Friday, December 31, 2021

New Year Greetings



Dear Blog Members,






My heartiest new year wishes for you and your family that all your dreams and wishes will come true in 2022.

Thursday, November 4, 2021

Diwali Greetings

 

Dear Blog Members,



May this Festival of Lights Bring  Peace and  Prosperity to You and Your Family


May All Your Dreams Come True 




Wishing you a Very Happy Diwali


Friday, October 15, 2021

Vijayadashami - Greetings

 

Dear Blog Members





On this auspicious day of Dussehra… I wish you every happiness and the fulfilment of all your dreams.


A very happy Vijayadashami to you and your family





Friday, October 1, 2021

Add-Shop E-Retail Ltd - Wish You Health Wealth & Prosperity


CMP = 134


Add-Shop E-Retail Ltd is incorporated in 2013 and started its commercial production and distribution in 2015. Later on the company converted into a public limited company in June 2018. The company is engaged in the business of manufacturing, marketing and distribution of products in the categories of ayurvedic products, food supplement products, agricultural products, animal feed supplement products, personal care and home care products under the brand name "Add-Shop Promotions". 




The company has set up its herbal & ayurvedic processing unit for manufacturing of cosmetic & non-cosmetic products in Rajkot Gujarat. The company manufactures its high quality products through its own two fully automated manufacturing units which are FDA, HACCP, GMP, ISO 9001: 2008, ECOCERT, and KVIC (Khadi & Village Industries Commission, Government of India) certified.


With an objective to penetrate major markets, the company caters more than 125 products to retailers and wholesalers. Add Shop has adopted new age marketing and distribution system which uses direct selling business method to promote and distribute products and services which uses word of mouth publicity, which is very low cost as well effective and also generate employment for the people. 


Organic Farming - Vish Mukt Kheti Samruddha Kisan  





This is one of the main objective of the company to minimize the use of chemical / pesticide and divert farmers towards organic farming which increases profitability of farmers as well drastically reduce import bill on chemical fertilizer. Currently there is a vast use of chemical fertilizers and pesticides into Indian agriculture. Organic farming will improve soil quality, reduce pollution into our environment as well deadly diseases. With this care of mother nature in mind, the company is producing and distributing high quality organic products to farmers for their agriculture use as well organic cattle feed products for their livestock. The Bhoomi sudha, Cropsudha, 3B(Black bioBooster), DNC –90,  Cropvitta, ASP –90, Microsudha, DOJ –80, Cattle Sudha are the major product in the field of agriculture.


Organic farming by Dinesh Pandya


https://youtu.be/wq81d5MHkwA

https://youtu.be/JxnosdT3EPY


PM Modi urges farmers to cut the usage of chemical fertilizers, pesticides and adopt organic farming.


https://youtu.be/BVs1KxbBpm0

https://youtu.be/QTVhXJJgHQA


Sikkim is the First Organic State in India and in the World.


https://youtu.be/-idI1dkaxzM

https://youtu.be/hAd7EPiL3f0

https://youtu.be/PfloyqsWfy4


Ayurveda - Healthy Way of Living




The Ayurveda principle  is preserving the health of healthy persons and  curing the diseases of diseased.


The primary objective of the company is  to promote Ayurveda to live healthy  and disease free life for Indians. It will also help to generate employment for the people living  in rural and urban areas. In this present competitive era of medicines and food supplements, the company is aiming to focus on ways to bridge the nutrition gap, which is a recognized cause of any diseases by promoting Ayurveda and its products. The company has full range of high quality ayurvedic products - ASP Madhushakti , ASP Aloe Vera, ASP Amla, ASP Ashwagandha, ASP Shatavari, Shlimsudha, Narisudha, Protein Sudha, ASP Triphala, Satayu Capsule, Karkyusudha, Necharsudha, Satayu Syrup, BrensudhaPowder, Gausudha, Naturacal, Sampurna Sudha, Hradyasudha Capsule, Vaytroga, Kenkarsudha, Skeensudha Cap, ASP Melshakti, Floosudha Cap, Pilssudha Capsule, Urosduha Capsule, Arthosudha Capsule, Narvosudha Capsule, Dadaji Gaupiyush Capsule, Dadaji Immumax Capsule, Dadaji Karkyumax Capsule, ASP Fimel Shakti, Joint Sudha Oil, Dentosudha Toothpaste, Tulsi Sudha Drop, V-Sudha, ASP Harde, ASP Alfalfa, Spirulina, Wheatgrass, ASP Tulsi, ASP Nony, ASP Moringa etc.


