In last one and half months,added
=Acrysil(avg buy price 177)
=Ganesha ecospere(avg price 494)
Sold vivid global
I will update portfolio in short time
=I have completely exited from vivid global with 55% loss.I had made investment in vivid global at my early learing phase.
=At present,i realised that vivid global has no dominant position in chemical buisness ,no moat,microcap company.So i booked loss.I had invested that amount in grauer n weil,lt foods and ganesha eco.
=At present, i prefer small cap company which is among top 3 leaders in their respective industries.
=I think, jenburkt pharma and auro lab are also microcap companies without any moat or dominent position.I will wait for financial results and then i will take decision.
My updated portfolio with avg buy price
1…Acrysil…(Rs 177.83)…(8%)
2…Astec life … ( rs 1017.39 )…(8%)
3…Lt food …( rs 45.18 )…(7.8%%)
4…Kei ind…(rs 405.25 )…(7.7%)
5…Moldtek pack…( 259.20 )…(7.2%)
6…Paushak …(rs 2615)…(7.1%)
7…Apcotex …(Rs 191.62 ) …( 6.8%)
8…Grauer&weil …(Rs53.06 )…(6.8%)
9…Jenburkt ph…(.rs 620 )…(6.7%)
10…Ganesha eco(Rs 515)…(6.3%)
11…kpr mill……(rs745)…(5.3%)
12…Ion ex ……(rs652.14 ) ……(4.3%)
13…Ratnamani …(.rs 1298 ) …(2.96%)
14…Auro lab …(rs 68.72 ) …(2.64%)
15…Suven phar …(rs 251.64) …(.2.5%)
16…Ccl products …(rs 270) …(2.3.%)
17…Alkyl amine@ (1979 )@( 1.97%)
18…other stocks… …( 4%)
Ice make
bajaj finance
ambika cotton,
Minda industries
Jamna auto
Rajoo engineer
Emmbi ind
Century extrusion
Rain industries
=Portfolio is 23.80% up of invested amount(Investment done in staggered manner from sept 2017 to feb 2021 with buy and hold approach)
2 Likes
My NOTES on PAUSHAK LTD
Paushak
(Notes by Pragnesh shah)
(Latest updated on dec 2020)
Paushak continues to be India’s largest phosgene based specialty chemicals manufacturer while maintaining domestic
market leadership in majority of its product portfolio.
USES OF PHOSGENE DERIVATIVES
1… Agrochemical(25%)
2…Pharmaceuticals(25%)
3…Dyes(15%)
4…polycarbonates(10%)…polyurethanes , plastic manufacturing…
5…Fine chemicals(7%)
…
FUTURE GROWTH/MOAT
1…Expansion
It announced receiving ministry approval for 3x expansion on 4th August 2020.
2…moat
-Strong entry barrier(only 3 companies)
-Highly explosive
-strict govt norms
-technology
-environment permission
3…Niche product.
4…only few manufacturers
5…FY20 annual report mentions tie-up with global MNC…this marks Paushak entry into lucrative CSM space…
6…new plant,
.Your Company has developed indigenous technology for its one of the key product portfolio last year and is in process of
building a new plant, with full automation and as per global standards, which will not only result in majority of import
substitution in India but will also help your Company to tap export markets
…
CAPEX
1…2015…capacity@150 mt/month
2…2016…capacity@400mt/month
3…2020./2020](tel:320202020)
…capacity@1200 mt/mont
… Paushak is undertaking large capex of about Rs 120 crore over fiscals 2020-2022.
…Till date, Rs 25 crore of capex has been carried out, and Rs 75-80 crore is likely to be incurred in fiscal 2021, and the balance in the following year
…This will be mainly to expand existing capacities, and increasing the phosgene capacity by upto three times.
…
NEGATIVES
1…Sunstitute change
As it is highly poisonus,it may be replaced by other molecule in future
2…Moderate scale of operations:
…Despite being in existence for over four decades, the company operates on a moderate scale.
…Growth momentum has picked up in the past 18 months, driven by diversification of customer base,
…Apart from the pharmaceutical sector, the company now caters to other sectors such as agro-chemicals and performance-based materials. .
3…company benefited from china pollution disruption
=However china supply may resume which will result on cost competition
4…Rising crude affects margin
5…foreign currency fluctuation
6… Hazardeous gas handling is key risk
…company is updating technology as per global chem comp.
.
7…Change in accounting policy(2019AR)
… During the year, the Company has made changes in its Policy for receivables, payables and working
capital which resulted in lower Receivable days and higher current ratio.
8… Paushak had invested in their group companies.There is huge increase in value of their investment in last 3 to 4 years.
=Mostly it is due to restructuring of group companies
…
POSITIVES
1…Promoter…alembic group
2…Moat
A…Strong entry barrier
=Phosgene being a hazardous chemical/gas is heavily regulated. After trying for several years, Paushak received approval from the Ministry of Environment and
the Ministry of Industries for expansion of capacity from 150 tonnes per month to 400 tonnes per
month
…The other companies into this are Atul Ltd and BASF. Atul is the only other Indian company licensed to produce phosgene. This is a moat for it. Other companies can’t just jump in to compete with them.
B…Technical expertise
C…it is not possible to import phosgene. Also that it cannot be moved in containers over large distances
D…The factors that are providing hindrance in the growth of this market are the high raw material cost and huge investments required in R&D and technology.
3…Domestic leader
=Paushak is India’s largest phosgene based specialty chemicals manufacturer serving
-pharmaceutical,
-agrochemical and
-performance industries.
…The Company is domestic market leader in most of its product portfolio.
Established market position in the speciality chemicals industry:
…Paushak has an established market position, backed by its presence of over four decades in the phosgene-based intermediates segment
4…The company is one of the few players licenced to manufacture phosgene gas, which involves government restrictions.
5…Strong operating efficiency:
… Paushak’s strong operating efficiency is aided by its backward integrated operations, which have led to strong operating margin (32% in the first nine months of fiscal 2020, and 29% in fiscal 2019), and return on capital employed (RoCE; expected at 20% for fiscal 2020).
