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Jagadeesh Chowdary

@Jagadeesh0203

Jan 2

📊𝐀𝐥𝐜𝐨𝐡𝐨𝐥 𝐒𝐭𝐨𝐜𝐤𝐬 𝐢𝐧 𝐈𝐧𝐝𝐢𝐚 🍻🍹

🏷️Market cap above 800 Cr

▪️United Spirits Ltd
▪️United Breweries Ltd
▪️Radico Khaitan Ltd
▪️Tilaknagar Industries Ltd
▪️Sula Vineyards Ltd
▪️Globus Spirits Ltd
▪️Som Distilleries Breweries & Wineries Ltd
▪️GM Breweries Ltd
▪️Jagatjit Industries Ltd
▪️Associated Alcohols & Breweries Ltd

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📊𝐔𝐧𝐢𝐭𝐞𝐝 𝐒𝐩𝐢𝐫𝐢𝐭𝐬 𝐋𝐭𝐝

Market Cap: 78,855.74 Cr.
Earnings per share (EPS) (TTM): 15.58
Price-Earning Ratio (PE) (TTM): 69.60
Industry PE (TTM): 73.61
Book Value / Share (TTM): 93.63
Price to Book Value: 11.58
Dividend Yield: -
No. of Shares Subscribed: 72.74 Cr.
FaceValue: 2.00

Fundamentals: Good
Valuation: Expensive
Recent Quarterly Result: Neutral

▪️𝐀𝐛𝐨𝐮𝐭 𝐭𝐡𝐞 𝐂𝐨𝐦𝐩𝐚𝐧𝐲

A subsidiary of global spirits leader, Diageo, manufactures, sells and distributes a portfolio of premium brands such as Johnnie Walker, Black & White, VAT 69, Antiquity, Signature, Royal Challenge, McDowell’s No.1, Smirnoff and Captain Morgan. The company is one of the largest players in the domestic India-made Foreign Liquor (IMFL) industry. Headquartered in Bengaluru, the company's wide footprint is supported by more than 50 manufacturing facilities across states and union territories in India and a strong distribution network.

United Spirits is among the top three spirits companies in the world. USL has a global footprint with exports to over 37 countries. It has established manufacturing and bottling plants in every state of India. In addition, to deliver its products to customers located anywhere in India, USL has established a robust distribution network covering the whole country. The erstwhile McDowell & Co. Limited was first established as a proprietary business in 1826.

▪️𝐂𝐚𝐭𝐞𝐠𝐨𝐫𝐢𝐞𝐬

𝐏𝐫𝐞𝐬𝐭𝐢𝐠𝐞 & 𝐀𝐛𝐨𝐯𝐞 (𝐏&𝐀)

-Upper prestige with 3 brands: Signature, Antiquity and Royal Challenge American Pride.

-Mid Prestige and Royal Challenge brands.

-Luxury: Johnnie Walker

-Premium: Black Dog in the scotch category, Black & White

The premium segment has the highest margin and ROIC

𝐋𝐨𝐰𝐞𝐫 𝐏𝐫𝐞𝐬𝐭𝐢𝐠𝐞 & 𝐏𝐨𝐩𝐮𝐥𝐚𝐫

The co.'s flagship brand, McDowell's

▪️𝐒𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐢𝐧𝐠

Promoter: 56.68%
FIIs: 16.51%
DIIs: 12.32%

▪️𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 & 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 (𝐐𝟐 𝐅𝐘𝟐𝟒)

After de-growing for 2 years, the company saw growth in FY22 at 19% in the topline followed by a modest growth of 9% in FY23. 5-year sales CAGR has been at 4% while profit grew at 12% due to margin increase and reduction in interest expenses. It has been reducing debt with almost negligible debt currently.

For FY23 Margins were at 13.5% with RoCE at 19.9% compared to 23% in FY22. Total NSV growth was down 2% from last year. Due to many govt regulatory concerns, the Revenue and operating profits were flat however, the profits jumped due to high exceptional income. The company saw ₹268 crore cost savings.

In Q2 FY24, the EBITDA reached ₹467 crore, reflecting a noteworthy % YoY growth of 21.4%. The standalone gross margin in Q2 FY24 recorded a YoY increase to 43.4%, with a rise of 278 basis points, and this growth was sustained on a QoQ basis. The interest cost escalated to ₹26 crore, marking a significant 24.8% YoY increase due to interest on customs duty. An exceptional gain of ₹31 crore during the quarter resulted from the final tranche of income from the slump sale and is now acknowledged as exceptional income post-fulfilment of customary obligations.

