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
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