Good study, but the market cap and order book is not justifiable according to me, also forward PE will be so high for this as the EPS growth is just 25% with a not a very healthy ROCE and ROE numbers.
Posts tagged Value Pickr
Neuland Laboratories Limited – Transformation towards niche APIs? (20-10-2024)
Typical Neuland culture, shall invest once they have confirmed customer requirement
Newgen Software (20-10-2024)
Hemant, Newgen isn’t just focused on document management systems; it also offers a low-code platform that allows both clients and Newgen itself to rapidly build products for various verticals, such as loan management, supply chain finance, customer onboarding, and more.
If you’ve been following Newgen for some time, you might recall that after COVID, a regulatory change in the U.S. created a demand for specific software. In just a month, Newgen developed a solution using its low-code platform to meet this requirement, making an entry into several smaller U.S. banks. In the U.S., Newgen’s competition includes Pega Systems, Appian for low code platform. Cracking the U.S. market would be a major win for Newgen, as it would be the only Indian product company competing directly with Pega in this space.
Just a couple of days ago, Newgen announced on the NSE that it has been featured in the Gartner Magic Quadrant 2024 for low-code platforms. I haven’t been able to find the 2024 Gartner document yet, but if Newgen is indeed featured, it would be the first Indian company to appear in that quadrant.
One of the things I really admire about Newgen is its employee retention. I have a couple of friends who have been working there for over 10 years, which speaks volumes about their employee retention policy.
And yes, valuation is definitely high, which is for everything in this market, but I am hoping it to crack US market, and if it does, I hope that it shows real product business operating leverage kick in.
Disclosure – Invested. Biased. Holding from Rs 250 level.
Apar Industries (20-10-2024)
I can see day payables=140 whereas receivables at 89. However, FY24 still shows a negative operating cash flow of -283 cr at operating profit of 1556 cr. Any specific reason for this or am I misreading it?
Kaynes Technology India Limited (20-10-2024)
About Kaynes Technology India Limited
Kaynes Technology India Limited is a leading player in the electronics manufacturing services (EMS) industry in India. Established in 2008, the company specializes in providing end-to-end solutions for electronic manufacturing, including design, assembly, testing, and logistics. Kaynes serves various sectors, including automotive, industrial, aerospace, and telecommunications, with a comprehensive product portfolio that encompasses over 300 electronic products. The company is recognized for its commitment to quality, innovation, and customer satisfaction, and it has established a strong presence in both domestic and international markets.
Key Points:
• Business Verticals:
• OEM - Turnkey - Box Build (39%): Specializes in delivering ‘Build To Print’ or ‘Build to Specialization’ services, catering to diverse industry verticals from complex box builds to sub-systems.
• OEM - Turnkey Solutions - Printed Circuit Board Assemblies (PCBAs) (56%): Encompasses PCBAs, cable harnesses, magnetics, and plastics, ensuring seamless manufacturing from prototyping to mass production.
• Original Design Manufacturing (ODM) (2%): Offers solutions such as smart metering, smart street lighting, BLDC technology, and IoT solutions.
• Product Design & Engineering (3%): Provides engineering services including embedded design, firmware and software development, and mechanical design.
• Revenue Mix (9M FY24):
• Automotive Industry: 31%
• Industrial (including EV): 44%
• Medical: 3%
• Railways: 11%
• Consumer: 8.37%
• Aerospace/Defence: 2%
• IoT/IT: 7%
• Approximately 85% of revenue came from India during FY23.
• Order Book: As of January 2024, the order book stands at ₹3,789 crore, up from ₹3,000 crore in June 2023, with an average order value increasing to ₹9.1 million in Q3 FY24 compared to ₹5.5 million in FY21.
• Customer Base: Notable clients include Siemens, Hitachi, IJL, Agappe, Tonbo Imaging, and Iskraemeco, among others.
• Manufacturing Facilities: Kaynes operates 14 manufacturing facilities across various states in India, equipped with 18 SMT lines, 70 THD lines, 26 cable harness lines, and 15 plastic molding machines.
