Seems, Pokarna’s sq ft realization is around $10 vs, Cesarstone’s retail market ranging from $30 to $100.
Posts in category Value Pickr
Delta Corp – A huge but risky opportunity (31-08-2015)
In the latest interview, the management has alluded to the Daman casino but not said when it will be launched:
Now Daman will open up where we will add several gaming positions. It will take one and half years to get the sales efficiency.
The article also highlights the size of the betting/gaming industry and I am reproducing an excerpt for those who don’t want to check the link:
In casinos, Sikkim must be doing Rs 50 crore on an annual basis. We do around Rs 250 crore. Our competition does a bit less. So the casino market is in the range of Rs 500 crore per annum now. But in cricket, they do Rs 5,000 crore a game. Every city has matka. The total market must be Rs 500 crore a day. So our thing is just a drop in the ocean. If the government legalises cricket betting, they will get huge revenues out of it. The can monitor it too. Today, it is wild. Then, we have race betting, in which Mumbai is Rs 170 crore per annum. There are seven-eight centres. Overall, it must be in the range of Rs 1,000 crore.
Omkar Speciality Chemcials Ltd — OSCL (31-08-2015)
http://www.business-standard.com/article/markets/four-bargain-stocks-to-consider-115083100004_1.html
One of the oldest small cap specialist Mudar pathreya recommends OSCL in todays Business Standard.
Mudar is a v old smallcap specialist who recently recommended Oriental Carbon & Chemicals LTD(OCCL) when it was hovering in the range of 400.At least the visibility of the co is increasing.
However the point raised by TheStocklady on why OSCL is raising funds from an unknown Venus India Asset Finance is also important? is a known finance co or bank not willing to extend loan?
Views Invited.
Discl-Invested recently
Santosh Portfolio ..feedback/suggestions from members (31-08-2015)
Dear Nikhil,
Personally, I welcome this discussion, and your persistence is appreciated.
It is important for all of us to revisit our biases and take new learnings.
Ref. your Page input:
Ultimately we must remember that future price CAGR is a linear speculation to a future non-linear realisation.
Real prices will reflect extreme valuations based on investors greed and fear and therefore present opportunities.
Remember Prof’s WABCO chart where you see 4 steep corrections to a stock that eventually appreciated 18x over 5 years.
Page share price will not show linear growth of x or y CAGR over the coming years.
At the next major market correction Page will offer attractive entry points.
Page is a business with high certainty and predictability of growth, and a high ROE of 60%.
Such a business should not be sold when at optically high P/E but added at every meaningful correction.
So please keep your eyes open for Page whenever it corrects to a more reasonable optical P/E.
Vishals wonderful interaction in the link above also articulates very well the reasons that a business like Page should be held for a long time.
It is also correct that you are inclined to look for high quality companies and not overpaying for them.
Although we are allowed to invest out of India. not many investors are willing to diversify their portfolios for a number of valid reasons.
There are countries / possibilities to buy high quality businesses at more reasonable valuations that satisfy the “buy and hold” criteria listed above.
Before the next major India correction (which may happen sooner than many of us think), you may want to take time and look at some of these opportunities for portfolio diversification, if the idea appeals to you.
Best regards,
Aniket.
Forensics and the art of triangulation (31-08-2015)
@Mantri – maybe you should post your vakrangee note on the vakrangee thread for the benefit of the boarders who are invested in that company.
POKARNA LTD ( Stock opportunities ) (31-08-2015)
Spruce Point capital management’s report about Caesarstone on why they are shorting this stock:
1.They collected quartz from multiple companies and did a lab test to find the amount of quartz in each one.As per Caesarstone,Pokarna and others,it should be 93% quartz and 7% polymer resin.Lab results of Caesarstone indicated less than 90% of quartz.
2.Less than 93% of quartz may be because of the 20% increase quartz raw material in the last 2 years.(Need to find out what is pokarna’s agreement with Chettinad group for quartz on pricing).
