Polycab CMP 1029
๐ Leader in the Wire & Cable Industry
๐ Domestic Mkt share ~12%
๐ Revenue (W&C 89%, FMEG 7%, EPC & Othr 4%)
๐ In the early stage of transition from a commodity cable manufacturer to a branded consumer durable player
๐ข๐ฝ๐ฒ๐ฟ๐ฎ๐๐ถ๐ผ๐ป๐ฎ๐น ๐ฉ๐ฎ๐น๐๐ฒ ๐๐ฟ๐ฒ๐ฎ๐๐ถ๐ผ๐ป
๐ Consistent track record & has delivered a topline growth of >15% in last 4 yrs
๐ Earning growth has outpaced the topline due to richer product mix & an expansion in operating margins
๐ ROC has improved: 16% (FY16) 28% (FY19)
๐ Enjoys a cash-rich B/S & remains well positioned to navigate the cyclical downturn
๐ Strong distribution network (3300+ authorized dealers, ~30 warehouses) to cater >1lakh retail outlets
๐ High degree of backward integration helps to reduce RM price volatility
๐ It has strong B2B focus. Its B2C presence (25% sales) continues to improve with the expansion in FMEG space
๐ 50:50 JV with Trafigura to set up a 225k MT copper wire rod mfging facility in Gujarat (Reducing dependency on copper external sourcing)
๐ 24 mfging facilities
๐ It had invested 1100 crs in last 5 yrs to enhance mfging capacity of W&C
๐ Despite being an asset heavy biz model with in-house mfging, it generates healthy return thru prudent capital allocation & working capital Mgt
๐๐๐ฟ๐ฟ๐ฒ๐ป๐ ๐ฌ๐ฒ๐ฎ๐ฟ ๐ฃ๐ฒ๐ฟ๐ณ๐ผ๐ฟ๐บ๐ฎ๐ป๐ฐ๐ฒ
๐ Continues to post healthy numbers Qtr after Qtr
๐ Sales & Op profit grew 24% & 26% in Q2
๐ 42% Sales growth in FMEG due to expansion in Dist Network & new product launches
๐ Strong project execution drove revenues in the EPC
๐๐ ๐๐ ๐๐ถ๐
๐ At Nascent stage
๐ Grew @ 57% CAGR in 2016 to 2018
๐ Competitive intensity remains high as the segment is very crowded
๐ Ramping up its presence in this vertical by leveraging the existing Dist Network & increasing market visibility thru brand development
๐ฅ๐ถ๐๐ธ
๐ High degree of fluctuations in the RM prices. However, it claims that they are successful in passing the increased RM cost to customers
๐ It imports majority of its commodities, currency fluctuations also hits the margins
๐ข๐๐๐น๐ผ๐ผ๐ธ
๐ Slowdown will act as a catalyst for industry consolidation & aid the shift of Mkt share gains frm the unorganized to the organized segment
๐ W&C Mkt in India is growing 10%-12% & the current Mkt size is ~52k crores
๐ Expansion in retail a big trigger
๐ Continue to expand on the back of GOI focus on Power, Infrstructure & affordable Housing
๐ Electrical vehicles a big trigger as it manufactures critical components of the electricity value chain
๐ Consumer facing retail brand contribute ~40% of its topline in the nxt 4-5 yrs
๐ Polycab valuations seem reaonable at CMP
๐ Marquee brand and sticky clientele
๐ Expect steady earning growth coupled with economies of scale & change in biz mix could drive the value migration
The Journey of Vini Costmetics
โ๏ธ1985: Darshan Patel joins his father's co Paras Pharmaceuticals
โ๏ธ1994: Launched Krack which was an overnight success
โ๏ธ1996-2000: Launched a range of products(D-Cold, Borosoft,Ring Guard,Itch Guard)
โ๏ธ2002: Launched Livon-IND's 1st hair detangler
โ๏ธ2005: Set Wet hairstyling gel is launched and later a deodrant under the same brand name
โ๏ธ2006: Patel exits Paras. He sold his 24% stake to Actis Capital for $43 Mn
โ๏ธ2007: Registered Vini Costmetics and spend the next couple of years doing consumer research
โ๏ธ2010: Vini Costmetics was launched; started selling pharma products; WhiteTone was launched; Paras Pharmaceuticasl was acquired by Reckitt Benckiser Group for INR 3260 Crs
โ๏ธ2011: Launched Fogg deodorants; Bay Capital came on board, investing 30 Crs
Aurobindo CMP 868
The company is developing:
โ๏ธ14 Biosimilars (5 of these expected to launch by FY25 with a US$20 market size)
โ๏ธ8 inhalers (US market size is >$10 Bn)
โ๏ธPneumcoccal Conjugate Vaccine (US$6.2 bn global market size)
โ๏ธ3 depot injectables (US$3.3 bn market size)