. …RoCE is expected to sustain around 18% through the capex cycle.
…Further, the working capital cycle is moderate with receivables and inventory of 86 and 66 days as on March 31, 2019, respectively.
6…CRAM business
=Paushak is also actively
exploring various opportunities, including contract manufacturing, with global customers, who are leader in their markets
and sees a good opportunity for itself while offering an “India alternative” to them.
7…Technology driven global Specialty Chemical Company”.
=.Paushak has also accelerated its efforts to improve the technology while enhancing capabilities and capacities to emerge
as “Technology driven global Specialty Chemical Company”. Paushak has been able to develop indigenous technology
for its one of the key product portfolio and would be expanding the capacity to a much larger size with “Make in India”
approach. It will not only result in import substitution in India but will also help Paushak to become a global supplier
while ensuring cost competitiveness
8…New products
…Paushak plans to invest aggresively to expand its capability, capacities and its infrastructure to accelerate the growth
of business while focusing de-risking its product portfolio, customers and markets. While Phosgene chemistry remains
core are of operation,company has started new chemistry
capabilities and services to it
capabilities and services to its customers while generating higher value addition. It will also improve the ability to handle
complex reactions and do multiple steps for the customers, especially innovators.
9…The key employee strength has been doubled in last two years with addition
of capable resources with substantial quality experience to enhance the overall operational capability of the Company.
10…Around 130 cr investment in mutual funds
11…[2018/2019]
Buy Back - They had a buy back recently in which 1700
12…RC logo(.nov 2019)
.Today, there are 55 enlightened companies having
Responsible Care (RC) logo in India, while a total of 148 companies are signatories to the
programme, pursuing implementation of Codes of management practice. Paushak has signed for the
programme in end 2018 and after lots of improvements and upgradation in a short span of time at
its manufacturing site at Panelav, Halol (around 40 kms from Vadodara), invited the auditors from
ICC in end November 2019. Paushak is proud to become the 56th company to have permission to
use Responsible Care (RC) logo
13…Backward integration
.On account of this it is backwardly integrated which helps it to cushion the impact of raw material prices.
14…improving export market potential
…Company has been able to harness export opportunity in recent times wherein its export share has increased to 21 percent of sales in last fiscal from 16 percent in FY17.
15…R&D
Company has strong R&D focus with R&D investment of the order of 2-3 percent of net sales.
…
2020 Annual Report Highlights
=It has developed many new products in last few years and
improving the yield, norms and consistency resulting in optimisation of the cost.
= Despite price softening happening in second half of the year due to improved availability from China, with internal improvements and aided by lower raw
material cost to us, we have been able to sustain our gross margins.
=Continuing our journey to build a sustainable business while benchmarking ourselves to global standards, we are
pleased to share that your Company has become 56th company in India to receive permission to use “Responsible
Care” logo (RC) from Indian Chemical Council (ICC), the nodal agency in India. You would be proud to know that your
Company has achieved this milestone within one year after committing to ICC and going through an extensive audit
from ICC which also required us to undertake substantial improvements at the site including automation & improved
infrastructure.
= Your Company is among one of the smallest companies (in terms of turnover) to receive the same
where majority of the companies having permission to use the RC logo in India are big players/MNCs. This has further
enhanced and substantiated our capabilities of running sustainable operations while handling hazardous chemicals
and generating greater value for our businesses.
=Your Company is also actively exploring various opportunities, including contract manufacturing, with global customers
and pleased to share that your Company has been able to initiate business with one of the global agro majors and
expect to develop the relation further while increasing the product & service offerings.
=We believe that “Make in India”
presents a great opportunity for us along with “India alternative” to global customers.
=Your Company has been putting substantial efforts to improve the technology while enhancing capabilities and
capacities to achieve its vision of becoming “Technology driven Global Specialty Chemical Company”. Your
Company has developed indigenous technology for its one of the key product portfolio last year and is in process of
building a new plant, with full automation and as per global standards, which will not only result in majority of import
substitution in India but will also help your Company to tap export markets.
=Your Company has also applied for expansion of its Phosgene capacity and is going through regulatory process &
expect to have approval within FY 2020-21. This will help your Company to accelerate the growth in near future where
opportunities have already been identified and we are working to scale up.
=With the sudden uncertainties brought by Covid-19 and unexpected lockdown, your Company’s sales also got
impacted at the end of year and may have continued impact next year as well.
= We have experienced competition
and pricing pressure from chinese suppliers and expect the same to increase. It is also expected that competition
will increase both, locally and internationally. Fluctuating crude prices along with exchange rate do pose a significant
business risk as well.
CHEMISTRY
…Phosgene (carbonyl dichloride) is a chemical compound with the formula COCl2. Basic production is achieved by passing purified carbon monoxide and chlorine gas through a bed of porous activated carbon, which forms the catalyst for an exothermic reaction in a cooled reactor. This forms a colorless gas that became infamous as one of the first chemical weapons. This highly toxic character means extraordinary precautions to keep phosgene contained.
…Paushak can supply conventional phosgene derivatives including chloroformates, acid chlorides, isocyanates and carbamates
…Phosgene-derived intermediates are used in manufacture of pharmaceutical active ingredients as well as specialty plastics, coatings, and agricultural protection chemicals.
…Because of safety issues, phosgene is often produced and consumed within the same plant, and extraordinary measures are made to contain it
…The great majority of phosgene is used in the production of isocyanates, the most important being toluene diisocyanate (TDI) and methylene diphenyl diisocyanate (MDI). These two isocyanates are precursors to polyurethanes. The reaction of an organic substrate with phosgene is called phosgenation.
