Nithin's Portfolio

nithin_Shenoy · August 17, 2023, 8:48am

“LatentView Analytics” is a global analytics and digital solutions company that offers various data-related services to businesses. They focus on helping organizations harness the power of data and analytics to drive business growth, enhance customer experiences, and make informed decisions.

Some of the services and solutions that companies like LatentView Analytics typically offer include:

Data Analytics: This involves analyzing large volumes of data to extract meaningful insights, trends, and patterns. Companies like LatentView Analytics might employ various techniques such as data mining, machine learning, and statistical analysis to derive actionable insights from the data.
Marketing Analytics: This involves analyzing marketing data to optimize marketing strategies, improve customer targeting, and enhance overall marketing ROI.
Customer Analytics: Companies like LatentView might help businesses better understand their customers by analyzing customer behavior, preferences, and feedback. This can lead to improved customer segmentation, personalized marketing, and enhanced customer experiences.
Predictive Analytics: Using historical data to predict future trends and outcomes. This can be applied in various areas, such as demand forecasting, financial analysis, and risk assessment.
Digital Analytics: Focusing on analyzing digital data generated from online sources such as websites, social media, and mobile apps. This can provide insights into user behavior, website performance, and online campaign effectiveness.
Big Data Analytics: Dealing with the analysis of large and complex datasets, often involving technologies like Hadoop and distributed computing frameworks.
Consulting Services: Providing expert guidance to organizations on how to establish and implement effective data analytics strategies and solutions.
Machine Learning and AI: Developing and implementing machine learning models and AI algorithms to automate processes, make predictions, and provide intelligent recommendations.

Concall Highlights :

Finance:

Reported positive Q1 growth, expects Q2 growth to be similar.
Market uncertainty causing delays in closing deals.
Optimistic about H2 growth, dependent on timely closures.
No plans for further investments.
Margin improvement expected with growth.

Challenges & Strategy:

Focused on consolidating with a top tech client.
Renewing entire book of work with third-largest account.
Added annual work and new groups through consolidation.
Identifies Generative AI as opportunity for unstructured data. Market uncertainty affecting timely opportunity closures.
Generative AI’s potential in analytics landscape.
Risk of Generative AI disrupting data engineering work.
Acknowledgement of challenges in retail and BFSI sectors.
Emphasis on longer sales cycles due to external uncertainty.
Company remains optimistic about growth.

Future Outlook:

Positive growth projected for Q2, Q3, and Q4.
The company aims to achieve a growth rate of 5% to 8% higher than the industry average.
They have made investments ahead of the curve and expect better margins when the macroeconomic situation improves.
The deal sizes have fallen in the last two quarters due to uncertainty, but the company expects them to improve in the long term.
The European business is going through a reset phase, but the company is having conversations with high-quality accounts and expects growth in the future.
The company has seen growth in the BFSI sector and expects more closures in the next quarter.
The impact of generative AI on the company’s data engineering work is still uncertain, but they see it as an opportunity rather than a risk.
The company expects growth to continue in Q2 and Q3, but the trajectory beyond that depends on the closure of opportunities.
Margins are expected to improve as investments have already been made and no further incremental investments are planned.
The company is optimistic about the future and believes their investments will put them back on the growth track.

Orderbook:

Contracts aligned with clients’ fiscal cycles.
Peaks at year-end, decreases as executed.
High probability extensions considered.

Risks

Market uncertainty affecting timely deal closures.
Focus on overcoming Generative AI challenges.

Business Performance:

Return to growth after a slower quarter, with 4.7% sequential and 23.1% YoY growth.
Company’s efforts resonate well with clients.
New client wins include a large iconic restaurant and European tire manufacturer.
Validation of Indian market strategy with a two-wheeler manufacturer win.
Existing accounts grow significantly, with technology, CPG, and logistics sectors.
Strong pipeline for growth anticipated in existing accounts and new logos.

Geographical and Vertical Distribution:

US contributes 96% of revenues.
Europe targeting 5%-8% contribution by FY '24.
Technology vertical leads with 69.2% of total revenues.
Industrials also show strong momentum.

Generative AI and Technology Disruption:

Potential impact of generative AI on operations and growth.
Challenges in applying generative AI to structured data.
Use cases for customer sentiment and review analysis.
Confidence in growth rate despite new technology.

