DMCC Concall Notes - Nov 2024
Financial Performance:
Q2 FY25 top line reported at ₹103 crores, with an EBITDA margin of approximately 15%.
Profit before tax of ₹8.5 crores and profit after tax of ₹5.8 crores, indicating significant improvement compared to previous quarters and the same quarter of the previous financial year.
Growth attributed to increased volumes and improvements in the Boron business, while export sales have slowed down due to the European market downturn.
Boron Business:
Significant growth in the Boron segment due to debottlenecking efforts, which increased available products for sale.
Management is optimistic about developing downstream Boron products to reduce dependency on commodity sales.
Anticipate annualized revenue from Boron business to reach between ₹100 to ₹125 crores.
Challenges:
Export business, particularly in the agrochemical sector, has faced significant declines. The slowdown in Europe is impacting sales, with no clear recovery timeline.
The management expressed concerns about the European chemical industry's future, citing high energy costs, low investment appetite, and strict environmental regulations.
Capacity and Investments:
No significant new capital expenditures planned; current capacity is deemed sufficient for existing and anticipated demand.
Monthly debt repayment of approximately ₹2 crores; current cash flow allows for this, with potential for increased repayments if cash flow improves.
New Product Development:
Continued investment in process development for new products, though these have yet to significantly impact the bottom line.
Focus on launching two significant new products for the domestic market, with one targeting automotive applications.
Market Dynamics:
Domestic demand for chemicals is recovering across various sectors, including pigments, fertilizers, paints, and polymers.
Bulk chemicals are operating at over 90% capacity utilization, while specialty chemicals range from 50% to 85% utilization.
Future Outlook:
Management refrains from making definitive forecasts but expresses cautious optimism based on recent improvements in domestic performance and pricing.
Plans to monitor market conditions closely before making any significant investment decisions.
Geographical Revenue Split - FY23:
Exports ~33%,
Domestic ~67%
Overseas Subsidiary:
In FY23, company's Subsidiary name was changed from Borax Morarji (Europe) GmbH to DMCC (Europe) GmbH. DMCC (Europe) GmbH is a 100% wholly owned subsidiary Company in Germany
Clientele:
Alkyl Amines, Apcotex, BASF, Deepak Fertilizers, Deepak Nitrite, Ipca, Sanofi, Pidilite, Dr. Reddy's, Unichem, etc.
Product Application:
Detergents, Dyes, Fertilizers, Agro-chemicals, Detergents, Dyes, Thermal Power Stations, Detergents, Ceramic & Tiles Industries, Steel Industries, Electroplating, etc.
DMCC was the first producer of Sulphuric Acid & Phosphate Fertilizers in the country. Currently, it is a fully-integrated Speciality chemical player in Sulphur, Boron and Ethanol chemistry
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Dee Development says
On Orders
👉 Order Book at ₹1300 cr, expect another ₹500-700 cr of inflows
👉 Should end FY25 with OB at ₹1500 cr
Guidance
👉 Margins will gradually scale to 20% vs 15% as of Q2FY25
Make in India & import substitution play.
#ShreeKarni fabcom received first major order from Safari industries for 20,000 Omega 19fb black bag 🎒
This mark major move up value chain
From fabric to finished bags 🧳
They already fabric supply to
VIP
Safari
Samsonite
Tommy Hilfiger
Hidesign
Swiss military etc.
With dyeing unit coming March They will also eligible supply to global luxury luggage brands .
Imagine opportunity size in coming years
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Packaging Film Companies
(Comparison)
Strong growth trends, profitability spikes and value opportunities!
- Garware Hi Tech
- Jindal Poly Film
- Nahar Poly
- Cosmo First
- Polyplex
HUDCO Management Says Very hopeful that PMAY 2.0 will be big for HUDCO
Net NPA is 0.31%, want to bring it below 0.3% in FY25 - CNBCTV18
SAMHI HOTEL
Growth projects would lead to inventory expansion of 700+ guest rooms and one F&B outlet along with significant repositioning of portfolio - Investor Presentation
Bangalore and Hyderabad to add -55% growth to our Upscale portfolio--2x higher revenue per room than portfolio avg.