COMPANY
…Incorporated in 1972, Paushak is managed by Mr Chirayu Amin and his family members, promoters of Alembic Pharmaceuticals Ltd (rated ‘CRISIL AA+/Stable/CRISIL A1+’)
…The company derives revenue from chloroformates, isocynates, specialty chemicals, carbonates and phosgene gas. These products have a wide range of applications across industries such as pharmaceuticals and agro-chemicals
Products
Development and manufacturing of phosgene based speciality chemicals and intermediates is Paushak’s core competencies. Manufacturing of organic intermediates like Isocyanates, Chloroformates and Carbonyl Chlorides is our expertise.
USES OF PHOSGENE DERIVATIVES
1… Agrochemical(25%)
2…Pharmaceuticals(25%)
3…Dyes(15%)
4…polycarbonates(10%)…polyurethanes , plastic manufacturing…
5…Fine chemicals(7%)
Above products are used in following
6…bedding and furniture sectors
7…Isocyanates are primarily used to produce rigid foam, flexible foam, paints & coatings, adhesives & sealants, elastomers & binders, and other applications
8…Consumer markets, including equipment and electronics, automotive and construction, in the emerging economies will present enormous opportunities for manufacturers and suppliers in the future especially the ones involved in infrastructure applications.
9…Isocyanate is extensively used in the construction, automotive, and electronics industry. The construction industry is the major user of isocyanate-based products including rigid foams, coatings, sealants and adhesives.
10… It is one of the most effective insulation materials available, thereby increasing its usage in electronic industry especially in refrigerators and freezers.
…
FINANCIALS
1…Cfo>pat
Pat… 126 cr
Cfo…90 cr
2…fcf%.of sales
2019…9.4%…10cr(capex)
2018…4.6%…5.6cr
2017…10.30%…5.5cr
2016…(-)…16cr
2015…0.3%…8.4cr
2014…9.4%…4cr
2013…3.4%…70 lkhs
2012…(-)…2cr
2011…1.1…1cr
2010…4.4%…1.2cr
3…receivables%
2019…22.53%(Accounting changed)
2018…35.84%
2017…22.53%
2016…25%
2015…29.53%
4…no days debtor
2019…85%(Accounting changed)
2018…135
2017…83
2016…97
2015…114
5…opm
2019…29%
2017…17%
2015…25%
2012…15%
2009…22%
6…de ratio…0
7…roe/roce…
2019…21/19
2017…13/12
8…invent turn ratio
2019…9
2018…10
2017…8
9… Current ratio…5.99
10…promo hold…
2014…66.80
2020…66.71
11…sallary@3.3%
2019…pat…39cr
Sallary. .1.30cr
12…RPT
…on arm length basis
2 Likes
PETER LYNCH ON WHAT TO BUY
AND WHAT TO NOT BUY
1---------------WHAT TO BUY ---------------
=INVEST IN SIMPLE COMPANIES THAT APPEAR
A… DULL, MUNDANE, OUT OF FAVOUR AND
B…HAVE NOT CAUGHT THE FANCY OF WALL STREET
C…LITTLE/NO INSTITUTIONAL OWENERSHIP
D…MODERATE GROWER
(20-25%CAGR) IN NONGROWTH/LOW GROWTH INDUSTRY
E…COMANY HAVING NICHE
F…CONSISTANTLY DOING BUYBACK
AND PROMOTER BUYING ARE GOOD SIGNS
2--------------WHAT TO NOT BUY----------------
=.IF I HAVE TO AVOID ONE STOCK, IT WILL BE HOT STOCK IN HOT INDUSTRY.
=Because
A…Extravagant expectations leading to high pe ratio
B…Hot industry attract smart people that awake day n night to get into buisness.If u dont have niche/patent,profit margin will be shrunken by huge competition.
C…30% cagr or more growth per year is not sustainable for more than 3 Years.
=THIS IS THE REASON THAT 20% GROWERS PRODUCE HUGE RETURN ,ESPECIALLY OVER A PERIOD OF TIME
3 Likes
PETER LYNCH QUOTES ON WHAT TO BUY
…WHAT TO BUY
A…INVEST IN SIMPLE COMPANIES THAT APPEAR DULL, MUNDANE, OUT OF FAVOUR
=negative/no growth/slow growt industry does not attract competitiors
B…HAVE NOT CAUGHT THE FANCY OF WALL STREET
=True contrarian is not investor who takes opposite of popular hot issue but true contrarian buys stocks that nobody cares about.
C…LITTLE/NO INSTITUTIONAL OWENERSHIP
=institutinal holding<20%
=brokerage coverage 3 or less
That is good investment
=some mutual funds does not allow >10% holding in any single company so this will miss small fast grwoing companies
=…Drawbacks of fund manager that restrict them in small investments
…job security problem in unknown companies
…inspection by 4 rule
…mcap<700cr…some funds have rules that they can not invest in such small companies.
So this small companies provide ample opportunity for retail investors
D…MODERATE GROWER
(20-25%CAGR) IN NONGROWTH/LOW GROWTH INDUSTRY
E…SMALL GROWTH STOCKS
=Big companies,small move
Small companies, big move
=Everything else equal,Companies having 50cr annual profit can easily double profit than companies having 500 cr annual ptofit
=So everything being equal,u will do better with small companies
=A fast grower company does not necessary belong to fast growth ind
F…COMANY HAVING NICHE
=find out niche in buis why company is growing better than rivals
G…CONSISTANTLY DOING BUYBACK
=Buyback is simplest n best way to reward shareholders
H…INSIDER BUYING/SELLING
…Insider buying,very good sign of undervaluation n good potential,especially when employees r buying
…insider selling is not much signigicant except major selling at high share prise
…I bought la quint even it was doubled than last yr and promoter has sold.
Later i came to know that one promoter was diversifying his portfolio
…Not buying stock because insider is selling may become huge mistake because insider may be selling for child edu,hoam purchase,diversification or other req.
I…SPIN OFF
Always look for recently spinned off company especially when there is insider buying
J…I am equally enthusiastic about once popular stocks the professionals have abandoned
K…SCRUTTLEBUTT
=…nothing can be more bullish than confmiration from rival
L…INVEST IN WHICH U HAVE GOT EDGE
Double edge
A…Proffesional edge
B…Consumer edge
3 Likes
WHAT TO NOT BUY(PETER LYNCH SUMMARY)
1=.IF I HAVE TO AVOID ONE STOCK, IT WILL BE HOT STOCK IN HOT INDUSTRY.