Co also developing 50 Other Complex generics
โ๏ธPeptides (US$14.5 Bn Mkt size-Global $2.5 bn size for 5 filed ANDAs and Global $12bn for 10 under development)
โ๏ธTopicals (US$4 Bn Mkt size-26 products under development currently out of total 37 products identified for development)
โ๏ธTransdermal patches (US$3 Bn Global Mkt size) : 8 products under development (Clinical trials to begin for the 1st product in FY21)
โ๏ธNasals (US$1.3 Bn Mkt size) : 1 approved + 4 under development (Filing will be done over the course of next 3 yrs) #Aurobindopharma #Growth
โ๏ธIND's Renewable Energy sector is world's 4th most attractive RE Mkt
โ๏ธGlobally, Cost to generate Solar & Wind Energy dropped by 90% & 70% in past 10 yrs
โ๏ธCosts almost at par with NG
โ๏ธRE is estimated to comprise ~60% of INDโs installed power capacity by 2030 (~24% at present)
โ๏ธGlobal Investments in RE: $282 Bn in 2019
โ๏ธ45% cming frm China, who aims to get 62% energy via RE in nxt 3 yrs
โ๏ธBy 2040, IND aims to generate ~49% of total Electricity frm RE
โ๏ธFDI inflow in the Indian non-conventional โenergy sectorโ stood at $9.22B in last 10 years
โ๏ธMore than $42B has been invested in INDโs โREโ sector since 2014
โ๏ธEstimated to attract investment ~$80B in nxt 4 yrs
โ๏ธThe past 9 months have slowed the Solar Energy installations by 80% v/s 2019 due to Covid
โ๏ธ2020-Cumulative solar capacity is ~37 GW
โ๏ธ2022-Tgt is 100 GW
Valiant Organics CMP 2795
โ๏ธA Specialty Chemical Manufacturing Company.
โ๏ธThe products of the company find several applications mainly in the agro-chemical, pharmaceuticals, rubber, dyes, pigment & in the making of veterinary drugs
โ๏ธFully integrated manufacturing facilities
โ๏ธRevenue: Domestic 85% & Export 15%
(Agro 40%,Specialty 30%,Dyes+Pigments 20%,API 10%)
โ๏ธRev. share from API is likely to increase in coming yrs
โ๏ธOne of the most competitive producers of Chlorination, Ammonolysis,Acylation,Hydrogenation & Methoxylation based specialty products
โ๏ธInorganic growth & organic capital expansion without much increase in Debt Equity
โ๏ธLeveraging a de-risked biz model
โ๏ธThe synergistic acquisition of Amarjyot chemical ltd last year
โ๏ธAbility to forward integrate by adding high-margin & high value products to maximise growth
IndusInd Bank CMP 380
โ Stock fell frm 2038 high to 235
โ Decreasing deposits
โ Rising bad loans
โ High exposure to telecom companies & NBFCs
โ Exit of a long-time CEO
โ Crisis at #yesbank has put question mark on rest of the private lenders
โ Stock corrected 68% in March
Journey from 2035 to 235
โ Dec 2017 - RBI imposes INR 3 Crs penalty for under-reporting of FY16 NPAs
โ Apr 2018 - Reports divergence in FY17 NPAs of INR 1350 Crs frm RBI's estimates
โ Sep 2018 - Discloses exposure of INR 3000 Crs to IL&FS, a crisis-ridden NBFC #IndusindBank
โ July 2019 - Completes merger with Bharat Financial Inclusion
โ Jan 2020 - Posts disappointing Q3, provisions up by 72%, gross NPAs more than double YoY, asset quality worsens, Mr Sobti set to retire in Mar'20
โ Feb 2020 - Moody's downgrades Outlook to Negative from Stable
The API Industry
โ๏ธ The backbone of India pharma industry is the bulk drug industry
โ๏ธ India has highest no. of US FDA approved plants (665) outside of the US
โ๏ธ India has 44% of global abbreviated new drug applications (ANDA)
โ๏ธ India needs to proactively boost the API Industry
โ๏ธ The Indian pharma industry is the world's 3rd largest in terms of vol
โ๏ธ India's API industry is ranked the 3rd largest in the world
โ๏ธ India fulfils 20% of global demand for generic medicines in terms of Vol & supplies over 60% of global demand of various vaccines & ARV drugs
โ๏ธ Indian bulk drug industry has grown at CAGR of 8.6% over 2016-2020. It is further expeacted to grow at similar CAGR during 2020-2024
โ๏ธ The import of APIs has risen at a CAGR of 8.3% from 2012-2019
โ๏ธ Bulk drug import reached a value of INR ~249 billion in 2019