Thread on Issues and Concerns around Bharat Rasayan !!
1st Issue - Promoter is giving loan to company
The interest rate promoter is getting is 9% which is at arm's length. This reflects promoter commitment and confidence in company rather than being a ref flag
1/n
1st Issue - Promoter is giving loan to company
The interest rate promoter is getting is 9% which is at arm's length. This reflects promoter commitment and confidence in company rather than being a ref flag
1/n
2nd issue - High Receivables
3rd issue - Sales to group entities
Have addressed here in this thread. However, with the current results, 2nd issue is alleviated.
2/n
3rd issue - Sales to group entities
Have addressed here in this thread. However, with the current results, 2nd issue is alleviated.
2/n
4th Issue - High Promoter Salary
Promoter's salary is actually low. Adding Profit linked incentive (commission) it becomes high. This shows he is more invested to generate higher profits for the company and his belief in growth. One should not be penny wise pound foolish
3/n
Promoter's salary is actually low. Adding Profit linked incentive (commission) it becomes high. This shows he is more invested to generate higher profits for the company and his belief in growth. One should not be penny wise pound foolish
3/n
5th Issue - Low dividend
True with all companies in aggressive growth phase. Investor should be happy that the money is being invested to generate higher returns instead of paying tax and giving dividend. Do you buy Growth Mutual Fund or Dividend Mutual Fund?
4/n
True with all companies in aggressive growth phase. Investor should be happy that the money is being invested to generate higher returns instead of paying tax and giving dividend. Do you buy Growth Mutual Fund or Dividend Mutual Fund?
4/n
6th Issue - Negative Cash flow
Generally happens with very aggressive growing companies in capital intensive sector. Once they pause the investment even for a brief while, they clean up the balance sheet pretty quick.
Moreover this is no more of an issue with BR now
5/n
Generally happens with very aggressive growing companies in capital intensive sector. Once they pause the investment even for a brief while, they clean up the balance sheet pretty quick.
Moreover this is no more of an issue with BR now
5/n
7th Issue - Related Party Sales
BR was set up as a backward integration for other two companies and gradually it found its own growth path surpassing the other group companies. Moreover, negligible dues from group companies
6/n
BR was set up as a backward integration for other two companies and gradually it found its own growth path surpassing the other group companies. Moreover, negligible dues from group companies
6/n
8th Issue - Almost 10% stock is with stock broking companies
Won't detail much here as not to be spoken in public but observe 3 things for those companies and connect the dots
1. Date of Acquisition
2. Holding Tenure
3. Their AGM date
7/n
Won't detail much here as not to be spoken in public but observe 3 things for those companies and connect the dots
1. Date of Acquisition
2. Holding Tenure
3. Their AGM date
7/n
9th Issue - Gifted their Star plant to Nissan which would have driven their next level of growth
Plant 3 - This is now Nissan JV with 30% ratio of BR
Capex - 290 cr + 20 cr land(this will be paid back to BR for selling the land)
Now some details
8/n
Plant 3 - This is now Nissan JV with 30% ratio of BR
Capex - 290 cr + 20 cr land(this will be paid back to BR for selling the land)
Now some details
8/n
So their expansion share is 90 cr.
Gupta ji won't give such an asset for JV if something significant was not on offer. It is anybody's guess. I am inclined to assume Patented molecules or higher share of business from Nissan.
9/n
Gupta ji won't give such an asset for JV if something significant was not on offer. It is anybody's guess. I am inclined to assume Patented molecules or higher share of business from Nissan.
9/n
Getting contracts from Japanse is the toughest and Gupta ji has been able to crack a JV with them. If my assumption for patented molecules is correct, this is history in making for BR.
10/n
10/n
Now coming to Plant 2
EC is pending site visit for 200 cr expansion
If i add the expanded capacity from Plant 2 and Plant 3(only 30% as their share) - For Those who think they had only 1 star plant
11/n
EC is pending site visit for 200 cr expansion
If i add the expanded capacity from Plant 2 and Plant 3(only 30% as their share) - For Those who think they had only 1 star plant
11/n
Total increased capacity for Plant 2 and 30% of plant 3 becomes
40k tpa for Agrochem from 12.3k tpa
15.6k tpa for Formulations from 12k tpa
If it was 100% of plant 3 capacity would have been
65.2k tpa for Agrochem
24k tpa for Formulations
12/n
40k tpa for Agrochem from 12.3k tpa
15.6k tpa for Formulations from 12k tpa
If it was 100% of plant 3 capacity would have been
65.2k tpa for Agrochem
24k tpa for Formulations
12/n
So those writing obituaries, please get into details before you blurt out and show your stupidity.
Capacity is still expected to be 3.3 times for agrochem and 1.3 times for formulations. This in itself is a stupendous number with a promoter like Gupta ji
13/n
Capacity is still expected to be 3.3 times for agrochem and 1.3 times for formulations. This in itself is a stupendous number with a promoter like Gupta ji
13/n
I too am disappointed on the Plant 3 being JV with just 30% share, there are positives though
1. Balance Sheet does not stretch
2. JV will significantly augment their capabilities to next level
BR has invested 9 cr in JV. I am not sure if BR has to invest any more capital
14/n
1. Balance Sheet does not stretch
2. JV will significantly augment their capabilities to next level
BR has invested 9 cr in JV. I am not sure if BR has to invest any more capital
14/n
This is one promoter i found to be utmost honest in his dealings and only focused on his work !!
