Some notes from the latest AR21:
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A brief on Mr. Amarpal Sethi, the founder of the company. The claim on company’s product quality is a bold statement.
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On Research & Development-
- Although, R&D spend is Zero. We need to understand how they recognise the R&D expense.
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All CSR amount spent and nothing is pending
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Some highlights from the MD&A. They don’t have an elaborate MD&A and it does not really carry a lot of insights on the industry or the company.
- “Exports continued to gather steam in our key markets that ensured we finished the year reporting double-digit growth”
- Domestic recovery was extremely robust once restrictions were eased
- considerable amount of pent up demand along with the import substitution effect which allowed your Company to make up for lost sales during the succeeding nine months
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Sales- 373cr (PY 298cr)
- Products- 361cr (PY 290cr) (+24% YoY)
- India- 188cr (PY 157cr) (+20% YoY)
- Outside India- 184cr (PY 141cr) (+30% YoY)
- No single customer represents 10% or more of the Company’s total revenue during FY21 & FY20
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Other expenses were 61cr (PY 57cr) out of which the largest item was discount 19cr (PY 14cr). Ideally, the company should deduct this from the sales figure. If that is to be done, OPM looks much higher.
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Receivables- 91cr (PY 83cr)
- More than 6 months- 6.6cr (PY 6.7cr)
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It was good to see Salary go down from 9cr in FY20 to 7.6cr in FY21 for KMP despite revenue and PAT growth.
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Long-term Loans of 24cr (PY 27cr) provided by KMP and Related Parties. They have charged interest of 3cr (PY 3.2cr) on this. This works out to be around 12% which is higher that the prevailing market rate.
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Subsidiary Financials-
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Pix Middle East (100%)- Sales- 11.9cr (PY 11.4cr)
- PBT- 98L (PY 87L)
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Pix Europe (100%)- Sales- 60.5cr (PY 48.4cr)
- PBT- 5.3cr (PY 2.9cr)
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The company made Fixed Asset Purchases of 25.6cr (PY 28.8cr)
- Land- 6.1cr (PY nil)
- Factory Premises- nil (PY 11.6cr)
- Plant & Machinery- 12.8cr (PY 20.2cr)
- Vehicles- 4.3cr (PY 1.6cr)
- One should understand the nature of the Land, Factory Premise, P&M, and vehicle purchases from the management.
Disc: Have a tracking position.