Ranvir's Portfolio

Hi …

Please go through the post no - 944 on this thread. I shared my portfolio there

There have been few changes post that. Major among them are -

Trimming ( halving of positions ) in KIMS, Narayen Hrudalaya

Exits from - ABSL AMC, UTI AMC, ICICI SEC, Wonderla Holidays, Maruti Suzuki, GFL

Additions in - Kamat Hotels, SAMHI hotels, Kopran, Supriya Lifesciences, Usha Martin, Kajaria Ceramics, Speciality Restaurants, Piramal Pharma, Marathon Next Gen Realty

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So much transaction with Group company and much of the debt is being used in Group companies, don’t you think it is hard to track such related party transactions and pose threat to our investment?

As long as the related party transactions are disclosed properly, I think its not such a big issue

Plus … in small caps, one has to take a leap of faith and keep position sizes small

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Is it worth looking such businesses where so much related party transaction and where you already knew that you can’t make conviction here to buy a decent size or to hold when a price shoot up, don’t you think it is not worth the time that we are putting in?( In Marathon case- just for the sake that the Real Estate sector is in demand).

Disc- Discussing this not from buying or selling perspective, but trying to know in general.

The whole idea is as follows -

Company’s valuations appear cheap

I have got inputs from friends ( informed ones ) about the promoter’s integrity ( otherwise, I would not have touched it )

If they keep performing and keep improving their disclosures, it can be a multi bagger (well - potentially)

As my personal confidence improves ( if the management is able to execute well ), I can avg up later

At present - its a tracking position ( about 1 pc of portfolio )

That’s about it :grimacing:

4 Likes

Ok Ok thank you so much sir, now i got the point.

IKIO Lighting -

Company overview and Q3 FY 24 highlights -

India’s leading ODM ( Original Designer and Manufacturer ) of LED lighting products sold under various customer brand names. Makes the following -

High end home decorative lightings

Indoor and Outdoor lights

Lighting for Commercial Refrigeration appliances and recreational vehicles

Rotary Switches

Fan regulator assemblies

Switches

USB chargers

Lithium Battries

Solar Panels and ABS pipes for recreational vehicles

Manufacturing facilities -

Haridwar - 42k Sq Ft - LED lights, regulators and switches

Noida - 1 - 80k Sq Ft - Regulators, Switches, Backward integration processes like - tool room, injection moulding, powder coating, CNC machining

Noida - 2 - 112k Sq Ft - Refrigeration LED lighting, LED modules, LED - lighting drivers

Noida - 3 - LED lighting for RVs, Solar panels for RVs, ABS pipes for RVs

Q3 financials -

Sales - 117 vs 115 cr

EBITDA - 26 vs 29 cr ( margins @ 22 vs 25 pc )

PAT - 19 vs 18 cr ( due lower interest outgo and higher other income due utilisation of IPO proceeds )

Company is net debt free with net cash levels @ 200 cr

Q3 Concall highlights -

Lighting business did display some demand weakness in Q3. Demand from export markets continued to be strong - for recreational vehicle products

Planning to launch highly innovative products in the ODM lighting segment in next 3-4 Qtrs. Have hired additional ppl for the same. Hence the employee costs in Q3 are elevated

Have been in talks with a lot of clients in the GCC region. Results likely to be visible by Q2 next FY. Negotiations are in advanced stages. A lot of sampling work has already happened

Sales of RV lighting showing very good pick up in the US mkt

Company expects Q4 to be better than Q3

Sales breakup -

ODM sales - 50 pc of total sales ( this is the business that company does for Signify Lighting - selling Phillips decorative lighting in India )

Display lighting - 32 pc of total sales

Others - 3 pc of sales

Exports - 15 pc of sales

Phase - 1 of new capex is likely to hit optimum capacity utilisation of 60-70 pc in about 24 months from now. At 60-70 pc utilisation, company is able to generate fixed assets turnover of 4-5 times that would amount to 300-350 cr in sales

Dependence on China for procurement of Raw Materials @ 42 pc ( at company level ) - primarily the Diaodes and Semiconductors which are currently not being made by anyone in India - this is also a key business risk

Industry wise slowdown in LED lighting industry in Q3 is perplexing. Even the company could not point out the reasons for it

Expecting Q4 to be better than Q3

Disc : bought recently, biased, not a buy / sell recommendation, not SEBI registered

4 Likes

Sir do you use technicals or take a call purely on the basis of fundamentals?
please reply it will be super helpful for us.

