SmallCap Hunter : Trying to find the dark horses with triggers

Q&A: Questions & Answers Portfolio Q&A
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Hello,

I have been an avid follower of ValuePickr forum and it has helped me shape my investing decisions. I have a 6 months - 2 years view on all these stocks, which can be further increased based upon performance.

I have basic finance background, have done a fundamental analysis course from BSE(which was actually helpful with loads of practical knowledge). Have bookmarked the investing books from valuepickr article on investing books and will be starting them soon. Also pursuing CFA Level 1. I am currently working with an experienced investor who has taken me under his wing to mentor and I am trying to learn and grasp as much as possible from him and would love to be mentored by fellow experienced investors. Have been an active investor only for the past 7 months.

Now, coming to the stocks, my main lookout is for triggers such as expansion(especially massive capex already done in last FY or getting done in next 1-2 quarters), import substitutes, demand-supply mismatch(such as current container shortage). I am looking for growth in bottomline and topline within 1 year. Also, I like stocks with low free float, which gives scope for colossal returns, when management has skin and competence. Also, I like to check P/E(alongwith industry P/E), P/B, OPM, ROCE, ROE, D/E, Earnings yield and few other metrics before deciding to dig deeper into ARs.

Coming to my picks(Heavy allocation) :

1) Pokarna - Massive Quartz expansion taking place in December 2020. Best in quality(based on scuttlebutt) and No 1 in terms of value as well. Home interiors will get a boost even after covid and with high ADD on Chinese products + reduced ADD on Pokarna are a plus. Waiting for a small correction to enter big. Preferably @140 levels. Expecting a 2x return in 2 years.

2) Lancer Container - Shortage of containers in India. Lancer having very low free float was a juicy call @60 considering there was no great upmove or downmove for a long time. With vaccines coming into play + Make in India leading to improved exports and decent metrics, decided to take the plunge. I feel container demand will be on the higher side over at least next 2 quarters if not more.

3) Alufluoride - Needed for aluminium smelting. Massive capex done and moved into new factory in December. Entered with half of desired allocation as Q3 nos will be pathetic(old factory was shut in order to transition to the new factory). Entered @175

4) MMP Industries -

FUTURE PLANS / PROSPECTS:-

"(A) ATOMISED AND PYRO & FLAKE POWDERS
After the start of operations in end of April 2020. Unit I (Bhandara) reached full capacity utilization during the month of May 2020 and is expected to operate at full capacity for the rest of the year.
Commercial operations of the Umred powder plant facility began in October’2019. Due to prevailing COVID-19 situation Unit II (Umred) was temporarily shut down in March 2020.
Looking at the present market condition and positive signs of demand pickup, Company estimates that the Unit II may restart its operation by the beginning of August, 2020 (subject to COV1D issue not further deteriorating). We expect that this capacity will also be fully utilized by Q-4 of FY 2020-21.

(B) ALUMINIUM FOILS
The Aluminium Foil project is at an advance stage of implementation inspite of the difficulties of the current adverse situation. Your Company expects to begin production of both bare foil and converted foil during Q-4 FY 2020-21 or earlier. In view of many audits and approvals before bulk supplies can begin, your Company will utilize a small % of capacity during FY 2020-21 and 50-60% during FY 2021-22. This can be scaled-up faster, subject to pharma customers speeding up approvals keeping in view the very buoyant market conditions prevailing today (Chinese and ASEAN region imports are reducing).

© ALUMINIUM CONDUCTORS

As reported last year, Aerial Bunched Cables (ABC) project is nearing completion. The Company envisages a moderate continuing growth in the aluminium conductor and cable sector. Trial production is expected to commence during August-September 2020. This will enable improved capacity utilisation, enhance value addition and diversify the product portfolio."

Self explanatory excerpt from AR which was the investment rationale + the fact of having it below it’s Feb 2020 prices and not overvalued even at current prices.

Entered @90

5) Kanchi Karpooram - Capex completing in December 2020 which will increase capacity substantially leading to improved topline and bottomline over a 1-2 year period. Camphor is currently in demand and I expect it to remain so in the medium term. Entered @425

6) Kitex Garments - No 1 from India for kidswear export. Decent capex done and ongoing. New textile policy is one of the triggers for the same, along with opening of economy. Entered @122

7) Vardhman Acrylics - New textile policy play which will likely favour Man Made Fibre oriented companies. Vardhman seems to be decently valued in it’s pack and again with low free float presents an opportunity for massive jumps in prices. Entered @34

8) Apex Frozen Foods - Huge Capex completed in FY20, wherein they moved to a new facility from their leased facility, They have also entered the ready to eat market which is expected to grow hereon. Again waiting to enter more below 300 for a 2 year period. Entered @270

Most of these stocks have low P/E and seem fairly valued. Considering how the market has run up, it is becoming tough to find quality companies at decent valuations.

Currently tracking(Zero/Tracking positions in some) :

  1. Sirca Paints
  2. Varroc
  3. Vikram Thermo
  4. Transpek
  5. Electrosteel Casting
  6. Safari Ind
  7. Shivalik Rasayan
  8. Ice Make Refrigeration
  9. Mangalam Organics
  10. HBL Power
  11. Greaves Cotton
  12. HFCL
  13. OCCL
  14. Rajratan Global
  15. Phillips Carbon
  16. Shree Pushkar
  17. Maithan Alloys
  18. Genus Power
  19. Amines & Plasticizers
  20. Hikal
  21. Mayur Uniquoters
  22. Gujarat Fluorochemicals
  23. Sarla Performance
  24. Borosil

Low confidence due to lack to data(or management quality) but mouth watering valuations/triggers

  1. Chemfab Alkalis
  2. Rama Phosphates
  3. TGV Sraac
  4. Sandur Manganese
  5. BCL Industries

I will provide rationale for each stock in coming days. I have given a basic viewpoint as to what I look for while investing. Many companies have detailed explanations on ValuePickr itself, but would be more than happy to provide more information, wherever possible. Looking forward to constructive feedback and/or more info on the companies mentioned above from esteemed members of this amazing portal.

Disclaimer : Not a SEBI Registered Investment Advisor. These are not buy or sell recommendations.

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Good One Aniket, fellow VPians were doing scuttlebutt on Sandoor, here is the presentation that might be useful for you. Sandur presentation VP group Oct 2020.pdf (2.8 MB)

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I regularly track TGV Sraac and attend AGM too , management is trustworthy .

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There is a news earlier today (unable to find the link), anti dumping duty on caustic soda is extended by another three months (earlier one was until Nov. 20). TGV - ( https://en.wikipedia.org/wiki/T._G._Venkatesh ) is a sitting Rajasabha MP and very shrude businessman. He started his career with Congress and then TDP now in BJP. I am from the same state but I prefer to stay away from companies that have direct political affiliation.

Just this news broke out, Rayapati Sambasiva Rao ( TGV and all these guys are buddies ) , it’s just a chargeheet , just imagine the impact of companies that has these kind of affiliations.

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Do lookup

  1. Vipul Organics, expanded 6x. The new plant is live. Last quarter results were good and this quarter likely to be good as well. Depreciation for last 2 quarters is high as plant is live. Company has maintained working capital on higher revenue
  2. Medicamen biotech, sister company of shivalik

How do you find out about expansions ? Do you search filings?

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Being friends doesn’t mean TGV is also involved.

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@edwardlobo Have been keeping a track of both :). Technically aware of most expansions playing out atm. Vipul has purchased a subsidiary, thus increase in Gross Block(new plant in Gujarat is yet to start construction work). Their talegaon plant was also shut for a long time. Thus stock languishing below 100. Certainly need to track how they progress. Honestly, in dyes industry, shree pushkar is my fav pick due to good mgmt and diversification in fertilizers as well as decent amt of capex being done by next FY(postponed from Q4 FY21).

Tracking medicamen, along with shilpa medicare, gufic biosciences etc. The list is too long to be put here. Also, pharma has run up too high for my liking, would wait for covid to die before analysing true value in that pack again. :slight_smile:

About expansions through screener. Have purchased premium to have no restrictions on no of stocks as well as columns(ratios). Get regular updates there. And then keep following concalls, investor ppts etc wherever possible to get latest updates on the progress and accordingly position your entry 1Q before expansion is to be completed and then sit for a year or two to hopefully get 50%+ returns. More than likely there is some sort of delay, so needs constant tracking of progress. I have an excel where I have kept trigger dates for all my watchlist stocks (over 50-60), which helps me decide which stock to pursue in which qtr. Many small cap expansion plays(from FY 20 with good mgmt) have given even 3x and above returns since March. On an avg I expect 50% return in 1-2 years.

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Certainly not to be considered against TGV, but honestly, trust factor reduces when someone is involved in politics. But accordingly price is also depicting that and valuations are reasonable for TGV Sraac. For me, if I enter TGV it would only be for a year or max 2, just to play out the capex cycle. I like their upcoming chloro methane project which can primarily be used for pharma, would take a ride on it when it is playing out. Also, in last FY they upgraded their factory to improve performance, which can start showing results from this year onwards.

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U read my posting in value pickr for TGV , u will get plenty of ideas. Their chloromethene is already on stream and they are doubling their capacity.

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Expansion is supposed to be completed by Q4 FY 21 as per my understanding. Would be glad to know the updated timeline from you.

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I checked most of these companies just now and they all are trading around or less than the price of entry.
With small caps you cannot make money just by following companies that announce expansion plans. A simple way to identify great small caps that have potential to become large caps is by looking at their cash flows. If a small business can generate more cash than it needs in a year + invest that cash at good returns in its own business, that’s the magic formula.

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That’s golden advice. Will certainly keep that in mind. Self-Sustainable Growth Rate (SSGR) should be an important metric as seen in Dr. Vijay Malik’s blogs as well.

I have a small large cap portfolio with companies such as Biocon, Hero Motocorp, ITC and the likes which were purchased in the last 2 years which will now form about 20% of my entire portfolio for a perpetual kind of investment whereas 80% would be dedicated to small caps and mid caps. Even in these there would be sub divisions between 1-2Q plays based on immediate triggers(such as Lancer Containers) and long term buys which can become multibaggers(such as Shree Pushkar). It’s just been 6 months since I have been actively searching for small caps, so I would like to complete the small cap universe before moving on to the mid caps. I am on a mission to know about most companies traded on BSE and NSE which I believe is a long term process over the next 3-4 years.

Btw, have entered into most of these heavy allocation stocks over the last two weeks. So I am expecting a choppy ride and thus many prices are below my purchase price. I intend to add more if some of these stocks fall by 10-20% in the coming months(Shree Pushkar, Apex and similar quality stocks). My tracking list, in which I have stocks like Guj Fluorochem, Ice Make, Amines & Plasticizers, Shree Pushkar has given a decent return of over 30% in the last 2-3 months. But I do would be glad when this is sustainable over a much longer period and not just a one off over optimistic rally.

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How you consider news from rating agencies like “Issuer did not cooperate”.

This is for Kanchi Karpooram and vipul O.
https://www.indiaratings.co.in/PressRelease?pressReleaseID=40386&title=india-ratings-maintains-kanchi-karpooram-in-non-cooperating-category

Thanks.

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Hello.

I find the strategy attractive.

You can also look at Asahi Songwon (Recently completed Capex for JV), Akshar Chem (Doing Capex for Silica project) and Bhageria Industries (Backward capex completed in Feb/ forward capex pending)

Asahi did buyback recently even after doing capex.

Regards

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Depends upon the company. For Vipul Organics, it’s just in my watchlist. I am waiting to see some more data before thinking of putting money in it. Maybe even a visit to the factory to see the status and operations.

For Kanchi Karpooram, they have zero net debt. So I do not see it as negative for Kanchi Karpooram with regards to credit rating news. But yes, I am not 100% convinced with the management and governance there. But time will tell whether it becomes a 2-3Q play or a 2-3 years or more play.

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Thank you for your detailed response. I did listen to pushkar concall and their dye capacity is fully utilised so the revenue from dyes don’t have a scope for increase

On vipul organics, the management told me one of the major shareholder is exiting due to personal monetary issue. He had around 3% stock which is now nearly all absorbed. From what I know in their 2019 & 2020 annual report there are no closed plants.

As per their bse filing the new plant has started production. Another company in dyes is Bhageria, even their plant is fully utilised and they are going for expansion of dyes. Currently the industry capacity is lower than demand abs given that the new dyes zero discharge plant of vipul organics is just open 2 quarters back it might do well from here. Just my humble opinion

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Deven

Ratings are required by a company only when they need debt. The rating agencies charge a fee. I think if the company does not wish to raise debt, the advisable course of action is to save that unnecessary cost.

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Thanks
So on screener you keep column for difference in gross block and capital work in progress?

Concall might be taking a lot of your time.

We would love to get a copy of your spreadsheet if you can I would be very appreciative

I do read all bse updates and try to get expansion news from there

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I don’t mean to discourage you at all but your strategy is one of wealth erosion and not wealth creation. By allocating 80% of your portfolio to micro cap names (some of the ones mentioned are smaller than most small caps) you are gambling on the chance one of these become a 100 bagger for you rather than optimizing to grow your portfolio by 20-30% every year.

If you alter your strategy a bit and invest 80% in mid caps rather than small caps (with proper research and due diligence) you will find your wealth increasing a better pace than the current strategy.

Again, nothing against you or your strategy, just sharing my 2 cents and trying to protect you from a mistake most people entering the markets first time tend to make.

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Without being as harsh as that, I do concur with the general sentiment of the post. IMO most microcaps will destroy wealth. This is because they are not differentiated and hence there is really no reason for them to continue to grow well into the future. IMO Alufuorine, lancer and Kanchi karpooram fall in that category.
At the same time, I would not say that microcaps as a universe is uninvestable. But the threshold/bar for investment (both valuation comfort and qualty of business) has to much higher, IMO. I am Invested in some microcaps like Chemcrux, RACL Geartech, Axtel industries (Full non-up-to-date PF here).

I personally monitor some screeners looking for both consistent growth microcaps (https://www.screener.in/screens/290863/1-Nov-SmallCap-healthy-growth/) and turn-around microcaps (https://www.screener.in/screens/245381/Sahils-smallcap-ST-or-MT-turnaround-stories/) but IMO most are not investment worthy/grade.

Among all your PF and tracking positions, the ones I like the most are Mayur, Safari & to some extent Pokarna.

All the best and I wish you lot of investment success. :slight_smile:

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Hii

I request all the small and midcap hunters to read the relevant thread of this two companies.
1.Shivalic bimetal
2.Arman financials.

I have been studying all the aspects of this two companies since 2 years and day by day my confidence on both of this has increased.

Disc. Invested in both.

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Wanted to know your thoughts on Kanchi Kapooram and why would it be considered a better play than Mangalam Organics which is also into camphor?
Further, where do you think we are in the Camphor cycle?

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From the portfolio thesis looks, like you have a clear idea about what you are doing. But on a caution note sometimes market don’t react to bottom and top line growth for a long time expecially during bear or range bound phase. One example from my own experience is Acrysil, it moved nowhere during my 2 year holding although company perfomance was good and then after my exit it started surging now, luckily it didn’t incur losses to me. As you are investing on triggers within small and microcap space, I suggest to condider your risk and adjust your allocation when you are not comfortable with the risk. Wish you good luck.

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The reason for going after expansion is so that when profits are higher, the pE is lower and sp rises to adjust pe to industry standard

As an excercise pe for vipul organics is 18, bhageria is 13 and shre pushkar is 15

Let’s say average pe for dyes is 14, vipul has 6x expansion recently, the other 2 don’t for next 1 year
Let’s say vipul is able to bring all 6x to production and keep same profit margins.
The new profit hence will be roughly 5cr per quarter. Or 20cr per year. Market cap is 94 so the pe now is 4.7
To get to average it as to rise in price by at least 3 times
This is what expansion does, you have to be in it until it’s fully played out.
Some pe on face like vipul will look expensive because markets forward looking tendency.
So instead of being able to buy at a PE of 14, on upfront you might be paying 20 on face but you need use last QTR to keep calculating

Hence some times pe is much higher in anticipation

Most people will be happy with 2 times instead of 3 times

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Was looking at this with interest and did some research. Apparently they were saying the same in 2018, I find it a bit strange the said in 2018 that they will utilise the second unit and now a repeating the same in 2020 annual report

Please see this link on their web:

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Here are a few good ideas from IIC 2020 which one might consider for further analysis

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Honestly, I feel mangalam organics is certainly good for long term. Kanchi Karpooram is more of a short term play for me. Not more than a year. I would like to enter mangalam organics once it falls a bit over the next 1 year. Also , I feel Mangalam having a B2C model will suffer in the short term but will be a better buy over a longer term horizon. I do not follow Camphor prices closely, but I feel camphor’s demand will keep on growing from here considering it has a religious + pharma angle.

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Both on my watchlist. Became aware of Shivalik Bimetals off late, so studying it.

Arman and Spandana are two interesting finance plays.

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I completely agree with your viewpoint. It would be almost similar to picking startups, maybe 1 in 100 would become successful. My main intention is to get a 50%+ return in a year at the moment as the investor I am working with has that philosophy(and he has been very successful through it, so would like to see how it plays out). I personally prefer to hold over a 2-3 year horizon minimum. So we are trying to find triggers, which can be like scrappage policy, textile policy, ethanol price hike, electric vehicles policy, massive capacity expansion. Biggest trigger is a jump in topline and bottomline, so trying to find expansion oriented companies on a shorter term perspective. We have a separate portfolio for long term picks, some out of these stocks can become a part of that. But would be a much more refined list than the one I have provided as various other metrics will come in play.

I have gone through VP posts on Chemcrux, RACL & Axtel. Will check them out in detail.

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I usually check Gross block vs gross block preceding year. Also CWIP vs Gross Block and CWIP + Gross block vs CWIP + Gross block preceding year. Will share my copy soon.

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"Despite this gloomy outlook, Your Company plans to diversify further with the addition of new specialty pigments, mono pigments, thereby meeting the requirement of digital printing market with the finest particle size of pigment dispersions. Company is in the process of regulatory approvals and approval of infrastructure for the expansion at its Dahej factory.

As informed in our last AGM, our Tarapur Plant was completed during the AY 2019-20. Production of Pigment Dispersion was stated at early stage. The ZLD effluent treatment plant was installed and completed. The commissioning of ZLD plant was done in October/ November 2019. Commercial Production of Pigment powder was started thereafter. With the Dahej plant in pipeline, your company will have a very strong position as one of top five pigment manufacturers in India."

Based on this I did a LinkedIn check on the staff, which seemed decent. They are currently hiring for the Tarapur plant. I went back into last 3 ARs and they have not mentioned exact details of capacity expansion, in terms of volume of each product. Also since last 3 AR they have been mentioning about Dahej plant and starting work on it, but have not see any movement on it. I certainly think Vipul organics is interesting, would like to know the exact amount of expansion that has taken place product wise. Stock price is certainly at an interesting level for a short term call.

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Vipul organics- Their capacity for dye intermediaries was completely utilised, if you read 2019 annual report

Sources close to management that I have spoken to, have said most of their production is used by Asian Paints and DIC Japan

Their old capacity was 20 tons and the new capacity is 125 tons

They have a zero discharge plant so no environmental issues. If you look recent filing of fine organics, one of the plants in Tarapur was closed due to environmental issues

From another source I was told lot of Tarapur plants are being given a notice due to environmental issues, I don’t know if any of these are dye companies

This quarter for vipul organics might be very good.

Disc: I have around 6% of my portfolio invested in vipul organics

You might also like Everest organics and Hindustan adhesives
I don’t have any other small caps other than these 3 and they form roughly 15% of my portfolio

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I think this link ( consistent growth microcaps (https://www.screener.in/screens/290863/1-Nov-SmallCap-healthy-growth/ 59) is broken. Would you mind posting the link again ? @sahil_vi

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Hello,

I think I understand the problem. The problem is that I use a few custom defined fields and that is why everyone else is unable to see it.

My filter conditions are:
"Market Capitalization < 1000
AND
Market Capitalization > 10 AND
Average return on capital employed 5Years > 12
AND
Sales growth 5Years > 7
AND
Profit growth 5Years > 15 AND

OPM 5Year > 7
AND

ocfbyearnings > 0.7
AND

Piotroski score >= 4
AND

Profit growth 3Years / 3 > 0.8*Profit growth 5Years / 5
AND
Price to Earning > 1
AND

Empirical ROIC > 10"

with
Capital Turnover = Sales / Invested Capital
Empirical ROIC = OPM * Capital Turnover
ocfbyearnings = (0.2*Operating cash flow 5years)/Average Earnings 5Year

Attaching the output as of today. Please feel free to create a filter of your own. :slight_smile:
1-Nov-SmallCap-healthy-growth.xlsx (23.9 KB)

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Thanks for the information,

I have few questions,

  1. Why such a huge expansion?
  2. Why company going for another expansion at Dahej?
  3. This business doesn’t require much capital investment, so it must be a competitive industry?
  4. Market is growing at 4-5% CAGR, high growth is only possible from taking market share from other companies.
  5. Any kind of technological advantage?

Tracking, not invested as these questions are unanswered.

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Hi Kalpesh

Almost every company that I track on dyes have gone for capacity expansion

Vipuls capacity even after 6x is no where near Shree Pushkar or Bhageria
Shree Puskhar announced in their concall capacity is fully utilised and they are going for expansion

Other dye companies planning expansion are
Poddar Pigments - expanding 20%
ASAHI SONGWON COLORS
Shreyas Intermediates - expanding 250 ton

I can understand just Vipul Organics expanding for better usage of funds but when business was doing well and expansion did not make sense, Vipul organics distributed a good part of their profit as dividends. I think this is a good sign. Further expansion by everyone which could be due to competition is scary and a race to bottom, however expansion when capacities are fully utilised is a good sign.

I would want to see the current expansion fully utilised before they get their hands dirty in Dahej. If I dont see this, I’ll sell but for now I am willing to give them a benefit of doubt that they should be able to sell the 6x
Past 3 quarters the numbers imply they have been, this is in the face of covid when its probably difficult to source new business
Inspite of 6x expansion, debt levels are still reasonable, which is another good sign
Inspite of 6x depreciation on quarterly p&l, profit have maintained or improved a bit which suggests the new plant is starting to contribute. How much and how soon they will be able to utilize all that, I dont know ? No one can be sure, probably not even the mgmt.

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I was looking at Alufloride when it was at its support price of 160 since last few days and suddenly in next 3 days, it shot up by 50% so i think you have got a good entry level in that one. enjoy the ride.

Mangalam Org is also the other stock which came in my radar as its at a good support level.

Disc: havent taken position in both.

regarding Philips Carbon–> there are only 2 main player Philips and Goa and depending on Anti China sentiments, they both have decent future.

Greaves cotton–> financially it doesnt look attractive to me

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Any views on Kitex, I am super interested in this company, the sales will go through the roof as the economies re-open next year. In addition, compared to other companies this one has not gone up much. What is holding this back? promoters dabbling in politics ?

Disc. Tracking quantity while researching the company

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Study the entire Kitex thread and read 2 point 2 capitals article on the Curious case of Kitex Garments. Do not forget what happened in the past cycle :slight_smile:

Disclaimer: Not invested.

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Vipul organics rallied quite a bit today

There was news dyes prices have increased after the increase in yarn and shortage

Although I think it’s still cheap, ath is around 290 and pre covid another 15% higher

If this quarter utilisation is high, which given shortage most likely will be, I think it will reach ath after quarter results

There was a big seller (3% holding as per annual report) called Mittal who bulk sold last time and had very little shares left

Looks like he is out of the script and his constant selling was holding prices down.

Might move strongly up from here

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Just got this notice on Ishan Dyes
 more or less confirms the story that there is a huge shortage and everything is being sold out

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Sorry I don’t want to make it into a vipul thread but while we are discussing vipul organics probably they have utilised substantial capacity because they are raising funds for cash flow

We know that if you are selling, most of your buyers won’t pay you advance. You have to buy inventory of raw materials and then once goods are sold your customers will pay you in 30 days.
So you need to carry cost of manufacturing and inventory cost for around 45-60 days.
Most of the time a small increase in production can be handled without excess cash via bank overdraft however a large 6 times production increase probably difficult to manage.

I don’t think they were expecting uplift of capacity at the levels they have now so this cash shortage might not have been planned.

We will know on Saturday as they are meeting on Saturday. I think tomorrow on news price might fall and give a chance to buy


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A company of 82 Mcap got an order for 40cr. This is huge. They are booked for whole year. Looks very good for dye industry. Shree Pushkar and Asahi songwon may also show same sort of results.

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How do you view the fund raising plan announced yesterday

  1. Why would they go for fund raising when they have already completed capex?
  2. The announcement also mentions ‘working capital requirement’ - why would a company dilute equity for working capital when it can be funded via debt?
  3. This is second dilution in 2020 post the merger in May’20. Your views on this

Is it a possibility that the promoters feel, the company is very undervalued currently, and knowing the demand and the upcoming performance, want to load up on the stock.

Your views are welcome.

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What kind of dyes do they produce that commands almost Rs 6lakhs/MT? Dyes realization for Shree Pushkar has been between Rs 2.5 to 3 lakhs / MT.

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I strongly feel we have had enough discussion of dyes here
I don’t want to take over @aniketk9 thread
I’ll start a thread as I read all bse filings with selenium so it’s easy to discuss this and other prospective expansions or special scenarios like aarti or navin contract manufacturing
I think expansion for the sake of expansion is not a good use of capital - society capital and company capital
I do apologise for digressing

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vipul organics is a long term bet for you or a short term? ,revenues have been growing substantially for the last 6 years,new capex, insider buying.Reason for asking is is this industry cyclical or the growth is throughout industry(on screener the peers are showing negative sales growth Quarterly does this company have some moat).

Also read annaul reports and other stuff found the company is investing in another plant in gujrat for pharma business (can you shed some light on this).

Thanks in advance

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Credit Rating is says issue not cooperating
 Is this a red flag?

Vipul Organics Limited: Issuer not cooperating, based on best-available information; Ratings continues to be ‘CRISIL BB/Stable/CRISIL A4+ Issuer not cooperating’ 30 Jun 2020 from crisil

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I think it’s a red flag
Debt has reduced since March balance sheet
Also I don’t understand how Crisil works
Does a company have to pay crisil fees even if they don’t have intention of applying for new loans in the near future
Credit certifying companies have historically done a poor job of checking financials properly before issuing a certificate
They are also unlikely to have qualified accountants working for them doing the analysis
Even audit companies with qualified ca have failed to properly check company financials for some other companies. Auditors have unfettered access to every part of the business guaranteed to them by law and they charge a bigger fee than crisil
Some investors have proven more uncanny in detecting fraud by simply reading the balance sheet and cash flow
So I tend to look at crisil report with a bit of skeptism

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I will hold for at least a year by which time they would have used all new cwpex

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Hi @edwardlobo
Thanks for sharing your ideas,
Initially when I checked financials I pass this easily but after some deep-dive I found very interesting things happening in Dyes & Pigment sector worldwide.

Disc : Vipul Organics now 18% of my portfolio

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There have been some movements in my portfolio :

  1. Alufluoride : Exited completely with a 90% overall profit in three separate tranches. Holding period was less than 30 days. The trigger had played out and it’s Q3 numbers will be abysmal, also it had reached my price targets.

  2. Entered GNA Axles in end of December at 255 : The group has been in the auto component industry since 1946. GAL markets its products through a common marketing network at the group level providing a whole range of products including axles, gears and shafts under one roof. The company has been long associated with its clients. The association with some of the domestic clients has been since the commencement of company operations. Furthermore, over the years, the company has increased its focus on exports with clients in USA, Europe, Asia Pacific, Mexico, Brazil, etc. Exports contributed ~65% of the total operating income in FY20, compared to ~54 % in FY19. The company has been supplying to some of the export clients since 2000. Long and established relationships with clients provide revenue stability to the company. Apart from supplying directly to the Original Equipment Manufacturers (OEMs), the company also provides components to the tier-1 suppliers.
    The company was undertaking two capex projects including setting-up of a new unit for manufacturing of axle shafts for LCVs, Small Pick-ups and SUVs and for enhancing its existing manufacturing facilities at a total cost of Rs. 170 cr. funded through term loan of Rs. 150 cr. and remaining through internal accruals. Both the projects have been completed, within the time & cost estimates. Post capex, the manufacturing capacities of the company have increased to ~6 million pieces per annum from the pre-capex capacities of ~4 mn pieces per annum.

Exited 25% allocation @360 & another 37.5% @400. Intend to keep GNA Axles for at least two more quarters, if not more.

  1. Entered Sarla Performance Fibres at 23 :
    The company has established track record of operations for more than two decades in the yarn
    manufacturing industry. The company manufactures specialized high tenacity yarns which has a wide
    range of application and used in the manufacturing of automotive seat belts and trims, airbags, upholstery, dress, casual & athletic footwear, leather goods, soft luggage, lingerie, swimwear, etc. The company earns ~52 percent of its revenue from export and balance from the domestic market. The company has developed a diversified and reputed customer base, which spreads across 40 countries. The reputed clientele includes Hanes Brands, Gildan, American & Efird, Delta Galin, Coats & Jockey, Vardhaman, SBM, etc.
    During FY2019-20, the company has expanded its manufacturing facility in India by additional 4800 tonnes per year high tenacity twisting capacity in Dadra, Gujarat

Two triggers lined up for Sarla. 1) Textiles policy 2) New Airbags rule which makes it compulsory to have airbags for front passengers in all vehicles. Sarla does help in manufacture of airbags.

Sarla is not a long term call but a pure short term trigger based play. Hoping to exit with 50-100% returns in next 3-6 months.

  1. ASI Industries - Entered at 13.45 : “ASI Industries is the world’s largest stone mining company and the only listed player in the India :
    :black_small_square: The company has ~46% market share in the stone mining industry
    :black_small_square: Mainly engaged in mining and processing of Kota and other
    natural stones
    :black_small_square: Holds the largest quarries in the world spread across 10 sq kms at
    Ramganjmandi, situated in Rajasthan
    :black_small_square: Produces over 12 million square meters of Kota stone every year
    :black_small_square: Acquired Al Rawasi Rocks and Aggregates L.L.C, Fujairah U.A.E
    (having lime stone quarry & stone crusher unit) for a consideration
    of AED 21.71 million (USD 5.915 Million)
    :black_small_square: The end user of the industry is the real estate, construction and
    Infrastructure”

2 triggers :

  1. Mining policy
  2. asi industries
    asi industries1584×765 341 KB

Exited 40% holding @19. Will keep remaining for a potential 2x rise in next 1-2 quarters.

  1. Vipul Organics - Entered at 110 with a 50% allocation for now :
    Playing the expansion story in Vipul Organics. Dyes & intermediaries should have a decent Q3 and a good Q4. I still prefer Shree Pushkar as a long term story. Waiting for a drop to 110 levels for Shree Pushkar to enter big.

  2. Mangalam Organics - Entered at 404 :
    After having entered Kanchi Karpooram for capacity expansion play, Mangalam Organics seemed like a decent pick with rising camphor prices and an almost 2.5x capacity expansion which was already done. Eventually will keep only one of them based on how they perform.

  3. WPIL - Entered at 500 :

65 years in designing, developing, manufacturing, erecting, commissioning and servicing of pumps & pumping systems. Manufacturing operations in India, the United Kingdom, Italy, France, Switzerland, South Africa, Zambia, Australia, and Thailand.

Business verticals:
Engineered pump division
Standard pump division
Infrastructure division

They have been on an expansion spree and with the upcoming budget, hoping for a boost for infra stocks, among which WPIL seemed fairly valued. They do have some concerns of being cyclical and related party transactions. So will be assessing whether to hold on for longer than 2 quarters.
No better place to get more information than : WPIL Ltd: Fundamental Analysis - Dr Vijay Malik & WPIL Ltd - Global Water Pumps

  1. Mayur Uniquoters - Entered at 288.6 :

“ MUNI has seen a sustained demand pickup since August. The automotive
segment is reviving but footwear remains a drag.
 The company is now an approved vendor for Volkswagen India and will start
supplies from Q4FY21.
 MUNI has got approval from BMW for material supply which should begin
from 2022.
 Supply to Mercedes, South Africa, will begin in Q4FY21.
 Product sampling is underway at the new PU plant and production will be
ramped up over the next 12 months. The plant is currently producing 30-40k
metres/month and ramping up by 10k/month. It can produce ~0.4mn/mtr
per month and earn revenues of Rs 1.25bn-1.5bn annually on full ramp-up.
 The government has increased import duty on PU material to 22%, thus
reducing the price gap between imports and domestic manufacturing.
 MUNI is working with Ford and Chrysler to get approval for PU usage in the
automotive industry.
 The company has taken a 5% price increase in October and another 5-7%
hike in November due to rising raw material prices. It plans to take a price
increase in December as well.
 MUNI is adding its seventh PVC line. The current plant can produce 2.7-
2.8mn metres annually. The target is to reach 2.8-2.9mn metres of PVC
sales in FY22.
 Management is increasingly opting for backward integration in order to have
better control over cost.
 MUNI has announced a buyback of 0.75mn shares (~1.65% of total equity) at
Rs 400/sh through the tender route.”

Multiple triggers lined up for Mayur Uniquoters over the next few quarters.

  1. Happiest Minds - Entered at 355 : Pure Q3 results play.

  2. Transpek - Entered @1560 :
    The company caters to various industries, such as polymers, agrochemicals, plastics, performance materials, coatings, pharmaceuticals, personal care, and flavours and fragrances. Furthermore, overseas markets, including the US, South Korea, and Europe, contribute 80% to the revenue. Competent promoters, decent valuations and consistent performance was the reason for the purchase. They might not give 50% return in a year but can give 15-20% CAGR over a longer period.

  3. Oriental Carbon(OCCL) - Entered at 815 :
    Tracking all tyre ancillaries and like 3 of them - OCCL, Phillips Carbon and Rajaratan Global. Missed the ride on the other two. Did have tracking positions in Phillips Carbon @130 but could not go for the jugular.
    https://occl-web.s3.ap-south-1.amazonaws.com/wp-content/uploads/2020/11/OCCL_Q2-H1-FY21_Investor_Presentation.pdf - This covers most of the basic information required.

Domestic Share of 55% - 60%
Global market share of ~10%
Trigger is 16% capacity expansion in Q1 FY22.

  1. Shivalik Bimetal Controls - Entered at 63 :
    EV and electronics play. Expansion to be completed by Q1 FY22 which will be a big boost. I feel the budget might also have some positives on this front. For more info : Shivalik Bimetal Controls Ltd - #150 by ayushmit

  2. VIP Industries - Entered at 345 (50% allocation) :

One of the two listed luggage companies in India. Bangladesh operations give it an edge over Safari but Safari’s growth has been faster. I would prefer Safari on a longer term perspective. Once travel starts, these travel oriented stocks will run, I am expecting things to improve from Q1 FY 22 onwards. Felt the price was right so entered with a 6-9 month perspective.

  1. Oriental Veneer - Entered 50% allocation at 45 :
    Budget play - Railway oriented stock.
    The company had completed a capex of ~40 cr to boost production capacity of wagons and is already running at > 50% capacity. Will exit in 1-2 quarters.

  2. Vikram Thermo - Entered at 185 :

Vikram Thermo wants to become one of the world’s largest pharma excipient manufacturers. They are a manufacturer, marketer and exporter of various pharmaceutical excipients, and provide solutions in Film Coating / Enteric coating and Sustain Release / Control Release formulations to pharma industry. The company has two product categories:

1). Diphenyl Oxide (DPO): The company started its business in 1984 at Chhatral, near Ahmedabad with the launch of DPO. DPO has following applications: in heat transfer fluid; reaction solvent in the manufacturing of API and as perfumery compound in cosmetics.

2). Drugcoat (Methacrylic acid copolymer): In addition to DPO, the company also started the production of its Drugcoat line of products that is basically a polymer used in tablet coating for enteric/film coating. It is also used for sustained release, transparent coating, moisture barrier coating, etc. Variants of Drugcoat are used based on the requirements - solid dosage, liquid dosage, high pH, low pH, all pH, etc.

Trigger : The Co. is in the middle of a major expansion of about 20 crs due to be completed by March 2021.

  1. Cords Cables - Entered at 48 :

PE just 7.9
EPS Rs 8.16
Price / Book just 0.44
Book Value 109.3

:point_right: Key Beneficiary of various schemes of Govt.
:point_right: Company has posted fabulous results in FY20, it posted EPS of Rs 8.16

  1. Amal - Entered at 188 : Pure Q3 and Q4 result play

  2. Monte Carlo - Entered at 232 :

  • Textile policy benefits
  • Q3 is it’s best quarter
  1. Integra Engineering - Entered at 35 :

Integra Engineering India Limited has come a long way since it commenced operations in 1987. Its comprehensive manufacturing facilities offers a unique blend of products as well as services to transport and power sectors. The operations are dependent on core sectors and their performance. The products primarily cater to Railway Control Systems as well as Contract Manufacturing for Indian railways.

Current production includes electro-mechanical relays, cable harnesses, wiring plates, fuse auto change over systems and mechanical enclosures like Power Converter, Traction Converter, Hotel Load Converter as well as Auxiliary converter. Recently introduced I-panel (own product), a unique product offering modularity as well as alternate to existing products is taking longer than expected time to make establish in the market. Consequently, it had to undergo changes by way of offering an alternative to meet market specific requirements.

History :

  • INTEGRA Engineering, formerly Schlafhorst Engineering India Ltd., was founded in 1981 as Padmatex Engineering Ltd. and was earlier part of the Saurer and later Oerlikon Group.
  • INTEGRA Holding has acquired a majority shareholding in Schlafhorst Engineering in January 2011, with the goal of strongly growing the business. Subsequent to the acquisition the company was renamed into INTEGRA Engineering India.
  • INTEGRA India Group Co. Ltd. which was established as Joint Venture with ABB in 1987 under the name of INTEGRA Hindustan Control was merged with INTEGRA Engineering in June 2012.

Product Portfolio :

  • The company offers the manufacturing and assembly of solutions in apparatus and equipment fabrication, assemblies or individual components.
  • Railway Signalling Relays as well as Textile Machinery (Draw Frame).
  • Engineering & Manufacturing for OEMs.

Trigger : Budget

  1. Frontier Springs - Entered at 314 :
    "Established in 1981, Frontier Springs Ltd. started with the production of Leaf Springs and Laminated Bearing Springs for Automobiles and Railways. Steadily as the railways modernized, so did we and within a few years had expanded our plant to accommodate the high demand for Coil Springs for wagons, coaches, and locomotives for the Indian Railways and many more clients.
    Although, our experienced team can design springs using design software by Institute of Spring Technology, Sheffield as per the specifications given by the clients, we have been preferred manufacturers for the following springs with the Indian Railways-

Springs for LHB Coaches
Suspension Coil Springs for Freight Stock
Suspension Coil Springs for Coaching Stock
Suspension Coil Springs for Diesel and Electrical Locomotives (EMD, WAG 9, WAG 7, etc.)
CLH and VLH Coil Springs for Power Sector (BHEL)
Frontier Springs Ltd. comprises three different units all working in synergy to fulfill the demands of clients and also developing new products periodically.

