any one tracking recently or can share links for any concall scripts.
I am trying to look all sources but couldn’t
mr himshah
can u please inform anything about the real estate operation because it was mentioned in sept qtr result that from next qtr real estate profits will be reported ny idea please share
I don’t track much hypo ( frankly missed it as I am negative biased for any real estate company due to black money component) . And due to covid I am unable to attend their agm personally .
As we can see from the latest result the chemical division top line and bottom line has improved by more than 15 percent.
The interesting point I learned from one of the engineer in kurnool who is working for srhh is there calcuim hypochlorite they say as the only one who manufacturers that is because of the reason is they are the one company who has patented the manufacturing process whereby there calcuim hypochlorite has a chlorine content of 70%.
That is the reason many times they have advance booking also. The recent high depreciation is one for the windmill and upgrading of the hypo plant. In Jan 22 i think they are going further for windmill project ( not confirmed).
The SDIC and sodium is getting a good traction the present capacity itself can cater for additional 100 cr in the hypo and beach manufacturing.
They are cash rich with investment to 1/3 of the asset the growth of the chemical segment is reasonable above 12 percent from pre vivid levels bottom line has shown growth of above 20 percent.
T.g Bharat is into politics that may be a thing to watch out but the family has a huge influence in kurnool where all the group factory and hospital are located.
Conservative but honest management.
Trading around 5/6 EVEBITA bullish movement seen.
Can the market give a valuation of atleast 8 EVEBITA for a price around 450/500 is a interesting view to ponder.
Disl invested
6 Likes
Stylam Industries Ltd Sree Rayalaseema Hi-Strength Hypo Ltd
Market Cap 1559.31 747.60
Current Price 920.05 435.55
High / Low ₹ 1,420 / 525 ₹ 458 / 226
Stock P/E 22.94 9.46
Book Value 167.96 277.22
Dividend Yield 0.27 0.68
ROCE 23.98 20.85
ROE 23.81 17.33
Face Value 5.00 10.00
Return on capital employed 23.98 20.85
Return on invested capital 17.94 16.49
Return on equity 23.81 17.33
Average return on equity 5Years 21.01 11.02
ROCE3yr avg 20.16 16.83
Graham 389.62 536.0
Intrinsic Value 523.98 983.84
Altman Z Score 8.57 6.10
Price to Cash Flow 19.70 10.62
Price to Earning 22.94 9.46
Price to book value 5.48 1.58
OPM 16.69 11.76
OPM 5Year 17.26 13.25
OPM latest quarter 14.77 17.14
NPM last year 11.61 6.65
NPM latest quarter 9.26 9.01
NPM preceding year 6.11 5.50
PEG Ratio 0.65 0.38
Operating cash flow 5years 218.89 281.72
Working Capital Days 100.64 48.00
Working capital 3Years back 94.92 90.08
Free cash flow 5years 57.06 161.60
OPM 10Year 15.11 13.25
Operating profit 106.46 136.31
Total Capital Employed 315.66 335.92
Operating cash flow 10years 265.08 399.13
Operating cash flow 7years 235.68 332.49
Free cash flow 10years 0.08 182.58
Free cash flow last year 73.03 50.10
Just a comparison between stylam and srhh what could be differentiated valuvation metric the market is seeing in a sector
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Excellent Q4 Numbers makes it a re-rating candidate. Good Jump in Top line and bottom line on YoY and QoQ basis.
1 Like
Key Rating Drivers & Detailed Description
Strengths:
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Established market position and healthy relationship with customers: The group is one of the major producers of calcium hypochlorite and stable bleaching powder in India and has consistently expanded its product portfolio. The two decades of experience of the promoters along with an established relationship with customers helped scale up revenue to over Rs 1268 crore in fiscal 2022.
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Healthy financial risk profile: Networth and gearing are estimated at a healthy Rs 570.31 crore and 0.03 time, respectively, as on March 31, 2022. Above-average operating margin and moderate capital structure result in robust debt protection metrics - interest coverage and net cash accrual to total debt ratios are estimated at 46.78 times and 6.11 times, respectively, for fiscal 2022.
