What is Manganese: Manganese is a grayish-white, usually hard & brittle metallic element that resembles iron but is not magnetic.
Application of Manganese

1. Alloys
2. Electrolytic Manganese Dioxide
3. Electrolytic Manganese metals
   End Use sector:
4. Industrial
5. Construction
6. Power storage and electricity: Manganese is one of the key components of lithium-ion batteries. The main use in EV batteries is in the cathode, which is the positive electrode. Nickel + Manganese + Cobalt (NMC) offers high energy density, good thermal stability, and long cycle life.
   On the conventional vehicle requires 11.2 Kg of Manganese while for EV vehicle requires 24.5 Kg of Manganese.

Company name: Sandur Manganese and Iron Ores Limited(“SMIOR”) for future ready!!!
The company has expanded beyond mining operations to include the production of Ferro Alloys, Coke, and energy.
SMIOR has 110 MT iron ore reserves, 17 MT Manganese ore reserves, 3rd largest manganese ore mining company in India, and 1999 hectares of mining area.
Mining Manganese and iron ores from two mining leases located in Sandur (Karnataka)
Fully mechanized iron ore mining contributes to higher margins.
The company has set up a hybrid renewable energy plant (42.9MW) in an SPV to cater to the growing energy needs of its ferroalloys.
Two waste heat recovery boilers with a cumulative capacity of 32MW set up to generate clean energy.
Key Milestones for the FY24:

1. Received environmental clearance for mining expansion from 1.6MMT to 3.81 MMT of iron ore (which can be further expanded to 4.36MMT) and Manganese 0.462 MMT
2. ⁠42.9 MW captive hybrid renewable energy product.
3. ⁠Commenced exports of iron ore after lifting of export restrictions in May 2022
4. ⁠SMIOR crosses $1.3 billion in market capitalization.

Financial:
FY23 FY24 Q1FY25
Revenue in Cr 2185.01 1334.80 624.73
EBITDA in Cr 451.62 402.80 214.00
% 20.67% 30.18% 34.26%
PAT in Cr 270.79 239.50 144.49
% 12.39% 19.05% 23.13%
EPS in Rs 101.23 14.80 8.92

Strategic business acquisition of ARJAS STEEL is a real help of SMIOR:
ARJAS Steel is among the top 5 players in this very specialized steel manufacturer in the industry.
The 80% of the company stake has been acquired by SMIOR and 19.12% by BAG Holdings Private Limited in April 2024.
Arjas is valued at an enterprise value (EV) of Rs.3000 crore. After the acquisition, combined value of SMOIR and ARJAS is expected to be Rs. 15000 Crore.
Revenue will be reflected in 6 to 7 months in the account book of SMOIR.

Key highlight of ARJAS:

1. A specialty steel company focused on high quality auto grade special Bar quality (SBQ) steel.
2. ⁠Integrated manufacturer from coke, sinter,hot metal and billets, to value-add bars and bright bars.
3. ⁠Marquee OEM clientele (direct and via supply chain),PV – Hyundai, Mahindra, Maruti, Ford.CV and off-road – Tata motors, Eicher, Escorts.2W – Royal Enfield, Honda, TVS, Hero, Suzuki.
   Snapshot:
4. 5 LPTA manufacturing capacity with a potential revenue of ~ Rs 5000cr.
5. ⁠20 MW captive power capacity (Solar + waste -heat)
6. ⁠2 production facilities, one each in Andhra Pradesh and Punjab.
7. ⁠Sizable land bank and infrastructure to expand up to 1 MTPA in the future.
8. ⁠Revenue and EBITDA growth and a robust balance sheet.
9. ⁠Working on product development nonauto like railways, energy EVs, and exports.

You cannot look at WIL solely with a financial lens. Not for now at least. Even small changes and improvements may not be appreciated, nor fully understood.

This is a legacy company which has suffered an unfathomable amount of misery & torture for years, and finally finds itself with one last chance, propelled with domestic tailwinds, government needs, nuclear power demand (very few can produce what WIL can), and equipped with astute investor backing.