Spring Division- In Kanpur, Uttar Pradesh and Paonta Sahib, Himachal Pradesh
Forging Division- In Kanpur, Uttar Pradesh
Colour Coated Roofing Sheets Division- In Paonta Sahib, Himachal Pradesh
We adopt updated technology throughout our processes of manufacturing which is why Frontier Springs Ltd. is always moving forward and has systematically grown over the years. Our fully equipped laboratory is one such example of our willingness to adopt all the latest techniques that science has to offer in our Industry."

frontier springs expansion

Trigger : Budget and Expansion

  1. Fermenta Biotech - Entered at 312 :

"– In Q2FY21 company has completed backward integration project at its Dahej plant to manufacture cholesterol. From Q3FY21 company will start using inhouse cholesterol coming out of said backward integration project. By FY22 company plans to use completely inhouse manufactured cholesterol as RM for producing VD3 and there will be no external dependence on that.

– Cholesterol currently forms 45 % of total RM cost for the company and the said backward integration project will generate savings of ~20-25 % on cholesterol purchase cost which basically means from FY22 onwards company should see ~300 basis points expansion in profit margins because of said backward integration project.

– Company plans CAPEX of ~150-250 cr over next 2 years. Funding will be via internal accruals and debt.

– Company is actively looking at avenues to monetise its real estate assets and use the funds raised out of that for its future expansion plans in nutraceutical/pharma API business."

  • By Mahesh Shah on Valuepickr

Post Budget I will be targeting companies with triggers in Q4 FY21 & Q1 FY 22.

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Could you share some light on Vikram Thermo and any views on Indo Borax

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Hi Akshay,
I have not researched Indo Borax, so cannot comment on it. What more information would you like on Vikram Thermo? Would suggest you go through Vikram Thermo.

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60

I dont bother much with the credit ratings as long as the the cash flows and debt and some fundamental check points tick my list, in a country like india accounting and books are not always accurate and this point has been mentioned by mohnish pabrai as well we have seen recent examples like yes bank ,dhfl and countless others sugurcoating there books and with triple A+ credit ratings .

The reason i like the company is the turnaround in cycle coupled with still being profitable with out capacity utilization of capex and if credit rating problem can easily be offset by the fact that there is heavy insider buying which should clear doubts that something is wrong in the books

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Hey sir

I don’t understand why alufloride’s results is bad @aniketk9 you mentioned thay results will be bad, so how can you told?

Are Results bad because of companies plan shut down because of expansion?

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They had a planned shutdown
Is probably consider around 180 range if it falls

63

Ishan dyes a competitor of vipul gaves spectacular results, hope vipul organic does the same together with expansion of 6X

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Good result by Vipul organics,
Going forward I expect economies of scale to kick and OPM, ROE & ROCE to improve significantly over next 2 years

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65

Thanks for starting this thread.
Small cap stocks which I hold and some in tracking:

  1. Shivalik rasayan
  2. IOL pharmaceutical
  3. Oriental Aromatic
  4. Blackrose industries
  5. Bajaj health

Views and suggestions appreciated

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What I know so far about IOLCP is that their main product ibuprofen is having a good market share as due to shortage in BASF

BASF is currently working on creating plant for ibuprofen and roughly the price of ibuprofen hold about 18 USD

Now coming to their new chemicals/API : one such example is metaformin wherein India has the highest market share - there are lot of players which deal with it


Once if BASF plant ibuprofen commercialises it’s safe to keep the triggers
 till then iolcp can do well
PS this is my view as I was invested before and exited due to one product pricing the company was making high margins and had dependency


I don’t know about their new 3 ongoing product pricing power and client base
 my rough estimates are that new 3 chemical are about 1 to 2 usd pricing


Which when you multiply by opportunity or the size of quantity won’t make much impact


Plus Point having ibuprofen to playout and also sell the new 3 chemicals we would see some traction in Margins


Secondly on OAL am invested : camphor prices are sky rocket

They have good customer base and they are planning to add about 2000 customer base coming to peers Kelkar is their competitior


Kanchi and Mangalam organics can also benefit due to camphor commodity prices but to be safer side I chose oal wherein has pricing advantage and also it’s a boring business which when you capture/latch a market share or the clients and the clients would not likely give up that flavour


So it’s sticky business but margin wise yes there can be ups and downs but company is sticking on contract agreement for prices to be make it stable


Going ahead I guess it will good


You can also look fairchem if you are interested 


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Basf plant will start in 2021 as per below

Vinati supplies raw material to basf for their ibuprofen plant

To get exposure to basf ibuprofen I’d probably buy vinati

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Usually Germans are very paranoid about timings

Even Indian companies when they usually give a date for plant going live, they generally stick to it

Vinati has built a big ibuprofen raw material plant in anticipation of demand coming from Basf

It’s only a matter of time and possibly before end of 2021 that vinati revenue will start hitting highs

I am expecting it to start from current quarter

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69

Solara also setup a big plant (VIZAG) for Ibuprofen I am not sure it is formulation or Intermediate or API , can someone please connect dots and give some insight please ?

70

Keep an eye on Polymed
65% of the revenues comes from govt supplies
with govt planning to spend more on healthcare, it might be a beneficiary.

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Vinati organics any day

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Some good resources for making strategy to invest in micro caps it is really good
1 ) Varinder bansal interaction with Ashish Chung a veteran
https://youtu.be/nfeebFUBRCU

  1. Varinder bansal with Ian Cassel

https://youtu.be/HrVgUmrxx00

Micro cap investment is very tricky and risky some rules
1)Not to invest more than 1% to 3 % of total portfolio
2) Read the Mangment Discussion for at least 5 years Dont bet on any expert advice everything and anything is questionable
3 ) Psychology play a vital role be ready to see 50% correction with your conviction bet
4 ) one must take minimum 5 year view as investment horizon flipping may reduce your capital
5) Decide time frame for exit based on performance of company or changing competitive landscape .
6) Look for incresing market share with improving margins with importance to top line
7) See the history of execution of promoter and strong parents DNA
8) Look for Focused approach of Mangment

I am learning and not pro yet INDIAN main sebse sasti EK cheese MILTI HAI 
 wo hai PHOKAT ki advice 
 Yet these are Minimum which one must do 
 in order to invest in Micro or small cap as the life and investing is full of randomness and Future oriented so stay vigilant as there is very less information is available online on these caps 


Regards

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So since mid Jan to last week, we have sold 55% of our small cap portfolio, considering targets for 1 year were being hit within few weeks. Wherever triggers were playing out we were taking out small quantities, thus hedging against massive falls. Also, there were some wrong picks(5 out of 30), which were sold at a minor loss. Did not want to be too greedy, plus I feel market is in an over optimistic phase. Even if markets go up by another 10-20-30%, I would not feel bad on missing out but If stocks tank by 20-50%, it would have hurt badly. So now we have some quality stocks(but only 20-30% of original allocation) and some new additions which have triggers lined up in Q4FY21 & Q1FY22. If market crashes within next 2 months, we are ready to deploy it again. If not, we enjoy the ride on our 45% of remaining portfolio and keep adding stocks with triggers.

We have completely exited from Transpek(loss), Kitex(loss), Frontier Springs, Monte Carlo, HG Infra, Cords Cable, HPL Electric, VIP Industries(Intend to shift to Safari, at an acceptable price), WPIL, Vipul Organics, Vardhman Acrylics, GNA Axles, Happiest Minds and Lancer Container.

Also exited partially from many stocks such as Kanchi Karpooram, Mangalam Organics, OCCL, Sarla Performance etc. wherein we reached our targets or I was not confident of further rise(Sarla).

Since we deployed cash in December, our returns on the 55% of PF that we have sold have been 22.37%(Dec 2020 to mid Feb 2021), i.e. 89% annualized(this was possible due to a massive bull run but on a sustainable basis, hoping it would be 40-50% annualized over a longer period of time). Current 45% PF is up by 3-4% wherein triggers are yet to play out(should play out in 3-6 months). So now we are waiting, for our quality stocks which ran up way before December/January or we missed out, to finally come down by 20-30% and also to deploy more in stocks we have entered but would experience a fall.

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Vipul I think you should have waited 2 more months

Only time will prove if I’m right or wrong :joy:

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Anyone looked in this company plans ?

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50% profit in less than a month was a good enough return. Would enter again at appropriate levels, if it looks rewarding. Also, have found some other interesting companies where I would like to allocate capital. I have actually faced the issue of exiting too early(Happiest Minds) or too late(Integra), just within the last 5 months, but taking it as a learning lesson on a case to case basis and will evaluate these decisions on a quarterly basis to understand how I can improve my timing.

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I do have Shivalik rasayan and Blackrose industries. I exited IOL after the last quarter results wherein revenues continue to be flat and ibuprofen prices have corrected a bit. So, I would enter IOL after another two quarters or so. Orient aromatic is doing well. I missed out on that. Plan to add now. But isn’t it risky now given the capmhor prices are skyrocketing and if prices correct substantially, we will see a collapse in share prices?

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All these 4 stocks I’m holding from very low level. All are 2x plus up . So I have margin of safety.

Camphor stocks are highly volatile. Manglam, kanchi , oal . But in long term It’s gives good returns.The trick is at what level u get into these stocks.

I prefer OAL as my bet in camphor and aromatic.

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Hi, is anyone tracking d p wires ? Apparently amitabh bachchan has a shareholding of 2.5% in this small cap.

Company numbers good reasonable.

Pls give your views who have studied this small cap.

Thanks.

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Just curious, if we invest only 1-3% of portfolio in entire microcap basket - Is it worth the efforts? say we chose 5 microcaps and they make 2% of portfolio and one out of those 5 become a multi multi bagger and we managed to hold on - Will it be a meaningful change to our portfolio? Thanks

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Some top quality stocks are up by equal percentage in last two months. Not undermining the efforts and picks, just thinking on the humungous efforts you made on tracking, buying and selling some 20 small/micro caps along with huge risks that come with it whereas say only a single Tata Motor or Tata Chemical or even L&T gave similar returns where we track just 1-5 medium/large caps with triggers and achieve same result?

Pls correct me where wrong
Thanks

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84

Just curious, if we invest only 1-3% of portfolio in entire microcap basket - Is it worth the efforts? say we chose 5 microcaps and they make 2% of portfolio and one out of those 5 become a multi multi bagger and we managed to hold on - Will it be a meaningful change to our portfolio?

It would depend on your entry. I personally like searching for stories of growth within the microcap space. As an example, I invested 1% of my portfolio in November on Digispice Technologies at an entry of rupees 7.6. Since then it has grown 1110% to be the biggest holding in my portfolio, despite withdrawing all of my initial capital in a partial sale. You’d need the right triggers and luck, but even if one of your stocks hits the mark, it’ll make up for the risk.

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85

Came across this company while screening for small cap. Look good on paper. There latest announcements looks encouraging as well.

https://www.screener.in/company/GOLDIAM/consolidated/

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Price has ran up quite significantly recently. Looks like quality company but afraid to enter at this price

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Last quarter topline growth is close to 100%. One needs to find out the reason behind and it’s sustainable for future.

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it is for sustainable compoundable growth of whole portfolio and it will reduce the chances to loose due to unknown and unseen events . We must formulate the strategy which suits to oneself . On top of that it reduce the huge volatility of our portfolio . Our main goal is NOT to LOOSE the CAPITAL 
 one rule to check weather you have good constituents of your portfolio is see when MICRO CAP INDEX falls 30% how your portfolio behave is it fall by 40% or in line or by 20% or by 10% or positive as compare to the index 
 MICRO cap stocks have more UNKOWN part and also LESS tracked and LESS information available online and even on their websites and those companies which prefer not to available debt do not approach to CRA or CRISIL of credit report . THIS is INDEED very much Worth of Efforts because when some worm come out off any COMPANY’s working one must be mindful that there wont be single cockroach and you wont be able to sell at the price you are currently holding 
 it is very crucial as the SENTMENTS prevails in the MARKET
 one must be very very cautious 
 and when we use predefined SCREENER it may be wipe out some GOOD companies so in my opinion one must only use screen based on Market cap ONLY 


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89

To summarize it in my view:
We don’t need to catch a multi bagger from start.
We can catch it from the middle and make little less gains but with significantly less capital loss.
I will gladly give away gains for a margin of safety.

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90

Hemisphere properties

As per the recent news of stamp duty payment for NCR property

‱ Hemispehere Property has allotted non-cumulative preference shares to the govt. and raised Rs.700cr. to pay stamp duty for the Delhi land. Imagine the value of the land if the stamp duty is 700cr.! The stock trades cheap at a market cap of under Rs.5000 cr. Buy at every decline for multi-bagger gains.

Actually the Company has 739 acres of total land out of which the land at NCR is only 127 acres .

As per simple maths for 127 acres land the valuation is 14000 cr based on stamp duty @5%.

The present market cap is less than 5000 crore.
This appears to be really undervalued as the value of total 739 acres would be in much more.

Pls correct if I am wrong.

.

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91

Company created to smooth en the land transfer which is yet to be completed.
Only if you are looking for Share buyback or hefty dividend otherwise not a investment kind of company.

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92

Any views on Auro lab, Morpean lab, Mazda, Vikram Thermo, Prince Pipe, Meghmani, or any other recommendation to add for long run

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93

I like Prince pipes, lot of things happening there including lubrizol tie up and prices of pvc/cpvc prices already increasing by 50% in the market
They should be able to dispose off all old stock at a good margin

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Ok thanks
Whether based on the the recent stamp duty payment CA we expect the valuation can go up

Also if the company looks to monetise the land whether it will be re rated

Pls share your views

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Of course it will go up but question is will you wait that long ?.
Or you can start a tracking position, later based on technical(when fundamentals change) increase your allocation.
Till than utilize your hard money for other available opportunities.

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96

Does anyone have any recommendations for smallcap or midcap biotech company working in gene therapy/CRSP related topics?

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Hello everyone. I am currently looking for some small companies (preferably <1000 Cr market cap) to research. I would appreciate if members could please share some names that they are tracking/holding. I am not looking for buy/sell recommendations but just some company names to research. In-depth research/analysis is not required. Thank you!

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Thankyou Malhar. These are the 2 co’s.

Vipul organics

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Do look into below companies

  1. Rajratan Global(BO with volumes in last 2 days)
  2. Acrysil(In Consolidation)
  3. RACL Geartech(In consolidation)
  4. Sportking (Tracking and digging for information)
  5. Aditya vision(Tracking and digging for Information)
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100

Vipul organics
Asahi songwon
Kiri industries
Black rose industries
Aluflouride
Globus spirits
Prince pipes
Prakash pipes
Rubfila
Rama phosphates
Makers labs
Camlin fine

That’s a lot to research

Acrasil &
Manali petro

Both good but think they have run considerably recently so bit hesitant to look at them although they might continue their run

Do let us know your observations if you get to research the above or any other suggested by fellow members

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101

If you’re looking for mid caps, ipca and vinati look very good

Abts is sold out at vinati and their new plant is going live for atbs

Vinati has still to rally in this bullish phase and is only waiting for a good trigger

Ps: also posted in vinati thread

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The FTSE 250 components, Royal Mail, Ashmore, and Lancashire Holdings have reported an increase in their earnings, despite the uncertainties and the investors’ mood has remained optimistic mostly after the vaccine rollout.

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Is anyone aware of listed Indian companies or their subsidiaries holding Cryptocurrencies on their balance sheet ?

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I doubt very much, given the uncertainty around the regulations around cypto currencies, if any any listed company will be holding crypto currencies on their BS.

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I don’t believe the market has taken off in India for gene editing. Can you not look @ Israel and US listed companies that are doing well in this space

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You are right. It will take a lot of time. US markets are indeed mature when it comes to gene editing but it’s hard to invest in US markets directly. Do you recommend any route? I have heard about vested is offering investment through their platform in US markets.

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I think Kotak allows USA investing through partnership with interactive brokers

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Word of caution on US investing, factor in exchange rate and transaction charges, unless you invest one lakh or more in one transaction it is not worth it.

If you want index exposure there are some good funds like MOSL S&P fund

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https://twitter.com/ixpoonia/status/1374235738410078210?s=21

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In addition to transaction charges that @Rafi_Syed mentioned. Please do note that investor will have to pay withdrawal charges that ranges between 10-30$.

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It’s not even nickel and dimed out of your profits, if at all; it’s straight up extortion rates

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I don’t have a target if something better comes I’ll sell to convert

Currently I am looking closely at another company, I can’t say the name yet

If I had money I would keep it in both but I now have investment in 16 odd companies and it’s difficult to keep track of all of them

Besides I am keen to keep holdings in highly liquid stocks as I am closely monitoring macro factors

While I understand one cannot know when the market has made a top, once macro factors give a signal of bubble territory I want to be in companies with zero exposure to debt, in consumer staples companies and probably some money in bonds. I don’t invest in banks as even Bank auditors don’t understand what they audit but near bubble I would get completely out of banks.

I am sorry, not an easy answer but for vipul most of the gains will come between now and until next result and possibly a few weeks after result, if they are good

If anyone is looking to sell I’d say end of May would be good time if results are good or immediately after results if results are poor and only sell if you find something better as they have a large capacity that will slowly be utilised over the years

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My big bet for 2021 is MMP Industries. Very attractive at current levels. Sharing rough notes below.

Aluminium products - pyro and flake aluminium powders, atomised aluminium powders (AAP), aluminium pastes, aluminium conductors (all aluminium, alloy aluminium and aluminium steel reinforced). - pyrotechnic aluminium powders in technical collaboration with A. Van
Lerberghe nv, Belgium (now called AVL Metal Powders nv) -
Capacity Atomized 12,000 MTPA / Flake powder 10,000 MTPA, Paste 1500 MTPA, Conductor 7200 MTPA, Manganese Oxide 4800 MTPA, Foil 5000
joint venture with Toyo Aluminium K.K. of Japan - for specialty aluminium pastes - 26% share
Star Circlips & Engineering Limited - 26% - manufacturer of Circlips, retaining rings, washers, shims and formed components mainly used
in auto and auto component industries

Aluminium Foil - Hindalco is India‘s premier foil and foil laminates supplier in different variants – plain, laminated, lacquered and printed which are used for various packaging applications - 5000 MTPA - pharma, food

Aluminium powders (pyro, flake and atomised) are used in many industrial sectors like construction (AAC Blocks) and mining (aluminised slurry explosives), agriculture (pesticides), defence (ammunition), fire crackers, railways (thermit portions) etc. aluminium pastes are used in automotive, decorative and industrial paints. Aluminium Conductors are consumed by the power sector for laying of overhead transmission lines.
The principal user segment in India for aluminium continues to be the electrical and electronics sector followed by the automotive and transportation, building, construction, packaging, consumer durables, industrial and other applications including defence.
Aluminium powder made by the Company is also used as fumigant in warehouses where grains are stored. With all government warehousing overflowing with grains, demand for this product is expected to double in 2-3 years specially with the favourable monsoon in the current year
Siporex, HIL, Ultratech (for AAC Blocks), UPL & Excel industries (for aluminium phosphides), Solar industries & gulf oil (for explosives), Coal India to name a few.
These are Europe, Africa and the Middle East. The Company’s products are now expected to be sold in Japan through it’s JV , TMI.
RM prices are passed on almost immediately, i.e. 10-15 days."

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Current Portfolio

MMP Industries
DHP India - half of market cap in Investments
S Chand - contrary bet, positive commitment from management in Q3
NDR Auto
KRBL - catching a falling knife

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@dn2017 – thanks for sharing your ideas. I did my independent research on MMP and it does look lucrative given the tailwinds for construction and mining sectors. The management (Mr. Bhandari) sounds very seasoned and credible – watched his IPO presentation from 2017. BTW, KRBL’s falling knife is something I too am playing with – Mr. Gupta’s bail should bring some relief.

My big bet for 2021 is Asian Granito Ltd. (AGL) – here is my thesis on AGL – I’d love to hear an unfiltered critique of my thesis:

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I think mmp industries price already factored near term growth considering this is cyclical business

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@dn2017 Hi
 Could you please share your rationale behind buying NDR Auto?

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I am not an expert on commodities but apparently we are in the beginning / middle of the metals rally. Steel is the darling of the market now. MMP capex is done and new commercialisation activity around foils. Could easily double from here in my view but let’s see Q4 results first.

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Please do some analysis and let me know if I am wrong but I think at 120 Cr mkt cap this company is free + huge credibility of founders. The company has been setup for the next generation and so has to succeed in my view.

NACL (run by Rohit Relan and 3 sons) is a dedicated supplier to Bharat Seats Limited and is engaged in manufacture of Seat frames and Seat trims for passenger as well as Utility Vehicles.

  • mcap 140cr? Cash 130 Cr - NP 20 Cr - Bharat Seats 28% worth 80 Cr - demerged from Sharda Motors - Other Income 9 cr a year (interest / FD)
  • demerged from Sharda Motors (now controlled by Ajay Relan) - owns 28.66% stake in Bharat Seats (Rohit Relan and Maruti JV - Bharat Seats Ltd is a joint Venture of Suzuki Motor Corporation Japan, Maruti Suzuki India Ltd, Rohit Relan and Associates with the aim to manufacture complete seating systems and auto components.) / - has 95cr cash 0 debt + 30 Cr Investments
  • 73% promoter stake. No pledge
  • 2 plants - has 50% in JVs with Toyota and Toyo
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Cash & equivalent as per last AR was arnd 95 crs. only. The stake is arnd 60-70 crs & NP inclusive of other income was 6 crs. only. Frm whr did u get 20crs. net profit & 130 cash?

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Thanks for bringing this up i did a detailed analysis to the best of my knowledge and skills , it definitely is undervalued at cmp but i want it to be a value buy and not a value trap .

what i learned

It is a newly incorparated company so past records are not available but one can see the track record of bharat seats of which Rohit relan was M.D to get a rough idea about the promoter , auto being a cyclical business is not doing very well ATM but there is strong recovery and bottomline back to precovid even all time high of 2018 in the last quarter for bharat seats but one has to observe if this can be maintained .Also the fact in annual report (page 37)one can see contracts which are repetitive in nature but all are from the associate or holding companies roughly amounting to 100 cr eyery year (out of which 96cr are from bharat seats )at current 7% margins gives 7cr of revenue from operation for 33 cr value of plant according to the latest balance sheet which is pretty high as mentioned by you is a company setup for new gen. So one has to track how is bharat seats doing , how the company utilises cash ,can get new customers other then the only existing associate company.

company also mention of reducing cost and getting new customers through bellsonica but google shows belsonica has same customers(maruti etc )which bharat seats has.So one lso has to track how belsonica is doing .

One thing which is i dont like is the salaries of 2 sons Pranav and Ayush is 4.5 lakhs per month each amounting to 1.08 cr no mention of salaries of Rohit(father) and Rishabh(3rd son) which is pretty high for company with expected net profit of 7cr and there are other salaries and 10% increment every year as well.Which imho is not a very good sign as it doesn’t inspire confidence for small retail investors like me.

the company does seem pretty undervalued with 5cr in cash in hand ,91 cr bank plus 9cr intrest income(assuming all other income as fd intrest),then there are investment in holding companies .i might just get a tracking position but i will wait for 2 more quartes for results and annual report ,how bharat seats , ndr auto and auto sector as whole is doing to decide whether to invest or invest if there is more market correction and the stock becomes more undervalued.

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Both of u guys did gr8 wrk to uncover this idea. Kudos
 :+1: :+1:. Its rare to find a co. selling for less thn cash + investmnts in this roaring bull mkt. 1 more kicker here is the probabilty that majority of spin-offs outperform the mkt.

However, wat r ur views regrdng the customer concentration risk? 100% of revenues cm frm one customer. Wat r the plans, if any for customer diversification?

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Excellent analysis on NDR autos. I started to read about the company and it’s associations with a stake in Bharat seats. A simple yet complex question which raises is that of the same business. Why would a company already having a stake in Bharat seats open a parallel company with the same business model. Is it not a conflict of interest case scenario?
Thanks in advance

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Hello everyone. There is one interesting small/micro cap called Raghav Productivity Enhancers. Please do have a look. In case any one is interested in doing collaborative research on this company, please send me a message. Thanks!

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Hi @edwardlobo
Just wanted to discuss Vipul organics expansion here, looks like 6X capacity expansion is just related to “pigments” and not the entire suit of the products which they offer.

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In AR FY20, pigments contribute 45% of the total turnover. This shall effectively mean ~3x total capacity expansion? Is my understanding correct here?

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You’re probably right

Any expansion if utilised is good use of funds, there are some companies that go into expansion just because their competitors are expanding

However, I have reduced my exposure in vipul organics and have increased my exposure of vinati organics as I like vinati’s better margins and probably higher utilisation of their new capacity after a recent interview by vinati ceo

Vinati also seems to be a forgotten company in the recent bull market as there was nothing extraordinary in their quarterly earnings. That might change this quarter report and my bet is on that possibility.

If it doesn’t give a good quarter I know the share price won’t go much down as most of the sellers seem to have finished their selling.
The thread on vinati on this forum also has a lot of negativity or absence of ramping
Buying a stock when no one wants usually is rewarding although it was more unloved when I first highlighted it a few weeks back on this thread.

It’s since up around 20% but another interesting feature has been in this mini selloff vinati has been holding up well and actually advancing

So possibility of good quarter as per ceo, expansion not priced in, making ath during market weakness are all positive signs and gives me a confidence to add to my position

Vinati margins are very good and the markets usually don’t want to see a big improvement in numbers to give the stock an over average price increase compared to stocks with low margins, markets like to see a much higher performance increase in quarter numbers.
This also makes fundamental sense as a company with better margins has a better moat and hence a better ability to protect that growth going forward. A lower margins company might lose the growth to a competitor.

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Even in the past it has swung with the aluminium commodity price but yes the product is good but the margins are in tandem with the commodity cycke

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Worth peripherals: Worth Peripherals Limited is one of the leading manufacturers of corrugated boxes. Last year it has been transferred to NSE main board from SME. Segments.
The company looks very undervalued at present. Recently it has completed a huge amount of expansion (60%). The company has also applied for land purchases for more expansion.
The future of the company looks very good. MP Govt will also be providing a 16 crores subsidy to this company installment basis. The expansion of the company shows that the day by day the demand for corrugated boxes is increasing in India. Financial of the company looks very good. Details will be found in the screener (Worth Peripherals Ltd financial results and price chart - Screener). As this company is listed in NSE only, annual report can be downloaded from NSE.

Views are invited from experts (@hitesh2710 @RajeevJ @ayushmit @HIMSHAH @sahil_vi @vikas_sinha) on this company. If I get positive inputs from experts, I want to add more.

Disc: invested

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Thanks for bringing in the sector of corrugated boxes into the discussion.
In my view this sector is an untouched one for now. I have started looking into this recently.
Hard to find the big players or well established players. Mostly due to the fact that the unorganized players can play a big role in the industry. Do you have any information on the competitors and share of unorganized players in the corrugated boxes section?
Thanks in advance

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As per the red herring of Worth Peripherals [page 91] no listed peers engaged in the manufacturing of corrugated boxes. RED herring documents can be downloaded from company siteRed_Herring_Prospectus-worth-packaging.pdf (5.3 MB). However, when I was google about Corrugated Box Manufacturers In India, I found the following article [Top 5 Corrugated Box Manufacturers In India]. It says top five unlisted Corrugated Box Manufacturers In India. 1. Canpac Trends Pvt. Ltd. 2.Multi Pack 3.Hariwansh Packaging Pvt. Ltd. 4.Trident Paper Box Industries 5.Kapco Packaging Company

I dont have any idea abouth their market share.

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Interesting blog on Sharda motors: Sharda Motor Industries Ltd: Fundamental Analysis - Dr Vijay Malik

NDR Auto: Spinoff from Sharda motors. At the moment is pure-asset-play aka cigar-butt type investment. Cheers. :slight_smile:

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Thanks for sharing the documents.
In my view an in dept study would be needed at this point of time to evaluate the growth. As stated before and also in your post, market coverage from unlisted players would be of prime importance.

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there is report by @yogesh_s on worth peripheal.

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Hi @jaman_valuepickr , Worth Peripherals looks interesting. with increased demand for e-commerce, I guess the demand would increase for corrugated boxes. They have reasonable ROE/ROCE.

However a couple of key questions -

  1. How does the company manage the impact of raw material price increase? Being in a B-2-B business, i suspect the company has any pricing power.
  2. Do we know what is the market share of organized vs. unorganized vs. company’s market share?
  3. Is this just a commodity business or does the company have any competitive advantage? If they have, what is it?

Thanks.

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I too was looking at this company for sometime and have literally found nothing concrete, The company migrating to main board successfully, Good management and the huge potential of this industry due to sudden increase in online shipments etc have nudged me to take a position (Half of which i intended to initially). I have shot off a question to their team regarding their capex and foray into diaper making ,Will share with you the details.
As for now the primary con is that it is a microcap and it has to withstand all the competition if a bigger player enters the market ,DO share any triggers you find

Voldemort

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It is not easy to answer these question easily. But if we see 10 year sale growth, it looks noncyclical in nature as seen from sale. image.

Secondly, package boxes are essential and non seasonal products for end user. Any increase in raw material price could be transmitted to end user. Further, we see increase in fixed asset in 2020. But we have not seen the reflection of it in the sale. May be in future we can see in sale.

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Makes sense but why hasn’t quarterly depreciation figures increased?

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Do you have any clue on this? March 20 depreciation 6 crores looks ok. but Sep 20 it is only 1.56 crores.

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Mar’20 dep is for 1 year , where as Sep’20 dep is for a quarter.

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Dear Jaman, can u please direct me to the report by Mr Yogesh on Worth Peripherals – I was not able to locate it.

Many thanks

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You will get here. Some discussion about worth peripherals during its IPO. Yogesh’s blue chip 10 Portfolio - Q&A: Questions & Answers / Portfolio Q&A - ValuePickr Forum
. screener will be found here.

https://www.screener.in/company/WORTH/

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Hello everyone. Came across this company called Raghav Productivity Enhancers.

Basic Background:

RPEL is engaged in the manufacturing of quartz based ramming mass, quartz powder, silica ramming mass and tundish board. It sells its products under the brand name of “Raghav” in domestic market as well as in foreign markets (majorly African and Asia Pacific countries).

Few graphs:
image.png

*Here 10 is FY21

Pros:

Commodities boom and metal prices skyrocketing

High promoter holding at around 73%

Last 3 years average ROCE is about 30%

Last 3 years average ROE is about 27%

Almost debt free

Operating margins at around 20 to 25%

5 years CAGR profit growth is 66%

No significant divergence between operating cash flow and profit

Exports opportunity(currently 18% of revenue)

Cons:

High debtor days at > 100 days

Capital intensive sector

Inventory turnover declined from 13x in FY15 to 3.7x in FY20

35x P/E multiple

5.5x P/B multiple

Company is paying zero dividends

Fixed assets turnover declined from 15x in FY14 to 2.4x in FY20

Large working capital requirements

Company has issued preferential equity shares to certain entities (including promoters) at a 20% discount to CMP

Non-cooperation with credit rating agency

Other interesting factors:

Mr Utpal Sheth is holding around 7% stake in the company

Mr Ashok Bhandari(CFO and president of Shree Cement for 25 years) is chief economic advisor to the company and visits the company every quarter

Customers:

R.L. Steel

Mahalakshmi TMT

Varsana SPA

Shreeyam Power and Steel Industries Ltd

United Steels Company

Rajuri Steel Pvt Ltd.

More customers

Sail, Tata, Essar, Jindal Stainless, Jindal Steel & Power, Rathi, Shah Alloys, Lloyds,

Facor, Electro them, Synergy

1026×244
(from a brochure on their website. No direct link available)

1600×358

Pros:

  1. Financials

  2. Gross Margin has been fairly consistent since Q2 2019 i.e. 10 quarters

  3. Operating and Net margins have fluctuated a bit but they also got stable since Q1 2020 except Q4 2020 and Q1 2021 (lockdown effect)

  4. YoY sales growth is consistently improving for last 5 years

  5. Consistently spending on R&D. They spent ~1Cr till Dec 2020 in FY 2020-21

  6. A total of over 10Cr has been spent by them, FY 2017 - 2020

  7. its R&D centre is the only one to be recognised by the Department of Scientific and Industrial Research (Government of India)

  8. a technical collaboration with Sweden-based JWK AB. JWK AB is a technology consulting Company with a formidable R&D track record in the field of silica used in refractory applications.

  9. Their ramming mass capacity is the largest in the world. The nearest competitor is not even half their size.

  10. Products selling at a premium of 20% compared to competitors (Annual Report 2020, page 29)

  11. They are organising analyst meets. For a company of their size, it’s surprising.

Cons:

  1. They increased non-current borrowings by ~INR 89 lac. It’s unclear what this money is being used for.

  2. Couldn’t find any investor communication channel. The investor presentation is missing which they supposedly uploaded on BSE on 6th November

  3. Corporate presentation on their website is inaccessible

  4. What is the difference between raghavsteel.com and rammingmass.com?

  5. https://www.raghavsteel.com/

  6. 765×139

Something seems odd. Everywhere they mentioned they started Raghav Ramming Mass in 2009 and later changed it into Raghav Productivity Enhancers.

  1. But this youtube video uploaded by them mentions Raghav Ramming Mass was established in 1977.
  2. Youtube: Ferro Alloys, Pig Iron and Ramming Mass by Raghav Ramming Mass Private Limited, Jaipur

RPEL has the following charges registered. The most interesting one is INR 19.26cr amount and a couple other hypothecated motor vehicles. (A charge is basically mortgaging an asset)

Can we find out what these motor vehicles are? I wouldn’t be surprised if these are some fancy cars being used for personal use.

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26th April 2021

Following are the people who attended the conference call on 7th November 2020.
Param Capital Research Pvt. Ltd.

Lucky Investments Pvt. Ltd.

Emkay Global Financial Services Limited

Mr. Nishid Shah

Ramesh S Damani

Relativity Investment Advisor LLP

These are the various contact details of the company:

Email:

rammingmass@gmail.com

cs@rammingmass.com

raghavsteel1@gmail.com

whistleblower@rammingmass.com

info@rammingmass.com

Phone:

9829011963

9829019963

2235760

2235761

Contact details of people for some third party/channel checks:

Customers:

sales@rajuristeels.com

accounts@rajuristeels.com

admin@rlsteels.com,

sunil@rlsteels.com,

nitin@rlsteels.com,

corporate@rlsteels.com

sales@smwispat.com

ajayarora@sail.in

ravi.dinde@kirloskar.com

Auditors:

bpmundraco@bpmundra.com

bgmca@yahoo.com

Lawyers:

rajranibhalla@gmail.com

Here is the link of their DRHP https://www.bseindia.com/downloads/ipo/2016125144222DP%20RRML.pdf

Interest free unsecured loans from promoter is a clear green flag

Promoters’ personal guarantee for 15 Cr loan is green flag

Interacted with Mr Govind Saboo

Did not get many answers, as he said there are certain limitations to what can be disclosed on a one on one basis

He said that you will have to do my own independent research (especially about competitors)

But few things which he said were:

Exports is direct sales, there is no broker or agent

Around 70% is induction furnace and 30% is foundry

In that, RPEL is catering to induction furnace

Industry is unorganized, so despite only 6% market share, RPEL is a market leader

Mr Bhandari is an advisor to the company; whatever management needs help with, they ask him

Private placement price was based on automated algorithm of past few months average stock price, and management did not decide that price

Raghav Steel is a promoter group company, and raghavsteel.com is the trade website of RPEL

Corporate gifting box on website is a designing mistake and they will change it soon

Around 90%+ customers are steel companies, but made some inroads in cement

Product reduces electricity requirement by a range but broadly 20%+

Fixed deposits to be utilized soon is going to be capex

About 300 players, broadly yes because it is unorganized sector

No patents as of now

JWK of Sweden helps in product development

Exports entry is long term strategic decision

Marketing people cannot comment

Some key questions:

1280×720

Inviting comments

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Infobeans Technologies:

‱ An IT services firm, Helps clients in Product engineering, Digital transformation, implementation and consulting of Service now and Salesforce products, Data migration to cloud (AWS, Azure, Google) and Robotic automation.
‱ Focus on the industries neglected by large peers
‱ 5 year Sales, PAT CAGR: 20, 22%
‱ Focusing on High Margin, repeat businesses
‱ Management looks honest, most from the top management are with the company since inception in 2000
‱ Management expects the company to grow 2x every year
‱ Currently 11 Fortune 500 clients
‱ Always looking for inorganic growth opportunities (acquisitions), good cash in hand
‱ Recently completed a Buyback, currently holds 75% of the total stake

I feel the earnings are expected to grow at a decent rate.

: Invested, will keep on adding as the conviction builds.

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IST Limited. It may be one of the most undervalued companies on the BSE. NET Cash and lot of real estate , almost fully leased in partnership with Brookfield REIT. Would love to hear your research comments


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IST Promoters:

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IST limited only, as I posted to the reply towards IST post. As mentioned by Kishan too, even though they have accumulated lot of cash and reserves, never returned even a penny to the retail holders. Let them first share atleast a minuscule amount to retailers, then only it will become a investable grade company.

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Dear Jaman,

it’s good to find some discussion on worth peripheral (normally you don’t see it anywhere easily)
I am holding since IPO and added more during our dip last year.

Reason for Holding:

  • Migrated to NSE.
  • Value Buy (Good Dividend Player, Fundamentally Good, Good Management, Evergreen Industry, Industry expected to grow)
  • Raw Material prices have gone up for last 1 year, many players have already shut down. Worth is surviving tough phase now.
  • Increased capacity in 2019 (10 MT i guess after IPO with borrowing)
  • Applied land to manufacture of diapers (surprise to me) worth wellness private limited
  • Applied land to manufacture of corrugated boxes (expansion) - worth pack india private limited.
  • Incentives from MP Govt.

Market Cap - Almost 100 CR
 lot of investors will find companies only if they are above 100 CR. hope things will change once we sustain 100 CR

Risk:

Highly fragmented industry - (though post covid, it may be different)
Raw Material Impact
Growth - Slow (suddenly things may change if we get approval and if all goes well)
I tried to get inputs from management but no response (concall / investors meet will be good).
They should focus to add more clients

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Same here too
I did buy around 3k shares in hopes that the management will be co operative in letting us know what is actually happening. If you see the industry as a whole, There is excellent opportunity to grow. But on account of the stiff competition and similarity in products, One has to either innovate in products to attract more customers or innovate in the production process in order to keep their margin intact. However worth seems to manufacture only corrugated sheets which is the most basic material which would keep their margins low. As of now there is no unique selling point with the company which leaves it with no pricing power. The company has expanded capacity but there is very high concentration on both its buyers and suppliers. As far as i have read, I cannot relate it’s foray into diaper industry with anything they’ve done earlier. I had shot off a similar questionnaire to their cs team and am yet to get a reply due to COVID. With the limited information available we can only hope anything not actually know things.
They seem to have around 35 lakhs in cash as on 31 march 2020 and around 24.18 crores in debt. Does anyone know how much of this debt was accrued on the recent expansion>?

