thanks for these notes yogansh
i think a lot of hair around pokarna has gotten cleared in teh last 60-80 days.
the company has stated its intent of adding capacity which can double its quartz turnover. Given the operating leverage, this can potentially do about 220-250 eps in about 3 years' time.
the mgmt has realized the drain from teh apparel business and they have shown their intent to act on it. if they do, this will remove another drag
granite continues to be under stress and reversion to mean is sometime away. but the business is managed for cash flows and margins and not for growth - that's a positive sign. if this reverts to mean in 2 years time, this will add to the EPS - that's an optionality.
given teh robust housing market in the USA, dollar staying strong, the demand environment for quartz is quite robust if the managemeent executes well (they are adding lots of sales people to sell quartz in europe/USA), this can re-rate over a 3-5 year time frame.
ashish kacholia increasing his stake is a positive sign too. other triggers could be appointment of professional COO/CEO and better quality board members. For a 20-25 % eps grower, 8.5 ttm pe is quite cheap imho.
Adjusted cash flow yield - viz., OCF - interest payments is about Rs. 70-75 Cr. and that's a 10% yield on today's mcap - which basically discoutns all future growth and accretion from divestment of the apparel biz. Given teh huge operating leverage in quartz, margins could go up after an initial j-curve from the new capacity. lets see how this plays out.
discl: i hold from 700 levels and added at around 1050-1100 recently again.