Posts in category All News
Buck stops with Modi govt, not NTA chief, as four exams cancelled in past 10 days: Congress (23-06-2024)
Trouble brewing in Maharashtra Congress (23-06-2024)
Third Eye: Party offices shift, yoga struggles, and RaGa’s farewell (23-06-2024)
Hinduja rejigs fundraise plan for Reliance Capital deal (23-06-2024)
The SME portfolio (23-06-2024)
Went through Screener and the BSE website to do a quick 45 min research on the company. My initial findings:
Pros:
- Patented Tech - There is no proper solution in the world for the effluent treatment except the TRL RAIN patented technology. There is no technology to treat BBD water to regulatory norms requirements in the world, so Coca-Cola approached TRL. Trials were conducted on the patented TRL RAIN technology pilot plant, and the trials were highly successful, demonstrating the effectiveness of the TRL RAIN technology in treating BBD wastewater and RO reject water. These excellent results have opened significant opportunities in the beverage industry for the TRL RAIN patented technology, which will result in further revenue generation for the company. TRL anticipates substantial growth in the beverage industry sector, which will help improve its bottom line. So this looks to me like the biggest trigger for this company. If we can monitor this and validate how much of this is accurate in terms of a) how big of a true patent this is and how long will they be able to leverage it b) How soon can they translate this to real order books c) and how much bottom line $$ are we talking about if they implement this across the beverage industry
- ROE/ROCE/Margins/PAT, all have shown good improvement in FY24
- No FII/DII yet (I personally look at this as a positive for SMEs as long as I feel like the company is legit and has great growth prospects)
- Promoter has a large stake which they have been holding onto
- Tailwind sectors (Water, Energy, renewables) with a large TAM.
- Top clientele - ISRO, Jindal Power Ltd, AMI Organics Ltd, Vardhman Group (M.P.), Asian paints, GSP Crop Science, Torrent Pharma, Bharat Heavy Electricals, Toyota Industries and Engines Ltd, Cairn India
Negatives - Company generated almost entire revenue in FY22 from supply of goods only. Need to dig more into this to understand what’s the revenue breakout across its business lines/capabilities like manufacturing vs EPC kind of work
- Cash conversion cycle is high
- The rating continues to be flagged as “Issuer Not-Cooperating” and is based on the best available information.
- Receivables are high, long standing debtors
- Looks expensive PE wise but again it is lower than its 5 year median so not entirely sure what to make of it. Anyway, for SME stocks, looking at PE makes little to no sense to me
The harsh portfolio! (23-06-2024)
Massive and abrupt climate change which is evident in India and across the world can have both positive and negative impact on companies producing agricultural products.
Some of the earlier assumptions while investing in such companies from long term perspective may need to be re-looked. Erratic monsoons may have impact on their earnings in earlier high earning seasons. Also these companies may have to invest more in R&D to produce new products. Companies having exposure to IoT may able to work closely with farmers and understand their needs better.
I believe this could be an area of good research for investors as well.
I may be wrong in my analysis as have no expertise in this domain.
Mutual Funds I am investing (23-06-2024)
Any impact on investors who already hold QUANT Funds?