Hi,

Here are the notes from the AGM ( notes may be rough but this is the synopsis).

Girish Shah spoke in his opening remarks that

1. The expanded capacity has doubled and will cater to orders coming from existing clients and new clients.

2. China is becoming very aggressive and getting market share is becoming tough.

3. Multiple factors hampering growth at the moment.( Logistics cost, Purchase cost, Geopolitical issues).In the A.R. Exports dropped to 18% and domestic sales were 82% shows the impact of the above factors on sales.

4. The joint venture Kalichem would be operational in the second half of the year which would be catering to API, Intermediates and the existing range.

5. The company kept adding new clients and introduced new products which is mentioned on their website, but no formal business yet from these products.

6. The promoters remain unfazed of the future that things would change, benefetting the company with better prices, both from purchasing of raw materials and selling prices of products.

The short term position of the company is too hard to derive at a growth rate for the factors stated above. F.Y.25 remains tough as the visibility has not improved with the existing conditions and as you all can see that the profit has taken a big hit.
Kalichem expects 50% capacity utilization in the coming year and no expectations on the profits though.

7. The company enjoys a high good will among their customers in the domestic market and has the necessary certifications needed to qualify to be a vendor.
   Recent certifications was from EVOVARDIS awarded Chemcrux with a “Committed” certifications.

8. Steam purchases would be cut down by 30% (ball park) as the generation of steam would start from October 2024.

This ends the AGM.
E. & O.E
Thank you

Company is out of business but has given 10x returns in the last 3 years. Reporting revenue and profit growth as well.

It is quite surprising to see that, Small companies with unproven business models (SME) are raising funds due to over enthusiasm of small retail and wholesale investors and lack of stringent regulations.

Over next few years, there could be explosions in NPA(s) of financial institutions, i.e. Banks and NBFC(s).

Some of the funds raised by these unheard companies like SME or Micro Caps might be used to raise more loans and it may put entire financial system under undue stress. Not only that, investors are latching to all IPO(s) in the market which are typically raised by Insiders who know the business and use those investors (outsiders) to fund their businesses.

Again, I may be wrong in my alarms and would be happy if proven wrong!!

They have been saying all that since 3 years. And they have never given a potential for the lockheed martin deal

It is definitely the reason for low and slow deposit growth.
There’s plenty of money in the system but deposit is not attractive compared to stock market.

“₹12-crore IPO of Resourceful Automobile, an SME company, which attracted bids worth ₹4,800 crore.

The ₹6,560-crore IPO of Bajaj Housing Finance set a new record, with subscriptions exceeding ₹3 lakh crore. The IPO was oversubscribed 63.61 times.”

Post from another thread:
3.2 Lkh crore blocked in bank accounts towards Bajaj finance IPO size of 6600 crore- looks scary !

Source:

The bank FDs are not even yielding 8% pa interest. Over that, the interest is taxed at peak slab rate. For me it is 35%. So post tax, returns is 5.2% while the real inflation will be North of 7%. And there’s no deposit protection beyond 5 lakhs.
I don’t see any incentive in Bank FDs. Money will be better placed in nifty index fund which will give 12% cagr over long-term.

A patient investor in HDFC Bank and Kotak Mahindra Bank will be better rewarded than an FD holder in those banks. Also, we are at the peak of interest cycle and interest is bound to go down from here which will bring down the FD rates even further.