129X at 1360/share with 10.49 EPS(FY20)
114X at 1360/share annualized EPS(FY21)
OR:
177X at 1860/share(GMP-500)
Face Value: 10
Let's deep dive a bit into the company & Indian Paint Industry
1/n
Objective of the IPO
2/n
Average cost of acquisition by promoter & selling shareholders
3/n
Summary of Assets & Liabilities
4/n
Summary of Profit & Loss statement
Company is growing PAT at 100% every year since FY18!
5/n
Summary of Cashflow statement
6/n
Value chain of a paint industry
The industry has a three-stage setup comprising raw material suppliers, manufacturers and sellers. Most of the raw materials in the paint industry are petroleum based, supplied by petrochemical companies.
7/n
Raw Material Analysis
Raw material sourcing: 60%+ of the input costs of paint manufacturing.
Around 300 to 400 ingredients are used in the manufacturing of decorative paints, of which, Titanium Dioxide (TiO2), a white pigment, constitutes around 20% to 25%.
8/n
The paint industry has historically been successful in passing on any significant price increases in inputs to the customers.
TiO2 is derived from ilmenite. Kerala Metals and Minerals is one of the leading manufacturers of TiO2 in India.
9/n
For water-based paints, the principal raw materials are acrylic emulsions and compounds such as TiO2, china clay and certain minerals.
Asian Paints, Berger & Nerolac- Inhouse emulsion production by importing raw materials such as monomers from China.
10/n Indigo Paints procures it locally as purchasing emulsion instead of producing it has a cost benefit & higher margins.
Apart from TiO2, the other raw materials being used for water based paints and putty: white cement, minerals including lime, dolomite, calcite and talcum.
11/n
India per capita paint consumption
12/n
India: Paint industry market size
The decorative paint segment: 74% of the total paint sales.
The Indian paint industry is valued at approx. ₹ 545 billion and is expected to grow to amount to ₹ 971 billion by 2024.
Historically almost doubled India's GDP growth rate.
13/n
Indian paints industry market-by Technology
14/n
Indian Decorative Paints
Emulsions & Enamels are clear leaders in the decorative paints segment.
15/n
Competitive Landscape: Decorative Paints
Asian Paints is the clear leader at 42% while Indigo Paints is at 2%
16/n
Indian house repainting cycle and share
17/n
Product innovation cycle in Indian paints Industry
18/n
Tinting machines increasing barriers to entry mainly due to space constraints at dealers end.
19/n
Company wise capacity, YoY growth and estimated capacity utilization
20/n
Company wise inventory & supply schedules
21/n
Unique products of Indigo Paints
22/n
Key Financial Overview of Indigo Paints vs Top 4 players
23/n
Key Financial Overview of Indigo Paints vs Top 4 players
24/n
As observed from above, Indigo Paints is growth at a fast pace YoY basis since FY18 and is planning capex of it's water based plant along with existing businesses.
Company will remain richly valued in line with it's peers and will trade at higher multiples post listing.
Above is not a recommendation nor advise to subscribe/buy to the IPO pre/post listing.
All data is from Company DRHP.
I am not a SEBI registered investment advisor.
Kindly do your due diligence and consult a licensed expert before taking any action.
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1/n Market Cap: 3,848 Cr.
Reserves: 771.04 cr
ROCE: 20.44 %
ROE: 17.64 %
Face Value:10.00
Debt to equity:0.14
Days Payable Outstanding:91.27
Days Receivable Outstanding:152.27
Inventory Turnover Ratio:0.26
Debtors Turnover:2.19
Current Ratio:2.17
OPM: 23.24%
NPM: 22.41%
EPS: 8.53
2/n Established- 1973
Located- Hyderabad, India
MIDHANI has been set up to achieve self-reliance in production and supply of various super alloys, special steels and materials to Defence, other Strategic Sectors such as, aerospace and energy.
Let's understand why we should keep this company in our radar and invest for good real upside in 2021 end-2022 onward
1/n Market Cap: 1,140 Cr.
Reserves: 555 cr
Face Value: 5.00
ROCE: 18.12 %
ROE: 14.43 %
Debt to equity: 0.06
Days Payable Outstanding: 52.53
Days Inventory Outstanding: 160.29
Days Receivable Outstanding: 67.05
EPS: 15.47
Debtor Turnover Ratio: 3.7
Inventory Turnover Ratio: 17.95
2/n The global synthetic leather market size: 2019: USD 29.2 billion
Projection by 2027: USD 52.96 billion
It is projected to expand at a revenue-based CAGR of 7.8% during the forecast period.
Mayur Uniquoters: Leading manufacturer of Artificial Leather/PVC Vinyl in the world
Presence in India: 90 years+
Number of Plants: 02 (Ballabgarh and Aurangabad)
Tyres supplied to: Passenger Car Segment (pioneer in introducing tubeless radial tyres in this segment) & Farm Segment
1/n Goodyear manufactures automotive tyres viz. farm tyres and commercial truck tyres at its Ballabgarh plant. It also trades in “Goodyear” passenger car tyres (Radial) for Consumer business which are manufactured by Goodyear South Asia Tyres Private Ltd (‘GSATPL’), Aurangabad.
2/n Other products which the Company markets and sells include tubes and flaps.
Sales performance during the year:
Tyres: 1654.19 cr
Tubes: 86.60 cr
Flaps: 0.31 cr
Consumer replacement business delivered a strong performance by growing faster than the industry in FY 19-20.
Let's gather some insights on an excellent company which is a prime candidate for PF addition on dips.
FY19-20 Annual Report summary:
1/n (1) Principal Business Activities of Company
Manufacture of Electronic systems & components: 56%
Repair & Maintenance: 31%
Trading of machinery, equipment & supplies: 13%
2/n (2) The Company continues to focus on operating cash flows, has no outstanding borrowings and it believes that the working capital is sufficient to meet its current requirements. (3) There were 3,310 permanent employees on the rolls of Company as on March 31, 2020.
Safari Industries FY19-20 AR is a good read compared to VIP Industries.
Company is also planning to Diversify in other segments of business in line with VIP Industries.
Few key points:
1/n (1) To attract the foreign investments and to make more space for the FPIs/ FIIs to invest in the equity share capital of the Company, it is proposed to enhance the investment limits of FPIs/ FIIs in the Company upto 49% of the paid-up equity share capital of the Company.
2/n (2) In order to meet with pace of changing business environment and needs, the Company proposed to enlarge its scope of operations. Accordingly, the Object Clause of the MoA Clause III A (2) shall be altered in order to cover wide range of business activities therein.