Born to beat - beginning of my journey to identifying potential multibagger from indian stock market

Market Preparing for 50% Correction From Recent High ?

2018-09-30T13:41:00.001-07:00

Sentiment around equity investment has taken an adverse turn lately. Though the Nifty has fallen 6 percent from the top, the pain of this fall is more than what this headline correction number shows. This is due to weakness in the already falling smallcap names since the beginning of this year, along with a sharp fall in certain pockets of the market.

So, is it time to buy as time of maximum pessimism is the best time to buy? We need to be very careful in picking stocks as wrong selection can be highly damaging. If you look at the market rally from 10600 to 11800 in just 2 months with the help bluechip names like Reliance, Tcs,Infosys,Bajaj Finance,Hdfc, Hdfc bank, Indusind bank, M&M, etc and other all nifty stocks correcting more than 20-30% so one has to understand the reasons behind this short term rally which is mutual funds are buying this few stock to maintain their portfolio strong and nifty positive to dump other weak stocks at decent price and one of the most important thing is FII's and FPI's continuiously biggest seller in equity and debt market with problems like Trade war between US-china, rising crude price, weakning of rupee near 73 levels, Rising bond yields,Election overhang implies policy uncertainty, and latest IL&FS Default case.

Fallout evident post IL&FS default

2018 would witness the highest sell off in debt papers by foreigners since they started investing in the Indian debt market.

Post the IL&FS episode, there is talk of the credit cycle worsening, but credit deterioration has steadily been happening in India since the last 4-5 years. What we are witnessing right now is more of a cycle climax than the start of a new cycle. The problem at hand is more of a liquidity squeeze owing to asset liability duration mismatch.Overseas investors pulled out a massive Rs 21,000 crore (USD 3 billion) from the capital markets in September, making it the steepest outflow in four months, on widening current account deficit amid global trade tensions.

The latest withdrawal comes following a net infusion of close to Rs 5,200 crore in the capital markets (both equity and debt) last month and Rs 2,300 crore in July.

Prior to that, overseas investors had pulled out over Rs 61,000 crore during April-June.

According to the latest depository data, foreign portfolio investors (FPIs) withdrew a net sum of Rs 10,825 crore from equities in September and Rs 10,198 crore from the debt market, taking the total to Rs 21,023 crore (USD 3 billion).This was the highest outflow since May, when FPIs had pulled out Rs 29,775 crore. FPIs never fully returned to the Indian equity markets after pulling out net assets worth Rs 61,000 crore during the quarter ended June 2018.

Although they net bought assets to the tune of Rs 7,500 crore cumulatively in July and August, the quantum of inflows was much lower than what was seen in the past when they invested with full conviction.This indicates that there has been a fair bit of uncertainty and cautiousness among FPIs investing in the Indian equity markets in the recent times.

The outflow in September was due to global trade tensions, widening current account deficit on the back of surge in oil prices, depreciating rupee, concerns over the government's ability to meet fiscal deficit targets and lower than expected GST collection.

"All these factors deteriorated the country's macro environment. It has also cast a doubt on the sustainability of the economic growth which is closely watched by the FPIs. This coupled with expensive valuation triggered a sell-off from FPIs in September.Additionally, given the global trade tensions, there has been risk-aversion among foreign investors which explains their cautious stance towards emerging markets like India, which are considered to be riskier than their developed counterparts.

So far this year, FPIs have pulled out over Rs 13,000 crore from equities and more than Rs 48,000 crore from the debt markets.

One interesting thing to note that in the last few days Stocks like DHFL,Yes bank,Infibeam etc. falling more than 40 to 70% in single day is the red alert for retail investors so i think if nifty trading below 10800 for few weeks then market can fall like 2008 recession from cmp 10930 in just few months towards 9500-7000-6000 too in panic selling. So Retail investors like us remain sideline from the market for some time is prudent decisions because if nifty falls 30 % then midcaps and smallcaps stocks may fall more than 50% from cmp too, one can continue their SIP only in this uncertainity. I may be wrong also because Market is supreme no one can predict it correctly. I have just share my opinion only for next 6-9 months so one can take their own call because i am not a expert/ SEBI registered research analyst, My formula in stock market is " Prepare for the worst and hope for the Best ."

Link for Raghuram Rajan view on trade war :- https://www.livemint.com/Money/iTiF8eao5o6mIWE0tk87jO/Raghuram-Rajan-foreseer-of-Great-Recession-warns-of-toxic.html

other useful video in hindi :-

source - Quint hindi :-

Aditya Birla Fashion and Retail Ltd. :- Making India Fashionable

2018-08-25T07:57:00.002-07:00

Fashion is perhaps the very first expression of success of a free nation. Fashion is a celebration and a joy. It is an expression that can manifest itself in different ways for different people and these ways are forever evolving.

Aditya Birla Fashion and Retail Ltd. (ABFRL) emerged after the consolidation of the branded apparel businesses of Aditya Birla Group comprising ABNL'S Madura Fashion division and ABNL's subsidiaries Pantaloons Fashion and Retail (PFRL) and Madura Fashion & Lifestyle (MFL) in May 2015. Post the consolidation, PFRL was renamed Aditya Birla Fashion and Retail Ltd

"This consolidation will create India's largest pure play Fashion and Lifestyle Company with a strong bouquet of leading fashion brands and retail formats. This move brings India's #1 branded menswear and womenswear players together." - Kumar Mangalam Birla, Chairman, Aditya Birla Group.

ABFRL has been founded in the belief that the first sign of success of a modern nation lies in the ability of its citizens to celebrate. India's young working population and robust economic performance has led to rising incomes which, combined with increasing global exposure, are empowering many latent wants to morph into demands. With retail expanding independently through brick and mortar as well as e-commerce, the Indian fashion consumer now deserves futuristic and comprehensive omni-channel options. The time for ABFRL to arrive was ripe.

ABFRL aims to catalyse the business of fashion through superior infrastructure and experiences, towards a new future.

ABFRL brings together the learnings and businesses of two renowned Indian fashion icons, Madura Fashion & Lifestyle and Pantaloons Fashion and Retail. This will create a synergistic core that will act as the nucleus of the future fashion businesses of the Aditya Birla Group.

ABFRL is India's No 1. Fashion Lifestyle entity with a combined revenue of INR 7,181 crore for FY 2018 and EBITDA of INR 501 crore for FY 2018.

ABFRL hosts India's largest fashion network with over 11,000 points of sale, which include close to 2,500 exclusive ABFRL brand outlets across 700+ cities and towns, 4,900+ multi-brand outlets and 4000+ Department stores across the country. It has ~22 million Loyalty Members as of 31st March 2018.

Business Overview :-

Company is India’s largest pure-play fashion and lifestyle entity with an elegant bouquet of leading fashion brands and retail formats. Lifestyle Brands Riding on extensive and deeply penetrated distribution network, our lifestyle brands - Louis Philippe, Van Heusen, Allen Solly and Peter England, continue to be leaders within their respective segments. With continuous efforts towards offering consumer delight through high quality products and differentiated in-store experience, we expanded our loyal consumer base to approximately 12 million this fiscal. These brands have created very strong equity amongst our loyal customers through years of persistent focus on product innovation, design development, consumer satisfaction and brand building.During this fiscal, business expanded its reach through new store openings, alongwith improving same store performance through focused store-level interventions. The business focused on integrating consumer feedback into product design and planning, aiming at improving product satisfaction scores amongst consumers. Lifestyle business took significant strides towards adopting digital ways of working both in terms of consumer engagement and brand building. We were one of the early movers to adopt Omni-channel capabilities and our concerted efforts helped expand the coverage to more than 700 stores, giving our consumers unmatched access to wide variety and choice of products.

Global Economy :-

The global economy is on a rebound. The International Monetary Fund (IMF) estimates indicate that global real GDP grew 3.8% in 2017. This is the highest growth pace over the last six years. It is also the broadest synchronised global growth upsurge, since 2010 as underlined by IMF. This impetus from a supportive monetary policy was further buoyed by a revival of investment spending in advanced economies. The expansionary fiscal and monetary policies in the US led to improve growth prospects. The US grew at 2.3% in 2017 as against 1.5% in 2016. Growth accelerated in Europe and Asia too. The global economic recovery is expected to continue. For the current and the next year, a strong growth at 3.9% is projected. This positive outlook is somewhat clouded. Increased trade protectionism, rising international crude oil prices, geo-political risks and the uncertainty about normalisation of monetary policies in advanced economies from highly accommodative conditions in the past, are some of the factors that dim the outlook.