Weaknesses:
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Susceptibility to volatility in raw material prices and forex rates: Raw material price fluctuations across products impacts profitability. Also, exports account for about 26% of the revenue and are mainly in US dollars. Against this, imports account for about 47% of raw material requirement, thus exposing the company to forex rate fluctuation risk.
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Exposure to intense competition: Pricing flexibility is constrained by competition from global players in the inorganic chemicals industry.
Source: CRISIL Rating Rationale
Do they actually have a patent on the manufacturing process of making Calcium Hypochlorite that has 70% chlorine? I couldn’t find any source, can some please help in that regard.
Also since it majorly exports to the US, it would be interesting to note that the US Calcium Hypochlorite market is poised to grow at 11.3% CAGR over the next 5 years
9.74% According to Data Bridge Market Research.
According to their website:
- Sree Rayalaseema Hi-Strength Hypo Ltd. has a distinctive edge in the manufacture of this product, thanks to the twin advantages of indigenous raw materials availability and supply of some specialized chemicals by Sree Rayalaseema Alkalies and Allied Chemicals Ltd.
- The company is also a front-ranking producer of Monochloro Acetic Acid. Manufactured by the scientific crystallizer technology, the product meets international quality standards. Monochloro Acetic Acid is used by all leading manufacturers of Non-Steroid Anti-Inflammatory Drugs, other pharmaceuticals, pesticides, organic chemicals etc.
Monochloro Acetic Acid finds applications in:
- Agrochemical Industry: Mono chloro acetic acid is extensively used in the production of herbicides, specifically glyphosate, which is one of the most widely used herbicides globally. The growth of the agrochemical industry, driven by increasing global agricultural activities and the need for crop protection, has a significant impact on the demand for MCAA.
- Personal Care and Cosmetics: Mono chloro acetic acid finds applications in the production of personal care and cosmetic products. It is used as a raw material in the production of surfactants, which are essential components of various skincare, haircare, and cleansing products.
- Textile Industry: MCAA is utilized in the textile industry for the production of thickening agents, which are used to impart desired consistency and texture to textile printing pastes and dyes.
- Pharmaceutical Industry: Mono chloro acetic acid is also used in the pharmaceutical industry for the synthesis of various pharmaceutical intermediates and active pharmaceutical ingredients (APIs).
4 Likes
Hi. I fail to see Sree Rayalseema as the leading listed player in the world in the world. Could you check again
| Revenue Source | 2021 (in crores) | 2022 (in crores) | Percentage Change | Percentage of Revenue |
|---|---|---|---|---|
| Calcium Hypo Chloride | 313.35 | 331.80 | 5.89% | 26.57% |
| Stable Bleaching Powder | 104.20 | 91.34 | -14.07% | 7.32% |
| Sodium Methoxide | 32.65 | 43.17 | 32.21% | 3.46% |
| Sodium Hydride | 5.04 | 7.73 | 53.37% | 0.62% |
| Sulphuric Acid | 96.65 | 298.54 | 208.88% | 23.90% |
| Trading Activity (Coal) | 303.98 | 448.92 | 47.61% | 35.95% |
| Power Generation | N/A | 26.52 | N/A | 2.12% |
| Total | 856.87 | 1248.02 | 100% |
Q. Is production of Calcium Hypo Chloride a complex process?
Ans. The production of calcium hypochlorite involves several steps and considerations, making it a relatively complex procedure. Here are some factors that contribute to its complexity:
- Chemical Reactions: The process involves multiple chemical reactions, including the chlorination of calcium hydroxide and the formation of calcium hypochlorite. These reactions require precise control of reaction conditions, such as temperature, pressure, and chlorine dosage, to ensure proper conversion and desired product quality.
- Process Optimization: Achieving optimal conversion efficiency and product quality requires careful optimization of various parameters, such as reaction time, chlorine concentration, and pH level. Process engineers need to fine-tune these variables to maximize the yield and quality of calcium hypochlorite.
- Equipment and Safety Considerations: The production of calcium hypochlorite requires specialized equipment, such as chlorine gas handling systems, reactors, and drying apparatus. These equipment must be designed, operated, and maintained safely to handle hazardous materials and prevent accidents.
- Quality Control: Calcium hypochlorite production involves rigorous quality control measures to ensure the final product meets the required specifications. Testing for chlorine content, moisture levels, particle size, and other parameters is necessary to verify product quality and consistency.