Hi…

I ve never looked at technicals in my life :grimacing: :grimacing:

However, I don’t detest technical analysis. Its just that I could never muster energy to learn technicals

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Ok sir i now understand that you don’t use technicals then how would you take a exit call because as far as i know technicals give exit far earlier than actual fundamentals and help in saving the hard earn money.Just trying to know your exit framework based on fundamentals and do you think that if you used technicals in your previous exit calls then you could have saved more money?

The only exit framework that I use is relative valuations / opportunity costs vs other avlb stocks etc.
It works well

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Focus Lighting -

Q3 FY 24 results and Concall highlights -

Sales - 59 vs 61 cr
EBITDA - 13 vs 15 cr ( margins @ 22 vs 25 pc … still very healthy for a manufacturing company )
PAT - 9.7 vs 11.3 cr

Segment wise revenues -

Retail lighting ( sold to customers operating retail stores like Clothing brands etc ) - 29 cr

Home lighting - 27 cr

Infrastructure lighting - 0.30 cr

Railways - 0.13 cr

Company participated in ACE TECH 2023 - a major architectural exhibition in India held at Bombay exhibition center from Nov 2nd to 5th - basically showcasing company’s PLUS range of home lighting

Some of company’s prominent clients include - Tata Motors, BMW, GAS, DIESEL etc

Company has tied up with multiple brands in Middle East - Centerpoint and Splash ( both belong to the Landmark group ). Have also tied up with Home Center and Home Box in India

Italian Lighting company - Schweitzer has tied up with the company for contract manufacturing of Retail lighting. Company shall be manufacturing in India and supplying to them for worldwide clients. Schweitzer is the largest lighting vendor for retail Industry across Europe. Company expects an annual business of 8-12 cr from this tie-up ( to begin with )

Company has invested heavily in new energy saving technology that can save upto 30-40 pc of energy costs for retailers. They ve also patented the technology

On home lighting front, company has set up its experience centers in Bengaluru and Hyderabad. Going to open a 4500 Sq Ft experience center at Nariman Point. Also shifting company’s office to Nariman point

Infra and Outdoor lighting - company has executed the lighting for Surat Fort. Bidding for multiple projects in Gujarat and Maharashtra. Expect to win - 60 to 80 cr worth of orders in FY 25. Have got the order for Guwahati airport from Adani group. Focus Lighting is the only company bidding for Mumbai airport

On railway lighting, 07 of company’s products have been approved. Have designed exiting new reading lights for Vande-Bharat and have got encouraging response from Railways

Company is also opening an experience centre in Saudi Arabia. Saudi is likely to be a huge market wrt Infrastructure lighting segment

Big opportunity exists for the company in Home Lighting space. Bigger brands don’t sell technical products in India, they only sell commodity products. Technical products are only sold by European companies that cost 4-5 times vs Focus Lighting. Going fwd - company aims to keep opening 4-5 experience centers / yr

Disc: initiated a tracking position, may add / reduce depending on execution, not SEBI registered, biased

2 Likes

Nilkamal Ltd -

Notes from FY 23’s AR -

FY 23 financial outcomes -

Sales - 3131 vs 2730 cr, up 14 pc
EBITDA - 312 vs 224 cr , up 37 pc ( margins @ 10 vs 8 pc )
PAT - 134 vs 83 cr

Declared a dividend of Rs 20/ share

Material handling division grew by 14 pc
Furniture division grew by 16 pc
Bubbleguard business grew by 62 pc

Company acquired 70 acres of land at Hosur for Greenfield expansion into continuous foam mattress and ready furniture. Expected to go live by Q1 FY 25

Company makes a variety of plastic, steel furniture. Also make Sofas, Office chairs

New capacity iro Bubbleguard business shall also go live in Q1 FY 25

Ready furniture - comprising of knock down furniture in Wood, Steel and Glass remains a key focus area for the company. Company has been working hard to establish robust retail channel for this business so as to be able to showcase its entire range to the potential buyers. Company now stands at 100 dedicated retail stores with retail space of 4 lakh sq ft. Intend to add another 2 lakh sq ft retail space in near future ( inside 1-2 yrs )

The mattress business could not grow in FY 23. They have put in an action plan to get back to high growth path

E-Commerce continues to be a high growth channel. Currently delivering to 12000 PIN codes in India

Company’s lifestyle retail business -
@ HOME - registered a sale of 230 cr, growing by 29 pc. As of Mar 23, a total of 30 @ HOME stores are operational. 17 are company owned and 13 are franchisee owned