Indian Economy :-

India’s economy is emerging strongly from the transitory effects of demonetisation and implementation of Goods and Services Tax (GST). Although India’s GDP growth slowed from 7.1% in FY17 to 6.7% in FY18, the economy recorded a sevenquarter high GDP growth of 7.7% in the exit quarter of FY18. This reflects momentum. India’s macroeconomic indicators remain healthy. The fiscal deficit has been cut to 3.5% of GDP. India’s foreign exchange reserves as at March end stood at a comfortable level of $ 424 billion. Investors seem to be positive on India’s economic prospects. The Foreign Direct Investment (FDI) flows continue to be encouraging. India’s global ranking on the ease of doing business notched up to 100 from 142 in barely four years, while that on global competitiveness index has climbed from 71st in 2014-15 to 39th in 2016-17. The prevailing sense of optimism accentuates India’s continuing economic growth in the future as well. It is attributable to the country’s solid fundamentals, such as deleveraging by corporates, resulting in much stronger balance sheets, better capacity utilisation with consumption demand becoming stronger, and insolvency and bankruptcy process weeding out non-performing assets, among others. The Government’s unwavering push for infrastructure projects – Bharatmala Pariyojana, airports, metros, affordable housing, urbanisation, smart cities and digitisation are excellent stimulators for the economy’s growth in the medium-term.

At the same time, we cannot ignore near-term challenges. The bucket of concerns consist of rising oil prices, hardening inflation, firming bond yields and widening current account deficit. The ongoing global trade frictions, particularly between the US and China, are worrisome and can have a spillover negative effect on countries like India. So the terrain ahead could be a tad bumpy depending on the economic and geopolitical environment.

Industry Structure and Developments

Global Market :-

Global apparel market is close to 2%(1) of world GDP with Europe, USA and China being the largest markets, holding combined share of more than 50%. Europe and US comprise of ~11% of World population while their combined apparel consumption share is 40%; indicating very high per capita expenditure on apparel in these markets. This implies large headroom for growth in per capita apparel consumption for India to be played out over next few decades. As per Mckinsey report(2), with the shift of economic growth from mature regions in West to emerging markets in South and East Asia, more than half of apparel and footwear sales will originate outside of Europe and North America. This further reflects available opportunities in these regions and companies have to seek new avenues of growth in emerging markets. The biggest trend that’s gaining momentum is that global fashion industry is moving towards a decisive phase of digital adoption by the mainstream consumers. The new age shoppers’ comfort with digital medium and content has changed the customer shopping journey from a linear process to a complex trajectory traversing across online and offline touch points. This offers an immense opportunity for fashion brands to create consumer delight by offering 24X7, deeply engaging and much more premium shopping experience. In the fast fashion segment, the robust 20% growth in the past few years has led to incubation of new online fast fashion players. This business has gained traction also partly because of rapid introduction of fashion trends by social media to an exponentially increasing consumer base. Source: (1) Reports by Wazir Advisors (2) Mckinsey Fashion Scope 2017 and 2018.

Indian Market :-

The apparel market for India is expected to grow at CAGR of 9%(3) from USD 51 Billion in FY 2017-18 to USD 65.8 Billion in FY 2019-20; backed by greater purchasing power leading to higher discretionary spends, better access to products, higher brand awareness, rising urbanisation and increasing digitisation. The share of organised retailing in apparel swelled from 14% in FY 2007 to 24% in FY 2017-18. Over the past decade, organised retail has not only captured new and incremental demand, but has also successfully shifted demand away from unorganised retail. Over the next three years, while branded apparel is projected to grow at CAGR of 19%, organised retail is expected to outpace it with growth of 21%. Additionally, though the per capita spend of apparel in India is expected to increase from USD 38 in FY 2017-18 to USD 66 in FY 2025-26, it will still be lower than other developed and emerging markets, ushering apparel players into a phase of robust growth. Menswear still occupies larger share of apparel market at 41%, while womenswear contributes 38%. However, womenswear across other countries constitutes 55% to 60% of total apparel market, highlighting the opportunity that exists for Indian market. The industry continued with its rapid growth this fiscal, led by aggressive expansion by value and mass fashion players, strengthening of foreign brands and strong growth of e-commerce players. Over the past few years, numerous International Brands established their presence in India. This year, many of these brands expanded their reach by setting up exclusive brand outlets, along with tailoring their products and price points to suit the Indian market. NSSO rural consumption survey has been showing continued trend towards more urban consumption pattern, with spends becoming more discretionary than need based in rural and urban markets. The expenditure on clothing, durables and consumer services is growing much faster than decadal average. Growth of these markets is characterised by increasing aspiration of owning brands and rising discretionary spends, though constrained by high price sensitivity. In line with the above, though Tier 1 cities continue to dominate the consumption space, rest of the country has been seeing a much faster shift from unorganised and unbranded play. It is expected that the total organized shopping space in top 10 cities will be lower than rest of India in next three years. With appropriate positioning and carefully carved out retail model, value & mass fashion players have been able to grow exponentially in these markets. E-commerce continued to build upon its strength of providing rapid scale and deep access to markets and consumers augmenting the opportunity that lies in strong brands to partner with them and recruit new buyers. Industry is still witnessing high discounting and promotions linked to aggressive growth being chased by key players. However, with increased focus on profitability, the disruptive impact that the sector had on traditional offline players few years back has somewhat diminished; creating a conducive ecosystem for offline and online players in India to partner and grow the market together. Omni-channel emerged as a promising bet as both online and offline players dabbled with it – many online players started physical stores while established offline businesses invested in developing online capabilities.

The ABFRL umbrella includes :-

Madura Fashion & Lifestyle

The custodian of several icons, including the top four fashion brands of India - Louis Philippe , Van Heusen, Allen Solly and Peter England — each of which clocked MRP sales in the vicinity of INR 1,000 crore. It also includes India's first fast-fashion youth brand,People; India's largest fully integrated fashion multi-brand outlet chain, Planet Fashion; India's largest premium international brand retailer, The Collective and the British fashion icon, Hackett London's mono-brand retail in India.

ABFRL has acquired exclusive online and offline rights to market the global brand – ‘Forever 21’ and its existing store network, in the fast-fashion segment in India.

To expand its international portfolio, ABFRL entered into exclusive partnerships with two of UK’s most successful fashion brands, ‘Simon Carter’ and `Ted Baker’.

Pantaloons

India's largest big box fashion retailer, Pantaloons is one of the fastest growing lifestyle apparel retail destinations in India. Constantly innovating designs, concepts and products by infusing the latest trends in fashion and clothing styles, Pantaloons has a repertoire of lifestyle brands to cater to every consumer's needs across multiple occasions. Pantaloons, is amongst the most widely present retailers in the value fashion segment with network of 275 stores spanning over 3.76 million square feet. During the year under review, as the value fashion segment grew strongly, Pantaloons added 66 new stores to its network and entered many new Tier 2 and Tier3 markets. These new stores will mature over the coming years and will add to our growth and profitability. Pantaloons also undertook various costoptimisation initiatives, leading to improved profitability. The business continues to make sound progress towards increasing the share of franchisee stores in the network to improve capital efficiency. Pantaloons has been awarded the IMAGES Most Admired Affordable Fashion Retailer of the year for second consecutive year along with the Best Turnaround Story Award - 2017. Pantaloons was also recognized as “Most Trusted Fashion Retailer” in the Brand Equity Survey of Economic Times, 2016-17. Its customer relationship programme with over 10 Million deeply engaged customers is one of the key drivers of the growth, contributing to more than 90% of sales.

ABFRL altogether hosts India's largest fashion network with over 8000 points of sale across over 700+ cities and towns, which include more than 2,000 exclusive ABFRL brand outlets. With ~19 million Loyalty Members as of 30th June 2017, ABFRL has a strong bouquet of loyalty programmes in India. ABFRL boasts of creating more than 20,000 new designs every year.

Fast Fashion :-

Company took an early bet on Fast Fashion business by positioning itself in the segment through two “Youth fast fashion” retail brands – People and Forever 21. While Forever 21 is the iconic global fast fashion brand that enjoys an enviable following amongst young girls, People is a young and edgy brand that seeks to address the fashion aspirations of Indian youth. This fiscal, your Company took calibrated approach towards this portfolio with clear focus on improving profitability. Many long vintage stores were rationalised during the year and new retail store models were tested and established. These initiatives led to improved profitability, thus establishing replicable profitable model for future expansion. Your Company is poised to capture significant share of the fast fashion market through its varied offering across customer segments, wearing occasions and price points.

Innerwear :-

Innerwear is a large and attractive market, currently under-penetrated in the premium branded segment. Your Company forayed into this space with the launch of Van Heusen innerwear for men in mid of FY 2017-18 and is encouraged with the outcomes in a short span of time. During this fiscal, Innerwear segment aggressively added points of distribution through pan India launches. Riding on product strategy focused on fit, fashion and innovation and favourable engagement models with channel partners, your Company considers this segment to become an important growth driver in coming years.

International Brands :-

International brands portfolio comprises The Collective, India’s largest multi-brand retailer of international brands and select mono brands. Simon Carter and Ted Baker, which were signed in FY 2016-17, opened their first store this fiscal and were well received by consumers. Additionally, during the year under review, your Company signed few more premium international brands for the Indian market viz. Polo Ralph Lauren, American Eagle and Fred Perry. These brands will open their first store in the coming financial year. With aforesaid additions to its portfolio, your Company will continue on its trajectory on building a strong but selective play in the emerging Super Premium and Bridge to Luxury Segments.

