@Kumar_manas, the management team said that the new beneficiation plant near the mines is being set up to eliminate around 20% loss of output during transit from mines to the incumbent plant. So, does that mean the existing plant will be underutilized?

Perhaps a new avenue for power exchanges…

Very long term positive for steel industry-

Earlier Indian prices were set at export parity price = International price - Freight cost

Gradually, Indian prices will be set at import parity price = International price + Freight cost

No wonder Indian steel prices are very resilient! This is how free markets work, despite the steel duty.

@NNaik

If you go through concalls of both Avanti feeds and Apex frozen, there is clear cut articulation that both managements expect FY 23 to be a year which is better than FY 22. However I do not consider these companies to be structural growth stories. Both are susceptible to vagaries of demand /supply and the duty structures in the US markets. Plus the all important input prices.

Kaveri seeds has been struggling to show meaningful consistent growth. They keep doing buybacks regularly which keeps folks excited, but ever since it went into corrective mode post its stellar rally where it went up multifold, it has never had any meaningful rally.

Sharing my US scuttlebutt findings:

• Personally, have been consuming Vadilal’s ethnic frozen Gujarati uncooked vegetables for 8+ year now in the US. Their offerings back then were limited to few Indian flavored ice-creams, frozen vegetables, and some Gujarati dry snacks.

• Vadilal started to put extra focus on US business about 4-5 years back and started offering ready-to-eat frozen Indian appetizers and entrees in frozen section of a desi grocery store.

• Haldiram dominated ready-to-eat frozen section almost like a monopoly with numerous SKUs. Vadilal caught-up with Haldiram on SKUs and now offer equivalent (if not more) SKUs. Having more SKUs is very critical in this business since capturing the limited freezer space at grocery store is a competitive advantage. It becomes very difficult for a new entrant to not only have multiple SKUs but then offer them at a price that is good enough for grocery store to replace with older incumbent brands. I feel Vadilal might be serving more than 50+ SKUs including both ice-cream and frozen ready-to-eat segment.

• As part of their new focused approach for US markets, Vadilal decided to do direct distribution to end customer (desi grocery store) instead of a distributor. This meant that there is no one in between except Vadilal, from manufacturing facility in suburbs of Ahmedabad to local grocery store in the US. Vadilal invested in having 3 warehouses in the US in New Jersey, Illinois, and California serving the entire country. This is the biggest competitive advantage for Vadilal which can be seen in its US margins. This business has tremendous operating leverage.

• A long haul reefer truck (refrigerated truck) leaves each warehouse every fixed day of the week to deliver goods that are ordered by the clients. All transportation costs are structured in such a way that the client pays for transportation. There are restrictions on minimum order that needs to be placed for Vadilal to load an order for delivery without any extra charges.

• Vadilal started a new warehouse in Florida to serve south-eastern and south-central market. This should be very beneficial to turnaround on an order from southern market in 1-3 days as compared to 4-5 days from New Jersey warehouse.

• Vadilal has almost monopoly in ice-cream business. There are 1 or 2 Pakistani players but their offerings are limited to Kulfi. Vadilal also caters to B2B in ice-cream segment by helping grocery store owners set-up ice-cream parlors within their grocery store.

This pic confirms that Vadilal’s US subsidiary acts as the distributor. I didn’t find any distributor name on back of Haldiram’s packs which leads me to believe that it has multiple distributors for each region of the country. I was able to confirm through some sources that Haldiram doesn’t distribute on its own in the US.

Disc: invested from lower levels and not a buy recommendation.