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Summarizing the overall discussion:
Mode of discussion: online, not in person
Focus of discussion: To understand more about history and evolution of the company
Attendees from Mallcom: Rohit Mall and their CFO

Points discussed:
About Mallcom:
1. Rohit Mall is part of the second generation of the management, and has been with the company for 2.5 years
2. Over a period of time the company has moved on from mono-line (leather gloves) to multi line products of hand, body and feet protection; head protection is a new business line they are entering into
3. Over the last 7-8 years, the co has changed it objectives towards growing more in the Indian markets as well as going higher margin business and becoming more proactive; the last few expansions have been unlike what Mallcom was used to doing earlier, now they are building capacity in anticipation of demand
About Industry:
1. Globally China dominates the industry with 70% market share
2. With China+1 wave, parallel supply chains are being developed and RM supply for non-leather material increasing
3. Private Equity players are also taking interest in development of this supply chain and enabling connections between clients and manufacturers
4. Indian market is about 12-15,000 cr market with half of it being un-organized
5. Indian market currently don’t have certification standards, BIS is trying to setup something and Mallcom is also pushing for these certifications to get developed
6. Purchase of the items is being influenced by plant heads and sub-heads with safety/functionality and aesthetics being considered into making these decisions; PSUs are buying through the GeM portal
USP:
1. Head to Toe → One stop manufacturing
2. European standard products
3. Certified products only, Mallcom hasn’t taken a price cut till now, but has actually raised prices for its products
4. Mallcom doesn’t bypasses its distributors even if it wins the deals
Mgmt team and structure:
1. Continuous investments being done towards plant and products
2. HR talent pool is being developed with a focus on building 2nd line of mgmt
3. The teams have dedicated KRAs
4. In the next 10 years they expect totally new set of people to take up the business
Sales and Production:
1. Sales team structure:
a. White Label: Geography followed by sales RM structure; for big clients there are dedicated sales team/RM
b. Branded: Area Sales Manager approach which are then bifurcated into geography and product line
c. The teams use Salesforce CRM to track the performance of the dealers and teams
2. Production Planning:
a. White Label: Almost back to back order based
b. Branded: Depending on the product category and past trends, the production happens through a mix of inventory stocking (eg. Shoes 60-70% are stocked) and customer back to back
c. Co uses Oracle ERP for production planning and inventory management
3. The mgmt focus is on the top-line and bottom-line growth (i.e. not necessarily RoCE or working capital)
4. New Product Development: New product development is more led by the teams developing the products internally and then trying out in the market; however inputs to developing these products is driven by
a. Based on the number of enquiries received for a particular product
b. Competition catalogue whats getting more presence
c. Tracking of Imports
d. Company’s capability wrt infra and RM and being able to manufacture the product
e. Co is open to outsource the product development initially and giving samples to get feedback before committing resources
f. Is the product going to be margin accretive
FY28 targets:
1. Co has taken up a target of 1000 cr, internally they also know it’s a stretch target, but wants to hit a number closer to it
2. FY28 sales mix is expected to be equally divided across categories of head, hand, body and foot protection
3. Given head is 2% of sales i.e. ~8cr and FY28 target would be 250cr, the company is investing in making injection mould capabilities to develop helmets
4. This helmet product portfolio to also enable the co to start catering to construction industry which it was not able to do earlier; fall protection and harness are other products required by the industry, but Mallcom not looking at those lines
5. Mining industry is expected to drive demand for products
AB Holding:
1. MSPL stake was provided at around 30 rs and bought back at 24 rs (at book value)
2. The idea was for AB Holdings to help connect with customers in Europe and ME
3. It didn’t materialize as per plans and AB Holdings offered their shares to be bought back and Mallcom did the same at book value
Plant specific discussions:
1. Ahmd Plant: Max util level is going to be 65-70%; currently at 50%, challenge is to find trained manpower
2. Sanand Plant:
a. 108 cr capex provides optionality of launching other product lines and therefore the asset turnover expectation is lower (100 cr on 108 cr capex)
b. The product of nitrile gloves is not the same as the medical gloves that top-gloves is manufacturing, but is industrial nitrile gloves
3. Kolkatta:
a. Consolidation of plants is underway
b. Revenue from sale of land through housing project atleast 2-3 years away
What keeps management up at night:
1. Capex utilization
2. People availability and costs

The bird flu season in Japan typically begins in October each year.

https://www.wattagnet.com/poultry-meat/diseases-health/avian-influenza/article/15637496/commercial-poultry-hit-by-bird-flu-in-bulgaria-russia

Since mid-October, three HPAI outbreaks have occurred across Bulgaria.

Interesting boardroom drama.

Forbes covered the story so far on 24-Nov-23.

Briefly, the company has had no promoters since the Singh brothers were convicted.

A board of independent directors has been in charge.

The Burmans want to take control and have made an open offer to get their holding above 26%. But the board is resisting. They think the offer price of Rs 235 per share is too low. Timing is ‘fishy’ says Religare board member Hamid Ahmed. The board appears to allege collusion between the Burmans and the Singh brothers.

There are countercharges of failure of corporate governance and excessive remuneration at the company. See deepuji2008’s post above.

Kedara Capital, the PE fund, holds 16% of Care Healthcare which is the flagship subsidiary of Religare Enterprises. Kedara came out with a statement supporting the Care management.

But the regulator is asking questions about the ESOPs.

Interesting interview with Mohit Burman on CNBC.

Once the regulators approve the open offer, this could resolve quite quickly with the Burmans in control and the current board out. Or could this end up in the courts and get dragged out?