India's widest distribution network

Financials :-

Company’s Performance :-

Company recorded a turnover of 7,181 crores in FY 2018; a growth of 8.3% over the previous year on the wings of better performance across all of your Company’s businesses. EBITDA grew to 501 croresvis-à-vis 476 crore last year, driven by improved profitability in our Value fashion segment. Your Company’s profit after tax doubled at ` 118 crores versus to ` 54 crores in FY 2017. The Lifestyle Brands: Louis Philippe, Allen Solly, Van Heusen and Peter England, sustained their leadership position backed by a strong brand equity and an increasing base of discerning consumers. Your Company’s business underwent significant operational transformation with heightened focus on product design, innovation and multiple initiatives centered around driving channel efficiency. Pantaloons extended through aggressive store additions and higher earnings. Spanning 275 stores across an area in excess of 4 million sq. ft. pan India, Pantaloons ranks amongst the leading players in the Value Fashion segment in India. Your Company expanded its portfolio of super premium brands, in line with the overall movement of market in this space. Partnerships with iconic international brands like American Eagle, Polo Ralph Lauren and Fred Perry were inked this year. In turn this has further strengthened its position in the growing segments of Premium and Super Premium brands. With the launch of men’s innerwear in FY 2017 under the Van Heusen brand, your Company entered the large and growing innerwear market. With an already established distribution reach of over 7,000 outlets across 75 cities in a short span, your Company is scaling up the business .

Opportunities :-

Huge market with growing opportunity Branded fashion is experiencing robust demand fuelled by rising incomes, increasing discretionary spending, improving access and growing aspiration for brands. Certain categories such as women and kids are expected to grow much faster due to rising proliferation of brands in these segments, more women joining workforce and discretion-based purchase replacing need-based buying. Tremendous opportunity exists in Tier 2 and 3 towns with increasing urbanisation, growing propensity to spend and heightened aspiration to use branded products. The exposure to digital economy has greatly changed the aspirations and expectations of consumers in these markets. These markets will also see rise of high grade mall space, driving entry of numerous brands trying to address the needs of brand seeking consumers in better quality shopping space. Rising affluence and increasing global exposure have led to growth in premium international brands business in India.

Digital Influence :-

Digital has emerged as the biggest force powering B2C businesses by creating digitally influenced and digitally enabled transactions. Your Company has embraced the digital revolution, upgrading the consumer shopping experience through Omni-channel play, blending post purchase consumer feedback in its product design process and digitally enabling the brick and mortar stores to offer more efficient and holistic shopping experience.

Threats and Risks :-

Increased discounting in industry :-

The unprecedented growth story of e-commerce created huge disruption in consumer retail over the last few years. Chasing customer acquisition and aggressive growth, the new/ e-commerce players rampaged offline commerce by resorting to aggressive discounting. End of Season Sale (“EOSS”), in its current form, heavily encouraged discount seeking behaviour and shifted a large portion of sales to discounting season; adversely impacting margins. Increasing discounts is perceived as big risk for apparel industry – players are working on improving the core customer propositions comprising of innovative product, sharp pricing and delightful pre and post purchase experience, to shift consumers back to a full price sale regime.

Inadequate supply of good quality retail space :-

With larger part of FDI in real estate focusing on residential development in the last few years, commercial real estate development had slowed down. This has led to most of the cities having insufficient supply of grade A malls and good quality commercial space, translating into higher rentals and unviable economics for retail companies.

Limited availability of talent :-

Apparel industry experiences the demand for talent exceeding supply in many critical areas of analytical thinking, technical competency and leadership skills. Growth of e-commerce companies and advent of international players in India has also created tremendous challenge in terms of retaining key talent. The above two factors have made talent development and management, an extremely crucial component of business strategy.

Outlook – Way Forward :-

Company expects FY 2018-19 to be better as the after-effects of demonetisation and GST implementation seem to have subsided. As per economic surveys, India continues to be the fastest growing economies in the world, and is expected to continue in FY2018-19 as well. This is supported well by favorable factors such as policy reforms and encouraging monsoon forecasts. Improving economic scenario is expected to translate into increased consumer spend. Furthermore, the fundamental themes driving consumer businesses such as increasing share of younger population, rising urbanisation, growing affluence, increasing discretionary spending and deeper penetration of digitisation continue to gain momentum. In view of the above trends, the outlook is likely to remain positive for the sector. Company is well positioned to leverage the opportunity in this growing market with its diverse product offerings across varied categories, price points and portfolio of strong brands that will enable it in addressing changing consumer needs.

I think long term investors consider ABFRL between 145-200 range in small lots and one can start adding in SIP mode for long term portfolio investment to handover to the next generation for the real wealth creation, stock runs a lot from 140 to 200 in short span of time in the last one month so add on every dips is best strategy for long term retail investors with time frame of 3-5 years, stock trading around cmp 202 , all the best guys and happy investing !!!!!!! [ Disclosure :- It is safe to assume that abfrl is in my long term portfolio hence my view may be biased so kindly do your own research before taking any positions. ]

Disclaimers :-

{ Any of the stocks mentioned above is not meant for the purpose of any advice. Kindly do your own study or consult your financial advisor before acting on any of the stocks mentioned. Stock market investments are subject to various risks including market risks. Markets are supreme & past performance is not indicative of any future performance.

The information herein is used as per the available sources of bseindia.com, company’s annual reports & other public database sources. Author is not responsible for any discrepancy Disclain the above mentioned data. Investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents

This is not a buy / sell / hold recommendation on the stock. The views expressed are for educative content purposes only. Future estimates mentioned herein are personal opinions & views of the authors. }

Happy Independence Day...

2018-08-15T07:00:00.000-07:00

No nation is perfect, it needs to be made perfect. Contribute towards the perfection of our country. On Independence Day, here’s wising our dreams of a new tomorrow come true for us, now and always. Happy Independence Day !!!!!!!

Five Steps of a Bubble

2018-06-30T11:19:00.002-07:00

Courtesy : Investopedia.com

1. Displacement : A displacement occurs when investors get enamored by a new paradigm, such as an innovative new technology or interest rates that are historically low. A classic example of displacement is the decline in the federal funds rate from 6.5% in May, 2000, to 1% in June, 2003. Over this three-year period, the interest rate on 30-year fixed-rate mortgages fell by 2.5 percentage points to a historic lows of 5.21%, sowing the seeds for the housing bubble.

2. Boom : Prices rise slowly at first, following a displacement, but then gain momentum as more and more participants enter the market, setting the stage for the boom phase. During this phase, the asset in question attracts widespread media coverage. Fear of missing out on what could be an once-in-a-lifetime opportunity spurs more speculation, drawing an increasing number of participants into the fold.

3.    Euphoria : During this phase,caution is thrown to the wind, as asset prices skyrocket. The "greater fool" theory plays out everywhere.

Valuations reach extreme levels during this phase. For example, at the peak of the Japanese real estate bubble in 1989, land in Tokyo sold for as much as $139,000 per square foot, or more than 350-times the value of Manhattan property. After the bubble burst, real estate lost approximately 80% of its inflated value, while stock prices declined by 70%. Similarly, at the height of the internet bubble in March, 2000, the combined value of all technology stocks on the Nasdaq was higher than the GDP of most nations.

During the euphoric phase, new valuation measures and metrics are touted to justify the relentless rise in asset prices.

4.    Profit Taking : By this time, the smart money – heeding the warning signs – is generally selling out positions and taking profits. But estimating the exact time when a bubble is due to collapse can be a difficult exercise and extremely hazardous to one's financial health, because, as John Maynard Keynes put it, "the markets can stay irrational longer than you can stay solvent."

Note that it only takes a relatively minor event to prick a bubble, but once it is pricked, the bubble cannot "inflate" again. In August, 2007, for example, French bank BNP Paribas halted withdrawals from three investment funds with substantial exposure to U.S. subprime mortgages because it could not value their holdings. While this development initially rattled financial markets, it was brushed aside over the next couple months, as global equity markets reached new highs. In retrospect, this relatively minor event was indeed a warning sign of the turbulent times to come.

5.    Panic : In the panic stage, asset prices reverse course and descend as rapidly as they had ascended. Investors and speculators, faced with margin calls and plunging values of their holdings, now want to liquidate them at any price. As supply overwhelms demand, asset prices slide sharply.

One of the most vivid examples of global panic in financial markets occurred in October 2008, weeks after Lehman Brothers declared bankruptcy and Fannie Mae, Freddie Mac and AIG almost collapsed. The S&P 500 plunged almost 17% that month, its ninth-worst monthly performance. In that single month, global equity markets lost a staggering $9.3 trillion of 22% of their combined market capitalization.