Disc: initiated a small tracking position, may add/reduce depending on company’s performance, biased, not SEBI registered

2 Likes

Glenmark Life Sciences -

Q3 FY 24 concall summary -

Sales - 573 vs 541 cr

EBITDA - 173 vs 145 cr ( margin @ 30 vs 27 pc )

PAT - 119 vs 105 cr

Seeing better demand outlook from North America. Reported good growth across LATAM, India, US, RoW Mkts. EU business was flattish, Japan business de-grew due some inventory correction issues

CMO business ( generic molecules ) seeing descent uptick. Seeing increased enquiries from multiple customers

Company’s revenue breakdown by geography -

EMs - 22 pc

Europe - 22 pc

India - 24 pc

LATAM - 16 pc

US - 11 pc

Japan - 6 pc

Therapy wise revenue breakdown -

Diabetes - 4 pc

CNS - 17 pc

Cardiovascular - 41 pc

Pain management - 6 pc

Others - 32 pc

R&D expenses for Q3 at 18 cr @ aprox 3 pc of sales

Expect to end FY 24 with a capex of 150-160 cr

Remain net debt free with net cash balance of around 135 cr on the books

Q4 LY was a strong Qtr. Expecting Q4 in this FY to be relatively softer

Gross margins expanded due to 2 reasons - lower RM costs and higher CMO business where the margins are higher

Most of company’s exports to US, EU are air lifted and are hence not affected by the disruptions in Red sea

Q3 employee costs are elevated due performance linked bonuses issued to management. Likely to remain elevated in Q4 too. Should normalise in FY 25

Expecting CMO business to go to > 600 cr/yr in next 4-5 yrs from a current annual run rate of 150 cr/yr. This should help improve company’s Gross Margin profile

Company is now focussing on Onco segment to expand their product basket

Disc: hold a small tracking position, not SEBI registered, biased

Laurus Labs - Can be a great opportunity if the management is able to walk the talk wef Q4

Q3 FY 24 concall and results highlights -

Sales - 1195 vs 1545 cr ( down 23 pc )
EBITDA - 183 vs 404 cr ( down 55 pc, margins @ 15 vs 26 pc - steep decline. However, the gross margins were at 54 pc, up 1 pc YoY )
Net Profit - 23 vs 203 cr ( down 89 pc )

Segment wise revenues ( for 9M ending Dec 23 ) -

Formulations - 984 vs 747 cr, up 32 pc
Improved business in ARVs and arresting of price declines. Developed Mkt export formulations also picked up. Multiple product launches scheduled in US in next Qtr

APIs - 1800 vs 1895 cr, down 5 pc
Sales breakup of APIs -
ARVs - 61 pc, Onco APIs - 15 pc, Other APIs - 24 pc
New capacity addition in progress in the Onco APIs segment

CDMO - 686 vs 1939 cr, down 65 pc ( steep decline due large PO executed LY. Except for that, core business grew 30 pc )

Company has 50 plus projects in Phase - 1,2,3 + 10 molecules in commercial stages. Seeing good demand/enquiries for late stage NCE molecules

Animal Health contract has commenced commercial validation batches

800 cr capex in CDMO facilities is on track

Bio - 131 vs 80 cr, up 65 pc

Total - 3600 vs 4660 cr, down 23 pc

Management commentary -

Believe that capacity utilisations should improve wef Q4 and hence the company should be able to report significant margin recovery. The same was expected in Q3 but has been pushed back into Q4. Expect capacity utilisation to pick up in Q4 and EBITDA margins to cross 20 pc. The confidence for the same is coming from the order book lined up wef Q4. The same is expected to sustain in FY 25 as well

As the capacity utilisation improves, EBITDA margins should get a good bump up. Continued interest and CDMO enquiries is a very positive sign

The Animal health contract is a > 10 yr multi product contract for supply of 20+ APIs to Intervet GmbH, a subsidiary of Merk Animal Health Ltd

Company also has a > 10 yr ago-chem products CDMO contract at hand. Capex for the same is on. Commercial supplies may begin in H2 FY 25

Disc: hold a tracking position, will add more as and when better results start fructifying, biased, not SEBI registered

1 Like

Hello Ranvir, two questions
Why not selling Radico Khaitan?. I understand that business is doing well and growing only but the valuations have stopped making sense now. Even when the capex capacity starts kicking in, valuations still seem high even if co. achieves expected earning growth.
Disc. holding it from lower levels but planning to exit

Are there still any hotel and hospital stocks left where there is a valuation comfort? and are fundamentally sound? If yes please suggest so that I can study them.

