Valiant Organics - High ROCE, debt free

Can anyone please share the complete report from which this is taken ?

And what are their capacities (product-wise) and utilisation levels ?

This is screen capture of the presentation company made in their last AGM.

There was a huge global disruption in the supply of para-aminophenol, the key starting material for paracetamol due to a major manufacturer in China shutting down temporarily.There was about 225% increase in the cost of PAP and 60%
increase in the cost of acetic anhydride and other starting materials for paracetamol.

From a recent concall. Do they have enough capacity to capitalize this opportunity which may be short term in nature

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Very interesting take on Valiant. Watch from the 5 minute point. He has kept it simple - looks at the increase in PPE and corresponding increase in revenue. Concludes that there is a lot of operating leverage yet to play out as PPE has increased 2.5 times since 2019 while revenues have risen just 10%.

Makes sense. Most of the capex that was completed in end FY 20 and in FY 21 would not have started delivering optimum capacity utilization yet, and we can hope for significant increase in revenues in the coming quarters.

We wil know more when the anual report is released, but this prima facie makes sense to me. Thoughts?

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Is anyone aware of the reason, why promoters n directors are selling shares of the company.

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there are 4 families involved in the business - gogri chheda savla gala and also savadia family… its a mix as co has acquired 2 companies in the last 4 years …so i suppose this is shareholding rationalization among them

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What a wonderfully detailed analysis! I always dread Dr Vijay Malik writing about my portfolio companies. He is one guy who can dampen your conviction in the stock with just a simple blog post. :slight_smile:

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I hold the stock from 1550 levels, thinking to add more, but Vijay Malik’s Post is logical also. Valiant Doesn’t have any contracts and lot of players are coming into PAP business.

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3 billion contribution on market cap of 44 billion valuation as per the report is not very encouraging

Q1 Results out. Revenue increased but PAT slightly down/neutral.
Increased phenol cost could be the reason.

93521ee7-ba5e-44d5-9699-8774b05dfd4c.pdf (623.9 KB)

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Results are ok…hopefully the company can progressively improve upon the performance going further as they stabilize performance from new capacities.

Good report to understand the business and its prospects by Monarch Capital.

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It all depends on PAP and OAP. Based on pure Price action the stock can move up from here. If kushliwal can post the screener chart for latest PAP prices
https://forum.valuepickr.com/uploads/default/original/3X/8/a/8a88a49a003188dac7d3d410fc5e99322551a8ad.png

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PAP Price chart from Screener:

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this is good news then the scrip is attractively priced. I am already long as per my TA which I am not able to publish here. Lets see what happens . Probability applies both for investing and trading. What differs is the composition of that probability.
PAP ( major portion I think 7500 tons) is i think consumed in house by Aarti and we do not know whether Aarti has done arms length deals. Need to dig more. Thank you Krishna 1

A good video on Valiant Organics Q1 fy 22 nos

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All the PAP will be consumed by Bharat Chemicals, a subsidiary of Valiant. Bharat Chemicals was importing PAP so far. So, I don’t see the elevated PAP prices making a big impact on the margin front unless that has also affected paracetamol prices.

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Out of 12000. 7000 will be consumed by Bharat and 5000 to the market. It is an addition revenue of Rs 3000-4000 cr to Valiant. You can please work out the math to see the effect under differential pricing and not so differential pricing. It is an imp substitute and indigenous process where Viinati has failed

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Have they perfected the process where Vinati organics failed inspite of making good Capex for pilot plant?