Beauty and Personal  Care  Herbal  Products





The company has wide range of high quality Beauty and Personal Care Herbal products under Bit us brand - ASP Herbal Hair Oil, Bit us Hair Conditioner, Bit us Lemon fresh Soap, Bit us Facial Kit, Bit us Sunscreen Lotion, Bit us Herbal Face Wash (Papaya & Cucumber), ASP Herbal Shampoo, ASP Saffronolivo Beauty Soap, Bit us Herbal Shampoo, Bit us Skin lightening Cream, Bit us Beauty Soap, Bit us Sanitary Pad, Bit us Gel Face Wash, Bit us Shaving Gel, ASP Aloeglycerin Bath Soap, Bit us Body Lotion, Bit us Peel Of Mask, Bit us Pimple Cream, Bit us Night Cream, ASP Luxurious Bath Soap etc.


Promotional Video - Personal care and home care 


https://youtu.be/eTL7RrVaQJ4


Home Care Products




The company is expanding its portfolio in home care segment  with  some of the key products - Home Sudha Dishwashing Liquid, Homesudha Multi-Purpose Liquid, Homesudha Laundry Liquid Detergent, Khadi Night Dress, Khadi Mask, Addshop T-Shirt, 7 in One Kitchen Dicer etc.


Promoters


Dineshbhai Pandya and Jayshreeben Pandya are the promoters of the company. They have started with vision to find and implement radical solution for very deep rooted challenges of the nation which is into developing phase.

A) Employment generation for the people specially for women.

B) To Promote Ayurveda, which is an Indian heritage - to live disease free life.

C)  To Promote organic Farming - To improve productivity as well profitability of farmers

D)  To promote Khadi so that it generates vast self employment at grass root level specially into remote village area of our Nation.


Dineshbhai Pandya is Promoter and Managing Director of the company. He is visually impaired person and a first-generation entrepreneur, trainer and motivator. He has vast experience in the field of  Agri and Ayurveda. Below given are some of his personal achievements. 

"Golden Book of World Records" (USA) Achieved for most village assemblies addressed by a differently abled person.

 "Best Businessman in History of Blind Person" awarded by Central Government 

"Best Canvassing Organic Farming"Award from  Agriculture Department.

"Krushi Mauli" Award from Swami Samarth Organization Maharashtra.

"Shram - Ratna" Award from Labor & Employment Department, Gujarat Government.

He has conducted more than 1500 Gram Sabha with Farmers across India.

"Best Motivator to Farmers in Layman Language"Award from Indira Gandhi Agriculture University, Raipur - Chhattisgarh.

His unit has been awarded as "Best Manufacturing Unit" by KVIC (Khadi & Village Industries Commission, Government of India).


Dinesh Pandya - The Miracle man   


https://youtu.be/-eTbgjqwhuY


Investment Rationale




As per KPMG and FICCI Report  - Direct sales enterprises  in India are growing exponentially. It is expected to  expand direct sales from Rs 16776 crores in 2019-20  to  Rs 64500 crores in 2025.  India has made rapid progress in Direct Selling business, having recorded an 18% CAGR over a period of last four years.


https://globalprimenews.com/2021/07/19/indian-direct-selling-industry-registers-28-y-o-ygrowth-currently-valued-at-inr-16776-crore-in-2019-20-idsa-annual-survey-report/


https://economictimes.indiatimes.com/industry/services/retail/direct-selling-industry-crossed-sales-of-rs-7500-crore-in-april-september-report/articleshow/79841129.cms?from=mdr


Direct sales in India gives extra income and encouraged micro-entrepreneurship considerably. Around 7.4 million Direct Sellers are employed in the Direct Selling industry in India. There has been a staggering growth of ~30% y-o-y and expected to rise exponentially  to 18 million in 2025.