• Expansion Plans: The company is setting up a new manufacturing facility in Karnataka and expanding existing facilities in Mysore and Manesar, as well as establishing an OSAT facility in Telangana. Kaynes has signed MoUs with the Governments of Telangana and Karnataka for investments totaling ₹6,550 crore to develop OSAT and PCB facilities.
• Acquisition: In December 2023, Kaynes acquired 100% of Digicom Electronics Inc. (USA) for USD 2.5 million, enhancing its electronics manufacturing capabilities.
• Fund Raising via QIP: In December 2023, the board approved the allotment of 57,75,577 equity shares at ₹2,424 per share, aggregating to ₹1,400 crore.
Business Strategy:
Kaynes Technology’s business strategy revolves around innovation, quality, and expansion. Key elements include:
Focus on High-Value Markets: Targeting industries like automotive and aerospace, which demand high reliability and quality in electronic component.
R&D and Innovation: Investing in research and development to innovate and enhance product offerings, staying ahead of technological advancements.
Geographic Expansion: Exploring opportunities to expand into international markets, thereby increasing revenue streams and reducing dependence on the domestic market.
Strategic Partnerships: Collaborating with key players in various sectors to strengthen its market position and enhance product capabilities.
Sustainability Initiatives: Committing to sustainable practices in manufacturing to meet global standards and customer expectations.
Business Model:
Kaynes Technology operates a business model characterized by:
Electronics Manufacturing Services (EMS): Providing a range of services from design to manufacturing and after-sales support.
Customized Solutions: Tailoring products to meet specific client needs, which helps in building long-term client relationships.
Lean Manufacturing Practices: Implementing efficient production processes to minimize waste and reduce costs while maintaining quality standards.
Board of Directors:
Key leadership includes:
K. S. Kumar (CEO): Leading the company with a vision for growth and innovation.
R. B. Shenoy (CFO): Responsible for financial strategy and management.
V. P. Nair (COO): Overseeing operations and ensuring efficiency across manufacturing processes.
Dr. Anil Gupta (Board Director): Providing expertise in technology and strategic decision-making.
Shareholding Pattern (as of September 2024):
Promoter and Promoter Group: 60.15%
Foreign Institutional Investors (FIIs): 12.00%
Domestic Institutional Investors (DIIs): 15.50%
Public Shareholding: 12.35%
Strengths:
Market Position: Established reputation in the EMS sector, with a strong focus on high-value markets.
Diverse Client Base: Serves various industries, reducing dependence on any single sector.
Robust R&D Capabilities: Continuous innovation drives product development and keeps the company competitive.
Quality Assurance: Strong emphasis on quality and reliability enhances customer trust and loyalty.
Efficient Manufacturing: Implementation of lean manufacturing practices leads to cost-effective production.
Weaknesses:
Dependence on Key Clients: Reliance on a few major clients can pose risks if contracts are lost or reduced.
Market Volatility: Fluctuations in demand in key sectors can impact revenue stability.
Limited Global Presence: While expanding, Kaynes still relies heavily on the domestic market, which may limit growth potential.
Supply Chain Risks: Global supply chain disruptions can affect manufacturing and delivery timelines.
Opportunities:
Growing EMS Market: Increasing demand for electronic components and manufacturing services presents significant growth opportunities.
International Expansion: Exploring new markets can diversify revenue streams and reduce risks associated with domestic dependence.
Emerging Technologies: Opportunities in sectors like IoT, AI, and automation could lead to new product development and revenue growth.
Threats:
Intense Competition: The EMS industry is highly competitive, with numerous players vying for market share.
Economic Downturns: Economic slowdowns can negatively impact demand for electronic products and services.
Technological Advancements: Rapid technological changes require continuous adaptation and investment in R&D.