Europe Business and Growth Strategy:

Europe revenue decline attributed to existing account’s drop.
Europe business in reset phase, positive signs with new accounts.
Challenges due to longer lead times for relationship building.

Verticals and Challenges:

Positive trends in technology and industrial verticals.
Sluggish dollar revenue performance in retail and BFSI.
Investments to address challenges in these sectors.
Positive performance in existing BFSI accounts, longer sales cycles.

Generative AI and Analytics Landscape:

Generative AI viewed as opportunity for unstructured data analysis.
Importance of strong use cases and challenges in generative AI.
Potential in predictive and prescriptive analytics with Generative AI.

Growth Trajectory and Expectations:

Positive growth momentum, Q2 growth slightly better than Q1.
Uncertainty due to longer sales cycles and market challenges.
Q3 and Q4 growth projections tied to pipeline opportunities.

Margins and Investments:

Anticipated margin improvement, investments made, rate hike impacts factored.
50% gross margin threshold in the US.
Operates on managed services contract model, efficient resource use.

Strategies and Goals:

Confidence in investments and capabilities for future growth.
Focus on relationships, expanding capabilities, and winning logos.
Aiming to regain lost ground through consolidation exercises.

New Accounts and Growth:

The company added new accounts, including a large quick service restaurant, a tire manufacturer, and a two-wheeler manufacturer.
Existing accounts in the technology, CPG, and logistics sectors showed significant growth.
Latent View Analytics saw traction in value propositions such as on-shelf availability, multi-tier supplier visibility, and one customer view.
The company has a strong pipeline for Q2 and expects growth to continue, although decision-making in the market is still slow.

Investments and Expansion:

The company is investing in frontend capacity and has onboarded new members to the Advisory Council.
Latent View Analytics aims to increase its presence in Europe and is actively evaluating M&A opportunities.
Long-term, the company aims to continue investing in frontend capacity and expects to see growth in high-tech clients and value propositions.

Attrition and Workforce:

Attrition decreased by 10% in Q1 and the company has 300+ campus hires.
The company closed the quarter with a headcount of 1,091.

Summary

Billing structure mainly fixed monthly rates.
Maintaining margin thresholds despite smaller deals.
Top five customers contribute around 60% revenue.
Average revenue per employee around $60,000 to $65,000.
Onsite-offshore ratio approximately 1:5.5.

Disclosure : These are not stock recommendation, Please do your own research before investing. Am just sharing and seeking the knowledge for education purpose.

bhuvanca · August 20, 2023, 7:02am

Hi @nithin_Shenoy thanks very much for openly sharing your portfolio. If possible could you pls highlight the rationale of having sadhana nitro in your portfolio.

manoopatil · August 22, 2023, 6:49am

@nithin_Shenoy - Just a question on your chemical watchlist. Did you exclude - Archean Chemical after deliberation or it did not came in your criteria only. Asking about this specific name as it has much superior margins compared to Aether and Fairchem.

nithin_Shenoy · August 22, 2023, 9:53am

@manoopatil Chemical stocks are expensive for most of the names that you did mention - I will refrain them for buying now

Disclosure : These are not stock recommendation, Please do your own research before investing. Am just sharing and seeking the knowledge for education purpose.

nithin_Shenoy · August 22, 2023, 10:00am

SADHANA NITRO CHEM

STRUCTURAL IMPORT SUBSTITION story, Green Chemistry via Nitro Benzene

PAP Stands for Para-Amino Phenol PAP is the raw material for manufacturing of Paracetamol - You know the Paracetamol is used Pain Relief and Fever.

Opportunity size for PAP :
The World demand for PAP before Pandemic has been at 1,60,000 TPA. Out of which 1,50,000 TPA (i.e. 94% of Total World demand of PAP) is sourced from CHINA. In India, there are players like Valiant Organics who make PAP but its not via Green Chemistry.

Sadhana Nitro got Process Technology using GREENER Technology(that means it is SUSTAINABLE in Future)

PAP Can be Produced using 2 Routes
1.PNCB Route (Valiant Organics exists)
2.NB Route(Sadhana exists)

Sadhana has been Awarded PLI Scheme by Indian Govt for PAP Plants of 36,000 TPA

They have completed all capex on the month of June 2023, and they will start commercial supply soon.

Now Granules is one of their clients and recently promoter has pledged his shares to issue warrants.