2 Likes

I agree with your observations

I have sold bulk of my Radio Khaitan holdings. Only a small / residual tracking position is left ( 0.5 pc of portfolio type )

Among Hotels, I like Kamat Hotels at current prices. It’s a turn around story. I would recommend u to go through its Q3 PPT and concall. See if u like it

4 Likes

Borosil Ltd

Q3 concall and results highlights -

Q3 financial outcomes -
Sales - 302 vs 207 cr
EBITDA - 65 vs 26 cr
PAT - 37 vs 16 cr

9M financial outcomes -
Sales - 714 vs 565 cr
EBITDA - 125 vs 80 cr
PAT - 61 vs 48 cr

Segment wise sales for 9M ending Dec 23 -

Glassware ( under Borosil brand ) - 155 vs 138 cr, up 12 pc
Non Glassware ( under Borosil brand ) - 290 vs 235 cr, up 23 pc
Opalware ( under Larah brand )- 269 vs 192 cr, up 39 pc

This performance is superlative considering most other consumer durable, kitchen appliance, glassware companies reported a flattish Qtr / 9M performance

Post doubling of Opalware capacity and its utilisation, significant operating leverage helped in margin expansion. Also the RM and fuel costs were benign in 9M FY 24

Company has just commissioned a furnace near Jaipur making press - ware Borosilicate. This ll help the company reduce its import bill and also help lower RM costs. This will also help the company ramp up its exports

Company is guiding for a medium term ( 3-5 yrs ) sales growth CAGR of 15 pc plus ( includes good and bad years )

Depreciation expected @ 80 cr / yr post the commissioning of Jaipur furnace ( that is going to make borosilicate )

At present, Borosil Ltd has a debt of 180 cr on its books

Most of the growth reported by the company is volume led as the company has not taken any price hikes this yr. Some element of growth is also attributable to higher sale of premium products

Opalware capacity utilisation @ 85 pc at present

No major capex lined up for next 12-18 months as the company intends to stabilise the borosilicate furnace and improve its utilisation

The company’s consumer durable range is placed at the premium end. Company is not playing in the mass mkt segment. Also, company doesn’t manufacture any of these durables. They just procure, control quality and distribute

Current size of Opalware industry is around 1200 cr. It was around 300 cr in 2016. Company expects the Industry size to grow to around 3000 cr in the long term

Currently, the company is basically selling to top 100 cities in India. Aim to expand to next 100 cities / rural areas in future

Disc: initiated a tracking position, not SEBI registered, biased

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Zydus Lifesciences ( Very Bullish commentary and important business developments ) -

Q3 results and concall highlights -

Sales - 4505 vs 4257 cr
Gross margins @ 67 vs 64 pc
EBITDA - 1102 vs 956 cr ( margins @ 24.5 vs 22.5 pc )
R&D expenses at 314 vs 344 cr ( @ 7 pc vs 8 pc of sales )
PAT - 789 vs 622 cr

Q3 Capex @ 213 cr. 9M FY 24 capex @ 650 cr

Region wise performance -

India -

Sales @ 1427 vs 1231 cr, up 16 pc

Branded India business and new Innovative portfolio grew strongly. Witnessed strong growth in Cardiac, Anti-Infective and Anti-Diabetic portfolio

Continue to maintain leadership in Nephrology

Company has 8 brands in top 300 brands in India. Also has a commercial portfolio of 13 Biosimilars in India. Has 09 more biosimilar molecules in pipeline

Company has also commercialised 03 NCEs in India - Saroglitazar ( for NAFLD ), Twinrab ( a biologic drug used for treatment in Rabies ) and Desidustat ( for Anemia )

India - FMCG segment -

Sales @ 397 vs 412 cr

FMCG segment witnessed weak demand scenario

Everyouth, Nycil - witnessed strong growth

Sugarfree, Nycil, Glucon D, Everyouth (peel-off) maintained their market leadership positions

US formulations -

Sales @ 1842 vs 1925 cr

Base business saw strong volume growth. Launched 11 new products including - ZITUVIA ( a 505(b)(2) product )

Emerging Markets -

Sales @ 493 vs 378 cr

Witnessed strong growth in Asia Pacific, Africa and Europe

Innovation -

Commenced phase II trials for ZYIL 1 for Parkinson’s. Phase II trials are also on for this molecule in India for ALS ( a rare neurodegenerative disease )

Completed phase II trials in India for ZY9489, an anti-malarial drug

NCE - Saroglitazar Magnesium ( already approved in India for non-alcoholic fatty lever disease ) - commenced recruitment of patients for Phase II trials in US

