@basumallick, have below queries. What r ur views ?
Have no ideaā¦ stopped tracking this for a while now.
Did some analysis of the company. here are some facts / observations
Management :
"PRODUCTS"
It is the only player in India to produce Carbon Black from Coal Tar distillation process which offers cleaner product with ultra low sulphur content; competitors use crude based feed stock (CBFS) route which incidentally has high sulphur content
Due to high value / custom products, realization is improving.
In Q32020 they are online with the capacity expansion of Specialty Carbon Black - 60,000 Tones. . Advanced Carbon black will come online by 2021. 20k tones of capacity . This will help company improve margin and realization further.
Risks
a. They run supply side risk of devalued raw material inventory when crude price falls after they have bought the inventory - 45 days worth of stock of raw material. this is seen in 2 years already
b. When the demand environment is bad, they start producing CTP - conventional productā¦ so overall sales is managed around 1800 Cr per year, with 10% Net Profit. (my guestimate for FY2020 )
At current price levels., company is at 58% discount to intrinsic value of around 120 Rs - very conservative estimate. I have assumed degrowh for 2021, 2022, 2023ā¦ Just to be cautious of COVID19 sitiuation.
Note : this is my first attempt to write on the forum . Any feedback is welcome!!!. thanks
Whats your logic behind the estimate of 120/-. Thank you
The main risks I see with them following a conversation with their investor relations
Having said this, I believe the company is taking right steps in this unfavourable environment and so it deserves a more wait and watch approach
Discl - Invested since beginning of the year and holding for near term.
Cheers
Uzi
Anti-dumping duty on import of Carbon Black expiring on November 17 this year.
Does anyone know why they have not announced the results yet?? ā¦ Have you observed this previously as well ?
SEBI extended the timeline to announce Q4 results from 30th June to 31st July. Many companies complained that they are not able to source the revenue, since some of their associates/subsidiaries or even auditors are in containment zones.
What is your logic for 120? How did you arrive at this figure?
Reasons to stop tracking will help us. Kindly elucidiate.
P.S.-I looked it up in screener and it looked good
Results announced. 0.15 dividend given. Weak results. One time impact of 130 crores for china plant
Revenue drop of 37%
Quarter drop 75%
Disc : Holding - planning to exit due to cyclical nature impact and tensions across India China issue. No thoughts on future
Good Set of dividend given
Iām holding it at avg 56/share. Looking to further add on major dips - i expect another washout in Q1fy21 based on conversations with the company. Reasons to continue holding
Overall still there are significant downsides to the business itself but all depends on how definitively they are able to transform themselves from commodity CTP player to specialized chemicals. I believe they can do it considering the strong competencies already present
I feel that the stock will take more beating but could be a winner in 5 year timeline if the end industry demand rises.
Another reason - There was a post from an employee on LinkedIn that they were happy that the company(Himadri) did not cut pay during these times. Now I donāt know if this still stands true but I felt it was a nice gesture by the company to not cut pay
Modern high rise pvt ltd whose directors are also CEO of himadri Co holds Rs182 crores of equity shares of Himadri Co and at the same time Himadri Co holds preference shares of modern high rise pvt ltd of equivalent amount . Is it a matter of concern ?
I would like to understand this before investing in the co
Recently the anti dumping duties wherein government are considering to raise are increasingly making more Indian companies to prefer Indian goods than cheap China materials.
Same you can notice in Thirumalai Chemicals charts am unsure what products/exposure might been in consideration for HSCL under anti dumping list. Definitely not an company trigger for the price movements, its purely market driven based on news - dead cat bounce.
I didnāt find any news since January for anti dumping of carbon or dye or rest of the products . . Also u can see itās peers such as rain, bodal chemicals not performing as exactly as HSCL.
Is this a run due to auto/true sector?
The company is dependent on china products as raw material to finish their goods . .what has company thought of this going Further?
Capex is getting done in for some of its products.
This huge buy in market indicates some momentum/news to come to light and may indicate good entry point.
Disc : Tracking
Based on my conversations with IR, the management doesnāt give much importance to anti-dumping duty related events and consider it a low business impact event. The reason they cited was better product quality as they have a lower sulphur content compared to cheaper Chinese imports.
Iām not looking too much into the price rise recently because it is pretty much the same company it was in Jan when it was trading at ~70, and when it trading at ~30 in march. Nothing has really changed except for a big one-time loss in investment in the Chinese subsidiary.
This is a cyclical business and currently they have delayed their capacity extension plans so as to better manage current cash flow.
In conclusion, I believe it will take 2-3 years to unlock the true value.
Performance of Himadri is not upto expectations. Any insights on the coming results. Will be benefited from the current chemical run.
I see in the latest investor presentation (just strated reading into this company) that they make advanced carbon materials (ACM) that can/will be use used in lithium ion batteries (LiB). With huge demand and government focus on indigenous production of LiBās going ahead, Himadri seems to be a beneficiary of it.
Couldnāt find any competitor of Himadri in this area. Anyone any clue?
they have been promising Advanced carbons since last 5 years, but no performance yet. I dont think the management has the skills/ idea of whats needed for it. The project has started long time back never seen light . Wait and watch mode for me
Hi , I was hoping you would through some information on if they restarted investment into capex and ACM plans. I dont see any updates of that in the filings they have made and I remember you had some success with IR before.
Do you know anything about why promoter sold some shares? . I am a bit concerned why Bains Capital is dumping stock almost daily nowā¦ What do they know that we dontā¦ I remember they bought at close to 320 Rs per share.
thanks upfront if you could share any information here.
