it appears that KPI green has bagged more orders but not declared the same. in the last credit rating report , they had 84MW orders. right now in the latest analyst coverage by Batlivala securities, they have orderbook of 120MW worth 580 cr. This is really splendid growth.
Posts in category Value Pickr
SmallCap Hunter : Trying to find the dark horses with triggers (03-09-2022)
FII holding 59% ? Can you elucidate please, could,nt find anywhere.
Kalpesh’s Portfolio (03-09-2022)
Business models that I like -
- Businesses which are lowest cost producers where retailers/dealers decide what is best for customers, customer buy’s whatever dealer/retailer suggest.
In this model brand name is not that important but an end users trust on dealer/retailer is.
a lowest cost producer can grow fast for long long time, when their products are of good quality.
Retailer/dealer will naturally sell where they have better margin’s and product quality is good, and who can give then better margin’s sustainably? off course lowest cost producers.
As the business grow moat of producers further strengthen by economies of scale.
they just need to sell at reasonable price and give good margin’s to retailers.
Find such companies where management understand real moat of their business is lowest cost production and take continuous efforts to be that way and increase the scale to such a level that competitors cannot think of competing.
Keep the pricing such a way that competitors production cost is higher or equal to your selling cost.
Risks : Management goes other way, Switching is easy for retailer/dealer
e.g. DHP India, Satia industries, Relaxo footwears etc
Moat of DHP is improving with scale and their cost cutting initiatives, it will keep gaining market share.
Satia can scale up almost entire capacity expansion immediately, by gaining market share even when prices are market driven, why? because it is one of the lowest cost producer and it’s financials provide it ability to provide better margin’s to retailers.
Suppose one Stationery shop owner in Gujarat sells WPP of 3 companies, and he is getting 15% margin from satia & 10% from other 2 companies, he will naturally push satia products to customers, as customers don’t care about company(most don’t in WPP) they just want paper to put in printer.
As cost structure of other 2 manufacturers don’t give then ability to provide more than 10% margin to retailer Satia is winner here even when customer is getting same price for all 3.
Things are not that simple in marketplace, there are other factors also involved.
But that is the reason Satia can put up new capacities very fast, and scale up them immediately as long as they know what their real USP is, and management don’t take any irrational decisions.
There are many hurdles in paper industry in supply side and production side like, availability of raw material, water, power, manpower etc which makes paper industry a difficult place for manufacturers but managements like JK and Satia know how to use these hurdles to their advantage(rational managements).
Will compete thepost later on as & when time permits
My mistakes with the stock market (03-09-2022)
So what is the mistake here?
I bought it at 83 in 2018 and waited for 1.5 years and finally sold at 55. after that it touched low of 30s also.
What I just want to say is merely missing the opportunity wrt to share price is not mistake. The rational behind buying and selling matters most.
I had significant quantity of Adani Transmission in 2017 at avg price of 164 and sold at 250 in 2019. Today the price is ~3800, I dont consider it as a mistake. Although the business performance has become 4x, the PE has increased by 10x.
Cosmo Films – Diffentiated player in commodity business (03-09-2022)
Would anyone here on this forum have data on film production capacities in Europe at aggregate level or better still by country (both BOPP and BOPET)? I believe Europe production is going to hit dramatically over next 2 quarters (owing to power issues - availability and cost) and it will fill shortfall from exports. Should lead to very robust margins despite capacity additions which has caused current lower margins.
Kovai Medical Center and Hospital – Health and Wealth (03-09-2022)
Its always good to read the annual report of Kovai. They have had a really good track record of consistent growth and scale up from a single location.
Other highlight is the several firsts that they keep doing in the medical field. It seems the management is quite focused on bringing new machines/technologies and doctor talent to offer the best of healthcare to the public.
Given the superior profitability that this co generates, I feel the stock has never got the due valuations.
Looking forward to attend the AGM to get more insights.
Ayush
Disc: same as before. Invested in family and client acs.
Kalpesh’s Portfolio (03-09-2022)
DHP India Ltd AR22 notes
* | Your Directors continue to be of the opinion that high quality of products and innovations in products as well as improvement in technology along with cost cutting efforts will help your company to face this competition. |
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* | The company is expected to continue to do well and improve further in the coming years. |
* | Application submitted to Calcutta stock exchange on 11 Aug 2021 to delist shares from exchange |
* | After proper Scrutiny and verification/inspection by The Calcutta Stock Exchange Ltd., they have given approval from deli sting of our Equity Shares from The Calcutta Stock Exchange Ltd. [Securities Code: 14058 & 10014058] w. e. f. 16th September, 2021. |
* | For reducing the consumption of energy, the Company has installed the Energy Saving Flameless Electrically operated Melting Furnace for Zinc to achieve reduction in energy inputs. |
* | This will have an impact in reducing the consumption of Fuel and Power and consequently the cost of production. |
* | The Company concentrated on expanding the export market for its products and continues to do so |
* | There is a big potential of increasing the sale of LPG Regulators for the export market. |
* | Long Term Relationship with the Clients |
* | Obtain various License and Certification for Exported Goods in various Countries as well as in India for specific technical requirements and safety measurement |
* | High quality and safe products at affordable prices |
* | Ongoing product innovation and improvement. |
* | Strong and varied range of products as per requirement of varied market |
* | Weakness - Time delays in procurement of raw materials. |
* | Opportunities: • Potential for expansion for diversified products. • The future global market is very optimistic relating to LPG Appliances. • Growing trend for consumption of Low Pressure Regulators & Gas Appliances. • Expanding into newer untapped markets. |
* | Threat: • Rising price of Raw Materials & Components. • Competitive environment with diverse players. |
* | The Company has already shifted the main focus of its manufacturing business from domestic market to the export markets and is confident of obtaining satisfactory orders in the coming years. |
* | The Company considers its human resource as the most valuable ingredient of the functioning of the company and utmost endeavor is made to maintain good relations with the employees at all levels |
* | 5.91cr spent on new office building |
* | 4.02cr spent on plant & machinery |
* | 0.42cr spent on vehicle |
* | 1.66cr spent on factory shed at Dulhagarh which is not yet in use |
Happy to see new statements in this years AR
Cost cutting initiatives are big positive this will further strengthen moat
5.91cr spending on office seems not a rational decision for the B2B company, I hope this is not a structural shift in managements behaviour towards money, for now I’ll just ignore it as company is in rapid growth phase.
