Hi.

While I don’t have a concrete answer, what I have understood with respect to the delay is:

1. Promoter exuberance. Rajiv Gandhi has in the past offered tall claims that do practically take longer to pan out. Timelines are not his strongest point
2. In the initial period there had been delays in getting approvals with respect to layouts and design that took sometime to be resolved.
3. As you mentioned the earthquake slowed down work earlier this year
4. In the last conference call he specifically mentioned the social trouble, in particular the border blockade being another reason for the delay.

There could be others which I am not aware of.

While he sounded confident of running a test batch in December (on the con call) – Personally I think it may take a little longer than that.

Disc: Invested. >5% of my PF

1. If you listen to Repco’s management they see ample growth, so till
   the time you see this 25-30% growth entry of all other HFCs is not a
   concern
2. Also, you need to factor in the fact that, Repco is very
   less leveraged, with higher leverage in future ROEs would increase,
   MOSL report on this says ROE would improve to 24% by FY20
3. Also, in 10lac segments they are still primary in Tamil Nadu… whole country
   represents growth opportunities
4. Non- salaried is also a growth niche, not easy to penetrate

I dont see why it won’t double in 3 years unless a global meltdown happens.

Diwali shopping normally happens for customers 15-20 days ahead of Diwali and stock gets purchased by franchisee nearly a month ago, last year Diwali was at around 20-22 October, so sales of Diwali season was fully booked in sales figures of Indian terrain or for that matter all garments company in Q2 only, this year Diwali was on November 11th, so much of Diwali season sales would have been booked in October month. Only Q3 figures would tell actual figures. Fingers crossed….

I think we still are not sure if there was any shutdown in Q2. We need to wait for the confirmation. Atleast to me it was not enitirely clear from the mgmt. interview as to when was the shutdown. But if that might be the case then this would be good set of nos.

In the meanwhile: The Board approved the proposal for issue of Secured Non Convertible Redeemable Debentures (NCDs) for an amount up to Rs. 320 Crores on a private placement basis to be deployed for the following:

(i) Repayment of the dues for the existing Term Lenders.
(ii) to finance augmentation of the capacity of Cement & Boards Divisions.

Despite having almost 20 days of maintenance shutdown they have posted wonderful results , As stated by mgmt second half is usually good than first half , this combined with full utilization can fuel EPS in north of 7-8 ! , FY 17 Eps is estimated at around 30-35 , Multibagger in making !!!