EMMBI INDUSTRIES :- RESULTS UPDATES 2018

2018-02-08T04:27:00.000-08:00

Conference call link download :-

https://drive.google.com/file/d/1ldfztt3Z5lXKSNAB4vZS7bexs9MyIazo/view?usp=drivesdk

Pennar Indistries Ltd. :- Potential Mega Multibagger In Making

2017-11-12T14:41:00.000-08:00

 Company Background

Established in 1975, Pennar Industries Limited is a leading engineering organization
with expertise in providing engineering products & services. It manufactures
precision engineering products like cold-rolled steel strips, precision tubes, railway
wagons/coaches, pre-engineered building systems, sheet metal components, road
safety systems, hydraulics and warehousing solutions. Pennar offers products and
solutions through four strategic business units:
i) systems and projects ii) industrial components
iii) precision tubes iv) steel products
And three subsidiary companies
 Pennar Engineered Building Systems Limited and

 Pennar Enviro Limited.

 PENNAR RENEWABLES PRIVATE LIMITED.

Pennar Industries Ltd (Pennar), a manufacturer of engineering
products, is well poised to capture the growth potential envisaged
in the solar, railways and pre-engineered building systems
industries. It is expected to be a direct beneficiary of the
government’s thrust on solar energy, railways, infrastructure,

‘Make in India’ and ‘Smart Cities’ campaign.

Pennar Industries Limited is one of the leading engineering organizations in India well known for its expertise in providing engineered products & services. An epitome of quality, precision, and perfection, Pennar is driven by an unrelenting desire to excel with experience spanning over three decades.

Our quest for engineering excellence began in 1988, with a strategic decision to establish our first manufacturing plant at Isnapur, near Hyderabad with an installed capacity of 30,000 MTPA to manufacture Cold Rolled Steel Strips (CRSS). Our decision catapulted us from a start-up to a profitable organization in the very first year of our operations. The company was growing at a rapid pace and thus to incorporate its expansion and demand, Pennar increased its manufacturing capacity to 50,000 MTPA in the year 1997.

The advent of liberalization gave us the much needed impetus to expand our business horizon. We embarked on a series of strategic acquisitions and expansion plans, most notably among them being acquisition of Nagarjuna Steel Ltd.; Press Metal, a unit of Tube Investment (TI) near Mumbai and the more recently the assets of Wayne Burt Petrochemicals, erstwhile Bailey Hydro, for venturing into Hydraulic Cylinders segment. We also established a new manufacturing facility at Chennai and set up an assembly unit at Hosur, near Bangalore to meet the requirements of Auto Components.

Today, with an annual production capacity of more than 350,000 MTPA, we are a multi-location, multi-product company manufacturing precision engineering products such as: Cold Rolled Steel Strips, Precision Tubes, Railway wagons / Coaches, Pre-Engineered Building Systems, Sheet Metal Components, Road Safety Systems ,etc. Recently we have also added Hydraulics and Warehousing solutions as two new products in our portfolio. Our company’s products have a significant presence in sectors like Infrastructure, Automobiles, Power, General Engineering, Building & Construction among others. Pennar is offering solutions for various types of Storage systems.

Pennar Industries has a pan-India presence with six manufacturing facilities situated across the country. These facilities include laser cutting, plasma cutting, transfer presses and CNC machines that enable it to make products of very high quality. All the plants are ISO certified. Pennar Industries endeavours to achieve ‘total customer satisfaction through total quality management’ and is committed to produce and provide steel-based products and associated services of the highest quality to customers all over the world.

Driven by our guiding philosophy of maximizing customer satisfaction with products and services par excellence, today, we have successfully established our identity as a Powerhouse of Engineering Excellence.

CDW tubes business scaling rapidly :-

Pennar mainly manufactures two products – CDW tubes and ERW tubes. ERW
tubes are an input raw material for manufacture of the higher margin CDW
tubes. The Company has developed several new products applications of CDW
tubes for all types of commercial vehicles. The company has achieved marginal

success in improving its market share from leading players such as Jindal Steel.

Systems & Projects to be the key revenue driver for the company :-

The company has successfully introduced new products in its railway portfolio -
Modular Frames & Cross Members for LHB (Linke Holfmann Bush) Coach
Applications. It has filed tenders for ICF (Integral Coach Factory) as well as
Wagons which will contribute to future revenues of the company.
Solar is another sub segment of S&P which is growing at a rapid pace. Currently
only 3 states in India are aggressive on solar capacity build up. Considering the
ambitious plans of the present government of adding 100 GW of capacity by
2022, other states are also expected to join in and hence Pennar should be a big

beneficiary of this largesse.

Three Subsidiary Companies :-

1- PENNAR ENGINEERED BUILDING SYSTEMS LIMITED

OVERVIEW

Pennar Engineered Building Systems Limited (PEBS Pennar)
was set up in 2008 with a vision to emerge as a leader in
the pre-engineered buildings and structural steel industry
space. The Company is engaged in designing, fabricating
and installing pre-engineered steel buildings, supplying
structural steel and components for manufacturing
industries, warehouses, aircraft hangars, commercial
buildings, high-rises, metro stations, stadiums and power
plants, among others. The Company is also engaged in
designing, fabricating and installing solar module mounting
structures, telecom transmission towers and cold- form
buildings for low-cost housing projects, among others.
The Company’s clientele includes UltraTech, L&T, HCC, P&G,
Godrej, Dr. Reddy’s Laboratories, ABB, JSW, Schwing Stetter,
Honda, Toyota, Ambuja Cement, Bharat Biotech, My Home
Industries, Schneider Electric, Reliance, IOT Infra, Volvo,
Toyotsu, Jayabheri, ACC, Schindler, Audi, Hindustan Unilever

and MRF Tyres among others.

HIGHLIGHTS 2016-17

• Reported a gross revenue of Rs.547.61 crore; EBIDTA
of Rs.56.35 crore; PAT of Rs.24.40 crore
• Executing a 20 storey high-rise commercial steel
building comprising, slated to be one of the largest
steel buildings in India
• Successfully executed solar power projects in
excess of 240 MW
• Finished the year under review with an order book

of Rs.425 crore

OUTLOOK

At PEBS, FY 2017 is expected to be one of the strongest,
resulting out of a robust order book translating into
attractive topline growth.
• Seamless integration of Engineering and Design
capabilities will lead to conversion of current outsourcing
orders into in-house manufacturing, reducing project
costs and ramping up bottomline growth
•Solar to continue its strong growth – in-house
capabilities developed specific to solar requirements will
ensure the same
• Increased focus on High Rise Steel Building – both
commercial as well as residential, and on Cold Form
structures for low-cost housing project, among others
•Expansion into US market providing for engineering

services paving way for additional revenue line.

Joint Venture :
Your company has invested USD 90,000 in M/s. Pennar Global INC
on 3rd July, 2017 to cater its products and services in United States
of America. Your company wish to convert this into a Joint Venture
with its other subsidiary M/s. Pennar Engineered Building Systems

Limited.

2- PENNAR ENVIRO LIMITED

PEL (Pennar Enviro Limited) provides process

technology solutions including water and waste-
water treatment, specialty additives, civil projects
and instrumentation. PEL covers a range of solutions
for industrial water, wastewater and specialty additive
treatment packages for combustion efficiency and also
for water treatment and operations and maintenance
services for various kinds of industries. Multiple
technology collaborations allow PEL to provide a wide

range of solutions to process industries.

OFFERINGS :-

Fuel Additives: Fuel additives and application in a
variety of industrial needs (including additives for
heavy and light fuel oils, storage stability additives,
additives for solid fuels and other industrial and agro
products). PEL pioneered the manufacture and supply
of fuel additives with a technical collaboration with
Total.
Water treatment chemicals: PEL produces range of
high performance specialty water treatment chemicals
(brand PENNTREAT), addressing the treatment of boiler
water, cooling water, raw and effluent water using
micro ltration, ultra ltration and reverse osmosis.
Standard pacakaged plants: PPEL’s modular packaged
water treatment plants offer several advantages over
conventional water treatment for smaller volumes
resulting in economies-of-scale. Pre- engineered
modular components allow wastewater treatment
plants to be sized specically around customer needs.
These products can also be designed to handle a variety

of in uent low rates and loadings to address discharge requirements.

Our standard plant capabilities make it
possible to provide fabricated structures / skids and
pressure vessels.
Turnkey solutions: EL provides EPC and O&M services in
the water and environment infrastructure businesses.
The turnkey environmental- friendly solutions
address the industrial and municipal segments (water
treatment plants, sewage treatment plants, effluent
treatment plants, effluent recycling plants, zero
liquid discharge plants as well as sea/ brackish water
desalination, among others). The business also offers

processing and treatment solutions.

HIGHLIGHTS 2016-17

• Recorded high revenue growth, registering a 15%
growth from FY 2015-16 and reached Rs.115 crore
in gross sales
• Created a strong engineering team with
capabilities in process design, optimisation and
project management
• Signed a deal with P & D Creative USA for new
range of products in chemicals
• Completed and commissioned large scale projects
that have paved the way for further bidding

in larger projects with increased ticket value.

OUTLOOK

• Robust order book assuring strong growth in
revenue and profitability over the next few years.
• Further planning for export orders under way – 2
export orders already on verge of confirmation for
FY 2016-17
• Expanding technical tie-ups will allow further

expansion of the addressable market size.

