See the company is generating sufficient free cash flow . Its a b2b business , receivables will be there - and they have to maintain inventory.
If there is news on expanding production, then the company may use internal funds and debt. Dont get confused by receivables and inventory. see the fcf
ICICI came with report on mayur with the tgt price of 700. Time frame 1 years.
Full report if anyone has please post
Surprising to see the report does not mention the footwear part of the business which will be 1000 Cr by CY 25 and the Zara deal is that happens, this might upgrade the stock .
Invested
Footwear segment of size 1000cr. Not came across any such info
Company continues disappointing on their guidance, some or the other thing keeps becoming a hindrance in their growth. Currently, they are struggling because of footwear and auto export slowdown due to strikes in US. Concall notes below.
FY24Q2
Disclosure: Invested (position size here, no transactions in last-30 days)
@harsh.beria93 big fan of your detail analysis . Do you know about dispute of Suresh poddar and Manav poddar. when will it resolved?
Mayur reported another flattish quarter (flat sales and profits). They keep moving the goal post as it comes closer, now they are guiding for a step growth in FY26, while FY25 will also be a growth year. Concall notes below.
FY24Q3
PU sales : 2.07 lakh sq.m
PVC sales : 68.48 lakh sq.m (vs 70 lakh sq.m in Q2FY24)
Exports (53 cr.): export general (18 cr.), export auto OEM (35 cr.). Auto exports were impacted for 2 months due to strikes in Ford plant
Auto OEM: 42 cr., auto replacement: 38 cr., footwear: 34 cr., furnishing 5.60 cr.
BMW is still 4,000 m, expect ramp up from April 2024
Mercedes : 30’000 m/month
Used to supply 2.5 lakh m to Maruti which has reduced to 30,000 m as they only supply to their premium models which can give them higher margins
Will see growth in FY25 but big jump will happen in FY26
Have introduced a new product for marine market (exports) which they were working for 3 years
Zara had four visits to their Gwalior factory and Mayur is expecting orders in next 3-4 months
Retail furnishing : Sold 20,000 m last month. 500 dealers now and hope to add 500 more in next year
Have seen large number of PVC plants coming up (10-12 factories in Gujarat now vs 2 factories 5-years back). They install plants for 150 cr. Vs competitor plants of 20-25 cr.
Sorry I dont know. Manav had joined the co a few quarters back.
Disclosure: Invested (position size here, no transactions in last-30 days)
One of the analyst asked if any professional management needed to brought in. For Mr. Suresh replied in detail that their 1st priority is the bottom line and not the top line. In a way he’s correct but how log the investors will be patient needs to bee seen
I exited post the concall. As you rightly said, they keep moving the goalposts after every quarter. Is this not a red flag for you, that they keep revising guidance?
In my opinion, one needs to give a long rope in case the management is being honest with the challenges.
Especially, when Mr. Poddar explained the challenges the co has faced with the uncertainty in the domestic footwear industry with BIS standards implementation.
IMO, the company has done well to avoid degrowth while keeping the margins intact.
There could be real business scenarios which might be encountered on ground, which we as investors might not be privy to.
What we can do is, assess what the current valuations, if they are optimistic or pessimistic considering whatever future growth might come in.
Disc: Invested, will revaluate after giving a couple of more quarters to the management to deliver.
Agree with you. But would it not be better to enter when there’s an indication of things turning around because as I see it, growth will be muted for the next 3-4 quarters. In the meantime there are fundamentally sound, fast-growing companies available at pretty much the same valuation e.g., Neuland Labs
Agreed. We as Investors should keep on owning businesses with excellent capital allocation and double down the position when there is growth visibility.
Great capital allocator + Growth visibility + Fair price = Great combo. Currently growth is missing in Mayur but suddenly can surprise 1-2 years down the lane.
