Of course the company has done a nice job. of course promoters have done nice things in the past. but @manhar the promoter has just purchased 10% of the company at 30cr instead of 200cr. Which fund manager will back this company? I also was thinking of buying this company but is corporate governance optional? But i guess different people have different thresholds.
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This seems so much fairer and 5x is so much better when compared to what KPI green energy did. The promoter sold one of his company named ‘K Park’ having 0 revenue, land worth 15 crs and absolutely nothing for 126 crores to the listed entity in exchange of shares deeply discounted to market price, then did an immediate QIP followed by a 1:2 bonus, and issued dividends while having a debt to equity ratio of 2.5. Despite all this people kept buying the stock taking it almost 3x in 3 months and Fund houses like Quant bought and sold the stocks within a month booking handsome profits. Smallcap is chaotic and filled with newbie investors making greedy decisions and pros feeding off of it. So what you are saying sounds so much better to me and nothing wrong if you dig deep into the industry norms (which is off paper).
2 Crores? Please look at this -
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I would delete this post as this does not add much value just replying to @iMrunmayee and @ChaitanyaC sir
this is day light stealing, I would ask this in concall, corporate governance is not good hence if you want to buy such business you better have a margin of safety
I would buy them below 20 times and sell them close to 40times this is what my strategy is, as companies with governance issues like some would never have a secular up trend
Recently when it was at 220 rs literally at 8x- 9x 2yrs forward earnings, most of the things were priced in, you should have bough it there, now once they announce something around their new factory, you would see them again at around 40times, that is the time to sell.
I have already made money out of them in 1 cycle, this is my second time doing the same thing
I am interested in this business because I see their product is great, but there are way more better companies to make money so you need not make money with just them
I am invested from lower levels
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@Mohit_baid you are just changing the benchmark so that this company looks better. one can arbitrarily chose an even worse company to make the point. How is it industry norm to steal 10% of the company (which is nice on every other metric)? How can the minority shareholders not have a say in this related party transaction. Actually does anyone have an idea how we can raise this to SEBI?
But I am understanding that people have different levels of comfort with promoter shenanigans.
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You don’t have to delete the post. Discussions like these not only help people who are invested now, but in future too. Beliefs, biases also play a role in our investment journey, and when I read some old threads, I get to know what happened at a given time, and how both supporters and doubters presented their views. Not everything is quantifiable when it comes to investing.
If one individual person with no connections to the business in any manner can find wrongdoings, then it is not surprising if the institutions or big players know and distance themselves. I also don’t deny the fact that money can be made even in the worst of the situations, if one can time the exit, which it seems you have and can again.
I can suggest to go through the threads of 8k Miles, Talwalkars and Vakrangee and see if you can get any new insights.
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I am not being defensive but rather being realistic and a little sarcastic, welcome to the small-cap space where you choose aspiring, high growth, efficient companies that are less dirty than the others. I learned it, accepted it, and made decisions. I was just like you but this is how it works haven’t found a company that is 100% clean till date. Some are all dirt and some a little because India inc. works in ways no management school can teach. So invest in only those that let you sleep peacefully.
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His linkedin profile and experience
https://www.linkedin.com/in/anand-agrawal-a4058220/
This is a big move and this is how I think about it.
- Som does not do surrogated advertisements, so how do they sell?? They have a very strong distribution network, that is how they sell, I some where read in 2019/2020 concall
- They opened 2 factories in 2018 and 2019 in KA and OR and then in 2020 they hired this guy, their market share was around 3% back then in both states and now around 20%, so they bought in the right guy at right time.
This guy Anand also has a very strong experience and came in at the right time when they are entering new states and planning for a new factory.
Interesting time ahead and this is a big news as per my understanding
Disc - invested
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While checking the result I noticed that tax percentage in this quarter is quite high to 45% (source: screener). Does anyone know why tax rate would be this much high in this quarter?
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Good Point
Might be due to entry in new states like Rajasthan
Although we will get to know once they publish concall transcript
I did some rough estimation of what could next quarter numbers could look like.
