The discourse on this thread has stunned and surprised me in equal measure. Firstly,I see a lot of confusion regarding Shilchar’s rev nos in the coming years & on their peak revenue nos. So one must understand that the realization/MVA can vary widely depending on kV mix and whether it’s being sold in the domestic mkt OR US/export mkt. Also,the Shilchar mgt has always been conservative even while talking of it’s peak revenue. They seem to take 10 lk/MVA realization as standard.
So here’s the thing: Back till FY21 & 22,when co had a capacity of 4000 MVA they would maintain that their peak revs will be in the 350-400 cr range. Later they raised it to 400-425 cr. However,in Q3 of FY24 they did 118 cr revs which translates to 472 cr annualized..that’s a variance of 25-35% from the first number! This capacity went up by 75% so it would mean at full util this 7000 MVA capacity can bring in 800-820 cr revenue. But in Q4FY25 they did qtrly revs of 232 cr which means a revenue of 930 cr on annualized basis! Now in the recent concall even after doing 172 cr revs mgt is saying they are at 90-95% util which means peak revs won’t be more than 700-20 cr. And similarly,with new capacity they are saying they’ll be able to do 1400 cr revs. Thus,the web keeps getting more tangled. Invariably,the mgt will push this number up once the new capacity comes in. So my estimate is that the peak revs post capex will be 1800 cr or so.
The matter of promoter sale is more fascinating. People are quick to dismiss cap good cos as ‘cyclicals’ and ‘commodity’ so there is an inherent bias to look out for the exact time things will start going downhill. However,Shilchar is a total anomaly since it makes 60-70% RoE/RoCE and doesn’t need to raise money or infuse money. So the only way such a promoter can cash out is by selling it’s stock. And regarding the timing,anyone can go back and check that the last stake sale took place around 2 years ago. Stock is 2-3x from there.
So my expectations would be this: In fy26 they’ll do 750-800 cr revs and ~950 cr in FY27. Fy28 will be the major step-up year.
I have also been surprised to see how the stock of Shilchar has been treated over the last 12-15 months. 6 months back ppl tracking the sector were complaining that Shilchar is not aggressive enough and there’s no revenue visibility beyond this 7000 MVA capacity. TARIL was considered top of the league both for it’s aggression and size. However,Shilchar has been able to maintain it’s very high GMs and EBITDA margins while continuing to grow at 30-40%. It now trades at 27x ttm and 22-23x fy26. Unless,markets or people with deep pockets expect the margins of the industry to go into severe shock due to oversupply or something starting Fy27 only then are such valuations justified. Still TARIL now trades at a premium of 100% to Shilchar on a ttm basis. So mkts are suggesting that it’s ok if a co dilutes all shareholders to raise money but it’s not ok if a promoter who keeps growing via internal accruals decides to ‘cash out’ a little.
Disc.: Invested. Views are biased.