STOCKS WITH MORE THAN 30% CAGR GROWTH ALSO COME UNDER HOT STOCKS .PETER LYNCH ADVISE TO AVOID SUCH STOCKS
=Because
A…expectations are high leading to high pe ratio
B…Hot industry attract smart people that awake day n night to get into buisness.If u dont have niche/patent,profit margin will be shrunken by huge competition.
C…High growth>30% cagr is not sustainable for more than 3 yrs
=When analyst expect double digit growth forever,the industry go into decline
=I like no growth/ low growth industry
…There is nothing thrilling about high growth industry,only to watch stock going down because for any single product ,there are thousand companies to make it cheaper
=e.g. disk drive
Experts said it will grow at 52%.
Industry did it,but 35 companies in competition, no one make profit
=e.g xerox
Many companies make machines n no one make profit
=e.g. carpet was once a hottest industry and every american want it.
Huge competition occured n no one make profit
2…AVOID whisper stocks
3…AVOID START UPS
If u want to invest in future multibagger,wait until good earning started
4…AVOID IPO
3 out of 4 ipo ,i have disappointment
5…AVOID HIGH CUSTOMER CONCENTRATION
=If company has 25 to 50% revenue from single customer,stay away because if contract cancellation happens and also due to price cut,concession are obvious due to dependancy
=Good investment are rarely made from such customer concentration
6…AVOID HIGH PE STOCKS
=IF U REMEMBER NOTHING ABOUT PE,REMEMBER ONLY FOLLOWING
.If u avoid investing in excessively high pe stocks,u will save youself a lot of grief n yr money
7…Rule no 1 in book
=Avoid listening to proffesionals
=20 yrs in this buis convince me that normal person using 3% of brain can
pick as good stock as wallstreet expert
8…Avoid Turnaround,if u r not specialist
=have long list of failed turnarounds i wish i dont bought
9…future earning
=it is rub.How do u predict?
=If u dont believe future earning,u will never buy polaroid at 40 pe or any other stock at high pe
=if u cant predict future earning,atleast u can predict how the company is planning to increase its earning
10…Avoid technology stocks if u dont have edge
=In Electronic buisness ,things changes so fast with newer technology
11…Avoid cyclicals if u dont have edge
=U can loose more than 50% if u buy cyclicals in wrong part of cycle and it may take years before upswing
12…AVOID SERIAL ACQUSITIONS
=It is diworsificqtion
=I like buyback than aqusition when company has cash
=If company must acquire something,it is best to acquire related buisness(synergy).Otherwise most company will overpay and mostly unrelated buis in acqusition.
13…Avoid NEXT
Another stock i would avoid is NEXT someyhing like next IBM
14…AVOID FOLLOWING EXPERTS
There r 3 reasons to not follow
A…expert may be wrong(40% chances)
B…U never know when they had sold
C…U can select as good stocks as experts
2 Likes
WHEN TO BUY (PETER LYNCH SUMMARY)
(TIMING MARKET)
=I dont want to sound like market timer and tell u when to buy.The best time to buy is the day u find solid company at reasonable valuation .
=U dont have to able to predict market to make money
=I dont believe in timing/predicting market.I believe in buying great companies at reasonable valuation weather dow jones is 1000/2000 or 3000
=There is no point in worrying about overvaluated market.The way u will know when the market is overvaluated is when u cannot find single company that is reasonably priced or that does match yr investment criteria
=The only buy signal i need is to find company I like at reasonable valuation.
In that case it is never too late or too soon to buy shares.
=some people try to time market by way how is economy like recession .
But Remember,things r never clear until it is too late
=However there is one perticular time when u buy ,u will have huge gain.That is when market crash ,free fall ,hicupps that occur every few yrs in stock market
1 Like
PETER LYNCH ON WHEN TO SELL(SUMMARY)
WHEN TO SELL
=Over the years i learned to think about when to sell the same way i think about when to buy.
=I pay no attention to external economic conditions except in few obvious cases where it is obvious that specific business will be affected in specific way
==================================
A…WHEN TO SELL GROWTH STOCK
1…Mistake in origional purchase
=When stock has not given return,i try to find out weather there is any mistake in origional purchase?
2…Changes in company 's fundaments
A…changes in business fundamemts
B…changes in top management
C…Cgange in growth rate =slowdown of growth
3…Very high PE
4…Stock has not given return over long period of time
=Whenever i had stock that has not given return ,i remind myself that unless i m confident enough in the company to buy more shares,i ought to be selling immediately
==================================
B…WHEN TO SELL CYCLICAL
…Sell at the end of cycle but problem is who knows when the cycle will end?
… So Sell when
-Falling commodity price.
Price of steel n oil starts falling before it is obvious in net profit
-plant at full capacity
-Company is adding capacity
-Rising inventory.It means lower price at end of cycle.I always pay attention to inventory
==================================
C…GOING INTO CASH
=I constantly recheck stocks and stories and thereby adding and substracting stocks
=But i dont go into cash.
Going into cash would be getting out of market
=My idea is to stay in market forever and to rotate stocks depending on fundamental situations
=I think if u decide that certain amount u have invested in stock market will always be invested in stock market,u will save yourself a lot of mistimed moves and general agony
=Some people sell their losers and hold on winners. …Some sell winners and hold losers.
…Both strategy fails because they track current price movement as performance of company.