Disc- Invested 5% of my portfolio
Kaynes Technology India Limited (20-10-2024)
About Kaynes Technology India Limited
Kaynes Technology India Limited is a leading player in the electronics manufacturing services (EMS) industry in India. Established in 2008, the company specializes in providing end-to-end solutions for electronic manufacturing, including design, assembly, testing, and logistics. Kaynes serves various sectors, including automotive, industrial, aerospace, and telecommunications, with a comprehensive product portfolio that encompasses over 300 electronic products. The company is recognized for its commitment to quality, innovation, and customer satisfaction, and it has established a strong presence in both domestic and international markets.
Key Points:
• Business Verticals:
• OEM - Turnkey - Box Build (39%): Specializes in delivering ‘Build To Print’ or ‘Build to Specialization’ services, catering to diverse industry verticals from complex box builds to sub-systems.
• OEM - Turnkey Solutions - Printed Circuit Board Assemblies (PCBAs) (56%): Encompasses PCBAs, cable harnesses, magnetics, and plastics, ensuring seamless manufacturing from prototyping to mass production.
• Original Design Manufacturing (ODM) (2%): Offers solutions such as smart metering, smart street lighting, BLDC technology, and IoT solutions.
• Product Design & Engineering (3%): Provides engineering services including embedded design, firmware and software development, and mechanical design.
• Revenue Mix (9M FY24):
• Automotive Industry: 31%
• Industrial (including EV): 44%
• Medical: 3%
• Railways: 11%
• Consumer: 8.37%
• Aerospace/Defence: 2%
• IoT/IT: 7%
• Approximately 85% of revenue came from India during FY23.
• Order Book: As of January 2024, the order book stands at ₹3,789 crore, up from ₹3,000 crore in June 2023, with an average order value increasing to ₹9.1 million in Q3 FY24 compared to ₹5.5 million in FY21.
• Customer Base: Notable clients include Siemens, Hitachi, IJL, Agappe, Tonbo Imaging, and Iskraemeco, among others.
• Manufacturing Facilities: Kaynes operates 14 manufacturing facilities across various states in India, equipped with 18 SMT lines, 70 THD lines, 26 cable harness lines, and 15 plastic molding machines.
• Expansion Plans: The company is setting up a new manufacturing facility in Karnataka and expanding existing facilities in Mysore and Manesar, as well as establishing an OSAT facility in Telangana. Kaynes has signed MoUs with the Governments of Telangana and Karnataka for investments totaling ₹6,550 crore to develop OSAT and PCB facilities.
• Acquisition: In December 2023, Kaynes acquired 100% of Digicom Electronics Inc. (USA) for USD 2.5 million, enhancing its electronics manufacturing capabilities.
• Fund Raising via QIP: In December 2023, the board approved the allotment of 57,75,577 equity shares at ₹2,424 per share, aggregating to ₹1,400 crore.
Business Strategy:
Kaynes Technology’s business strategy revolves around innovation, quality, and expansion. Key elements include:
Focus on High-Value Markets: Targeting industries like automotive and aerospace, which demand high reliability and quality in electronic component.
R&D and Innovation: Investing in research and development to innovate and enhance product offerings, staying ahead of technological advancements.
Geographic Expansion: Exploring opportunities to expand into international markets, thereby increasing revenue streams and reducing dependence on the domestic market.
Strategic Partnerships: Collaborating with key players in various sectors to strengthen its market position and enhance product capabilities.
Sustainability Initiatives: Committing to sustainable practices in manufacturing to meet global standards and customer expectations.
Business Model:
Kaynes Technology operates a business model characterized by:
Electronics Manufacturing Services (EMS): Providing a range of services from design to manufacturing and after-sales support.
Customized Solutions: Tailoring products to meet specific client needs, which helps in building long-term client relationships.
Lean Manufacturing Practices: Implementing efficient production processes to minimize waste and reduce costs while maintaining quality standards.
Board of Directors:
Key leadership includes:
K. S. Kumar (CEO): Leading the company with a vision for growth and innovation.
R. B. Shenoy (CFO): Responsible for financial strategy and management.
V. P. Nair (COO): Overseeing operations and ensuring efficiency across manufacturing processes.
Dr. Anil Gupta (Board Director): Providing expertise in technology and strategic decision-making.
