@ishikaghose – I don’t have technical stops like those anymore. At least i cant remember the last one (maybe time technoplast was the last that triggered technically that i remember). It could just be that i have been lucky that most have performed but i have had a few fundamental stops that got triggered (HOEC for eg. twice last year) and KPT now.
@cathene – KPT my thesis appears to have been flawed. It might still do well subsequently but numbers don’t indicate what I had assumed. I still hold some shares to scale up in the future in case my thesis is still right (like in HOEC when it went wrong twice but is now eventually right)
Welspun corp, Monthly – 13 year rounding bottom. I believe this time it has enough to break the 300 barrier and reach beyond.
The company is guiding for a 15000 Cr topline and 1500 Cr EBITDA and 10% EBITDA margins and good uptick in RoCE to 16% for FY24. The order book suggests that guidance may infact be slightly conservative.
Line pipes business is doing very well having delivered > 1 million MT in FY23. The current order book is at 1.1 million MT in line pipes (14,600 Cr) and bid book at 2.5 million MT (ATH). So line pipes alone may meet the FY24 guidance if they execute this order book.
The installed capacity is 2.2 million MT, so there’s good chance that they could deliver higher volumes in FY24.
The rest of the businesses in Pig Iron/DI pipes used to transport water are also doing quite well as is the TMT bars and stainless steel pipes. (Source). They had acquired Sintex plastics business and ABG Shipyard as well at good valuations. Sintex market share has declined to 9% from 25% and the target seems to be to restore this business to past glory. ABG shipyard business is more an optionality at this point and I haven’t considered it in valuation.
I believe the stock is trading quite cheap at current valuations and a 8-10x EV/EBITDA multiple will mean there’s a chance to make a 2x here. Also the debt repayment from the 1500 Cr EBITDA should help reduce the interest burden and deliveraging will further improve the bottomline.
Disc: I have positions in the stock at 260 levels. I am not SEBI registered and could be wrong with my thesis. Please do your own due diligence.
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