As per a report by the World Federation of Direct Selling Associations (WFDSA), the top countries with global market share are USA (22%), China (11%) and Germany (10%). India’s ranking in the industry in terms of the size of the sector has improved to 12th rank globally, up from 15th position in 2019. The contribution of Indian direct selling industry in global sale is still less than 2% which gives it huge growth possibility in the future.




https://wfdsa.org/wp-content/uploads/2021/06/Sales-Seller-Report-2020.pdf


https://www.businesswire.com/news/home/20210526005567/en/Direct-Selling-Association-Releases-Data-Showing-Record-High-Sales-Sellers-and-Customers-in-the-U.S.-in-2020


Indian homegrown direct selling companies are stimulating ‘Make in India’ by sourcing products and  people across India to make this industry and sector atmanirbhar so that every citizen embraces self-reliance. The direct selling industry is going to be the catalyst for this transformation.


Add-Shop E-Retail Ltd is only listed  direct selling company in India. It is coming in the category of consumer non-durables, household and personal care products. The company is growing exponentially right from beginning  due to high quality products and very dynamic team. 






Add-Shop E-Retail has much 
bigger agriculture product portfolio then any other direct selling company in India. It gives huge growth potential due to national drive for organic farming . The company is aiming to expand its product portfolio from 125 to 500 products in next 5 years.


Add-shop is leveraging on its robust distribution network of more than 550 franchises spread across the country for its ayurvedic products and agriculture products. The company has ever expanding very dynamic marketing and distribution network. These people are  the  major asset and  growth catalyst for the company. 


The company works on cash-and-carry business model with its franchises and business associate, it help to keep check on receivable and generate high ROCE.


This industry has given tremendous empowerment to the Indian women. Today almost 2.1 million women have been successful entrepreneurs and are at the center of this industry.


The company believes that the agriculture sector in India is expected to generate better momentum in the next few years due to increased investments in agricultural infrastructure. Foreseeing the growth in the agricultural sector, the company intends to tap the growth opportunity by pushing sales through a wide range of agro products. 


Add-Shop E-Retail is growing much faster then its domestic and international direct selling peers like  Vestige and Amway. If we compare these companies then Add-Shop has much bigger product portfolio and sales turnover at same age. The below graph will give the fair idea of exponential growth possibilities in this business.




The company has recently approved private placement of the convertible warrants to the foreign investor (NEXPACT LIMITED) at the conversion price Rs 160 on  preferential basis.  It will improve the fund liquidity to further expand its operation in new areas.

 

https://www.bseindia.com/xml-data/corpfiling/AttachHis/8788537b-f574-457d-a9bf-4eefec3e99a2.pdf


Digital India’s alignment with technology is shaping the new norm in the industry. Besides using technology for marketing and distribution, company is increasingly investing in online training and development tools. These are creating transparent self-sustaining business models in entrepreneurship with better governance.


Add Shop Awards & Certificates


The company is having all required certification to meet the manufacturing and distribution standards


https://www.addshop.co/#/AwardsCertificates


Conclusion


Add-Shop E Retail Ltd is in the future business of 21st century. It has a proper path in career building opportunities and it emerged as a viable source of income and growth in  marketing business. It has made a steady progress and well poised for tremendous growth in the coming years. The government has taken several initiatives such as strengthening regulatory framework for direct selling industry, Vocal for Local and Aatmanirbhar Bharat have led the Indian people to consider the prospect of locally produced goods being bought and marketed through direct sale routes, involving low investment costs and high returns. 

Even though 'Ayurveda' is originated in India but American & European companies have dominated the herbal product segment in the world. These foreign companies are making billions $ but Indian companies left far behind due lack of interest and promotion. This is great initiatives taken by Add-Shop and it makes its future extremely bright.  Add-Shop stock at cmp 134 is giving excellent investment opportunity for  short term to long term ( 1 year to 5 years ). It can be bought + / - 15% from cmp with 10 - 20 % allocation.



Sunday, September 26, 2021

Update on Next Stock


Dear Blog Members,


We are going for last stock of this year in the coming weekend. 

It will be posted on  the blog on 1 October 2021 (Friday  after market hours).   

The allocation will be 10-20% for this stock.


Friday, September 10, 2021

Sunday, August 15, 2021

Happy Independence Day

Dear Blog Members,


Let’s salute to our great heroes, their sacrifice has given us great nation to be proud on it. 




     Happy Independence Day



Friday, July 16, 2021

Raymond Limited - The Complete Man


CMP  =  453



Raymond is the leading player in the branded textile industry with a legacy of almost a century. The Raymond Group is a market leader in the organized textile industry in India. Raymond has its footprint across a diverse range of businesses such as Textiles, Apparels, Fashion Retail, Engineering, Auto Components, FMCG and Realty. 


