Anyone attended the concall?
Any notes if you can mention.
Expansion plan and Growth projections?
Posts tagged Value Pickr
Krishca Ltd : A SME offering steel strapping Solution (13-06-2024)
How to analyse Equity Mutual Funds? (13-06-2024)
Additionally, I took a step further and started comparing some mutual funds as well.
Have a look at the same:
- Motilal Oswal Mid Cap v/s HDFC Mid Cap - AssetWorks | Motilal Oswal Mid Cap v/s HDFC Mid Cap Opportunities
- Quant Small Cap v/s HDFC Small Cap - https://assetworks.in/0z3lf
- Tata Large Cap v/s JM Large Cap - Tata Large Cap v/s JM Large Cap
How to analyse Equity Mutual Funds? (13-06-2024)
Hi all, apologies for not reverting earlier.
For all those who are interested in the findings, I am dropping links to the mutual funds analysed using this framework so far:
- Axis Small Cap Fund - Direct, Growth - https://assetworks.in/5qnf2
- Nippon India Large Cap - Direct, Growth - AssetWorks | Nippon India Large Cap
- Quant Small Cap Fund - Direct, Growth - https://assetworks.in/cd5no
- Tata Small Cap Fund - Direct, Growth - AssetWorks | Tata Small Cap
- Bandhan Large Cap - Direct, Growth - AssetWorks | Bandhan Large Cap
- SBI Small Cap Fund - Direct, Growth - AssetWorks | SBI Small Cap
- Tata Large Cap Fund - Direct, Growth - AssetWorks | Tata Large Cap
- HDFC Mid-Cap Opportunities Growth Fund - Direct - AssetWorks | HDFC Mid Cap
- HSBC Mid Cap Growth Fund - Direct - https://assetworks.in/ytfd5
- Aditya Birla Sun Life Frontline Equity Fund - Direct, Growth - AssetWorks | Aditya Birla Sun Life Frontline
- ICICI Prudential Large and Mid Cap - https://assetworks.in/i491b
- Franklin India Bluechip Fund - Direct, Growth - https://assetworks.in/j15q5
- SBI Large and Midcap Fund Growth - Direct - https://assetworks.in/1cz5
Remember that the values were updated as of the report generation date so they might be outdated.
Your feedback on the same is highly appreciated. Also, I am not promoting myself here. If the mods feel that I should remove the links to the website and provide the excels of this analysis, happy to do that too.
Sumitomo Chemicals ~ After Excel Crop Care Acquisition (13-06-2024)
Amid widespread distress in the agrochemical sector, the Sumitomo share has shot up and settled at a level above where it had crashed to when the glyphosate controversy first erupted more than 18 months ago. Q4 results were good, margins were among the highest in recent years, sales growth returned after 4 quarters of decline and operating profits were sharply higher by 74 % YoY after 5 quarters of degrowth. Cash flows were very strong and dividend payout has jumped due to a special dividend declared in February this year. More importantly, the concall revealed even bigger surprises which seem to have excited the market.
Some highlights from the Q4 FY24 concall:
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Q4 & full year FY24 performance: The decline in domestic revenue during the year was caused by mix of both price and volume reductions. Pricing decline of 25 % to 30 % was seen in FY '24 across. The decline was mainly in generic molecules, decline in specialty was only around 2 % or so, but here volumes have degrown by around 8 to 9 %. The decline in prices of key active ingredients has now stalled to a large extent. The company did not pass on that entire cost benefit in the market. It launched 6 new products - 3 herbicides, 1 insecticide and 2 fungicides in FY '24.
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Two projects with around Rs.120 crore capex initiated in 2021: Both these projects have started commercial level production. In the first project, 40 to 60 % commercialization was achieved last year and it will be ramped up to 100 % this year. In the second project, some revenues will come in the current year and ramped up in the next year.
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Bhavnagar plant: Current year, 100 % of the production capacity Is expected to be exported out
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Tarapur plant: New plant is ready for commercial production. It is only for exports to affiliate companies. Those molecules are not sold to any other third party.
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Dahej plant: The application for environment clearance has already been submitted. It will have at least 2 brand-new products from SCC Japan. However, it will have a gestation period of at least 18 to 24 months after the EC is received, before supplies for the next set of molecules start. But the product which will be picked up will have a very long strong competitive situation for at least next 10 years plus, either in terms of patent protection or in terms of SCIL’s leadership in those products all over the world. They will not be commodity products.
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Barrix: The acquisition helps in expanding the product segments in environmentally friendly technologies. Barrix was acquired on 15th December 23. In terms of the sales, about INR 10 crores to INR 12 crores has been consolidated in the books for this 100-day period.
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Parent’s commitment: The management said the parent company in its various presentations and investor interactions has emphasized the importance of India as a market and as a manufacturing footprint indicating future growth potential for India and SCIL. India is a priority for them. The top management of SCC want India to be a big manufacturing hub in times to come. (My observation is that parent’s commitment to Indian subsidiary is the most important driver of valuation in case of MNCs, and this must have sounded like music to analyst’s ears)
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Electronic Chemicals: The management said the parent company is quite strong in electronic chemicals. Some of these technologies used in the display devices such as chemicals used in LCD, LED, QLED - Sumitomo has been one of the leading companies in the world. In addition to that, some of the products that go into semiconductor for the 5G mobile tower and mobile stations, in those applications also Sumitomo has a very strong presence globally. In India also, there is this whole ecosystem gradually being set up. We are now seeing a bit of scope of doing this. We have just got the preliminary inquiry from Japan, they have asked certain very high-level questions. What will be the final decision or outcome of it, we are unable to say. But for sure, it is starting now. And it (i.e. the foray into electronic chemicals) will be through Sumitomo Chemicals India Ltd only and not through any other company. (This again is very good news, and though actual action is still several years away, is more than enough to excite the investor community in the current environment).
