very concise analysis. it gives a preliminary hint about the nature of business company doing.
Few questions : –
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In FY 20 and FY 21, operating margins were suddenly high , 26% and 35% while long term average had been around 19%. What was the exact reasons for this sudden rise for just 2 years and is there any such future possibility of this happening?
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PE re-rating has happened in last 2 years. Past 10 year average PE has been 20 , while 5 year average has been 40…but from last 2 years , PE has been re-rated and in the range of 65-70. Is this sustainable? and if so why? I mean, is there any change in nature of business.? You have said that they don’t want to go in forward integration direction, then what is this PE expansion due to?
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When I see a long term Stock Price chart , what I observe is, whatever big move that has come in the price , is only after March 2020…But from 2005 till 2020 , its a normal earnings growth reflected in price. So what was happening in this business during those years?
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After 15-20 years of good business performance, its still under smallcap category. Is there a chance that in next 10 years, it can become a large cap company? Is there such business scope or it will remain as a small cap company ,all its life?
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Compared to Deepak Nitrate, I know they both have different product categories and different chemistry. .but just for assumption, I want to paint them with same brush as chemical companies, then which one out of them has Target market so big and scope such that it can become a large Cap company?
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