a9172ef0-2e7b-441b-8bd5-6f89c3ced416.pdf (604.9 KB)
Company has announced regarding marketing arrangements for PVCO pipes of a pvt ltd company.
Company finally announced regarding PVC manufacturing plant
Another important news regarding this company was that Anti-Dumping duty on Caustic Soda was removed from Oct-2018 onwards.
As per technical chemfab has broke multiyear high .2018 high was 275.Immediate resistance is placed at 314 that was the high of 2008.
Above 314 it can reach 500+ levels
Is there anyone still tracking this company fundamentally?
yes, Let me know if u need any information on the same
Q4-23 results were declared yesterday. Revenues are down YoY, whereas profits are up. Slightly concerning on the revenue front Whatâs your reading of the results?
I am not following this company but i am following Gujarat Alkalies and both these companies deal in Caustic Soda , and Caustic soda prices are down from Mar22 levels 20% YOY and 36% QoQ, so that can be the reason for low revenue, no idea about Profit as i m only following Caustic Soda.
Hope this can lead you somewhere.
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Checked the results and clearly the Profit has increased because of decrease in raw material prices which will be coal prices (coal constitutes 50% of cost in Chlor Alkali companies) which were very high around MAR22 and have came down a lot form that level.
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I stumbled on this company when I was looking at high RoCE companies available at low market cap relative to FCF. Below is screener query that threw this name.
Valuation seems too lucrative to be true. Company generating 40%+ RoCE available at mkt cap to FCF of just 7 and PEG ratio of 0.27. It was available at 310 Cr. (371 Cr. market cap - 61 Cr. cash) with TTM revenue of 30 Cr.
I decided to dig further. It turned out to be a typical commodity business story.
Step - 1: Due to sudden development, demand outstrips supply.
Step - 2: Prices goes up. Companies make abnormal profits. Valuation looks cheap.
Step -3 : Underline development normalizes. Prices are back to normal levels. Company valuation tumbles.
In this case it is power cost. 60-70% of caustic soda production cost is power. Power in Europe became very costly due to Russia-Ukraine war. It became unviable for some of the plants to produce caustic soda and they were shut down. Lords Chloro gets power from Jaipur Electricity Board (JVVNL) and rate is unchanged since last 3 years. Hence it minted money. However normalization of energy cost in Europe and global recessionary fear have crashed caustic soda prices. Hence Lords Chloro margin suffered. So much so that it posted a loss in last quarter.
I have already burnt my finger in one such story of HEG. Hence I plan to stay out of this.
However this once again proves that if someone is skilled at timing commodity cycle, they can make good money in commodity stocks - 6 times appreciation between Sepâ21 and Sepâ22.
But please remember, it needs extreme skill and quite a fair share of luck.
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