Disclosure : These are not stock recommendation, Please do your own research before investing. Am just sharing and seeking the knowledge for education purpose.

nithin_Shenoy · August 22, 2023, 10:08am

Gentle Note :

The stock is tumbling down so I have cut down my holdings too - I would rather wait for breakout to pick back the stock.

Current Additions :

Mayur Uniquoters
Latent View
Gabriel

Added more to the allocation
DMCC
Orchid
Kamo Paints

Reduced
Sadhana (Waiting for breakout)
Fluorochem ( Waiting for approval & it will take minimum of 2-3 quarters)

Disclosure : These are not stock recommendation, Please do your own research before investing. Am just sharing and seeking the knowledge for education purpose.

nithin_Shenoy · August 22, 2023, 10:11am

KAMO Paints : I like their revenue Guidance of 1000 crore by FY28 and currently they are doing revenue of 260 odd crores now investing is the game of probability do weigh your risk and probabilities accordingly.

260 odd crores revenue now with 5x growth in next 5 years in no brainer for me, but again I might be wrong.

Portfolio has come to a size about 22-25 numbers, Whereas i did commit to stay between 10-15

SUVEN has 2 molecules in Phase-3 now and likely SUVN-502 may pass the Phase-3 test, if they do then there will be huge runway for Suven. So SUVEN LIFE SCIENCE are into research and SUVEN PHARMA is into CONTRACT MANUFACTURING - so given which side of the coin is much heavier :

Most of the research based companies such as SUVEN LIFE : has demerged from the main company SUVEN PHARMA to value unlock - because the research expense are considered to be expense than asset.
So SUVEN LIFE sciences focuses on research or on contract research
Most of the value unlocking happens on SUVEN PHARMA for manufacturing and distribution.

JIOFIN : Most of the ETF funds are selling JIOFIN due to the reasons that JIOFIN is not part of the index - JIOFIN was part of Reliance and recently they got demerged and since reliance was part of the index where JIOFIN is not - that is why ETF funds needs to be sell these stock as a base part of the criteria.
24th is the last record date (I guess) - will add when dust settles, JIOFIN will have tight competition with BAJAJ FINANCE JIO has the lowest cost of funds, can be a good arm strength in retail as they can fusion retail, digital, trends to include JIOFIN…

Disclosure : These are not stock recommendation, Please do your own research before investing. Am just sharing and seeking the knowledge for education purpose.

nithin_Shenoy · August 24, 2023, 4:35am

PF :

Serial	Stock Name	Buy Price	CMP	TODAY	Weightage	Return	Holding Days
1	LAURUSLABS	344.69	394.6	0	36%	14.48%	23
2	NEULANDLAB	2100.01	4055	2	14%	93.09%	210
3	SYNGENE	682.35	810.45	1	10%	18.77%	182
4	PRAJIND	296.41	487.3	0	5%	64.40%	282
5	AXISCADES	452.44	555.5	1	4%	22.78%	97
6	SYRMA	346.72	482.5	1	4%	39.16%	147
7	ORCHIDPHAR	579.69	577	0	3%	-0.46%	82
8	NEWGEN	499.57	949.95	0	3%	90.15%	109
9	SBCL	146.02	558.95	2	2%	282.79%	182
10	MASTEK	2155.64	2189.4	2	2%	1.57%	7
11	DMCC	309.66	326.4	1	1%	5.41%	132
12	JUBLPHARMA	453.95	472.4	2	1%	4.06%
13	KAMOPAINTS	177.97	190	-1	1%	6.76%	7
14	OKPLA	109.25	117.9	5	1%	7.92%
15	SIRCA	365.86	421.4	1	1%	15.18%	105
16	GABRIEL	251.71	282	2	1%	12.03%
17	JUBLINGREA	465.49	485.3	2	1%	4.26%
18	LATENTVIEW	413.56	427.25	1	1%	3.31%
19	TATACOMM	1694.61	1827	0	1%	7.81%	7
20	PATANJALI	1306.83	1278.1	0	1%	-2.20%	7
21	GUFICBIO	241.17	285.95	-1	1%	18.57%	109
22	JIOFIN	225.03	213.45	-5	1%	-5.15%
23	EASEMYTRIP	41.19	39.75	2	0%	-3.50%
24	BCONCEPTS	454	426.3	0	0%	-6.10%
25	FLUOROCHEM	2892.1	2877.45	1	0%	-0.51%	21
26	SUVENPHAR	515.25	519.85	0	0%	0.89%	7

How you should read this chart is for example : 55% of my Portfolio allocation : I did make 131% returns now at the entire portfolio level (XIRR) can be very low

My Own Tracker for all BSE listed stocks :
Week wise

Month Wise

Cheers

I don’t know am still not convinced with the Banks

Firstly I understand the banks will do well in next 12 month
Secondly after 12 months there will be NPA issues
Thirdly Bank profit pools are not too narrowed example in banks there are many and so thus the concentration pool of profit gets dispersed

I understand the fact not all banks are the same, they have different strategy but still not convinced.

