Pragnesh’s portfolio

Jyoti resins

MOATS

=I think, their business model(focused on hardware shops and carpenter) is the reason for their excellent past track record

=Customer first@Main strategy
(No middle man)

1…Investment in working capital(receivables)
(Advantage to retailers-Hardware shops)

=Increased debtor days in new states and stable debtor days in mature states-That is growth strategy of company

=These will increase receivables and debtor days.As per company, they have nil debt and dont need major capex in near future. So, they are growing by investing in working capital(increasing receivables)

=Due to new software, they are able to identify bad loans.

=New big companies ask retailer for early payment. Today, we are not working in that strategy. Today, we are working in Delhi and UP with120 days cycle.The reason is that
we cannot ask for that payment till the time our product does not
penetrate there and we don’t get repeat orders.

2…Discount/scheme to customers
(Advantage to retailers-Hardware shops)

=All the companies push the material to the retailers, there is no scheme, meaning no discounts.Then with
the company’s the retailation will be spoiled.

=We are passing extra profit to custumers (hardware shops)when margin is high .

3…Carpenter reward model
(Advantage to carpenter)

-We have one of the best and highest rewarding carpenter rewarding model in the industry

• Reward & loyalty programs are devised state wise
• Company app provided to carpenters for claiming and redeeming points. Slab systems created on usage basis
• 3.5 lac carpenters currently registered under this programme

4…Network

-Presence in 14 states

• Operating through 60 distributors for smaller cities
• Operating through 35 branches for bigger cities (metros)
• Selling to 12,000 active retailers & working with 3.5 lac carpenters
• 400 sales executives & business development executives

5…Low cost manufacturing;
(Asset light)

-Overall manpower costs is limited to 15-16% of revenues

• Selling and Distribution expenses maintained under 12%
• Asset turnover is at 8x
• Amongst the highest EBITDA per tonne vis-à-vis peers
• Working capital efficient hence No Debt and OCF & FCF positive

6…Diversified product portfolio

-The company offers a wide range of products with several features and catering to different substrates such as :

• Anti Termite -Water proof -Fast drying
• Wider coverage -Fungal resistance -Heat resistance
• Weather proof -High fixing strength
• Cold and hot press applications
• Multi purpose uses for Wood, PVC and Acrylic

Disc…invested