Yes equity is generally costlier than debt, but two points
It matters at what valuation is equity raised. Higher the valuation, lower is dilution and hence lower the cost.
Warrants they raised in last 12/18 months at 22rs and 65rs were highly dilutive but still was needed to get out of debt situation.
Can someone tracking here highlight What would be triggers here for rerating?
Due to paying of taxes eps will not grow for 2 more quarters. That is a trigger. Another trigger is some fii is selling. They have small stake left. These are the triggers as per me.
Impressive turnaround story. Only fly in the ointment could be their over dependence on US export, at a time when US is entering into Lalaland of Donald Trump
Its time to be cautious on any company having more than 50% exports to US
Disclosure - Interested but not invested
Why is Donald Trump lalaland? He is good for US business/ economy and good for India.
Infact Indian companies having US dependence should do much better in his reign.
Just one correction here – In H125, only around 25% of sales were to US. Domestic is also growing very strongly.
He is good for US economy…period…for rest of the world, its a game of chess. Sometimes up and sometimes down. In short term, as he goes after China, Mexico and Europe, Indian exporters may benefit. But he will come back and ask for his pound of flesh from Indian govt/indian businesses and will be unpredictable even after giving in to his whims and fancies…so his tenure would be full in surprises so not good for any steady long term business growth for non US companies, doing business with US
I think this should stock do well over the next 3 years. All of you have covered the important points and here is what i wanted to add.
Disclaimer: Invested a huge chunk at 79 level.
I wouldn’t count on the pe of 50 part. Just because now the transmission and distribution theme is going on the stocks are getting high pe. After 2-3 years this might not be the case.
thanks for the calculation. Have you considered the EPS with possibilities of dilution?
I will request fellow boarders to be circumspect and not be overly optimistic. In my opinion, expecting a PE of 50 is a bit too much, particularly for a commodity kind of business. Moreover to calculate big projections on pen and paper is easy but to deliver is the tricky part. So it is advisable to be grounded and tone down expectation. In this downturn, I expect that better opportunities will come your way. Rest upto individuals.
@Prabhat_Mohanty Fellow boarders are just trying to predict the possible outcomes from the currently available data. I think this is what fundamental investing is all about. The kind of triggers this business has, i also believe that it can reach a bottomline of 300 cores by FY 28.
What valuations and earning multiples it will get is upto the market. If you feel earning multiple of 50 is wrong than you can assign whatever multiples you feel are fare to the earning projections. And you can take investment decision accordingly.
For example personally for me, even a earning multiple of 25 (which i feel is fare) will give a market cap of 7500 in FY 28 on a earning of 300 crores. It means stock provides an opportunity of 300% returns from current price. Somebody whose expectation is 6 times will only be happy if he gets 50 times exit multiples.
So, its all about personal expectations and decisions. If you feel its a commodity and should get only 10 times earning multiples than it will not provide you any upside as per your calculation. You should not invest in that case. So, investing decisions are quite personsal, and this valuepivkr community should only be used to understand a business and probale earning trajectory.
Disclosure: invested.
Has the management informed about the capacity that they will be adding in FY27 to achieve 3500cr ?
During the Q2 conference call, the CMD mentioned that the new plant will be at least as large as the current one. Considering the current plant has a business capacity of ₹1,800 crores with minor expansions, I estimated the overall revenue capacity for FY27 to reach approximately ₹3,500 crores.
Additionally, in earlier interviews (non-equity-related), the MD has expressed aspirations for the company to become one of the top three cable manufacturers in India.
The calculations I’ve shared aim to highlight the potential returns this stock can deliver. Growth levers are already kicking in, and while there is no DII investment yet, the upcoming ₹400 crore QIP might change that.
On the management side, I hope they continue conducting conference calls and providing transparent guidance. It will also be important to monitor their performance in the US market amidst tariff-related challenges. Based on my understanding, tariffs imposed equally across countries could actually benefit Paramount.
As there are risks and upsides to every business, I would love to hear more insights and perspectives from the community to further refine this analysis and uncover new angles.
With Trump pulling the plug on New Green Deal, stopping funding of renewable projects, will it have any impact on exports of Paramount?
Although it also depends on how much of the exports to USA are B2B and B2C.
During the concall MD mentioned that houses in the US consume their cables via distributors, which is the B2C model and they sell at a fixed cost (Factoring in the copper pricing etc). I don’t recall hearing or reading anything about the B2B sales in US. Nonetheless, Paramount is the biggest Indian supplier of cables in the USA for 2024 as per NSE data. But your point is worth probing.
Does anyone have any insights into their subsidiary they acquired in Aug 2023, Valens Technologies. It was earlier controlled by one of their KMPs.
They acquired it for 2cr and the reasoning they have given is:
My concern is it going to be another foreign subsidiary issue again? They have given out 17cr loan to this subsidiary and the only thing mentioned in the Annual Report is that the amount has been used for “business”
Any thoughts/ insights are appreciated.
I am still looking to get understanding around company’s ability to maintain growth from export segment. Would be interesting to look at Dec quarter results