@Sudhanshu_Shekhar : Helped me to fast track with the banks but given the small finance banks - there is SURYODAY, EQUITAS, UJJIVAN, FINO (coming in) many more if they come in - I am quite skeptical the earnings will get dispersed.

Now Why JIOFIN? : See BAJAJ FINANCE was the only Big fish in Ocean and there is a premium scarcity to it, same way as you see in the same Ocean JIO has arrived with low cost of funds to grab more share - that’s why am interested and hardly there are 2 tough players with solid background

Disclosure : Not a buy or sell recommendation, Please do your own research before investing. Am just sharing and seeking the knowledge for education purpose.

scr · August 24, 2023, 2:04pm

Any reference for Cost of Funds for JIO Fin. I am not able to get info related to that. Only one web article mentions that CoF will be lower than other NBFC [1]. Will they be substanially lower than Bajaj Fin ? Bajaj Fins is 7.61 in latest quarter.

https://www.businessinsider.in/finance/news/will-jio-fin-disrupt-the-financial-services-sector/articleshow/102931017.cms

nithin_Shenoy · August 29, 2023, 5:38pm

Good Day @scr

Firstly in the investing realm it’s all about the probabilities and uncertainty of the future that everyone invest with some level of mental model.

Do I have a concrete evidence in proving this? NO

Even the company doesn’t share their strategy or cost of funds that easily before starting a business.

So my thesis are

Firstly JIO comes from the reputed management none other than Ambani.
Secondly JIO is headed by the market veteran KV Kamath
Third : JIOs stake in Reliance
Fourth : Major Source of funds for JIO would be none other than the mother company reliance
Fifth : Reputation matters when it comes to HNI, UHNI, corporates to invest in an NBFC for so which we have, secondly we have top notch management, third we have reliance as a parent to take care of all the needs during crisis
Sixth : Reliance doesn’t need a introduction to the market, they already have they have name, brand and reach to every corner of the country that becomes very easy for them market and push this forward
Seventh : Cross selling in reliance digital, trends, much more
Eight : They have all man power needed and they are already established so that cuts most of the hurdle.
Ninth : Coming to capital they can raise capital either issuing NCD or get money from the parent company or they can reach to N number of investor for the capital. So capital is not a big task here, the biggest bet would be management on utilisation of it.

I don’t know if this answer suffice your needs but I don’t think Reliance has any problems with capital.

One thing is for sure that Ambani’s are good at :

If you know that tou have a product and no one is buying them : then you make loss and also you loose in terms of market share.
However if you sell your product at reasonably cheap value and if you still make loss that’s okay for them but the main point is did you capture the market share?

Same principle DMart runs low product tiny margin
JIO sim was one more example with free of services over a year followed by exuberant price hikes thus choking other players to also raise their prices.
At end everyone walks to DMart for low prices and everyone needs JIO for low prices…!!