Disc. Sold 99% holdings, Still have a tracking position

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Any views from anyone on Creative Peripherals? They have started with b2b marketplace last year and it looks like scalable business similar to indiamart

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No sales growth and decreasing OPM.

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They seem to be dealing with the best of the brands and are able to scale up but my concern is wafer thin margins with decreasing trend
Any reason why so low margins

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As of Sept2020, It has cash of 22 Croes and debt 18 crores. Cash get doubled from March 2020. Kindly see the screener.

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.

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Can anyone share views about GUFIC-BioSciences ltd

Screenshot (13)
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check there last 2qtrs

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Yes but where did the cash come from.This cash could be one off but margin are continously low.

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Came across this company - Ginni filaments. Two things seem to be working in favor of the company - Debt reduction and margin expansion. Sales growth is a concern. Does anyone have more information about this company?

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If anyone is interested in deep dive of IST Ltd, would recommend Dr, Vijay Malik’s analysis of the company.

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Worth Peripherals
In response to my mail to the CS of the company, I received the following.

  • The company passes on the adverse changes in the raw material prices to the customers and the expected timeline for the same is said to be about 1.5 months

  • Their entire sale is covered by weekly orders from customers and they are trying to get more customers into their fold

  • They expect to invest around 50 crores in their new plant (Boxes) and are expecting an initial production of around 1500 tons. I have further asked them how they wish to fund the same i.e accruals or debt

  • “We believe we stand out from the competition primarily due to our R&D, Quality, Services, Long-standing relationships with our customers and suppliers, technical knowhow, company-owned vehicles for on-time delivery of boxes, and our capabilities in terms of multicolor high graphic printing in a completely automated line leading to savings to customers and increased strength” was their reply when i asked them about how they differentiated themselves from not being a pure commodity play.

    I have asked them a few more questions about their foray into diaper making, Margins, and so on. I have also asked them how they are planning to de-risk their supplier / client portfolio which is very concentrated as per their DHRP. Will update this thread as it goes.
    I think the company is trying to leverage what it knows and does the best on a much higher scale, I still have no clarity on what their diaper fiasco is all about. As far as I understand multicolor high graphic printing is just printing boxes with images or something of that sort. Also, I don’t know how an expertise in that will be beneficial to the company, Seniors pls share your thoughts.

Hold a tracking position
Pls delete if it does not add value

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Ginni filaments: consistent growth in consumer division with good margin is interesting.

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Thank you for sharing this. Has been in public discourse earlier. Have you come across or done a later analysis? I would like to post a deep dive into IST if anyone is interested


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No I have not come across any other deep dives. I have not done further research nor invested.

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Satia Industries, anyone?

Triggers:

  • Production capacity will be 2x soon. In the latest conf. call the MD said that FY22 will have at least one quarter with 2x capacity coming online [1] [2]
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Looking at historical PE and current PE, it doesn’t look like the doubling of capacity is fully priced in.

There are other great things about Satia – @kalpesh4430 has shared more details on his portfolio thread Kalpesh's Portfolio - #45 by kalpesh4430

Disc.: invested

[1] https://www.satiagroup.com/wp-content/uploads/2021/05/Q4FY21-Conference-Call.pdf
[2] https://www.satiagroup.com/wp-content/uploads/2021/05/Investor-Presentation-February-2021.pdf

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Hi anikit bro I liked your stock selection and research can u please share some research stock that are current undervalued please

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Margins are lower in creative peripherals because of lack of Pricing power historically. But management has provided guidance for better margins going forward due to economies of scale. They have started international operations with distribution of Honeywell products. Margins will also increase with induction of more customers on ckart due to reduction of traditional selling costs.

Previously creative was only in distribution business whereas now it’s in three businesses
 I.e distribution, contract manufacturing for Honeywell ane Ckart which is b2b market place like India mart and jdmart.

Disc - invested

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Another interesting development is that the company changed it’s name recently from creative peripherals and distribution to Creative Newtech limited to reflect the fact that it’s not solely in distribution business anymore

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If anyone tracking Sterling Tools – I am trying to assess the potency of the following triggers but not able to find good information sources:

Trigger 1: JV with Jiangsu Gtake Electric Company Limited. The two companies agreed to join hands to provide the Indian Electric Vehicle OEM’s with best in class MCUs. MCUs are a very core component of EVs.

Trigger 2: addition of Hyundai to its new customer list that will lead to incremental revenues from FY22.

Trigger 3: Bangalore facility capex leading to additional capacity.

Please DM if you’d like to collaborate on this research.

Thanks

Disc.: invested

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In Advait case, Sales has gone up but the operating profit has remained more or less the same in the last two years. And, operating margin has gone down. I think this should also be considered.

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Dear All,

I have been following Compuage Infocom Ltd for the past 2 months, the stock has increased close to 30%.

Interest coverage ratio is low but should not be a major concern as of now. Its trading below its book value.

Request your views

https://www.screener.in/company/COMPINFO/consolidated/#ratios

Disc: Small tracking position

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@shiva – in your view what are the triggers?

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I think historical OPMs won’t have a lot of relevance in Creative Peripherals.

  1. They have developed the Ckart platform and have onboarded their own customers on the platform to begin with. As the sales volume increase, the operative leverage will kick in since the platform marketplace makes it easier to conduct business. Q4 concall said the same thing.

  2. In May 2021, Creative also launched the seller module on Ckart. So it isn’t just their products, but also the products of their customers (to begin with) and other vendors that can also be traded. Kinda like Udaan and IndiaMart.

  3. Honeywell is the game changer here. The management has commented that they’ll have close to 40% gross margin for Honeywell products and higher than average EBITDA margin. These will be even higher for MENA exports for which they’ve also got the right from Honeywell and for which they’ll start exporting in Q1 FY 22 or Q2 FY 22. Honeywell sales (worst case scenario) per management is around 80 to 100crs in FY 22. In FY21, this number was around 25cr in FY 21. So from an expected topline of 700crs, Honeywell EBITDA alone would be 15crs and rest of the 550 crs contributing another 7/8% EBITDA. So FY22E EBITDA may be around 50crs in total. To me, that’s not a bad number given that Honeywell portfolio will only increase and EBITDA too will increase with volumes courtesy ckart.

Then, CP is expanding the product range and trying to get more brands on board.

  1. At 200crs valuation, I don’t think there’s a whole lot of downrisk except if operating margins.
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Has anyone here heard of/is tracking “Scan Steels” ?

The company posted good results, makes TMT bars and other steel products and operates mainly in Odisha.

Key Triggers: 1. Infra story and Odisha hit by recent cyclone so Infra story++.
2. Anti Dumping duty on steel extended to december 21 so a little protection from imports.
3. Steel prices have Increased sharply and then have declined a bit but are still up from base.

The stock looks fundamentally attractive with extremely low debt and the company has posted excellent Q4 results.

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Add shop E Retail
another interesting script.
FMCG play
Market cap less than 100 cr

Ayurvedic products
Agriculture n animal feed products
Health hyegine personal care

Sales, revenue n profit increasing
Increasing distribution network
OPM approx 14%

Gujrat based promotors
https://www.screener.in/company/541865/

Pls post ur views.

Dis: invested.

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dont u find something fishy in their receviables at 50 % of sales

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payables also rose, so not so worrying.
Their business model is too unpredictable though. how do you predict the success of their ‘agents’?
also why did they change the name to add shop e-retail? They get most of their revenue from offline sale.
Nonetheless looks like a fast growing company.

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Annual report of the firm says it’s simply trading of ayurvedic products/medicines. What’s the moat here
just as its below 100 crore?

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Authorized Seller & Service partner for HP, Asus & Samsung which have been seeing an upward trend during the pandemic.

New partnerships with Dahua Technology,Optoma Corp, etc.

Fundamentals are good enough to sustain future growth

The stock has gone up another 10% since I posted.

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Some details about the JV I was able to find (posted on STL’s thread):

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Bajaj Healthcare.
Fastest growing small cap pharma company.
Zero FII n DII holding.
PE ratio 15
World number one producer of chorhexidine n ascorbic acid.
Trigger
NSE listing.

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My Microinvestment idea


  1. Add shop E Retail
personal care, ayurvedic products, animal feed, nutrients, new plant
  2. Cybertech system and security
 cybersecurity
  3. ASM Technology
 semiconductor technology
  4. Resonance speciality chemicals
pyridine products
  5. Ishan dye
food ingredients, pigment
  6. Sagarsoft india
microsoft, digital, mobility, few fortune 500 clients.

Disclosure
 initial entry in above stocks.

Opinion from experts welcome.

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My filter criteria also picked up Shop E Retail and Ishan Dye.

Disc: Invested in Ishan Dye.

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Same here. Add shop came in my screener and there is nothing on VP (except this thread).
Though i wasn’t able to find much information on the internet. Anyone wants to collaborate on it?

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Off the bat looks a great pick. Any idea why it corrected so steeply in the last 3 months despite stupendous results

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Lyka lab micro cap having mcap of 220cr.

As per quarter 1 21-22 result company has repaid 32 CR loan to ARC.

Promoter has released pledge share also.(source BSE disclosure by Company)

Started Job work for Remdesivir drug for reputed Indian pharmaceutical company.(source annual report 20-21) and advertisement on news paper dtd 17.04.21 https://www.lykalabs.com/

Increasing capacity by 50% and ready by second half of current financial year.
Following is abstract of last Annual Report

“To meet the increase in demand for lyophilised products the company has embarked on an expansion project of its Lyophilization Plant at its Ankleshwar factory. This Project is likely to be completed in 9-12 months with a 50% enhancement in capacity for lyophilisation.
Company has received permission to manufacture and marketing of Liposomal Amphotericin B Injection 50 mg/vial from Government of India, Directorate General of Health Services, New Dehi.”

Fail to understand how company can repay loan of 30 CR having turnover of 48 CR for Ist qtr.

If someone having deep knowledge of pharmaceutical sector can throw light on the company?

Can it be considered as fundamental turnaround story.

Invested in last month looking to momentum in the stock though still learning technical analysis.

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Pl consider Remdesivir Injection instead of Remdesivir drug in above write up.

Sorry for inconvenience

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@kartiks
We have to take into account bonus shares issed in the ratio of
1:1 in early 2020.The price is more than doubled since ipo.

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The recent developments at Creative Newtech look interesting. I have a tracking position.

However, I have a couple of questions. I recently found that the company allotted a substantial number of preferential shares (400K equity shares and 600K warrants) for Rs 110. The approval from board was received on 1 July when the share price was around Rs 186.

Why was such a huge discount given? Is such low pricing even legal? Even if legal, such low pricing is against the interest of the minority shareholders. I am not very familiar with the regulations. Even though the company has notified a CA certificate saying that the preferential issue follows the ICDR regulations, I have my doubts. I would like to understand this issue.

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There is already a separate thread on Vertoz:

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Super results by Creative last week and management sounded very honest about their plans for future. Key highlights:-

  1. Q1 FY22 impacted by lockdown and represents around 2 months of sales. They did 69crs and 70crs of biz in June and July 21 - best performing months in the history of company

  2. Console margins are depressed because Honeywell expenses have started flowing but revenue is yet to kick in. The management has guided for a launch in middle of September for Honeywell products and are sticking to 80 to 100cr revenue guidance for FY22. That makes INR 17cr EBITDA just from the Honeywell licensing business. Rest of the INR 600crs (conservative number) business could contribute another 5% EBITDA margin so another 30crs. So a total of 47crs EBITDA expected in FY22.

  3. Ckart - Independent director on board from IIM who teaches platforms and social networks. So they’re seeking guidance from the board in terms of the skillset, direction and how to play this business. Tentative plans would be revealed in the next 2 months. Could include a demerger of ckart too.

  4. Guidance for Honeywell business - INR 200/250 crores by FY23. The agreement is till FY25 and they’re in very early stage talks with other brands as well for licensing business.

  5. Numbers: INR 135cr revenue; 4cr EBITDA and 1.23cr profit.

Per the guidance by management, Honeywell business should contribute ~35cr EBITDA by next year and rest of the business could contribute a similar amount. Overall 70cr EBITDA in FY23.

Currently the stock is trading at a mcap of around 315cr which is 4.5x FY23 EBITDA.

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Is anyone tracking Libas Consumer products?

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This issue was spoken of in the Q1FY22 con-call and I have myself been critical of the move but here’s the perspective of management:-

  1. We were talks with these for last 1/2 years;
  2. Not sure if the rights would have been subscribed (management sounded skeptical)
  3. Said they’ll consider rights in future fund raising requirements
  4. No further immediate funding requirements, so no further dilution.

And yes, the pricing is as per SEBI norms, it looks very low because the stock had a sharp upmove from 130 levels.

Not very satisfied, but then, not every thing is perfect. One has to weigh risks / rewards here.

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Is anyone tracking Auro Labs now? @crazymama @cabunny There is a closed thread:

A couple of questions:

  1. @cabunny Did the company give the answers to your questions, particularly related to the capacity?
  2. What are the reasons behind the ongoing correction?

Disclosure: Not invested.

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Add shop e Retail


Expansion is going on.

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Pacific Industries Ltd ( BSE: 523483 )

Market Cap â‚č 123 Cr.
Promoter holding 74.0 % ( Good )
Debt â‚č 42.3 Cr ( Concern )
Listed Peers: Pokarna

Pacific Industries Limited is an India-based company, which manufactures and deals in marble and granites, and allied products. The Company is engaged in mining and quarrying.

https://www.pacificindustriesltd.com/

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Recent Result Trends :

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If anyone is tracking this space, please do share more information.

Regards
Gaurang

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Is there anything specific in Add-Shop E-Retail, continuous UCs from few days?.

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Please go through its business model. U will get answers. This script is upcoming FMCG player.
@ Add shop e retail.

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d9005d3f-6017-4157-99a6-d339b852d6d2.pdf (541.7 KB)
MY be after pref share allotment to this PE fund, a lot of buying is happening in the stock

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I got some product review directly from people who have used the product and they were great.
All the online reviews are also good.

The very high receivables is a worry. company’s relationship with Dada organics (another company of the chariman) is suspicious. However there is PE fund investing in the company and the chairman also has a very good reputation.

disc: small percentage of my pf.

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Sir
We do not have any thread on Add-Shop. Can we make one for better understanding and follow up.promoter seems very honest. A blind person with high visions.
Disc. Invested recently.

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Apologies if this questions seems naive as I have not studied this business, but what’s stopping giants like Amazon and Flipkart to kill Add-shop? Trying to understand their competitive advantage and what makes them stand out in this space?

Curious to get some thoughts here. Thank you!

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161b73ac-97ee-48dc-8c90-e734babfac08.pdf (590.2 KB)

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Previous Auditor Resigned and new Auditor appointed in place. is it just a routine or any thing suspicious? Why any auditor will resign without ant reason?

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I have also noted few minor observations on Add-Shop E-Retail.

  1. MD is signing himself on all the disclosures submitted to exchange despite he is partially disabled. CS is not signing any documents.

2.Company is not having any proper designed letter head. Currently they use word header letter heads.

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c316da06-fea4-4864-b7d7-535e71ccf5fc.pdf (3.4 MB)

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This time CS has signed the letter. And using word based latter head is not an issue. Yes company should use companys logo in all the communications.

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Promoter is the competitive advantage. He personally has addressed highest no of panchayats and made a world record. And thst feeds bsck customer stickiness and networks effect in buyers. Snd its a sustainable advantage which online players can not even dent.

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That is because Dolly Khanna recommended it on 1st oct.

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As of 2021, Add Shop E-Retail has 70% of assets in trade receivables, which seems very high. Working capital is getting stretched as well. Latest AR tells that they entered into a lot of RPTs as well. Not sure, if anybody has any view on this, but looks like a lot of red flags to me.

Not Invested, tracking and studying.

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e2eb1311-7664-4f01-b156-e77bb02fb07e.pdf (1.3 MB)
Add-shop : Q2 FY22 Results seems very good. Can anybody analyse the results in depth?

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Relevant suggestion by - humbleInvestor!

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https://www.thedesiinvestor.in/?p=24

It does appear to be rather shady. The entire stock raw materials are being sourced from promoters, despite the IPO prospectus clearly stating that AddShop has an agreement with Marss Herbals for manufacturing.

The franchise and distributor numbers have changed in different filings it seems.

Also, the new investor Nexpact could be related to market operator Sanjay Dangi.

The blog has highlighted several other concerns as well.

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Yes, I had already pointed out in my last post that the pace at which TRs have been increasing as compared to the revenues, clearly shows this company is basically incentivizing it’s distributors in some way to store the goods to their warehouses, and record them as sales. With a business model like theirs, it’s very easy to do so as there are thousands of distributors and it’s very hard to track, to how many of them the goods provided are actual sales and how many are just for the billing purposes. It’s a classic example of P&L manipulation.

What makes matter worse is that we don’t and can’t even know, how many of these transactions (customers and suppliers/manufactures) are related party transactions (RPTs), as the company has many times told the exchanges that they don’t fall under the bracket, where they have to report the RPTs to the investor community at large.

I don’t see any competitive advantage as well, and getting backward integrated by leasing out lands to produce the RM/finished goods is not a scalable option, as the organic farming for different agri produce can’t be done everywhere.

It’s a risky journey and I have decided to opt out of it, until they become more transparent, and/or I see improvement in their TRs/Inventory, and thus in the cash flows.

Disc: Not Invested. Tracking and studying.

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Bonus share recommended in add shop e retail 7:10 fully paid.

Disc: invested and planning to add on dip.

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Hi, Here is my thesis about a closely tracked stock. I am looking for opinions if I am thinking in the right direction or not.

Kwality Pharmaceuticals Limited is an India-based holding company. The Company manufactures and exports pharmaceutical formulations in liquid orals, dry syrups, tablets, capsules, sterile powder for injections, small volume injectables, ointments, external preparations and oral rehydration solution (ORS)

While the Stock has run up from 100 rupees to 900 rupees according to the latest results:

Sales : 300 Crore

PAT : 94 Crore

I believe the remarkable performance by the company calls for a discussion.

Management has maintained it is able to repeat its first-half performance which means a PAT of FY PAT of 180cr+.

This translates into EPS of 180 and pe of 4.63 with an industry avg PE of 26 (Bulk Drugs).

Further 2 plants will get commissioned in next few months.

Company has also mentioned that due to Remdesivir and Propofol - it has gained a lot recognition in the international market and got a PHARMACEUTICAL INSPECTION CO-OPERATION certificate.
According to even basic calculations, this stock deserves a PE rerating because of

Stellar performance
Margin expansion
Confidence in repeating the performance for the coming years.
Hope to get your viewpoint on this situation.

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Good stock
Invested
Usually due to upper circuits you can’t buy this stock but has retreated a bit due to market weakness allowing people to enter
Also it’s going to try listing on main board that will bring more recognition and liquidity together with quarterly reporting

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What are reason you think it a good stock ? Would love to understand the rationale behind your thinking ?

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For similar reasons you mentioned
The business generates 25% of its market cap every year and is expected to increase it
Let’s say it does not increase any revenue or profit but maintains it, I’m happy even if price stays where it does
With new plants that have been lined up and with them being listed on the main board it’s only a matter of time before other investors will notice it
Many investors use screeners and not company filings to research their stocks, this stock is not on the screeners yet, but that doesn’t mean it’s value is lost

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What suddenly changed for the company to double the top line and margin becomes 4 times.
did they just exploited the supply chain constraints.
Was there a change in business mix which caused such windfall.
What is the roadmap to sustain the topline and margin.
If we go by historic numbers and leave this one super quarter price seem fully priced in.
There was a increase of `~35% in fixed assets

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Any thoughts on DCM Nouvelle? Company seems to be fairly priced. I have not seen any active discussion on VP on this co.

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Kwality Pharma
Well, what changed was operating leverage kicked in and in times of uncertainty the company used its low cost of production and good quality products to gain global recognition - gain certifications - get its products registered and push its high margin products across new geographies.

Screenshot 2021-11-27 at 1.37.59 PM
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I have vetted almost 100 companies this earning season especially in the pharma and chemical space. I didn’t come across a single company that expanded margins - revenue and positive commentary for the future like kwality pharma did. Plus it has the backing of investors like Ashish kochalia. Now the questions comes when will market realise this and price in the future growth as well. Do share your opinions guys. would love to hear some anti thesis pointers as well.

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The company shares very few details about the revenue from its various products. How much of the revenue is associated with Covid-19? The target markets can attract other companies owing to the high margins. What are the competitive strengths that will protect the margins? Any idea what is the sustainable revenue and margin next year onwards? The management seems to have provided guidance about the next half year but not beyond.

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I completely agree with you. In their recent updates about shifting to the BSE mainboard from the SME board, they mentioned that they want to unlock value and create better transparency for investors. so I hope they are able to do that. currently, the vote is underway.

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Let’s say all of additional revenue is from Remdesivir. Other companies, one I was following was Everest organics, they couldn’t capitalise on this. Getting approval for Remdesivir from patent holder is a bit tricky and new approvals unlikely. In the heat of covid crises, they were more open to consider

South Africa has roughly 25% vaccine uptake

If they can maintain this revenue for another year and then say back to usual ebit of 2 crore, they would have enough free cash, almost equivalent to the current market cap

That amount of free cash gives you a lot of options provided management has foresight.
Their major revenue is Africa exports. A lot of companies are planing this sector, like Fredun pharma. Caplin did a good job expanding into Latin America

Not everything of course is guaranteed. Any stock comes with many ifs and buts otherwise anyone could fire up excel and come up with best stocks to invest for lasting wealth

Most of what the insiders know is unknown until it’s played out and many times the insiders are not even the management

I think the stock is at 50ema and many people know that, that level is when people get scared and dump. Smart money usually picks up here for next leg of movement. I’d wait for a week to see if 50 ema holds or falls. If it holds strongly during market weakness, then the normal pull back pattern would have played out and the stock likely will rise.

There has been a good level of buying support and reduced sellers at this level, even during market weakness and selloff yesterday.

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Again I’m not counting new plant, new products, research plant etc
Back of envelope calculation without any of it looks good

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Do anyone have any information on Siyaram Silk Mills regarding Dr Vivek Bindra hired as consultant?

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Their latest note on the reason behind migration

Screenshot 2021-11-29 at 2.41.45 PM
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Nandani Creation Ltd.

Another interesting microcap.
Market cap around 90 cr
Revenue. 45 cr
Descend profit making company.
Almost debt free.

E-retailer.
Jaipuriya kurti, palazzo , jacket, suits, fusion bear etc

Client like Amazon, meesho, flipkart, snapdeal, Myntra, Paytm, azio, nyyka tatacliq etc.

Many stores in Rajasthan.
Expansion in progress.

Input from respected members invited.

Disclosure
 Initial investment. Planning to increase holding gradually.

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Company name:— Tinna Rubber and infrastructure Ltd.

Market capitalisation:-- 145crs.

Promoters holding:-- 73.81 percent.

FII holding :-- .59 percent (new entry)

Campany’s site :-- http://www.tinna.in/

Financials :-- Tinna Rubber & Infrastructure Ltd financial results and price chart - Screener

Investors presentation :-- https://www.bseindia.com/xml-data/corpfiling/AttachHis/0c690e63-5b0f-4070-a7ad-9c76ef970e7f.pdf

Management discussion :- Tinna Rubber & Infrastructure Ltd. - Valorem CXO Meet - YouTube

Tinna Rubber and Infrastructure Ltd. (Tinna) was founded in 1977 and has grown to become the largest
integrated waste tyre material recycler not only in India but also Asia. It is amongst the global leaders in
the manufacturing of recycled rubber materials, like Crumb rubber and Crumb Rubber modifiers for
bitumen. It is also one of the very few companies in the world to manufacture 80-140 mesh micronized
rubber powder. The company caters to the entire range of recycled rubber applications including crumb
rubber for the purpose of road construction and also non-road applications like new tyres, rubber mats,
conveyer belts, and many more.
The company has built strong world class infrastructure through sustainable and fully integrated
manufacturing facilities with completely environmentally friendly processes and zero liquid discharge
processes. The manufacturing facilities spread across India at Panipat (Haryana), Kalamb (Himachal
Pradesh), Haldia (West Bengal), Gumudipoondi (Tamil Nadu) and Wada (Maharashtra). Over the years,
Tinna has constantly focused on innovation, backward integration and quality improvements.
With the increasing awareness about the benefits of recycling waste tyres not only by the government
but also by the community at large, the company has built a strong demand and order book pipeline from
the revival of the road sector post change in the Government guidelines as well non road segment. With
ample capacities in place to cater to this rising demand, the bright future envisioned for the company is
now becoming a reality. In Q2-FY22 revenues grew by 76% year on year, while EBITDA and PAT grew by
over 100% year on year, and the company has also reduced debt considerably as compared to a year ago.

Triggers are:-

Sales,EBIDTA and Net profit is increasing.

Debt is reducing and interest coverage is healthy.

Management is optimistic to be Debt-free in two years.

Capacity of company is 72,000 MTPA.

As per management current capacity utilisation is 60 percent and expect 100 percent utilisation in FY 22-23.

High entry barrier in this business as product approval takes 3 to 5 years.

As per management there is tailwind in the sector and there is huge demand of their products.

Contribution of export is 5 percent in sales and management expect it to 20 percent in coming years.

Govt. Of India in process of making use of CRMB mandatory on top layer of all road surfaces.

All major tyre companies in India are it’s clients.

Disclosure : invested.

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What Happened to the Loan and Advance sections from suddenly from 21 Cr Gone from book ? in Sept Qtr

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From loan and Advances to Other Asset Item. Only group has changed nothing else

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Message from Hon’ble Minister of Road Transport & Highways, Shri Nitin Gadkari Ji, during National Conference on Bitumen & Road sector (Organised by Rex Fuels along with CRRI-CSIR) held in Delhi on 25th November 2021 reinforces commitment of our Government to create sustainable and long lasting roads using Crumb Rubber Modified Bitumen (CRMB)

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Shareholding pattern of TINNA RUBBER for Dec 21 qtr. announced.
https://www.bseindia.com/corporates/shpSecurities.aspx?scripcd=530475&qtrid=112.00

FII holding increased to .64 percent from .59 percent.

DOLLY KHANNA holds 1,42,739(1.67 percent) shares in the company.

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In this counter purchase activity has increased significantly. For the last three sessions, it has increased by three 10% circuits! A bonus issue is going to happen (7:10) on 17th Jan 21. Is there any change in the company?. Two Bulk purchases of 1 Lakhs shares each by Rohan Gupta are done on 3 and 4th January (Source BSE: Stock Share Price | Get Quote | BSE) . You are requested to comment on this.

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One microcap which i found out recently: Master Trust Ltd financial results and price chart - Screener

Brokerage company, nothing spectacular about the product.
Their android app is powered by tradelab.in. I haven’t opened an account so I am not able to test the user experience offered by them. However their Playstore rating is 3.7 whereas mature brokerages’ app have 4+ ratings.
They have pan india offline presence with higher concentration near NCR.
The recent growth can be attributed to the market bull run after lockdown. All brokerages witnessed tremendous growth and Mastertrust’s growth (in %) is in line with the mature peers.
They also offer PMS service but their revenue and profit contribution is minimal.

The management remuneration was 2.7cr against net profit of 37cr for 2021.
The KMP has also given loan to the company and receive reasonable interest on it. The net interest amount is insignificant.

The secretarial audit has multiple points reported (pg 44 of AR’21) which I consider as minor issues but reflect on the management poorly.

The company has excessive cash at the moment. (like other brokerages)
MCAP: 375
EV: -292
TTM Sales: 293
Net borrowing: 103, Paybles: 577
Cash equivalent: 770, Receivables: 51

The stock price has grown 8x in a year already. Current PE is 7.47.

Any though tribe members?

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RUTTONSHA INTERNATIONAL RECTIFIER


A ultramicrocap company.

Market cap approx 190 cr.
Profitable company.
Almost no debt(<5Cr).

High promotor holding 72.5%

Semiconductor business.

https://www.screener.in/company/517035/

It was consistent slow consistent moving company since long time, but suddenly in focus due to semiconductor shortage.

Trigger- PLI scheme from government.

Please share your view and opinions.

Disclosure: initial entry.

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After Plastics, Environment Min Wants To Expand EPR To Waste Tyres

Link :- After Plastics, Environment Min Wants To Expand EPR To Waste Tyres - The Wire Science

  • The environment ministry has released a draft notification to implement extended producer responsibility (EPR) for waste tyre management,
  • This extension of EPR requires the manufacturers and importers of tyres to also handle their disposal after consumers have used them.
  • This draft notification has been in the works for a while: experts and the National Green Tribunal have been calling for a law to tackle growing concerns over waste tyres in India

The environment ministry’s new draft notification, to extend EPR to include for waste tyres, aims to address these concerns. According to the notification, the ministry appointed an expert committee that included representatives of the NITI Aayog, CPCB and the All India Rubber and Tyre Recyclers Association, among others. The committee had been tasked with preparing a comprehensive action plan to manage the disposal of waste tyres.

After meetings with stakeholders and inputs from the committee, the ministry developed a report on tyre scrap, which also included recommendations on EPR, and submitted it to the NITI Aayog in August 2021.

According to the new draft notification, by 2024-2025, all manufacturers and importers of new tyres will need to recycle all their products, starting with recycling 35% and then 75% of their products for the first two years, and achieving 100% by 2024. The notification also bans the import of waste tyres for the sole purpose of producing pyrolysis oil or char.

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Could this benefit Tinna Rubber? Stock has seen a massive run up recently.

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263

can these policy benefit rubber chemical manufacturing company’s as there is tailwind is there , can policy as such enhance the trigger

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Company like TINNA RUBBER AND INFRASTRUCTURE LTD who recycles waste tyre into value added products in eco friendly manner will be hugely benefited.

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265

please read this. This is going on since 2017

is this not pump and dump story???

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The fundamentals of Tinna Rubber looks good to me. Financial performance of the company is improving QnQ . Quarterly results of Tinna Rubber for Dec 21 will be announced on 12/01/2022. I will share my analysis on financial performance after seeing the quarterly results.

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Company is showing some consistency in terms of reporting the profit. Below is the result announcement. @rinkupranjan - looking forward to your analysis on the result

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In Q3 of FY 22, consolidated sales figure of Tinna Rubber increased to 70.56 crs against 55.13 crs of Q2.

EBIDTA increased to 10.84 crs against 9.98 crs of Q2. EBIDTA margin reduced to 13.36 percent against 18.1 percent of Q2.

Net profit after taxes remains flat at 4.19 crs against 4.16 of Q2.

Reason for lower EBIDTA margin:-
In an investor meet dated 15/12/2021 management already told that there is margin pressure because of increased raw material prices. The management also clarify that they have the pricing power and increased cost will be passed on to its customers in coming quarter.

During Q3 the company has booked one time additional interest cost of rs. 74.83 lakhs paid to IBCCL which is disclosed in notes on accounts.

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I had attended the Investors meet with the management of the company organised by valorem cxo meet on 15/12/2021. Some important points I noted are below not covered in my earlier posts:–

The company recycles only truck and bus radial tyres. The percentage of natural rubber in radial tyres are more than any other tyre. Market share of radial tyres are increasing continuously because of better mileage.

In coming quarters the management expects EBIDTA margin of 15 to 17 percent is sustainable.

Management has given the guidance of 25 percent CAGR growth in revenue for next 3 to 4 years.

The company has signed MOU with few large tyre manufacturing companies to recycle the rejected or wastage material left after manufacturing process.

On capex plan management told that when the company reach the maximum capacity utilisation level, they will set up new facility in India or abroad.

The management is very confident on achieving the 100 percentage capacity utilisation by FY 2022-23.

The company has won many orders from road construction companies in last two and half years. Which is converting in revenue now because company’s products are used in the last phase of road construction and applied on top layer of roads.

The company has also developed a product which is mix of waste plastic and rubber to be used in road construction. That product is already applied in few road projects on trial basis.

Valuation of the company for FY 2022-23 on estimated basis by me:-

Revenue ( assuming 100 percent
capacity utilisation). 320 crs

EBIDTA ( 17 percent of revenue
As per management guidance) 54 crs
Less:-
Interest cost ( assuming no
Change in debt) 8 crs
Depreciation cost 8 crs
Profit before tax 38 crs
Less:-- taxes (25 percent). 9.5 crs
Net profit after taxes 28.5 crs
Outstanding shares
(85,64,750)
Estimated EPS for FY 2022-23 rs. 33.28
Current price rs.270.70
One year forward PE ratio
(Estimated) 8.11

Disclosure: - not for buy or sell recommendation

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270

Very good summary. In the investor meet you mentioned the management had guided for 70% revenue growth in FY22,i.e.,221 cr. With 70 cr in Q3(9 m revs=171 cr),they are well on track to exceed this as long as wave 3 doesn’t devolve into something horrible. Company also seemed pretty confident of achieving 100% utilisation in FY23 which implies that new capex maybe announced sometime this CY. Exports is a low hanging fruit and company plans to ramp up exports to 20% of revenue in few years. Tinna has been making 56-58% GMs since a while,so EBITDA margins moving towards 20% with more scale is entirely possible.

With their 72,000 T capacity they are the largest in their segment. The total recycling market is pitted at 3-400k/year out of a total 1.5 mil tyre mkt. There is a decent share of unorganized players,which should move to players like Tinna. The India tyre market growing at 5-6% cagr will itself give a good fillip to more ELT tyres for the sector. Best part is that Natural rubber volatility doesn’t affect the recycled market much. This needs to be tracked. ESG is a global trend and over time the trend of recycling ELT tyres should only increase,how Tinna capitalizes on this will also need to be monitored.

This debt issue was a big overhang especially after ICRA had downgraded Tinna to D- but post this take over by SBI,company will save north of 4-5 cr interest cost/year which will go straight to bottomline.While Q3 margins were a bit disappointing,given this change in interest cost the UC today seems warranted.The savings will be permanent and will facilitate faster debt repayment.

Disc.: Invested.Views are biased.

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272

Just came through article in newspaper regarding Add shop e retail.

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273

Thank for the update. One query - there is sudden drop in revenue from FF2016 (530 Cr) to FY2017(69 Cr). Please share if you have any info on the reason for revenue drop.

Thanks

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274

Because of demerger from its subsidiary company Tinna Trade limited.

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275

Can someone please share their thoughts or review this company called - Permanent Magnets Limited.?

276

Thanks for the detailed write up. Interesting opportunity. Can you please provide some guidance on valuation take into account the projected numbers for FY 23, FY 24 and FY 25.

277

As per the recent business update of Add-shop e retail, it seems they are doing business well. EXPANSION Via E-COMMERCE BUSINESS PLATFORM AND BY NEW PRODUCTS. See the [BSEINDIA]

278

Investor presentation of Tinna Rubber for 9m/Q3-FY22.

Operational Highlights

Electrical Load enhancement process underway at Gumudipoondi plant to
double the reclaiming capacity. Additional capacity will help in catering to
increasing demand from existing customer base in South India and overseas.

‱ Decline in margins in current quarter was due to the negative impact of high
ocean freights and domestic raw material cost, which was mitigated to some
extent by increase in sales and sale prices in both road & non-road sectors.

‱ Purvanchal Expressway, which commissioned in Q3-FY22, was one of the
drivers for increase in sales in road sector.

‱ Ongoing projects including prestigious Bundelkhand Expressway and
Jamnagar-Amritsar Expressway shall provide steady growth in the coming
quarters, with similar infrastructure projects to drive sales in road sector
business in rest of FY23 as well.

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279

There too much upper circuit due to low float , it can be a clear case of pump & dump

Tinna rubber
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280

Cam across this interesting company named Scandent Imaging. While it has got a few hospitals in Mumbai, it still calls itself imaging company as-in 2D/3D imaging/scans used for diagnosis. Fundamentally numbers appear good.

image
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In Mar’21, Net Cash Flow was also positive. Primary reason for growth appears to be coming from the boom of hospital sector post pandemic breakout. If Imaging business becomes accretive, could add to the top and bottom line. Management quality needs to be validated. Generally, such small companies can be easy targets of manipulations. From Last 5 years profit growth has been phenomenal.

Could this be a dark horse with the trigger? Only time will tell.

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281

In case of Tinna Rubber do we have any idea on its order book and how its gaining traction. What has actually led to such a jump in revenues for Tinna and is it sustainable?

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I am subscribed to a reputed Financial Magazine which also reports Stock Manipulation & Scandent Imaging featured in the list. The article is paid hence cannot past the content.

A Snippet-
For FY14-15, sales were Rs7 lakh while there was a net loss of Rs24.83 crore which was because of other expenses of Rs19.63 crore.
These included expenses of Rs7.09 lakh paid as consent fees to the market regulator for non-compliance with regard to SEBI (Substantial Acquisition of Shares and Takeovers)
The stock price should have languished however it shot up from from Rs2.18 on 29 January 2015 to to Rs20.6 on 2 May 2017 for no major reason.

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283

You are referring to Moneylife article that was published few years back. Agree, that not everything appears prudent from Management stand point but from last 5 years or so, no such issue has come to forefront. Having said that still, it is a cause of concern.

284

Came across this company 2 months back and took just a very small position for tracking around paltry 180 shares
 Of the view that the way imaging business is progressing and the margins they enjoy after break even of centres it can be huge. Star Imaging has gone from strength to strength
 No imaging company is listed except this. Its just hope, will see their next 2 3 qtr results

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285

Hi,

Just curious to know , are you still holding Kwality pharma. Looks a good company with capacity expansion and all. Only doubt is , is the market valuing it a la kilpest. Ie: majority of the earnings being covid driven and earnings will taper down in future.

Would be nice to hear your current views if possible.

286

I’m holding it, markets generally are down as well as covid being the reason for increased revenue markets are right that revenue levels won’t sustain
However I think they have collected almost 20-30% of market cap in liquid cash and they sell covid drugs into countries that don’t have strong patent protection like Bangladesh which is price sensitive market that is not going to enforce patents until they get a bit wealthy as a nation.
There are many drugs that are easy to replicate but patents protection prevents selling these
The have a distributor network, waiting to see if they can leverage that to push other products
They are also buying plants as they are cash rich
Once the management gets a taste and knack to do business in a specific way mostly they scale from there like bharat rasayan and many many others, even pi industries
They are moving to main board so more people would be able to participate in their growth
I think things will start moving in April
The markets have been weak as well so any small selling is not being absorbed
I have seen this in other scripts like medicamen biotech however some sectors are attracting a lot of money, ev being one.
Some companies in this sector like jbm motors and Talbros auto have done well and I think they are just starting as my gut feeling is that market wariness will end anytime after budget
Once investors see a business friendly budget the market will rally I think very fast and too soon for most people who are out of it based on technicals and volume I’m seeing

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287

Add shop had issued convertible warrants to Nexpact late last year which was a sign of FII investing money. Now that has been rescinded.