Company sold 6.5 million cases of Beers in Q1 FY24 with average per case realization of Rs 559. Capacity of Hassan plant has been increased by 5 million cases and has been operationalised during first week of this month. Assuming 100% capacity utilisation of this added capacity, the sales projection for beers is 7.8 (6.5 + 1.3) million cases Q1 FY25.
With price realisation remaining the same, the total revenue from beers sales comes out to be roughly 436 crores, with assuming 12% OPM, EBITDA will be around 52 crores. With 9-10 crores for interest and depreciation, PBT should hover around 42 crores, with tax of 25%, PAT comes out around 32 crores.
With TTM Net profit not growing, at PE of 40, we can only expect 20-30% growth in share price.
We still need to account for 10% profit that won’t be credited to company due to equity exercise done by promoters few months back. If we take those numbers into account, it means it’s currently trading at it’s fair valuations, with low possibility of returns in the future.
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Room for growth is a bit not too much from this point as they have cracked the major markets in which they are present and gained a resonable market share there from single digits to high double digits
Beer being the star can’t get them to a 60-70 PE like other IMFL players listed
Maybe a room for peak PE of 40-45 and a price rise of 20-25% from this point if market sentiment rimains on the stronger side
Agree @manhar the sales would grow at a staedy pace but margins (due to glass bottles) and taxation to some level is a stress
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what’s your thought on this quarter tax rate? Its 45%, which I din’t notice in few earlier quarters.
I can only make guess, it’s better we wait for concall.
One more thing i noticed that realisation per case was 488 in Q4 FY23 and it improved to around 560 next quarter. So would they undertake a similar price hike this quarter as well ?
@lovekesh_thakur realization is a function of product mix as well, like if they sell more hunter or IMFL then blended realization would go up + every year exactly this time of the year they do a price hike of 5% or so so yes it would increase
@sanju.inlv what I can only say on the TAX part is check the historical tax
For united brewries
'SO we need to figure why it had decreased to 25% suddenly UB did not have any losses as well??
My understanding is top line would grow at 50%++ need to understand bottome line growth. I would wait for time or price correction to re enter as of now does not make sense to me
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@manhar earlier corporate used to have higher rate. Now it is 25%, until corporate has not chosen new rate. I noticed that they had even lower than 25% for last couple of quarters so I was curious why it jumped too high. Anyway let’s wait if anyone ask in concall and it gets clarified.
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SDBL has released the investor presentation on link here
For the the most interesting slide is about growth drivers.
Uploading: image.png…
Q4FY24 CONCALL NOTES
min entropy = 0
• TAX PROVISION OF 13-15 CR CREATED THAT’S WHY THE FIGURE LOOKS INFLATED
• NEW STATES ADDED JHARKHAND,RAJASTHAN,PLANNING TO ENTER NORTHEAST
• HASSAN PLANT EXPANSION ENOUGH TO CATER TO THE DEMAND FOR ALL THE STATES
• KEEN TO EXPAND CAPACITY IN ODISHA (NEXT QUARTER MAYBE)-TO CATER TO JHARKHAND AND NORTHEAST
• ONGOING PROCESS OF ACQUIRING VALUE BUY ACQUISTION
• MARGINS TO REMAIN TO 12-13% EBITDA MARGINS FOR SHORT TO MEDIUM TERM NO IMPROVEMENT IN THAT
• FY25 GUIDANCE ACCORDING TO Q1FY25 RESULTS
• 95-96% OF SALES FROM STRONG BEER AND ELSE FROM OTHER CATEGORIES (80-85% MARKET IS OF STRONG BEERS AND REST OF OTHER CATEGORIES ACCORDING TO MANAGMENT)
• ANTICIPATING DEMAND FOR ORISSA,JHARKHAND AND NORTH EAST(WB,SIKKIM) WILL INCREASE IN FEW MONTHS
• NO QIP BEACUSE THE CAPEX AND WORKING CAPITAL NEEDS ARE SATISFIED
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