Cheers

nithin_Shenoy · September 5, 2023, 1:42pm

Portfolio Update

Serial	Stock Name	Buy Price	CMP	TODAY	Weightage	Return	Holding Days
1	LAURUSLABS	344.69	406.9	3	39%	18.05%	36
2	NEULANDLAB	2161.97	3720	2	13%	72.07%	223
3	SYNGENE	682.35	810	2	11%	18.71%	195
4	PRAJIND	296.41	525	4	5%	77.12%	295
5	AXISCADES	452.44	566	1	4%	25.10%	110
6	SYRMA	346.72	535	-2	4%	54.30%	160
7	NEWGEN	499.57	861	2	3%	72.35%	122
8	SBCL	146.02	570	-2	3%	290.36%	195
9	GABRIEL	266.78	329	3	2%	23.32%	20
10	MASTEK	2155.64	2406	3	2%	11.61%	20
11	ORCHIDPHAR	570.64	565	1	2%	-0.99%	95
12	GUFICBIO	248.36	313.35	-2	2%	26.17%	122
13	JIOFIN	231.95	255.3	1	2%	10.07%	20
14	DMCC	309.66	353	-1	2%	14.00%	145
15	JIOFIN	244.3	255.3	1	1%	4.50%	20
16	KAMOPAINTS	177.97	183.9	-2	1%	3.33%	20
17	LATENTVIEW	417.32	459	1	1%	9.99%	20
18	SIRCA	365.86	418.5	-1	1%	14.39%	118
19	JUBLINGREA	465.49	514.9	1	1%	10.61%	20
20	TATACOMM	1694.61	1868	-1	1%	10.23%	20
21	OKPLAY	109.25	112	1	1%	2.52%	20
22	JUBLPHARMA	476.5	464.5	-1	1%	-2.52%	118
23	FLUOROCHEM	2911.08	3040.05	-1	0%	4.43%	34
24	EASEMYTRIP	41.19	39.9	0	0%	-3.13%	20

nithin_Shenoy · September 27, 2023, 2:31pm

Power Value Chain, short summary :

Industry Scenario :

Total target for 2030 :500 GW renewable energy installation
Installed Capacity as of July 2023 : 179.322 GW Renewable energy, large hydropower
Remaining Capacity to be completed by 2030 : 320.678 GW

The following is the installed capacity for Renewables:

Wind power: 42.8 GW
Solar Power: 67.07 GW
Biomass/Co-generation: 10.2 GW
Small Hydro Power: 4.94 GW
Waste To Energy: 0.55 GW
Large Hydro: 46.85 GW

Aims to produce five million tones of green hydrogen by 2030.
Aims to achieve 125 GW of renewable energy capacity.
* 57 solar parks with an aggregate capacity of 39.28 GW have been approved in India.
* Wind Energy has an off-shore target of 30 GW by 2030, with potential sites identified.
India has set a target to reduce the carbon intensity of the nation’s economy by less than 45% by the end of the decade
Achieve 50 percent cumulative electric power installed by 2030 from renewables,
Achieve net-zero carbon emissions by 2070.

Following list of activities in renewable energy will be considered for trading carbon credits under bilateral/ cooperative approaches under Article 6.2 mechanism as assigned under the National Designated Authority for the Implementation of the Paris Agreement (NDAIAPA):

Renewable energy with storage (only stored component)
Solar thermal power
Off-shore wind
Green Hydrogen
Tidal energy, Ocean Thermal Energy, Ocean Salt Gradient Energy, Ocean Wave Energy and Ocean Current Energy
High Voltage Direct Current Transmission in conjunction with the renewable energy projects
Green Ammonia

Union Budget 2023 Highlights

Green Growth identified is one of the nodes in the SAPTARISHI (7 priorities).

$2.4 Bn National Hydrogen Mission for production of 5 MMT by 2030, $36 Mn additional in Budget.
4 GWh Battery Energy Storage Systems supported through Viability Gap Funding
Pumped Storage Projects has received a push with a detailed framework to be formulated.
$1.02/2.5 Bn Central Sector Support for ISTS infrastructure for 13 GW Renewable Energy from Ladakh

Credits : Renewable Energy in India: Investment Opportunities in the Pow....

Power Finance :
For anything and everything you need Finance :
(Supervisor)
PFC
REC

PFC/REC provides financial assistance to entire power sector value chain across India. This includes financing to state and private utilities in generation, transmission, distribution space including financing the associated forward and backward linkages.

Power Generation : These companies have MOU with PFC/REC for considering loan, now the power generation companies setup the plants or they source out contract to EPC companies to setup the plant for them.

Power Generation companies are set of companies who is responsible for carrying out projects to achieve the 500GW installed by 2030 and to be operational.
I don’t fully expect these companies to have a robust balance sheet by EOY however this will be for 2030 as these companies needs to generate cash and cash can be generated when there is power generation
(Supervisor)

NTPC : NTPC (National Thermal Power Corporation) : NTPC is one of India’s largest power generation companies, primarily engaged in the generation of electricity through coal, gas, and renewable sources.
NHPC : NHPC (National Hydroelectric Power Corporation) : NHPC is a public sector undertaking engaged in the development of hydropower projects in India.
SJVN
BHEL : Bharat Heavy Electricals Limited (BHEL) : BHEL is a leading engineering company in India involved in the design, manufacture, and maintenance of power generation equipment such as boilers, turbines, and generators.