3- PENNAR RENEWABLES PRIVATE LIMITED

Pennar Renewables Private Limited has recorded a

revenue of Rs 26 crs with Net Profit of Rs 3.6 crores.

The company is into the business of supply of solar power

to Telangana DISCOMS.

PROJECTS DETAILS

• Spread across 3 sites, 2 in Karimnagar and 1 in
Medak and domiciled under a single SPV
• Commercial Production commenced in April
2016 and have Power Purchase Agreements(PPA)
with Northern Power Distribution Company
of Telangana Ltd. (“NPDCTL”) and Southern
Power Distribution Company of Telangana Ltd.
(“SPDCTL”) for supply of power on long term basis

i.e. 20 years

HIGHLIGHTS

• Attractive Tariff of Rs 6.45/kWh
• Projects are located in Telangana which has one
of the highest generation potential in the country
• Long term 20 years PPA with a significant residual

life

INDIAN SOLAR POWER SECTOR
OVERVIEW :-

Power is one of the most critical components of
infrastructure and is crucial for the economic growth
and welfare of any nation.. Energy security through
non conventional sources is of paramount importance
to a country such as India which depends on exports
for 80% of its energy needs. Electricity demand in
the country has increased rapidly and is expected
to rise further in the years to come. In order to meet
the increasing demand for electricity in the country,
massive addition to the installed generating capacity
is required.
India ranks third among 40 countries in EY’s Renewable
Energy Country Attractiveness Index, on back of strong
focus by the government on promoting renewable
energy and implementation of projects in a time bound
manner.
Indian power sector is undergoing a significant change
that has redefined the industry outlook. Sustained
economic growth continues to drive electricity demand
in India. The Government of India’s focus on attaining
‘Power for all’ has accelerated capacity addition in the
country . Total installed capacity of power stations in
India stood at 315,426.32 Megawatt (MW) as of February
28, 2017. In order to meet the future demand mass
additions in installed and generated capacity is needed

for economic growth. However, a continued downward spiral of power tariffs fueled by price wars between existing players, and an uncertainty in module prices and tax regime pose significant threats to the viability of the market.

GOVERNMENT INITIATIVES SOLAR

10 years of tax exemption is given for all solar projects
to promote investments into renewable energy sector
The Government of India announced a massive
renewable power production target of 175,000 MW by
2022; this comprises generation of 100,000 MW from
solar power, 60,000 MW from wind energy, 10,000 MW
from biomass, and 5,000 MW from small hydro power
projects.
The Government of India plans to start as many as
10,000 solar, wind and biomass power projects in next
five years, with an average capacity of 50 kilowatt per
project, thereby adding 500 mega-watts to the total
installed capacity.
The Ministry of New and Renewable Energy plans
to introduce a fixed-cost component to the tariff for
electricity generated from renewable energy sources
like solar or wind, in a bid to promote a green economy.
The Ministry of Power plans to set up two funds of US$
1 billion each, which would give investment support for
stressed power assets and renewable energy projects

in the country. India is slowly shifting its energy base from traditional
energy to renewable energy model. So solar energy is
going to play a lead role in conversion from conventional
energy to renewable energy sources. The past few
years witnessed several big-ticket investments in
the solar power sector . However, downward-spiraling
power tariffs brought about by price wars amongst the
major players combined with prevailing GST-related
ambiguities may reduce growth and capacity additions

in this sector.

BUDGET 2016-17 PROPOSALS

The AMP (Automotive Mission Plan) 2016-26 is a collective vision
of the Government of India and the Indian automotive industry
where the vehicles, auto components, and tractor industries
should reach over ten years in terms of size, contribution to
India’s development, global footprint, technological maturity,
competitiveness, and institutional structure and capabilities.
The vision is to make the Indian automotive industry among
the top-three in the world by 2026 in engineering, manufacture
and export of vehicles and auto components, encompassing
safe, efficient and environment-friendly conditions for
affordable mobility of people and transportation of goods in
India comparable with global standards, growing in value to
over 12% of India’s GDP and generating an additional 65 million
jobs. AMP 2026 envisages that the Indian automotive industry
will grow 3.5-4x in value from its current output of around
Rs.464,000 crore in 2015 to about Rs.16,16,000-18,88,500 crore
by 2026, based on base case of an average GDP growth of 5.8%
and an optimistic case with an average GDP growth of 7.5%

during the period.

INDIAN RAILWAYS SECTOR OVERVIEW

Indian railways is growing at a very good pace and is
expected to grow at a 10 % growth rate in 2017-18. Indian
railways is expected to be the third largest railway
market in the coming five years. The government’s
initiatives towards proper utilization of railway assets
for revenue generation along with increased capital
expenditure into railway projects will push growth in
railway sector moving forward. Improvement in FDI and
development of cold storage chains along the railway
networks will substantially increase the revenue
generation in future. development of cold storage
chains along the railway networks will substantially

increase the revenue generation in future.

INDIA’S INFRASTRUCTURE OVERVIEW :-

The Indian Infrastructure sector is one of the key
drivers of the Indian economy. The sector is largely
responsible for propelling India’s overall development
and enjoys intense focus from the Government policy
making that would ensure time-bound creation of
world class infrastructure in the country
The Road Transport & Highways Ministry has invested
approximately Rs.32,000 crore (US$ 47.7 billion), while
the Shipping Ministry has invested around Rs 80,000
crore (US$ 12.0 billion) in the past two and a half years
towards building world class highways and shipping
infrastructure in the country. The Government of India
is expected to invest sizably in the infrastructure
sector, mainly highways, renewable energy and urban

transport, prior to the general elections in 2019.

Financials :-

Pennar Industries’ Standalone H1FY18 Gross Sales at Rs 608 Crores; up 20% YoY

H1FY18 EBITDA Margin up 200 bps at 9.2%

H1FY18 PAT up 46% YoY at Rs. 14.3 Crores

Key Risk Factors

 Subdued Macro Economy may delay growth
The growth in the steel market is expected to be muted in the short term on
account of poor growth in core consumer sectors such as infrastructure and
construction. However, the demand is expected to rebound in the latter half of
2017.

 High competition across segments
The competition in the steel industry and more specifically in the S&P
segment is growing tremendously. Particularly in the tubes segment the
company faces stiff competition from large players like Jindal Tubes.

 Delay in Accounts Realization could inflate interest costs
Pennar has been facing some issues in working capital management due to
delays in debtor realizations. A few large debtors, such as L&T, are seeking
longer credit cycles leading to Pennar having to resort to securitization of its
receivables leading to inflating its interest costs to around 17-19%. If the

issue persists then the working capital management cycle could get extended

I think the company has been investing in new CAPEX to expand its product profile and increase the markets. This has already shown results by achieving highest sales and EBIDTA. Most of these activities are planned through internal sources so long term investors with time frame of 3-5 years consider pennar industries around cmp 68.5 and dips towards below 60 if any in lots for conservative target price of 130++ all the best guys and happy investing... [ Disclosure : holding shares hence my view may be biased so kindly do your own research before taking any positions ]

[ Disclaimers :- Any of the stocks mentioned above is not meant for the purpose of any advice. Kindly do your own study or consult your financial advisor before acting on any of the stocks mentioned. Stock market investments are subject to various risks including market risks. Markets are supreme & past performance is not indicative of any future performance.

The information herein is used as per the available sources of bseindia.com, company’s annual reports & other public database sources. Author is not responsible for any discrepancy in the above mentioned data. Investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents

This is not a buy / sell / hold recommendation on the stock. The views expressed are for educative content purposes only. Future estimates mentioned herein are personal opinions & views of the authors. ]

Andhra Petrochemicals :- Turnaround Candidate with Multibagger Potential

2017-11-05T11:02:00.002-08:00

Andhra Petrochemicals Ltd., incorporated in the year 1984, is a Small Cap company (having a market cap of Rs 305.47 Crore) operating in Chemicals sector.

The Andhra Petrochemicals Ltd. (APL) was promoted by The Andhra Pradesh Industrial Development Corporation (APIDC) and The Andhra Sugars Ltd (ASL) in 1984 as joint sector Company. Subsequently the structure of the Company has changed into an assisted sector Company with ASL being the major share holder.

Andhra Petrochemicals' oxo-alcohols facility in Visakhapatnam, in the state of Andhra Pradesh, is the only producer of oxo-alcohols in India and accounts for 30 of the market.

It produces isobutanol, 2-ethylhexanol and n-butanol.The facility began its operations in 1994 with an initial capacity of 30,000mtpa. Over the years the company enhanced its production capacity to 39,000mtpa. The estimated investment in setting up the facility was about $50m.

Plant expansion :- In March 2007, Andhra Petrochemicals announced its plans to expand the capacity of the oxo-alcohols facility in Visakhapatnam. The expansion was completed in May 2010. The expansion plan increased the plant's production capacity from 39,000mtpa to 73,000mtpa. Andhra Petrochemicals invested about $65m in the expansion.

Financing :-

The expansion project was carried out using loans, internal accruals and debt. About $44m is a term loan and the rest of the investment came from internal accruals and equity.

