Interesting new blog post on valiant-
Technically stock seems to have bottomed out -
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Also if you see the promoters in the retail section they have started buying the stock in the past 2 quarters.
Where is this information youāre picking up from? I canāt see any disclosures.
Is the company not doing any earnings call in FY 25?
In the absence of any earnings call how are people tracking the business?
Anyone on the group who has any meaningful insights on the business please do share it. Thank you!!
The company sells commodity chemicals, where they have no control over the demand. clearly topline indicates demand slowdown since 2022, Valiant business is cyclical and I believe the cycle is at its bottom for the following reason.
ā This year we had better Monsoon and its going get better in the coming years as the weather cycle is changing from El NiƱo to La NiƱa (google it if not known).
ā RBI will most likely start cutting repo rate as they are waiting for the inflation to settle (inflation will most likely settle soon in the coming months because of good rain fall and banks improving their credit to deposit ratio etcā¦ to put it simply RBI has been taking strict corrective measures to curb inflation for the past few years, we are close to inflation settling down).
->Globally, central banks in developed countries have already started cutting interstate rate, this will increase the demand for the commodity products dependent on export market.
ā Technically as well stock seems to have bottomed out.
to your question. I believe the management is not conducting concall because they do not have anything to say other than the demand is weak because of that utilization is really low etc.
->To judge the management you have old concall to refer to.
ā The the promoter holding has been steady for this year.
ā there is slight increase in promoter holding the in public section (not sure why some are in public section).
ā Valiant Organics and the Aarti Group are closely related.
Disclaimer: Invested from the recent lower levels.
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Valiant Organics is a demerged entity from Aarti Industries, but the connection is somewhat indirect. Valiant Organics was initially a part of Aarti Groupās operations. In 2015, it was spun off as an independent entity focusing on specialty chemicals, specifically in chlorination and hydrogenation processes, which were part of Aarti Groupās earlier business segments. The demerger allowed Valiant Organics to focus on niche chemical manufacturing independently, while Aarti Industries continued to grow in its areas of specialty chemicals, pharmaceuticals, and performance chemicals.
This separation has allowed both companies to pursue their own strategic goals and growth trajectories within the chemical industry.
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Iāve been holding this stock for 975 days, which speaks to the importance of patience in investing.
One interesting aspect is that their Fixed Assets (FA) and Capital Work in Progress (CWIP) have more than doubled since the time when the stock was at its all-time high. This suggests a solid foundation for growth, and thereās a good chance that, when the time is right, it could yield substantial returns for its shareholders.
Disclaimer: I am personally invested in this stock, and my opinion may be biased. Whether my assessment proves right or wrong, I reserve the right to my own perspective.
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My current average price for this stock is around ā¹527, and Iām comfortable with averaging it further if needed. Iām not stuckāthis is just how the stock market works. Not every stock will be a superstar right away, but with patience, thereās a good chance it will have its moment.
Disclaimer: I am personally invested in this stock, and my opinion may be biased. Whether my assessment proves right or wrong, I reserve the right to my own perspective.
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Thanks for sharing your view! This stock makes up only 2.9% of my overall portfolio, so Iām comfortable with my current strategy and prepared to hold. I appreciate hearing different perspectives, but Iām set on my approach for now!
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Pls give reasons for why youāre holding. Fixed assets and CWIP has doubled but profits have crashed, so that could indicate terrrible capital allocation by management. Building up capacities when time was good in a cyclical industry and then getting stuck with it.
Main thing one has to answer is, what is the demand supply dynamics for their main products? Because if chinese oversupply is there and expected to continue, then no amount of increase fixed assets is going to save the company.
had studied it when it was at around 450 levels. Passed on it because it has so many products and itās impossible to track demand supply dynamics of them
Thank you for raising these points. Hereās a broad overview of why Iām holding the stock based on recent developments:
- Capital Strengthening: The company has initiated a rights issue to raise ā¹50 crores, a proactive move that could help strengthen its financial position, support future growth, or address debt concerns.
- Employee Stock Options: Offering employee stock options under its 2022 plan suggests management confidence in the companyās long-term potential, aligning employee and shareholder interests.
- Current Demand and Revenue Context: The company has openly acknowledged the impact of low demand across product lines, resulting in lower sales and price corrections. This transparency demonstrates managementās awareness and their efforts to communicate the challenges faced.
- Incident Management: They recently disclosed a fire incident at one of their plants but reassured investors that itās covered by insurance with no expected material impact, indicating their risk management is in place.
Iām considering these factors, along with potential improvements in demand dynamics. While challenges are present, and yes i agree last 4-5 quarters are not going in our way, there are also signs the company is taking steps to navigate them effectively.
Also, the company boasts a leadership team with significant experience in finance, chemical engineering, and corporate banking. This expertise, combined with their transparency in addressing issues such as the fire incident and low product demand as pointed earlier, suggests a well-managed and accountable company. Additionally, the re-appointments and new appointments of directors demonstrate a commitment to maintaining strong corporate governance.
As I mentioned earlier:
This stock represents only 2.9% of my overall portfolio, so Iām comfortable with my current strategy and prepared to hold. Just because Iāve held this stock for almost three years doesnāt mean I havenāt earned returns from other investments.
Disclaimer: I am personally invested in this stock, and my opinion may be biased. Whether my assessment proves right or wrong, I reserve the right to my own perspective.
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Any views sirji after the Q3 FY25 resultsā¦
I think the demand is turning around. Revenue is up ~19% and EPS trued positive.
Dis : Continuing to accumulate.
Yes, kindly watch for one-two more quarter to make a solid decision.
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