Power Transmission These are the set of companies that outline the transmission towers to carry electricity from rural villages to urban areas.
The estimated cost of the power transmission project is around Rs 27,000 crore
These need to start their work from current or next year to layout HVDC for miles.

POWERGRID (Supervisor) : Power Grid Corporation of India Limited (POWERGRID) : POWERGRID is a central transmission utility responsible for the development and operation of the power transmission network in India.

Power Distribution

PTC

Some of the EPC private companies : : Some of the EPC players get contract from the above mentioned supervisor.

Companies	Companies Focus	Sector
KEC International Limited	Power Transmission	Infrastructure
Kalpataru Power Transmission Limited (KPTL)	Power Transmission	Infrastructure
Skipper Limited	Power Infrastructure Products Manufacturing	Infrastructure
Apar Industries Limited	Conductors and Cables	Manufacturing
Finolex Cables Limited	Cables and Wires	Manufacturing
Tata Power	Power Generation and Power Distribution	Conglomerate
Adani Power	Power Generation	Power Generation
SW Solar	Power Generation and Maintenance	Solar Technology
Schneider Electric	Switches	Electrical and Automation
General Electric (GE) - Transmission and Distribution (GE&TD)	Power Transmission and Distribution	Diversified
Power Meters (Genus, HPL)	Power Meters	Manufacturing
CESC Limited	Power Generation and Distribution	Generation and Distribution
Torrent Power	Power Generation, Transmission, and Distribution	Generation, Transmission
Reliance Power Limited	Power Generation through various sources	Generation
Suzlon Energy Limited	Renewable Energy, Wind Power Generation	Renewable Energy, Wind Power
Tata Power Solar Systems Limited	Solar Power Generation and related services	Solar Power Generation
Adani Green Energy Limited	Renewable Energy, including Solar and Wind Power	Renewable Energy
NLC India Limited (formerly Neyveli Lignite Corp)	Lignite Mining and Power Generation	Lignite Mining and Generation
INOX Green Limited	Renewable Energy Generation	Renewable Energy
INOX Wind Limited	Wind Turbine Manufacturing and EPC	Renewable Energy
Indian Energy Exchange (IEX)	Electricity Trading Platform	Energy Trading
Borosil Renewables Limited	Solar Glass Manufacturing	Solar Technology

Image Credits : Emerging trends in the power value chain -

Current Focus can be on FINANCE, EPC companies. EPC companies not the distribution part whereas Transmission, as all the old transmission either needs to be maintained/installed, development/infra projects, conductors, wind companies etc etc

Note : Wind companies need 2 year to install and start generating cash however the same with thermal needs more time approx 4-5 years.

Disclaimer : This is for educational purpose and whatsoever discussed in my thread is not a buy or sell recommendation.

nithin_Shenoy · October 13, 2023, 5:22am

INDUSTRY STRUCTURE

Industry Dynamics as of 2016 : This industry structure was proposed by Vinati Organics

Para amino phenol or 4-aminophenol (PAP) is one of the most widely used intermediate in the pharmaceutical industry.

Primarily, PAP is used in the manufacture of paracetamol, a widely used Over-the-counter :

Analgesic (pain reliever)
Antipyretic (fever reducer)

More than 80% of para amino phenol worldwide is used for manufacturing paracetamol.

Sectoral use :

Pharmaceutical sector : 80%
Rubber antioxidant : 7 %
Dyes : 5%
Miscellaneous : 8%

Indian PAP Scenario :

India is one of the major users of p-amino phenol and is the second largest market for this product after China.
The following are the important users of PAP in India:

2016 Data : All credits to Vinati Organics

The captive users of para amino phenol :

Meghmani Organics
Farmsons
Bharat Chemicals .

The demand of PAP in India based on paracetamol capacity that exists is close to 38,500 TPA.
However, all the PAP and paracetamol capacity is currently not being utilized.
Easy availability of competitive PAP from China, pollution and credit terms are the major reasons for the imports.

India currently imports close to 21000 TPA of PAP.
All the imports of PAP happen from China.

EXPORT Possibility :

In 2010, the consumption of paracetamol in Asia was 65000 TPA and that in Europe it was around 25000 TPA.
The global demand for paracetamol stands between 145000 to 160000 TPA.
Hence, to cater the global demand, the present project has high potential for export.