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FY 25 and beyond: The management said they are concentrating on increasing the volumes of their products first. The purchasing in Q4 for the coming quarters has been at a very good level, very good pricing. So the current margins will remain at least for another few quarters. As of today, they feel that pricing is quite stable and they don’t see any risk of reducing the prices in coming months. Because of the (good) rain forecast, the domestic market will revive very quickly. As it revives, SCIL will revive further. International business revival may take some more time. But there is stability in order positions. About 8 % to 10 % contribution may come from new products. There will be at least 3 new product launches in FY25. These are 9(3) proprietary products, which will be coming into the market in the next few weeks targeting the Kharif season. And there are 1 or 2 more products, that depends on the regulatory approvals. Overall, they are looking at 12 to 15 % volume growth in the domestic market.
To conclude, those who held on to the stock amidst the more than a year-long distress seems to have been vindicated.
(Disc.: Invested)
Hitesh portfolio (13-06-2024)
But market has already started discounting FY26. So, there shouldn’t be much correction to the stock price, unless there is some unforeseen event which postpones FY26 (expected) performance to FY27.
Angel One: Metamorphosis into a Fintech? (Previously Angel Broking) (13-06-2024)
I don’t understand why the stock isn’t moving. Is there something that the market is discounting?
Rishi Laser- A Precision Fabricator (13-06-2024)
Q4 FY24 Con Call Notes - Organized Summary
Customer Update:
- Two customers in USA and one in Australia with ongoing commercial orders.
- Significant business growth expected after Q3.
Raw Material:
- Increased steel capacity expected in the next six months, potentially stabilizing prices.
Capital Expenditure (Capex) & New Business:
- New 70,000 sq ft facility 30 km from existing plants (₹10 cr investment).
- ₹2-5 cr allocated for routine upgrades.
- Full plant utilization expected in 2-3 years.
- Entering round & square steel processing (tubes).
- First machines for this new business arriving by Q2, generating revenue from Q3 onwards.
Products:
- Round & square steel processing will target:
- Equipment manufacturers
- Furniture industry
- Hospital industry (stainless steel tubes)
- Large cutting facility at the new plant to supply parts to Chennai and Bangalore factories (currently at full capacity).
Business Segment Growth:
- Top line growth anticipated in H2 driven by export expansion.
Exports:
- Initial commercial exports commenced with Emerson Electric (USA).
- First commercial order received from an Australian company (glass processing equipment).
- Caterpillar (domestic supplier):
- Parts exported to two US plants.
- Aftermarket component orders received.
- France: Parts exported last year.
Manpower & Efficiency:
- Maintaining current headcount while increasing sales by 50-60% through robot installation in the Bangalore plant.
Growth Potential:
- Optimistic outlook for H2 growth in the off-road construction equipment sector (large dumper trucks for mining).
- Conservative FY25 growth guidance: 15%.
- Potential for larger construction equipment customers (Caterpillar) to reach ₹120-150 cr revenue within 3-4 years.
- Combined revenue potential of new and existing facilities: ₹300 cr (conservative estimate).
Margins:
- Margins depend on skilled labor costs.
- Training facility opening in Gujarat to address this.
- Double-digit EBITDA margin possible with higher growth.
Plant Utilization:
- Bangalore & Chennai: Full utilization.
- Gujarat & Pune: Underutilized (exact utilization level needed).
Competitors:
- Apex Auto
- Surin Auto
- Model infrastructure
Investing Basics – Feel free to ask the most basic questions (13-06-2024)
Which things makes a balance sheet “a strong balance sheet”?
I know debt should be low, cash should be high but what others things to look out for?
For a good business, growth, cash flow and valuations matter the most. Which things are the most important when analyzing the balance sheet ?
CAMS – Indirect Bet on Financialization? (13-06-2024)
CAMS launches Bima Central. Those who are following the company may know that they have been talking about this for a long time. Now its officially launched. Those who already have an eIA with CAMSRep will get access to Bima Central for managing their policies of various insurers, with features such as simplified policy information, renewals & reminders, profile management of personal data and nominee information, policy calendar, and more. Those who want to open their new eInsurance Account (eIA) will be able to do so instantly on Bima Central after completing KYC.
SBI General, ICICI Prudential Life, Star Union Daichi Life, TATA AIA and Aditya Birla Health and many other insurers were involved in developing multiple use cases and helping to build Bima Central.
After IRDAI’s recent directive on electronic issuance as well as general
push towards digital technology, this is a step in right direction. Hopefully we will soon have eAI mandatory for insurance like we have demat for equity.
0da1c37c-8f11-490f-b87b-9b550161d4ee.pdf (bseindia.com)
Regards,
Suhag