3.Quartz is no longer a premium stone,there is a new stone called Dekton from a Spanish company called Cosentino is the new premium stone in the kitchen countertop.
4.Market Share gains by Caesarstone in US is not true.They looked at the import data for quartz into US and found that many other players were gaining market share from Caesarstone.Can be verified using this link:
http://www.stoneupdate.com/us-stone-imports/analysis-mid-yearannual/920-test-of-tables
This link shows imports from Indian increased 200% from Q1 of 2015 to Q2 of 2015.
5.Gross Margins of 42% in US is overstated because they included their FX gains,their margins in Singapore and Australia are 32% and 25% respectively.This is despite being a B2C player.Now,if we look at Pokarna’s margins it is more than 70% gross and 25% Operating margins.
6.I have seen some reports using Freedonais’ research report to identify market share gains of stone players.Spruce points mentions that Freedonia made those reports on behalf of Caesarstone and not completely unbiased.
POKARNA LTD ( Stock opportunities ) (31-08-2015)
Guys,Forgot to add a couple of points.
1.Daltile used to have Caesarstone as their quartz supplier ,now they do it with Pokarna under the brand name of One Quartz.
2.They also mentioned about the sprecupoint capital management’s findings about the caesarstone’s misleading facts about their business.This is the link for that post if you want to take a look,i will post those points in the next post.
http://www.sprucepointcap.com/cste-ltd/
Hi @varun_kejriwal ,sure I will wait for few more days for others to post in their questions if there are any.I will collate all the questions and talk to the company again.Whatever i did was a pure journalistic work,jut gathering the information and publishing them as is.need to wear a real analytical hat and analyse,dissect the story in every angle like the seniors of this forum if we want to take a significant position.
On your question of finding the price difference,i think we can do by comparing the prices in Caesarstone and daltile website,we might get an idea.But Caesarstone is marketing their product as a premium one and hence,there may be some premium price than others.
After talking to the company, following questions came upto my mind:
1.If Breton technology is considered to be superior technology,then we need to find if Pokarna the low cost producer among the quartz players who uses Breton technology?
2.Is there any chinese player using Breton ?Here is the list of companies uses Breton:
http://www.breton.it/engineeredstone/en/product/Plants_for_manufacturing_compound_stone/WEB_LINKS_TO_THE_MAIN_BRETON_COMPOUND_STONE_MANUFACTURERS
3.Have written to the Breton,Italy to confirm if they offer their technology one player one country or multiple players could get their technology.
4.Warranty Information:
We need to find the warranty policy of various players like Caesarstone,cambria,Siletone alongside Pokarna? Current AR of pokarna has no mention about contingent liabilities related to warranty claims.
5.@Maheshcm has been doing some work in US talking to the industry people and doing some scuttlebutt. I spoke to him couple of times,he said he will update us his findings soon.I will try my best to talk to some distributors as well and gather the information.
End Customers:
1.How much is the total cost of buying and installing quartz compared to granite?
2.Percentage of cost the customer is spending for kitchen countertop in the overall cost of house? If it is under 5%,then shift to quartz from other stones could happen faster considering the merits of engineered stone.
3.Quartz is relatively a new one in the countertop industry,need to know from the early adopters how do they feel about it after few years of use?Are these adavantages of quartz (Scratch resistant,non porous,no chipping,no sealing needed,durability,heat and chemical resistant) really true?
Granules India Ltd (30-08-2015)
Motilal Oswal initiating coverage on Granules India –
http://www.motilaloswal.com/Financial-Services/Research/Detailed-Report/Initiating-Coverage/13875
Page industries (30-08-2015)
what an adjustment. Less than 2%…even company will not be able to predict that with precision.
God bless the analyst and their wonderful work using excel.
Granules India Ltd (30-08-2015)
One thing for sure that promoters’ are very market savvy. They timed their warrants when lots of exits by long term investors/PEs were happening. Two benefits, one they got it slightly cheaper and second it boosted investor confidence for short term.
Disc: invested but looking to exit at a better price.