Its a bit difficult to find out the execution details of their Advanced carbon plans. But an input which I got from couple of linkedin profiles of managers/Engineers at Himadri.
Anode carbon material for Li Ion battery is developed and exported to Japan, Korea. Executing good orders of Meso carbon intermediate product to China
Battery Developer- setup production line for lithium-ion battery pack in cylindrical
And prismatic configuration for EV, grid storage, power inverter and others
1 of their sister concerns Motovolt mobility is going to produce e-cycles. So, there will be a captive market for their battery products to start with. So, these seem to be indications that behind all the shareholding noise, there may be significant developments happening to address the EV market potential.
Yes they have sold 40 Lakh share on March 1st out of 97.8 Lakh which they have purchased a week back on 25th Feb.
On observing all the bulk deal closely starting from 19th Nov 20:
We can infer that all these selling is happening because of fear of stock price crash due to selling done by Himadri credit and finance ltd and Bain capital.
So on this bulk deal front there is no much concern provide numbers and fundamental are sound.
I have lost 20% because of this fear. So it is better to wait till dust settle down and name of purchaser in bulk deal comes out.
I have a stupid question : As since HSCL is importing its raw material from China is there any such RM that is affected by TDI? Because long back i noted that they source RM from China…
Also since the company is diversified into so much sub products are there are x factors such as crude oil and rest affecting these sub products and pricing? How to track between all of these…
Wonderful scuttlebutt finding @rajstock … Can the IR not confirm this officially ?..,. No where in their AR i see a mention of them getting into Battery Development … or the fact that they have developed a anode grade carbon material.
I hope they start a investor conf call every quarter…
CTP prices are improved by over 35% . Himadri has 70% market share of CTP in India, with Graphite , Aluminum , Paints are all doing good, expect Himadri to post a good Q4.
I recently started tracking this stock and don’t know much about it. I do have one question in my mind: Why do we treat this as a specialty player rather than a commodity? Looking at its OPM for the past decade, the margin has a huge swing from single-digit to mid-20s which is characteristic of a commodity player. Also, it sells its products to industries like aluminum, construction, etc. that are cyclical in nature which in turn affects how the company performs. It does have specialty products like ACM, Specialty carbon, etc but that product portfolio is not huge. The majority of the revenue is from commodity/basic chemicals, right?
Does Himadri provide a break up of revenue to gauge what percentage of revenue was from specialty products?
you are right… current biz largely is based on CTP sales and not ACM sales…
I had posted below , total volume per year by net profit generated.
this is for 2016,2017,2018.2019,2020 (2020 was trailing when i made this calculation)
299137
356902
379679
363,154
330,000
4,874
6,534
11,915
15,416
11,191
(634)
2,310
6,521
8,928
6,336
with Speciality carbon black and ACM, their end user industries would be B2C (electronics, battery etc) and not for the tyre / aluminum etc.
The company seems to be a good value at the moment.
where did you find the ctp prices.
in feb 2021 presentation on their website i dont see it anywhere
May not be. As one ICICI direct report pointed out the current price might be due to derating, as the market seemed to have realized that the company do not deserve spec. chem. premium, at least not at this moment.
What I see for Q4 is below.
a. Raw material prices came down quite heavily in 2020 with Oil price going down. their inventory was derated that reduced Q3 profits - due to provisioning for inventory cost reduction. Note that this is a notional loss Only and not an actual loss. (Selling price of CTP was still intact) . This will be reversed in Q4 as OIL prices have gained back as well as they did acquire raw material at lowest cost of OIL price slump. so net positive impact on profit
b. Demand was subdued for most of 2020 but Q3 saw pick up, Q4 would have seen higher pick up with Aluminum smetlers restarting , demand picking up there. as well as other end markets picking up like Tires , Paint, Graphite Anodes etc.
c. Only thing I am not sure is about the capacity of ACM and SCB and how much is utilized there. this will send margins even higher.
barring any other stupid thing, the EPS for full year would be close to 3Rs. at current price PE of 15.
d. Market looks at future and not present… So if you consider FY22 to be a good year for biz - Full year EPS for FY22 is atleast 6-7 Rs. so PE at current price is 6 or 8…
A fair value of the company is somewhere around 80 Rs (11X PE)
expecting no more stupid surprises like raw material cost erosion or some other shit like in last 3 quarters.
Disc… Invested from lower levels in 2020. For the ACM story.
I don’t think the company is investing into the ACM. They were planning to do capex in two phases for the ACM plant but they have abandoned the idea sometime back. Did you verify that they are reviving the plan. Recently instead they invested around 100 Cr into some battery operated bicycle project. I am skeptical about their story otherwise this stock would have not been so low even if the Aluminium and Steel sector is growing up so much and other thing why Bain Capital took exit(at low valuation) if the story is intact.
The Management has just talked and talked about ACM & SCB and how it is used in the Li ion batteries. There is nothing on the execution side of their plans.
HSCL is more or less a basic chemicals player and in my opinion, deserves a PE of around 10-12 considering how varying its margins are. Even a PE of 15 seems ridiculous to me.
If the company is able walk the talk on ACM & SCB and actually add significantly to revenue from their sales, then we can start to think about it as a specialty player. The opportunities are available.
BTW, does anyone have any pointers on the management?
HSCL clarified that it is not launching any such bicycle project which is a relief. Honestly, if they did, it would have been a huge question mark on the company’s future plans as they would be deviating from their core as a carbon company.
Just to provide clarity on the timeline of events:
1st December 2020: Multiple articles in news on HimadriGroup launching e-cycles.
9th December 2020: Clarification from Himadri Speciality Chemicals Ltd that it is not launching lithium battery powered cycles. No other info given as far as I can see.
12th December 2020: Kolkata-based EV startup Motovolt Mobility has launched its fleet of smart e-cycles, started by the co-founders of Himadri Group.
