Agreed, lets see who bought and it could be part of a deal as mentioned by @atishay1
Also post results, Centrum broking has raised the TP to 1090 (25% upside). I am hopeful to see this company grow post all the capex plans in next few quarters.
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Link to Centrum research report - http://www.moneycontrol.com/mccode/news/article/article_pdf.php?autono=8546021&num=0
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ICICI DIRECT comes with a research note on OCCL & price target of 1125.
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OCCL making great moves as predicted.one of the few cos which is executing well.
Q4FY17
Sales up 19% at 82cr
EBITDA up 31%
EBITDA % 30.2% vs 27.5%
PAT down 23% at 9cr
@Vivek_6954 PAT down is it because of increased deferred tax payment?
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Yes SajiâŚResults are good infact
Q4FY17 concall:
We are delighted that we commenced the production at the new plant ahead of schedule.
Expect phase 2 to be commissioned by Q2FY19.
Demand for insoluble sulphur has increased and we expect it to improve with better tyres for M&H vehicles.
Expect to grow in America & China.
Deferred tax is on ac of opening of new plant. As per the law, we have to provide the higher taxation though the actual payout is still at the MAT rate.
We are seeing obvious benefits of operational leverage at Mundra.
Intend to maintain div payout at 20%.
New plant has done good utilization in this quarter. Growth is mainly from growth in volumes, pricing is stable. New customers have also been added
The subsidiary should see improvement going forward. There have been sevral write-offs done in this qtr.
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Is he referring to OCCL ?
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I think he was referring to OCCL but not directly. Do we have any other listed major company who supplies key raw materials to tyre industries?
phillips carbon i believe is another company. though i have not much knowledge on these companies/ matter.
he was referring to nocil i guessâŚ
http://linkintime.co.in/website/gogreen/2017/AGM/OCCL/AR-2017.pdf
Some marquee names like Pabrai,Anil Goel,Seema Goel,Sangeetha s DSP BLACKROCK,P Subramanian,have entered n increased their holdings in OCCL besides HDFC ,L&T MF
any idea about NEETA MANOJ RUPAREL,SURESH BHATIA ,DEVABHAKTUNI KRISHNA
KUMARI other major shareholders?
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Good to read the FY 17 annual report of the company - the quality of the report is much better with useful insights on the industry and the company:
During the year the Company registered a growth of about 9% in Insoluble Sulphur Sales. The growth was achieved consequent to commissioning of the new line at Mundra SEZ in December 2016. The additional sales were mainly on account of increase in domestic demand and export mainly due to new geographies added. The sales volume growth was in double digit in both the markets. Average Sales Realisation was lower during the year due to reduction in Raw Material Prices. However, there was an improvement in margin over last year on account of better capacity utilization.
The first phase (5500MTPA) of Expansion of Insoluble Sulphur at Mundra, Gujarat was completed during the year and commercial production was started on 20th December, 2016.
Sulphuric Acid margin were better than the previous year resulting in better profitability. However sales were lower due to lower production on account of maintenance issues in the plant.
Future Prospects:
Growth in global tyre Industry, after a period of lull, has started picking up. Growth numbers are also expected to be healthy.
Other growth driver is the new compounds being designed for Ultra High Performance Tyres where requirement of Insoluble sulphur is on the higher side. This will add further to the growth of Insoluble sulphur, consumption globally. Our product is accepted and is suitable for such new age applications.
We have successfully opened up newer markets like China and USA. The response for the Companyâs products has been good and there is sufficient head room for growth in those markets. These markets are expected to be our major growth drivers.
The Company has also been able to get approvals from couple of new Tyre customers. This along with new geographies apart from adding to the sales numbers will also help to mitigate risks.
The work on second phase of capacity expansion of Insoluble Sulphur at its Mundra Plant is under progress and expected to be commissioned on schedule in second quarter of 2018-19.
The name of the Subsidiary has been changed during the year as per agreed terms at the time of acquisition. One production line of this subsidiary producing tyre tube valves was closed during the year.
Good pointers on continuous R&D being pursued by the company. Recurring expense is 88 lac.
