They mentioned this in the CONCALL. Actually I have found 3 to 4 extremely important point on yesbank and am very excited to share them. Somehow waiting for some conclusive proof to post all of them together. After going through the con call I was completely clear on this entire asset transfer. Actually as per RBI guidelines they cannot record the value of 11100 cr in their books because logically they are not receiving any cash and if they increase their book value and later the asset recovery does not happen then there is a big challenge. So the assets will be recorded at NET VALUE which is 8300 cr. As you said 15% will further reduce the carrying value. If you ask me this is extremely positive news because earlier I was thinking this will increase book value without rooting through P&L but now this 1100 cr ( might not be exact) will come through P&L.

If you ask me we can expect this 1100cr in end FY24 or MID FY 25

secondly they have targeted 5000cr of recovery this year which does not include recovery from ARC. This was again a big positive surprise for me.

For further reference this is screenshot of con call for better understanding

Thankyou for taking time and writing.

@Tar how did you develop a circle of competence in Pharma? / how do you develop a circle of competence in any sector? What’s your process like?

I had attended the AGM of Usha Martin Limited held online today. Some of the working notes of the AGM are given below (can be some discrepancy in noting down the notes):

• We are at exciting stage in the company. See great opportunities in domestic and international markets despite challenges globally. Company to focus on key strategic issue and higher value segment.
• Mining in America, South America and Australia are a big opportunity for us. Takes 3 years to develop relationship. We have made major breakthroughs in Africa, Australia, South America and now US. Booked more than 200 tonne of orders in US and South America. There is huge shortage of manpower resulting in shortage of mining ropes. Wherever we have supplied orders, we have matched or even exceeded the life of rope expectations. Next 3 – yeears see 300 – 500 MT per month from 100 MT per month currently. It’s difficult to get into this market but once you get in, it continues for long time,
• Ports – developed crane ropes – Have 85 – 90% market share in many ropes like Middle East. Started supplying to PSA in Singapore and expect higher market share. Expand port crane ropes in Europe, South America and America. Expansion in Ranchi and Thailand will help in increasing our market share.
• Elevator ropes and fishing ropes in domestic and international market – taken good market shares. We have approval from Schindler, Otis etc for India and international markets.
• Fishing ropes doing well in Scandinavian market and have breakthrough in South American markets.
• Looking beyond products into services and looking to expand services in Europe. Singapore we have started this. Few years back we had 4 million dollars sales and now we will do 14 million dollar in FY23 and ramp up further to 20 million dollars. Middle east also we will do well.
• Russia also we see opportunity as it used to import from Europe and America. Due to sanctions, the companies in these geographies aren’t supplying and we are getting good enquiries. See good business in next 2 – 3 years from Russia.
• European and Thailand performing very well. Strengthened orgnisation structure. Significant improvement in topline and bottom line this year.
• European market is important market for us and there could be disruptions due to issue of gas supplies. Germany is a big supplier of ropes and given issues there we will get more opportunity due to higher fuel and other costs. Final stages of starting distribution business in Germany. Already started supplying through our Rotterdam subsidiary.
• Sustainability of margins? 14,000 to 18,000 per MT on standalone basis improvement in FY22. Consolidated 18,000 to 22,000 per MT in FY22. Expect these margins to sustain. Some inventory gains but it’s not substantial. Our ability to develop more and more specialty products leading to higher margins. Expect margins to be sustainable. Volatility in RM prices? Volatile environment but able to maintain margins. Not just RM but also freight basis. Most contracts now on FOB basis. Margins to be at similar levels.
• Company’s focus will be more and more on high value added products and increase share of services.
• New modernization project is funded entirely through internal accruals. Complete the expansion by Q4FY23.
• Asset Turnover – aim at 1.5 – 2 times of fixed assets.
• %age on wire ropes, LRPC, wires – no further investment in LRPC – expect to grow to 75000 – 78,000 MT from 65,000 MT and to 85,000 MT next year – there is going to be competition from JSW or Tata Steel. We have good brand and will be able to compete.
• Also into plasticated LRPC. Part of plastication lines – better margins in domestic and international markets. Good demand in near future.
• Expansion – mostly its on wire ropes and improving the facilities in Ranchi – labor productivity – modernization – reduce cost of production – most of it would be to improve volumes of wire ropes – 30,000 MT wire rope capacity to be added. 60% of that would be on value added side like oil, mining, elevator, port etc
• Oil sector lot of investment coming up – new opportunities and investment coming up. Lot of pipeline and enquiries there. If oil sustains above 100 doller per barrol. Expect it to be very strong atleast in next 2 years. %age contribution from oil & gas segment is 15 – 20% in wire ropes and expect this to go up.
• Conference calls to be started from this quarter itself
• Wire ropes – product pricing – UML is in the mid-range – US and European companies would be at higher range, Korea is in line with UML price range. As we inch higher in product mix, we will move towards higher range.
• Growth in next 2 – 3 years? Based on expansion and bullishness in demand we expect to grow at 15 – 20% in next 2 – 3 years including volume growth.
• Focus will be on international markets. Mining - Australia, South America, Africa. Elevator – India, Europe. Fishing ropes – Scandinavian countries, Oil & gas – present across world
• Net debt – 191 crore – debt to be paid off using internal accruals.
• Steel in Thailand – India steel used to go there but now import duty imposed. Most of it now comes from unit of Tata Steel. Also, buy from China and Korea – small quantity. Competitively source steel for Thailand subsidiary.
• International subsidiary capex – not much capex in distribution subsidiary. Usha SIAM has turned around. Plant was established in 1981 – old one. Thailand plant – 4 – 5 million USD in next 4 – 5 quarters – improve processes and add capacity in specialty ropes and fine ropes. European and Thailand subsidiary should show good turnaround these financial year.
• Volume – rope 52,000 FY21 to FY22. Wire strand volume reduced. LRPC – 49,000 to 65,000 MT. Alteast 10 – 12% growth in volumes. Some benefit from expansion. Next year big improvement in volumes post expansion.
• Daughter just joined the business and is based out of Singapore. Getting involved in International market. Will also be in India at mother plant soon.

(Disclosure: Invested from lower levels)