Shree Pushkar Chemicals

Very average results.

http://equitybulls.com/admin/news2006/news_det.asp?id=229966

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Result concall today.

Day/Date: Friday, 1
st June 2018
Time: 4:00 pm
Primary Number:
+91 22 6280 1309
+91 22 7115 8210

Can some one tell me whats is the segment wise breakup at the Ebitda level(Not revenue wise). Or if someone has the ebitda magin breakup segment wise.
I just want to understand what amount of profits they make from each segment, but I am unable to find segmental breakup.They have given breakup revenue wise but its of no use as I dont have Ebitda margins segmental wise. What amount of realizations they have segment wise.
It will be of great help if some one can give the same.

Concall Q4 FY2018 transcriptShree Pushkar Concall June 2018.pdf (94.1 KB)

Decent results. Approximately 25% increase in topline and profits for the half year as compared to last year. Yearly EPS can be between 15-17. Stock is currently trading at 12-14 PE which is fair.

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More than decent I would say outstanding result if we compare last few quarter. Both q-o-q and y-o-y it is in growth trajectory. Hope long consolidation will be over now. Hope to see some MFs will notice this performance.

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Is anyone tracking this company? What are the prices of vinyl sulphone and H-acid at present? Are China production back on track?

shreepuskar.pdf (1.5 MB)
Shree Pushkar Investor presentation

Again very good set of numbers posted by company. Not sure why stock price is continuously in pressure. Management also communicated that Company is looking for inorganic growth.

Thanks for posting the results. They had bought some land last year, I was expecting them to utilize it for expansion apart from the inorganic growth avenues. Let’s wait for the concall.

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Promoter takes another bite from the market. 44,500 shares acquired on 15 Feb.

He has accumulated ~2% from market in the last 6 months.

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Board meeting on Friday, 15 March to approve an investment proposal.

https://www.bseindia.com/xml-data/corpfiling/AttachLive/842fb3d5-8621-4b6d-a0b8-0bde88f8c163.pdf

Looks like we will have some clarity about the investment mentioned in the Q3 results.

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Some real positive development in company.

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This will double their fertilizer (SSP) capacity from 200,000 TPA to 400,000 TPA.

Price is in line with Kisan Phosphates acquisition which was ~9 cr for 100,000 TPA.

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  1. The company revenues majorly comes from Dye Intermediates and Dye - 84% and Fertilizers - 14% and rest from Saleable acids and Cattle feed

  2. Capacity
    10-01-04-02

  3. The company intends to built units for Ancillary textile chemicals and to become a one stop for textile solutions but no expansion plans as of now and the management would like to keep the moves secret.

  4. The dyes Division should have a capacity util of 75-80% which should contribute to 130-140 Cr (From Earnings call)

  5. H Acid price has reached to a level of almost Rs.410 to Rs.415 and the chairman personally expect it to go to Rs 425-430,

  6. The exports have grown to 73 Crores from 23 crores. - This will increase the receivable days (usually in the case of exports) which will increase in the working capital needs (But no significant changes in the debtor days).

  7. The company plans to spend 150 cr to expand Dyes intermediates which will increase the revenues close to 250 Cr (175 Cr in First phase and rest in second) which should increase the bottom line by at least 10 Cr if 50% if sold outside apart from the captive consumption

  8. The company has ended marketing tie up with DCM Shreeram and started own marketing and sales team in the northern india.

  9. Sulphuric Acid plant in haryana will be able to product 125 Tonnes/day and cost of sulphuric acid per tonne is Rs 7500-8000 and the setup cost of this plant is 10 Cr. (50% captive and 50% sold outside)

  10. The changes in the price of dye intermediates will take around 2 months to reflect in the dyestuff prices.

  11. In H-acid and Vinyl Sulphone the company has higher single digit market share in India.

  12. FY 2019-20 dye intermediate sale is 3158 metric tonnes and our dyes sale is 2765 metric tonnes for the nine months. In value terms it is Rs.172.95 Crores in dye intermediate segment and dye segment it is Rs.81.05 Crores.

