Any update on the fire incident?. How much damage has happened and is there any loss of sales?
A fellow investor talked to company officials. As per him, they had some raw material loss which was insured. No machinery is burned and they had just 5 days operational loss.
Thanks for this update
I think the key consideration is whether the property was adequately insured or not - there is an insurance premium of about 7 lakhs in the P&L. Also they were constructing an additional capacity of 18k tons and this was also nearing completion - I could not find proper reference if this was on the same site or a different one. If it was different, it would mean that bigger part of their capacity was safe
I suggest try uploading to google docs and share the link. This is one solution, but OfCourse there can be many other ways.
My study about Eco recycling limited
Investor meet announced for 13 Feb - a lot of things will be clearer then
Hi can you share on Google drive again or on what’s app 9810981541
Remind me after 2 days
|Revenue from Operation
Good margin expansion, revenue probably impacted by fire incident, concall tomorrow
Please send your video
Wasn’t the fire incident in Jan? How will it impact Q3 revenue?
The fire incident barely had any effect, production was impacted for a few days and that was it.
Looking at the company and financials I am wondering how is it being valued at 1000 Crs. There was a kabbadiwala in Central Delhi (Connaught Place) who had a turnover of ~20ish crores back in 2010. Maybe I should find him and tell him to file an IPO for 2000+ crores now
This firm looks more like a “dhanda” than a proper enterprise and is valued at 1/6 of Gravita with a 100 time less sales. The “dhanda” part would also explain why their margins are so high as they might be operating as part of the informal sector.
Thoughts on why this “dhanda” is being covered so extensively?
Fair question, very fair question
I guess it’s because of this. https://x.com/GunavanthVaid/status/1754567506768146928?s=20
EPR is changing the nature of the business. If the CP kabadiwala can handle this then he surely has a chance of getting a good IPO.
No I agree with EPR tailwinds. But I don’t see how Eco Reco is supposed to benefit from this to an extent that its being valued at 40X sales and 80X earnings given how small and non-unique the business is. If this space becomes that lucrative, I am sure bigger players will step in fairly quickly and set up facilities and capabilities e.g., Amara Raja putting up lead recycling capabilities
Add to this the fact its already at 1000 crores and not a microcap anymore e.g., RACL was available at 55 crores MCap at 60 Crore sales.
So I am struggling to see what the Safety of Margin is? Or should I just buy the narrative and hop on for a scary ride to the moon?
Have you seen what kind of capacity expansion they are doing and what turnover they can do at peak capacity?
I have seen it but the market seems to be discounting perfect execution from a company which could not grow or execute over the last 5-7 years. EPR is not a new thing at all. Its not like EPR started in Mar’23 and hence why Ecoreco is growing now.
And their annual report for 23 shows they spent more money on equity investments than CAPEX…
You have validquestion on the valuation. No point in me trying to answer them, so i’ll let it pass. Mgmt. indicated in the last call that, EPR could have added another 5 cr. to last Qs revenue. EPR site had been delayed and now it’s under operation. So hopefully we will be able to see the full revenue (including the EPR revenues) potential from Q4 onwards. One thing mgmt. accepts that this line of business has opening for 100s of Ecoreco’s. So don’t expect them to be a differentiated business. It’s about capacity building & execution. Let’s see how they do it.