On point 4, KS K GmbH is definitely selling now after expressing intention to sell for past 1 year.
Posts tagged Value Pickr
Solar Industries Ltd (16-11-2023)
I have been following Solar for a little more than a couple of years now and that percentage has remained with me, I forgot the exact source. They invested in 2 tranches, first they took a 25 percent and then a additional stake. I will try to get the source and edit this comment, if somebody else does, I will delete this.
Solar Industries Ltd (16-11-2023)
Can you please share some source about this 31% stake , I tried to dig in but seemed they invested some amount in Skyroot with condition that they will offtake solid fuel from Subsidiary of Solar.
Shriram Pistons & Rings Ltd (16-11-2023)
Was researching this after good results… But have some questions… If you can answer as very less information available…
- Is newly acquired TPPIL Vertical is included in Q2 Results?
- Had heared that newly acquired 2 Biz of EV are in losses… any idea about it?
- How much revenue contribution is from new vertical & product portfolio is premium or commodity in nature?
- KS Kolbenschmidt GmbH is selling stake in Shriram piston is that true? And how much free float available?
If u can answer would be helpful…
MTAR Technologies – A wager on innovation meeting economies of scale (16-11-2023)
The MTAR Technologies Ltd Q2 FY24 Earnings Conference Call discussed several key points:
MTAR Technologies Ltd Q2 FY24 Earnings Concall
Performance Overview: MTAR Technologies reported revenue of ₹166.85 crores, with a 3.4% year-on-year increase in EBITDA at ₹36.1 crores for Q2 FY24. However, there was a decrease in profit before tax and profit after tax compared to Q2 FY23.
Order Book and Growth Projections: The company anticipates a healthy order inflow in the second half of the year from new and existing customers in the clean energy, nuclear, and defense sectors. This is expected to maintain the closing order book around ₹1,400-1,500 crores. They have received around ₹80 crores of order inflows in Q2.
Clean Energy Sector – Bloom Energy: MTAR is focusing on the production of Santa Cruz block 2 hot boxes for Bloom Energy, moving from the previous Yuma model. There was a deferment of shipping plans from Bloom, impacting MTAR’s short-term growth. The company expects to ramp up production of Santa Cruz block 2 in the coming quarters. They also mentioned ongoing negotiations with Fluence for a substantial order.
Domestic Business Outlook: The company expects a significant pick-up in domestic business, particularly in the nuclear sector. They also highlighted the ongoing projects and the expected increase in revenues from these domestic ventures.
Financial Aspects: The company is working on reducing networking capital days by the end of the financial year. There was a mention of a sharp reduction in payable days due to liabilities paid for inventories purchased in previous quarters.
Guidance for FY24: MTAR aims to generate revenue of around ₹600-700 crores by the end of FY24, with an EBITDA margin of 26% ± 1%. This guidance reflects the current business scenario and the company’s strategic focus areas.
Investments and Future Plans: MTAR is investing in enhancing its product portfolio and expanding its customer base. The company is actively participating in the space and defense sectors, with a focus on import substitution opportunities like ball screws, water-lubricated bearings, and roller screws.
Challenges and Adaptability: MTAR discussed adapting to changes in technology and market demands, particularly in the clean energy sector with Bloom Energy. They emphasized their readiness to meet evolving customer requirements.
Open Invitation for Plant Visits: The management invited investors to visit their facilities to witness the company’s advancements and future project developments firsthand
Engineers India Ltd (16-11-2023)
Engineers India Limited Q2 FY24 earnings conference call: https://www.youtube.com/watch?v=a1slTI2dBLY
- Introduction (00:01): The call, hosted by Dam Capital Advisors Limited, begins with a welcome message and a reminder that participants will have a chance to ask questions after the presentation.
- Introduction of EIL Management (00:35): Ms. Buika N introduces the EIL management team, including Mr. Sanjay Jindal (Director of Finance), Mr. Sendu P (Company Secretary and IR), Mr. RP Batra (Executive Director, Finance and Accounts and IR), Mr. Sun Saka (Executive Director Technical and IR), Mr. Aman Singh Chopra (Senior General Manager, CMD Office and IR), Mr. Viv Maida (General Manager, Marketing BD and IR), and Miss Niha Narula (Senior Manager, Company Secretariate).
- Opening Remarks by Mr. Jindal (01:13): Mr. Jindal provides an overview of the financial results for Q2 and the first half of FY 2324, noting a turnover of INR 777 crore for Q2 and INR 1,586 crore for the half-year. He details segment-wise turnover and highlights an increase in profit before tax (PBT) and profit after tax (PAT), with a notable improvement in EPS.
- Order Book Status (03:37): Mr. Jindal mentions the company’s order book value of INR 8,188 crore, divided between the consultancy segment and the turnkey segment.
- Q&A Session Announcement (04:28): The floor is opened for a Q&A session, with instructions for participants on how to ask questions.
