Some back of the envelope calculation:
8% PAT assumed for FY25 x 40% rev gr. guidance in FY25 x 775.6 Cr (LY revenue) x 60 PE (assumed) = 5212 Cr market cap
Current market cap = 5194 Cr
[PE assumption = Route Mobile’s PE x 2]
So CMP of Zaggle has already priced this year’s growth potential. Is this a fair statement to make?
Just to let you know, promoter is not interested selling products in India…given the long delayed projects in India…he explicitly called it in concalls…
Any updates on your view? KRBL has styaed flat while LT foods doubled from 200 to 400+.
The company is present in the entire value chain of exploration and drilling services. It undertakes drilling and exploration of coal, minerals and coal-bed methane. The company has expanded into aquifer(water) mapping programmes for state and central government agencies besides 3D and 2D seismic data acquisition and processing for renowned oil and gas companies in India. It also provides consultancy for geological field services, mobile field services and other allied services. The company has 41 operational rigs with capacity to drill between 300 and 2500 meters.
The company has won orders from Reliance Industries for CBM, has entered into a JV in Onam for copper mining and has won a coal block in Jharkhand. This makes the company a full fledged exploration and mining company.
Exploration Services
As detailed above the company provides a host of traditional services which include the coal and mineral drilling services, 2D/3D seismic exploration of minerals and Oil & Gas both onshore and offshore. The company also provides geological and geophysical services.
It is the leading CBM exploration and production provider and has won an order from RIL and Oil India. it has 2CBM drill rigs for now which are capable to drill upto 2000m.
The company is also present in unexplored energy industries like geothermal and shale gas exploration service
The company earns an EBIDTA of 20-22% in these services and a growth of 20%.
Order book position as of March 24 is 221cr.
CBM Reliance Project.
In FY 23-24 the company won a production project from Reliance for Rs. 84cr. The company expects that it is possible that the size of the project can increase to 270cr.
Onam Project
In the year 23-24 the company has won a copper mining project of Rs. 1,050 cr. The company has a 30% share in the JV. The entire contract is outsourced and it expects to provide a steady PAT of 2-3 crore every year.
The company has created a Saudi Arabia subsidiary under this JV to carry out similar mining services out there.
The company expects further orders for the JV in the coming years due to diversification of revenues implemented by Oman.
Jharkhand Coal Mine
Company won the Jharkhand coal mine which has potential reserves of 84 MT. in 2021.
The company expects to start the production of mine in FY 26.
The company would have to incur a capex of 240cr for this project. Out of this Rs. 72cr approx. is payable as upfront fee which shall be adjusted against future payments to Government by way of Royalty and revenue share. Hence the effective capex comes to Rs. 168cr .
The company expects to generate a revenue of Rs. 700-800cr from FY27-29. On the above revenue it expects to generate a EBIDTA of 40-42%.
Financials
For FY 24 the company earned a revenue 133 cr with a EBDITA Margin of 18% amounting to 27cr and PAT Margin of 5% amounting to 8.3cr.
In Q1 FY 25 the company earned a revenue of 30cr, EBDITA of 7cr and PAT of 2cr.
It is trading at a TTM PE of 40, EV/EBIDTA of 15 and Mcap/Sales of 2.7
It has 2.79cr shares outstanding as on date.
Please share notes if Anyone attended recent AGM ?
The Microsys Promotic can be a big opportunity going forward. If implemented well it opens up a lot of opportunities for the company in Europe and in India. Given the low base of the company, even minor market share can impact the bottom-line in a big way
There are huge tailwinds in the industry for organised players due to several factors.
Most of the players guiding for double digit growth.
But at current valuation it does appear that PNG’s valuation might be slightly stretched, especially in light of its margin profile. While the company’s growth prospects are positive, its profitability and margins need to improve for the current valuation to be fully justified. Therefore, a cautious approach seems reasonable unless there’s a clear path to margin improvement or significant growth in non-Maharashtra markets.
Senco looks more reasonably priced even after recent run up in stock price than Png because of geographical diversification, improving studded ratio qoq , batter margins.
Other players titan and kalyan are already trading at much higer valuations.
But if PNG able to improve margins then bottom line will improve significantly and things will look interesting. And they need to geographically diversify themself.
If anyone at E2E is reading this, your monthly newsletter is really good!
I am subscribed for several months and this month’s was chef’s kiss.
I didn’t get a feeling of being “sold” to at all unlike a lot of other tech newsletters I get. Further, the pace of updates and releases is exemplary. I can imagine the breackneck speed the dev team is going through.
A few feedback points:
Cheers!
It’s another shocking movement by promoters to rig share price. It’s now ~34, they want to see it below 10 as penny stock by issuing further unnecessary bonuses
Brent Crude saw a steep drop ~4% yesterday. Though neither paint or tyre comps rose much which might be due to pressure.
Crude prices will come down eventually as the war pacifies.