- Regulatory Compliance: Manufacturing calcium hypochlorite involves adherence to safety regulations, environmental standards, and chemical handling protocols. Compliance with applicable regulations adds complexity to the process, requiring thorough documentation, monitoring, and reporting.
Q. Is production of Sulfuric Acid a complex process?
Ans. The process of making sulfuric acid is considered complex due to several factors:
- Chemical Reactions: The production of sulfuric acid involves multiple chemical reactions, including the combustion of sulfur, oxidation of sulfur dioxide, and absorption of sulfur trioxide. These reactions often require specific reaction conditions, catalysts, and control to achieve high conversion efficiency.
- Reaction Control: The reactions involved in sulfuric acid production are highly exothermic, meaning they release a significant amount of heat. Controlling the reaction temperatures and managing the heat generated is crucial to prevent unwanted side reactions, equipment damage, or safety hazards.
- Equipment and Infrastructure: Sulfuric acid production requires specialized equipment and infrastructure to handle corrosive materials and ensure safety. This includes materials resistant to sulfuric acid’s corrosive properties, such as certain types of stainless steel or lined vessels, as well as appropriate control systems for process monitoring and control.
- Safety Considerations: Sulfuric acid is a highly corrosive and hazardous substance. The production process involves handling and storing sulfuric acid and other chemicals, which requires strict adherence to safety protocols and regulatory requirements to protect workers and the environment.
Q. Is production of Stable Bleaching Powder a complex process?
Ans. The process of making stable bleaching powder involves several chemical reactions and steps, but it is not considered an extremely complex chemistry. The reactions primarily involve the chlorination of slaked lime (calcium hydroxide) to produce calcium hypochlorite and calcium chloride. These reactions are relatively straightforward and well-known in the field of chemical manufacturing.
However, the process does require proper handling of chlorine gas, which can be hazardous if not managed safely. Additionally, attention to controlling reaction conditions, such as temperature and moisture content, is necessary to obtain the desired quality and stability of the final product.
Used ChatGPT to answer these questions for me, not an expert, please point out if you find anything wrong about this.
The company claims to be a leading producer of Calcium Hypo Chloride, Stable Bleaching Powder, Sulphuric Acid. What is the way to verify this? What all competitors do they have? What sort of market share do they have? Do they have any moat? Aren’t most of their products commodity products (Calcium Hypochloride, Stable Bleaching Powder etc.) ?
Disc: Hold a tracking amount
4 Likes
Hey Prakhar and all,
Curious to know
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Sree Rayalaseema Hi-Strength Hypo Ltd. claims to be the only producer of calcium hydroxide, but if we look at the price of hypo from 2017 to 2023, there is significant growth in prices but no improvement in margins.
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Why are the company’s trading sales increasing in comparison to its main products, namely chemicals?
4 Likes
I think the reason the price of Calcium Hypochloride didn’t have a big impact on the OPM is because coal prices shot up like crazy recently (but now they’re calming down). So even though the material cost went up to 73% in 2023 from 67% in 2022, you can see that in the March 2023 quarter, the material cost went down to about 63% and the OPM was around 15%. It seems like the coal price situation is cooling off a bit.
I’m not entirely sure why that happened. Maybe they saw an opportunity to capitalize on the high coal prices? I couldn’t find any information about it in their Annual Report or Credit Reports. It’s a bit puzzling, but sometimes companies make strategic decisions based on market trends.
Disc: Hold a tracking position
1 Like
How big is your tracking position in terms of your portfolio? Curious to know your approach given the uncertainty in the stock
It’s around 2% at the moment
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Their AR states that Calcium Hypochlorite volume decreased b/w 2021 to 2022. No reason was stated.
The company also trades coal and they made good money in it which is the reason for increase in revenue YoY.
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As water recycling has good scope ahead, Calcium Hypochlorite might do well, if management focus on core business.
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why would a company whose marquee product is showing an uptick in sales year on year (41% according to latest AR), would not add capacity for the same…in fact it decides to dabble in a new line of business (real estate) …am I missing something?
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You’ve pasted from Screener. Screener hasn’t captured standalone cash flow data. It’s available in the annual report. Cash flow from operations is Rs 134 crore, standalone basis. Wild allegations.
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