IDBI Bank, State Bank of India, State Bank of Hyderabad and Andhra Bank are some of the lenders for the project.

Process technology :-

In October 2007, Andhra Petrochemicals announced that it had chosen modern LP Oxo SelectorSM 30 Technology, from Davy Process Technology, a London-based supplier of proprietary process technologies. Davy's technology is considered the most efficient and economical method for the production of oxo-alcohols.

The LP OxoSM process technology is used to manufacture normal and iso-butyraldehydes from propylene. The normal and iso-butyraldehydes are further processed to convert them into plasticiser alcohol, 2-ethylhexanol and butanols for solvent uses.

The process involves reacting propylene with synthesis gas which produces normal and iso-butyraldehydes. The synthesis gas is a combination of carbon monoxide and hydrogen. The reaction is carried out at less than 100°C in the presence of a homogeneous modified rhodium catalyst. The conditions under which the reactions are carried out ensure effective utilisation of raw materials. It also results in low by-product formation and requires less energy.

Different variations of the technology are available depending on the requirements for the production of oxo-alcohols. The technology can also be used to produce higher alcohols such as C11 to C14 from olefins produced from Fischer-Tropsch synthesis.

Facilities :-

The Visakhapatnam plant has a storage facility for raw material and products, steam generation, diesel power generation, a sea water cooling tower and space for raw water storage. The plant also encompasses a significant green belt.

Products and feedstock :-

Isobutanol, 2-ethylhexanol and n-butanol are used in various applications. Isobutanol is used in plasticisers, amino resin, isobutyl, acetate, printing inks, nitro cellulose lacquers, urethane catalysts, pesticides, resins, pharmaceuticals, varnishes and rubber chemicals.

2-ethylhexanol is used for surfactants, acrylates, lube and fuel additives, mining, solvent extractions, agro-chemicals and lubricants. N-butanol is used in plasticisers, adhesives, detergents and acrylates.

The facility uses naptha as feedstock. It is supplied by Hindustan Petroleum's (HPCL) Visakh refinery. HPCL will also meet the additional demand for feedstock after the capacity of the plant is increased through the expansion.

Market growth :-

The demand for oxo-alcohols in India is estimated at more than 100,000t/y. The demand is expected to increase in the future due to the growth of the Indian economy and particularly the petrochemicals sector.

As a result, the demand supply gap for oxo-alcohols is expected to be 7–8% per annum. This potential demand for oxo-alcohols is what triggered Andhra Petrochemicals to expand its plant capacity to tackle competition from increasing imports.

Global Outlook :-

Oxo Alcohols Market by Type (N-Butanol, ISO Butanol, 2-Ethylhexanol), Application (Acrylates, Glycol Ethers, Acetates, Lube Oil Additives, Resins, Solvents, Plasticizers) - Global Trends & Forecast to 2020 Oxo alcohols: A projected value of 12,601 KT by 2020, signifying firm annualized growth of around 4.4% between 2015 and 2020. Oxo alcohols are prepared by reacting olefins with syn gas (hydroformulation reaction) under low pressure in presence of rhodium catalyst. The resultant aldehyde is hydrogenated to give Oxo-alcohols. Various olefins such as ethylene, propylene, acetylene can be used as raw materials for preparation of different kinds of Oxo-alcohols. The commercially important Oxo alcohols are n-butanol, 2-ethylhexanol, and isobutanol. Currently, Asia-Pacific is the biggest market for Oxo alcohols followed by Europe and North America, which together accounted for more than 90% market share in 2014. China is the biggest market for Oxo alcohols, followed by United States, and is projected to grow at a CAGR of 7% between 2015 and 2020. The European market is comparatively mature with a consumption growth rate well below the average market growth. The European Oxo alcohols market is expected to show the lowest CAGR between 2015 and 2020. On the basis of application, the Oxo alcohols market is further categorized into Acrylates, Glycol Ethers, Acetate, Lube, Resins, Solvents, Plasticizers, and others. Plasticizers are the largest application segment of Oxo alcohols, followed by use in acrylates and acetates industry. On the basis of type, the Oxo alcohols market is further categorized into N-butanol, 2-ethylhexanol, Isobutanol, and others. The growth in end user segment is primarily driven by growing demand from the Asia-Pacific region particularly from China. The major players of Oxo alcohols BASF Petronas (Malaysia), Dow Chemical Company (U.S.), Eastman Chemical Company (U.S.), ExxonMobil Chemical Company (U.S.), Arkema SA (France), Evonik Industries (Germany), The Andhra Petrochemicals Limited (India), Oxea (U.S.), ZAK S.A. (Poland), Ineos (Switzerland), BAX Chemicals (The Netherlands), Qatar Petroleum (Qater), and LG Chem (South Korea).

Financials :-

ANDHRA PETROCHEMICALS LTD. has reported financial results for the period ended September 30, 2017.The company has reported net sales of Rs.147.36 crores during the period ended September 30, 2017 as compared to Rs.56.94 crores during the period ended September 30, 2016.The company has posted net profit of Rs.19.15 crores for the period ended September 30, 2017 as against Rs.(7.67) crores for the period ended September 30, 2016.The company has reported EPS of Rs.2.26 for the period ended September 30, 2017 as compared to Rs.(0.90) for the period ended September 30, 2016.

Future Outlook :-

Company's performance capability is expected to be good as the Propylene supply from HPCL got normalised. However, the Company's performance to a large extent is dependent on international supply and demand for these products and their prices which are influenced

by crude prices, exchange fluctuations and dumping from the sources other than that covered by Anti-Dumping Duty.

OPPORTUNITIES AND THREATS :-

Estimated demand of Oxo-Alcohols at 2,20,000 MTPA, with healthy growth rate of 8% to 10% per annum, in general, is a good opportunity for the Company with existing capacity of 80,000 MTPA, considering the huge demand-supply gap in the country. As such there are no constraints in the Company's production capability with Hindustan Petroleum Corporation Limited (HPCL) able to meet full Propylene requirement. Sales realization is also expected to improve over time, firstly on account of Anti-Dumping Duties imposed by Govt. of India on imports from certain countries and secondly fructifying Company's efforts of bringing certain other countries and products in this fold, though it may take some time. This appears to be some positive development for the Company. However, downturn in product price scenario internationally and dumping of the products and currency fluctuations may impact the

Company's performance and recovery process to some extent.

RISKS AND CONCERNS :-

The Company is depending for its major raw material, i.e., Propylene from a single source, HPCL refinery. However, the risk is built in the

project evaluation. Crude prices, exchange rate fluctuations and political instability in the Gulf area are of major concerns.

I think andhra petrochemicals future seems to be bright because of the latest quarterly results with 19cr profit and 2.26 eps so long term patience investors with time frame of 3-5 years consider andhra petrochemicals around cmp 45 and dips if any for multibagger gains in long term currently scrip in ST group so one needs 100% margins and trading only at BSE. [ Disc : It is safe to assume that I have vested interest in andhra petro so my view may be biased so kindly do your own research before taking any positions, all the best guys and happy investing.]

{ Disclaimers :-

Any of the stocks mentioned above is not meant for the purpose of any advice. Kindly do your own study or consult your financial advisor before acting on any of the stocks mentioned. Stock market investments are subject to various risks including market risks. Markets are supreme & past performance is not indicative of any future performance.

The information herein is used as per the available sources of bseindia.com, company’s annual reports & other public database sources. Author is not responsible for any discrepancy in the above mentioned data. Investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents

This is not a buy / sell / hold recommendation on the stock. The views expressed are for educative content purposes only. Future estimates mentioned herein are personal opinions & views of the authors. }

Tv18 Broadcast Ltd. - Consolidation over after 7 years ?

2017-10-02T04:14:00.000-07:00

‘TV18 Broadcast Limited’ is a subsidiary of Network18 Media & Investments Limited,
one of India’s most diversified media conglomerates engaged in news, entertainment, digital content,
filmed entertainment, e-commerce, magazines and allied businesses. TV18 owns and operates the largest network of channels – 49 in India, spanning news and entertainment. We also cater to the
Indian Diaspora globally through13 international channels.

∆ Widest portfolio in the industry :-

TV18 is the only player in the Indian Media & Entertainment space with a
portfolio spanning News, Entertainment, Infotainment and Digital across both

national and regional markets.

∆ Through an equal-partnership joint- venture with Viacom Inc. named Viacom18, TV18 operates an array of entertainment channels. The entertainment portfolio comprises Hindi general entertainment
channels, English entertainment, movies, youth and musical entertainment, kids genre and six regional entertainment channels as well. This includes leading properties like Colors, MTV and Nickelodeon. The group has a presence in the movie business too, which it operates through Viacom18 Motion Pictures. It has also launched OTT video platform VOOT in FY17.

TV18’s Infotainment joint venture with A+E Networks operates factual entertainment
and lifestyle channels named History TV18 and FYI TV18 respectively. TV18 and Viacom18 have also formed a strategic joint venture called IndiaCast. This multi-platform content asset monetisation
entity drives domestic and international channel distribution, placement services and content syndication for the group’s channels and for other broadcasters as well.