Strengthen our share in key office markets of Bangalore and Hyderabad which continue to perform strong
Increasing share of variable leased assets to boost returns and provide capital efficient growth
Combination of operating asset, brownfield and future expansion allows short capex to revenue cycle
Growth to be funded from internal accruals and help in improving leverage ratio
Medical Device Industry
80% Imports Dependency
Motilal Oswal positive on capital market players
Preferred Picks in AMCs:
HDFC AMC: Buy, Target at ₹5200/sh
Nippon AMC: Buy, Target at ₹900/sh
1. Welspun Living Ltd
2. Vardhman Textiles Ltd
3. KPR Mills Ltd
4. Garware Technical Mills Ltd
5. Trident Ltd
6. Arvind Ltd
7. Nitin Spinners Ltd
8. Jindal Worldwide Ltd
9. Alok Industries Ltd
10. Vedant Fashions Ltd
11. Orbit Exports Ltd
12. Bombay Dyeing Ltd
13. Sangam India Ltd
14. Page Industries Ltd
15. Century Enka Ltd
Revenue Breakup - FY23:
Sale of Chemical Products ~99%,
Other Operating Revenue ~1%
Export Countries:
USA, Mexico, Italy, Japan, Australia, UAE, Turkey, Spain, France, Germany, Belgium, United Kingdom, China, Peru, Colombia, Netherlands
Manufacturing Facilities:
Company has 2 production facilities in Roha, with an installed capacity of ~300 MT /day of Sulphuric Acid, and in Dahej,with 50% of total area available for further expansion after completing of upcoming capex
Product Portfolio:
a) Bulk Chemicals:
Sulphuric Acid, Sulphuric Anhydride, Oleum, Chloro Sulphonic Acid
b) Speciality Chemicals:
Benzene Sulfonic Acid, Phenol Sulfonic Acid, Sodium Benzene Sulfonate, Sodium Phenol Sulfonate, Menthyl Lactate, Methane Sulfonic Anhydride, Diphenyl Disulfide, Diethyl Sulfate, Diphenyl Sulfone, Sodium Vinyl Sulfonate, 4.4 Dihydroxy Diphenyl Sulfone, Methyl p-Toluene Sulfonate, Para Chloro Thiophenol, Isethionic Acid Sodium Salt
c) Boron Chemistry:
Boric Acid, Borax Pentahydrate, Borax Decahydrate, Trimethyl Borate, Zinc Borate
India Stock Brokers market share
1) Groww: 25.8%
2) Zerodha: 16.5%
3) Angel: 15.4%
4) RSKV (Upstox): 5.8%
5) ICICI Sec: 4%
6) Kotak Sec: 3%
7) HDFC Sec: 2.7%
8) Motilal Oswal: 2%
9) Others 24.8%
Today we discuss about One Company in detail
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Getco alone plans 96,000cr investment by 2030
Plans to add 1000 new substations
850 will be 66kv
150 will be 220kv 400kv 765kv
Gujarat & Rajasthan will lead the transmission infra demand
Copled with Renewable infra planned
Regional transmission players may benefit
With huge capital expenditure planned for FY25-FY32, the Transmission & Distribution(T&D) sector is witnessing significant growth in both substation capacity and transmission networks.
National Electricity Plan (Volume II) is likely to be credit positive for EPC companies in the transmission & distribution (T&D).
9 lakh crore investment expected by 2032. Government is looking for PLI scheme for different power transmission components in the value chain.
EPC players in T&D segment are set to experience tailwinds never like before.
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MOFSL Covers P N Gadgil TP 950💹
FY24-27E🔥
REV/EBITDA/PAT: 23% / 31% / 36% CAGR
FY24-27E, 30% store expansion CAGR🔥
- 36 ~ 80 by FY27
FY19-24 REV/Store CAGR
- PNG : 20%/4%
- Titan : 20%/19%
- Kaylan : 14%/13%
- Senco : 16%/10%
- Thangamayil : 22%/13%
Second-largest organized jewelry player in Maharashtra in terms of the number of stores, with ~8% market share in Maharashtra
Aims to become the leading jewelry retailer in Maharashtra within a few years (Tanishq leads in store count at present)
Footfall reported 27% CAGR over FY21-24
Over the last 3 years, the studded ratio has improved by 250bps to 7%, aims to take this ratio into double digits in the coming year (15+%)
Studded jewelry yields higher profit margins as it includes gemstones or diamonds
For Titan & Kalyan, studded share is at 28-29%
Levers for Operating Leverage
- As studded mix improves, margins will expand
- To reduce debt from IPO proceeds. As gold metal loans increase, finance costs will reduce
GML carries a low-interest rate at 3-4%
FY24 Return Ratio: best among peers
- RoE: 34%
- RoIC: 24%
Inventory turnover for PNG is over 5-6x (2-3x higher than the industry)
Risks
- Higher competition
- Gold price volatility
Very comprehensive report by MOFSL
#PNGJL #PNGadgil
PATANJALI FOODS CEO Says High Palm Oil Prices Have An Impact On The Soaps And Biscuits Segment
Expect To See Some Impact Of The Increase In Palm Oil Cost
Contribution Of Palm Oil Is 20% In Biscuits And 20%+ For Soaps - CNBCTV18
Expect ₹3,100-3,200 cr in FY26 revenue from Patanjali's HPC business
Q3 festive season was muted, H2 will be better than H1
FY26 revenue growth seen b/w 7-8% and earnings growth of 8-10%. Expect to see some impact of the increase in palm oil cost
Textiles Sector Has Huge Growth Opportunity in India ✨
15 Companies Which are Actively Focusing on the Textiles Sector