Domestic / Export Markets

According to CCN reports, the Chinese capacity for para amino phenol is close to 110000 TPA.
In addition to paracetamol, PAP is also used as an ingredient for hair dye (Reddish brown hair dye).
The main producers of this kind of dye are Rohm & Haas and a few Chinese players. It is known that close to 5000 TPA of PAP is the Chinese demand of PAP in hair dyes.

While India does have installed capacity of PAP, most of the Indian demand for PAP is met through imports since the Chinese producers are cost competitive.
Thus, on a conservative side, we can estimate that the total demand for PAP globally is 130000-150000 TPA.

Project Description with Processes Details :

Manufacturing Process: Broad manufacturing process of the chemical (Para amino phenol) is described and depicted below.
In our novel route, Para Amino Phenol is manufactured directly from Nitrobenzene and Hydrogen in presence of aqueous Sulphuric acid.
Nitrobenzene is in-house produced by Nitration of Benzene using conc. Nitric acid. Hydrogen is manufactured from Methanol and Water.

Reaction scheme for Hydrogen from Methanol Methanol and Steam react at high temperature in presence of catalyst to produce Hydrogen, Carbon Monoxide and Carbon dioxide by following reaction

The hydrogen gas is further purified by using hydrogen purification system i.e. by Pressure swing absorber (PSA)

Nitrobenzene undergoes continuous hydrogenation to give an intermediate phenyl hydroxyl amine, which in presence of sulfuric acid undergo rearrangement to product p-aminophenol (pAP) and Aniline as by-product.
The sulfuric acid present is neutralized using Anhydrous Ammonia to produce by product Ammonium Sulphate.
The impurities in product pAP are removed by continuous extraction with different solvents.
Extracted solvents are recycled by distilling the spent solvent.
Process block diagram for the manufacturer of Para amino phenol

Mentioned by Vinati Organics :

Total demand for PAP in India is to the tune of ~25,000 MTPA and all of it is being imported.

Share Khan Report :

BUSINESS

Sadhana Nitro Chemicals : Company is engaged in manufacture of chemical intermediates, heavy organic chemicals and performance chemicals India emerged as one of the major source for chemical intermediates

Opportunity Size
Key Points
Moat
Process
Management Track

Opportunity :
PAP

Opportunity size for PAP The World demand for PAP before Pandemic has been at 1,60,000 TPA.
Out of which 1,50,000 TPA (i.e. 94% of Total World demand of PAP) is sourced from CHINA.
Total demand for PAP in India is to the tune of ~25,000 MTPA and all of it is being imported.
7.0 Billion Dollar Opportunity mentioned by Vinati Organics :

Key Points :

Sadhana Nitro Chem after 4 years of Efforts, got PROCESS TECHNOLOGY
Superiority in PAP Production
Structural Import Substitution Story
In India, there is NO COMMERCIAL SUPPLIER of PAP.
In Short, Sadhana Nitro Chem has unique advantage due to
Manufacturing PAP using NB Route(Green Process)
PAP is BACKWARD INTEGRATED by NB where Sadhana has 4 decades experience in handling NB and NB derivatives (NB refers to Nitro-Benzene)
PLI Scheme : In 2021-22
PLI SCHEME In AGM 2021,the management said that Sadhana has been Awarded PLI Scheme by Indian Govt for PAP Plants of 36,000 TPA and Sadhana will get incentives In Short, Committed Production Capacity for PAP : 36,000 TPA Committed Investment by Sadhana : Rs.197.27 Crore

Key Chemicals :
• PAP : Para Amino Phenol
• 2-Anilino-6-Dibutylamino-3-Methylfluoran : ODB2 Color Formant
• MAP : Mera Amino Phenol
• Aniline :
• BTCA
• Metallic Acid MA
• Nitro Benzine NB
• Ortho Amino Phenol OAP
• Ammonium Sulphate AMS
• Diethyl Keto Acia DEKA
• Diamino Diphenyl Ether ODA
• 1,2,3,4 Butane Terra Carboxylic Acid BTCA
• 3,3 Dinitro Diphenyl Sulphone 3,3 DNDS
• Dietyl Keto Acid DEKA
• Aniline 2,5 Disulphonic Acid : ANDS 2,5