Raymond Corporate AV


https://youtu.be/axoCd6ERoFE


https://youtu.be/YRqxj_tLevE


The company classifies its business operations into seven operating segments: Branded Textile, Branded Apparel, High Value Cotton Shirting, Garmenting, Tools & Hardware, Auto Components and Real Estate. FMCG and Denim business is operated through Associate and Joint Venture Company respectively. The company has 18 manufacturing plants in India & one in Ethiopia





Raymond has one of the largest exclusive retail networks in the textile and fashion space in India.  Raymond’s branded textile enjoys almost 100% customer awareness in India


Branded Textiles


Raymond is the #1 player in the worsted suiting fabrics in India and one of the world’s largest integrated manufacturers of worsted suiting fabric.  Branded Textiles is its flagship business and over the years. Raymond benefits from the vertically and horizontally integrated manufacturing facilities located in Vapi, Chhindwara and Jalgaon with an annual capacity of 38 million meters.  Suiting fabrics account for ~70 - 80% of the branded textile business and is the most preferred brand across the retail textile market. 





Raymond is also largest over-the-counter branded shirting player in the domestic organised market. The company markets its suiting and shirting fabric under the brand ‘Raymond Fine Fabrics’. 

Raymond also has a unique offering of Made-To-Measure ( MTM )across 47 stores in India. MTM is a personalized service that allows the customer to design their desired outfit right from selecting the fabric to the final product. The customer can select a range of fabric and designs from the Raymond collection to suit their taste and style. The company has launched advanced fabrics like ‘Technosmart’ and ‘Technostretch’ to offer smarter fabric to the customers. These fabrics are made up of poly wool fabrics with UV protection, wrinkle resistance, high stretch and smooth touch, which are ideal for crafting trousers, suits and jackets.

Raymond has  launched  high-end premium quality fabrics in five different blends including wool silk, Super 250s, Super 180s, Super 150s and Super 120s.  Raymond has recently launched an anti-viral fabric named VIRA SAFE which is also anti-odour to provide protection from bacteria and other germs. Raymond has over 20,000+ SKUs with a price ranging from Rs 300 to Rs 3 lakhs per metre suitable for every individual need.


Branded Apparel


Raymond has been one of the leading players in the Indian menswear segment, offering diversified high fashion apparel through four differentiated power brands — Raymond Ready to Wear (RRTW), Park Avenue (PA), ColorPlus (CP) and Parx. Additionally,  uniquely positioned brand - Ethnix by Raymond, offers ethnic wear apparel suited for special occasions and celebrations designed to appeal to the discerning Indian men.





Raymond enjoys a higher brand recall owing to its premium quality and legacy brand image. The company has also recently forayed into the ethnic wear segment through the launch of ‘Ethnix’ brand which will connect with the growing trend for Indian traditional wear market. The company also launched Next Look brand to offer differentiated products to the consumers evolving fashion trends. Raymond has also launched the Khadi collection signifying the roots of the nation. The company expects huge revenue potential from the Khadi portfolio over medium to long term.


Retail


Raymond is pioneer in organised textile retail in India. Raymond presented the first ‘The Raymond Shop’ (TRS) in 1958 to the Indian discerning consumers and offered them the unique fabric to garment service through in-house tailoring value proposition. Raymond continued its retail journey by establishing significant network through TRS, MTM and EBOs for its in-house brands namely RRTW, Park Avenue, ColorPlus and Parx across length and breadth of the country. 







The Company also introduced a new label called ‘Ethnix by Raymond’ to offer distinctive ethnic and Indo-Western collection. Targeting the millennials and hyper-mode consumers, Raymond introduced a new retail format called Style Play, which sells only apparels of all Raymond brands with a slick urban appeal to consumers especially in smaller towns and cities.

Retail in Numbers 

Overall retail space 2.4 mn sq.ft.

