Collection is the biggest challenge for this company. Rest it has all the ingredients.
They gave a guidance of 30-35 cr PAT for FY25
Either thats a conservative number, or they have reduced their guidance significantly from before.
Any idea what volume they did in this quarter?
1 Like
Hi
Has any one looked at the cash flow statement.There is a big Payable item of 10.51 crores. Any idea what it can be related to please ?
Thanks
Thanks for checking that. I have found the answer in H1 concall , promoter has mentioned that the investment done in setting up capacity of 18000 metric tonnes was classified under current liabilities as per the advice of the auditor and they have put it under line item ‘trade payables’.They should have put it under 'Purchase of Fixed assets or machinery ’ in ‘Cash flow from investing activities’ to avoid this confusion, according to my novice accounting skills
2 Likes
Must be some technical reason for classifying it like that
As far a i have read, Eco Recycling is not doing complete e-waste recycling process. After dismantling and shredding they sell the plastics , metals, … to some other companies . It can be a recycling company like Gravita which does smelting , but also to some other industries which i am not sure.
I dont know how they are giving EPR credits as they dont to complete recycling.
so what i could see here is, Eco recycling does collection service and nothing else. Not sure how they can sustain this margin for long time. Except riding the EPR wave nothing looks promising in this business.
1 Like
Metal is where, the money is, in e-waste recycling. Once the metal is extracted the recycling is done. What else do you expect them to do with it ? Make gold jewellery ?
2 Likes
They sell the recycled products in the market
Ecoreco does a lot more than just collecting
They recycle the e-waste
Their facilities are certified as per international standards which gives them preference when international players recycle in India
They have other services as well in e-waste
1 Like
Have you attended their regular investor concalls and presentations?
valuations have become expensive. currently trades at 102x PE
But they are also growing their EPS by 100%
Look at forward valuations
They are targetting 35Cr PAT for Fy25
On FY25 bais, they sre trading at 58 P/E
And there is growth visibility for next 2-3 years atleast, with an upside risk
1 Like
The first snippet is from their concall(Q1 FY’ 24 Results Conference Call”
July 25, 2023 ) where they say they sell it to smelters.
The second snippet is from their website , which doesnt say smelting of metals. You cant use these metals directly in a manufacturing . You need to recycle it know.
Now correct me with some details from their concall or website, if my understanding is wrong. we are here to discuss facts and lets discuss.
1 Like
Recycling forms a major part of revenue(70 %) in comparison to data destruction, refurbishment and lamp recycling which includes the rest(30%)
Just check the below link from the unlisted players where the final step is smelting
What about the valuations the P/E is on fire since the last few days even though the prices did come down in the last few sessions.
It is to be seen how the company manages to bank on the opportunity. I think the capacity seems to be not an issue for this company anymore.
3 Likes
India’s electronics manufacturing is at an ‘inflection point’, poised to almost quadruple between FY24-30 to $450 billion, compounding at around 25 percent CAGR, Nomura has said.
In a note dated September 11, Nomura listed out multiple catalysts driving this growth:
- Higher sourcing by global players like Apple/Samsung (~20-30% of requirement)
- Global IT hardware players (Lenovo, HP, Dell, others sourcing ~20% of global requirement)
- Rising electronics usage and a localization push in automobiles
- Usage in railways, telecom and defence, and stronger scale-up in the component ecosystem (display, PCB, semiconductors).
The note by Nomura said exports are likely to scale up faster at a ~35% CAGR, reaching $210 billion by FY30F, while domestic consumption should grow at a 15% CAGR.
Centre’s push for domestic manufacturing of electronics - led by Production Linked Incentive (PLI) schemes worth $20 billion - remains the key enabler to achieve this growth. More than half of this capital allocation has been made to manufacture semiconductors and electronic components.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
So wondering how India is gonna handle e-waste (responsibly). That’s where, companies like Ecoreco would immensely benefit through EPR credits and Recycling.
1 Like