At these prices, the following companies are looking attractive.
Bharat Rasayan (trading at 13 PE) - Agrochemical Technicals Manufacturer
Benefiting from the China plant shutdown and supply chain de-risking in the Chemicals space. Excellent track record in compounding and established relationships with global MNCs which can take years to crack. Just completed the capex for backward integration to reduce raw material dependence on China.
Reduced crude oil prices, increasing sales to MNCs formulators for domestic and export sales and entering into Agrochemical Innovator CRAMS should aid margins expansion. Revenue growth, margin expansion and PE expansion, likely to be on the cards when held over long term.
PSP Projects (trading at 7 PE) - EPC Construction Player
Consistent high growth company - 30% CAGR over 3 years. Current market cap at 970 crores with 220 crores cash in the balance sheet. Primarily deals in institutional and industrial construction projects. Primarily focussed on the 50-500 crores orders category (some competition with larger organised players at higher end of this spectrum) where there is less organised competition.
Significantly low debt, efficient working capital management due to the nature of the order book allowing for mobilisation advances in industrial and institutional orders plus monthly billing based on the quantum of work completed. Very less dependence on govt orders is a positive.
Earnings growth guided at 20-25% levels as the company enters new geographies as well as takes on larger projects. Margin expansion likely as the company takes on more complex projects. PE expansion likely too as the cycle turns.
Key risk remains company ability to execute in newer geographies while maintaining working capital discipline and management bandwidth to handle multiple concurrent projects.
Disc: Invested. Further thoughts welcome.