The Board of directors approved the withdrawal of entire Preferential issue of up to 8,00,000
convertible Warrants at Rs. 160/- per warrant of Add-Shop E-Retail Limited approved by
shareholders thought postal ballot on 09th November, 2021 and approval of From MGT -14 by MCA
(ROC Ahmedabad, Gujarat) due to inordinate delay in grant of confirmation of in-principle approval
of the Preferential Issue by BSE.
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288

https://www.bseindia.com/corporates/anndet_new.aspx?newsid=840dfd12-f0f9-4982-8b5f-146dbd311f0b

Satia Industries posted pretty solid results, and this without the new capacity coming onstream.

Disc.: invested

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289

Natural Capsules Presentation(Worth going through, lot of good things happening in this company) : https://www.bseindia.com/xml-data/corpfiling/AttachHis/c8caef1f-3206-406b-9074-1e9f2a6d5ccb.pdf

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290

What is the impact of withdrawl?

291

Thank You so much for your inputs on Worth Peripheral
Did you get further reply on your questions? Please update.

292

Their shareholding is dicey, study the public shareholding. Truck owners own a large part of the company, the price falls every time they sell, even though the triggers are present fundamentally. I am surprised how no one brings it up in con calls

294

It’s answered above by @kalpesh4430

Also their shareholding hasn’t changed much over time.

Disc.: invested

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295

Hi Sandesh

Which one is the Financial Magazine? Can I subscribe to this magazine.

warm regards
Navneet Agarwal

296

No, Think it is because the company has a limit on how much info it can divulge. Then Got busy with my job
Hence could not afford the time to follow up, I have reduced my position to a much much lower level. Once I follow it back, Shall let you know if I have something of value

297

WardWizard Consistently delivering superior sales growth in their Electronic 2 Wheeler segment, worth tracking it

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298

I regularly read all the online magazine from Moneylife.

299

My recent findings

KITEX GARMENT LIMITED

About the Company
 Established in 1992, Kitex Garments Ltd (KGL) is into exports of cotton and organic cotton garments especially infants wear located in Kizhakkambalam, Kerala.
 World 2nd largest infants wear manufacturer
 Per day production 4.5 Lakhs units with 4600 employees in payroll
 Kitex also supplies to Jockey International. Most of their sales are export to US market.
 Recorded highest turnover of 730 crore in March 2020.
 Touched Market capitalisation of 5000 crore in 2015
 Company enjoys EBITA margin of around 20% in past several years.
 Infant wear is a specialised product.

Figures (based on 18/01/2022)
 Market capitalization 1732 crore
 Debt-free company
 P/E – 22

Future Plan (Based on MD comment, report, MOU, Director’s discussion)
 Kitex have a CAPEX plan of 2406 Crore and on the political issue, they have decided to move out from Kerala (Not an investor-friendly state) and invest in Telangana State(Number 1 state for ease of doing business in India).
 MOU with Telangana Government has signed by the company for Capex plan of 2406 Crore. Kitex will be investing in 2 textile parks in Telangana state.

‱ Kakatiya Mega Textile Park, Warangal – 1113 Crore
‱ Sitarampur – 1293 Crore
Kitex has formed a subsidiary company in Telangana called Kitex Apparel Parks
 On completion of the above to project company expects target sales of 4,000 crores. (Current sales of the company is 700 crore). Which is 4 to 5 time upside growth

 Kitex will become world largest kids wear manufacturer. Current production is 4.5 Lakh units per day (largest player is from china having 5.5 Lakh units’ capacity per day).
 Kitex capacity will become 18 Lakh units post expansion of above mentioned 2 units.
 Capex has already stated in Kakatiya Mega Textile Park, Warangal project and expected to commission from December 2022. Project in Sitarampur will kick start from December 2023. So expecting full capacity from the company in 2024 onwards.
 Telangana state is 3rd largest cotton manufacturing state in the country. So kitex can easily get these cotton which is the principal raw material for the company.


Offer from Telangana
 The government will give an interest subsidy of 8%. So, the company can run the business with 1% or less interest for 5 to 10 years.
 Income tax exemption
 PF/ESI Exemption
 Income Tax 8% Saving u/s 115 and 1% save 80JJA
 Easy procurement of cotton from the state because Telangana is the 3rd largest cotton producer in the country.
 Cheap labor, water, land cost etc.
 Top of that Company will benefit from Central Government PLI scheme of 10,000 Crore.
 MD says over 6 to 7 years company is going to get 70 to 80% return from the government in the form of various subsidies.

Management
 The success of every business lies in the hands of its management.
 No wealth will be made if operator is not capable enough. In other words, a good management can make wealth even if they run bad business.
 Kitex group has made nationally recognized brands over last 2 decades that too from not an investor friendly state in India. Their major brands Chakson pressure cooker, Sara’s curry powder (Sister concern of kitex run by MD’s brother) and kitex infant wear.
 Many companies failed to manufacture When NASA needs some special dress which will adjust based on climate change including Aravind mill and later the same has manufactured by kitex group for jockey who supply said items to NASA in USA.
My bet on Kitex (Why I invested)
 Proven management
‱ 3 well-recognized brands created by the group.
‱ Run the textile business for the last 2 decades with above industry average EBITA margin.
‱ Moving out from Kerala to the best investor-friendly state.
‱ Infant wear manufacturing is not easy to start so many are not involved.

 Business perspective
‱ Expansion is 4 to 5 times more of the existing plant (Expecting to hit 18 lakh units per day against current capacity of 4.5 Lakh units).
‱ Incentives from the Telangana government. (Tax exemption under income tax and interest subsidy of 6 to 7% which will result in 75% of investment of 2500 crore over a period of time).
Some calculation corners
My entry was when share was trading at 170/-
 Share price - 170
 Share Capital – 7 Crore Shares
 Market capitalization (170*7=1190 Crore).
 P/E – 15/-
 IN 2016 Company’s market cap touched 5,000 crores with a turnover of 700 crore. Management says 2022 will have the highest turnover in the company)

On future (perspective)

When they complete plants in Telangana top-line touch 4000 crore

Keeping same profit margin – 10% = PAT = 400 Crore against current year 100 crore PAT)

Multiplying with current P/E = 400+100 = 50015 = 7500 crore market cap
If market is crazy about valuation in 2016 when p/e was 40 then valuation will be 50040 = 20,000 crore.

So share price may hit = 20,000/7 = 2875/- (Oh my god). Forget even if it touches 1000 great return (fingers are crossed. Time will tell).

Assume when they get 8% tax exemption and 8% interest subsidiary the profit can double or triple. No, I don’t want that calculation.
Summary “Heads I win; Tails I don’t lose much” borrowed from Mohnish Pabrai whose thoughts have influenced me a lot
Concern
 Management runs a non-listed sister concern of similar business
 No idea about company funding plan for new CAPEX of 2400 crore.
 The market is all-time high and any correction can have an impact of all shares irrespective of the performance of the company
 Highly labour and CAPEX intensive industry. Scaling up with such huge labor can be a concern
 All figures are based on comments from management. Need to wait and see how demands pick up
 Highly dependant on 3 to 4 suppliers.
 Vietnam and Bangladesh are more competing companies in the sector when china plus move starts.
 These return will be expecting 4 to 5-year time frame.
 My entry was at 170 range and now share trade at 265 Range (30/01/2022) Seems bit priced based on current earnings.
 My view can change and I will exit based on future developments so keep it as only a discussion for education purposes.

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300

Will it be possible for you to share the entire data of stocks which can be extracted from screener in excel format with all columns, that would be really helpful to everyone.

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301

The corporate governance is a major issue in this company.

302

Can you elaborate
 If you ask me in 2017 they had focused to promote a political party called 20-20. In fact, that was a huge success in the panchayat election. they had swept all 4 panchayath elections like what AAP does in Delhi. Seems they had a plan to enter state polities and contexted in the 2020 election but failed all the candidates
 Recent, interview of MD seems they started politics to help people and if the verdict of the general public is against us then we accept. Now, he is behind the Telangana project which 4 times higher than the current business of Kitex.

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303

Has any one done any work on shah alloy, came up with 80+cr PAT last year. However, has been marred by debt in the past and in 2017 did one time settlement with lenders, Are things turned around for good or still some issues pending or is it just the commodity cycle that they are benefitting from?

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Management losing focus on business is big no no for me!

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Kitex MD is more interested in fighting the ruling communist pary and congress. To show kerala government is not investers friendly he went to thelugana. Everyday he is in news fighting the left.
Last one year he comes up with some aligations against all political parties so no party is supporting him. His main interest is politics now.

306

True post Legislative assembly election seems he is focused more on the new project. seems share also went from 80 to 270 range

307

Can any company sustain a PE of 350? I would be very uncomfortable unless a PE expansion happens quickly. I understand the PE earlier had been even higher, but these levels too make me uncomfortable to enter.

308

Corporate governance should be first filter rather than last imho.

309

Rating of Tinna Rubber upgraded by ICRA

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310

CMS infosystem


New listed stock.
Small cap ~4000 cr market cap.
Zero debt
Increasing revenue n profit
Cash rich

IT company with cash management service

24% share of ATM
Clientage like axis, hdfc bank, ICICI bank.

Hidden gem with high growth potential.
High promoter holding.

Disclosure: invested.

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311

Ward wizard continues to deliver.

Crosses 5K monthly sales mark for the first time and logs a record sale of 30,761 units in FY’22. Company is new in e-bike segment and i am not sure on their bike quality either. Does any body track it?

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312

Actually I started the thread for Wardwizard - Wardwizard Innovations & Mobility Ltd – Joy e-bikes

But I unable to gather much information about the business, and also I think its too risky, as I doubt promoter integrity.

But I still closely track the Joy e-bikes, though quality is not as par with peers, I think it is doing well, because of the huge tailwinds in the sectors, as far as deliveries of bikes are concerned, they just started to deliver on time, last quarter there was at least 1 months delay for deliveries, which now seems to be gone.

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313

ATM is already a sunset industry; high growth potential here is dobtful.

It looks more like an Infrastructure company, capital-intensive business.

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@bdvravariya thanks for input.
I think ATM will remain backbone of banking and keep growing particularly in semiurban and rural area.
Online wallets hardly 5-10% people use.
CMS also has 31% revenue other than cash management like automated bank services and card issuance.

316

Interesting company.
I compared ATM,POS transaction value for the month of Feb for a few years using data provided by RBI to get an idea of what growth are we seeing.

|       | 2018     | 2019     | 2020     | 2021     | 2022     |
|       |----------|----------|----------|----------|----------|
|ATM+POS| 28452379 | 30493960 | 34061779 | 31744099 | 31230314 |
|ATM    | 24748715 | 25943070 | 28277728 | 25865772 | 25572696 |

amount is in lakhs.

I don’t see any growth in the value transacted.

source: Reserve Bank of India - Bankwise ATM/POS/Card Statistics

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317

Yes, I can vouch for it. New upcomming gen will not want to use atm cards. especially debit. becuase they can easily pay via upi or other online banking channels. and more over debit cards charge fixed annual charges. And there is also a trouble of loosing/skimming nd things.

for me personally, I had surrendered my debit card as it charged me ~150INR annualy.

but this can also work the other way around for depositing money via atm machines as well even after banking hours


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318

Any body tracking here refex ind, it’s available only 9 pe, 3year cagr profit growth 248, it’s industry ges supplier company, because of micro cap I can’t find more about this if someone help,

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319

I don’t remember the specifics but there were lot of corporate governance issues with refex. Sorry for not being able to provide concrete evidence but can try focusing on this aspect of refex

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320

Is anyone tracking Parnax Lab?
Disc- have a tracking position

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321

Is anyone still tracking Add-shop E Retail. ? Promoter has sold shares and reduced some stake. What will be the reason? Is anyone aware? I have a small position in it.

322

Standard Industries:
It made a large profit in the March Quarter after a long time making losses - thus its P/E has decreased to less than 1. It has reduced debt this in the March Quarter and increased reserves as well. Cash Flows seem to be changing for the better.
A P/E rerating also seems likely.

Please share your views.

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323

Is the March quarter performance repeatable? Any idea on how the business is going to be like for next set of quarters?

324

From the results

"The Board of Directors of Standard Industries Limited (SIL) have accorded their approval to enter into MOU dated 22nd March,2021 with Support Properties Private Limited, Carin Properties Private Limited and Feat Properties Private Limited (collectively called as “Assignees”) to transfer and assign all its leasehold rights in 62.25 acres of the Company’s leasehold property situated at Plot No.4, Trans Thane Creek Industrial Area in the villages of Ghansoli & Savali, Taluka Thane (“Property”), for an overall consideration of Rs. 427.33 crores.

Consequent to withdrawal of Carin Properties Private Limited and Feat Properties Private Limited from the above transaction contemplated vide MOU dated 22nd March,2021 viz,
assignment of Leasehold rights of 62.25 acres of Company’s Leasehold property situated at Thane, only Support Properties Private Limited , a party to MOU will be the Assignee.

Accordingly, Board of Directors of SIL vide Circular Resolution dated 3rd June, 2021 have given their consent to enter into a Supplemental MOU and other documents to be executed with Support Properties Private Limited, at the same overall consideration of Rs. 427.33 Crores subject to various conditions precedent getting satisfied .

Pursuant there to SIL has received approval from MIDC and has entered into “Deed of Transfer and Assignment of Leasehold Rights” with Support Properties Private Limited on 31st March, 2022 to transfer and assign all it’s leasehold rights in the said property and Sub-station Building situated thereon on same terms and conditions and for the same consideration as mentioned above."

Basically they had 62.5 acres of land on lease. They have transferred the lease for 427cr. Hence the one time consideration.

They will be paying out an interim dividend of 1.75 and final of 0.75, totaling to about 14% of market cap. No information on the business going forward, or the use of the remaining cash.

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325

They have sold to an investor that is not bad in my opinion.

326

Thank you very much sir for your kind reply. Can you tell me where to see or check to whom they have sold or whether it is dilution or investment. Sensing the future prospects, I have taken it 10% of my PF.
Regards

327

You can see in the bulk deal section. link is in bse:

328

Thank you sir. I got clarity but wouldn’t it better that investors have bought directly from open market without dilution of promoters stake. Why promoter will reduce his stake below 50% from his company.Sorry If have asked a silly question.

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329

Not at all. The Note to statements reads - "The Board of Directors have accorded their approval to enter into MOU dated 22nd March,2021 with Support Properties Private Limited, Carin Properties Private Limited and Feat Properties Private Limited (collectively called as “Assignees”) to transfer and assign all its leasehold rights in 62.25 acres of the Company’s leasehold property situated at Plot No.4, Trans Thane Creek Industrial Area in the villages of Ghansoli & Savali, Taluka Thane (“Property”), for an overall consideration of Rs. 427.33 crores. "

This 427.33 is what makes the result looks amazing. This is just one time and could not be repeated. Also, the Promoter Shareholding is scary.

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330

I agree with your observations. The following two cases may arise.
(a) In my opinion, if the promoters are giving their shares to an informed investor(s) that is always good as the informed investors know the business more than a retail investor. There may be several reasons why promoters will sell. Maybe they need money that is not always bad.
(b) Stake below 50% (near to 50%) is a little bit worrying. If the informed investor who has purchased from the promoter starts selling in the open market that will be more worrying. We have to keep a watch on the development. One of the reasons for investing in this stock is the fighting spirit of the promoter. You may see the videos on youtube about how he has created the company.

Discl: invested

331

Thank you for pointing this out. I had not done a deep dive into the company.

332

I don’t think that the shares have been offloaded to informed investors. Only Mr. G Shankar has been increasing his holding in the company continuously, however it being still negligible to the tune of 3% only. Also, Mr. Dhiren Mahendra Shah looks like another informed investor with the company who has drastically reduced his holding in the company. Now, considering on a rough basis let’s take Promoter holding =20.15%, DII = 4.2% ( which has again been in a reducing trend), with Mr. G Shankar and Mr. Shah 4. 53% (combined). Now, the remainder 70 % is with the public with no one having a significant holding so as to appear in the SHP. If I am right in my line of thoughts, I believe that one must reconsider being invested in the company and take benefit of the short term rise to make informed calls on hold/sell/buy.

333

I was talking about Add-shop e–Retail. Are you (@Tanay_Malpani) talking about the same? @prabhatshaw .

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Yes sir I was talking about Add-Shop E Retail and I am quite satisfied after the details you have given. Shares has been bought by HNI Investors and they have also invested in other companies in bulk quantities.
Regards

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Oh. No Jaman Ji. I was talking about standard Industries. It got mixed up. And just one thing I would like to state. Even I am invested in Add Shop Retail. It has been on a growth spree. Definitely a good script to hold long.

P. S. As both of the script discussion was about promoter shareholding and matched with the point I made on SHP of standard Industries, got mixed up

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ANG Lifesciences India Ltd

Fundamental Snapshot
Market Cap - 246 Cr
P/E - 6.20 (Industry P/E - 23.0)
PEG - 0.09
ROE - 63.5%
ROCE - 53.2%
EVEBIDTA - 4.55

  • Annual EPS growth is 467% and quarterly EPS growth is 331.36%.
  • Debt increased by around 50% where as Reserves increased by around 100%.

Seems to be an undervalued pharmaceuticals company.

Please share your views

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Found one company DCM Nouvelle Limited at interesting point of CMP: Rs.180. PE is lowest in the industry with highest ROE :50% and ROCE:42%

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338

Add-shop promoters sold more than 10% stake there by suppressing the price of share and now going for right issue almost 1/3rd of their sell price. Is this kind of activity is common or is it a king of red flag of the management? Can any senior comment of the issue please?

Disc: was holding 10% of PF but sold after right issue announcement, thinking this is not a good governance practice and mgt has manipulated the stock price.

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The merits of a rights issue depends on several factors such as the resulting dilution (if there are 5% more shares after the rights issue, the dilution is 5%), historical dilution, previous cash flows of the company and so on. In case of Add-Shop, I checked the company is repeatedly diluting—I do not find this encouraging.

right issue almost 1/3rd of their sell price

This is not uncommon. Another company that allocated preferential shares (this is different from rights issue to the existing shareholders) at 1/3rd of CMP is Creative Newtech. It is not illegal but it is against minority shareholders, and thus unethical. I consider this as a red flag and am wary of such companies, but I know some other people do not consider this a big deal. Rights issue at 1/3rd is slightly better (less unethical, probably, since existing shareholders have the rights) but favors big shareholders.

To contrast with a positive example, I know another small company that brought preferential issue for a new shareholder at close to CMP (the dilution was only 5%).

Sale of 10% stake, if it happened, is another red flag. So, I’d say your decision to exit is good.

Disclosure: Never invested, not interested in this stock.

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Thank sir for your Reply.
I do not have an issue with the right issue price rather it is better if one consider being in the company. But I feel like price has deliberately been suppressed to bring it down from above 150(they start selling from this point) to sub 100 and now the right price @54/-. you are right some big HNI investors have entered gradually and promoter sold gradually. Now with that money promoter will buy almost 3 times the shares. I have only issue with deliberately suppressing/manipulating with the stock price actively. On other parameters, the company is very good but I am not comfortable with the mgt now. Became more confident after your explanation. Thanks once again!

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The stock had a huge run from 100 and peaked at 165 in less than a month and then started the downward trajectory. Doesn’t necessarily mean that promoters took it down.
Also its a right issue which every stock owner can apply for and not a stock warrant which are exclusive to whoever the board decides to offer.

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ANG Lifesciences break out:

image
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*I am not very good at technical analysis so do correct me if I have done anything wrong

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Looks really attractive at this price for value investing In ANGL. Though My concern is 44% promoters pledged Holding. Any idea, do they have any oncoming capex plan?

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Yes. You can go through their investor presentation, they are expanding in huge way, they did couple of asset purchase of indo swift units last years
In last 3 years company is in large expansion mode, numbers have just started reflecting
hence i believe pledged holding

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Enkei Wheels Ltd

Market cap: 780 crs

Enkei Wheels Ltd is a MNC Company (ENKEI Group Japan), EWIL produces aluminium wheels for automobiles and motorcycles, and supplies them to the Original Equipment Manufacturers (OEM) only.

Old Capacity: 4W: 90,000 pcs Per Month and 2W: 120,000 pcs Per Month

Triggers:

Cap Ex and falling raw material (aluminium alloy ingots) prices. Plus the Auto industry is set to revive in coming years.

Brief info about the Cap ex, as mentioned in the AR 2021:

Recently the company has completed a long awaited capex plan of adding capacity which was delayed due to COVID. The New facility also known as MAC5 completed and inaugurated for its production on 03rd May, 2022. Cap ex is funded by Foreign Currency Loans from Banks and External Commercial Borrowings for which the rate of interest is very low.

This will add 40,000 pcs to 4W capacity. Plus new facility for Paint shop with capacity of 180,000 pcs will be completed by December 22.

MAC5 line is the latest line of the Enkei Group, and EWIL will be the first company to introduce M3 full-line installation in EK group overseas company. This should be a major change and evolution that will remain in the history of EWIL

Additional Cap Ex:

The next project planned after the start of MAC5 operation is considering the conversion of the existing MAP3 line to MAT. We have targeted to complete this project by the end of FY 2022. We are also planning to promote further expansion of production capacity

Disclosure: Invested in family account.

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@karna Thanks for the clarity! I am thinking of investing in it.

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Any one has looked at Shah alloy? Can any one share any details?

348

Promoter’s pledge is too much!!

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Anyone tracking Lyka Labs? As per the Joint Management Control Agreement dated November 24, 2021 between Ipca Laboratories & the promoters of the Co., Ipca shall be entitled to increase its shareholding in Lyka Labs upto 51% subject to certain conditions. (Mentioned on page 6, clause 3.1.4 of the letter offer.) It is only a matter of time, before the Ipca decides to exercise its right to increase its stake to 51%.

lLetter of offer Lyka labs.pdf (979.4 KB)

Results for 21-22 have been phenomenal, aided by Covid, but there is more to the Co. Currently the balance sheet is in the process of getting cleaned up with a spate of write offs. The latest AR talks of 50% capacity increase Lyophilised products.

The open offer failed as the offer price of Rs. 130.50 was considered to be too low. Interestingly, the current market price of Rs. 118 has fallen way below the open offer price.

Attaching the Annual Report for 21-22
Lyka Labs.pdf (2.3 MB)

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Albert David Ltd. could be an interesting idea with decent potential for growth. Results for June Qtr. came in yesterday, with perhaps an all time high top line of 93.19 crs with its gross & operating margins intact. The results seem to be not so good, due to M to M losses (other income) due to fall in market value of investments as on June 30th.

The pharma Co. which is being run by a professional CEO, is sitting on substantial liquid investments in equities/ mutual funds. If it can continue on its growth path, then future expansions can easily be funded. This would improve the return ratios dramatically as investments in mutual funds dampen return ratios.

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Hi, i am tracking or holding small quantity of some less talked companies.

JTL Infra
Ganesha Ecosphere
Mitsu Chem Plast
REPL
Share India Securities
Sheetal Cool Products
TAAL Enterprises

Please share your views on above companies. Ready to discuss more about the companies.

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352

Few updates on Tinna Rubber from my side ( which is not covered in investors presentation, concall or annual report):–

I had attended the AGM on 30/06/2022,
Few notable points are :–

  1. An international tyre company added to its customer list and also received first major order from it in Q1of fy23 that is ATG Yokohama.

  2. Going forward management is very confident of achieving 20% EBIDTA margin.

  3. Because of increased working capital requirements the company may not be able to reduce the Debt level but they are targeting to reduce it by 10% in fy23.

  4. Management told that there is no need of major capex for growth in fy23 as the company has sufficient spare capacity.

  5. They are installing Solar power system in one plant.

  6. Capacity of micronized rubber powder (MRP) is increased to 12000 MTPA from 10000 MTPA.

  7. Projected sales figures for fy23 is 320-350 crs.

          Recently management of Tinna Rubber told in a conference that they have started to recycle the passenger vehicles tyre in addition to Truck and Bus radial tyres. They also seeing opportunity to recycle off-road tyre and Agricultural tyre as well.

    In concall of Q1 fy23 , management told that Tinna Rubber has the capacity to recycle 75000-80000 MT of waste tyre per annum.
    As per Investors presentation dated 12/08/2022 , Tinna Rubber has crushed 15000 MT of waste tyre on Q1 of fy23. So, Tinna has still 30% of spare capacity for volume growth on annualised basis.

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More on Tinna Rubber and Infrastructure Ltd :—

Tinna Rubber has an associate company named TP Buildtech pvt. Ltd. Where company holds 49.20% share. An interesting thing is that the other partner is Mr. Mayank Shinghal, who is the promoter and managing director of PI INDUSTRIES LTD.

The financial performance of the TP Buildtech is substantially improved in fy 22. The company has posted a net profit of 15 lakhs in fy 22 against net loss of 2.86 crs in fy 21.
The sales figure of fy 22 is increased to 47 crs against the 28 crs of fy 21. Source of information
https://www.crisil.com/mnt/winshare/Ratings/RatingList/RatingDocs/TPBuildtechPrivateLimited_July%2007,%202022_RR_295035.html

Till company has only one product which is a concrete admixture named Aqualoc-TP. Recently the company has developed and launched the other product named Betonflow-TPCWA, which is a ’ crystalline Water Proofing admixture '.

In Q1 of fy23 concall, management was very optimistic on the future of TP BUILDTECH PVT. LTD. Till they have two plants and now they are considering to build the third plant.
Management commentry on TP Buildtech on Q1 concall of fy23

IMG_20220826_131921
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355

Have a close look at Management and Board of Directors.I did

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Anyone tracking Alkali Metals Ltd.? The Co. specializes in Sodium derivatives & one can see a steady improvement in numbers. Can the Co. contribute in the development of Sodium-ion batteries, which is gaining in acceptance as a potential option to lithium batteries. Its early days but the potential is immense.

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357

Recently I was looking into the financials of a stock: Super sales India Limited. Details will be found in the screener (Super Sales India Ltd financial results and price chart - Screener). Interesting company is in all-time low PE. Though the sales, cash flow, and NP is continuously increasing. I have recently invested some money in it. Any comment on the stock? Thank you

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SUPER SALES is Lakshmi Machine Work company handling the sell side transaction, so a sales/trading entity.

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but the annual report 22 shows it has a cotton yarn business, which is around 80% of rev. What I understood is that 2.5% holding of Laxmi machines are held by Super sale.

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Yes Laxmi also share holder of supers sale.

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The CEO of Albert David has resigned resulting about 10% correction in the stock price since recent high. CEO resignation may not necessarily be a shocker as current CEO will be around until December which will provide board to select another suitable candidate.

file:///C:/Users/manohpatil/Downloads/452746dd-00cd-4bde-94ec-42e48f8c22db%20(1).pdf

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363

Alkali Metals also manufactures Sodium Azide, which is used in the making of Air Bags. Another potential area of growth, given the recent awareness towards safety in case of accidents.

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364

Is any one still tracking Scandent Imaging? Seems promoter has sold some quantity. Any updates about it?

365

GENCON is a construction company whose share price has constantly decreased for the last four years though the sales and fixed assets are gradually increasing.

image
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The credit report says:
Strong revenue visibility: Successful track record of project execution has led to healthy orders of around Rs 817 crore as of March 2022, to be executed in the next two-three years. This provides strong revenue visibility over the medium term and will help scale up operations.

However, I have not understood why this is going negative. Any idea on it?

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366

for ROE 7.36 % business the PE of 9 seems reasonable enough. they have been earning ROE below the cost of capital consistently.

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367

Hi,
Just came across a company ‘Sreechem resins limited’. Manufacturing refractory binder resins. Company catering to steel plants.
Mcap - 52 Cr
PE ratio - 9.62
Sales growth 5 years - 25%
Profit growth 5 years - 69%
Debt to equity - 0.69
Promotor Holding - 21% (Negative)
ROE- 34%
Cash flow positive and significant improvement in working capital in last few years.
Please share your valuable inputs if anyone is tracking this company.
Thanks.

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368

Do you have any idea about what is that newly developed product they have mentioned in AR, it’s merits & demerits? All they said is newly developed product is approved by Tata steel and getting repeat orders.

369

Any idea what is the “newly developed product”, that is doing all the wonders for them but has remained unnamed in the latest AR? That phrase has been mentioned 10 plus times mostly in relation to remuneration increase of directors and good results inspite of the doom and gloom of chinese flooding of phenolic resins .

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370

Also why’s promoter holding so low for such a small company? Definitely a deal breaker for me unless there’s something more to it.

371

Currently nothing much info available in public domain. Yes the past annual reports are all copy paste, only the numbers got changed. But something has really changed since last few quaters that is why company start generating above avg ROE. Might be some ban on raw materials of refractory to reduce dependence on china. Still trying to find the information.

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372

There are many example currently where earnings expanded bcoz of restrictions or shipping issues(from china). we need to be aware and cautious of such companies.
Do check historical margins before taking a call

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373

Look at the cash flows

Last 5 years -
Cumulative EBITDA: 126 crs
Cumulative Cash Flow from operations (ebitda after working capital changes): -13crs!.. meaning the company hasnt earned any cash though it shows profits on income statement
Cumulative FCF: -132crs
Cumulative FCFE: -156crs

The huge cash deficit is filled by 50cr debt increase and 100cr through equity issuance.

In short, the company is quite the cash guzzling machine! :sweat_smile:
I have not seen such horrible cash flow numbers on any company yet

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374

Here’s a talk by dr. prashant mishra on youtube.
He routinely finds small/micro cap gems and also shares very detailed threads on finding them.
He was also very vocal about the rampant medical charity fund raising frauds that happen.

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375

Good observation. These businesses are usually capital intensive and cash guzzling. From FY 2021 Cash from operating activity has become positive. This is very positive. From the credit rating on can guess that this may improve in the future. credit rating: Rating Rationale. (Disc: Invested)

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Free cash flow still negative and debt is increasing.
It’s best to stay away from such companies at least until they start generating consistent fcfs.

It is actually one of my main filters before taking analysis of any company any further. If the business cannot generate free cash, then there’s something intrinsically wrong with the business model itself.

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377

Dmart has negative FCF, because it puts back the cash generated into the business, taking no debt. So we have to know the reason why there is no free cash.

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378

I am studying Websol Energy System Ltd. The company makes solar cells and is increasing its capacity by 7 times (from the current 250 MW to 1.8 GW) while upgrading its solar cell tech from multi-crystalline technology to Mono PERC and TOPCon. As per the annual report, 1200 MW capacity would come live by end of this year.

The company decided to take voluntary losses in Q1 by scraping the existing technology and replacing the legacy equipment with cutting-edge alternatives. The losses would continue for another quarter or so. Expected sharp rebound in 2023-24.

Not sure if it is part of the above capacity expansion plan but early this month, Websol announced JV with AMP Energy India, part of Amp Energy Group for 1.2GW capacity of solar cell manufacturing.

Disclaimer: Studying it and would appreciate any further thoughts. The company thread isn’t very active.

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@pranavpallod12, as per my analysis they are investing.

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Solar module manufacturing industry in India has never been and is still not attractive from an investor’s perspective.

  1. Most the technology required for manufacturing is always imported because there is no tech development which happens in India. Mono PERC as a technology is not very old, and now we have TopCon, additionally there will be many other in the development stage which will render the TonCon obsolete pretty soon.
  2. Most raw materials required for module manufacturing are imported. The value chain is solar grade silicon ingots >>>wafers>>>cells>>>modules. At most we make cells in India from imported wafers and then module manufacturing is essentially an assembly work (with some automation/mechanization involved). There are many other materials required like glass, aluminum frames, junction box, connectors, soldering materials, EVA (front and back), backsheets, etc and host of chemicals, most of which (not all, but significant portion) is again imported, mostly from China.
  3. The tech development in solar is rapid, meaning technology obsolescence is fast. This leads to significant CAPEX on a regular basis (leading to writing off of earlier investments).
  4. The global price of solar module is driven mostly based on China’s price. Government may try to protect domestic manufacturers but its never going to be sufficient because India does not manufacture modules at scale. Moreover, many regard solar modules as commodity (for price negotiations) even though its not. And because of rapid tech development the fall in price of modules historically has been pretty high.
  5. There is no technology advantage, no competitive advantage, no pricing power, for Indian manufacturers.
  6. Just think about this, in the past decade and more, there is huge installation of solar projects in India, more than 80% of which used imported modules. Why, because the manufacturing scale was never there. Even currently, we dont have enough module capacity to meet the demand.
    I personally think that it could only be a speculative bet and pure luck to make money, because fundamentally the economics are against module manufacturers. A company like Reliance Industries also bought a foreign module manufacturer and did not invest in building the business from scratch. Tatas also have had module manufacturing business for many years, but that has never scaled to meaningful capacities.
    Look at historical performance of WebSol, Indosolar, Swelect, Surana from perspective of sales growth, profit growth, RoE/RoCE, networth improvement, etc.
    Closing comment
chances of losing money in such stocks are much higher than making money.
    Not invested, only sharing my personal opinion, not an investment advice.
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381

Thanks, @Ketan_Chheda. This is exactly the kind of anti-thesis I was looking for.

I may go with a small allocation purely betting on the fact that India currently has a manufacturing capacity of 3GW of solar cells. The target is to increase it to 25 GW by April 2023. There is a union budget allocation of 19500 Cr PLI for this year. [source].

Some players will benefit just by the scale ambition. Hoping WebSolar to be one of those. What I am not sure about is how are they funding this.

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382

Nature of the business is commodity, the OPM is pretty much reflection of that , where commodity play we need bigger volume, as supply side crisis will be over in a 6 months period so the commodity pricing will be over,

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383

They too take debt. check their balance sheet

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Your observation is 100% correct as our module manufactures do not have technological advantage unless there is technical tie up.

386

This is a 238Cr Market Cap company producing Aluminium customized products for end users in Defense, Railway, Automobile, Solar, Elect / Mech, Medical sector.

Thread was opened during March-2021 when it’s market Cap was half than today, Can not understand why Moderators decided to close the thread.

This company seem to be a good pick with these fundamental.

Sales growth 10%
RoCE 24%
PE 9
Dividend Yield 0.5%

Promoter has increased holding during April-May-June-2022

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387

Has anyone looked at Krishana Poshchem
They make fertilisers. One of their group company Madha Bharat Agro Products expanded and with good results their share price increases 4X after expansion

The promoters are now doing the same with Krishana Poschem

The expansion has already completed and the new plant will go live in this quarter

The group recently also signed up with Jordan to ensure supply of phosphate at a good rate. This was done before the recent inflationary period so they have a good control over their raw materials

Their products being agricultural fertiliser are usually completely sold out as there is a constant shortage

You might like to look. This quarter most likely won’t be very brilliant but next quarter will give a good results and then subsequently as well their performance is likely to be good

If you have patience and want to accumulate now when impatient investors are selling in a years time this is likely to give a good return

Have a look


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Their (ASRL) total sales is 50 Cr and trade receivables is 40 Cr
Also their inventories are at 30 Cr.
Doesn’t look good.

asrl
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The greatest negative about ASRL is that they decreased the promoter holding from 63% to 36%!!!

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Can you please explain how did you infer this?

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There are so many good companies, why look at companies where promoters are selling

Look for instance Apcotex:
Their current plant is fully utilised. They have maintained better margins on that full utilisation so their customers don’t mind paying them to cover cost of inflation.
Their raw materials are used by one of the largest latex gloves manufacturer. Glove manufacturing business is recession proof.
And Apcotex is now almost on the final few days or weeks of going live with a new plant.
The risks of failure of that extra capacity is very low

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392

I said “likely”, one can’t be certain
However I don’t know what you mean, infer what ?
“Next qtr low” or “better following qtrs”
Both are likely due to so many factors: inflation pressures, expansion project not handled correctly, low demand, competitive price pressures, etc etc

393

APCOTEXIND [Rs 528]

In the balance sheet as on 30-Sep-2022, there is sharp increase in CWIP and Borrowing.

Is this the reason or something else, that even after July-Aug-Sept-22 result which is improved YoY, the stock price is sliding. Down 10% since result announced.

I bought just before result announcement [observing improved RSI] based on technical, and now sitting on 10% loss.

394

I had a loss of 30% on globus spirits after I first brought it and then it went on to deliver multiples of my buy price.
If you are a technical buyer generally you should be able to avoid the 10% draw down.
Its near impossible to have a 10% drawdown if trading technically if the amount you are investing is low as you shld have and respect a stop loss.
However I trade fundamentally as I dont live in India and keeping technical trading screens open during trading hours is difficult
I do trade technicals in US and on s&p futures
I trade only flag patterns breakout with a stop loss. Apcotex had a failed breakout with volume on 23rd september but no follow through.
The promoters have been buying a lot of quantity as if you look at their last investor presentation, the expansion is not talked about a lot neither they talk about their demand. Those things are mentioned in the concall.
I suspect they want to either underpromise/overdeliver or maybe accumulate a bit more when the expansion initial hurdles are ironed out
On technicals its still within the flag pattern. At this stage the risk is it might break down which if it does, then it will lose another 5 to 10% however if you pick now, with a 5% stop loss the risks are very low
Ofcourse all stocks move in line with markets. If the index is down, most will give some but generally during the july selloff I was invested in Timken that didnt break the flag although was nearly about to but fresh money kept arriving into it as as soon as the indices turned it rallied

I think for me 30% drawdown for 3x return is fair game, nothing can go up in a straight line. My partner gets worried when its down 30% but I have asked her to not look at where I am investing just worry about running the home and giving me time off. Win-win

Apolgies for the long post.
Ps: the increase in WIP and borrowing is in line with my expectations of what should happen during expansion stage. I’d be worried there was no change in WIP or cost of capital. I actually had made a screen once to see growth in CWIP and inventory but all of it takes time to drill into which I dont have.

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Hi Edward,

First thing first, Thank you for your continuous articulate, unbiased contributions on the forum, it’s quite useful.

My main query and confusion were CWIP / Debt, which you well clarified.

It looks I have not written properly 10% down term.

It’s not my account is down 10%, this stock price is down 10% from my buy price [Rs 605], it is just a token quantity purchase of APCOTEXIND.

This being investment account, SL is 200ema and it was quite far 515

But pre-result rise wasn’t such to think it reversing to 200ema immd after result!

I knew nothing about company, buy sell is done based on 1D daily chart.

Let me wait if it can stay afloat 200ema or submerges to click Sell.

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396

You’re very kind @kartiks

If you want to learn technicals look up quallamaggie and go through some of his videos, if you already haven’t done

Most technicals are only showing you what has happened and can’t predict with certainty what will

Quallamaggie over 10 years, starting with 3k ended up with 100m
With that kind of performance you’d expect him to be right more than 90pc but from what he said in one of his videos said his winning ratio was just 25% and he lost on 75% of his trades !