∆ From general to business to regional news, entertainment and digital, TV18’s family encompasses a complete range of broadcast offerings for people in various parts of the country and outside. TV18’s bouquet includes marquee brands such as CNBC-TV18, CNN News18 (formerly CNN IBN), Colors, MTV, Nickelodeon, and many others.

∆ Re-imagining Television :-

Unleashing our imagination to capture new opportunities in the television industry, we initiated a series of measures and launched several new channels/platforms to improve our ranking and performance across genres during the year.

∆ News18 is transforming into the umbrella
brand for all general news from the TV18 bouquet, across English, Hindi and Regional

languages.

∆ Strategic initiatives :-

∆ Complete revamp of English general news channel CNN-IBN – The channel was rebranded as CNN-News18, with a fresh logo, a completely new look and a new philosophy. The primetime band of 8 pm to 11 pm was also transformedunder the banner of ‘Primetime 2.0’

∆ Hindi General News channel IBN7 was refreshed as News18, with new shows and talent, and a more pertinent tagline– Danke ki chot par, with the idea to challenge the status quo.

∆ ETV regional news channels are being transitioned to the News18 umbrella brand.

∆ Integration of regional entertainment portfolio into Viacom18 has been completed with merger of Prism TV with Viacom18.

Improved rankings:-

∆ CNN-News18 ranking moved up to #2 post rebranding; settled in top 4 channels .

∆ CNN-News18 was #1 channel during US Presidential Elections result coverage

∆ Nickelodeon ranked #1 in Kids category

∆ Colors was a close #2 in the GEC genre;and ranked #1 in social media buzz.

∆ History TV18 ranked no.1 in FactualEntertainment genre in mega cities.

∆ Investments :- Across its portfolio, TV18 group made investments to the tune of ` 380 Crore in FY17.

∆ Re-aligning Strategy :- At the root of an organisation’s growth lies its ability to connect with its consumers at A DEEPER LEVEL. The transforming Television industry landscape in India has led to the emergence of regional channels as a vital bridge between viewers and media organisations.

At TV18, we have successfully embarked on this change by expanding more aggressively into regional markets as part of our strategy to realign ourselves with the changing needs of the viewers. We continued to sharpen this focus during the year through regional channel
launches (3 news, 1 entertainment and 3 HD feeds).

∆ Exploiting synergies :- Simplification of our corporate structure facilitated our transformation as we moved proactively to bring in greater operational synergies across our Television

network. We completed the merger of Prism, which handles the regional entertainment portfolio, into Viacom18. We also propose to merge Panorama Television Pvt. Ltd., our 100% subsidiary handling regional news, into parent TV18. These integrations help in driving better realisation of synergies, improved cash flow management and accentuated

’network effect’ benefits.

∆ Establishing umbrella brands :-TV18 is in the process of phase-wise re-launching of all the ETV-branded channels of Panorama under the News18 brand. The 5 ETV regional entertainment channels were similarly re-launched under the Colors brand last year. The intent is to grow these flagship brands for general news (News18) and general entertainment (Colors) by gaining more mindshare and leveraging the power of umbrella branding.

∆ Revitalising growth :-With our eyes on growing our presence across the country, we invested substantially into new regional channels. Early successes despite a tepid market endorsed the strength of our strategy. Moving forward, we shall continue to revitalise regional growth to further boost TV viewership and rankings of our channels across genres.As the demand for vernacular content increases and regional advertising markets deepen further, we shall further augment our presence across the country. With our ability to feel the pulse of the viewers and our national platform to bank upon, we are ideally positioned to grab a large chunk of the vernacular opportunity pie.

∆ Tv18 launched three regional news channels during FY17, as part of the News18 bouquet, in Kerala, Tamil Nadu and Assam/ North-East, to add to the five already launched over the previous two years.

∆ To hammer home our existing advantage in the Kannada market, where we are already #1, Tv18 launched Colors Super as the second GEC in Karnataka, along with an HD feed for primary GEC Colors Kannada.

∆ Exploring & owning niches :- As we move proactively towards content rejuvenation to drive growth, we continue to look for new niches that we can own to enhance our offerings for the consumers.
The launch of the lifestyle channel ‘FYI TV18’ was in line with this philosophy. This factual entertainment channel focusses on lifestyle, with eight shows marking its launch. The success of the channel could
be gauged from the fact that it ranked #2 on several occasions soon after launch, and went on to be ranked #1 in the genre in ‘All India All 2+’ and ‘Mega Cities All 2+’,with a market share of 29.6%.

∆ Plugging white spaces :-
As a relatively new entrant in the entertainment arena, it is our constant endeavour to fill the gaps in our content bouquet and reach out to the masses. The launch of Rishtey Cineplex - a free-to-air movie channel, followed by launch of MTV Beats - a free-to-air 24x7 Bollywood Music channel, was aimed at plugging such white spaces. The two channels packaged
Bollywood content in new avatars for mass audiences and have been very well received.

∆ Media & Entertainment industry will stand to benefit from GST implementation in the long run, as entertainment tax will fall under its ambit, and input credits will be available to all segments across the board.

∆ Growth Drivers :- Some recently announced government policies will have a lasting impact on the M&E industry especially over the long term.

∆ Goods and Services Tax (GST) – “Remove barriers for the consumer” The GST regime that kicked-in from July 1, 2017 will have varied levels of impact across different segments of the industry. However, in general, M&E will stand to benefit as entertainment tax will fall under the ambit of GST and input credits will be available to all segments across the board. From an industry stand-point, the removal of tax
barriers between states could also set in motion a virtuous cycle of improvement in consumption levels. Further, a shift towards the organised sector can potentially increase advertisement revenue in the medium term.

∆ Cable Digitisation – “See your consumer” - The paradigm shift in the overall operations of the television sector brought about by digitisation is expected to continue flowing in gradually, once the teething troubles get sorted out. Addressability shall not only provide improved revenue due to reduction in issues of under-reporting in the short-run, but also improve consumer analytics and hence the monetisation potential of advertising inventory in the long-run.

∆ TRAI Tariff Guidelines – “Empower the consumer to choose” -The TRAI’s guidelines on tariff and interconnect will alter the operating dynamics between stakeholders. While TV channels are typically sold as a bouquet today, the guidelines mandate à la carte pricing of channels at the retail level to give the customer complete control over channel subscription. However, industryparticipants have cited multiple issues, including pricing regulation on content, lack of infrastructure for marketing and billing on an individual channel at the retail level, niche channels facing reach problems, etc. Further clarity is awaited as the matter is sub judice.

∆ Rise in Digital Consumption of Content :-The launch of 4G by a number of telecom companies and the price wars that have ensued have resulted in considerable reduction in data tariffs. The free data use
period offered by Reliance Jio between September 2016 and March 2017 further encouraged the use of both mobile internet and data. This, in turn, has led to an increase in online usage and interaction
on digital platforms. As competition in the telecom sector has risen sharply and 4G roll-outs have picked up pace, a substantial drop in data tariffs and debottlenecking of bandwidth has been witnessed. The digital revolution has received a further fillip by government and private initiatives to

create public wi-fi zones and a faster roll-out of broadband services.These trends have the following implications for the media sector :-Higher content consumption, especially video, enabled by cheaper data and launch of multiple OTT platforms and services .Smartphones gaining ground as a second screen along with TV, especially as prices in India have dropped and 4G phones have become mainstream Growing affinity towards on-the-move

viewership of content through mobile phones.

These trends will put advertising spends in this segment on a higher trajectory and they are expected to grow at a CAGR of 30.8% by FY'21.

∆ Small Towns and Rural Areas Display Robust Consumption Small towns and rural markets continued to demonstrate steady capacity for consumption of more traditional forms of content in a phenomenon that the KPMG – FICCI Report, 2017, refers to as the ‘Bharat’ story. In the print segment, despite competition from digital media, regional markets displayed growing demand. Film exhibition also saw an expansion in the number of multiplexes across small towns. The footfalls and revenue realisations also received a boost as major operators commenced business in Tier II cities. The television segment, however, offered
most apt instance of the strength of the ‘Bharat’ story. The high levels of television impressions and viewing time in rural India caught the attention of broadcasters and advertisers alike. The obvious reaction to this was an increase in the number of advertisers on rural-focussed television channels, and broadcasters focussing on regional content. Going ahead too, TV viewership is slated to be significantly
catapulted by rural India, as urban markets begin to saturate.

∆ Rural and Digital Coverage through Broadcast Audience Research Council (BARC) :-BARC India is the only government registered TV ratings service in India, which releases individual viewer ratings since June 2015 and rural viewership data since October 2015; thus covering India more holistically. Further, BARC has also announced a phased roll-out of Digital measurement platform ‘EKAM’
recently, which will help track the hitherto-unmonitored digital content consumption.

∆ KEY HIGHLIGHTS AND DEVELOPMENTS :-

1- Free to Air (FTA) Channels Attract Advertisers :- Free-to-Air channels continued to build on the momentum they created in FY15. Some prominent channels went FTA, as a drive to increase viewership was implemented by some broadcasters, especially to latch onto the DD Free dish-led FTA market-growth. The viewership trends revealed through BARC’s rural measurement in FY16 endorsed the trends marked in FY15. Once again these
channels achieved high reach and viewership and as a result, advertising spends.