Turnarounds like these are very difficult to stomach, as they aren’t straightforward and they take their own time.

@Ghonarbochon has explained well. The story is far from complete. If the picture all the investors have in their minds, manifests to even 50% – it’ll be a fantastic story. A fairytale & worthy of a case study.

Early entrants may get a long ride but it will require a lot of patience, government & industry support, and managerial execution.

Glenmark Life Sciences Q1 FY25 Analysis: Key takeaways!!

Glenmark Life Sciences has shown signs of recovery in Q1 FY25 with 9.7% quarter-on-quarter growth in revenue, reaching INR 588 crores. The company witnessed broad-based growth across geographies, with the Generic API business clocking a revenue of INR 535 crores, up 10.5% QoQ and 6.2% YoY. The CDMO segment also showed promising growth, with revenues increasing by 20.2% QoQ to INR 43 crores.

Strategic Initiatives:

1. Expansion plans: GLS is focusing on capacity expansion with additional capacities at Ankleshwar and a new pharma capacity at Dahej becoming operational in Q2 FY25.
2. CDMO growth: The company is actively pursuing growth in its CDMO business, with two new projects expected to start commercial supplies by Q3/Q4 FY25.
3. R&D investment: GLS is planning to build its own R&D center to facilitate new technology platforms and portfolio expansion.

Trends and Themes:

1. Recovery in demand across geographies
2. Focus on chronic therapies (67% of revenue in Q1 FY25)
3. Increasing interest from specialty pharma companies in the CDMO segment

Industry Tailwinds:

1. Improving global economic outlook
2. Rebound in pharmaceutical demand
3. Growing interest from innovative pharma companies due to the CHIPS and Science Act

Industry Headwinds:

1. Geopolitical tensions affecting supply chains
2. Challenges in Europe’s demand outlook
3. Raw material price volatility, especially in solvents

Analyst Concerns and Management Response:

1. Concern: Gross margin decline
   Response: Management attributed this to discontinuation of PLI benefits and unfavorable product mix, expecting margins to stabilize or improve from current levels.

2. Concern: Dependence on Glenmark Pharma
   Response: Management emphasized that the relationship remains strong, with GLS supplying 90%+ of Glenmark Pharma’s API needs. They also noted that other business segments are growing faster, naturally reducing dependence.

3. Concern: Environmental compliance issue at Ankleshwar plant
   Response: Management expressed confidence in resolving the issue quickly and catching up on any production loss within the quarter.

Competitive Landscape:
GLS appears to be well-positioned in the API market with its diverse product portfolio and growing CDMO business. The company’s focus on expansion and new technology platforms suggests efforts to strengthen its competitive position.

Guidance and Outlook:
Specific numerical guidance wasn’t provided, but the management expressed confidence in continuing growth momentum in coming quarters with stable margins. They expect the CDMO business to reach INR 500-600 crores in the next 4 years.

Capital Allocation Strategy:
GLS plans to invest INR 300-340 crores in capex for FY25, with an additional INR 350-400 crores for the Solapur facility over the next two years. The company intends to fund these investments through internal accruals, maintaining a debt-free status.

Opportunities & Risks:

Opportunities:

1. Growing CDMO business
2. Expansion into new technology platforms
3. Increasing demand from specialty pharma companies

Risks:

1. Regulatory compliance issues (e.g., recent environmental notice)
2. Raw material price volatility
3. Geopolitical tensions affecting supply chains

Regulatory Environment:
The company faces stringent regulatory requirements, as evidenced by the recent environmental compliance issue. However, management appears committed to addressing these challenges promptly.

Customer Sentiment:
Customer sentiment seems positive, with growing demand across geographies and increased interest in the CDMO segment from specialty pharma companies.

Top 3 Takeaways:

1. GLS shows signs of recovery with 9.7% QoQ growth, driven by broad-based growth across geographies and segments.
2. The company is actively expanding capacity and investing in new technology platforms to drive future growth.
3. While facing some near-term challenges (gross margin pressure, environmental compliance), management appears confident in resolving issues and maintaining growth momentum.

Any update on the guidance front?