…When Tecobell was beaten down in1972,it was stock and not company in bad shape
1 Like
I had added
Anup enginnering,
Acrysil and
Ganesha eco in last 2 months
=Not sold any security
=My updated portfolio with avg buy price
1…Acrysil…(Rs 190.97)…(8.9%)
2…Astec life … ( rs 1017.39 )…(7.5%)
3…Lt food …( rs 45.18 )…(7.3%)
4…Kei ind…(rs 405.25 )…(7.2%)
5…Moldtek pack…( 259.20 )…(6.8%)
6…Ganesha eco(Rs 515)…(6.8%)
7…Paushak …(rs 2615)…(6.7%)
8…Apcotex …(Rs 191.62 ) …( 6.4%)
9…Grauer&weil …(Rs53.06 )…(6.4%)
10…Jenburkt ph…(.rs 620 )…(6.3%)
11…kpr mill……(rs745)…(5.0%)
12…Ion ex ……(rs652.14 ) ……(4.0%)
13…Anup eng(Rs 585)…(3.6%)
14…Ratnamani …(.rs 1298 ) …(2.8%)
15…Auro lab …(rs 68.72 ) …(2.5%)
16…Suven phar …(rs 251.64) …(.2.4%)
17…Ccl products …(rs 270) …(2.2.%)
18…Alkyl amine@ (1979 )@( 1.8%)
19…other stocks… …( 3%)
Ice make
bajaj finance
ambika cotton,
Minda industries
Jamna auto
Rajoo engineer
Emmbi ind
Century extrusion
Rain industries
=Portfolio is 48.37% up of invested amount
(Investment is done in staggered manner from sept 2017 to uptil today with buy and hold approach
1 Like
Added Beta drugs at avg Rs 250
Ratnamani metals
Moats(competitive advantages)
1…LARGE SCALE PRODUCTION
A…The largest manufacturer of Stainless Steel Seamless and
Welded Pipes & Tubes in India
B…The Country’s largest manufacturer of Nickel Alloy Pipes &
Tubes and Titanium Welded Tubes
C…One of the major manufacturers of Carbon Steel Welded
Pipes (ERW, L-SAW & H-SAW)
=Considering its leadership
position in the domestic stainless steel pipe segment, we believe Ratnamani is best suited to benefit
from the impending revival in the domestic capex cycle in oil refinery, petrochemicals, power and fertilizer sectors
2…High quality and premium products
=Ratnamani metals and tubes ltd. as a company always adhere to high quality and specialized products for niche market which helps to maintain market dominance and higher margins
=The Company
has able to make difference through delivering premium products, offering wide product portfolio and
becoming preferred supplier. A decade of expansion and diversification later, company is at a very important juncture of record high order book as well as international orders.
3…R AND D
.But, what distinguishes us are robust R&D setups and testing cycles. Our battery of tests are rigorous enough to examine every aspect of the production cycle; they are sensitive enough to pick up the
smallest of variations from the norm.
We are so conscious of quality that we don’t commit to orders if we are not absolutely sure
we can deliver to the highest standards. Of course, business volumes are important, but they
cannot happen at the expense of quality. It is this uncompromising attitude to excellence
that has won us hearts and smiles over the years, across the country and overseas.
.4…Diversified and customised products
=It offers product portfolio
in diverse grades with lots of customisation.
…RMTL’s products portfolio
distinguishes itself from its peers both in stainless steel and carbon steel categories
=We have the reputation of being a one-stop shop; we can
deliver the most comprehensive range of products – be
it in size, or thickness or grade. Our production facilities
are also equipped to handle both small and large orders,
making us the most versatile producer around. An
ongoing L-SAW capacity replacement and addition
initiative will help us clinch larger orders in an expanding
market.
5…Niche products
It is a matter of great pride that we are the preferred supplier
in high-end niches like nickel, titanium and exotic steel
alloy products. We are also making a name for ourselves
with our ability to turn out products that rival the quality
of costly imported items, only at cheaper rates. Our
ongoing Stainless Steel capacity augmentation will add
further depth to that capability, enabling us to create
newer market niches. We are also engaging in capacity
conversion to take advantage of emerging opportunities.
With some modifications, Stainless Steel capacities can
be converted to manufacture Titanium Tubes, the
market for which is on the ascendant now. Being import
substitutes, Titanium products are considered higher
end compared to standard Stainless Steel Tubes.
5…Hot excrusion press
…The company has also chalked out plans to set up a hot extrusion facility for large diameter (dia) seamless stainless steel pipes and matching cold finishing capacity
…The new facility will be funded through internal accruals. This facility will make Ratnamani Metals the only player in India with the capability to extrude mother hollow pipes of up to 8” in diameter against the company’s current capability of extruding tubes up to only 2” diameter.
… After commissioning the new facility, the company will be able to manufacture large dia pipes, which will ensure import substitution as well as further penetration of the export market,” ICICI Securities said
6… Location
connectivity from Kandla and Mundra ports gives our
company the advantage of logistics and low transportation costs to keep prices competitive
7 …Low cost production in india
Disc…invested
1 Like
Acrysil
MOATS
1…Technology and quality
=ACRYSIL claims to be the only quartz sink manufacturer in India and Asia and
among the four companies in the world having Schock technology for
manufacturing Quartz sinks (other three players are in Europe
=One needs decades of experience to reach the quality level which Acrysil manufactures.
=Quartz sinks are being manufactured by China and many countries in Eastern Europe with different
technology. ACRYSIL’s strength is because of Schock – a superior technology not readily available
from the market.
2…Low cost production
due to india base
3…Carysil Brand(domestic)
Carysil domestic brand
25% growth in domestic buisness due to caŕysil brand creation
1 Like
ANUP ENGINEERING
MOATS
A=Technology@Helixchanger
=The company has technical collaboration with Lummus Technology for special High Efficiency Heat Exchangers (Helixchanger).
The company has adopted a technology to fabricate and
supply Helical Baffle Heat Exchanger for global markets.
=The company has signed a technology partnership who are
the inventors and leaders in Embaffle Heat Exchangers
technology. This technology had made us the only fabricator
in India, with such capability.
B…Entry barrier
====Why big companies not enter
=The smaller average order size of ~Rs. 2.5 Cr discourages expansion of larger capital
goods companies into the process plant equipment market.