- Question on Financial Adjustments (05:17): An analyst asks about adjustments related to liquidity damage settlement, leading to a discussion on margins and revenue adjustments. Mr. Jindal clarifies the impact of a 45 crore adjustment on turnover and profit.
- Discussion on Turnkey Segment Margins (05:55): The conversation shifts to margins in the turnkey segment, with explanations on quarter-to-quarter variations and long-term margin expectations.
- Pipeline and Future Prospects (07:07): The management discusses future business prospects, including ongoing bids in various sectors like oil and gas, petrochemicals, and infrastructure.
- Consulting Margins (08:20): An inquiry about consulting margins leads to a discussion on quarterly variations and expected change orders.
- International Initiatives (10:51): The management talks about increasing international initiatives, mentioning projects in Algeria, Nigeria, South America, and the UAE.
- Non-Oil and Gas Initiatives (12:34): Discussion on diversification into non-oil and gas sectors, focusing on decarbonization projects, including green hydrogen.
- Investments in Fertilizer and Refinery Projects (20:32): The call covers EIL’s investments in fertilizer and refinery projects, discussing returns and related work orders.
- Future Investment Plans (21:08): There’s a discussion about future investment plans, particularly in the context of the NRL expansion.
- Ordering Activity in International Markets (32:34): The management speaks about international business, order sizes, and the nature of these orders.
- Strategic Alliances (37:14): The call touches upon strategic alliances, particularly with Sunrise Group of Australia, and their role in emerging technologies like solar concentration.
- Opportunities in Decarbonization and Defense (39:02): The conversation shifts to opportunities in decarbonization, green initiatives, and the defense sector.
- Expectations for FY 25 (41:38): The management discusses expectations for FY 25, focusing on the cyclical nature of the business and project-oriented strategies.
- Coal Gasification Projects (43:03): There’s a discussion about coal gasification projects and collaborations with companies like Coal India and NLC.
- Closing Remarks (47:44): The call concludes with closing remarks and a thank you to the participants and the management team.
Sanghvi Movers (16-11-2023)
Valuation Note update (November 2023)
Disclaimer : Invested
I wrote a note on Sanghvi in July 2023 to make sense of the valuations !
The General Conclusion at the time was :
Valuations are linked to Sales (& Ebitda) which are linked to Order book
X % of Growth in the Order book would mean ~X % of Sales Growth BUT higher EBITDA Growth because of operating leverage.
Based on the above logic, at that time I had written :
“…If for the 21% Revenue Growth (order book growth based) assumption, which we estimated would bring in 35% EBITDA Growth and ~ 50% PAT Growth,
Therefore, a 50% Revenue Growth might bring in much higher EBITDA and even higher PAT Growth.
BUT Even if EBITDA & PAT Grow by 50%, and bear in mind this is seriously conservative given that Sanghvi has high operating leverage built into its business model, we’re looking at :
Median Current Forward (as on July 23) EV / EBITDA 5.4 9.1 6.33 P / E 9.6 21.1 14 Which, again, are not exactly mouth-watering valuations but are not as expensive optically as they seem today… “
Hindsight being 20-20, the above conclusion seems to have been mostly correct, judged not only by the Stock price movement but also judging by the more fundamental point that the Wind Energy Sector continues to grow – Big Time !
As @rcinvestor999 pointed out, Wind Energy Installations are increasing at a much more rapid pace compared to the last many years.
Suzlon Stock Price is a reflection of this bullishness.
Suzlon’s order book (~ 1650 MW) looks as robust as India’s Cricket WorldCup Team and I recently wrote a note on Suzlon Valuations too if you’re interested.
The Suzlon charm is such that I was at a Diwali party in Amritsar and one of my friends, who in 2014 had lost a shit ton of money in Suzlon has now made all of it back !
As luck would have it, he bought back the stock at 8 Rs/share and is holding onto it with his dear life.
He got so drunk that night he almost couldn’t speak but every once in a while, he randomly shouted SUZLONNN !!! at the top of his voice 
And with that let’s come right back to Sanghvi’s current situation :
If the order book is any reflection of Sales growth, H2FY24 could see Sales growth of ~37% Vs. H2F23 Sales.
| H2FY23 Sales (Cr) | H2FY24 Sales (Cr) |
|---|---|
| 250 | 342.5 |
This means, Sanghvi can hit Total Sales of ~ 628 Cr this year if H2FY24 turns out to be in line with Order book Growth.
Let’s stay on the Conservative Side and assume growth rate in H2 FY24 Sales is ~25% Vs 37%, this means Total Sales for FY24 would be around ~ 600 Cr.
At an EBITDA margin of 60.5% (Avg of last 4 quarters), we would end up with an EBITDA of Rs. 363 Cr.
An Important point to note here is that the operating leverage angle to the story has played out fully it seems because at capacity utilization of 83-84% and OPM of 60-61%, the OPM expansion seems to be a thing of the past.
Secondly, the debt reduction and consequent outsized growth in PAT vs Sales growth is also a thing of the past. Debt has increased to ~ 336 Cr in September 23 vs ~180 Cr in March 23, which is starting to show up on the Income statement in the Interest Cost.