▪️𝐓𝐞𝐜𝐡𝐧𝐢𝐜𝐚𝐥𝐬

Looking at the weekly timeframe, the stock did a Rising Channel formation and currently trending within the formation. RSI & MACD are flat. This channel-biased move may continue. An immediate resistance level is 1122. On the lower side, immediate support is 1045.

📊𝐔𝐧𝐢𝐭𝐞𝐝 𝐁𝐫𝐞𝐰𝐞𝐫𝐢𝐞𝐬 𝐋𝐭𝐝

Market Cap: 47,602.18 Cr.
Earnings per share (EPS) (TTM): 9.51
Price-Earning Ratio (PE) (TTM): 189.40
Industry PE (TTM): 73.61
Book Value / Share (TTM): 151.81
Price to Book Value: 11.86
Dividend Yield: 0.42
No. of Shares Subscribed: 26.44 Cr.
FaceValue: 1.00

Fundamentals: Average
Valuation: Expensive
Recent Quarterly Result: Neutral

▪️𝐀𝐛𝐨𝐮𝐭 𝐭𝐡𝐞 𝐂𝐨𝐦𝐩𝐚𝐧𝐲

United Breweries Limited (UBL) is engaged in the business of manufacture and sale of beer and non-alcoholic beverages. It is among the largest beer company with Kingfisher & Heineken as the brands. It has a 53% share in the Beer market with premium offerings too & exports.

The Co has 20 owned facilities and 10 contract manufacturing arrangements across India. It operates in 28 states, 8 UTs, and 50 international countries. The Co. has expanded its “Kingfisher Ultra Draft” offering in the lighthouse market of Maharashtra.

▪️𝐒𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐢𝐧𝐠

Promoter: 71%
FIIs: 6.70%
DIIs: 15.97%

Promoters decreased their stake whereas FIIs and DIIs increased their stake in the company during Q2 FY24

▪️𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 & 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 (𝐐𝟐 𝐅𝐘𝟐𝟒)

FY23 financial results showed recovery vs the prior year with net sales up 26.8% and EBITDA declining 11.54%. Free operating cash flows at Rs. 900 crores due to continued improvement in working capital and optimised investment levels. Renewable energy usage for the year has reached 81%. Volume growth of 3% was driven by Telangana, Rajasthan, UP and West Bengal. The premium segment recorded 19% growth. Ebitda was down, driven by inflationary pressure, negative state and route to market changes. Inflationary pressure on the cost of sales continued to impact margins even after healthy pricing of around 5% due to the cost of sales, for barley, and the packaging materials.

For H1FY24 the revenue grew by 6.38%, EBITDA de-grew by 16%, margins continued to decline, and Profits declined by 18%. However, volumes grew 7% led by 10% growth in the premium segment. Huge Price increases were taken in Rajasthan, Uttar Pradesh, Karnataka, few in Maharashtra as well. However, RM volatility persists impacting financials. The company has gained market share in Telangana and Andhra Pradesh.

Capex ₹350 Cr for 2024.

▪️𝐓𝐞𝐜𝐡𝐧𝐢𝐜𝐚𝐥𝐬

The stock is trending up on the weekly chart and is trading above its resistance level of 1788. Technical indicators are looking strong, if the stock manages to close above 1788 then further upside may be seen, and may test 2000 - 2100 level, on the lower side 1680 may act as support for the stock.

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Jagadeesh Chowdary

@Jagadeesh0203

Dec 22, 2023

📊𝐏𝐚𝐩𝐞𝐫 𝐒𝐭𝐨𝐜𝐤𝐬 𝐢𝐧 𝐈𝐧𝐝𝐢𝐚 (𝐀𝐛𝐨𝐯𝐞 𝟏𝟎𝟎𝟎 𝐂𝐫 𝐌𝐂𝐚𝐩)

▪️JK Paper Ltd - 6599.07 Cr
▪️West Coast Paper Mills Ltd - 4811.33 Cr
▪️Andhra Paper Ltd - 2300.7 Cr
▪️Seshasayee Paper and Boards Ltd - 2246.49 Cr
▪️Tamil Nadu Newsprint & Papers Ltd - 2047.94 Cr
▪️Kuantum Papers Ltd - 1496.57 Cr
▪️Satia Industries Ltd - 1437 Cr

Book Mark this tweet as I will be sharing Fundamentals and technicals of these companies over the weekend.

