What about the taste differences even if the items are the same? People who like BK’s taste will go there, and not to McD, even if McD prices its items lower than BK, and offers same quality. I cannot recall the taste difference between Coke and Pepsi, but they have been in business for decades. So can an argument exist for all these different QSR businesses to coexist and grow?
No investment in any QSR, interested in the broad theme.
He is the co-founder at MK ventures, along with Madhu Kela. Although, it appears he has invested in his personal capacity, not as MK ventures, and Madhu Kela isn’t in. Which is fine.
The preferential was at around 114/share right?
Ajay Upadhyay has gotten in earlier, I believe around 50-70ish.
Things were not good in recent past thats why this is a turnaround investment opportunity.
If management execution was good this would have been a 10-15kcrs marketcap company instead of 800crs marketcap
The bet here is on potential turnaround in next 2-4 quarters driven by renewed management focus, hug fund raise and industry tailwinds.
Poor Q3 results were already known to the market because of labour strike which lead to 30crs revenue loss and profitsbility. Please read press release in detail.
We can’t keep on discussing what happened in the past as its irrelevant to the investment thesis.
What needs to be discussed is what kind if numbers the company can post.
Also, if you are not convinced that the turnaround is possible then please skip this. There are many other opportunities available in the market!!!
Good summary. You got mixed up with distribution and DaaS. DaaS has been their best performing vertical.
Now that all the acquisition led growth is accounted for, it will be interesting to see how their Q4 numbers will look like (Adara was acquired in Q4FY23) since it will be all organic growth. Frankly I feel Rategain should be able to cross the 1000cr revenue for FY24 (or come very close to it) as Q4 has historically been their best quarter. Also, the management has been always under promised with their guidance, so realistically, I will be surprised if it takes them 3 years to double their revenue, especially if they do acquire another company or 2 in the due course.
Disc : Invested and biased.
Shree PAcetronix – Although QoQ results in Q3FY23-24 have been a little dismal. Overall 9MFY23-24 has been good enough. We see growth in Sales Revenue, Net Profit and EPS too.
Why then the share’s price has been rolling down in such a hurry? What is that info about the company, which is not available in the public domain?
Pref funds allotte list include Ashish Kacholia, Tushar Bohra (i think he is associated with MK Ventures)
Notes from caprize investment managers:
Funds raising Plan is to invest 100cr over the next 18m for capex with possible asset turn of 10x. The company aims to achieve a turnover of Rs. 1,500 crores to Rs. 2,000 crores per annum in the next five years, with EBITDA margins of 20% to 22%. FY23 rev stood at 322cr.
What does the company do?
Manufactures hardware for launch vehicles (SSLV, PSLV, GSLV); equipment for nuclear reactors; marine gearboxes for naval frigates, corvettes, submarines, missile hardware/launchers, etc
Key Segments
Aerospace: Solid Propellant Motors, Nozzle End Segments, and Strap-On Motors
Missiles: Motor-casings for tactical and strategic missiles
Defence: Mobile Missile Launchers, Mobile Bridges, Containers and Launchers
Nuclear: Heat Exchangers, Calandria, End Shields, and Shield Tanks
Industrial products: Gearboxes, Castings, Centrifugal Machines and Crushing & Grinding Equipment
Key Clients: ISRO, BDL, HAL, DRDO, NPCIL
With the massive Make-In-India push along with rising intensity of public-pvt partnership in defense, we believe the company could be on the verge of a MEGA turnaround with major push coming from ISRO/Aerospace and the Defence/Missile program.
What to monitor?
Order Book – 822cr as of last qtr, 1500cr of offers in the pipeline. Potential: 3x with ISRO OB, 2x with Missiles, 3x with NPCIL
Debt reduction – Current total debt 478cr (LT 261cr)
But how does one evaluate a company with highly checkered past, limited/narrow public information/understanding.
While the past performance has been abysmal (300cr+ cumulative losses), Definitely a watchlist candidate for the next 4-6 quarters!
Personal opinion on the basis of recent conference calls [Q4FY21/FY22/FY23 and Q2FY24]:
Easy to understand business which makes value for money non-leather footwears for the masses with a decent brand recall. However, business performance in recent times has been below par due to the super relaxed attitude of the owner operator (OO) at the top. For lack of sales growth or lower OPM, the OO provides similar reasons in every interaction without any concrete mitigation plan: competition, market share protection, inflation, monsoon, war etc. It makes me feel as if every problem of the world is a hurdle to sell items that are mostly priced below Rs. 200.
An aspiring management can easily convert the business potential to sales/profits by:
It seems all the above are evident to market participants. They also hope that the jockey will be changed sooner or later, resulting in numbers that reflect the true potential of the business. Hence, the super premium valuations.
Disc: No position.
Investors are excited about Ammonia plant commissioning. However, we need to take following points –
(1) Gas based ammonia plant economics depends on Gas prices. As Gas prices are fluctuating a lot, economics of the ammonia plants also get fluctuating a lot ! As per management, new ammonia plant pay back period is 7 to 8 years !!. If Gas prices goes high, imported ammonia gets cheaper!!.
(2) Government also pushes green ammonia to minimize reliance on import gases. This concept is very much linked with green hydrogen economics. Considering innovation and world push on green hydrogen, this one should not ignore . (Good article link)
Regarding Ammonium Nitrate – Government is more focused on farmers and do all they can do to reduce burden on farmers by controlling fertilizers prices and its inputs. Russian and China has excess capacity. Slow down in China, could be another risk of cheap AN import.
Main customer of TAN – Coal mining. Coal India looking all option for cheap TAN and govt always help them by allowing cheap import form China and Russia.
Company has significant debt on its book and invested capital has future risk. Hence, we need to wait and watch for few qtrs. I think company has tough time ahead and unless there is significant margin of safety, it might not give good return on investment for investors
Disc – Not invested but tracking as I believe promoters capability of execution !!