Therefore, going forward I think EBITDA & PAT growth will most likely not exceed Sales Growth as has been the trend for the past few quarters
Anyway, the Current EV/EBITDA based on TTM Ebitda is 11X
Therefore, on a full year basis and based on our estimated Ebitda for FY24 of 363 Cr :
EV / EBITDA comes to ~ 9.9X
Similarly, if we assumed a Net Profit Margin of ~ 27.5% (Avg of Last 4 Quarters)
Net Profit based on 600 Cr would be 165 Cr which would translate into a forward PE of 21.4X
A quick look at the above tables shows that the differential between the Current & Forward July Valuations are much higher than November valuations.
This could be because in July we were discounting full year numbers whereas as of November 23, we are discounting the numbers for the next 2 quarters.
Bottom line is that Valuations based on EV/EBITDA & P/E seem to be reflecting the bullishness in the sector and are based on the visibility provided by the order book.
Much has been factored into the stock price it seems and the order book would have to continue to get better even from this point for the stock price to do well. or multiples would need to expand.
The obvious risks also remain :
-
Execution Delays
-
Slowdown in Economy & Wind Sector and thus declining order book and consequently declining utilization
-
Operating leverage seems to have maxed out and if utilization declines, OPM would be hit leading to rapid decline in PAT. Remember : Operating leverage works both ways
If anyone has thoughts on the contrary or want to add something, please feel free to DM or reply here.
Thanks
Rahul
Rategain – Fast Growing SaaS Leader (16-11-2023)
Looks like there will be 5% discount on the floor price (Effective rate may be around 641/-). Good to see despite the news of EPS dilution the stock recovered from the day’s low to end only 1% down. Hopefully in the coming weeks/months rategain will announce some acquisition.
Hitesh portfolio (16-11-2023)
Hitesh Sir… Your views on Mold Tek Packaging : Having strong tailwinds in the sector, company growth is also decent and analysts have also been bullish since long but stock’s price is not moving at all since more than a year…
Ganesha Ecosphere – Green Earth play (16-11-2023)
PPT(Nov 2023)
FUTURE GROWTH FACTORS
A…Ganesha Overseas, Nepal:
=Started commercial production in Feb,2023.
=Current capacity utilization
has ramped up to 70% and expected to further ramp up to over 80% by end of Q3, 2024
B…Ganesha Ecopet, Warangal
=Production of Rpet Chips and RFDY started during April, 2023. Products
are under commercial trials and approvals from various brands took longer time than our expectations.
=Commercial offtake now started from October onwards. Ramp up of capacity utilization by Q4, 2024.
C…Ganesha Ecotech, Warangal:
= Started commercial production during February, 2023. However, ramp
up of Washed flakes, being captive supply to Ecopet, is dependent on Ganesha Ecopet ramp up.
=Businesses in subsidiaries suffered a net loss of Rs. 10.3 crore during the quarter due to lower level of
operations. Operations ramp up is expected in H2, FY24.
D…B2B business
=Approvals have been received from some of the leading brands for Rpet (B2B grade) Chips and
Company has started getting orders.
= Production till December, 2023 has been booked and line is now
running at full capacity.
= Export market is also improving and we have started to book exports orders too.
=Company is putting up two more production lines which is expected to be operational over next 6-8
months in two stages.
=We are expecting to get the capacity of all three production lines booked for FY 25 over next 3-4 months.
=We joined hands with Manjushree Technopack Ltd., a leading manufacturers of Pet preforms for over 50 leading brands of the country, for joint development and marketing of Rpet Chips. This alliance will
strengthen our market penetration.
=RPSF production line at Warangal is going to start very shortly and we have already started to explore
the Southern market for the same. Filament yarn capacity will be ramping up gradually
E…Core RPSF Business:
=To mitigate the slowdown in core textile sector Company has planned to shift its focus from yarn
spinning sector to non-woven and technical textile segment, where demand and prices are better
than spinning sector.
=Company is targeting to reduce present 65% proportion of yarn spinning sector in RPSF Sale to 50% over next 6 months.
F…Exhibitions
=Company has increased its presence in national and international exhibitions and expos for
showcasing its products and it is participating almost every month in any of international/ national
exhibitions. It is benefitting Company and it has explored new markets and customers. As a result,
exports started increasing which declined during June 23 quarter.
G…Govt policies
=Government has introduced BIS standards for some of the textile products to control the dumping
from China and other neighboring countries.
=Government support through policies such as approving
B2B recycling for food grade applications & mandatory
regulations to use recycled PET from FY2024
H…Go rewise
=The brand is being launched with a commitment for the good
of tomorrow. Go Rewise is dedicated to conserving resources
and establish sustainability supremacy by efficiently recycling
PET plastic into premium quality products
Disc…invested since 2021
Howevere, company is giving flat results
(flat operating profit with high depreciation and high interest expense ) since last 2 yrs.
I will wait for next 1-2 yrs before taking any decision.