Currently this sector is available at decent valuation.

📊𝐉𝐊 𝐏𝐚𝐩𝐞𝐫 𝐋𝐭𝐝

Market Cap: 6,565.19 Cr.
Earnings per share (EPS) (TTM): 72.05
Price-Earning Ratio (PE) (TTM): 5.38
Industry PE (TTM): 9.39
Book Value / Share (TTM): 272.05
Price to Book Value: 1.42
Dividend Yield: 2.06
No. of Shares Subscribed: 16.94 Cr.
FaceValue: 10.00

Fundamentals: Good
Valuation: Attractive

▪️𝐀𝐛𝐨𝐮𝐭 𝐭𝐡𝐞 𝐂𝐨𝐦𝐩𝐚𝐧𝐲

It is the leading player in office papers, coated papers and packaging boards. The company is a part of the prominent JK Organization.

JK Paper is one of the most respected paper companies in India today. The company’s diversified product portfolio comprises office paper, writing, printing paper, packaging board and speciality paper. It enjoys a rich experience of ~6 decades, enabling it to emerge as one of the biggest wood-based paper companies in India and a leader in the branded office paper segment.

The Company comprises state-of-the-art integrated manufacturing facilities in three locations- Rayagada, Odisha, with an installed capacity of 2,95,000 TPA, Central Pulp Mills in Songadh, Gujarat, with an installed capacity of 1,60,000 TPA and Sirpur Paper Mills in Kagaznagar, Telangana (owned through its subsidiary), with an installed capacity of 1,36,000 TPA.

The company’s product portfolio includes office papers, packaging boards, printing & writing paper and specialty papers. JK Paper has a global presence across 62 countries including the USA, major countries of Europe, the Middle East, Asia and Africa.

▪️𝐒𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐢𝐧𝐠

Promoter: 49.64%
FIIs: 10.90%
DIIs: 3.18%
Public: 36.29%

Both FIIs and DIIs increased their stake in the company during Q2 FY24.

▪️𝐅𝐘𝟐𝟑 𝐫𝐞𝐯𝐞𝐧𝐮𝐞 𝐦𝐢𝐱 (𝐒𝐞𝐠𝐦𝐞𝐧𝐭 𝐰𝐢𝐬𝐞)

Cut size office paper – 40%
Packaging board – 25%
Writing & Printing segment – 25%
Coated paper – 10%.

▪️𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 & 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 (𝐐𝟐 𝐅𝐘𝟐𝟒)

The company’s compounded revenue and profit growth for the last 5 financial years stand at 9% and 28% respectively. The cash flows have also been healthy over the years. The return ratio profile has been fairly healthy over the past 4 years which has been aided due to improved growth in profitability. The working capital days have also been improving over the years on account of lower receivable days.

For the financial year 2022-23, the consolidated net profit amounted to Rs 1,208.22 crore, in contrast to Rs 543.82 crore in 2021-22. In terms of consolidated revenue from operations, FY23 recorded Rs 6,772.17 crore, up from Rs 4,244.33 crore in FY22.

For Q2 FY24, the company posted a stagnant quarter with muted growth in its operating profits and bottom line. Margins were around the lower end. The quarter witnessed challenges stemming from lower sales realization and higher input costs coupled with reduced demand during the quarter. However, there has been a recent positive trend in the demand for the Packaging Board, coupled with a notable increase in selling prices across all product segments.

Furthermore, the company made strategic moves during the quarter by securing Board approval for the entry into a Share Purchase Agreement (SPA) to acquire 100% shares of Manipal Utility Packaging Solutions Private Limited (MUPSPL). The acquisition, scheduled to conclude within the next four weeks, is contingent upon fulfilling conditions outlined in the SPA.

▪️𝐓𝐞𝐜𝐡𝐧𝐢𝐜𝐚𝐥𝐬

Trading at the resistance level and trading within an Inside bar pattern whereas technical indicators are bullish, if the price trades Inside bar 408 more upside is expected price can test the next resistance 453. Support is 364 on the weekly chart.

