Don’t expect the gap to go below 10% for long. There isn’t much arbitrage left IMO. This is because after the merger, credit of shares of Inox Wind to IWEL holders and their subsequent listing will take at least a month. During this period, you won’t be able to sell your shares even if there is a market fall. This lack of liquidity will be compensated by a slight arbitrage in IWEL shares on the merger date. Same happened in previous mergers like Equitas.
Posts in category Value Pickr
INOX Wind (31-08-2024)
Don’t expect the gap to go below 10% for long. There isn’t much arbitrage left IMO. This is because after the merger, credit of shares of Inox Wind to IWEL holders and their subsequent listing will take at least a month. During this period, you won’t be able to sell your shares even if there is a market fall. This lack of liquidity will be compensated by a slight arbitrage in IWEL shares on the merger date. Same happened in previous mergers like Equitas.
Premco Global — Narrow Fabric (A critical component for inner wear) (31-08-2024)
As per managment, they can use practically capacity at level of 85% given the number of batches would reduce the operating time for change in new production order. Hence, at 75% they can increase sales by 10/75, i.e. 13% from the current capacity. However, there might be some new products as well which may need new machinery. Hence, in my view, new capacity expansion is much needed for the company for future growth. One shall not wait for 13% growth, which can happen in 3-6 months time and end up with siuation that there is demand but no capacity to fulfil that demand. While optimum utilisation and just in time improve productivity and margin, at time, particularly given the current geopolitical situation, some buffer for supply shocks are good in my opinion.
Secondly, on margin, your observation that margin at 10%, is not true business margin.
Find enclsoed sales, operating profit and operating margin of Premco Standalone and Consolidated financial over past 10 years sourced from screener.
Your obersvation is correct that during FY18-FY20 period, Consolidated operating margin was 9-11%. However, that was period when Vietnam operation was about to stabilise. If one look at FY26-FY24 period, than consolidated maring are around ~17% which is very good in my understanding.
Further, in my understanding, while the company has not grown signficantly during last few years, they have also not compromised on margin to enhance sales. I find that trait being long term value accretive. Again, this is my subjective evaluation which may biased and wrong.
Disclosure: Same as last post.
Ola Electric – Full Stack EV play? (31-08-2024)
Thanks Deven for this analysis. The case does look bullish, given here only 2W business is considered. Even taking conservative estimate of Ola’s market share at 20%, company can still do decently well.
Major triggers could be other businesses apart from 2W, like 4W (depends on management and it’s ability to fix consumer trust, it has the ingredients to become India’s Tesla).
Going into other business models with swappable battery packs (like Gogoro), setting up it’s own EV charging stations etc could be other revenue streams.
INOX Wind (31-08-2024)
LTP on friday (NSE)- INOXWIND – 221, IWEL- 12016
Value of 632 INOXWIND = 139672, (Ratio of 632:10)
Correct me if i am wrong, if u invest 120160 in IWEL, u get 139672 in INOXWIND, which is upside of 16.23%
Investing Basics – Feel free to ask the most basic questions (31-08-2024)
hi
where to find industry specific reports?
Maithan Alloys Ltd (31-08-2024)
Companies are not required to furnish balance sheet on quarterly basis. Only on half yearly basis.
RACL Geartech Limited (31-08-2024)
In the concall, management has listed down various initiatives to cut costs and reduce working capital requirements. While that would help to mitigate some pain, their biggest challenge is to bring down debt which will in turn bring down their interest cost. In Q1 FY 25, interest cost for the quarter is higher than PBT for the first time in the history! This is a worrying sign and I hope management would make efforts to strengthen the balance sheet by diluting some equity.
Disclosure : One of my largest PF holding. Transactions in last 30 days
Long term bonds (31-08-2024)
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