72) and Equitas Holdings (buy price 84): I bought both back last month, at about 30-40% lower than what I had sold them at. Indiabulls is a clean special situation play. The merger should go through and value will be unlocked. I may add closer to the event materializing. Equitas still trades at a slim discount to Equitas SFB and the reverse merger will happen soon. Equitas SFB traded at about 1.2 times book when I bought, and had improving RoAs. Very favourable risk-reward.
Cosmo ferrites – bet on growing electronics and EV theme (09-09-2022)
had recently studied this company. few points:
- low margin high competition business
- has been making profits in past 1 year as sales have doubled - not clear how this has happened and whether it is sustainable. It could be due to some temporary imbalance in supply from international players. But not sure what is the reason.
- Expansion is large compared to current FA and debt funded. New product/ process.
- Promoter purchases are very small
- Price has run up from 15 in March 2021 to 400 currently. Profit booking will prevent price from increasing.
All in all it appears to be a high risk with moderate returns at best. Very high chance of price correction from here.
Vineet Jain portfolio (09-09-2022)
An update after long. Have been tied up with work and travel over the past few months. And I have had so much to say but have been lazy to post
I have churned the portfolio quite a bit, some due to changes in certain industry structures, some because I found better opportunities. Will break this down into smaller posts for ease of consumption.
Scale-ups
Scaled up my positions in Valiant (3% of PF at about 600) and Newgen (4% of PF at about 400) in the last week of August.
I think Valiant’s business has bottomed out and most of the promotor selling done as well. The Gala’s now hold less than 2% share an they may or may not sell out, but it won’t be material. Meanwhile falling crude, restarting of their factory that was affected by the blast and improving realizations from chlorination should lead to increased topline and margin expansion over the rest of the year. Q2 may not be great but Q3 and Q4 should be materially better. Risk-reward at under 1.5 times sales was compelling.
Newgen is the only company in the small and mid cap IT pack that may not be affected as badly by the impending recession in the US and UK IMO. In fact low code/no code solution adoption may increase as companies look for less capital intensive options for efficiency improvements. Their last concall was encouraging. While the business bottom may be a quarter or two away, I think the stock price bottom may be in place already. It may fall if the entire IT pack continues to fall though, but I think it should do better than most mid and small cap IT companies. This is the only IT exposure I have at the moment.
Hitesh portfolio (09-09-2022)
Hi Hitesh
Any thoughts on Nava Ltd?
Usha Martin – Coming out of the Chaos (09-09-2022)
Just my two cents:-
- Open Market selling, yes shares are being sold openly in the market. Many times, there is no block deal.Plenty of time institutions also buy openly from the markets. However, this is not the real risk and is more to do with the voting nature of Mr. Market
2.Real risk lies in LRPC strands, and capacity addition by Jindal. Will be interesting to see if they can hold their margins or not. That is what I am looking at, given the management is guiding to increase VAP as a % mix.
+Another point to note is Bekaert which is the world market leader in steel wire ropes is headquartered out of Europe, Brussels. Might face a lot of challenges with procuring steel for manufacturing steel wire ropes, that can create a market vacuum for both Usha M and Bharat Wires to exploit.
Disc: Invested since 60s, not a reco to buy or sell.
Cosmo ferrites – bet on growing electronics and EV theme (09-09-2022)
As per the management, their new soft ferrite manufacturing capacity has already kicked off operations at the end of Q1, which IMO should translate to higher top and bottom line in the coming quarters. The Company has also placed order for a Top Hat Kiln to meet customers growing demand for higher permeability ferrite cores (technologically advanced ferrite cores) which is expected to start operations from FY24 and will further improve sales mix towards value add products. This appears to be high margin product.
Also promoters have been buying the shares from open market during Mar & Jun quarter.
Discl: Invested.
Rain Industries – An oversold de-leveraging play (09-09-2022)
How much % revenue comes from Europe ?