=====Why clients prefer anup than smaller companies
…Liscence n certificates
It takes small new companies 10 to 15 yrs for liscence as it is critical product
…Tailoring and complexity
All process equipment is specifically tailored as
per clients’ specifications requiring high levels of customization which prompts larger
clients to opt for established suppliers who meet the complexity and quality standards.
…Criticality of product.
Heat ex plays a critical role in
large scale industries like oil & gas refining, petrochemicals and fertilize
Clients prefer reliable
suppliers with a proven track record of quality and timely delivery thus benefiting larger players viz.
ISGEC, Godrej, L&T, BHEL, TEMA and Anup.
C=Low cost benefits due to cheaper manpower etc. in India
D=Sticking to deadlines and avoided paying liquidated damages - Gained confidence of customers leading to repeat buys - Liquidated damages are one of the biggest cost
E=Increasing complexity and weight of the product manufactured: Over the years, the company has increased realization of the equipment manufactured by it
F=Repeat business from existing clients because of trust being established(80%)
3 Likes
KEI INDUSTRIES
MOATS
1…For HT and EHV cables,
=The manufacturing process
is technology and capital intensive, posing high entry barriers.
=In the category of 400kV EHV cables, we face
less competition currently as only few companies in the
world have established the capability to manufacture such
cables. Stringent requirements for meeting compliances
and securing product approvals in EHV cables further
make it difficult for new players to enter the market
2…Backward integration
=We have been able to backward integrate our services by setting up in-house manufacturing of PVC.
3…Forward integration
=Leveraging our in-house cable production, we have strategically forward integrated into the Engineering, Procurement and Construction (EPC) services for power and transmission projects.
=We continue to be selective in undertaking EPC projects, bidding only for those that have a significant cabling requirement as that gives us a strategic advantage in earning better margins through the in-house supply of inputs.
4…Strong prequalification credentials
=We supply our products to various
governmental agencies, based on a prequalification process and grant of approval by these governmental agencies.
=. KEI is a
pre-qualified supplier and has approvals from large number of corporates as well as public sector undertakings like Larsen
&Toubro Limited, Madhyanchal Vidyut Vitaran Nigam Limited, GE T&D India Limited and Gujarat Energy Transmission
Corporation Limited, among others
5…RETAIL SEGMENT since 2000
…growing network
2014…650 dealers
2018…1284
2020…1668
2 Likes
Ganesha eco
MOATS
1…Economy of scale
=Leading market position among RPSF manufacturers
=– With an installed capacity of 108,600 metric tonne per annum
(MTPA), GEL continues to be the largest manufacturer of RPSF in the country.
= Supported by its large scale of operations,which results in economies of scale and augments bargaining power with suppliers, the company has demonstrated
healthy and steady profitability over the years.
=: Apart from us there are 35-36 more recyclers in the country having varied kind of capacities.
= Of course, we are the largest one and we are having the advantage because of our large production
base and large customer base.
= Our company is commanding 18% of the Indian market share of this recycled fiber. We are
making all kinds of fiber. So, if a customer has any requirement of any kind of fiber our company
can supply that. It is our Speciality.
2…Value added products
=Strong focus on R&D and development of
value added products – expend the current value-added product portfolio from the current 25% to 50% over next 2-3 years
=…incremental margin will come from the value-added products,
=Increasing the share in Non-woven and technical textile sector where prices are more stable and margins are better.
=Share of revenue
of value-added
products, 2014-15
21%
=Share of revenue
of value-added
products, 2019-20
25%
3…New products and .Strong r nd
=Presently, we are working on development of certain specialty fibres. It is like flame retardant
fibre, antibacterial fibres and biodegradable fibres. All these fibres are specialty fibres and are
being introduced for the first time in India in the recycled fibre segment. All these specialty fibre
products will fetch up around 35% to 40% extra margins.
= This flame-retardant fibre finds its
application in certain critical applications where the fire hazard is more and the
=antibacterial fibres it can kill 99.99% bacteria on the fabrics and the
=biodegradable fibre has been introduced
just now. It is fully capable to biodegrade under landfill and ocean in one year and the soil left
behind from the degradation will contain no plastics and it will remain perfectly fertile.
=We are also going to introduce a fibre which is another sort of the specialty fibres and it will be
having its application in cement and paper industries, so all these products are under different
stages of developments and the trial sampling has already been done.
=We have also executed certain orders in the European markets and in the Indian markets and the customers are
evaluating our products.
=Further, we have also sent all these samples in European labs for testing so that it can have
international acceptance and acquisition.
=Focusing on new product developments
more particularly -
Anti –microbial Fibre with licensed
technology
Bio-degradable Fibre
High tenacity Hollow conjugated
fibre
Micro Fibre
Dope dyed high tenacity Fibre
=Right now, all these specialty fibres are under introduction stage. We are at trial stage in the Fire
Retardant, antibacterial and in the biodegradable fibre, after having approval of the European
labs we will be further expanding all over the world and also in the Indian market. It will take
some time but certainly the initial outcome is very encouraging
4…South plant@improved margin
=Once we ramp up the new in South we would be getting some freight advantage and apart from this we are going for products which are value-added products, like filament yarn and recycled chips. So, there
the realizations and margins are much higher. So, the blended EBITDA margins of 25% we are
looking from the South facility.
5… …south plant.less competition…good demand
=It would be having
…44% capacity for the fibre and
… 27% for the filament yarn
…27% for the chip.
So, it is bifurcated into three segments.
=
A…PSF
=Demand
…There is a large market for PSF and filament yarn. In PSF the recycled capacity is quite large,
and the market is expanding. So, the incremental demand is being met by the recycled fiber
which is around 40,000-50,000 tonnes per annum. And south market there is a big textile market.
.=Demand shift
So far, the textile market was dominated by cotton and virgin polyester. Now the market is
shifting from cotton to PC Yarn (polyester cotton yarn), blended yarn, they are shifting. So, the
demand is increasing for polyester also. The kind of capacity which we are putting up there is
not very big capacity. So, we don’t see any problem there. We are already having the customer
base.