Tanla Platforms ~ Leading player in the fast-growing CPaaS market (03-09-2022)
I hope folks would have seen the Tanla AGM, statements, queries, and answers. I think while still short on hard details (numbers) it still gives a clearer understanding of the business. I put down my takeaways and some other points as well. One of the actions (buyback) is already triggered. Takeaways:
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Taken at face value - Q1 is the floor, and we will be above in margin terms … Hopefully this is for enterprise margin as per question and not blended margins or total value of gross margin. If so, one of the key questions – whether it can get worse from here – is likely addressed. So, the discounting for worse case scenario should hopefully end.
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I expect by Q3 or Q4 they will give start giving clarity on wisely numbers. There are few reasons why I think so. Nonetheless Aravind said it is in the plan and Uday also sort of alluded that in couple of quarters some numbers will start coming. Would request all readers to send emails to Tanla Investor Relation outlining what sort of disclosures you would like to see going ahead.
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Deepak talked about expansion to MENA region in a couple of quarters. Will believe that when I see some senior level hiring. But first time they mentioned a specific place and specific time. MENA region is good from cultural affinity as large number of IT managers in MENA region are Indians and you don’t go head-to-head with better capitalized American /European companies in their home market. Yet disappointing that Southeast Asia where they acquired exclusivity rights from Kore.ai is not there.
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Goalpost for Wisely international foray moved once again. From Consultant’s Report, to Idea case study over Q1 to now “Will roll out once we have deployed at older customers”… So essentially, there is no timeline.
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Even more disappointing is management doesn’t want to address geographic risk by acquisitions. We have seen how one player can rock the Indian market. Organically you can develop that hedge over 2-3 years but leave yourself vulnerable in between.
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Buy back definitely in plans. I think he will likely announce ASAP. Question is whether it will be the quick and easy 10% or more meaningful 25% (even here it will not exceed 175crores. - so, buy back will be at best 1.25-1.50% of outstanding equity). I would want 25% to happen, with management not participating. This would give investors to overall tender 2.5-3% equity at a good price and taxes paid by company on buy-back actually accrue to the tendering shareholders. Moreover, it will spark attention on the script all over again.
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Indian market to grow to 25K Crore in 4 years per opening statement of Uday. A CAGR of ~30%. Besides this international market which is multiple times the size of this market will also be addressable. The opportunity size is huge and Tanla can aspire to grow at greater than 30% CAGR organically.
Other Views
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I believe enterprise margins will continue to be strained compared to FY22 (would believe approx. 4%+ gross margin is lost (over and above SBI) for the balance quarters of this FY at least), but platform is going to hit big, if they need to return to 20% EBITDA. Personally, I prefer this. Enterprise GM to reach back to 20% in weaker quarters will be difficult. I rather see them hit 100 crores in platform revenue by Q4 (which they should IMO). Enterprise Loss of Margin is partially SBI. However, that can’t explain more than 2% and won’t be applicable post Q2. I suspect bigger losses in ILD space, which will continue for the next few quarters.
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Enterprise volume growth is going to be exceptionally good for NLD (even post SBI volume loss). How much of it is neutralized by losses of Volume and margin in ILD – I don’t have a very good handle. UPI volumes are ramping up like crazy and they have direct co-relation to SMS volume. Similarly for e-commerce transactions and travel and leisure industries. In FY22, UPI facilitated over 4,600 crore transactions (Source NewIndianExpress) a run-rate of less than 400crore pm. In both July and Aug this year it is over 600Crore pm. Growth rate YOY basis would be 80%+. Even after SBI losses Tanla will likely get ~50% of this volume IMO as it is the dominant incumbent in BFSI. NLD volume growth directly feeds 1:1 into DLT volumes – so platform revenues will also be on fire.
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A lot of platform play hinges on Data Protection Laws. Regulatory mandates such as DLT can super charge the business as enterprises have no option but to adopt. Both Consent management on Trubloq and Wisely are impacted by delay in data protection bill. If it comes through in 2023, that will be provide another boost to domestic platform revenues.
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Forex related losses are likely to continue as Q2 is likely to see worse depreciation of Euro/GBP compared to Q1. So that won’t be a one time as expected by management.
If some of above optimistic view turns out true (enterprise margin not falling lower than q1, NLD growth and Platform growth) then hope fully prices will recover rapidly post Q2 results. We would have lost a year no doubt and given 30% CAGR return expectations - 30% of opportunity value too, besides a price de-rating of ~20x (~40%) from peak. But all is not lost and Tanla still seems to have great potential. This industry is on a take-off trajectory. Let’s hope Tanla does not again go fighting with Telco’s and do a self-goal Q1FY23 style all over again.
Disc: Invested and sitting tight, hoping for above.
IDFC First Bank Limited (03-09-2022)
I have been warned about the credibility of Mr Vaidyanathan. The dark shadows from his ICICI days still linger, I have been told.
While I am trying to dig for the significant negatives, I found more positives along the way…
*VV is Harvard BS alumni
*Shriram group wanted to merge with IDFCFIRST bank, but regulations didn’t allow
*