Xpro India - getting bigger?

Stock Opportunities
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Film capacitors are commonly used in various components of electric vehicles (EVs) due to their favorable characteristics, such as high capacitance values, low leakage current, and reliable performance over a wide temperature range. Here are some specific components in EVs that may require film capacitors:

  1. Power Electronics: Film capacitors are widely used in power electronics applications within EVs. They can be found in inverters, DC-DC converters, and motor drives, where they help stabilize voltage levels, reduce ripple current, and improve power factor correction.
  2. Onboard Charging Systems: Film capacitors are utilized in EV charging systems to smooth out voltage fluctuations and reduce electromagnetic interference (EMI). They are commonly used in the input and output filtering stages of the charging infrastructure.
  3. Electric Motor: Electric motors in EVs often incorporate film capacitors for various purposes. They can be employed for motor start and run capacitors, as well as for improving motor efficiency and power factor correction.
  4. Energy Storage Systems: EVs may feature energy storage systems, such as supercapacitors or ultracapacitors, which are used for regenerative braking, quick energy release, and temporary power buffering. Film capacitors can be utilized in these systems to support their operation and enhance overall energy management.
  5. Auxiliary Systems: Film capacitors find applications in auxiliary systems of EVs, such as lighting circuits, HVAC systems, power steering, and infotainment systems. They assist in stabilizing voltage, reducing noise, and protecting sensitive electronics from voltage spikes
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46

Things are really bright but one question, they are suggesting the requirements of more than 50 lines by 2030 but by FY26 they’ll have only 4 lines with them and it takes almost 4-5 years to get a new line delivered. So, even if they order any new line in FY26, they’ll still be sitting with 4 lines in FY30 or am I getting it wrong?

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How many Bruckner installations are there in India (biax dielectric) apart from XPRO ? Are there any orders which are in the works ? They seem to have had few orders at Plastend trade fair.

Textile units in tirupur use Bruckner for textile processing and they arent as complicated to buy install and operate. Different world though.

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48

The annual report is out. The below lines caught my eyes which helps to understand the nature of the business.

Blockquote

The industry structure in the field of polymers processing is spread wide, from miniscule to fairly large capacities. There
is usually no direct thumb-rule in terms of “size vs. profitability”; it is possible for players to work out their own viable
economics depending upon various factors, mainly a combination of product mix and market segment or niche. Supply
chain linkages to clients play an additional role for some. Since polymers are generally freely available at prices
synchronized to global prices, market focus besides technical and service competence has been the key to success. It is
fair to say that the Company is a mid-sized player with significant strengths in its market segments, but remains subject
to usual market pressures. In the overall, the Company’s operations are relatively capital intensive; raw material and
power constitute the largest proportions of direct costs. We believe that opportunities are substantial both in terms of
market growth and product diversity and that threats from replacement products are not significant. The main raw
materials used by the Company are Thermoplastic Resins (such as Polypropylene, including special grades for dielectric
films, Styrenic Polymers and LD/LLD Polyethylene, etc.).

Blockquote

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Thank you for sharing. Let me simplify to understand this -

The field of polymers processing includes various companies of different sizes, from very small to fairly large.

There’s no simple rule that bigger companies are always more profitable.

Each company can figure out its own successful strategy based on factors like the products they make and the specific markets they serve.

Some companies may also have special relationships with their clients, which can be an advantage.

Polymers are widely available and their prices are connected to global markets. So, to succeed, companies need to focus on specific markets, offer good technical expertise, and provide excellent service.

The company being discussed is of medium size and has strengths in its specific markets, but it still faces normal market pressures. It requires significant investment in equipment and raw materials, with raw materials and power being the biggest costs.

Overall, there are great opportunities for growth and product diversity in the market, and there’s not much risk from competing products.

The company mainly uses Thermoplastic Resins, like Polypropylene, Styrenic Polymers, and LD/LLD Polyethylene, for its products."

In summary, the text discusses the structure of the polymer processing industry, the company’s market position, the importance of market focus and technical expertise, as well as the main raw materials used by the company. It also mentions the opportunities and challenges in the market for polymer products.

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Why did promoter sold 6% last quarter?

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The fall in promoter holding is a result of extra shares issued via preferential issue. ( warrants converted to equity shares)

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Oh, Thank you very much

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“Cosmo First” starts the commercial manufacturing of the “Metallized Film for Capacitors”. Not sure how these metallized films are different from the dielectric film manufactured by Xpro?

Below is what I could find about “Metallized Film Capacitors”.by doing simple Google search:

Metallized film capacitors are a type of film capacitor that uses a layer of metal deposited on a plastic film to form an internal electrode. The metal layer is much thinner than metal foil, so the volume after winding is also much smaller.

The biggest advantage of metalized film capacitors is their “self-healing”. Weak electrical defects are destroyed by an electrical arc that extinguishes when enough metal of the electrodes is vaporized.

Different types of metallized plastic film capacitors have different properties and are suited to slightly different applications. The values of metallized plastic film capacitors may range anywhere from several picofarads to a few microfarads. They are normally non-polar.

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the value chain is:

  1. Creating biax film from pp
  2. Metallizing Said film
  3. Creating capacitor from metalized films
    Xpro is in #1, cosmo in #2, most clients of xpro are in #2+#3

this is forward integration for xpro.

Reason why xpro doesnt do metalizing is coz its a main value addition for its clients (capacitor makers like tdk, globe deki) but players like cosmo getting into metallizing will only help xpro (in case clients dont want to do metallizing now they have a way to source metallized films from cosmo)

Disclaimer: invested in xpro, biased

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Cosmos would now manufacture capacitor film along with metallisation. Wont this mean that it would be a competitor for Xpro in film segment?

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No. As per the comment from Sahil, first you need Biax film and then you can metallize it. Cosmo doesn’t seem to have capabilities (at least till now) to manufacture Biax films.

Cosmo may end up being a customer of Xpro, buying biax films from them and then metallizing those films.

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Any idea what triggered todays fall ?

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Any updates on the results for Q2?

Unable to find the same. However, stock price tanked 7% today!

Disclosure- Invested

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You can find the result on the screener.in

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Hi,
The results are bad…Thus the fall…
I started Buy on dips…today
Hope the demand retrieves in H2FY24 as this was the first point on their concall…

Is there any news/estimated industrial requirements of of the product portfolio?

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The company has sustainable margins now compared to previous years

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The supply-demand situation 2-3 years out is now looking bad for the industry.

  1. Xpro: 1 line already and adding 2 more lines. This itself will take care of ~75% of total domestic industry’s demand
  2. SRF: new entrant with 1 line as announced recently.
  3. Jindal: 1 line already operational and capacity utilization being ramped up. Getting the right quality is unlikely to be a challenge for them given that one of their subsidiaries is a global leader in this segment.

It seems like the industry will be in an over-supply situation in 2-3 years time unless the companies can crack the export market.

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SRF’s line will comine online in 3 years, Sale may take another 6 months to an year. By that time XPRO’s two lines will be online and contributing to revenue. They aim to target export for EV & Solar as per the last concall. If they are able to capture export market in next 3 years then things might play out good for XPRO.

Irrespective of what happens 3 to 4 years out. Next 3 years look really good for Xpro as two lines will come online in FY25 & FY26 respectively and will start contributing to revenue.

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Fund raising board meet planned on 19 Dec 23

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65

If the fund raise is to further increases the Capex, then I’d see it as a v v big positive.

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