2- Consolidation across the Value Chain:- During FY16, leading players in the M&E
industry continued to consolidate their presence across genres and markets. While the number of mergers and take-overs were fewer than in previous years, the size of these transactions was higher. Even in the radio space, larger players expanded their footprint into non-metro cities and towns by acquiring smaller industry players. The consolidation drive permeated the film exhibition business too, albeit at aslower rate.

3- Advent of Video on Demand Services (VoD) :- Over the past year, there has been a surge in VoD services. Global OTT leaders Netflix and Amazon Prime have made an entry
into India, with significant war-chests and a subscription-driven model. Side by side, major domestic broadcast network backed platforms driven largely by advertising, such as VOOT (Viacom18), amongst others, also launched their bouquet of services. Telecom provider’s content aggregation platforms like Jio TV/Jio Cinema, Airtel Wynk, etc. too have gained ground. As of now, various models are being experimented with; as monetisation in OTT is a challenge given scalability concerns and lack of an established currency for advertising.

4 - Consumer Analytics:- A Crucial Tool The M&E companies have begun to extensively use analytics as a basis for building and validating their business models. Even challenges in the business environment are being addressed based on the results of analytics. BARC viewership data offers broadcasters and advertisers fresh insights which are translated into
modifications in content, distribution and advertising strategies. As technology evolves, availability of data will only increase. This will enable organisations that ride this opportunity to optimise customer base.

∆ MAJOR INDIAN OTT PLATFORMS INCLUDING VOOT ARE ADVERTISING- DRIVEN, VERSUS THE SUBSCRIPTION- BASED MODEL OF GLOBAL PLAYERS LIKE NETFLIX AND AMAZON PRIME.

∆ Media Industry :-The Indian M&E industry is expected to grow at a 13.9% CAGR to reach ` 2,419 billion by FY21, from its estimated size of ` 1,262 billion in FY16, due to positive demographic trends,
improved connectivity driving reach and availability of segmented content offerings.

∆ The Indian Television Industry :The Indian Television industry stands at ` 588 billion in FY16, registering a growth of 8.5% over the previous year. It is expected to grow at a CAGR of 14.7% and double in size by FY21 to reach ` 1,166 billion. Both advertising and subscription revenue are expected to contribute to this growth. While advertisement revenues are expected to grow at a robust 14.4%, subscription revenue will lead with a stronger growth

of 14.8%, on account of the benefits of digitisation that will accrue post FY17.There were 181 million television households in the country in FY16, translating into a television penetration of 63%. Within this universe, the Cable & Satellite (C&S) subscriber base stood at 169 million in FY16. By FY21, the number of television households is expected to reach 203 million, implying a TV penetration of 67%. The C&S subscriber base is slated to climb to 171 million by then. This rising trend in both TV penetration and increase in C&S base bodes well for the Indian television sector.

∆ The Indian M&E industry is expected to grow at a 13.9% CAGR to reach ` 2,419 billion by FY21, driven by positive demographic trends, improved connectivity boosting reach and availability of

segmented content offerings.

∆ If you look at the above mentioned charts of time technoplast after long consolidation between 2008 to 2016 time technoplast gives multi-year Breakout and started it's northward journey from 42 and made new 52 week high of 205 and giving massive 500% returns to investors in just 18 months.

∆ I think consolidation in tv18 is over in 2018 or sooner and tv18 also giving handsome returns in long term view of 3-5 years so patience investors accumulate tv18 at cmp around 40 and dips towards 35 if any, my conservative target price is 75+ all the best guys and happy investing.... [ Disclosure : holding from 43 levels hence my view maybe biased so kindly do your own research before taking any positions in tv18. ]

{ Disclaimers :-

The information herein is used as per the available sources of bseindia.com, company’s annual reports & other public database sources. Author is not responsible for any discrepancy in the above mentioned data. Investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents

This is not a buy / sell / hold recommendation on the stock. The views expressed are for educative content purposes only. Future estimates mentioned herein are personal opinions & views of the authors.}

EMMBI INDUSTRIES - UPDATES IN 2017

2017-09-12T12:41:00.000-07:00

EMMBI INDUSTRIES:- Updates in 2017

EMMBI INDUSTRIES :- A BLUECHIP IN MAKING

2017-09-10T04:54:00.001-07:00

Emmbi Industries began as a twinkle in the eyes of first-generation
entrepreneurs, Makrand and Rinku Appalwar. An opportunity spotted in 1994
saw the birth of Emmbi in the November of 1994 with one small
manufacturing unit in Silvassa. Since then, Emmbi has grown from strength to
strength, transforming into a leading global polymer company.
∆ Emmbi Industries is one of India's largest technical textile and specialty polymer processing company
manufacturing (1) woven sacks and FIBC (Flexible Intermediate Bulk Containers) which are used in transportation
of bulk commodities like chemicals, fertilisers, cereals, detergent (2) advanced composites of
pharma and food grade, such as anti-carcinogenic, anti-bacterial, anti-corrosive and tapered-proof FIBC, with an
R&D center recognized in Apr 2016 by India's Department of Scientific and Industrial Research (DSIR) to
differentiate from its other peers in the fragmented industry as well as various technical
textiles and advanced composites such as container liners, protective irrigation system, canal liners, first to
introduce flexible water tanks (patent registered), car covers used in water conservation and agriculture products.
∆ Established in 1994 by first generation owner-operators and husband-wife team, Makrand and Rinku Appalwar,
Emmbi is based in Maharashtra with its manufacturing facility located at Silvassa in Gujarat in which 48% of their
product sales are derived from international markets. Emmbi’s customers include established consumer and
industrial companies such as Hindustan Unilever, Tata Chemicals, Godrej Industries and ITC, as well as ecommerce
players like Flipkart, Amazon and eBay.
∆ In recent years, Emmbi launched an increasing number of innovative products whose applications can be found
in food, safety, water conservation, agriculture, infrastructure, e-commerce, crop protection, hazardous & nuclear
power plant waste management and solid waste management. For instance, Emmbi recently inaugurated the
world’s widest width pond lining facility at its Silvassa plant in Gujarat in Apr 2017. Emmbi will produce 4,380
pond liners per year under "Jalasanchay Brand", creating an extra water storage capacity of 48 million litres per
day for rural India. The states of Maharashtra and Rajasthan where the company is presently active in the
business, has a plan to produce 110,000 & 50,000 pond liners per year respectively for the next five years. This is
the new market segment for Emmbi with a potential size of Rs2,000 crore (US$310 million). Emmbi is a top 3
players in pond liner business and aspires to get 10% of the market share of pond lining business in the coming
years. Emmbi is also working with five banks to make funds available for farmers for its pond-liner business, which
the management expects to bring in huge opportunities going forward.
∆ Upcoming new innovative products to drive Emmbi’s growth include: (1) Advanced composites: The start of the
clean-room food and pharmaceutical grade packaging plant in July 2017; Pneumatic human safety fall arrest
systems & dunnage systems; E-commerce tamper evident multi trip packaging; Infrastructure road & roofing
underlayment, Fire retardant scaffolding; (2) Water conservation: Retail distribution of pond liners, flexi tanks;
canal liners, check dams, lapeta pipes; (3) Agro-Polymers: Export substitution crop protection, mulch fi lms, silage
incubators, agro sheds.
New innovations :- Emmbi Wool Pack
• Application- Emmbi Woolpack will be used
for packaging of Raw Wool
• Speciality - Traditionally “Wool” waspacked in nylon which is very expensive. AtEmmbi, we have developed a Special Blend of Polymer which offers all the
properties of a conventional woolpack at50% of the cost.
• Market Size- US $ 360 million.

∆EMMBI MAKING WORLDS WIDEST WIDTH POND LINER AND REVENUE FROM THE BUSINESS EXPECTED TO GROW AT CAGR OF 145% FROM 650 POND LINERS TO 10000 IN 2020.
∆ Revenue in 2017 is 240.99 crore vs 2013 is 140.19 crore which around 70% total growth in last 5 years.
∆ Net profit in 2017 is 12.73 crore vs 2013 is 3.24 crore which almost 400% total growth in the last 5 years.
∆ EPS in 2017 is 7.2 vs 2013 is 1.91 which is almost 400% growth in eps.
∆ Promotors holding :- 57.78
∆ one of the Fii Hidden champions fund already holding 699690 (3.96%) stake and also increasing his stake from open market which is another Positive for long term investors.

∆ I think Emmbi Ind will grow minimum 15-20% CAGR for the next 5-7 year's and looking forward to future Outlook of the company price seems to be cheap so long term investors with time frame of 3-5 years consider around cmp 193 and dips towards 165-170 if any for conservative target price of 400+ all the best guys and happy investing...

[ Disclosure :- holding from 17 level's hence my view maybe biased so kindly do your own research before taking any positions in Emmbi. ]