B…Filament yarn
=And as far as the filament yarn, there is not much recycling capacity in the country, only 1
or 2 players are there so far.
=And market is larger than the PSF market. And with the kind of
requirement of recycled stuff by the brands and the large manufacturers, the demand is muchmuch higher. So, we don’t see any problem in selling the filament yarn.
C=Chips
=In chips side also there
is a very high demand in developed countries like Europe and US. So, we are having some good
enquiries and we are also trying with few brands. So, the capacity is not very high in terms of the demand, so we don’t see any problem in selling the entire material and ramp up the capacity
in six months period. We are very optimistic to ramp up the capacity in six months period after
the plant is operational
=The chips plant which we are putting state of the art plant. We are already getting the US FDA
approval for this product. And quality would be at par with the virgin fiber, with the recycled
tag. So, there is 35%-40% premium for the recycled chips as against the PET chips.
=If a new player comes with new capacities so how easy or difficult is it
for them to on-board a new customer or let’s say replace us there?
=Actually, about selling the products of this South project we are already having serious inquiries
from several customers. Basically, it is from abroad. So, they are very-very seriously asking
when we can supply them chips and flakes and the filaments, etc. So, at present we don’t at all
anticipate about any problems in selling the products which will be manufactured in our south
plant. It will be sellable in India also.
6…Big basket of products
=We are making all kinds of fiber. So, if a customer has any requirement of any kind of fiber our company
can supply that. It is our Speciality.
…if our competitors give a slightly lower price so this business can go there, right?
= Actually, every customer has to understand his pricing also much so far little bit variation is there, then the customer will always buy from me, not from a competitor.
=We are having a big basket of products with us, we are having product for every application for the customers. So, customer benefits because we are having ready products for them, so they
prefer to buy from us,if there is not much price difference
2 Likes
ION EXCHANGE
FUTURE GROWTH
1…(june 2021)
Recently The company has been awarded a contract under the Jal Jivan Mission for the rural drinking water supply to 1000 villages in two districts of Uttar Pradesh namely Varanasi and Aligarh
• The value of this project is approximately Rs 1000 Cr and details regarding it will be out post approval of the detailed report and the project should be constructed and commissioned within 21 months of signing of the contract
1…(2017)Goa plant for membranes started in 2017
=Integrated and automated reverse
osmosis membrane manufacturing
process at Verna, Goa.
2…(2019).new rnd centre at hyderabad
3…strong order book
(Oct 2020)The company has an approximate order book of INR 6,500 Mn excluding Sri
Lanka project. The Sri Lanka project outstanding USD 90 Mn.
4…Over 50 patents
Over 100 products launched
5…(High margin)Selective profitable orders
=We continue to remain conservative. We avoid the tendency to pick up
orders at lower margins and also prefer not to pick up orders just for the sake of filling the
books. In the long run, we do have to execute these orders and they may constraint our
capacity to invoice the more profitable orders. So we prefer to be selective about the orders
we want to pursue aggressively and profitability is an important criteria which we use for the
selection.
=Government orders are minuscule compared to industrial orders, so impact on WC is not that much (I’m sure the question was asked with VA Tech Wabag in mind).
6…Your company also continued to maintain its market
leadership in innovative and advanced Zero Liquid
Discharge (ZLD) projects.
7…Resins
=The Resin Division continued to contribute to the
company’s growth and profitability. Whilst the company
has established its position as a reliable and quality
supplier in geographies such as USA, Europe, it has
successfully exported its products to the SE Asian market through its established presence in these
geographies.
=Integrating its innovation in ion exchange resin
technology and standard engineering, your company
launched a unique product INDION SWIFT 5Gx to meet
the growing requirements of high purity water systems
required by the pharmaceutical, power, semi-conductor
and electronic industries. Based on several unique
features of this product, the company received a large
number of orders for this product during the year under
consideration.
8…quality
The resin facility at Ankleshwar has also obtained renewed prestigious certificates
9…Membranes
=It has secured breakthrough orders for membranes
manufactured in the newly constructed state-of-the-art
integrated Reverse Osmosis membrane manufacturing
facility in Goa.
10…EXPORTS
…Your company has posted a turnover of INR 315 crores
driven by the chemicals business in addition to revenues
from ongoing engineering projects including Sri Lanka.
…It has secured breakthrough orders for membranes
manufactured in the newly constructed state-of-the-art
integrated Reverse Osmosis membrane manufacturing
facility in Goa.
…Your company consolidated business in geographies
like the North America, Middle East, SE Asia, South and
East Africa by increasing business presence in many
countries in these geographies.
11…The water and wastewater treatment market and company will continue to
grow on account of
A…WATER DEMAND
…increase in demand due to rapid
urbanization,
…Water demand in the country is expected to grow at 21% CAGR over 2015-2020.
B…SEWAGE
=A study by the Central Pollution Control Board (CPCB) has revealed that almost 62,000 MLD of sewage is generated across
urban India and there are just 816 STP installed that treat 23,277 MLD or 37.5% of sewage per day.
=Strict sewage disposal directives issued by
Central Pollution Control Board (CPCB) necessitate efficient
wastemanagement
C…INDUSTRIAL WASTE WATER
…Implementation of Zero Liquid Discharge
regulation by the government on industries, is expected to
stimulate the wastewater treatment market even further.
…In India only 60% of industrial waste water is treated.
…Around 40% of the STP’s do not conform to the environment protection standards. Compliance by state owned STP’s is low.
…The waste water treatment sector is expected to grow faster than the water treatment sector.
… Increased government regulations on waste water discharge to drive demand for water and waste water treatment chemicals.
D… SCARCITY
of water for industrial and
domestic uses.
E…GOVT PROJECTS
probable projects
=Amrut
INR 500 bn (USD 7.7 bn) has been allocated for investment in 500 towns and cities under AMRUT and another INR 480 bn
(USD 7.4 bn) has been put aside for upgrading 100 cities to attain ‘smart’ status.