📊𝐖𝐞𝐬𝐭 𝐂𝐨𝐚𝐬𝐭 𝐏𝐚𝐩𝐞𝐫 𝐌𝐢𝐥𝐥𝐬 𝐋𝐭𝐝

Market Cap: 4,798.78 Cr.
Earnings per share (EPS) (TTM): 148.11
Price-Earning Ratio (PE) (TTM): 4.91
Industry PE (TTM): 9.39
Book Value / Share (TTM): 448.42
Price to Book Value: 1.62
Dividend Yield: 1.38
No. of Shares Subscribed: 6.60 Cr.
FaceValue: 2.00

Fundamentals: Good
Valuation: Attractive

▪️𝐀𝐛𝐨𝐮𝐭 𝐭𝐡𝐞 𝐂𝐨𝐦𝐩𝐚𝐧𝐲

Incorporated in 1955, is engaged in manufacturing paper, paperboard and coated duplex board and is one of the oldest and largest producers of paper for printing, writing and packaging in India. The company is a flagship company of the Kolkata-based S. K. Bangur Group. The company uses Eucalyptus, Casuarina, Subabul and other hardwood as raw materials. It procures wood from Andhra Pradesh, Tamil Nadu and Pondicherry.

Manufacturing capacity is at 3,20,000 MTPA + 2,40,000 MTPA of Andhra Paper with capacity utilisation levels of 98% in FY23 vs 72% in FY21.

The Company’s Cable Division has entered into an agreement for the supply of cables with large Indian Telcos, a large network integrator for the Tanfinet project and has a robust order book which would help it to grow the cable business. With upcoming growth in the Indian and global market with 5G and FTTH, the company is well placed to take up a growth path. For FY23 Production: 72,246 Kms of cables. The company’s cable business makes up 7% of the business compared to paper which owns 93% of the business.

The company received approval for acquiring Uniply Decor Ltd on 20th Sep 23. The company had also acquired Andhra Paper with a 72.31% stake.

▪️𝐒𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐢𝐧𝐠

Promoter: 56.53%
FIIs: 7.80%
DIIs: 6.77%
Public: 28.90

▪️𝐅𝐘𝟐𝟑 𝐫𝐞𝐯𝐞𝐧𝐮𝐞 𝐦𝐢𝐱 (𝐒𝐞𝐠𝐦𝐞𝐧𝐭 𝐰𝐢𝐬𝐞)

Paper and Paperboard Division: 93%
Cables Division: 7%

▪️𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 & 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 (𝐐𝟐 𝐅𝐘𝟐𝟒)

Till 2021 the company showed muted growth however post that the govt mandate of the ban of single-use plastics made the company increase its revenues substantially. The operating profits jumped in FY22-23 & FY23-24. The margins more than doubled in FY22-23. The jump in operating profits was reflected in PAT and the company started making good profits from losses. This was due to backward integration and favourable paper realization. The operating profit margin remained somewhat volatile over the past 5 years (due to the decreased demand during the pandemic), it remained in the range of 24% to 12% for the last 5 financial years. Revenue grew at a 5-year CAGR of 9.2% and gross Profits grew at 16.4%.

For FY23 Revenue grew 46% YoY & EBITDA grew 149%, and margins doubled to 33%+ due to cost optimisation. PAT rose 214%. Segment-wise Paper revenue grew 45% YoY & Ebit grew 220.5%. Cable revenues grew 61.2% and Ebit grew 100%.

For H1FY24 Revenue growth was flat, EBITDA grew 2.7% YoY, margins came in at 30% vs 29.7% YoY, and PAT grew 9%. For Q2FY24 the results were very poor with negative growth recorded. Paper and paperboard revenue declined 0.1% however PAT rose 2.75%. Cable segment revenue grew 13.6% however PAT grew 135%. The company’s short-term borrowings declined from ₹132.74 Cr to ₹56.12 Cr.

▪️𝐓𝐞𝐜𝐡𝐧𝐢𝐜𝐚𝐥𝐬

Looks strong in the weekly chart. RSI is strong too, so more upside is expected. the nearest resistance level is 780. If it closes above the 780 level it may move toward the 810-847 levels. on the lower side, 643 will act as a strong support.

Read 8 tweets

Jagadeesh Chowdary

@Jagadeesh0203

Feb 26, 2023

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