Completed asset transfer of CUTX - 101, a Copper Histidinate product for treatment of Menkes Disease. Rolling out NDA application for the same in US

Company is presently in the process of adding 700 MRs in India to accelerate the formulations business. Full effects should be visible by Q1 FY 25

Acquisition of LiqMeds ( a UK based company ) specialising in Oral Liquid formulations - Zydus Life acquired LiqMeds in Oct 23 for 700 cr plus yearly payouts till FY 26 on achievement of certain performance liked milestones. It’s already a profitable business. Most of their products are based on 505(b)(2) opportunities. The business is expected to scale up over next 1-2 yrs

All three NCEs launched in India are doing really well. Company expects, Saroglitazar to become its biggest brand in times to come !!!

Company expects a slow pickup for ZITUVIA in US. It’s an important launch for the company. Should add significant value in FY 25

Company continues to enjoy exclusivity for Asacol ( used to treat inflammatory bowel diseases ) in US mkts

Company reported strong numbers and healthy margins even without Revlimid sales in Q3. Revlimid sales are expected to be recorded in Q4 and Q1 FY 25

Have a good pipeline of exiting launches in US till FY 27

EM business momentum is likely to sustain going fwd. Likely to keep growing in double digits

Company has launched a bunch of transdermal products in US in FY 24. Over next 2-3 yrs, these can generate 400 - 500 cr topline for the company

Disc: holding, inclined to add more, biased, not SEBI registered

Q4 concall and results highlights -

Company raised 1500 cr via QIP in Q4. The issue was oversubscribed by 5 times ( by marquee investors ). The proceeds to be used to primarily fund the Margin Trading Facilities

Avg daily orders @ 77 lakh vs 42 lakh in Q4 FY 23, up 83 pc YoY. Avg daily orders in Q4 FY 22 were around 32 lakh

Q4 Financial outcomes -

Revenues - 1357 vs 826 cr, up 63 pc
EBITDA - 480 vs 386 cr, up 28 pc
PAT - 340 vs 267 cr, up 27 pc

Mkt share in India’s demat accounts @ 14.7 pc. This was 10.1 pc in Mar 22 and 13.1 pc in Mar 23
Mkt share in Incremental demat accts @ 23.1 pc
Share in retail equity + F&O turnover @ 18.1 pc

Unique SIPs registered with Angel One @ 13.93 lakh / month in Q4 vs 1.08 lakh SIPs in Q4 FY 23 - witnessing exponential growth !!!

Have tied up with leading Banks and NBFC’s to provide a variety of fixed income products

Breakup of revenues -

Broking revenues - 924 vs 581 cr ( 85 pc of broking revenues derived from F&O segment )
Interest income - 247 vs 137 cr
Others - 186 vs 112 cr

Client funding book @ 1777 vs 1153 cr. Adequately covered by Client’s demat holdings with negligible NPAs

Segment wise Mkt share -

F&O Mkt share @ 19.8 pc
Cash Mkt share @ 15.4 pc
Commodity Mkt share @ 59.5 pc

Have hired a team for launch of AMC business. Waiting for regulator’s nod for a swift launch

Segment wise Mkt share -

F&O Mkt share @ 19.8 pc
Cash Mkt share @ 15.4 pc
Commodity Mkt share @ 59.5 pc

Have hired a team for launch of AMC business. Waiting for regulator’s nod for a swift launch

Angel One became a co-sponsor of IPL which started recently. This is a brand building exercise specially towards tier - 3,4 cities

Onboarded more than 20 lakh clients in Q4 taking their total client base to over 2.2 cr

Have decided to forego dividend payments for next few Qtrs in order to conserve funds for greater working capital requirements to fund growth

Have won the IPL co-sponsorship rights for an annual amount of Rs 82 cr. Out of this Rs 23 cr were booked in Q4. Rest will be booked in Q1. Company is going to pay Rs 82 cr / yr for a period of 5 yrs. In addition, company will spend around 120 cr towards digital and media spends in Q1

EBITDA margin guidance for FY 25 @ 45 pc ( +/- 2 pc ) despite higher costs wrt new hirings, spends related to AMC business, general advertisements, ESOPs, IPL spends etc

Company could not grow its MTF book in Q4 due shortage of funds. Post QIP, this limitation should be behind

Aim to tie-up with multiple banks/NBFCs to ramp up lending business

Disc : hold a small position, biased, not SEBI registered, keenly looking out for Jio’s entry into broking business