=•“Namami Gange”,
…the clean Ganga initiative, can create significant opportunities.
… INR 200 bn (USD 3 bn) has been pledged by the government over the next five years to clean up the Ganga
2 Likes
=I had added
Beta drugs
Anup enginnering, from fresh capital.
=Sold some quantity of jenburkt pharma with loss and added beta drugs from that amount.
=My updated portfolio with avg buy price
1…Acrysil…(Rs 190.97)…(8.4%)
2…Astec life … ( rs 1017.39 )…(7.1%)
3…Lt food …( rs 45.18 )…(7.%)
4…Kei ind…(rs 405.25 )…(6.8%)
5…Moldtek pack…( 259.20 )…(6.4%)
6…Ganesha eco(Rs 515)…(6.4%)
7…Paushak …(rs 2615)…(6.3%)
8…Beta drugs(277.18)…(6.5%)
9…Apcotex …(Rs 191.62 ) …( 6%)
10…Grauer&weil …(Rs53.06 )…(6%)
11…Anup…(636)…(5%)
12…Jenburkt ph…(.rs 620 )…(4.68%)
13…kpr mill……(rs745)…(4.6.0%)
14…Ion ex ……(rs652.14 ) ……(3.6%)
15…Ratnamani …(.rs 1298 ) …(2.5%)
16…Auro lab …(rs 68.72 ) …(2.2%)
17…Suven phar …(rs 251.64) …(.2.1%)
18…Ccl products …(rs 270) …(1.9.%)
19…Alkyl amine@ (791.56)( after split)@( 1.5%)
20…other stocks… …( 3%)
Ice make
bajaj finance
ambika cotton,
Minda industries
Jamna auto
Rajoo engineer
Emmbi ind
Rain industries
=Portfolio is 77 % up of invested amount
(Investment is done in staggered manner from sept 2017 to uptil today with buy and hold approach
HOLDING OLD STOCKS AND BUYING NEW STOCKS FROM FRESH CAPITAL)
Astec life
FUTURE GROWTH TRIGGERS
1…we want to increase our EBITDA
margins from 20% to 25%. We want to grow at the rate of 20%compounded.
2…New herbicide plant
=Now reaching close to
completion of the construction of the plants and we want to inaugurate the plant in the third week of February 2021 , so the full impact of the revenues will come in 2 years of the
commissioning.
=The herbicide plant is being used for contract manufacturing,
= ICRA notes the company’s planned efforts towards diversification with the ongoing capex towards setting up an herbicides manufacturing facility, which is expected to commence operations in FY2021.
3…new R n d setup
… Furthermore, it is making
investments for setting up a new R&D facility, which is expected to result in a significant boost to its R&D
capabilities and will facilitate its new product development plans.
=At the moment, we are not really doing early stage research. Our new R&D center, which is
going to be commissioned next year will be at a scale where we can start doing the contract
research part as well. Currently we are so busy with doing process development and bring
products online that we do not have the bandwith to do basic research.
=We come at a stage where there is either a product without a technology, we just have to do the process
development or there is a tech available and then we take it and take it forward
=. So those are the two models at the stage, the development of the molecule, we are not involved for the
moment, this is the plan for the future.
=Furthermore, the company’s investments in the new R&D lab are expected to
provide a significant boost to R&D capabilities, enabling it to develop new products and also benefit from the opportunities that the global demand shift from China may present for the Indian entities.
…we want to increase our EBITDA
margins from 20% to 25%. We want to grow at the rate of 20% compounded.
= So we need to develop the capability, which attacks the higher margin
products, so what are we doing in the new R&D facility
=, we are going to be developing
capabilities through
-fluorination as you know Navin Fluorine, SRF have a monopoly on
this, we are going to develop the capability for this.
- Organometallic chemistry,
- chiral chemistry,
- high pressure chemistry,
- flow chemistry, hydrogenation, some biochemistry
these are just the short list the kind of things that we will be developing in the new lab,
4…Backward integration
=A new plant to manufacture the intermediates was commissioned during 2018-19 at mahad and is performing as per
expectations. This has led to improvement and stability in margins and less dependence on China.
=This is not only helping the Company in reducing its reliance on
China, but is also aiding in margin expansion.
= Astec’s operations are
supported by its backward-integrated operations, providing a steady supply of raw materials at cost effective rates, thus reducing the reliance on Chinese imports to some extent and aiding in profitability improvement.
=We import 70% of our total purchases, of that 75% comes from China.
=Yes, the good news is that we have commissioned one product, 50% of our purchases from
China of one particular product and we have commissioned that plant, we have the position
to make as much as we need, so depending on the price from China, we are the make or buy
from there, so that immediately brings our total purchases from China down from 50% of our total purchases to 25% if you chose to do that , so we do not have a specific number, but
as far as possible we want to minimize the dependence on China and that is ongoing
activity.
5…expansion of manufacturing capacity of certain
existing products
= Measures taken by the company for adding capacities
by way of new manufacturing plants as well as de-bottlenecking existing capacities through process improvements augur
well for the business amid growing demand in India due to supply disruptions in China and high utilisation of existing
capacities.
6… china derisk strtegy
=Disruption in the supply of agrochemicals from China
places India at a sweet spot with international firms, as the latter are looking at partnering with Indian
manufacturers for contract manufacturing business.
=This provides a long-term revenue visibility to the Indian agrochemical companies.
=As global companies look for alternate manufacturing locations outside China, the opportunity available to Indian manufacturers including your Company
will be huge. Organizations with deep technical capabilities of technical or intermediate chemistries are likely to gain from this shift / diversification of the manufacturing base.
7…The Company has
made substantial investment to bring Environment,
Health, Safety (EHS) standard to international levels. The
Company is therefore optimistic of making substantial
strides in developing this business segment and
developing new products.
8…new molecule
=next financial year about 2 to 3 molecules
and every year we want to launch at least 2 molecules.
2 Likes
Adding Stylam industries