I’m sure you’re doing well but I just thought of putting it down in case someone else is interested

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397

Dear members,

Can we please start a discussion here about Alkali Metals? I can’t find any thread for this stock here in this forum, hence requesting.

TIA


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398

There was a post by @RajeevJ Sir on Alkali metals in this forum.

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Yes @suhas_iyengar, I saw this post & another one regarding the manufacture of sodium azide required in airbags by @RajeevJ Sir.
But after those two posts, the topic was not followed up.
So if we can discuss about the company’s corporate governance, upcoming capex plans, future prospects etc.
Just a request to the learned members of this forum.

400

@suhas_iyengar @Ashisbabu
There is not much information forthcoming from the Co. Alkali Metals, which is why I did not start a separate thread on the Co. That being the case, one may simply have to follow the numbers & take a call. Q2 numbers should be coming in the next few days.

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Thanks for the update @RajeevJ Sir :slightly_smiling_face:

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Apcotex management guidelines for next few quarters was not good. As per their conference call, next quarter will be hit hard. I was mistaken here. The raw material prices have gone up. On a bad result next quarter the stock will be further hit so people are exiting in anticipation of a bad quarter or two.
Money can remain on the sidelines or invested elsewhere
I have sold and invested in data patterns
I have had experience of holding onto such companies that go out of favour and it’s painful.
The flag pattern was broken to the downside on Friday

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Thx Edward for update,
I booked loss in APOTEXIND today at 513 [buy price 605]

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Saro concept chhe
I signed up
Currently totally there 2 stocks reco
SHREEPUSHKAR
IONEXCHANGE

posted here in benefit to those who don’t wish to sign-up for the entire list of stocks [total 2]

Good work, It would be helpful to read reports. Thx

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408

Anyone tracking Permanent Magnets Limited? Annual Report and presentations show promising times ahead. EVs, Smart Meters, BMS they operate in almost similar segments of Shivalik Bimetal.

409

@phreakv6 is. And I follow his posts :slightly_smiling_face:

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MAANALU [RS 177] maanaluminium.com

Market Cap 240 Cr

Jul-Aug-Sep-2022 result announced yesterday

Quarterly Change YoY

Sale 158 to 188 Cr
OPM 5 to 10%
EPS 3.47 to Rs 9.69

With this, TTM figures
Sales 655 Cr
EPS Rs 24.84

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Screenshot_2022-11-11-16-29-23-74_f541918c7893c52dbd1ee5d319333948
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Excellent results from permanent magnets limited.

Screenshot_2022-11-11-16-23-36-17_f541918c7893c52dbd1ee5d319333948
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What is more exciting here is balance sheet, significant capacity expansion in last six months, almost doubled. Sectoral tailwinds are there, let’s track how this plays outđŸ€ž

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Tried to extract important points about small cap investing from 2 books

1
One up on wall street(peter lynch)

2
100 baggers(Cristopher mayer)

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Three dark horses where i can smell a potential multibagger is Anjani foods, Prolife Industries and Sheetal cool
first two are illiquid stocks, have few issues but potential is there
Anjani can scale up if done correctly
Prolife we dont have visibility but need to watch for results


Sheetal cool is already a 8 bagger from IPO price and can scale up further if business is done correctly

All are high risk and capital can be lost

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While studying one micro cap company I found p/b 29 it’s matter of concern?

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Please dont see only the P/L growth, pls check the last ten years cash flow, most of the CFO is negtive because they invest in WC more, most of the sales increase is parked to debtors and check the short term borrowings which is growing tremendously. Margins are very poor, the company is growign than its means and dotn have pricing power. Not a long term buy and it can collapse in single downturn.

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Recently ordered few hygiene Product online on amazon.product quality is good.now trying to understand this company.

Yuvraaj Hygiene Products Ltd.Incorporated in 2000, Yuvraaj hygiene Industries Pvt. Ltd is engaged in business of manufacturing and supplying of hygiene and cleaning products.

Nimesh kampani Of JM Finanace Connection.

Brand - HIC Broom and Cleaning Mop.

Good Rating on Amazon.But company is making losses.

Disclaimer - Not an advise to buy,sell or hold.

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I attempted to find companies defying to fall with Index during last week, and filtered 10 of them [covered in this video 10 Stocks @ Pharma Sector Rotation where Money Flow rising - YouTube ]

Two companies among them are nano cap and can be posted in this thread.

AAREY DRUGS, [Rs 41] Market Cap 101Cr, has double digit RoCE and manufactures API for Pharma sector, Stock has appreciated 10% last week against Nifty fall of -ve 2.5%

ALPA LAB [Rs65] Market Cap 136Cr, has double digit Sales Growth and in the similar business, Stock has appreciated 5% last week against Nifty fall of -ve 2.5%

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Airbag Industry In India To Grow To Rs 7,000 Crore By FY27: ICRA

The industry size of airbags, a key safety feature in vehicles, is expected to grow to up to Rs 7,000 crore by FY2027 in India, from Rs 2,500 crore currently, according to ratings agency ICRA. The growth in the airbag industry, one of the fastest growing auto component segments, is expected to be fuelled by the increase in content per vehicle arising from higher regulatory requirements and voluntary increase in the number of airbags per vehicle for enhancing safety, ICRA said in a statement.

The mandatory content per vehicle for airbag manufacturers is expected to rise from Rs 3,000-4,000 currently to Rs 8,000-10,000 by Oct. 1, 2023. The average number of airbags per car sold is about three currently, and this is expected to increase significantly post the mandatory implementation of six airbags per car from Oct. 1, 2023," ICRA Vice President and Sector Head Vinutaa S said.

Accordingly, ICRA said it expects the industry to grow to Rs 6,000-7,000 crore by FY27, from the current levels of Rs 2,400-2,500 crore, at a four-year CAGR (compound annual growth rate) of 25-30%.

The ratings agency pointed out that earlier, only one airbag per car, the airbag for driver seat, was mandatory from July 2019. This increased to two airbags (dual front airbags) for category M1 vehicles manufactured from Jan 1, 2022. M1 vehicles are those that can seat up to eight passengers and weigh less than 3.5 tonne.

Going forward, for M1 category vehicles that will be manufactured from October 1, 2023, two side airbags and two side curtain airbags have been mandated. This move was undertaken to prevent torso injury for people occupying the front row outboard seating positions and prevent head injury for people occupying the outboard seating positions, it added.

Vinutaa S said the cost for original equipment manufactures could increase further depending on modifications required in cars’ structural changes and deployment of additional sensors. Moreover, she said capacity building in the next one year is critical to meet regulatory requirements in a timely manner.

Several players have started undertaking capacity enhancements in the last six to eight months to gradually scale up their facilities, and ICRA expects a capex of around Rs 1,000-1,500 crore in the next 12-18 months for capacity enhancements and localisation measures," Vinutaa S added.

ICRA pointed out that the inflator forms about 50% the total airbag cost, while cushion and other components form the remaining.

The industry currently imports 60-70% of its components primarily from overseas parents or joint venture partners, stemming from the lack of indigenous technological capability and absence of adequate volumes.

“Unless there is adequate backward integration for the incremental airbags expected to be produced, the import content would only increase further going forward,” ICRA said.

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@Pranshinv
Useful post indeed! We need to find out what is the percentage of sales of Sodium Azide to the overall sales of Alkali Metals. That has to be significant for this development to have a meaningful impact on the financials of the Co. Another factor that needs to be borne in mind is the percentage of Sodium Azide in the input cost of airbags. It will help us understand if the increased usage of airbags going forward will help the Co. improve its numbers.

The Co. is not too forthcoming with info.

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Bombay Metrics has announced 9th January as Record Date for the Bonus Issue in the ratio of 3:1.

424

For the last few days, GENCON was going up. Today it is locked in the upper circuit.

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yeah, I checked the deliverable volume(~820000), its close to 5% of all outstanding/public shares(don’t know if its significant):
https://www.screener.in/screens/893157/penny-stocks-with-volume-spike/

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yesterday update after market close:

Generic Engineering Construction And Projects Ltdhas informed BSE that the meeting of the Board of Directors of the Company is scheduled on 13/01/2023 ,inter alia, to consider and approve Proposal for raising of funds by way of issue of securities to Promoter and/or Non Promoter including determination of Issue Price.
locked in upper circuit again today.

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This meeting was on the issuance of preferential and warrants. They have issued 67,50,000 (Sixty-Seven Lakhs Fifty Thousand) Equity Shares on a preferential basis and 54,50,000 (Fifty-Four Lakhs Fifty Thousand) fully convertible warrants (“Warrants/ Convertible Warrants”). what I understood from the name in the allotment table, no one from promoters group. Before 10th Jan 23, the share price was around Rs. 29-35 range for a long time and the allotment is also done at Rs. 32.4. It looks good to me though the sudden price surge created a price mismatch. Details will be found here [
GENCON.pdf (324.0 KB)]

(Disc. Invested)

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Production Process of Sodium Azide
Sodium Azide is prepared from Sodium Amide at desired pressure and high temperatures in reaction with Nitrous Oxide. In the process Sodium Amide is converted to Sodium Azide and Sodium Hydroxide. The hot reaction mixture is cooled and transferred from the reactor for isolation and purification of Sodium Azide. The purification process involves leaching and washing of Sodium Azide and Sodium Hydroxide mixture to separate Sodium hydroxide from Sodium Azide. Wet Sodium Azide
is obtained from the purification stage and is dried to get crystalline powder. Sodium hydroxide separated from Sodium Azide is disposed off as a caustic lye.

Supply of Sodium Azide by Alkali Metals Limited

Installed Capacity MTPA
Sodium Derivatives 3400
Amino Pyridines 600
Fine Chemicals 400

Extract of DRHP of Alkali Metals Limited :slightly_smiling_face:
Increased sales of sodium derivatives, from 1205 MTs during FY 2005 to 1669 MTs during FY
2006 also boosted the growth in sales.
The increase in the turnover during the FY 2005-06 is mainly attributed to the increase in
sales of the product Sodium Azide which increased from Rs. 81 Mn to Rs. 226 Mn in the FY
2006. The increase in sales was due to the bird flu virus that had spread throughout the world
and Sodium Azide is an ingredient used in the drug manufactured to cure the infection caused
from the virus.

Demand of Sodium azide in Airbag Industry

No. of Passenger Vehicle in FY 2021-22 30,00,000 Society of Indian Automobile Manufactures
No. of Airbags per Vehicle from Oct 2023 6 6 airbags mandatory for passenger cars from 1 Oct, 2023 | Mint
Total Airbags 1,80,00,000
Sodium Azide required per Airbag (in grams) 50 Refer below link
Sodium Azide (in KG) 9,00,000
Sodium Azide (in MT) 900
Cost of Sodium Azide Per Kg 3000 Sodium Azide - NaN3 Latest Price, Manufacturers & Suppliers
Annual Sodium Azide usage in Airbag (in Cr) 270
SOLVED: A typical airbag contains 50.0 g of sodium azide, NaN3. Upon impact, the airbag deploys and inflates within 40 milliseconds to a volume of about 60 L, at a velocity between 150 and 250 mph. The airbag inflates due to the decomposition reaction of NaN3 and fills with nitrogen gas in the following reaction given by the unbalanced equation: A second reaction has to occur to remove the Na, which is highly reactive and potentially explosive. Balance the following reactions, and determine how many grams of KNO3 that should be placed in the airbag to fully react with the Na. a. How much additional N2(g) will be produced by the second reaction?.

Attaching DRHP which gives a good sense of Product sales ,Product application industry and Customer concentration i.e Top 10 customers
DRHP 2008.pdf (1.8 MB)
The Chemistry of Airbags C11-2-09.doc (135.5 KB)

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Do check this on the same subject

431

is it a listed company. I have not seen any on screener.

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This is part of ALOK Industries

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SYSCHEM ANALYSIS

  1. Syschem is an Antibiotics API manufacturer. Syschem has a market cap of around Rs.200Cr. Its manufacturing plant is located at Kalka, in Haryana.

2.The existing management do not seem to have found a way to run the company profitably. They were consistent, only in making losses, over the last 10 years!

  1. 3rd party started acquiring shares and offered to take over the management. Actually that has happened, if you check shareholding data. By March 2022 quarter, the lead-promoter has changed.

  2. There is a remarkable change in quarterly performance since last 4 quarters. The new management seem to have turned the company around. The operating margin has become ~10% vis a vis the earlier perineal, negative numbers

  3. There is visible sales / profit growth. the new promoters of Syschem are owners of “Industrial Solvents & Chemicals Pvt Ltd” (ISCPL), a 500Cr company with decades of experience in pharma intermediates & APIs.

  4. Apart from blue chip pharma companies in India, ISCPL has customers in Europe, Africa, Middle East & Far East who are served through their group company, “Indosol Exports”.

  5. What we can presume is that the new management will be able to use their Indian as well as foreign operations to cross sell Syschem products, at higher margin. ISCPL has enviable client list including all major Indian Pharma Blue Chips

  6. ISCPL also been able to arrange bank funding (HDFC BANK) to key raw material suppliers, recently, by extending their corporate guarantee, which would have been impossible for the previous investors

  7. They should be able to expand capacity and add more products, to the API portfolio of Syschem. Potential

  8. Syschem India Promoter holding increased from 22% in June22 qtr to 52.10% in Sept qtr with new promoters coming in. 9 consecutive quarter losses till Dec 2021 and 3 consecutive quarter profits from Mar22 to Sep 22.

    image
    image979×1274 151 KB

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Great find. Looks definitely a ‘TURNAROUND’ story.
But their product concentration is just too much.
Amox, Ampi & Cephalexin.
All these are nearly 30 years old molecules with all of them being under Drug Price Control Act.
And believe me there may be minimum 20-30 more companies doing these products.
So as such no MOAT / Pricing power.
[Same thing applies to Natural Capsule - All the drugs that they are going to manufacture are steroids aka life saving drugs so all are under price control.]
Yes. Syschem can be a turnaround as being profitable from a loss making company. But can be a multibagger only if they start making some unique APIs.

My personal opinion.

Regards,
dr.vikas

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views on Alok industries based on new results?

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Dear Vikas,

May be, ISCPL has good experience on API , they may utilize some part to SYSCHEM

437

Hi Sanjeev, could you please also post on the company thread?

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Please do visit my post on a Microcap from a Newage Business.

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439

did you go ahead with libas? down quite a lot and trading cheap now

440

Will they able to produce some different product using the same produce line? Even if possible, is it economically feasable?

441

Anyone with info on Oriental Rail Infrastructure Ltd financial results and price chart - Screener?

I used to track this company earlier and I found the management to be honest. The company supplies to indian railway. Their products are rexene covers of the seats, seat veneer, wagon, coupler and boogies. And they recently doubled their capacity boogie, wagon, coupler and rexene capacity.

At MCAP of 202 cr today and has open unexecuted order book of 500cr+ (as per latest investor presentation, it was 1900cr + in FY22 AR). The order book was even bigger but Indian railway cancelled some of their orders because of delay at their end (its a huge con ofc).

The industry is very competitive and last quarter they posted negative PAT. The credit report attributes this to high RM costs which are coming down and poor working capital cycle which I don’t think is going to get better given the increasing product range, order size and well its B2G.
The price has fallen significantly and is at levels of 2018 when the company used to do 1/3 sales of today.

I really didn’t find the answer to the question of why just the latest quarter had negative PAT?
If anybody can find an answer to this than this is a superb opportunity because the company can easily double the revenue from 300cr to 600+ in 2 years since the capex is complete and current unexecuted order book is sufficient for an year.

Disc: Tracking position (0.75% of portfolio). Looking to invest more.

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Hi Nirmit. I booked my profits in the stock recently on seeing the results. Had entered in March end. The stock is cheap and will continue to be for the following reasons:

  1. Cancellation and inability to fulfil orders, few BSE circulars in last 3 months will give you an idea. I have a big doubt on their execution capabilities. A big order book is of no use if it can’t be executed on a timely basis.
  2. Promoter and promoter group companies continue to support ORIL by way
    of interest free unsecured loans of Rs.82.14 crore with Rs.50 crore of it being subordinated. If you factor in the interest cost for these loans, the profitability worsens further. Need to see if and when these loans get converted to equity at some point.
  3. Shareholding is dicey, lot of associates of the promoter are a part of the public shareholding, selling pressure can be created here if there’s any disputes. It’s a tightly held stock retail float wise.
  4. While the theme is strong, I am not convinced on their operative ability, YoY doubling of topline with net losses is pointless. Need further understanding when this negative operating leverage can turnaround, would need management interaction for this.
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Lykis

Lykis is an FMCG brand with over 1000 skus and does some private labelling for FMCG brands as well. (all of their brands and businesses are mainly export, so no real domestic presence)

Mr. Vijay Kedia held a large stake and was promoter of the company for years until Mr. Nadir Dhrolia took over recently. This resulted in a mega turnaround of the company. (top-line as grown multifold during the past couple of years)

Lykis disposed its loss-making tea business very recently, and Mr. Dhrolia used his rich experience in African exports to scale lykis’s revenues multifold (from ~100cr to current TTM of ~450cr). Mr. Dhrolia then purchased part of Mr. Kedia’s stake and ran an open offer to eventually hold close to 70% of the firm with Mr. Kedia has either exited or holds less than 1% now.

Lykis currently faces issues on generation of cash flows although the turnaround has just begun so it might be acceptable.

The valuations are cheap all things considered, it trades at a market cap of ~150cr with ttm rev. of ~450cr and Op. profits of ~12cr and PAT of 11cr (PAT is close to Op. profits primarily due to tax advantages due to previous loss making years) a multiple of ~14x currently. OPMs have also significantly improved, touching ~5.5% last quarter.

Is anyone tracking this company? Objective is to see if their accounting profits/turnaround translate into cash flows for the company and eventually FCF with improving ratios.

(disc. I may have made mistakes with the info/narrative above, If there are errors do let me know/correct, I will edit or delete the post. Further, all numbers are ~from screener.in.)

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I agree on the cancellation part. TBH they shouldn’t have grown their order book to 1900cr + given they do a sales of 200cr a year. It was bound to happen.

#2 Lot of other small caps companies pay 15%+ rates to promoters for the unsecured loan or a hefty rent is paid to promoters. Here it is the opposite. The management is willing to put their money to get the company going. I personally see this as a positive.

#4 This is precisely the question worth investigating. They have the capacities, they have the orders, the theme is strong. Can they be profitable? Why were they profitable earlier and not now?

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Lykis.
I m tracking Lykis from past few months. What I hv observed from exchange filings and other media news is that they have shifted their office from Kolkata to Mumbai after taking over from mr kedia sir. And kedia sir has either completely exited or reduced to below 1%. I am not an expert and my sources are limited so I my be wrong in my understanding and assumptions. (I hold around 8% of my PF)

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Without Mr. Kedia involved, is there any info you have on the current mgmt. cleanliness?

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Lykis.
I do not hv proper info on the mgt but I hv made some guesses and assumptions that may be wrong.

  1. I tried to find out in social media and on internet about any wrong doing but did not get anything meaningful.
    2)I found out that mr Drollia is associated with the company, mgt and mr kedia from very long time ie from years and mr kedia will not do business or associate very long with any improper person -personal thought.
    I hv a position in the stock so I hv a soft corner towards company and mgt and I may not see things in right perspective in certain times.
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And new mgt is not completely new in the business they were in the Business from long. And commitment after take over is clearly visible like shifting of corporate office, making company profitable, huge growth in revenue in times of crisis after corona till now etc. I think they have started acquisition in the year of corona.

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Thanks for the info, mgmt. is always a concern in small companies let alone in the Indian markets as a whole.

I still can’t understand why Mr. Kedia would choose to completely exit the company after its turnaround begun. Especially considering the potential upside should lykis start generating cash flows and grows at such pace.

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That is also beyond my understanding. may be they have agreed in that way.Here I made an assumption based my mr kedia’s quote about the mgt. That many times mgt doesn’t know how far they can go.( ie tere ko nahi pata tu kitna aage ja sakta hai)

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I have only one concern that they are carrying huge debt in their balance sheet wrt their size. And debt have also grown with the rise of revenue. I hope going forward they can achieve 7-8% operating margins when inflation/RM cost eases otherwise this is very risky business to hold on.

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all their debt is short term. With such a huge increase in top-line and operations, perhaps they’ve needed adequate working capital through the year (not to mention they werent’ profitable enough either)

Maybe better to track their recievables and related cycles, working capital and related cycles & subsequently their ROCEs. But this clarity will only emerge over time.

Ultimately, one would want to see their accounting profits translating into cash flows and then through streamlining of the business & various other leverage kicking in, some free-cash begins to emerge and grow.

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Please read Websol and my thoughts on this thread :thread:

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You seemed to be quite prescient in Lykis. Good nos recently & reyurns too.

Nadir Dhrolia seems to hv turned around the company after taking over from Mr Vijay kedia & selling loss making tea garden in Silchar.

he is a n Agakhani who seems to hv a good reputation as far as doing business ethically & Agakhanis control the whole business chain in Africa.

No wonder business seems to have turned around for Lykis

Anyone tracking the co Lykis ?

Discl- Invested with small qty

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Promoter sold some shares as per BSE disclosures. What could be the reason? any insights?

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With almost Only positive news from all corners I have recently bought Lykis. There was a disclosure made by promoter selling shares last week, since then the sentiment has dampened.
Anyone has more insights, please do share.

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The stock is in ESM Stage 1. Read about this here:

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Yeah, thats right. It is a small cap with 200 cr mcap.
It’s a turnaround story with top and bottom lines multiplied many folds this year, so is the price from 20rs to 100+ and it went in UCs thats the reason for the stock to be in ESM.
But the recent stake sale by promoter is the negative tag here, just wanted to check if anyone knows the reason and anyone knows more about the company and promoter ethics.

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461

CFO negative though co is showing profit.
Debt is 144 cr as per screener, how company is paying 6 cr interest in 144 cr debt - 4.16% interest rate.
No capax etc is planned, what’s narrative for turnaround?
Think this way if you have not thought yet, if yes ignore my message.

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May be they got the higher debt at the end of FY or they have included it as part of expenses which is not good.
Thanks for the insights @Deven . Good to know screener provides such info. If there are any such other places where we can get details, please let me know.

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It is approximately 6.09 cr only. Even in the previous FY they had 100+cr borrowings and paid around 2.67 cr as interest. May be I need to learn more on these areas to understand better.
The good part is theres is huge increase in volume(may be private labelling), hope it wont be an one time income.

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‱ Company name: Gujarat Containers ltd.
‱ Market Cap â‚č 117 Cr.
‱ Current Price â‚č 193
‱ Stock P/E 10
‱ Book Value â‚č 61.6
‱ ROCE 30.8 %
‱ ROE 38 %
‱ Promoter holding 59.66 %
‱ Price to book value 3.14
FINANCIALS: - Gujarat Containers Ltd financial results and price chart - Screener
COMPANY’S SITE: - http://gujaratcontainers.com/

Overview
Gujarat Containers ltd. is a leading manufacturer in India offering a huge variety of specialized BARRELS (drums) under one roof.
Financial Performance (Year Ended FY2023) :-

The company has reported total income of Rs.136 crores during the Financial Year ended March 31, 2023 as compared to Rs.150 crores during the Financial Year ended March 31, 2022.
The company has posted net profit of Rs.11 crores for the Financial Year ended March 31, 2023 as against net profit of Rs.9 crores for the Financial Year ended March 31, 2022.
Further debt equity ratio, stock turnover ratio, fixed assets to sales ratio, roe, roce, working capital days, etc are continuously improving.
PRODUCTS: -
The co. offers products like Galvanized Barrels, Epoxy Barrels, Composite Barrels, All side Welded, Barrels, Open Top Barrels, M.S.Plain Barrels, NRV Barrels, Carboys & Liners, GP Sheet Barrels, HMHDPE Barrels & Jerry Cans.

Other listed manufacturer of Barrels: -
Balmer Lawrie & Company Ltd.( 40% market share in India), TPL Plastech Ltd & Sicagen India Ltd.

Industry served: -
The barrels manufactured are used for storing chemicals, dyestuffs, pharmaceuticals, resins, petrochemicals, and petroleum and its by-products.

INFRASTUCTURE and Manufacturing Capacity of GCL : –
Manufacturing capacity is 2500 barrels per shift.

‱ Main Plant – GCL has well established plant set up to produce 2000 BARRELS per shift. In this plant, it has sheet cutting & sizing, spot welding, line welding, seaming, degreasing and partial drying in preheating oven facilities.
‱ Lacquer Lancing Section – GCL has developed a special type of lacquer application system to give the best quality BARRELS. Besides, it has two-way traceability methods to detect leakage and seepage in BARRELS. Entire process is on semi-auto system and least manhandled
‱ GI Section – Over the period of time GCL has mastered the manufacturing of GI BARRELS. Today GCL is the only Company in India having highest capacity in producing GI BARRELS & having all the required infrastructure In-house. It has ample infrastructure and manpower to produce more than 500 BARRELS per day.
‱ Blow moulding section – Quality of the Composite BARRELS is penetrated in its liners. To ensure zero complaint & assure best quality liners GCL has made its own blow moulding facilities at its plant. It has 5 blow moulding machines having different capacity of production. GCL utilize HMHDPE granules from IPCL / Reliance only.
‱ Welding section – GCL do all-sided-welding to its BARRELS on specific demand of its valued customer. This section has different types of welding equipment’s and rotators. These BARRELS are used to fill highly hazardous products.
‱ Quality Lab – In this section GCL has Helium Testing Facility, Automatic Degreasing plant for cleaning barrels internally and externally without manual intervention, raw material testing facilities and analysis of raw materials and chemical compatibility test of epoxy lacquer, seaming compound & GI.
‱ CUSTOMERS:–
Atul Limited, Meghmani Group, Murugappa Group, Privi Organics, Reliance Industries, Sun Pharma, United Phosphorous Limited, Gujarat Insecticides Limited, Oriental Aromatics, Kutch Industries, GSP Cropscience ETC.

EXPANSION: –
Gujarat Containers Ltd has set an expansion project at GIDC, Dahej for projected capacity of manufacturing of 75000 barrels annually, at total outlay of RS.18 crs, which is being funded out of Internal Accruals. The project is likely to start trial Production by June 2023 and to commence its commercial operations by July, 2023.
INDUSTRY OVERVIEW, MARKET SIZE, DEMAND AND PROJECTIONS: -
The global steel drum market is projected to witness linear growth between 2023 and 2033 at a CAGR of 5.6%, reaching US$ 20.8 billion by the year 2033.
The steel drum is a safe and secure rigid packaging solution made from carbon steel or stainless steel. The steel container drums hold prominent features like being cost-effective, easy to handle, safe & secure for shipping, resistant to fire, reusable, recyclable, and many more, which augment the demand for steel drum.
The key reason for the swift growth of steel container drums market is that it protects the stored material against harmful UV rays, moisture and dust. Furthermore, properties such as durability, high sustainability, eco-friendliness and excellent strength make small steel drum a preferred choice in the packaging industry.
The steel drum market witnessed lucrative growth due to its demand in various industries like chemicals, petroleum & lubricants, paints, inks, & dyes, and others. The market growth for steel drum manufacturing process seems to remain sizable in the forecast period considering the benefits provided by it for storing and shipping hazardous & non-hazardous materials.
Since there is a significant correlation between the industrial output and demand for industrial packaging, demand for enhanced industrial packaging is evident, with stabilized manufacturing sector output.

Investment Thesis: -
I found GCL as a proxy play to Indian Chemical Industry.
India’s Chemical Sector Holds Market Opportunity for Steel Drum Manufacturers
India Market Size (2033) US$ 1 billion
India Market CAGR (2023 to 2033) 8%

The steel drum for sale are basically consumed by chemical industries due to the rising demand for chemicals in various end-use industries. The targeted segment is the prominently growing sector in India. The chemical sector is growing at a significant pace.
The key chemical players are targeting India market for manufacturing chemicals, which may increase the exports. Back on this factor, the market growth for steel drum manufacturers in India seems promising in the near future.
This report is very insightful on future prospects of Indian Chemical Industry.

Risks:
‱ The intermediate bulk containers (IBCs) are hindering the steel drum market growth. Comparing steel drums and IBCs, the latter ones are cost-effective in terms of storage and transportation. Looking through the shape, the round shape of steel pan drum results in unutilized space, whereas IBCs result in maximum space utilization. Moving towards the usability feature, steel drums have low usability as compared to IBCs.
‱ The availability of raw materials and the price of raw materials, more particularly iron & Steel are be subject to material changes in Pricing levels.
‱ As GCL is a micro-cap Stock and it is very illiquid.

DISCLOSURE: - recently invested at Rs. 156/- levels. It is not a buy or sell recommendation.

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Anyone tracking Ameya Precision Tools? It was massively oversubscribed during the IPO. Recetnly touched all time lows when promoter did some good buying. Hard to find much info about it.

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Thank you for sharing. Margins have improved slightly and debt is reduced a bit. However, It is interesting to know why the company is not coordinating with a rating agency, based on the rating given by CRISIL, investors, lenders, and all other market participants should exercise due caution while using the rating assigned/ reviewed with the suffix ‘ISSUER NOT COOPERATING’.

468

Ratings are required by a company only when they need debt. The rating agencies charge a fee. I think if the company does not wish to raise debt, the advisable course of action is to save that unnecessary cost.

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cfo is negative as the receivables are extremely high, i think they maybe trying to get new clients and it order to capture them they will be providing extra credit period (assumption), what should be tracked here is are there write offs.
debt is all short term, to fund the working capital, no idea on why the interest is so low, will deep dive soon.
so the plan would be to sweat the current assets first, as you can see how the revenues have grown without adding any new capacity, maybe more is left (maybe). also they would first want to get a bit of cash flow rather than just going further deep into debt.

all of these are assumption, thats what i am thinking, we need to give some breathing space and time to the management after they have already bettered the company so much. atleast we know they can execute.

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so just an honest question, when you know that IBC may capture/ take away market share from GCL. whats the reason for buying it. as the market will not grow now. and also as IBC is more efficient and effective>?

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Thank you, Rinku, for your input. Appreciate!
I have a few observations about this company as a part of the Thesis (It does not give buy or sell recommendations though)

  • Increasing Receivables>Increasing sales - did not pass
  • Miscellaneous Expenses > Volatile and high in the recent past.
  • Contingent Liability is 4.23 Cr. For FY2010-11 VAT
  • As per the Auditor, “according to the information and explanations given to us, following are the disputes”
  • Dispute Amount - Income-tax Act, 1961, 1944 - 1.03Cr (Amount) - dispute pending at Jurisdictional A.O Vadodara Gujarat .
    -VAT- 4.23Cr (Amount) - dispute pending at VAT Tribunal, Ahmedabad.
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472

Appreciate your views!

Here we can see Debtors day are continuously improving

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But EBITDA margin is continuously increasing

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These type of contingent liabilities and disputes are common in almost all the manufacturing companies.

3 Likes
473

Thank you again, Rinku. About increase in margin was the first observation from my side when I looked at it.

Even if the contingent liability is below 15% of the last year’s PAT, I will still ignore but it is more than that plus zero cash flow. It does not mean that company can not do well in the future. I will personally avoid such a company but anyone who has a risk appetite can take a position with a solid exit strategy and certain allocation as a satellite portfolio. Appreciate all your view and it is always pleasure to learn from each other!

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1 Like
474

As one of the competitor, TPL Plastec Ltd. has already commenced production of IBC in addition to BARRELS. I think, going forward, GCL may also set up IBC manufacturing unit.

475

So why study GCL when we know a listed player in the product which will be take over the market share.

And how do we know gcl will set up this unit, there must be some entry barrier right, if gcl is planning to enter it

476

Lykis promoters further sold as per today’s disclosures to exchanges. Not sure why the promoters are dumping in the open market? Any clues?

1 Like
477

I think there is no direct competition between GCL and TPL Plastech, as GCL currently makes only steel drums and composite drums while TPL Plastech makes only plastic drums and plastic IBC. Both steel drums and plastic drums/IBC have their own benefits and limitations. Some industry prefers steel drums and some prefer plastic drums. The demand of drums will remain for decades whether it is made from metal or plastic. TPL Plastech is specialist in making plastic drums, so it commences making plastic IBC because of increasing demand. While GCL is specialist in making steel drums, GCL can make Steel IBC, as IBC can also be made from steel.

I chose to invest in GCL because of better financial parameters in comparison to TPL Plastech like ROCE, ROE, Interest coverage ratio, Fixed assets to Turnover ratio, Stock Turnover ratio, cagr growth in sales/ net profit in last 10 year/ 5 year/3 year etc.alongwith cheap valuations.

1 Like
478

Did you find anything about Mitsu?

479

Since most of microcap counters hunt start with exchange notifications, I will use this thread to post some of the names I am tracking/buying. Viewers can do their own due diligence.

Scripname: Sparc Electrex
BSE Scripcode: 531370
Company Update on Trademark License Agreement with Hyundai Corporation Holdings Co., Ltd, Korea

7 Likes
480

Hi @somu0915

It would be nice if you can mention why you are tracking/buying while posting the company names

Thanks

1 Like
481

Most of these names will be under 100cr market cap and at this stage not much info is there and one needs to take a gut/instinct based position if one wants to.
For example, RACL geartech 5 years back was a 50Cr market cap company I invested and it had less info, only knew that it had collaboration with kubota, bmw. Today it is a 1200Cr company.
That was enough to take a small position. As time goes by, one needs to continously monitor events happening in the company.

In above example, Sparc has done good by having an exclusive trademark license agreement with Hyundai Corporation.

One needs to see how they capitalize on it, whether they can show increased revenue/profits due to this engagement.

In micro cap, its a dark tunnel with very faint light at end of tunnel, as one crosses it, the light is more visible.

24 Likes
482

so do you track and check financials when screening for new counters, or you just play the story. and how flexible are you in terms of these financials, also are you just betting on these counters based on these small rays of sunshine or you for something particular.
curious to know about your process
thanks

2 Likes
483

Any member update how come lykis huge debt paid interest low

485

He has bought the majority stake at 20/share and sold only ~1.5% at 120/share.
The timing of the sell is coinciding with ESM framework and his 50th Birthday celebration.
Company’s financial looks very promising the fall is fully dedicated to promoter selling.
however i checked with Company sec and the response i got is nothing off.
my sense is to hold till the Q1 numbers and then take a informed decision.
do not sell in panic , if promoter selling was not there this was best time to add.
But now its better to wait till result or let the stock settle.

4 Likes
486

Lykis case is quite different. Usually when there is such distress selling happens for a small cap at lower circuit, there wont be any buyers. Here 2Lakh + shares traded at LC or just around it.
Not sure why promoter keeps selling instead if he avoided that the prices would have been almost double of what it is today.
Anyone know where its facilities are located and how many employees work there?

487

Lykis main office is in Mumbai with more than 200+.
i think promoter selling is done for time, now they are at no trade period due to quarterly result.
my sense is he must have sold for personal reason, as he was having his 50th Birthday this week . His bday was celebrated in grand way with his employees and family.
Best option is to stay invested till result and then take a call.

2 Likes
488

Well, I fail to understand for selling, even assuming it was for personal reasons. Promoter could have easily pre-planned and sold to some qualified institutions instead of open market. Since the financials are in good shape, he could have easily made a deal. On the other hand, due to his stupidity, the co lost significant market cap in the last few trading sessions. Any thoughts?

2 Likes
489

There is no one answer to this question and it is a very difficult question.

For most of micro-cap counters, financials will not be in place, if they had been then it would not be a micro-cap in the first place.

So, different counters have different interesting observations.

But most important of these is the promoter integrity. Sooner or later this comes into play.
Also at some point, either 3/5/6 years down the line financials also have to come into picture, market will only recognize once financials start falling into place.

So my thought process is to buy the scrip to keep it in satellite portfolio, atleast give it a 0.1% allocation.
Because companies out of sight are out of mind and there are hundreds to watch in this space.

So I can give 0.1% to a micro cap based on several parameters →
AGM sends out a positive note on promoter, the way promoter speaks his body language depth of his answers, how he answers to questions from his shareholders, promoter buying continuously from market from several years, some JV, good set of quarterly results, induction of a reputed person as director as board member, niche sector, leadership position in very small sector, open offer where net worth of promoter is big, open offer from new promoter who has existing set of decent business, change of business setup, big land bank, significant assets in books, an existing nano/micro cap investor having position, players extremely beaten down sector.

Above are only very few parameters to look at that I can think of right now.
But there are many.

Once the company is in portfolio, then real research starts, with competitive advantage, checking promoter integrity, scuttlebutt with employees/dealers, attending AGMs.

All this is is a multi year process and based on conviction, either I increase my position or decrease my position.

And then comes the toughest part of holding these micro-caps with a timeline of 5/7/10 years and continuously monitoring the events in the company.

Even after such a process, if I am able to make money on 50% of my scrips, I will lend up making huge sum of money. And most of time many are failures.

So this is the process, but it is worth the pain as most money is made in market in scrips where no-one is looking at them.

16 Likes
490

Can we wait for these microcaps to make it to midcap level
coz if company is good, it will graduate even from midcap to large cap and thus become atleast 10 bagger?

491

I feel comfortable when it’s surpasses 300cr+ & other criteria’s

1 Like
493

I have started tracking position. Company appears to be proxy for FMCG sector. But valuations are at higher level.

1 Like
494

Anyone tracking SG Finserve?

495

I do hold position in this stock, albeit a small one since 2019.
One of the finest company when it comes to paint and other similar containers. Uses technologically advanced processes for near perfect product everytime.
Had diversified into making containers for various other industries like food industry.
Looks overvalued to me right now.
Can enter at dips

1 Like
496

Holding since last year from 90-100 levels, allocated 10% of portfolio at that time, did not sell single quantity till now, I think it has to be somewhere close to 10,000 crore market cap given the pedigree of the promoter in next 4-5 years.

2 Likes
497

A genuine question, how and why this company came to your radar? was it based on ROCE/ROE scans or anything else?

498

How and where can we find the data of delivery taken by ace investors like Vijay Kedia , Ashish Kacholia
If myself do not want to wait till Q ending SHP

499

What was your rational of buying this company , as Ashish Kacholia is also invested in this

500

The CRISIL report says that the promoter holding will continue at least 60% stake, whereas the promoter holing as of today is at 49.3%. Any specific reason for this or am i missing something?

501

The concept of buying moonipa was because I had earlier played best steel logistics with same promoter and saw how the Gupta’s took over and transformed the company.
It is with that intent that I entered moongipa at 90 levels. Nothing was clear that time, what business is going to come, what will be the equity of the company, what are the future plans.

But all I knew that this is a very strong promoter who has the proven capability to turn around small companies into big ones. And on that conviction I took a 10% bet.

One can only take such bets at such early stage only on the pedigree of promoter and nothing else.

6 Likes
502

Which company is this, the previous post looks to be deleted.

503

any view on Sangal paper , I see the same promoter holding over 1% !!

1 Like
504

Could not find anything on Pondy Oxide, worth a Look?