MOAT

Differentiation : Only producer of PAP in India
Disruption : Yes due to green chemistry, safe for environment no discharge.
Execution : Yet to find out
Ability to Scale :
Forward Integration : In AGM 22,Mgmt said they will FORWARD Integrate into production of Paracetamol because PAP is RAW MATERIAL for Paracetamol and it is natural to forward integrate into Paracetamol In my View, it is possible only after 2-3 years
Expanding Downstream Capacities : In AGM 2022,Mgmt said that they were Expanding Nitro-Benzene(NB) Downstream Derivative COLOUR FORMER(ODB2) Capacity from 550 TPA to 2000 TPA. Plans to
Utilisation of OBB2 to 60% by Q4-FY 23 and 90% in FY 23-24
Capex they are doing need for PAP, COLOR Formants, ODB2
It is also significant because Sadhana Nitro-Chem is also BACKWARD INTEGRATED in ODB2. To manufacture ODB2,the Company requires Keto Acids(DBKA,DEKA) and MAP. At present both MAP and Keto Acids has been manufacturing by Sadhana. So it is an INTEGRATED manufacturer of ODB2
Since 80% goes into Pharma, the DEMAND will be DEFENSIVE in Nature
Sadhana Nitro got PROCESS TECHNOLOGY Superiority using GREENER Technology(that means it is SUSTAINABLE in Future)

PROCESS

SADHANA Diagram : Unique Competitive Advantage of Sadhana Firstly,

PAP Can be Produced using 2 Routes

1.PNCB Route (First Route)
2.NB Route (Second Route)

I. The First Route for PAP production is used by ALL CHINA Manufacturers and some Indian Manufacturers and in China there is one company named Anubahyi Chemicals they make via NB route

ii. The Second Route only Sadhana makes it

So the First advantage of Sadhana Nitro is to manufacture PAP using Nitro-Benzene(NB) Route.
The Second Advantage is that Sadhana Nitro has 4 decades of Experience in Nitro-Benzene(NB) which in turn use NB to manufacture PAP

MANAGEMENT TRACK

Compliance :

Granules mentioned in the concall that the end user supply of Raw Material has Quality issue.

Execution :

Post Phase -1 PAP Commercialization, the Company Stabilized both Production and QUALITY Standard
·
Scaling :

Capex Announcement :
PAP Capacities In AGM 2021
Sadhana said that the FIRST PHASE of 6000 TPA PAP Commercial Production Started in Q3 FY 22. In AGM 2022

The receipt of PAP Product Approval from Clients has Commenced.
The Company is in the process of Expanding PAP Production from 6000 MTPA to 36,000 MTPA in next 1.5 years

Sadhana will become commercial supplier of PAP to Indian Companies

Raw Material
BENZENE : AARTI INDUSTRIES - Con call February 13th 2020

NITRIC ACID : DEEPAK FERT, GNFC, RFC
METHANOL : GSFC, RFC, DEEPAK FERT
SULPHURIC ACID : DMCC (Cannot be Tanfac because wherever Sadhana goes DMCC follows)
ANHYDROUS AMMONIDA : Local
TOLUENE : Local
SOLVENT : Local

IBUPROFEN vs PARACETOMOL

@Vivek_Shetty : Can you please share your valuable inputs here

SHIPMENT DATA

#	IMPORTER	LAST ADDRESS	MOST RECENT	NO. OF CONTAINERS	GROSS WEIGHT KGS
1	RAINBOW CHEMICALS COMPANY	NEW YORK/NEWARK AREA, NEWARK, NEW JERSEY	09-06-2020	66	376692 KGS
2	DOMTAR PAPER COMPANY LLC	NORFOLK, VIRGINIA	23-09-2023	19	292368 KGS
3	HUNTSMAN ADVANCED MATERIALS	NEW ORLEANS, LOUISIANA	05-05-2023	5	30708 KGS
4	YUNICHEM USA	NEW YORK, NEW YORK	30-03-2022	4	2086 KGS
5	GALERIA PRODUCTORA DE COSMETICOS S	NEW YORK/NEWARK AREA, NEWARK, NEW JERSEY	23-06-2020	3	4072 KGS

Sadhana Customers

RAINBOW CHEMICALS COMPANY → Sumitomo Chemical is their parent company
DOMTAR PAPER COMPANY LLC
HUNTSMAN ADVANCED MATERIALS
YUNICHEM USA
GALERIA PRODUCTORA DE COSMETICOS
MIKI SANGYO (USA) INC.