One of the risks in Natural Capsules story that I see is as following –
All the innovation, cost savings, speed, energy savings etc. are happening because of technology developed by DBDS robotics. My understanding is that this technology is not exclusive to Natural Capsules. DBDS is free to sell these latest machines to any clients they can get.
This combined with the fact that capex to put a new line of capsules is not very high (sub 50cr).
So natural capsule is more of an early adopter of latest technology developed by DBDS and that is the advantage they have. With low capital requirement & easily available technology, any advantage of technology will not be durable and eventually all the efficiency benefits would have to be passed on to the customers (B2B, large customers). This is like Textile industry where everybody moves to latest technology and nobody makes above average ROCE.
A caveat to above observations is that – this is more like a terminal risk where it can take multiple years for this risk to play out. In the meantime, a company can manage to maintain some advantage over a few number of years and investors might make decent amount of money.
Disc – No investments
P.S. The gallery page of DBDS robotics is quite interesting. Both AGC and Lonza have visited DBDS premises to look at the machines.
https://dbdsrobotics.com/gallery.html
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