Catalyst:

  1. Push for a circular economy around the world
  2. Non-Ferrous metals are entangled in concentrated supply chains, recycling them is very essential for countries to secure their interests
    Screenshot 2023-07-23 at 1.25.33 PM
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1 Like
505

any thoughts on ACGL? Tata motors holds 49% stake in this company. manufactures buses

506

Any idea about Zim Lab?

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1 Like
507

https://forum.valuepickr.com/t/automobile-corporation-of-goa-ltd-jointly-promoted-by-tata-motors/108145AC

508

I have started that thread, but not got any response on it :sweat_smile:

509

Had created a thread on this at SG Finserve - is this birth of another Bajaj finance? - #2 by ShareFarmer however it was closed.

I am betting more on the promoter and their almost guaranteed customer from APL Apollo distributors and vendors. The other big opportunity is anyways there as they are targeting the complete supply chain ecosystem for their lending.

Disc: I am invested

1 Like
510

It passes most of my checklist points. Considering it but dint buy because of the subdued revenue growth. While their direct competitor Gravita is growing at 25%, POCL is forecasting a 10% growth for 2 years running. Although they have big plans and targeting a 30% CAGR growth in revenues till 2030.

Will look at it again based on Q1 results or if the Lead cycle reverses and it impacts the margins.

511

Make sense, what interested me was that I was running a small-cap screener for companies with the
following filters

`

Long Term Debt To Equity Annual < 0.5 AND PE TTM Price to Earnings < 15 AND Promoter holding pledge percentage % Qtr = 0 AND Market Capitalization in Cr < 1500 AND ROCE Annual % > 10 AND Promoter holding change 8Qtr % > 0 AND NetProfitAnnualAveragePrevious5Year > 30 AND FreeCashFlow4YearAverage > 0 AND Market Capitalization in Cr < Total Revenue Annual avg 5Yr Cr

`

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This gave me some interesting names, and Pondy seemed the most interesting.
DISC: Invested.

512
514

present run of small caps
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I have tried to summarize the article IsaacAsimov mentioned, pls pardon my summarizing skills.
I would be curious what experts make out of it , I can only relate myself to “H.”
How hot is small cap space and if it is time to shift to large caps ?

2 Likes
515

Why can small caps still keep rising?

  • The current rally in smallcap space is too strong. If you look at BSE Smallcap Index, it started rising from 29 Mar 2023. Till now, it never has touched 20EMA once. It is not even taking minor corrections to take some rest.

  • The current PE ratio is 27 which is not too high from the perspective of smallcap index. It was trading at 114 PE in Jan 2018 peak. Maybe there is still time before we see some heavy correction.

Reasons to worry:

  • The AMCs have stopped taking money. They are running out of ideas to invest in.
13 Likes
516

NPST

Established in 2013 Network People Services Technologies Limited (NPST) is a Fintech Company focusing on Digital Payment Solutions like UPI, IMPS, Mobile Banking & Wallets to Banks and Payment Companies. NPST operate as “NPCI Approved Merchant PSP” digitizing Merchant acquiring space under the brand name of "TimePay”. Currently, the company is providing its services under two verticals i.e. Technology Service Provider (TSP) and Third Party Payment Application Provider (TPAP).

Technology Service Provider (TSP) (For Banks & Financial Institutes)

  1. Switch Products IMPS | UPI | Mobile Banking Solution (Revenue model: Licensed model)
  2. Super App – integrated Mobile App for Banking services (Revenue model: Pay per transaction)
  3. Qynx – Merchant switch (Revenue model: Subscription): Qynx is a Digital Merchant platform for banks that provides a complete suite of services and products to manage and operate Merchants of various sizes and categories. The solution provides an end-to-end product stack to digitize your merchant network and increase revenue potential through digital offerings. A must-have product for banks & fintech to create merchant stickiness to acquire new business.

Third Party Payment Application provider (TPAP) (For Payment Aggregators and Merchants)

  1. EVOK - UPI (API) engine (Revenue model: Pay per transaction): TimePay Evok is an API-based Payment platform empowering businesses with the flexibility of real-time UPI transactions and innovative payment channels integrated with the reconciliation module. Delivering UPI payment solution being one of the approved TPAP.
  2. UPI plug-in
  3. Payout solution

Even if you don’t want to invest please go through its latest presentation once. It looks like an amazing company with an exponential profit growth model.
Latest Investor Presentation

Problem: Since it’s an SME, can buy only 400 shares. The minimum investment is 4Lac. Most of the time stock is in UC. Current MCAP: 650 cr.

6 Likes
517

Maan Aluminium

Screenshot (161)
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In comparison to the other aluminium companies, its financials appear better. It has split the share and given a bonus a couple of days ago, practically dividing the stock into four parts.
Disclaimer: Have a small holding.

2 Likes
518

Has anyone looked into DSSL ? Dynacons ?

Sharing a screenshot of the fundamentals.
There is a thread for the same here on VP.
Did not see this name being talked about, hence I shared it.

Disc : Invested.

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1 Like
519

While Dynacons operates in an interesting sector and the topline and PAT growth have been impressive, I had the following concerns:
Low margin business
Receivables makes up 75% of assets on the balance sheet
Cash from operations has been consistently poor

Hence didn’t invest.

5 Likes
520

Yes, those are indeed the stand out points when looking at the company.
But that all broadly makes sense when you consider 2 major points :

  1. Small Company.
    Almost all names are bigger, Im guessing at least double in size of this name.
  2. Legacy Business but Private Clients + projects are long term.

Now, what made sense to me what how the company is winning deals. You can check the frequency of deal wins, and its a good flow for a small company, and the clients a huge.
I have no idea what the management does to win these deals, but they do win them.
And don’t you think they’d want to keep winning them ?

So, as long as they keep winning and improving on their client interactions ?
It is good. The company can grow.
Receivables, for them to be good, the company’s position in the value chain matters, small companies do suffer this way. Big inventory, Big Receivables, Big deal win timings etc.
“You need me, more than I need you” mentality is anyways prevalent in the Indian business environment (I have other businesses, hence speaking from experience). This also impacts the margins, but they have been growing. It was ~3% and now its ~5%.

The more it grows, the more it has a say in terms of pricing power, receivables and more.

For me its about the management. I keep seeing those "Deal Win’ updates ? its nice.

I AM INVESTED.

3 Likes
521

Isn’t its PE at 61.1% rather disconcerting?

522

NPST, PE at 61

Yes, currently it’s overheated. It’s best to wait for a correction. But what I could understand from their Presentation is once the software is sold, revenue will go directly to the bottom line. In pay per transaction model the increase in UPI payments won’t require additional investment/infra on their part. It might be valued as a software product company rather than service based company.

2 Likes
523

https://www.screener.in/company/542753/#shareholding

Modus operandi: Management announce some short of tie up or differed tie up (https://www.bseindia.com/xml-data/corpfiling/AttachLive/8034b696-6cbd-4ba6-bbc7-c0384fe4e348.pdf) < sale their stake < retail buy it in search of multibagger.

Disc: Retail investor - not sebi registered. Not buy sale advise.

3 Likes
524

Any idea why Lykis still falls? I have invested here. Seems results of Q1 are not that bad as it is beaten even after a 50% fall.

1 Like
525

I think more than their quarterly results, ever since the stock was placed in ESM restrictions (which I never understood SEBI’s logic), the stock has been swinging up and down.

1 Like
526

Any thoughts on promoter stake reducing from Sep 22 onwards? Rohan Gupta has sold 385000 shares on 31st Jul also. Thnx

527

0.1% is too low to move the needle, waste of time and effort
atlease 2-3% is good otherwise at portfolio lever nothing will change


528

due to Q-Q comparison, however Q1-Q1 it has done well, give one more Qtr and see.
i’m very optimistic on the counter.

529

Any one tracking balaxi, any idea about recent result , exceptional item losses?

530

Kanchi Karpooram is listed in BSE only. Is it a negative point?

531

Balaxi Pharma as a stock is very attractively valued. However 40% or so of their revenue comes from Angola which is facing hyperinflation. So that’s the current risk which is putting downward pressure on its revenues. Else the business model is strong

2 Likes
532

Are you tracking Maan Aluminum? It seemed to be the cheapest aluminium stock even before split/bonus. One thing in their favour is that the split/bonus and delivery of shares was most prompt.

However, after these events, no buying seems to be possible, though the bid is made at higher than the offer price. Can anybody enlighten me?

1 Like
533

previously balaxi was just into trading good, but now planning to start its own manufacturing
one needs to know if they will be able to execute this
we dont know its capabilities
several certifications will be required
labor cost will come in
margins will reduce

very risky, needs to be looked at closely, especially the execution capabilities

3 Likes
534

Few things to note for this company:

  1. Margin is low. But the margin has been increasing. This means they are adding higher margin products. This is exactly what management spoke about. Walking the talk.

    Screenshot 2023-08-15 at 14.15.01
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  2. “check the short term borrowings which is growing tremendously”—Their short term borrowing is at March 2016 levels. Whereas their sales is more than 4x the March 2016 sales.

    Screenshot 2023-08-15 at 14.25.18
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My take: I know that not every financial ratio is perfect here. I believe if that had been the case, the company would not be trading at sub 10 PE. We can invest during their journey of improving financials(most of the PE expansion happens here). Or after the financials have improved(returns based on earnings only). I choose to do the former.

2 Likes
535

Which company are you talking about ?

536

Maan aluminium, you can see by following the linked thread of replies

2 Likes
540

Why are the margins so low? Are these expected to expand going ahead? What are the entry barriers for new entrants? Please elaborate. Disc: Studying

541

As steel products is commodity based and is 90% of the revenue and non-steel products being only 10% ,so as the product mix changes towards non-steel, margins will expand.

1 Like
542

Is anyone tracking below two companies?

  1. Jai Balaji Industries: It makes iron and steel products. Its profit has jumped from 22cr to 170cr. YoY.
  2. Ashapura Minechem: It is involved in mining and makes derivative products. Their profit has jumped to 102 cr. from 35 cr. YoY.

Just wanted to understand the root cause for such a big jump in profits. And if these profits are sustainable.

2 Likes
543

IKIO lightings ltd makes Interesting case study !! If anyone tracking this company kindly share your findings it will be much appreciated.
Compañy recently came up with its sucessful ipo listing and held its maiden earnings call and here are the highlights

  1. Company primarily operates in the ODM ( Original Design Manufacturer) mainly LED
  2. Company has a B2B model and are not looking to go into B2C model
  3. The growth trajectory has been good in the last 5-6 years as the SKUs have grown from 200 to 1000+, the company was heavily dependent on imports but has become backward integrated and export numbers have also grown over the years
  4. Company has 3 business verticals
    :black_small_square:LED products
    :black_small_square:Commercial refrigeration
    :black_small_square: Others ( usb chargers, mcb switches, rotary switches, ips containers, drivers)
  5. Company has 4 well integrated manufacturing facilities. 3 in Noida and 1 in Haridwar. The total area of these facilities is ~ 3,00,000 sq feet
  6. Conpany has repaid 50cr of debt from the ipo proceeds and the consolidated gross debt now stands at 48cr as of June 2023, other items in ipo prospectus include investment in new facility and general corporate purposes, both are in-progress
  7. CAPEX - Company is building a 5,00,000 sq feet project into three blocks where Block 1 is almost in final stages of completion and is expected to commence operations by end of this FY. Overall completion of all three blocks is expected in next 2 years. Total capex required for the entire project is 212cr. The asset turns expected around 5x with more than 60% plant utilization. The capex is primarily funded by ipo proceeds.
  8. Company has given good 1st quarter result
    Total income 36.19cr
    Ebitda 237 million Rs
    Ebitda margins 21.7%
    PAT 138 million
    PAT margins 12.7%
  9. Downsides
    :black_small_square:Small cap company so competition from existing industry giants a threat
    :black_small_square: Company’s 50% sales are to Signify (Philips) so major dependence on one client
    :black_small_square: Delay / divergence from capex plans will dent the future prospects

Disc - Recently added to my portfolio (2%) so may be biased

7 Likes
544

the products are not manufactured by shankara but traded, they just capture the spread, no value add or further processing by them.

now they are adding higher margin non steel products, which will increase margins as well as ROCE

545

Maan Aluminium financial ratios are very attractive (all tables courtesy the Screener)

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Performance in the last few years has also been excellent.

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It is also doing wonderfully in comparison with its peers.

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It has split and given a bonus in one go recently. Adjusting for bonus and split, its price should be more than â‚č90. But since then it has been falling, in a real cascading manner. It has not been possible to buy more also.

Is anybody aware of any any adverse factor relating to this company or aluminum in general?

PS: I have a small holding.
PS-2: The thread on thus stock has been closed in 2021. I think it is an interesting stock.

2 Likes
547

@avneesh @Deven @somu0915 and seniors.
I am newbie and Since my PF is 87% small caps
it has ran very hard and fast since march end.
Nowadays, i keep coming across same news regarding small cap space being over heated.
I refer to another recent thread on small cap.

My query -
1.How hot is small cap space ?
2.Is it possible to dentify that its time to get off the party while its still on ?
3.What indicators can be helpful and if we can stay clear when the tide is about to turn ?

1 Like
548

Its temperature is not homogeneous. You have a look at your portfolio, consider the business prospects, consider the valuations, and then make a decision on a per stock basis. Don’t get swayed by macro noisemakers, they will fill your ears, not your pockets. If a stock has a long runway ahead, unless its obscenely valued (>80 PE), stay put. As long as you feel growth rate can justify valuation, no need to worry. Even if price falls, you can own more of that business.

Depends on your thesis for buying in, whether you wanted to simply play the PE expansion and exit once your targets are met, or whether you want to stay in the game for longer.

Never wait for the market to tell you when to exit, always stick to your rules/plans based on your time horizon, return expectations and risk appetite.

Indicators don’t guarantee anything. US Government Bond Yield Curve Inversion typically an indicator of recession. We all know how that played, and those who sold thinking the market will go lower are either biting their nails from the sidelines or Fomoing at higher prices.

Disclosure: 75% of my portfolio are small caps. Continue to hold unless I get extreme lucrative exit deals

18 Likes
549

When the bull market starts, expect it to last atleast a year. I see no reason to exit small caps so soon. We have probably seen just 1/3rd of the entire up rally. There’s a lot more to go
 Also, stocks are not extreme hot. You could still find some small caps that are still value buys.

Disc: my portfolio is 95%smallcap, rest midcap

8 Likes
550

Focus on what is possible at your end rather than worrying about inflation, oil prices, GDP numbers, etc.

Can you predict the market direction, oil prices, etc. ? Not really
Can you take action when your stocks start falling? Yes

If you don’t have an exit plan then you may follow this very simple one below:

  1. Low conviction stocks: Sell if they fall below 20EMA or below your purchase price.
  2. High conviction stocks: Give them more room but sell if they fall below 50EMA.
  3. Stocks that are already in loss: Your personal call depending on your thesis. You should know why you bought it in the first place.

Selling will always be filled with regret. Either you sell too soon or you sell too late. But if you want to grow as an investor, you have to learn to live with this emotion.

But it’s best to have an exit plan. I have seen my big profits turn into losses. I don’t want to repeat that again. Either you can learn from others mistakes or you can pay a price to learn the same lesson.

Note: All this is not applicable if you’re a TRUE fundamental investor.
EMA- Exponential Moving Average

16 Likes
551

Wonderful Insights related to selling!!
Which timeframe like weekly , Daily or Monthly that we should follow these EMAs?

553

@StonePitbull @ajayt001 @avneesh and seniors.

I feel, We all would be busy by now trying to catch up with
my pf is down by -5%
biggest single day down i saw recently
anyway,i again bought few i liked
though i tried not to fall in love with them 
but that emotional bias i am still trying to overcome(i couldnt today !)
the Question
is it correction ? retest ?
or is the music slowing down ? 
is it time to run ?

554

Hi @Nimit,

Do you have any updates on the corporate governance issues related to Refex?

555

It will be foolhardy for me to affirm if this is a correction, retest or start of a long way down but to me it was long time coming. Particularly with the last six months bull run (>35% jump in small caps), in my opinion another 10% fall would in fact be good for the overall health of the market.

6 Likes
556

Its hard to know, my portfolio is down north of 3%. Added few on the names I was confident on, and few of them, I’m hesitant as they might be falling knife. Kotak’s report likely triggered this. I’m sure the markets will shrug it off and move on as long as earnings don’t disappoint in the next few months. Music has started slowing down on frothy areas. Looking back, I missed taking profits 3-4 stocks, which could have given some psychological relief in this fall nonetheless those are quality names and should recover in the long run.

This tweet was so prescient.
https://x.com/jitenkparmar/status/1701110943852138996?s=20

3 Likes
557

Not tracking, I maintain a blacklist where I keep such stocks which I have read and rejected due to governance issues.
I ignore minor governance issues when investing in small caps but not the ones like refex, uflex


4 Likes
558

Sorry. I am trying to learn reading charts. What’s the difference between EMA & DMA ?

559

Emotion of greed was absolutely prevalent. I also was experiencing it.

I will narrate an example. During the last few years there’s only one IPO, I had subscribed to. A government company with zero NPAs, very decent growth coming at 0.8-0.9 P/B. I put in a big application. Got full allotment. Stock listed at discount. And went down 30% from there. Results declared were good. At a point it came to 0.6 book and sustainable+growing dividend yield of 7%. I did add during these falls and it became a decent sized bet for me. IPO was at 26 Rs and went down to 18 levels. Dividend for last year was 1.40 Rs. My expectation was a dividend and at some point maybe a 40-50% appreciation.

Somehow this stock got fancied and has gone all the way to 90+. P/B upwards of 2.5 and div yield less than 2%. The stock gave me 2.5X, much more than I deserved and expected.

“Bhaav Bhagwaan Che” is the stupidest thing in my view. At both ends the pricing was absolutely wrong. There is no such thing as efficient markets.

Example like these, and there are many more, tells me about the euphoria in the markets. And markets were ripe for a correction. Reasons will be attributed now. But the real reason, is huge pockets of overvaluations.

41 Likes
560

Everyone would have an opinion and no one can really say for sure.
My opinion is that this is just a minor blip/ profit booking in a structurally strong bull market.
I won’t call it a reversal of trend unless market goes below previous high of 18900.
I believe there will be some more blips like this but the ultimate destination Nifty is headed to is atleast 24000 in 2024. I have arrived at this approximate number using both fundamental and technical indicators in valuing Nifty. And this rising tide will take all stocks up along with it.

In fact, our portfolios will be much higher by this Diwali in Nov than where we are today!

6 Likes
561

Anyone tracking Infollion Research Services Limited ??

563

@LarryWink Here is my quick take on the way markets move. 1) 80% of the time market is on an upwards trend while 20% of the time the market is on a downwards trend. 2) Percentage fall/day in bear market is about 3x times that of Percentage rise/day in bull market. 3) On an average the market returns are around 13-14% p.a. for the Indian stock market. There could be divergence to these rules in the short term but in longer term things will converge around these rules.
Using these three rules you can see if there has been a divergence from these rules in recent times. Triangulate using your assumptions to estimate if you see market as going up or down.
I won’t comment on individual stocks that you hold but like the fact that you follow the dictum “buy on dips”.

4 Likes
572

Anyone tracking newgen software? Can it be a long term bet?

1 Like
573

Thread on the company exists.

574

Hi Guys,

I am new to this Forum. I was checking different threads and wasnt able to find much information about two industries. Anybody currently tracking Pyramid Technoplast & Refex Industries.

Thanks

1 Like
575

Dark horses from the Warehousing space

Companies with decent land holding are venturing into the warehousing space. I found some well-known companies (E.g., Mahindra Logistics, TVS SCS, etc.) as well as five dark horses (small/micro/tiny caps).

  1. TransIndia Real Estate (Countrywide)
  2. Anant Raj (North India focus)
  3. GKW Ltd (East India focus)
  4. Lakshmi Automatic Loom (South India focus)
  5. Shreeji Translogistics (West India focus)

While I have always been bullish on the logistics’ industry, I realized that the warehousing space is more fascinating.

12 Likes
576

UP and Bihar focussed Small Cap Dark horses

I am trying to identify companies which have most of their presence/stores/branches in the interiors of UP and Bihar. The well-known companies/banks always avoided these regions due to various reasons.

I found the following companies: Aditya Vision, V-Mart, and Utkarsh Bank. Are you aware of any other dark horses?

4 Likes
577

V-mart is good company to study as valuation is attractive but they are getting competition from other brands like zudio which is run by trent

578

@avneesh @ajayt001 @StonePitbull @Nickp @ChaitanyaC @jitenp @vikas_sinha

Based on my interests into small caps news/threads, hoping to learn more.
Many news on small caps is more or less summarized at The below VP discussion comparing PPFAS flexi funds vs small cap funds. (which is largely based on recent presentation by PPFAS funds)

PPFAS supports large caps and gives reference to an IIM-A study
 suggesting small caps didn’t outperform large caps from 1995-2019.
Some argue PPFAS might criticize small caps due to not having a small cap fund, even though historically small cap funds have given around 20% returns over a decade.

However,
historically, when a lot of money pours into small caps, they tend to go down heavily with a slight market correction. Small cap funds usually follow a pattern: 2-3 years of a rally and then 1-2 years of a gloomy period. This aligns with Howard Mark’s book on market cycles, indicating we’re currently at the peak/getting to the peak of a small cap funds rally.

My query is regarding small cap stocks for a retail investor(who is 93% small caps), how one can wade through these situations.

1.If we can not time the exact top, what could be time frame to run, Diwali-23 or July-24? what time frame do you feel is comfirtable before it gets gloomy?
2.What can be prudent approach, if we are not sure about running away, e.g. can take off partial profit?.

3 Likes
579

Fusion Micro - They’re a micro finance company with big exposure of loan book in UP & Bihar

2 Likes
580

Hello amazing people of VP,

Back after a long hiatus.

I am currently running a SEBI RA firm. Have learned a lot from the community and applying lessons learned here and through investing. I have a better grasp of playing commodities/cyclicals vs highly moated companies as compared to 2020 since I have been doing this full time.

I would like to discuss themes/sectors:

Extreme Euphoria (Price Increase):

  1. Railways
  2. Infra
  3. Capital Goods
  4. Financial Services
  5. Smallcap IT

Basically, Govt spending and credit growth were the reasons for the same.

Consolidation/Downward Trajectory (Decent Valuations):

  1. Chemicals (Agro+Specialty+Commodity)
  2. Pharma
  3. Shrimp Companies
  4. Battery Manufacturers (Since the top two listed players are entering Li-ion batteries as well)
  5. Alcohol manufacturers
  6. Textiles

Many sectors/stocks are currently at frothy valuations. Now is the time to invest where there is pain (demand issue at present with foreseeable growth in the next 2 years).

I would highly recommend these 2 videos and basically this channel in itself for great insights into various sectors/industries:

  1. https://youtu.be/6xh2LPlBLi8?si=fvgqPTf1MrOpkBCb - Chemical Sector: Pessimism An Opportunity?? A Masterclass Session by Aditya Shah, Sekhar, Jiten Parmar & Ravikant

  2. https://youtu.be/O3-Emzv-Xe0?si=i1Mn4Tjvr9pFpYgp - Banking And Financial Services Masterclass | Aditya Shah, Vineet Bhatia, Ravikant, Falak Kalyani

Also, SOIC Channel - https://www.youtube.com/@SOICfinance is gold (for the uninitiated).

What are your views/thoughts on the same? Any sectors you would like to add to the extreme euphoria OR consolidation/current pessimism segments?

Disclosures :
:one: All opinions expressed are personal.
:two: This post is not an endorsement to buy or sell securities.
:three: Past performance is not indicative of future returns. Always conduct your own due diligence or seek advice from a financial expert before making any investment decisions.

12 Likes
581

Happy to see you back!

I have tracked Railways, Financial services and Infra from the Euphoria section. From the downward trajectory I have track Chemicals, pharma, shrimp.

My views:

  1. Electronics manufacturing: The euphoria here is at another level. I couldn’t catch the gravy train here and I feel the FOMO in me. There is definitely goverment’s seriousness in it and the capex being done by each player.

  2. Railways - Definitely extreme euphoria specially with wagon manufacturing companies. A lot of froth is because of the expected large tender from railways but expecting similar order in coming years is doubtful because the NRP hasn’t been revised and as per current plan the wagon demand till 2030 doesn’t justify 50 to 100 PE. Ofcourse the companies are doing more than just wagon manufacturing but I still don’t see value in buying them at 70 PE or so. I do hold a position in couple of them and will exit when I see the euphoria ending.

  3. Financial Services - I don’t personally think there is extreme euphoria in it. There is certainly optimism but I am still comfortable holding companies at current valuations. SOIC’s recent video on financial sector has good data on the valuations and historical examples.

  4. Infra - I have exited from all infra plays. It was a short ride but I don’t understand this sector to comfortably hold it at today’s valuations.

  5. Chemicals - I will start loading agrochemicals when there is assuring visibility of profits. I am happy to lose the opportunity to buy the bottom in favor of lower risk.
    I don’t hold speciality chemicals because they require better understanding of the area and the business (my personal belief) and things change faster. I hold commodity chemical companies because they are easier to understand and track.

  6. Pharma - I remain in a generic pharma company and tracking two other. I don’t think there is too much pessimism here. Other sectors are looking more colorful than this.

  7. Shrimp - Similar to agrochemicals, I am happy to buy it when the ride begins! Too much uncertainty here.

Other sectors I want to track - Renewable (euphoria? or fairly valued?), hospitals, wood panel, PEBs (many small caps here)

8 Likes
582

On the railways front, EDFC is now complete last week. WDFC will also get commissioned by next year. These are both extremely high volume traffic needs lines. All these will require wagons and wheels and elccy equipment. Once it proves itself in terms of revenue run rate, the North South and regional Freight corridor plans will be evaluated for biz risk and need .

that is another round of froth and upswing waiting.

2 Likes
583

Next sector in line
Q1.Telcom sector ? ( I hear some quant funds are loading telecom hardware, telecom software, telecom infra)
Q2. What is the usual time frame by when the hot sector is known to investors ?
Q3. Which are the Big funds/ Big guys to follow, to learn about the sector in the favour ?

any views ?

584

I have very limited experience with small cap stocks, and most of such stocks did not give big returns for me, one reason being I invested in them with any knowledge, particularly the ones at the beginning, a few years ago. Invested in many different stocks, with mixed results.

I guess, one question that has to be asked is the expectation from such stocks, the reason why one has invested, was the expectation a multibagger, or small becoming medium and to big, in other words one that can be held for years, or anything else.

What kind of an investor you are, in the sense that, would you feel bad if you sell and see the stock go up by another 100% after you sell, or your focus in on finding on other such bets, along with the fact that you have got some experience now?

The entire process I guess is independent, in the sense that, each stock is different, as it is company with a different business, and the process is also intertwined with other factors like the expectation being met, fear of losing the profit, or cannot let the stock go because of a gut feeling that it will go up after selling.

Until one finds which style suits oneself, what kind of profits or losses are affordable, practically and emotionally, these type of questions will always exist, and they are normal. I would have feel very bad if I see a stock go down by 50% a few years ago, but now even if it falls by 20%, I will look at it and take a decision. My point is that, this is all learning, and the decision of selling even at a good profit may turn out to be wrong in the future, but this will help in understanding and taking better decisions in the future.

For someone who has 93% in small caps, I would say, can you afford a 30% fall in price at PF level, and is time on your side to build such a PF again, with more knowledge than before, and with experience.

I don’t hold any small cap stocks, although I speculate in them for shorter periods, and I try to be agile in booking profits when I get rewarded beyond my expectation, so take my views for what they are worth, with a lot of salt.

7 Likes
585

You are right - I noticed that Quant MF has increased exposure to HFCL.

2 Likes
586

Standalone Hotels with low Marketcap

I was under the impression that Hotel Leela (HLV) is the most attractive (listed) smallcap hotel until I came across a fellow VP’s post regarding RHL. I then decided to explore more such companies, and found the following list of hotel stocks. My criteria was ownership of one hotel (4/5 Star), negligible debt and Zero pledge.

  1. Asian Hotels East (Hyatt Kolkata)
  2. Robust Hotels (Hyatt Chennai)
  3. Royale Manor (The Ummed Ahmedabad)
  4. Savera (The Savera, Chennai)
  5. HLV Ltd (The Leela, Mumbai)
  6. Advani Hotels (Caravela Resort, Goa)

The only trigger that I can think of, is the World Cup!

7 Likes
587

CyberTech is growing very well. Its cashflow statement is really good and also even being a small cap its reserves are increasing really very good
 can someone give a detail view on its business, it will be very helpfull

588

Did you know that ideaForge is India’s largest Drone company and Infosys holds more than 4% stake in this company? The IPO price was 672/- (oversubscribed 106 times) while it listed at 1300/-. It is currently trading at 823/-

The global drone market size is expected to reach US$ 30 Billion by the end of 2022, and it is further predicted to experience double-digit growth, with a CAGR of 25% from 2022-2032, to reach valuation of US$ 279 Billion by the end of the aforementioned forecast period.(Source)

3 Likes
589

Also see lemon tree as this one is fast growing and adding more rooms regularly

2 Likes
590

Even at 823/SH it is trading at 112 PE, 3400cr MCAP for 34cr PAT seems excessive. Just at the first look, couple of things stand out.

  1. While 90% revenue is from drone sales, there is inventory of 623 days? Worth looking into it
  2. Normally such companies make more money from post sales services / additional revenue drivers from same customer - while that did grow from 0.3 to 0.5%; it does feel smallish to begin with.
5 Likes
591

Yes, Lemon Tree is good, and they would soon start operations in their 650+ rooms’ hotel near the International Airport in Mumbai. However, for this discussion, I am evaluating listed companies with only one property.

592

Agree with your points, and it explains the reason for the recent fall. Hopefully Q2 results would be better and situation might improve slightly. Looking at the Q1 results, I believe that all the Drone Companies (ideaForge, Zen and Droneacharya) will trade at <60 P/E after the Q2 results.

1 Like
593

Excellent analysis. Froth is apparently there if a business is at 70-80 PE valuation. But it does not mean that it would not stretch to 90 or 100 PE, given the euphoria. So keep riding such winners is a good idea. One stage 2 sets in, exit is imperative.

1 Like
594

Ideaforge - advantages are that they are among the first to start commercial activities. But
drone market is India is starting to get heavily congested and there are more than 100 players. Goods news is that low payload and range and being left to private entities while HAL, L&T are into highly niche areas like high altiude , high payload or weapons platforms ( Archer, Ghatak)
The defence market is the biggest one in India. And Positive indigenization list that is being released by Defence minister which puts higher hurdle on imports and nudges the forces to insource. Right now, we do import a lot from China but efforts are on to start everything locally. +ve sign here: Press Information Bureau

Fifth Positive Indigenisation List

The Fifth Positive Indigenisation List has been prepared by DMA after several rounds of consultations with all stakeholders. It lays special focus on import substitution of components of major systems besides important platforms, weapon system & sensors and munitions which are being developed and likely to translate into firm orders in the next five to ten years.

Prominent items include Futuristic Infantry Combat Vehicle, Articulated All-Terrain Vehicles, Remotely Piloted Air Borne Vehicles upto 25 Km with 2Kg Payload for Army, Naval Shipborne Unmanned Aerial System, Medium Upgrade Low Endurance Class Tactical Drone,

2 Likes
595

Is anyone tracking emerald finance? I found below new product from their AR:

The company in line with its vision to expand its offerings and to serve retail customers at large has already started working on its own salary advance solution. This product entails tying up with employers to offer short term loan as salary advance. The amount lent is then collected through salary deduction.

This is a niche product in India. This product is in vogue in developed countries like US and Europe. The company feels that this can grow into a significant business in future. The company already has experience of this product due to its earlier partnership with Rainpay India Pvt Ltd.
This solution will be completely digital and will use the latest digital technologies to provide a seamless experience to both employers and employees. The company is building this solution through internal resources.

1 Like
596

Yes
it is range bound 175-205
once H1 result comes out 
direction will be decided.mostly northward jouyney


1 Like
597

GKW Ltd
MCap of this company (GKW Ltd) is only 425Cr. It is unclear if this deal will result in any revenues for this company.

2 Likes
598

KCP sugar industries (KCPSUGIND)
if Anyone is tracking ?

599

Hi,

Is anyone tracking Refex Industries?

1 Like
601

IIFL securities have come out with excellent numbers for Q2 FY24. The entire Wealth Management sector is witnessing tremendous growth as seen in results of Anand Rathi and other broking/wealth companies. IIFL Sec is perhaps the most undervalued stock in the wealth space

2 Likes
602

By virtue, small/micro-caps are known to be volatile. Considering the recent run-up in these stocks, a significant correction was always around the corner.
It is all about patience, especially if you have complete faith in the management. Over a considerable period (over ten years), the small-cap funds have outperformed the other funds.

1 Like
603

I agree; at the same time, please be mindful of this: SAT stays Sebi ban on IIFL Securities from adding clients Hope this is not revoked.

1 Like
604

It is said that, when valuations go into froth zone, markets/stocks look for a reason to fall, any reason, and the reasons while valid, the reactions need not be logical every time.

Broadly speaking w.r.t the markets, one can think of going along with the market, act in accordance with the market, and w.r.t specific stocks, there could be a few different scenarios, one could start taking a position, and see what happens, because the price after a fall in some stocks may very well be a good support, so there may not be more fall, not that prices will not fall more, even the bluest of the blue fall, but this is another scenario. Consolidation is another scenario. One could look at the % of falls in the specific indices, or the stocks in the watch list, for some visibility.

I think, it is hard to follow the price of a small cap, compared to a large cap, so one has to be more careful.

So, depending upon the understanding of the business, and price levels, one can come up with different scenarios and the likelihood of them happening, and take decisions.

I have positions in mid and small caps, but these are only for shorter term, so on days like today, SLs come flying, I cannot stop them, so take my views with a good amount of salt.

6 Likes
605

@LarryWink As per your observation of historical trends by Howard Marks, smallcaps have had 2years of downtrend, but where is the rally?
I am expecting atleast a year of rally starting this year or next. Or maybe we are in the midst of a longer term rally

1 Like
606

Benaras and TaJGVK are also worth studying.

607

Is anyone tracking Emerald Finance?

608

Refex is not only in refrigerant filing 80% of its business comes from coal ash handling which is deep cyclical in nature every 2 or 4 month they receive order.
It will increase your Blood pressure only with LC.
Hope that helps

5 Likes
609

Anyone tracking HFCL & Blackbox. HFCL has posted a bad result. Anyone share insights of the two companies who are in telecom hardware.

610

I have 270 shares of refex at 671, down by 16% today
any suggestions. I can’t find any substantial information on its corporate governance or leaders! Any suggestions/ advise would be appreciated!

611

TRIL - Transformers & Rectifiers.

Tried to understand based on a ready report.
V
Transformers and Rectifiers (India) (NSEI_TRIL) - Simply Wall St.pdf (2.2 MB)

After going through above report , What catches the eye is:
1.PE~100.
2.Fair value >800%

I tend to presume the above report might be based on insufficient data.

However screener presents more or less same PE
V

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Although the stock price swings are extreme, it is continously moving in only one direction.

The query - What could be driving the price ? , is it in a froth ?

D-Invested.

1 Like
612

Is anyone tracking sunil industry, main bussiness in railway seat .
Disc at present not invested

613

On the face of it, 2nd quarter 23 results of Lykis look subdued. However, on consolidated basis, the net operating cash flow has turned substantially positive for the first time after new management took over. 1.5cr, who initiated the thread in May this year, and others tracking the company, any comments?

614

Anyone tracking IFL enterprise ltd. Recently they have won loads of export orders for paper supply . They also have signed on Australian firm for joint venture .loads of positives but stock price falling . Any views

615

Bharat Bijlee also in Transformers and Industrial motors industry with low PE comparing with peers

1 Like
616

This didn’t age well.

2 Likes
617

Anyone tracking Libas?

618

Yeah Bharat Bijlee is in Transformer and rectifier manufacturing. This is a Highly cyclical industry and material cost is a big part of the overall Sales. Even though PE looks attractive there are so many players with similar cost structure. There is no Entry Barriers and any small change in Copper LME / Steel Prices can affect the Bottom Line, as generally there is no Pass through clause in most contracts.

1 Like
620

I also bet on International Conveyors looking at the results which just came out. Even with lower revenues, the company managed to increase MARGINS, which tells me that they have a pricing upper hand.

Also, the business is niche and possibly cyclical in nature. Mines which are restarting or mines which need upgrades, would require new conveyor belts.

Interestingly, the public holding is kinda coming down, which is a GOOD thing.

Forward PE of 5, means there is a good valuation comfort as well.

4 Likes
621

And the icing on the cake is the continuous promoter buying.
Only tracking.

2 Likes
622

They seem to be making more money from their investment in the share market than their core operations. Explains why they have been investing heavily in the stocks (recently Gufic Bio and Aegis Logistics). I would stay away. They are no different than a holding company.

They have multiple business units, all mutually exclusive (Conveyor Belts, Wind Energy, Goods trading, Equity investment, diworsification?) Capital allocation and corp governance seem to be an issue here.

Disc: Tracking, not interested right now.

2 Likes
623

is any on tracking shardul securities last two quater had been robust result

Screenshot 2023-11-14 193329
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2 Likes
624

The holding company keeps on holding stock and doesn’t sell whereas in treasury ,they keep on rotating the stocks based on performance. This is the difference.

625

Yup, I didn’t exactly refer that they are a holding company, but they act like one or more of a stock trading company.

Now ask this to yourself, you are investing in them because of their core business or because the management prefers to invest the cash flows in the stocks of other companies rather than focusing on growing their core business which is seeing tailwinds currently? What would happen during bear market, or when the business starts seeing headwinds, or both of these things at the same time?

2 Likes
626

Bharat Bijlee (BBL) also holds 21,38,160 shares of Siemens India. The value is equivalent to 50% MCap of BBL.

2 Likes
627

Is anyone tracking Maiden Forgings?

1 Like
628

I am trying to get information on Systango Technologies. Is anyone tracking this script?
Notably, Ashish Kacholia has 1.1% stake

3 Likes
629

Just started
 Growth nd financial s looks bright.

2 Likes
630

I am closely tracking Maiden Forgings. They seem to have a plan in place, especially for exports and value-added products to expand the margins. However, their sales growth has been lackluster and recent half year results were not encouraging either (flattish sales, EBITDA and PAT).

Given the scale of operations, it might take some time to break into new customers and geography, but if they succeed with their plans, it could be a real good business. Execution needs to be monitored here like a hawk.

Discl: not invested yet but certainly interested, tracking.

6 Likes
631

Are you talking about Systango?

