New episode…equally insightful.
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I am new to cyclical investing.I guess Spinning sector bottom out , huge volume coming and downturn continue in Polyfilms?
Is anyone can correct me , where i am wrong in both the cases?
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Phthalic Anhydride looks like another sector worth tracking currently. Have done some work on IG Petrochemicals (Market leader). Would appreciate any thoughts.
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Balance sheets for most players like Nahar and sportking are strongest in their life. Now we need to wait patiently for next upturn.
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US /Europe are the major market for many of them. If US/Europe gets into recession or inflation does not come down, demand will be weak. These companies may underperform for longer than expected . Request views of senior members on this .
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Where can I track the Zinc Oxide price and its historical data? Thanks in advance
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Tijori Finane: RM section
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Cap goods companies have done extremely well in last few years with firing on all cylinders - robust order inflows, strong revenue growth and margin expansion. They have strong order books and now expanding capacities & foraying into new segments, which should help in next leg of growth. At the same time, valuations have become rich due to all rounder performance resulting in significant jump in stock prices.
Extracts from few recent press releases
indsil financials have been bad. but stock price is volatile. is there any reason for this. they also keep mentioning sale of overseas plant… and price moves up and then crashes…
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Indsil has disclosed to BSE that the sale of their 50% share in Al Tamman has been completed… does this mean they will get USD 19 mn from the sale?
they have also redeemed pref shares. It seems company is going to turn around… will it return to its previous highs?
From Bloomberg, originally:
Welcome to the end of the biggest commodity boom - The Economic Times (indiatimes.com)
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The entire PVC/Chlor Alkali Chain looks to be setting up well. The trigger is that Capacity additions over the next 3-4 years look minimal globally and there are specific demand triggers in place- US replacing their water pipeline systems by PVC (from lead) , India’s growth of 7-8%…
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which company to benifit ?
The only company I track really well in this space (Chlor Alkali/CPVC) is Epigral. There has been an excellent product mix change that has taken place here as well. Tracking well since I’m invested since 2021. You may want to study this company.
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China exporting copper to the US !
Copper price squeeze upends global trade flows - The Economic Times (indiatimes.com)
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Rain Industries: A Potential Turnaround play, might have bottomed out, reversal looks like from the next few months.
Positives and Key Considerations for Rain Industries:
- Raw Material Availability: Rain Carbon recently received approval for a higher allocation of Graphitized Petroleum Coke (GPC), a critical raw material for their Vizag and SEZ plants. This development comes after a long period of restriction and should enable the SEZ plant to operate at full capacity within 6 to 12 months. This increased capacity could significantly boost revenue and profitability, thanks to enhanced operating leverage.
- Debt Management: Although Rain Carbon’s debt is high and interest rates are elevated, the company historically took on loans at low interest rates for expansion projects. Their Return on Equity (ROE) was previously higher than the interest rates on the debt, making this a reasonable strategy. With most of the capital expenditure completed and plants coming online soon, the company is positioned to start reducing debt more aggressively as no major capex has been planned in near term. Also interest savings flow through to the bottom line, this could lead to a re-rating of the company’s stock. This can change the perception of investors looking towards this business.
- Aluminum Market Outlook: The demand for aluminum is expected to rise due to trends such as the shift toward electric vehicles, automotive and aerospace light-weighting, and the expansion of renewable energy infrastructure. Global aluminum production is projected to grow, surpassing previous highs over the next few years.
- Cost Efficiency: Rain Carbon is among the world’s lowest-cost producers of GPC and CPC Though they don’t beat their chest and say, their cost advantage is reflected in their operating margins, even during downturns, positioning them favorably compared to competitors.
Optionality and Strategic Moves:
- Anhydrous Carbon Pellets (ACP): Since 2011, Rain Carbon has been developing ACP to mitigate risks associated with the availability and quality of GPC. This patented product could provide a significant competitive moat by safeguarding margins against raw material price fluctuations.
- Shift to Value-Added Products: The company is transitioning towards value-added products in advanced carbon materials, which should stabilize margins and reduce cyclicality compared to their traditional products.
- Focus on Energy Storage Materials: Rain Carbon is making strides in the energy storage sector with the establishment of a new R&D facility in Hamilton, Ontario. This center will support the development of energy storage materials for lithium-ion batteries, solid-state batteries, sodium-ion batteries, and hydrogen fuel cells. The R&D efforts are expected to drive innovation and strengthen their position in the energy storage market.
Given Rain Carbon’s strong cash flow, low valuations, potential for debt repayment, Operating Leverage, recovering carbon product demand, and other strategic initiatives (Optionality Playing out), it appears that many of the negative factors have been addressed. Any positive developments could lead to a significant re-rating of the company’s stock, which is currently undervalued and overlooked.
DISC: Invested (Can be Biased)
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Except for the first point, rest is already know to market. Still not able to understand why the price is still down. Also, if market falls, won’t there by risk of further downside?
I agree! However, In the stock like this, market usually don’t react on the information, news or narratives they want it to be reflected in the numbers first that too consistently for few quarters because of the past experience that it isn’t one off but rather it’s a long term trend. That’s what i believe so technically once it starts reflecting in numbers the market will start aggressively adding it or atleast start taking interest. Regarding the downside, I’m not that smart but from the little I know 130-140 is a strong long support if markets falls down significantly however in small corrections it should respect 140-150 based on technicals
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Tea price are up 40% ytd in coimbatore (source: Weekly Prices | The Official Website of Tea Board India)
Majority of this rise came in last one month.
United Nilgiri owns and operates multiple tea estates near coimbatore. The company is debt free, trading near book value and at a P/E below 15.
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Was checking the prices from 2021. I do not see much correlation of stock price w.r.t tea price. similar prices are seen in 2021 and 2022. I am yet to download and chart. But only eyeballing the data.
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