Promoters to be issued 2,07,000 Warrants convertible into Equity Shares on a preferential basis at a Price of Rs 1017 per Warrant.
44359456-1ce5-4c0f-b223-024b28c2fb86.pdf (317.3 KB)
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unable to understand this ,promoters issued 1.5% extra shares (2/132.8)but stake only increased by 0.61% ? Can anyone explain?
1.5% on total basis, only promoter stake increased by .61%, check below table of promoter stake pre and post issue.
Next 12 month expectations of 3000cr rev and after that 5000cr rev expectations
Current export revenue 3% ,targeting this to be 30% of revenue , also export is a higher margin business
Current pat margins at 2.5%-3% ,targeting this to be around 3.5%-4%.
Pref shares currently to be used for working capital , debt repayment can be easily done after few years.
Cost of debt at 9%, will be reduced to 3% soon.
Wc cycle from 60 to 45 days expected soon.
Roe targeting to be 25%-30% from 20%.
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Superb Q3FY24 results.
-Sales up 72% YoY.
-EBITDA up 48% YoY.
-PAT up 40% YoY.
-EPS growth of 15% YoY.
EPS growth lower than PAT growth due to issue of new shares in Q3FY24.
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Management Commentry on Results:
New facility has become operational in August 2023 which has a capacity of producing 750 - 800 kg per month and currently have achieved 60% capacity utilization.
Intend to grow revenue at 30% CAGR for upcoming years.
Want to expand product portfolio - doubling from current 3000 offerings to about 7000 per month by introducing new metals such as white gold, platinum and studded jewellery as well as foraying in new segments like mangalsutra, chains, antique bridal jewelleries etc.
Want to expand footprint beyond the domestic market to have meaningful export contribution from markets of SEA, MEA and USA.
Plan to double headcount of our inhouse design team from 100 to ~200-250.
The company also plans to add around 30,000 moulds every year. Moulds are used in the casting process of manufacturing jewellery.
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Fundamentally the company does look strong and poised for growth but what sets it down is the amount of stock price manipulations that have been happening lately.
Disc.- Invested
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Can you share some details on why do you think that the stock is being manipulated?
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A few things that give away how someone is just tossing around the stock like a pillow:-
- See the recurring long wick candles? Check out other stocks in your portfolio and see how many have these.
- See the drop in volume yet rise in stock price volatility? random UCs and LCs every other day, reason why the stock is in the ASM list.
- Despite great results the risen stock price was used to exit and lock it in LC.
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Low volume on rise is because of circuit filter being hit. once price is on circuit filter, there are no sellers and hence low volume.
The stock was in 5% circuits even when the volumes were high, check out the size of the candles. It landed in the ASM list on 10 Oct 2023 first time (so the 5% locks). I believe in the business and its growth prospects, the reason why I created this thread but the stock is being manhandled. Name another quality stock with such high fluctuations daily, difficult ain’t it?
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Usually low market cap stocks with 5% circuits show these kind of patterns. The stock has crossed 50 pe and came up with 40% eps growth. The management also said that they are targeting 30% from here in terms of PAT correct? I do not think that results were good from the current valuations perspective and hence some investors may have wanted to exit.
In my view, their 30% growth guidance is for topline and not the bottom line. With operating leverage and operational efficiency steps, margin should grow at a faster pace.
One blip wrt earlier guidance - Earlier they were talking of 5k cr revenue in FY26 and now in FY27. Realistically it may happen in FY28 (with 30% CAGR).
Disclaimer: Invested
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Thanks for correcting me.
I went through the concall. The guidance is to reach 5000cr revenue by 2027 so that implies a CAGR of 41% or so. Apart from this PAT margins will expand on top of it. Triggers are reduced gold losses via ERP implementation, switching new customers to higher margin designs after first order, constant fixed costs.
They will also switch the current 160 cr loan which is around 9% to gold loan at 4.5%. This would have negligibe effect I think, because they also plan to increase the loan amount to 240 crs or so.
Overall I agree that 40% cagr target is ambititous and execution is important. Stock has a lot of upside left if they walk the talk.
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Another preferential issue at ~1000.
Surprising, in the recent concall they indicated that any further preferential allotment would not be required anytime soon.
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This is the not new one. It’s all ready noticed on 16 jan and approved on 8 Feb at price of 1017.
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Oh is that so? The filing came yesterday. In that case, the concall is consistent with no more dilutions. Thanks for pointing this out.
Company looks good fundamentally with a strong growth trajectory. Need to see if management walks the talk and meets the guidance of 5000 Cr revenue with 3% margin by FY27 or not. Considering the working capital requirement for 5000 Cr revenue will weight down on the margins by increasing the interest cost or we will see equity dilution
But the preferential issue done at a significant discount to the share price at that time is concerning and then another preferential warrants issue within a month (although close to the current price this time) raises some doubts on the company.
Disc: Tracking position
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