633

Not much information available in the annual report they just have listed the products/services they offer with the client location.
The financials look strong but lack of info from the managment side

Pls do let us all knwo if u can gather some insights about company and its currect product building updates

634

I went through some interview videos of the company Directors (on YouTube), but that was not convincing. Now I found the Earnings Call video but yet to go through it

3 Likes
635

Now you can say that you were too early to exit Integra Eng

636

Any opinion on Primo Chemicals Ltd
(BOM: 506852)

638

image
image

These days narratives >>> fundamentals !

3 Likes
639

I couldnt agree with you more, this is what I often think these days, is it sustainable? doesnt surprise me if some one shares a story of small cap that has run up 3-4 times in last 1 year, with some improvement in fundamental outlook, I dont think I am qualified to say the valuations are not justified, but in general there is lot of optimism. To be specific some tier 2, tier 3 auto supplier have valuations 3-4 times higher than historical avg


4 Likes
640

HEMANT SURGICAL(HSIL)
Upcoming star.

Ultramicrocap company approx 183 cr
Low P/E, high ROE, ROCE
zero debt
OPM ~10%
High promotor holding.

Healthcare services and equipments.

Dialysis set up, ICU set up, Modular OT set up, Onco set up, Diagnostic set up, dental set up, blood bank set up.

Critical healthcare products
X ray Machine
Mammography machine
Ultrasound machine
etc

View and comment are welcome.

Disc: invested.

6 Likes
641

Poly Medicure and HSIL have similar businesses but their operating margin has different. Reason don’t know. It needs to study but Poly Medicure has a 25% Operating margin while HSIL has a 10%. There is no such huge data in HSIL for the study. It’s a risky bet

2 Likes
642

Could be on account of comparatively lower turnover base and competive price offering than polymedicure being premium supplier. it should improve gradually in coming years in line with sales rise.

1 Like
643

Infinium Pharmachem
New talk of town.

Pharma/API segment
Niche segment
Iodine derivative and related product
200+ products
7+ API

Product used in most of industries including
pharma, chemical, cosmetics, agrochemical, electronics, rubber, dairy food product, oil & gas, medical, renewable energy
lots more.

Global presence 15 + country

Market cap ~340 Cr
Zero Debt
OPM ~14%
Topline/bottomline maintained
Healthy cash reserve
high promotor holding
Zero FII/DII

Suggestion and feedback required.

Disc
Initial entry n planning to increase holding.

644

This appears to be a recently listed company (listed on 17th April 2023) , what is the reason for issue of bonus shares soon after that ?

1 Like
645

yeah, maybe you are right. But there is very less data for analysis

646

I am now studying about Adeshwar Meditex. They are company which does marketing and trading of medical disposables like surgical dressings, first aid kits, etc. Recently the promoter has changed. The new promoter has decades of experience in the medical field and has been a minority shareholder in the company since 2017. His son has been the CFO for some time. Together they own upwards of 50% of the company already. If the open offer succeeds fully they will own roughly 86% of the company along with their PACs.

There are a couple of questions that I still have though.

  1. The current promoter sold her stake at 6.5 rupees per share which is lower than the current market price
  2. The new promoters haven’t disclosed any plans on what they plan to do with the business. All they have written in the open offer document is that they plan to continue with the same line of business.

So I am still not decided whether I want to invest in the business or not. I will update when my thinking evolves.

7 Likes
647

Would like to know your valuable thoughts on the business


648

The average margin is 5-6% 
trying to find a reason why it suddenly went 10% 
any anybody have idea?

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649

Not sure about sector as a whole but i think HFCL is in favour.
Net debt ~ 0.71 times EBITDA,
Interest cover of 8.7 times more than adequate.
EBIT increase by 7.9% over twelve months.
D-i’ve gone with Quant MF & Invested ~70 level, not a recommendation, not registered advisor.

Existing Thread on this forum.

2 Likes
650

Pls discuss about Spels. It is good or bad for us.

651

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I think you should stay away from this company.

Sales is down
Ebitda Margin is down
Very high EV/Ebitda ratio
PE is very high

Company is loss making but down know who is buying the company because it is creating new highs

Is it hype of new upcoming ipo Polymatech Semiconductor?

3 Likes
652

The markets have gone mental, High PE and low growth stocks are making new highs every day with anticipation of growth and news while good companies with sound financials and decent valuations are dead.

7 Likes
653

I tried but theres nothing, no information whatsoever on how the business is doing what is their outlook etc.
If anyone can pls share any info they have.

654

Agreed. This is due to increased retail participation, while private equity is selling everything.

1 Like
655

Thank u for clearing my thought.

658

2023 was a great year for the small-cap index with a staggering 47.5% returns. Statistically 2024 might be a year of consolidation. It will be tough for markets to repeat this performance for two subsequent years.

2023 was also a year of bank failures in the US. Silicon Valley Bank, First Republic Bank, Signature Bank and Credit Suisse (almost) went bankrupt. For a moment it felt like 2008. But somehow the problem was contained and was not allowed to spread to the Global Financial system.

After a 20% rally from JUL-2023 the PE for the small-cap index has climbed to 32. Let’s see what 2024 holds for the markets.

4 Likes
659

What’s the thesis behind the single property selection? Did you dive deep into Advani hotels?

660

Single property was only for comparison purposes. Advani Hotels did have the upper hand as the property is based out of the most favoured holiday destination.

1 Like
661

Yes Advani hotels numbers are really attractive. However, they are not reinvesting their earnings back in the business for growth. Do you have any thesis on Advani Hotels?

662

Ketan your inputs are priceless and yes the chips are loaded against India in solar modules . but it seems this Waree seems to be making a big break with a large order from American majors who are looking for China alternatives 
 they must be knowing something which all of us sceptics cant fathom 

Malolan

663

Such items are really commodity with no right to win
 It might so happen that company gets couple of big orders from state governments or civic bodies etc 
 but cant imagine making a big impact

Malolan

664

Hello Meet Kush

Forgings is not a really value added area . mostly one gets paid on machine hour basis 
 and even Ramkrishna and Bharat Forge have struggled to generate economic profits and return on capital.

Only if a company is making machined parts which required design inputs apart from casting foundry or forging press makes sense to invest

I am purely looking from a business viability perspective
 else any companys share price can be pulled up by operators
Malolan

2 Likes
665

My apologies, but I never mentioned that they do any forgings, or are talking about forging as their value added products. Infact, they are not into forgings yet, not sure if they were doing it earlier (although given their name, forgings business makes most sense).

By value added products, they mean stainless steel and specialized steel products, collated nails for white labeling, pneumatic nails, oil tempered wires mainly used in auto sector. Again, forging is not what they do or intend to do yet.

DIsc: Not invested, tracking.

666

Unfortunately, that is the case with the single-property companies. I would rather prefer Samhi Hotels with 31 properties and ~3600 Cr MCAP

667

It looks like the company is looking to delist - offering price of Rs 155. Interestingly the book value of Shardul Securities is close to double that of its market price. Hence I expect that the promoters will likely not get to 90% at the price they are currently offering.

669

have you collected any new information on systango ? because recently i have started tracking that stock

1 Like
670

@puran_tak

SYSTANGO

Market cap
~450 cr
A Digital engineering services company.
Available at good valuation P/E 25
Topline /bottom-line uptrend
OPM ~30%
zero debt

Offices at India, UK, USA

Mobile app.development
Data engineering, AI/ML/Cloud
blockchain
and much more

A story that just started.

Disclosue
Invested.

3 Likes
671

I am an avid follower of Systango (Invested)for last 9-10 months. I track them from head to toe on a daily basis through internet, glassdoor, ambition box, indeed, personal contacts, investors, you tube, various forums etc. I will summarise my tracking observation as soon as I find some time.

11 Likes
672

Hi Do they actually manufacture all they have listed on their website or branding chinese equipments bought in bulk. As for the consumables the margins are maintained high by the hospitals while suppliers dont get a kings share.

673

Ideally one would want both topline and bottom line to increase. I just checked the margins have increased primarily due to lowering of material cost( which will not continue to slide for ever) from 61% to 47% while their employee cost has gone up from 8.14% to 13.33%.

674

Thank you for the summary @DocDhiru
Since this is a typical services company I think PE of 25 is a standard not cheap. So I don’t think we can expect a lot of PE rerating here. And the management also talks about increasing the hourly rate to improve margins. But I am also in the IT field in Germany currently and there is a big slow down at the moment, so I don’t think it will be easy to increase the hourly rates at least in near term 6 months.

But company plans to do a revenue of 25 million USD, so approx 200Cr by end of 2025. TTM is 57 Cr. (looks a little ambitious!) And if they maintain the same margin around 28-30%, expected PAT is around 45-50Cr in the best case scenario.

Not invested. Just tracking

2 Likes
675

Why the company is paying such low taxes around 14-16%?

676

Its actually over ambitious target. Nevertheless they seem to be investing in grooming people which can probably payback once the slowdown is over. In your opinion is it purely a service company?

677

Yes, this is definitely a services company for sure. In the concall the management talks about hourly rates which is the classic model for service based software consulting companies.

678

do someone knows about any new project or technology or cost cutting technique that make it different from another peer companies??? @Investorscientist @ankur_bhatia

679

I went through their site and they do offer projects in latest technologies like promt engineering(AI), blockchain(though it hasn’t lived up to the hype yet), etc. But sadly in the services industry the trend catches up really quickly. And suddenly you will find most companies offering these. The main differentiater for such kinds of companies is the ability to provide services for lesser hourly rates and have good customer network to make sure that all employees are occupied. And that’s why most of these companies have offices in India as salaries for developers are low there. Recent trend is also to have offices in Eastern Europe region (Poland, Romania) as salaries are lesser compared to say UK or Germany and moreover they work in the same time zone.
The management mentioned that they want to acquire a company in UK with the IPO funds. I think that is definitely a step in the right direction. This will help them get customers in the EU market. But one thing to remember is that unlike product companies they don’t have any operating leverage. In product companies increasing the users of the product rapidly increases the PAT But for them only realistic way for them to increase the revenue and PAT is to hire more people and get them billed most of the time.

This was totally based on my experience in working in a very similar company here in Germany for the last 6 years.

4 Likes
680

Very articulate response. Yes they try to offer a bit more than only service but a long way to go. Have done a background check with their clients who seem to be happy with the overall approach of the management. Being a Rathi for the employees they are bit tight on expectations but at the same time give lot of exposure to newer technologies. This company may have some gestation period before they spurt out. H2 is expected topline of 65 Cr. but 200 CR plus is coming year is over ambitious. Vinita is very very hardworking and ambitious. At times you need a over ambitious person at the top to drive the system. Ashish Kacholia who has 3.1% stake ( as per last trendlyne) may have increased now is also supposedly guiding the management, Its very difficult to compete on service alone but being a UK parent company they have recognition especially among startups. Hopefully they should do well in a couple of years. Disclosure: Invested and may be biased. No recommendation intended.

1 Like
681

Did you find any more updates on this business Adeshwar Meditex


2 Likes
682

Just that the previous promoter has left the board of directors. Still don’t know why the previous promoter sold or whether the new promoters plan to shake up the business in some way so that the growth goes up by a lot.

1 Like
683

Which companies are under radar right now for average up or investment in smallcap space?

684

Aries agro
Hemant instruments
Rico auto
Good company for studies on valuation and growth

4 Likes
685

All E technology 
IT, AI/ML, Microsoft business partner
Rox hi-tech
IT, Digital AI/ML, Medical automation
Sungarner
Solar panel, battery, inverter
ORIANA POWER
Solar energy solutions to industrial and commercial customers
Advait
Green energy, power infra
Hi green carbon
tyre recycling, green energy
Arham tech
Electronic manufacturing
Paragon fine chemical
Speciality chemical

All are newly listed and good company for study.

9 Likes
686

@Investorscientist @DocDhiru Ashok kacholia’s stake is rising by every quarter . Is it signal for bull rally in the systango ???

1 Like
687

@puran_tak 
i think healthy company valuation as compared to its peers and business prospects is driving force.

1 Like
688

@DocDhiru Could you please share a few listed peers? I would like to study them as the company definitely looks interesting with quite a bullish guidance. I shall then post my notes here with some comparison with the peers. The ones that I have in mind are based on my knowledge from Germany are are listed in Europe, but that won’t be of any relevance for comparisons in terms of its valuation in India.

689

Hi Ashish Kacholia last increased stake in Sept 2023. I do not have information beyond that. Being a SME their growth story will unfold only in May 2024 when they post their H2 results. They may take bit of hit from European recession. Do not have sufficient data to comment on bull rally, let us hope that no operator is actively involved in the stock.

690

infobeans tech
innovana thinkslab
ksolves india Ltd

1 Like
691

Company with strong moat.

692

InfoBean Technologies fits in the framework of under earnings.
Although recovery is taking more time then i thought.

693

Hi guys, anybody tracking King Infra Venture?

694

HEY @NeelaC @Investorscientist
have you got any new goat thing about ideaforge ?
Recently started tracking
in last fews day volume has increased
Looking woth to have in our porfolio
Do this stock have any separate stock where we can post our analysis?

2 Likes
695

anyone tracking - Rox hi-tech? They are serving Leading Wind Power and Chip Technology (Micron Tech) like companies.

1 Like
696

Anyone tracking pennar industries and capacite infra? They have given multi year breakouts and reasonable valuation still intact

697

Hi Kamal, just started looking at this company post the recent quarterly results. Not sure why the stock reacted so negatively, results were not so bad, apart from some slight build up of inventory.
If you are still holding, kindly share your reading. Thanks!

698

@Mayank.mail
The Q3 resukts were not bad, the revenues stood at ~ 117cr up 2% YoY and down 1% QoQ
EBITDA margins for 9m FY24 at 22.1% vs 22.3% 9m FY23
PAT margins for 9m FY24 at 14.9% vs 14.6% 9m FY23
According to the object of IPO the company has paid 500cr debt obligation, the cash and bank is also healthy which has brought the debt to equity down to 0.09
RV sales are rising steadily, company is supplying to the largest player of RV in US namely Forest River which has 27% market share
The factors that negatively affected are
‱ Muted demand for LED lights affected sales and thus increased inventories
‱ The delay in the Block 1 is a major reason i feel that has had impact, the backward integration is absolutely critical as it will lower/end dependency on imports and lower the costs and boost exports snd earnings. The commencement is now expected by end of Q4FY24 for 2lakh sq feet Block 1 and for Block 2 is Q4FY25.
I too felt that the share price fall after this result was an over reaction, hopefully things should be better in next couple of quarters

Disc : Not SEBI registered
Not a buy or sell recommendation

2 Likes
699

The ongoing beating since last 3 days, so far has beaten overvalued small caps, few names are already beaten by -30%.
how strong does smallcap space look now ?
I am sure it isnt at ~100. So, is it just an intermittent beating or they are driving them small caps out of party ? how hot does it look, still touchable ?
I tried touching few yesterday, it still hurts ! yet trying to touch some (couldnt hold my itch to do something all the time) :crazy_face: :grin:

1 Like
700

Long term chart shows that whenever the divergence between BSE Small cap index and nifty 50 doubles, bse small cap index corrected to the level of nifty 50. It will be interesting to watch what will happen this time.

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21 Likes
701

PE of the small-cap index is still comfortable at 31.5, even slightly lower than 32 (at 2023 end)

Let’s also look at the Yearly returns of the small-cap index:

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Unless we are in a global boom cycle like 2003-2007, there is a high chance that this year might be a year of consolidation.

9 Likes
702

lets hope this is the case.
since last 2 year i observed many such blimps in between
other than consolidation during January & Octorber 23
in all cases smallcaps didnt budge and the draw down at PF level was recovered most of the time within week
this time it has to go +15% (based on blimp/consolidation pattern which is only naive pattern i understand)
ongoing beating seems to have subsided and most of them r up and running ( people will flag this post but ill name few names anyway
in a hope that it may give some ideas to others for study)
NBCC,HUDCO,MSTC,KCPsugar,NEWGEN,OIL india - up and running, these r the names i knew took most beating.
IREDA,JPPOWER,NFL,BCCfuba,USHAmart - still seem to be at the recieving end of the stick.

EOD edit: IREDA too changed its course & is up.

703

As a general comment - where ‘you’ would mean ‘reader’

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Perform a thought experiment :
What would you do at the black arrow? Imagine the current time was that time! Will you get out? Will you stay? If it is almost double then, at the black arrow, how confident are you based on the statement ‘bse small cap corrected to the level of nifty 50’ :slight_smile: . Cover the picture, to the right of the black arrow and try predicting confidently.

Chart reading and prediction is easier to accept in hindsight. Acting upon every signal is difficult, and if not acted upon, then the heuristic of action is weak. We can always say it will be interesting to watch what will happen in the future, but our actions of today are not commiserate of the events of the future.

5 Likes
704

Indirect Real-Estate Play

Following are the small and micro-cap companies, which are indirect real estate companies with deep valuations:

  1. Elpro
  2. Elnet
  3. Alembic Ltd
  4. Raymond
  5. Nirlon
  6. NESCO
  7. Century Textiles
  8. Accel Ltd
  9. Texmaco Infra
3 Likes
705

may be smallcap can go 3x returns of nifty50

706

Unlike the future, the present is knowable. What is not knowable is when the trend will turn. In stock market it is impossible to do right thing at right time. But The benefit of recognizing where we stand in the trend is that it enables us to take appropriate action. Rich returns make the investors less afraid of losing money than missing out of fat gains. In these conditions we should lower our expectations and proceed with caution. What does that entail in practical terms? I am not saying to exit but it might involve shifting from highly overvalued stock to less aggressive stock or making sure that we won’t need liquidity in the event of trend reversal. We can’t control the market but we can control our response.

5 Likes
707

Above mentioned Companies, do any company has niche mote. ? Please explain.

1 Like
708

what is the CAGR or rolling return of small cap index against sensex for the same time duration?

709

Any stocks in the space of Busbar or Busduct manufacturing? I’ve heard from people in this Industry have a huge tailwing. Now high rise towers are using these over cables for electrical transmission and even in Datacenter there’s a huge demand in this space. C&I electric is a big player in this space but they’ve been acquired by Siemens. Any other such players?

4 Likes
710

i think schneider electric manufactures busbars

3 Likes
711

Apar Industries manufactures busbars, as mentioned in their Q2FY23 conference call.

2 Likes
712

any one having idea about agstra ? How is it Performing?

713

@tanmay007
Micron is one of top client of Rox Hi-tech.

1 Like
714

What is happening around smallcap space ?
has great indian smallcap sale started already ?
or is it a shakeup ?

716

Does government mandate of reducing exposure to mid and small caps have any bearing on this sell-off?

1 Like
717

I am expecting this yo yo till elections. Lots of sectors clarity will come post election and full budget presentation. Till then, up and down will happen every week.
Keep re-visiting your portfolio. Everyone’s portfolio is seeing correction. No one is alone.

14 Likes
718

With respect to smallcaps
There are 2 scenarios which comes to my not so intelligent brain !! :stuck_out_tongue_closed_eyes:
1.There was a bubble and it needed to burst 
thats what happening now.
2.There is a bubble which needed to burst so that it can get bigger.
While its very difficult to look at the names getting beaten everyday and pf going -2%/day, I would like to think that the latter is playing out.! :melting_face:

Edit:3.20pm, it feels like my PF is going to die today itself. :grin:

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8 Likes
719

The sell off in March month is quite common and one can see this pattern in 2020 to 2023. Every time this happens and market bounce back from april.

1 Like
720

We actually need a good correction then it feels normal

2 Likes
721

It definitely has. Retailers are spooked and so are MFs. But I feel MFs will enter again at lower price.

2 Likes
722

do you mean 17 days of further correction?

723

I beg to differ with some recent views posted here. Correction in market is a natural process and we don’t need any lectures like, it is March. But what is presently going on in the market is simply butchering. If more than thousand companies are in LC, it is not normal. Of course, it was on the radar, with SME IPOs getting oversubscribed more than 1000 times and doing out 3-4 lac lotteries to few thousand lucky investors. But excess of anything is bad. In my opinion this sell off has more negatives than positives and retail investors are worse off. And mind you, this sell off may unearth more scams, which will be a death Nell for the market.

5 Likes
724

Are you going to hang in there or exit.

P.S : Very few small caps in my PF. All were slaughtered.

P.S 2: Even the Large Caps in my PF were slaughtered. Hammered at both ends of the bell curve. NO protection only destruction.

2 Likes
725

I can precisely guage the market. :grin: > Mr.Market is The Hero of all the TAKEN movies. (i know know taken1,taken2,taken3, but if more such movies come out He will be the only Hero)

He is like “I dont know and i dont care where you are hiding you money.micro,small,mid, large or XL. I will find you and take it from you” :rofl:

I was able get out of couple of PSU before this carnage started but that was tiny part of PF
but i kept buying (i think ive buying philia which i would like to improve someday)
lets see.

I remain 100% invested in equity, Since i am sure my fulltime job will keep me afloat in any market condition.May be i remain invested because of my shorter experience in market( may be ignorance is bliss
lets see)
 So i am still hanging in there, being philosophical " kya leke ayethe
sab market me hi rahega
vagere vagere" :smiling_face_with_three_hearts:

image

6 Likes
726

Sure, Just having a light moment. Did not buy or sell anything. Waiting for storm to pass either side to make next move.

The move is just begun. Next few months will be a roller coaster with downside bias. Clarity should emerge after elections.

One thing to note. What has moved previously will not move with same speed again. Market always focusses on new sectors.

3 Likes
728

I couldnt agree more.For sure What has moved will not move with same speed, except extra ordinary names if we can find.

I am trying to track Telecom, Ports and hydrogen, where i think there is some movement
lets see.

I am bit sceptic on pure Solar EPCs
i dont hold any.

1 Like
729

Small Cap stocks bounce back ! PSU small and mid cap stocks are back in to action ! Are retail investors right ?

730

Possibility of a head and shoulder breakdown in small cap index. Right shoulder is still in the formation stage. Let’s see how it pans out in coming weeks.

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2 Likes
731

@avneesh Thanks avneesh.
This is interesting, hopefully we get some clarity in weeks or so. Possibly in April, once the “usual march fall” theory is settled ?

732

Anyone tracking Greenchef Appliances?

733

Yes 17 days minimum as i predicted plus say till elections volatility shall be there. Small and midaps are not cup of tea of everyone. The one saying it’s not normal hasn’t seen any correction and butchering in past! Investor’s duty is to stay invested with his companies and not run away like a trader when market is checking one’s conviction.
After this correction, rally will definitely come. Numbers will keep coming and market will keep rewarding good companies.

1 Like
734

It’s again natural, what’s so unnatural here. When valuations get overstretched such sharp corrections are bound to happen. This is nothing in front of 2018 fall. And why March ? Any HNI investor can tell this March month tax harvesting along with of course election related volatility and stretched valuations.

735

Not many retail investors were around in the market in 2018 or 2020 and have seen real carnage.

Recent correction of 20-40% fall in small caps is nothing. When the same stocks went up 2-10x in the space of just few months everyone thought it was normal :). 55% up move in small caps index in a single year cant’ sustain. I expect a very long time before we see the same pricing action across the small and microcap patch.

4 Likes
736

Okay so I see Lot of People here some are just blaming smallcaps and midcaps only because they missed it, and They were just invested in Largecaps and bunch of blue-chips on the other side some are supporting Smallcaps and Midcaps only Because they were Invested in Small and Midcaps which made them crazy Returns last Year.

But leaving This aside let’s look at some facts

The EPS of smallcaps which used to Be around 340rs has increased by more than 50% to be around 520rs in These Last Two Years.

And For Midcaps The EPS has Gone up by 65%+ From 390 Rs to 660 Rs.

So when Earnings Grow Why shouldn’t the stock move up??

The P/E of Small caps was around 26 which has risen to 28 which is not much to consider it as bubble valuation

And same with Midcaps as well P/E remains almost same.

So I personally beleive that this price growth Is real w.r.t earnings Growth and is not valuation Bubble and one should use This fall to increase Their allocation in High conviction stocks.

GImbm0IWgAAn2ND

But I also understand The point That there are numerous companies Where Stock price Rised despite of Their bad earnings growth and definitely they will get butchered.

So I believe The conclusion is to Hunt for good Companies showing Growth With Their Numbers.

11 Likes
737

This 2year data comparison is hiding the recent slowdown in earnings and sales.

The YoY sales/profit growth for Q3FY24 is worst in the case of smallcaps.

image

1 Like
738

@avneesh can we say CNXSMALLCAP steered clear of H/S pattern ? or is it too early ?

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739

I don’t think it may be called as H/S pattern. Since the so called Head is too deep compared to the shoulder and being too deep, on Weekly chart nothing is evident as such.

I’ve right to be wrong.

3 Likes
740

What about Q2FY24? If you have data for that, can you please share?

741

For sure we need to watch the trend, and particularly track down companies individually. But i believe since economic growth is robust we can start to see the industries posting good results again. But will have to observe the trend closely and usually q3 is slow for many industries.

1 Like
742

I don’t know the accuracy of this data. The source is the video at the end.

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@LarryWink I guess it’s too early. Honestly, it’s too hard to predict what will happen next. I posted the chart just because I found it interesting.

Data Source:

1 Like
743

Weird! So as per this data the sales of smallcaps have declined by 23% from Q2FY22 to Q3FY24. And profits down by around 40% in the same period. Then how did the eps grew by 50%? :thinking:

744

All these stocks have seen their prices surging far ahead of their earning performances.

1 Like
745

So the markets had a good fall on 13th march, after the SEBI chief had said SME’s could be in bubble territory.
The most hurt is chemical sector, from past 1 year it has already been underperforming, and now it has corrected more with the bloodbath.
Can the chemicals lead the next leg of rally ?

1 Like
746

Technically, chemicals are still looking weak. And I think fundamentally also not much has changed.

3 Likes
747

Can anyone suggest a good book / article on smallcap investing?

1 Like
748

peter lynch books: One up on Wall Street, Beating the Street

1 Like
749

A Zebra in Lion Country by Ralph Wanger

3 Likes
750

Check Ian Cassel’s blogs.

https://microcapclub.com/turnarounds/

They are simply awesome.

10 Likes
751

@avneesh

I think we are again in for the ride, CNXSMALLCAP started to show the same “dope moves”. :stuck_out_tongue_closed_eyes: . are we past the bubble phase or still circling the bubble ?

What does history say about such moves after a drop
is there a way to corelate to history ?

1 Like
752
  1. Masterclass with superinvestors (Compilation of India’s biggest investors and it’s really the best considering India’s scenario relevance)
  2. One up wall street (read it many times and it’s still relevant)
3 Likes
753

Any phosphate importing agro based company may not do well, as issues involved with importing and the area they are importing from .

1 Like
754

any updates on subex??

755

Recently Compiled some notes on ADC India Communications.
ADC India Communication.docx (6.2 MB)

5 Likes
756

@Ajit_Mohanty, @Ghonarbochon Hi Guys I am new to this platform. I had a query can you please let me know where can I find the expected Q4 or H2 FY24 result date of Droneacharya Aerial Innovations Ltd.? Searched the internet, cant seem to find it anywhere.

757

The red flags that I raised back then on this company couldn’t be any clearer and finally it all came out in the open. Interestingly, SEBI found out same things that I pointed out in my post, related party transactions and fake sales/manipulation of P&L. I am glad I didn’t invest. Market has its own of teaching a lot of things and keeping you humble. :pray:t2:

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13 Likes
758

Hii fellow members,

Have a look at this company.

SANJIVANI PARANTERAL LIMITED RESEARCH REPORT DOWNLOAD FROM THIS LINK.

DISCLAIMER: IAM NOT A SEBI REGISTERED RESEARCH ANALYST/ ADVISOR.

THIS REPORT IS JUST FOR EDUCATIONAL PURPOSE.

7 Likes
759

The current numbers and valuation look moderate but the management guidance is next level. Need to do some management background analysis. Could be a multibagger. but promoter holding is decreasing.

760

Yes, you have point out wright thing, but when I gone deeper in the share holding, Asish Kacholia hold more than 3% share holding, DIi also hold more than 9% holding and management themselves have invested additional fund in the FY 24.

761

CNBC does a poll but only for Blue Chips generally. Results can be found on Moneycontrol or Screener.

762

IMG_5930
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What does that Graviton’s trade implies? Trying to show volume of trade in stock? - This is from screener- block deals of IKIO lighting

763

Graviton is a prop desk, they are quant traders and you’ll see their trades coming up in many many stocks. It’s nothing unusual, it’s what they do - they trade large quantities at tight spreads. I presume it’s algo trading.

1 Like
764

Very high risk, had defaulted to banks. Could be now a turnaround story. Attached report gives some more details.

2 Likes
766

Good Report Soourav. But Please look into corporate governance as well.

https://x.com/beatthestreet10/status/1739676867375050773?s=46&t=GZbLJTSVoviyMof1ELe2Mg

1 Like
767

I have noted all this point. Every business has dark sight. But it seems that there might be some turn around in the business. At 2013 - 15 company used to do a job work. But Now they have started building their own brand in the market it seems from the joint venture. You should keep a look on management guidance, if they met their guidence it’s going to be awesome. We have to keep a look in the company for this full financial year to see management is achieving their guidence or not.

1 Like
769
3 Likes
770

Rating improvement: Rating Rationale
Also Ashish Kacholia has bought 3+% stake in Q4 FY24.
Invested today

771

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  • Why are they holding so much cash?
1 Like
772

Looks like they have raised money, 23 crs. The equity+reserves have gone up by 30crs minus profits.
Looks like promoters have diluted equity to raise the funds. Their holding has come down 4.67%.

3 Likes
773

This should interest many, a beneficiary of growth in the Railways, e-buses, healthcare, hotel industry, etc


1 Like
774

image

04/07/2024

PREFACE:
The company originally filed DRHP for a combo IPO of fresh equity issue worth Rs. 45 cr. and an offer for sale of 7800000 equity shares. According to the Lead Manager, SEBI returned this document saying that company has good earnings and is not in need of cash, hence opt for OFS route only. Based on this suggestion by the regulator, LM refiled the fresh DEHP in January 2024 with requisite size of offer and finally got approval for an OFS of Rs. 130.15 cr.as per final RHP. It is a debt free company as of now and is capable of meeting any fund needs from its internal accruals. Thus at the behest of regulator, the IPO was a fully secondary offer.
The IPO price was Rs 136 and it was listed on 10th June at NSE & BSE

ABOUT COMPANY:
Kronox Lab Sciences Ltd. (KLSL) is a manufacturer of high-purity speciality fine chemicals. It manufactures products compliant with reagents, pharmacopeia, and various food grade standards used in the pharmaceutical, nutraceutical, veterinary, food, biotech, chemical analysis and research, metallurgy, personal care and other specialty markets.

The company’s product groups include acetates, carbonates, chlorides, citrates, hypophosphates, nitrates, nitrites, phosphates, sulphates, and other ultra-pure fine chemicals.

KLSL manufactures High Purity Speciality Fine Chemicals for diversified end user industries. Its High Purity Speciality Fine Chemicals are used mainly as:
(i) Reacting agents and raw material in the manufacturing of Active Pharmaceutical Ingredients (APIs);
(ii) Excipients in pharmaceutical formulations;
(iii) Reagents for scientific research and laboratory testing;
(iv) Ingredients in nutraceuticals formulations;
(v) Process intermediates and fermenting agents in biotech applications;
(vi) Ingredients in agrochemical formulations; (vii) ingredients in personal care products;
(viii) Refining agents in metal refineries; and (ix) ingredients in animal health products, amongst others.

Company’s products are manufactured in accordance with industry standards like IP, BP, EP, JP, USP, FCC, LR, AR, GR and ACS in addition to custom manufacturing specifications, which differ from the industry standards, required by its customers in 10 mesh to 100 mesh.

Its range of more than 185 products spanning across the family of phosphate, sulphate, acetate, chloride, citrate, nitrates, nitrites, carbonate, EDTA derivatives, hydroxide, succinate, gluconate, among others are supplied to customers in India and more than 20 countries globally.
In addition to the manufacturing of products in accordance with various domestic and international standards, KLSL also undertakes custom manufacturing to achieve high levels of purity, as specified by the client, having different purity levels than the prescribed industry standards. Custom manufacturing requires deep domain knowledge, expertise and understanding of the characteristics of each chemical and its compounds, including decreasing the level of existing impurities and the processes to be deployed to reach the desired level of purity.

Manufacturing Facilities The company has 3 manufacturing facilities spread over 17,454 sq. meters, having an aggregate installed capacity of 7,242 TPA, which are situated at Vadodara in Gujarat, and is close to the seaports of Mundra, Kandla, Hazira and Nhava Sheva.

Expansion Co. intends to establish a new manufacturing unit at GIDC Dahej – II Industrial Estate and the company has acquired land measuring 20,471 sq. meters for it. In the new plant it plans to produce High Purity Speciality Fine Chemicals like acetate, adipate, ascorbate derivatives, aspartate derivatives, benzoate, citrate derivatives, EDTA derivatives, gluconate derivatives, glycinate derivatives, lactate, malate derivatives, orotate derivatives, propionate, sorbate derivatives and succinate.

User Industries
Pharma - 41%
Scientific Research & Laboratory Testing - 29%
Nutraceuticals - 25.5%
Others - 4.5%

Geographical Revenue Bifurcation
India - 68.5%
Exports - 26.5%
SEZ Sales - 5%
Merchant Exports - 1%

Exports USA is the leading export market contributing 80% of their export revenue; they have presence in 20 countries including, Argentina, Mexico, Australia, Egypt, Spain, Turkey, United Kingdom, Belgium, United Arab Emirates, China, etc.

Repeat Customers During the Fiscal Years 2023, 2022, and 2021, the company served 351, 316, and 283 customers, respectively. In the last 3 years the company served over 592 customers, with 141 (23.82%) placing repeat orders.

R&D Capabilities The company has established an in-house research, development, and testing (RDT) laboratory to develop and test products. During Fiscal Years 2023, 2022, and 2021, the company manufactured and sold 157, 156, and 159 products, respectively.

Customer concentration
Top 10 Customers - 50.5%
Top 20 Customers - 65%

KLSL’s blue-chip customer list included name like Sanofi, Divi’s, Mankind Pharma, Lupin, Dr. Reddy’s, Sun Pharma, Zydus to name a few.

Key Things to Note :
(1) Company is a small niche player in the segment since last 14 years.
(2) It has plans to expand capacities 3.5x times its current capacity.
(3) CAPEX planned over FY25-FY26 is worth ~60 cr. v/s current gross block of 36cr.
(4) EBITDA margins over last 5 years are 21% + each year.
(5) Consistently good positive Operating Cash Flow Generation with last 8 years average EBITDA to OCF conversion at 53.13 %.
(6) Exports currently contribute 26 % to total revenue.
(7) Exports are majorly to USA which signifies credible quality of its products.

Strengths of Kronox Lab Sciences
Client retention: Manufacturing niche specialty chemicals for clients requires a lengthy R&D (research and development) and audit process. This creates significant exit costs for clients. As a result, it becomes costly for them to switch suppliers, ensuring they stick with the company. Kronox maintains a sales record of over five years with almost one-third of its client base despite having no long-term contracts.

Weaknesses of Kronox Lab Sciences
Heavy reliance on pharma and biotechnology industries: Over 70 per cent of Kronox’s revenue was linked to the pharma and scientific research segments as of nine months ending December 2023. A slowdown in these industries can significantly impact the company’s financial performance.
Revenue concentration: Kronox caters to over 500 clients. However, its top 10 clients contribute nearly 45 per cent of total revenue. A walkout or reduced demand from even one key client can adversely affect the company’s financials.

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Compiled Notes from here & there

17 Likes
775

Kronox is a great company. Though the chemical sector is not doing well, even in this downturn the company has maintained its profitability. Good long term bet in my view.
Disclosure- Invested

4 Likes
776

Why Cadsys India is hitting back to back lower circuits. Now available at 203 rs price. Any thoughts on this stock would be highly appreciated.

3 Likes
777

Techknowgreen Solutions is a new listed company in upcoming environmental consulting field. Have written a detailed blog at Techknowgreen Solutions - Microcap in need of the hour business

1 Like
778

Where did you find the company plans to expand capacities by 3.5 times?

Disc. Invested

779

Q1 FY25-First Concall

warrants issue to promoters and non promoters at Rs300 and current price is around 400

D2C (Retail) : HoReCa sales - 75:25

Risk- See, natural calamities when you are in a business which is dependent on agriculture, some of those risks are we are exposed to them. Something we have done recently and we will continue to do more of is that we have recently taken a new parcel of 150 acres of land under active farming which is approximately 200 kilometers away from our winery. Now, what that does is that it slightly derisks us from an agro-climate risk perspective, so those are the initiatives that one can deploy to reduce any risk, which is nature related.

Our revenue guidance for the year though still remains at north of 15%.

Guiding only 15% growth and no EBIDTA guidance bcz we are going to be doing a major capacity expansion as I mentioned earlier as well, which is going to give us a 25% increase in our overall installed capacity over the previous financial year.
Topline and EBIDTA will grow YoY for next 3 Years(Not giving specific guidance for OPM).

Hotel sector will grow so Fratelli will grow as they operate in Premium and super Premium segment.

We are a family driven business that is professionally managed.

While in Q1, the trading business of the listed entity contributed approximately Rs. 100 crore in revenue, this will reduce dramatically in Q2 and will completely shut down in Q3.

150cr m 100cr agro ke hata de to means 50cr sales from Wines in Q1.

In Q1 we delivered revenues of approximately Rs. 45 crore relative to Rs. 46 crore for the same quarter last financial year. This follows challenges in availing permits, owing to the disruption due to the general elections and of course that aspect has been resolved now in Q2. Q1 is also seasonally off quarter, and we are already seeing the other trends as well reverting to the norm.

we are now the second largest brand in the country and about 4 times the size of the number 3.

Export - only less than 3% of revenue and it will grow 20% this year(due to small base),but majorly focusing on domestic.

Capex will go live in By December 2024

No geographical Concentration- I would like to say is that we don’t have a high dependence on any one region. The South, the West and the North regions contribute handsomely of course to our overall topline. And they are all within the range of 25%-30% . And then of course, that is followed by the East region in number 4 . That is the rough split.

Our top markets, which we identify is our big 6-7 and they would be Maharashtra, Karnataka, Delhi, Telangana, West Bengal, and Goa,

we enjoy a strong presence in all segments with a major focus on Premium and Luxury segments. For FY21, we had 70% contribution from the premium and super premium segments, and this has risen to 73% in FY24 on an expanded operating base.

70% plus revenue has been coming from our Premium and Luxury segments now for the last couple of years

Rs. 600 above is what we classify as Premium in our portfolio.

we have come to command 30% market share in our industry today where time is a very powerful moat as mentioned previously as well. There are a few additional moats in the business that I will briefly like to touch upon today. We have imported now and adapted approximately 12 varietals from the best wine growing regions in the world and have successfully cloned them as well. The process of identifying and incorporating new varietals is still ongoing.

As we look to the next level of growth, the benefit we have is that we have over 400 acres of active farming and approximately 1,400 acres overall, which are under cultivation. This along with favorable agroclimatic around our vineyards works in our favor at the moment . These natural moats in business distinguish us and give us a strong lead in terms of operating excellence in business.