Major Shareholders:
HDFC Trustee has increased holding from 2.67% to 6.77%
L&T Mutual Fund holds 4.2%
Pabrai Investments .95%
Subramanian 1.18%
DSP Blackrock .79%
Mr. Anil Goel has reduced from 1.5% to 0.46% (major selling at 675)
Seema Goel has reduced from 0.8% to NIL (Sold at about 675)
Sangeetha S sold 1.15% (at about 700)
Management Discussion:
Global demand of Insoluble Sulphur is estimated to be 2,77,000 Mtpa as per Notch Report. Out of the above, about 77,000 Mtpa demand is in China and 37,000 Mtpa demand is in America. Out of the 77,000 Mtpa demand in China, about 50% is for the globally accepted quality of the product which is manufactured by three Companies in the world including your Company. Therefore, the demand for quality Insoluble Sulphur may be estimated at about 2,38,000 Mtpa. The current demand of Insoluble Sulphur in India is estimated at 16000 Mtpa. This is expected to continue to grow in double digits on the back of the following factors:
- Growth in radialisation of Commercial Vehicle tyres which is currently at about one third of the total demand of CV Tyres.
- India emerging as a hub for exports of tyres.
- New Capacities being set up in India for Tyre manufacturing by international players such as Bridgestone, Michelin and
Yokohama as well as domestic players to cater to international market also. - More Insoluble Sulphur is consumed in High performance tyres and new tyre technologies
The Insoluble Sulphur industry consists of three players who manufacture internationally acceptable Insoluble Sulphur including Your Company. One of the companies is a global Multinational having multi location plants. This player dominates the international Insoluble Sulphur Market. The other player and your Company are then similarly placed. However, Your Companyâs Geographical footprint is wide and encompasses all continents. Other than above, there are a few Chinese manufacturers who are also in the business of Insoluble Sulphur, but they are yet to find global acceptance.
The 3rd line of Insoluble Sulphur (Phase I of expansion) at Mundra was successfully commissioned in December 2016 and work on the 4th line (Phase II of expansion) was started during the year.
The Company has made inroads in the American Markets and, therefore, is hopeful of operating the new addition in capacities at optimum level in the coming year. This should result in further optimization of input costs.
The production of tyres globally is shifting to more environmentally friendly tyres and lighter tyres. This will require consumption of more Insoluble Sulphur per tyre. Therefore, dosage of Insoluble Sulphur as a percentage of rubber is increasing.
Your Companyâs efforts to enter North American and Chinese markets have also born fruit due to which The Company is confident of selling production from expansion
The Risk of competition from new manufacturers, mainly from China, is met through continuous product and process improvement to maintain quality and cost advantage over them and through collaborative efforts
with tyre companies to see that their requirements are met. Further, high technology barrier coupled with exhaustive approval processes of tyre manufacturers acts as a deterrent for entry of new manufacturers.
Regards,
Ayush
Disc: Invested
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In earlier annual reports they used to mention how much quantity in MT was insoluble sulfur was sold. It was helpful to calculate price per MT at which company is selling. They have stopped this in recent annual reports. Any idea how much quantity was sold?
Also, the promoters have sold some shares. Could this be important?
Disc: not invested
Hi Ayush,
Where did you get 2017 Annual report from as i dont see in company website
Thanks
Krishna
Hi Kris
I got it via registered email with DP. Here is the link
http://linkintime.co.in/website/gogreen/2017/AGM/OCCL/AR-2017.pdf
Regards
Uday
Disc: Invested
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Pabrai also made this statement in his talk on shift - âelectric cars use lighter tiresâ. Does anyone have any ground level data on this? I tried comparing weights of tesla tires vs bmw 5 series tires on tirerack.com and they were actually quite similarâŚ
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Some reading around this I was doing plus some other previous experience.
In an ideal scenario what would an ideal electric car want? As per my understanding the lightest body, endless charge, just optimal coefficient of friction at the four points where the rubber touches the tarmac. Rest is either safety or comfort (both very important). This is within the constraints of a given electric motor(s) in the car. So yes a Tesla would prefer the lightest tyre having the properties of optimal grip. Actually the power (hp) generated at the engine/motor is different from the one which is actually measured for a car. The hp delivered depends a lot on the tyre and the surface it is on. So things like mileage (charge in case of EVs), longevity, hp and torque depend a lot on the properties of the tyre be it size, composition, treading, weight etc.
Even on Teslaâs website you have a selector for calculating the charge required and the only input for the tyre is the size of it (weather also to a certain extent). Then if we look at Michelin or Goodyearâs website the recommended tyre for a Tesla is a high performance consumer tyre which is no different for other internal combustion engine cars. So I donât think any special tyres are made in the market especially for Teslaâs. This doesnât mean that the future will be like this. Infact I am sure there will be special EV tyres which will come and they will certainly have higher insoluble sulphur. Perhaps its a matter of time now.
Infact the tyre recommeded for Tesla Model S by Michelin is Primacy 3 brand. In my first car a humble Hyundai Eon I upgraded the tyres to this! Yes they are good 
Thanks & regards
DV
Disclosure: Tracking amount
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