SmallCap Hunter : Trying to find the dark horses with triggers

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.


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

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):

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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.


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)

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

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)


Do check this on the same subject

is it a listed company. I have not seen any on screener.

This is part of ALOK Industries


  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.


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.



views on Alok industries based on new results?

Dear Vikas,

May be, ISCPL has good experience on API , they may utilize some part to SYSCHEM

Hi Sanjeev, could you please also post on the company thread?

Please do visit my post on a Microcap from a Newage Business.


did you go ahead with libas? down quite a lot and trading cheap now

Will they able to produce some different product using the same produce line? Even if possible, is it economically feasable?

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.


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.