In this financial year, we have renovated our Master Selection range and launched it in Q1.

We have also launched Pinot Noir and this adds a much sought after varietal in our premium range. We are also working on a range of launches and renovations in the upcoming quarters, which are all poised to cater to various cohorts of consumers.
We have created exclusive brands, some of these including Svara for the Taj Group of hotels, Ghungroo for the ITC hotels and Amaris from Living Liquidz, which is a leading premium retailer, all of with whom we enjoy very strong relationships. Within select states, we have leading market shares in the HoReCa channel as well. This includes markets of Delhi, West Bengal, Karnataka, and Odisha.
At an overall level, we have derived significant contribution from the HoReCa channel, and this share will continue to grow as of course, new outlets keep opening year-on-year.
Furthermore, there is a major traction consumption across Tier-2 and Tier-3 towns for hospitality and modern retail or what we call MTO brands. As these brands cater to the next set of patrons, we will be ready with our distribution reach. Having an edge in the HoReCa and the MTO channel will allow us to seamlessly extend our strengths into newer markets as these new outlets get inaugurated in new towns and cities.

Wine tourism- Going forward, we are investing to open a 40 key multiuse property which will be spread over 170 acres at Akluj .This will strengthen our brand visibility, enhance B2C selling and add a supplementary profitability stream to our business. We are looking at introducing some new formats to explore in-city opportunities for vineyard tourism as well.
This strategy has five key pointers to it, firstly, being an integrated wine maker, our investments foremost are being channeled into development of vineyard acreages. We are continually introducing and adapting select imported varietals into the country.
in order to support the business of producing and selling a higher value, high quality portfolio of wines, we are continually investing in technology both at the manufacturing end and also across the sales functions.

Yes, ma’am, we are. We operate in Maharashtra. Maharashtra offers a wine promotion scheme and we are beneficiaries of it just like any other winery in Maharashtra
Top three brands in our portfolio would be the two Reds, which is firstly Reds as you probably would know, is the highest contributing segment in our wine business and in the wine industry as well. And therefore, we have two very strong brands in the Red Wine segment, one with Cabernet Sauvignon and the other being Cabernet Franc-Shiraz both contribute roughly 8%-8.5% to our overall business.
So, the whole thing about our portfolio is that we have a lot of hero brands which are contributing between 5%-7% of our topline and that consists of roughly 7 to 8 major brands.

Wine Tourism - We are expecting to build a 40 key property in Phase-1 at our location. We expect our ARRs to be around Rs. 20,000 - Rs. 25,000 per room night. In terms of occupancy rates, I think first maybe up to 3 years, it may be around 40% odd, but after 3 years it will pick up to about 60%-70% is our expectation.

In our CAPEX outlay for the next 2 years, all of it will get committed in this financial year, but some will get spend this year and some in the year after. But we expect to spend about Rs. 30 odd crore in capacity expansion and brand building. We are expecting to spend ~Rs. 5 odd crore in expanding area under cultivation. I mentioned already about Rs. 45 crore - Rs. 50 crore in building the hospitality business . These are some of the broad areas where we are committing our CAPEX.

Right now- more than 85% capacity utilisation
At this point of time, we have roughly Rs. 90 crore of debt in our balance sheet. About Rs. 15 crore is long term debt, and the balance is working capital. We may take an additional Rs. 10 crore - Rs. 15 crore of long-term debt going forward to complete all the CAPEX that we have planned over this year and the next year.

our Value contributes between 20%-25% looking at market specific trends. That has been the trend roughly for the last 3-4 years. Premium as a category, roughly all put together like I said is contributing almost 75%. Like I said, the Super Premium and Luxury is contributing about 15%, Premium is contributing anything between 55%-60%. And Cans, on the other hand contributes roughly 5%, that is our product mix

2 Likes
780

Which company’s concall have you sent above? @saurabhgupta

2 Likes
782

Anyone tracking Yash Optics and Lenses?
Thanks

783

Any idea which companies make water meters?

784

There is a company named Filtra consultants
involved in the trading business of such water related products

3 Likes
785

Yash optics: IPO Rs.53.15Cr raised, Rs.18.25Cr capex for backward integration, Rs.11.85Cr for new machinery at existing unit, 10Cr for WC & 6Cr for loan repay, rest for general and issue expenses. It has good nationwide penetration in Indian market & 10% export income. ~RHP.

2 Likes
786
1 Like
788

Hi @kdjolly,
Where are you getting your information from for sakar?
I’m unable to find any company presentations or concall transcripts after Oct 2022.
Thanks in advance!

789

The Information is collected from various updates:

https://nsearchives.nseindia.com/corporate/SAKAR_06032024114328_ANNOUNCEMENT.pdf

https://nsearchives.nseindia.com/corporate/SAKAR_09052024130353_Sakar_Announcement.pdf

https://nsearchives.nseindia.com/corporate/SAKAR_08072024135242_Saka_Announcement.pdf

790

Genus power recently ventured into making water smart meter

3 Likes
792

India Gelatin, fundamentally the company looks good.

But there are few things to keep in mind.

Technically there is rounding top pattern forming typically highs have already been made.

Company is operating at Peak margin, Peak ROCE, means lesser scope of improving it further.

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1 Like
793

How can with China dumping and Chemicals sector being downturn this company be in peak margins? How?

1 Like
794

I am not sure what business the company is in. I just shared view based on my preliminary observations.

795

Also please check quarterly margins not yearlyđŸ™đŸœ
You had mentioned worried. Yearly margins give wrong picture ?

1 Like
796

I hardly feel competent to advise, but in my opinion this company is in business which is cyclical in nature. So you should check the valuations based on historical price to book and price to sales too.

797

The company looks strong on several fronts, including a low debt-to-equity ratio, significant fixed assets, and its highest YoY profit, with TTM profits continuing along the same trajectory.

However, the stock price is currently at an all-time high and appears to be in Stage 3 (consolidation at upper levels), which could be risky. If demand remains steady or grows, the Stage 2 (bull trend) may persist.

While profitability has dipped due to rising material costs, the company has managed to control other expenses. Additionally, 20-30% of its income comes from non-core sources.

2 Likes
798

Any views or counter views on Trust Fintech and SA Tech Software ?

799

Are you talking about India Gelatine or something else? As it is not trading at an all-time high currently, rather the other way around if we consider the last one year.

800

Yes India Gelatine. Correction i meant in all time high range considering previous years. So value buying should be considered.

1 Like
801

Important Notice: Share Only Relevant and Valuable Content

Hello everyone,

I kindly ask that you refrain from spamming this thread. If you have substantial data or insights on individual stocks, please create a separate topic to discuss them. This thread was specifically created to discuss smallcap companies in my portfolio and to seek valuable feedback from the group.

For any detailed conversations or individual stock discussions, start a new thread. Please avoid using this space for brief or private discussions.

This thread has already been removed once due to off-topic posts. If spamming continues, it may be permanently deleted by the admins. I’ve worked with the admins to reinstate this discussion under the condition that I help moderate the content. If it’s misused again, I’ll have no choice but to accept its removal.

Feel free to use direct messages for private conversations or create a dedicated thread if you have meaningful data to share. Let’s keep this space valuable by contributing only when we have substantial insights to offer.

Thank you for your understanding and cooperation.

27 Likes
805

There is already a thread on International Conveyer Ltd.

Please follow the rules and regulations.

1 Like
806

I think the spam is because of the name of the topic. I myself thought its a thread where people post smallcap stocks with triggers instead of portfolio QnA until I read this post. Would have never guessed that.

5 Likes
810

Alright folks, time to address the sloth in the smallcap space?

May be the post is not related to specific names but intentions to learn and identify smallcap indices direction and some views on smallcap space as a whole.

Since many weeks, ~8 weeks , the index has gone into consolidation. the PF which is 90% small cap hasnt gone anywhere
contrary to nifty50 which saw continous rise during this period

it seems smallcaps are on a slow grind, which i didnt observe in past 2 year.

While the picture is all rosy,With the FED rate cuts and all this liquidity in the market, I’m starting to wonder: are we being hoodwinked here? Are we at the top, with nowhere to go but down?

What are the other understanding or observations on this.what do you hear on the smallcap space as a whole ?

I’ve been used to continous action and excitement for so long. i am like, on a withdrawal symptoms !. :crazy_face:
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6 Likes
811

Mid & Small cap fund houses are sitting on cash right now expecting a correction after a strong run of 1-2 years. It can start correcting from tomorrow or even after 6 months
 who knows. But indicators are there that a correction is likely.

1 Like
812

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Were you not in market between Jan 2022 to March 2023? see how long it was sideways ?
After a run up like we have had in past 18 months , it’s very ok if it goes sideways for a while. Mutual funds are just as dumb as us 
this sitting on cash thing has been going on for 12 of those 18 months . It’s likely there will be some sector rotation and some money might move from small caps to large caps but whether it will correct by 30% as it did in 2022-23 is anybody’s guess . Nobody knows anything 
 it might fall tomorrow and it might run for further 3 years 
who knows ?Be aware of doomsday prophecies 
.they just sound more impressive but are just as accurate as the optimists 

Disc 
70% portfolio in small caps 
not running after high fliers but not running away nor sitting out .

11 Likes
814

As someone who invests a lot in small caps and has seen many up and down cycles, my take is that corrections should be expected and welcome and NOT feared by retail investors.

Thing with small caps stocks is that when they are in a bull run and making new highs every week or month, no one stops and wonders if it’s normal for a stock to give 2-3x returns every year when underlying earning growths are nowhere close
 Or how much story market is pricing in and how much of price is just bubble.

In bull markets many take those crazy stock prices rises as a given and not a matter of concern. And when money starts exiting at insane valuations we feel scared (instead of being happy) thinking something is wrong with the market.

So it’s a problem of expectations. Mean reversion is par for the course for stocks and over a period of time, price corrections will happen for every stock to reduce gap between valuations and earning growth. At the same time companies with earning growths will never disappoint their investors regardless of the market cap, interest rate cycles, fed actions, liquidity etc.

So if one is confident of their portfolio companies doing well on earnings, they need not be afraid. Even if the stocks correct they will recover quickly to make new highs. However if one just bought the stocks because they were running and big (or dumb) money was chasing them, then one needs to be very cautious because without conviction fear can take over very quickly resulting in all sorts of reaction to news flow.

I generally welcome corrections because it allows me to buy more of the stocks that I have in my portfolio and increase my allocation at lower prices in case I missed out on betting big on a good opportunity.

16 Likes
815

Now a days Emerald getting lot of attention, do you have any new insights ?

816

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Does anyone know why order is not getting placed in AngelOne. I saw these things happening lately for micro-cap shares.

817

So what happens with many of the scrips under ESM is that there are fixed times when the order can be placed. Maybe Emerald finance is also one of them. The time duration is 45 min starting from 9:30, for placing orders then the next 15 mins is a gap time and so on


2 Likes
818

So 45 min → 15 min break → 45 min trading → and so on.

Just like what is happening in different angle with jpassociates which is allowed for trading only first day of the week.

819

Try after 10 am on Monday and Tuesday. it worked for me.

1 Like
820

I have started investing in:

Lancer Container Lines Ltd
Polylink Polymers (India) Ltd
Srestha Finvest Ltd

with only 0.05% of my overall portfolio for now. As these looks clearly good on books personally to me.

Also willing to add the Emerald, for now failing to do so.

Disclaimer: Not for recommendation. Do your own study.

3 Likes
821

Correct correct
 not sure about JP associates though

1 Like
822

What would be the best way to play the BESS theme? Any shovel players?

1 Like
823

All these stocks have made huge gains for investors who rode on the promise of new and renewable energy. And suppose we keep seeing poor historical performance without seeing the tailwinds and the reasons for the turnaround. In that case, we will end up not investing in future-oriented stocks and be happy with HUL, Tata and Nestle. Just my 2 cents.

2 Likes
824

Ketan has a point in that the tailwinds mainly come from increasing demand and the Indian manufacturers are not in a position to take advantage as they are always behind in terms of technology and pricing power. The turnaround comes from govt.'s protection which makes it fragile as they will again crumble in the face of competition.
Its not a Tata motors like story where they either acquired (JLR) or developed in-house capabilities, allowing them to be competitive with other large players. The company itself is forward looking. Whereas Solar manufacturers in India are not forward looking even though the industry is.

825

I went through the company, but I don’t have full conviction yet. Here are some key points:

Positives:

  • Management is projecting 8-10x profit growth over the next 3 years.
  • EWA loans have grown from â‚č2 crore to â‚č3.5 crore QoQ, according to management.
  • They charge only processing fees with no interest on loans.
  • Almost zero NPAs in the EWA category.

Negatives:

  • Larger companies already have internal infrastructure for EWA, limiting market potential.
  • Management struggled to recall key figures for the EWA and business loan divisions and didn’t provide a breakdown in their presentation.
  • The EWA market in the USA is only $22 billion, which might indicate the market isn’t that large.
  • Management claims NBFCs and banks aren’t interested in â‚č25,000 ticket size loans, which I don’t believe is entirely accurate.

It’s an interesting new product, but there are some unclear aspects, which is typical with microcaps. I’ve taken a small position for now.

3 Likes
826

Hi, anyone here tracking oswal agro mills? The recent announcement dated 16th September 2024, stating that the company has received 23 lakh sq. ft. area in the form of DRC. Based on a rudimentary calculation based on reputed articles, the company can sell these to other developers at Rs5000-6000 per sqft, thus a windfall gain of around 1000-1200 crores on a market cap of approx 1000 crores, this seems like a no-brainer. Does anyone have any thoughts about the same?

1 Like
827

I had interacted with Emerald to roll-out EWA in our startup. The following were my observations:

  1. They don’t have any senior guy leading the sales of EWA - promoter’s son is taking care of that. He is still studying his MBA or any other PG course, i don’t remember exactly.
  2. The product is okay - lot of other NBFCs are also adding this product in their arsenal. It can be another product for a NBFC but making it your sole revenue generator is a stretch.
  3. Adoption is challenging for those companies with relatively higher field related work. Companies prefer to have salary as a medium to recover on-field losses or cover absconding cases, etc.,
4 Likes
828

Where to check the activity of MF houses whether they are buying , selling smallcaps or sitting on cash?

829

DIY approach is to check the disclosure from each fund house. I do track it for few of the select fund houses (PPFAS flexi, Quant Focus, and Tata Balanced). You may check their websites to download the fact sheet and export to excel to do the analysis.

1 Like
831
1 Like
835

Great pick but One thing, 0.05% that is not conviction also if it goes 10X it still means u just made 0.5% increase in the overall gain that for you would not mean much as 0.5% is what stock move in a day.

Wealth can be create with a bit of concentration or even Mutual funds are good

836

Indag Rubber
Refer annual report
Entered into BESS through JV and manufacturing BESS for subsidiary of Hitachi Energy


3 Likes
837

Here’s my analogy: When I explore micro-cap stocks or those with a market capitalization below â‚č500 crores, my focus is on building strong conviction before gradually increasing my stake, but I can limit it to a maximum of 1%.

Additionally, risk appetite tends to evolve over time, especially when the portfolio, built on stable and undervalued quality stocks, performs well.

Lastly, allocations like 0.05% or 0.5% have different implications based on the size of the portfolio, which varies from person to person.

Also, when you are good in something (mentioning in a good way) why to go to Mutual Funds, I’m currently 99.9% invested in equities. MF is only for taxation purpose though very limited.

4 Likes
838

Can you please give a brief thesis for investing in Polylink Polymers.What are the triggers and what are the growth areas that you see. Ebitda margin seems to be on the lower side (4-5%). CFO is also negative and Trade receivables are high. This quarter the promoter holding has reduced. It seems like few minority promoter group shareholders are trying to exit. If you can guide on the company prospects a little bit then that would help. Thanks in advance!

1 Like
839

To be honest, I don’t come from a financial background and don’t analyze an extensive list of parameters. My approach to value trading is relatively simple and focuses on certain broad observations:

1st Approach:

I generally look for companies where the stock has seen a significant correction (e.g., a steep decline from its highs) and where there’s been notable improvement in fundamentals over time. These situations often create potential for strong upside.

2nd Approach:

Another scenario I focus on is when a stock has been consolidating around earlier levels, but the underlying financial performance (e.g., profits or revenues) has improved significantly compared to the past.

Of course, I also consider other factors like Debt-to-Equity (D/E) ratio, Return on Capital Employed (ROCE), etc. It’s not about checking every quarterly result but taking a long-term view if the fundamentals align.

For further context, you can check out relevant threads or discussions that explore such ideas:

‱ MapmyIndia Discussion

‱ Lancer Containers Thread

Note : This post is purely for learning purposes and should not be considered financial advice.

2 Likes
840

What’s your view on KONSTELEC. It’s 120 cr micro cap company. Healthy order book of around 600 cr. They basically doing a EPC business focus on electrical infrastructure.
Strength 1 Good order book with quality clientele. PSUs as well as private sector.

Risk 1 This company is not able to generate free cash flow ( typical EPC business problem)

Recently added this company. Trading at 19 pe. Below industry or. I don’t find any reason for such low valuation. Please look into this company. I don’t have financial background so I have limited understanding of financials.

8 Likes
842

Can someone please enlighten me about the details of the capex done by kingfa science in FY24. They have done a huge capex but there is no significant change in topline. Was it just a maintenance capex?

843

Are you tracking Shish Industries?

844

I’m not a SEBI-registered advisor, so I cannot provide direct investment advice. Also, I’m not actively tracking this company.

That said, here are my personal views (not a buy or sell recommendation):

The company appears good based on its financials, and if held patiently, it may potentially reach the â‚č20–â‚č25 range. However, since this is a micro-cap company, it’s crucial to closely monitor its capex plans and sales growth for a long-term perspective.

Its debt-to-equity ratio looks healthy at the moment, but it’s important to ensure it doesn’t rise significantly. Additionally, understanding the corporate governance practices of the company is essential before making any investment decisions.

2 Likes
846

Also any view on Energy development corp as I see it turning into profit in coming quarters and still promoters are holding and accumulation is on

847

Just entered Krystal integrated services - seems like a speedy growth company in FMS .

848

Thank you Lovish ji for you reponse. I would really appreciate your input on the growing negative cashflows in Shish Industries. How would interpret that?

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851

Kindly Ignore the deletions done by mistake earlier.

Cash Flow Observations:

  1. Cash from Operating Activities (CFO):

‱ Significant improvement in CFO from March 2021 (â‚č2.25 Cr) to March 2024 (â‚č12.55 Cr).

‱ A notable increase in profit from operations, from â‚č3.12 Cr in 2021 to â‚č13.56 Cr in 2024.

‱ Working capital changes have negatively impacted CFO, especially in 2024 (-â‚č22.96 Cr), which suggests the company might be tying up more funds in receivables or inventory.

  1. Cash from Investing Activities (CFI):

‱ Investing activities show consistent cash outflows, with March 2024 recording a significant outflow of â‚č18.13 Cr. This is primarily due to fixed asset purchases (â‚č11.58 Cr in 2024).

‱ This indicates the company is actively investing in expansion or upgrades, which could be a positive sign for future growth.

  1. Cash from Financing Activities (CFF):

‱ Inflows from financing activities were strong in March 2024 (â‚č19.87 Cr), mainly driven by proceeds from borrowings (â‚č17.04 Cr). This suggests the company is leveraging debt for expansion or operational needs.

‱ Debt repayment is also evident, indicating the company is managing its obligations.

  1. Net Cash Flow:

‱ Net cash flow turned positive in March 2024 (â‚č10.81 Cr) after being negative in previous years, indicating an overall improvement in liquidity.

___________________________________________________________

Key Insights and Considerations:

‱ Positive Cash Flow Trend: The improvement in operating cash flow and net cash flow reflects better financial management and operational efficiency.

‱ High Borrowings: The rise in borrowings highlights a reliance on debt, which must be monitored to ensure it doesn’t overburden the company.

‱ Capex Focus: Substantial investments in fixed assets indicate a focus on growth and capacity expansion, but it’s crucial to ensure these investments translate into revenue growth.

‱ Corporate Governance: Since this is a micro-cap company, evaluating the transparency and governance practices is essential.

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EWA currently contributes about 2% of Emerald’s revenue currently. I did some back of the envelope caculation based on their guidance and the numbers seem almost insignificant as far as EWA is concerned. Not sure how they are guiding for 8 to 10x PAT growth in 3 years.

FY26

Run rate at the end of FY25e = 2 crore monthly.

Run rate at the end of FY26e = 15 crores monthly.

Considering 1 crore run-rate increase every month on an avg., total disbursement from EWA = 2 + 3 + 
 + 13 = 90 cr.

Total revenue = 1.5 % of 90 cr = 1.35 cr.

FY27

Run rate at the end of FY26e = 15 crores monthly.

Considering it to be constant 15 crore every month, total disbursement = 180 crore.

Total revenue = 1.5 % of 180 cr = 2.7 cr.

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853

Other segments will also ramp up. They have tied with a lending partner for their distribution business.

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855

Some numbers don’t seem to match (happens sometimes when you use chatGPT) :

  1. CFO in Mar 24 is a negative -16cr and not 12.55Cr. So it has decreased and not increased.
  2. Increase in CFF is not from raising debt, but mainly from proceeds from shares of amount 17cr. Borrowings are only 6cr.

Therfore the insight that positive cash flow trend seems incorrect. D/E of 0.21 indicated moderate leverage in the capital structure and not a concern when interest coverage ratio is 19, which indicates strong capacity to meet debt servicing requirements.

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Yes after deducting other things from profit from operations.

Yes, I agree with this. Here i didn’t go inside.

Disclaimer - ChatGPT is used only to formalise & beautify the appearance of the post.

857

Sorry if I’m jumping in between but which stock are you discussing about? (The CFO Screenshot)

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859

Hi everyone,
I recently came across this company - Kamdhenu Ltd.
What I found interesting and from what I understood was the franchise model they have with independent steel mills and the distribution network. They are an asset lite steel manufacturer. Does anyone track this company or have looked into it?
They also had a paint business that was recently demerged. Another thing I observed in their annual report was that their audit tax fee increased from 1 lakh the year before to 5 lakh in 2024.

Would love your thoughts on the company.

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861

Even jindal has a franchise model. Any clue how much revenue they have it from their PEB business ? #Kamdhenu
Thanks.

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862

Oh I didn’t know that about jindal.
Can you elaborate PEB, I’m not sure I understand.

863

PEB is Pre-engineered buildings - structures whose components are manufactured off-site and assembled on-site offering faster construction, cost-effectiveness, and adaptability.

1 Like
864

Quick question, any particular reason for selecting Krystal over SIS?

As SIS LTD is a market leader, it also offers diversification.

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865

They don’t seem to have mentioned that breakup anywhere.

866

Hi sanjayji, Are you sure this has any connection with Nimesh Kampani? I am not sure. This is for Yuvraaj Hygiene.

867

Yes, the promoters of Yuvraaj Hygiene Products Ltd are related to Nimesh Kampani. The company’s promoters include members of the Kampani family, which is associated with JM Financial Group, founded by Nimesh Kampani

868

KISAN MOULDING cmp 43 Only BSE listed Monthly Chart
this quarter Sameer Gupta Firm Apollo Pipes
bought almost 4% Equity at avg Price 48
Apollo Pipes now hold 58 % Equity Total Promoter holding now 69.67 % Eq
few old investors selling which is been bought by Promoters
Special Situation with APOLLO PIPES as new Promoters

last year 1 Feb 2024 Price was Rs 15
In 3 Months 3rd May Price reached 93
now after the Price & Time correction
Stock Taking Support at 200 DMA and
Also the previous Breakout retest

Anyone Tracking Fundamentally Kindly do reply

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869

1 .Business Overview**

  • Kisan Mouldings Ltd, established in 1982, manufactures plastic piping and irrigation products.

**Key Financial Metrics (as of April 2025)

  • Market Cap: â‚č519 crore
  • Current Price: â‚č43.5
  • Book Value: â‚č17.2
  • Price to Earnings (P/E): 73.2
  • Price to Book (P/B): 2.56
  • Price to Sales (P/S): 2.08
  • Dividend Yield: 0%
  • Return on Capital Employed (ROCE): -17.2%
  • Return on Equity (ROE): -41.2%

Recent Financial Performance

  • Sales Growth (5 years): -11.4% (declining)
  • Operating Profit Margin (FY24): -9% (negative)
  • Net Profit (FY24): Positive turnaround, but previous years had consistent losses.
  • EPS (FY24): â‚č4.87, after several years of negative EPS.
  • Debt: Company has reduced debt recently.
  • Cash Conversion Cycle: Improved to 17 days (was much higher previously)
  • Promoter Holding: Increased by 4.02% in the last quarter[

Valuation

  • Intrinsic Value Estimate: â‚č10.96 (stock trades well above this.
  • The stock is trading at 2.53 times its book value, which is considered high given its weak fundamentals

Strengths

  • Debt reduction and improved working capital cycle
  • Promoter confidence shown by increased holding

Weaknesses

  • Consistent negative ROE and ROCE, indicating poor capital efficiency
  • Declining sales over the last five years.
  • Stock price significantly above intrinsic value and book value.
  • No dividend payout

Quality Assessment

  • Rated as an average quality company based on long-term track record.

2.Key Revenue Growth Drivers for Kisan Mouldings in 2025

  • Product Diversification: Expansion into new product segments such as plastic molded furniture, household wares, and custom molding articles, alongside its core PVC and irrigation products, broadens its market opportunities

  • New Product Launches: Refreshing existing product lines and introducing innovative products (e.g., CPVC plumbing systems) are expected to help regain and expand market share

  • Strong Distribution Network: With over 1,600 dealers nationwide—30% of whom are exclusive—Kisan Mouldings benefits from extensive market reach and efficient logistics.

  • Geographical Expansion: Multi-location manufacturing units and branch offices in major cities support better market penetration and customer service

  • Reputation and Brand Strength: The established ‘KisaN’ brand enjoys a strong reputation, aiding customer retention and new customer acquisition.

  • Technical Investments: Ongoing investments in technical know-how and manufacturing capabilities are expected to enhance product quality and operational efficiency, supporting future sales growth.

These factors collectively position Kisan Mouldings to drive revenue growth in 2025, despite recent subdued sales performance.

  1. New Products and Markets Targeted by Kisan Mouldings for Revenue Growth

  • OPVC Pipes: Kisan Mouldings is aggressively entering the OPVC (Oriented PVC) pipe segment, which is positioned as a replacement for traditional ductile iron pipes. This is a major new product focus, supported by positive initial feedback and planned capacity expansion.

  • uPVC Window Profiles: The company is investing in uPVC window profile production, targeting the growing construction and infrastructure sectors.

  • Water Storage Tanks: Recently launched water tanks directly compete with established brands like Sintex, expanding Kisan’s reach into the consumer and infrastructure markets.

  • High-Margin Product Lines: Focus is increasing on high gross profit products such as SWR (Soil, Waste & Rain) drainage systems, column pipes, micro-irrigation systems, and various fittings.

  • Geographical Expansion: With new manufacturing capacity in West India and a greenfield plant in Varanasi, Kisan is aiming for a pan-India presence and greater market penetration.

These initiatives are expected to drive substantial revenue growth over the next two to three years as the company scales up production and broadens its product portfolio.
Source. Perplexity

5 Likes
870

Thank You @vineesh_ramesh for the Detailed Funda Reply.

APOLLO PIPES raising Share Holding definitely raises Confidence
Mr Sameer Gupta is known for Turnaround Stories imho

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871

Please provide authenticate proof if you have. Because there are no relation shown between Vishal Sudhir Kampani of Yuvraaj Hygiene Products Ltd and Nimesh Rameshchandra Kampani of JM Financial group of companies in internet.

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872

Both DINs are different in the two annual reports of Yuvraaj and JM Financial’s which mean these two are different sets of management.

873

Sector Tailwinds

Aerospace and Defense has been identified as a megatrend as the government policies have become more focused on developing the two sectors. With the rise of the aerospace manufacturing, aerospace components manufacturing and tooling companies are poised to grow similar to the automobile components industry. However , unlike automobile component manufacturing aerospace component manufacturing is much more stringent than automobile ancillary as the gaining trust of the OEMS is one of the biggest challenges as with commercial aerospace we are dealing with majorly just 2 OEMs and within private sector a few more entities.

An excellent presentation on Aerospace was shared in their annual investors summit and this is one excellent deep dive on the Aerospace sector as a whole . Value Quest is someone who bets big on megatrends with insightful articles and is a must watch for anyone interested in Aerospace

ValueQuest is betting big on Unimech Aerospace as one of the winners of this megatrend which made me excited to look further into the sector .

Techera Engineering

My first though researching Techera Engineering from SME space was this is another SME pretending to be in one of the hottest sectors of the markets capitalizing the tailwinds and encashing along the way .

But researching deeper tells another story altogether

Techera promoter Nimesh Desai has been into automation systems, machining and tooling operations for over 30 years ? What is his achievements ?

Built a proprietorship Techecellency from scratch in 1996 - > Went almost bankrupt in 2001 - > Converted into a Private Limited Company - > Established the VW Engine Assembly Line in Chakan by 2014 - > Entered into JV with Jendamark Automation South Africa - > Company made approx . 50 to 60 cross in revenues by FY 2019 when Desai sold his shares in Jendamark India to the SA JV

Jendamark was already working on aerospace tooling back from 2014 itself but I believe their core business was industrial automation and assembly line with major European automobile companies in their portfolio

Second Innings with Techera

Nimesh Desai alongwith his son Meet Desai ( Aeronautical Engineer ) started the Techera . Starting from scratch Desais understood that building assembly lines and automation for automobile had become too capital intensive as these automation lines now were driven by robotics and multiple complex capital intensive machine .

They identified the niche in aerospace tooling / MRO operations equipment’s and Ground Support equipment’s as this was less crowded and also they had the prior experience in the aerospace and again this was not capital intensive in nature.

Over the last 6 years , out of which couple of years have been lost due to Covid they have expanded the business from scratch to 38.5 cr. Techera has provided roughly 400 tooling parts for the Tata Airbus C295 program , has worked with HAL and according to a promoter in one of the interviews said a single aircraft project required rougly 300 to 400 cr tools . And these tools are specific to the aircraft make as each tool has to be customized to their specific requirements.

Techera expects to grow its Sales conservatively YOY by 30% ( CFO mentions 50% ) and maintain 70 : 30 split between Aerospace and Industrial Automation space on a longer term .

Summary

Techera is an SME in a space which is at a inflection point . Strong Promoter background , no cross holdings and big dreams ? Can it deliver on the long term time will tell but stars seem to be aligning for this small SME

Key Risks

-SME volatility on both upside and downside can be expected
-Concentrated holdings due to being SME
-Working Capital Cycle needs to improve
-Policy or Govt Change can have adverse impact
-Skilled Manpower is difficult to get
-Works closely with the contractors of the OEMs but the tools needs approval of the OEM as well

Disclosure : Invested and Biased

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874

Has anyone looked at OBSC Precision.

875

OBSC Perfection Ltd Financials
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OBSC Perfection Ltd, incorporated in 2017, is an India-based precision metal component manufacturer specializing in high-quality engineered parts for the automotive industry, with growing exposure to non-automotive sectors like defense, marine, and telecommunication infrastructure.

Key Highlights:

  • Revenue grew from â‚č115 Cr to â‚č143 Cr.
  • Operating Profit and Net Profit both increased, indicating improved efficiency and profitability.
  • EPS remained stable, suggesting share dilution or reinvestment.
  • Total Assets nearly doubled, reflecting expansion or capital investments.
  • Operating Cash Flow improved significantly, a positive sign for liquidity.
    • Operating Cash Flow improved from â‚č5 Cr to â‚č9 Cr, indicating better core business performance.
  • Investing Cash Flow became more negative, reflecting increased capital expenditure or investments.
  • Financing Cash Flow surged from â‚č5 Cr to â‚č40 Cr, possibly due to new equity or debt raised.
  • :package: Order Book Composition (â‚č723 Cr Total)
  • Segment Share (%) Approx. Value (â‚č Cr)
    Automotive 93.2% ~674
    Defense 5.1% ~37
    Marine 1.6% ~12
    Telecom & Others 0.1% <1
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@kdjolly Please post the content directly on the forum instead of posting via word files.

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Tanfac Industries Ltd
08/06/2025
Established as a joint-sector collaboration between Anupam Rasayan India Limited and Tamil Nadu Industrial Development Corporation (TIDCO), Tanfac Industries Limited has been at the forefront of the chemical industry since commencing commercial production in March 1985.

The state-of-the-art manufacturing facilities, spread over 60 acres in the SIPCOT Industrial Estate, Cuddalore, are equipped with cutting-edge technology sourced from Switzerland’s BUSS Chemtech and Germany’s CHENCO.
TANFAC is engaged in the manufacture of Anhydrous Hydrofluoric Acid, Sulphuric Acid, Potassium Fluoride, Potassium Bifluoride, etc.

In May 2022, Anupam Rasayan acquired a significant stake in the company, reinforcing its capabilities and expanding the expertise in fluorine chemistry. This acquisition has strengthened Tanfac’s position as one of India’s leading producers of hydrofluoric acid, with applications spanning the agro, pharmaceutical, and polymer industries.

The Market Cap was around Rs 650cr, at the time of acquisition, 5X already.

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As per the Tanfac Industries Annual report 2022:

We believe there is strong symbiotic relationship between Tanfac and Anupam as Tanfac has strong presence in key starting materials for fluorination chemistry. This can be leveraged further by addition of Anupam’s core strength in chemistry and process optimization in capitalizing huge potential that fluorination chemistry offers.

Tanfac has been one of the leading players in Fluro chemistry for decades. We intend to modernize the facilities and enhance the operational capacities at Tanfac.

We also plan to create new capacities and launch new molecules to capitalize the competency of Tanfac in tapping new opportunities. We are pleased to inform you that we have already integrated key functions such as Information Technology, Finance, and Human Resources, while preserving the business’s core DNA and maintaining business continuity.

We are pleased to co-lead an organization that will play a pivotal role in our growth, and we are confident that Tanfac’s meticulous planning for capitalising on emerging opportunities will lead to continued success. Tanfac can count on Anupam Rasayan’s support in achieving its objectives. It is expected that use of fluorine compound in the manufacture of pharma products will increase in future.

What they Manufacture:

Tanfac is engaged in the manufacture of:

Anhydrous Hydrofluoric acid,
Sulphuric Acid,
Oleum.
Aluminium Fluoride,
Potassium Fluoride,
Potassium Bifluoride,
Boron Trifluoride Complexes,
Calcium Sulphate (Gypsum),
IsoButyl Acetophenone,
Acetic Acid,
Peracetic Acid and
Poly Aluminium Chloride, etc.

Competitive Edge & Technology Tie-Ups

Tanfac has strategic technology partnerships with global leaders:
Davy Process (Switzerland) – Expertise in Aluminium Fluoride production.
CHENCO (Germany) – Tech for Hydrofluoric Acid manufacturing.
Grasim Industries – Helped in setting up the Sulfuric Acid plant.

These partnerships boost efficiency & product quality while ensuring tech superiority.

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From 2024 Annual Report:

Expanding Our Reach and Enhancing Customer Relationships In FY24, we embarked on a journey of expansion, entering new geographies and broadening our customer base. This strategic move has allowed us to cater to a diverse clientele, offering customised products that precisely meet the evolving needs and wants of our customers. By widening our vendor base, we have strengthened our supply chain, ensuring resilience and reliability in our operations. Recognising the growing demand for our products, we have made a substantial investment of â‚č102 crores to double the capacity of our product, Anhydrous Hydrofluoric Acid (AHF).
This capacity expansion, expected to be completed by September 2024, is financed entirely through internal accruals, reflecting our strong financial health and commitment to remaining a debt-free company. This strategic investment is poised to significantly enhance our topline and profitability in the coming years.

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PRESS & MEDIA RELEASE
OCTOBER 7, 2024

We wish to inform you that the Company has completed the expansion project and commissioned the expanded capacity on 7th October 2024.
Speaking on the occasion, K. Sendhil Naathan, Managing Director of Tanfac Industries, said, “We are excited to announce that we have completed the expansion project at the cost of around â‚č 100 crores and commissioned the new State of the art HF plant as planned. With this TANFAC site has become one of the largest HF plants in India. In line with earlier communication, we intend to use majority of HF to manufacture high-end specialty fluoride molecules within our group companies. This expansion will sustain our growth trajectory going forward.”

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June 19, 2024
Tanfac Industries Limited Signs Framework Agreement with Japanese Specialty Chemical worth ~$81 Mn (~â‚č675 crores):

Tanfac Industries Limited, one of India’s leading Specialty fluoride chemical manufacturers, has signed Framework agreement worth revenue of ~$81 Mn (â‚č675 crores) over next 5 years with one of the leading Japanese Specialty Chemical companies to supply a refrigerant gas. The supply for this product will start from H2 FY2025-26.

Speaking about the Framework agreement, K. Sendhil Naathan, Managing Director of Tanfac Industries Ltd, said "We are pleased to announce the signing of Framework agreement with one of the prominent Japanese players in Speciality chemicals. With this agreement, TANFAC strategically enters into the refrigerant gas segment. We continue to capture the growth and value in fluorination chemistry and enhance our product offerings.

We will undergo a plant expansion at our Cuddalore facility to manufacture this product. This expansion, coupled with the signing of the agreement, we continue to get visibility over the significant growth in coming years."

Balancing Risks with Robust Strategies:

In the ever-evolving business landscape, risk is an inherent aspect that companies must navigate with agility and foresight. At Tanfac Industries Limited, we recognise the importance of a proactive approach to risk management as we strive to achieve our vision. While risks cannot be entirely eliminated, our comprehensive risk management framework is designed to identify, assess, and mitigate potential threats.

By establishing a dedicated Risk Management Committee and implementing rigorous internal controls, we ensure that our business operations are conducted efficiently and in compliance with regulatory standards. This strategic approach enables us to adapt to challenges and seize opportunities for growth.

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Q4 Commentary:
Speaking on the performance, Mr. Afzal Malkani, Director commented, "The Company is pleased to announce the highest ever revenue and net profit on the back of successful commissioning of its new HF expansion plant. This milestone, coupled with the ongoing growth in the HF and markets of downstream products during H2 FY25, has enabled TANFAC to deliver record performance in both revenue and net profit for the year ended March 31, 2025. With the optimization of the new HF plant and implementation of other downstream products, we anticipate continued strong performance in the coming years.”

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Some Marquee Names:

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Late Stage on a Weekly Chart?

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Disclosure:
Still studying, No position as of now. No buy/sell recommendation.

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879

Hi @kdjolly, I am curious about how exactly you have configured the cash flow configuration in Screener.in. Both cash flow and efficiency ratio look interesting in the screener data attached in the above screenshot. Could you please let me know the plugin or configuration used for it? Thanks in advance

880

Here it is:

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