  13. From the Earnings call observation it is clear that the company wants to become a unique product supplier than becoming a commodity player.

GROWTH ANALYSIS :

  1. The standalone earnings have grown at a rate of ~35% in the last 10 years.
  2. The interest coverage ratio, debt to equity, current ratio stands at 23, 0.19 and 1.82 respectively
  3. The earnings have grown at a CAGR of ~23%
  4. The inventory days have reduced from 109 days in 2014 to 48 Days in 2018
  5. Payable days have increased from 19 days to 35 Days. the company doesn’t have any finance crunch and increasing payable days shows good power over the vendors
  6. The tax rate is around 35%
  7. ROCE and ROE is good at 21% and 15% approximately
  8. Operating Efficiency has increased from ~12% (2014) to ~16%(2018)

MANAGEMENT :

  1. If you look at the growth of the company from trading chemicals to manufacturing of dye intermediate and fertilizers and to dye intermediate and dyestuffs. Latest plan is to get into textile ancillary chemicals and to become the one stop textile solution
  2. It is visible from the expansion of the company and growth if you see the last three years, whatever the management has said was almost fullfilled almost and clear execution.
  3. From the earnings call, the management is clear to make the company as a brand identity than becoming a commodity company.
  4. The company plans Rs.75 Cr (Totally 150 cr) capex on Dye Intermediates which can be used for Captive as well as outside sales.
  5. Also all the acquisition and to be are in field of the company. No bad acquisition has been made and hunger to export to the international market.
  6. When the company acquired kisan phosphates the first thing it did is add sulphuric acid plant and captive power supply to make it more operative efficient.

SHAREHOLDING PATTERN

  1. if you look at the shareholding pattern of the promoter in the last 8 quarters vs public shareholding. It is very clear the promoter has been buying from the public.
  2. Promoter shareholding has increased from 61.66% to 64.88% in the last 8 quarters

RISKS

  1. The growth was boosted by the pollution in china, if things go back to normal, there could be a risk for the indian companies which is not possible in the near term.
  2. Decrease in the demand, There was no good report or article to find out the real demand for dye and dye intermediates

VALUATION :

  1. The company is current trading at 16 PE, If the new DI plants to be set up adds 175Cr of revenue and at a 10% NPM the bottom line should be increased to 65-70 cr which should increase the EPS by ~20. Then the forward PE becomes 8.12 at CMP of 170.
  2. If you look at the previous valuation, the company had enjoyed a rich valuation ~ 30 PE. If the company is debt free with good management, demand for the product, no debt and good acquisitions and expansions why shouldn’t this company get a 30 PE again.
  3. If Market gives 30 PE with the EPS ~20 Rs, the stock price should between 500-600 Rs where there is still 200-250% upside.
  4. The company can command higher PE because of the good sales growth and earnings growth combined with good ROCE and ROE

NOTE : I haven’t invested in the company, Your POV is welcome and please write if i have missed something.

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CFO Mr. Ratan Jha resings, no specific reason has been given by the co as of now. b2e50db1-2e0e-404a-a98e-9c2fc37d1c11.pdf (341.8 KB)

The share has come down to one hundred levels. Any issues?

Dyecol launches in Bangladesh. Company looking to enter South America and Turkey as well before new capacity comes online .

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https://www.cnbctv18.com/market/stocks/market-expert-sp-tulsian-bullish-on-chemical-space-bearish-on-2-aviation-stocks-4962071.htm - Updates from SP Tulsian

Dye intermediates seems to be positive and have beneficial to companies involved in creating such chemicals. Shree Pushkar might benefit from this as they stand at 69% capacity utilization at 8986 MTPA for dye intermediates : https://www.tijorifinance.com/company/shree-pushkar-chemicals-fertilisers-limited

Not sure who might be their clients on domestic front & internationally, any idea about their supplies and order book as in to whom they deliver the product and the price cost compared to Bhageria & Kiri?

Anyone who attended earnings call two days ago? Looks like they havent uploaded the transcripts yet.