@Ravi_Hegde I agree the narrative of Globus being a commodity chemical company
Having said that, this year is quite unprecedented scenario. Worldwide, we see the inflation across the Globe which it not see in past 50-60 years. Specific to Globus’s raw material, Coal prices have spiked almost three time. To my knowledge, such as steep price increase have not happened in past 10-20 yrs. Cement manufacturers(even the cheapest producers like Sanghi) did also suffer in past 5-6 months. We can hope for this unusual times will normalize, and the investments made in growth yields results. But as you said, we are at the mercy of commodity (fuel, grains, packaging) prices cooling. From conference call, one aspect I personally must appreciate that they are looking for cheaper alternatives of sourcing the raw material by way of sourcing it via coal linkages with Coal India’s subsidiaries. The market is not in company’s control but the intent indicates the management’s willingness and capability to work around.
On the flip side, some of the management members appeared to be overboard on the call. One of the member providing 100% assurance on Govt’s behalf to increase Ethanol pricing given the cost pressures.
During the conference call, management stated that the margins for Q2 will be even worse than Q1 , They expect margins to get better from Q3. (Subject to terms and condition i.e. commodity prices
)
In terms of growth however, growth story is indeed intact as @Ravi_Hegde has mentioned!
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