Shareholding Pattern (as of September 2024):
Promoter and Promoter Group: 60.15%
Foreign Institutional Investors (FIIs): 12.00%
Domestic Institutional Investors (DIIs): 15.50%
Public Shareholding: 12.35%
Strengths:
Market Position: Established reputation in the EMS sector, with a strong focus on high-value markets.
Diverse Client Base: Serves various industries, reducing dependence on any single sector.
Robust R&D Capabilities: Continuous innovation drives product development and keeps the company competitive.
Quality Assurance: Strong emphasis on quality and reliability enhances customer trust and loyalty.
Efficient Manufacturing: Implementation of lean manufacturing practices leads to cost-effective production.
Weaknesses:
Dependence on Key Clients: Reliance on a few major clients can pose risks if contracts are lost or reduced.
Market Volatility: Fluctuations in demand in key sectors can impact revenue stability.
Limited Global Presence: While expanding, Kaynes still relies heavily on the domestic market, which may limit growth potential.
Supply Chain Risks: Global supply chain disruptions can affect manufacturing and delivery timelines.
Opportunities:
Growing EMS Market: Increasing demand for electronic components and manufacturing services presents significant growth opportunities.
International Expansion: Exploring new markets can diversify revenue streams and reduce risks associated with domestic dependence.
Emerging Technologies: Opportunities in sectors like IoT, AI, and automation could lead to new product development and revenue growth.
Threats:
Intense Competition: The EMS industry is highly competitive, with numerous players vying for market share.
Economic Downturns: Economic slowdowns can negatively impact demand for electronic products and services.
Technological Advancements: Rapid technological changes require continuous adaptation and investment in R&D.
Disc- Invested 5% of my portfolio
Puretrop Fruits Ltd (Previously Freshtrop Fruits Ltd) (20-10-2024)
Updated the forum title according to name change – https://bsmedia.business-standard.com/_media/bs/data/announcements/bse/19102024/dbdd8944-89e0-45de-8021-c3a31a9f697d.pdf
Puretrop Fruits Ltd (Previously Freshtrop Fruits Ltd) (20-10-2024)
Updated the forum title according to name change – https://bsmedia.business-standard.com/_media/bs/data/announcements/bse/19102024/dbdd8944-89e0-45de-8021-c3a31a9f697d.pdf
Kotak Mahindra Bank – Low Cost Liability Banking Franchise (20-10-2024)
A very lazy calculation without much rigor, by projecting full year numbers for subsidiaries
Kotak Life: 3x embedded value
16000*3 = 48000crores
Kotak prime: 9650crores = 2x book value: 19300crores
Other lending subsidiaries book value 5000crores valuation 2.5x book value = 12500crores
Kotak Securities: 20x Earnings : 20* 1700crs = 34000crores
Kotak AMC = Average assets under management = 12% of average assets under management 470000crores = valued at 56000crores
Kotak Mahindra Capital: 6000crores
Others subsidiaries: 5000crores
Total:180000crores
Holding company discount 20%
Value of subsidiaries at 145000crores
Current market cap at 371000crores
Ex subsidiaries: 371000-145000 = 226000crores
Core standalone book value : 110000crores, core price to book at current market cap at 2.05x
Kotak Mahindra Bank – Low Cost Liability Banking Franchise (20-10-2024)
A very lazy calculation without much rigor, by projecting full year numbers for subsidiaries
Kotak Life: 3x embedded value
16000*3 = 48000crores
Kotak prime: 9650crores = 2x book value: 19300crores
Other lending subsidiaries book value 5000crores valuation 2.5x book value = 12500crores
Kotak Securities: 20x Earnings : 20* 1700crs = 34000crores
Kotak AMC = Average assets under management = 12% of average assets under management 470000crores = valued at 56000crores
Kotak Mahindra Capital: 6000crores
Others subsidiaries: 5000crores
Total:180000crores
Holding company discount 20%
Value of subsidiaries at 145000crores
Current market cap at 371000crores
Ex subsidiaries: 371000-145000 = 226000crores
Core standalone book value : 110000crores, core price to book at current market cap at 2.05x