Is Samhi hotels paying too much given the turnover is only 24cr but they are paying 205 Cr?

I recently watched a podcast of a senior analyst from Nuvama where she mentioned about the value chain of Pipes and fitting industries.
Insights I got:
Pipes and fittings is a bulk industry where the bigger player is getting and the smaller player is getting smaller. So the question comes in mind, why is this happening? The major raw material for pvc pipe is PVC resins and the major suppliers of resins are likes of reliance industries, Chemplast; and when big companies such as supreme or astral goes to procure resins from reliance, they have a bargaining power, incremently they can procure it at 2-3% discount. This reminds me of the moat of APL Apollo where they purchase raw material at a marginal discount rate from the Iron n Steel players. And on the other hand, small players lack this bargaining power, at first they can’t directly go to Reliance or Chemplast to procure resins, they have to procure via distributers and in this chain distributer wll have a cut of 3-4%.
Additionally being a bulk material, that needs to be transported from plants to the retailers incurs significant logistics cost. And only big player, Supreme has plants in various parts of the country, they can save on logistics supplying it to the retailers, on the other hand small players lack this scale. This reminds me of Ultratech where the company have various plants all across the country. PVC pipings industry is a commoditised economies of scale business, where the lowest cost and the most efficient manufacturer is poised to well.
Supreme and Astral are clear leaders. This industry has witnessed the significant value migration from unorganised to organised. Supreme is guiding to increase its revenue at 25% CAGR where all other players are downsizing their estimates. The next leg of growth in this sector can come from introduction of OPVC pipes as government wants to replace DI Pipes by OPVC. Additionally, in western countries usage of plastic doors and window panels are common (made up of UPVC) this segment may gather momentum. Additing to this, the pipes used in Fire control systems is also poised to do well.

As an investor in BCL, it has been a roller coaster ride this year. Below is a summary for anyone who wants to come upto speed with BCL:

Good

Company’s transition from Edible Oil to pure-play Green Energy continues with good momentum. Here is a summary of the declared plans for the next 2 years.

1. As per current disclosures, in around 2 yrs time, company will have 1100 KLPD Ethanol-ENA (current 700 KLPD), 150 KLPD Bio-diesel, 20 MTPD Bio-gas, plus country made liquor business

2. Edible oil business will be shut down in the next couple of quarters, required machinery will be moved to where the Distillery is located and land on which Edible Oil business is, will be sold. Proceeds (40+ crs) from that will help in bringing down debt or help in capex. Shuttering of Edible Oil business will also help in substantial reduction of working capital in addition to the proceeds from land sale.

3. 75 KLPD Bio-diesel plant under construction in Bhatinda along with power plant, planned completion by 1st quarter next FY

4. 150 KLPD of Ethanol plan under construction in Bhatinda, planned completion by 3rd quarter next FY

5. Another 75 KLPD Bio-diesel plant construction will start at the W.Bengal subsidiary once the first Bio-diesel plant stabilizes

6. Edible oil business has low single digit margins, while the Green energy business will have mid teens margins. Should help the company command better multiples than what it did in the past

Not so good

1. SEBI notice – no idea yet what it is about. Will try to get some info from IR.

2. Margin pressure (discussed above) – I believe it is a short-term phenomenon. Once new maize harvest comes, maize price should cool down. This year more area is under maize cultivation. Rice is rotting in FCI godowns but govt still not releasing it at subsidized rates like they did in past, for Ethanol is disappointing. Allowing companies to participate in e-auctions won’t help much due to high auction price

3. Promoter selling – for me promoter selling 1.6% when they hold ~60% stake is no biggie. Promoters sell for various reasons, buy only for one. When asked the reason for selling during the Arihant Rising stars conference, Mr. Kushal Mittal mentioned that his parents are over 60 yrs now and they needed money for personal/social obligations. He said that promoters have always put in money in the business when required, so recent sales shouldn’t raise too much concerns (not his exact words, but that’s what he implied)

4. Low cash flows – according to Management it is primarily due to Edible oil business constraints e.g. The flip-flopping govt policies related to custom duties, made it very difficult to plan inventory, often resulting in substantial inventory losses. Now, with EO business shuttering over next few quarters and major Distillery capex starting to generate returns at higher margins, cash flow should improve substantially.

Disclosure: Invested. No recommendation.

Hey
Can anyone please help me understand why does burger king has so much of depreciation expense.

I observed they are generating positive operating cash flows but due to depreciation cost they are showing are loss ar bottom line.

They have 2300cr fixed assets and depreciation is around 350cr

Where as jubilant has around 6,000cr fixed assets and their depreciation is almost half than burger king

Can anyone please explain this ?