Total Stores 1,486

1,090 TRS - The Raymond Shop

47 MTM outlet - Made-To-Measure

349 EBO’s - Exclusive Brand Outlets ( Comprising 34 RRTW, 83 PA, 113 CP, 36 Parx New format stores – 32 Ethnix, 50 Style Play, 1 Khadi )


• One of the largest exclusive men’s lifestyle retail networks in India

• Asset light model with around ~80% of stores on franchise model

• Strong capability to create world-class, designed stores for evolving consumer preferences

• Enduring and trusted channel relationships across generations, with some even spanning over 50 years


 High Value Cotton Shirting 


Raymond has high value cotton and linen B2B shirting business which offers high value cotton and linen shirting and bottom weight fabrics for leading domestic and international brands. The company offers the world’s finest fabrics such as 340s count cotton and 150 lea pure linen. 





The company has set up two state of the art manufacturing facilities in Kolhapur and Amravati with a manufacturing capacity of 27 mn meters and ~1,400 tons linen yarns & 4.8 mn meters of linen and blended fabrics respectively. The plants are strategically located in the vicinity of weaving clusters to take advantage of the flexibility and cost savings.


Garmenting 


Raymond had forayed into the garmenting business through its wholly owned subsidiaries - Silver Spark Apparel, Everblue Apparel to manufacturing high end suits, jackets, shirts and trousers. Raymond supply garments to major brands in international markets such as JC Penny, Macy and Haggar Clothing among others. The garmenting business is an export unit with majority of its exports to the USA, Europe and Japan. 

The company has set up facilities in Bangalore and Ethiopia with an annual capacity of 6.7 mn pieces and 2.1 mn pieces respectively. Raymond is also the largest exporter of full canvas suits from India.

Raymond has set up a plant in Ethiopia which is another developing hub for garmenting. Ethiopia has become a major attraction today for apparel manufacturers due to advantages such as duty-free access and low-cost labour and power availability. Also, Govt of Ethiopia is giving relaxations for ease-of-doing business, providing land to set-up plants to global manufacturers.

There is gradual shift in textile manufacturing is seen from China due to increase in labour & power costs along with ongoing Anti- China sentiment globally. India is at the forefront to capture a larger pie of the shift by offering incentives and other benefits with an aim to become a garmenting hub. Raymond being a larger and more established player in this segment will be a beneficiary from an increase in textile and garment manufacturing to India.


Raymond UCO Denim JV 


https://youtu.be/4OYfwjEdfYo


In 2006, Raymond entered into a joint venture with Belgian denim major UCO NV with a vision to mark worldwide presence. The manufacturing facility is strategically located in the heart of the cotton belt in Maharashtra India  with manufacturing capacity of up to 44 Million meters per annum. It is most versatile, flexible and vertically integrated denim manufacturing facility in India.

To complete the vertical supply chain and offer complete denim solutions to fashion forward customers, Raymond has set up state-of-the art denim-wear facility Everblue Apparel Ltd (EBAL) in an integrated textile park near Bengaluru India. The denim garmenting business offerings include products like super premium jeans and other apparels which are supplied to top global and Indian fashion brands.

It has strong footprint and network across the Americas, Europe, Asia and India


Engineering 


https://jksuperdrive.com/


Raymond had  diversified its business into engineering product segments such as tools & hardware and later ventured into auto components. 





JK Files is world’s largest manufacturer of files with a presence in over 100 countries. It can manufacture according to any specifications of customers including BS, FS, ISI and DIN. It has an impressive 32% global and 80% domestic market share.

The company manufactures steel files and cutting tools in the state of the art manufacturing facilities located in Ratnagiri, Chiplun, Pithampur and Vapi with a total capacity of 83 mn pieces of files and 21 mn pieces of drills annually. The company also markets hand tools and power tools under the same brand. Exports contribute around 47% of the total tools and hardware revenue.


http://www.ringplusaqua.com/


Ring Plus Aqua Limited, a subsidiary of Raymond Ltd, is a prominent manufacturer of ringears, flexplates and water pump bearings. It caters to domestic and international OEMs and after-market customers in automotive, non-automotive, industrial and power generators, agricultural, off-highway vehicles, earth-moving equipment, marine applications, among other industries.





The company commissioned a new manufacturing facility in Sinnar, Maharashtra, in May 2019, by further adding ~2 mn pieces of capacity for ring gears, making it by size the second largest player in India. Exports contribute around 65% of the total automotive components revenue. 


Turnaround of engineering businesses has happened few years back. Now it become the dark horse with very high growth rates both in terms of revenue and EBITDA margins.


International standard product portfolio, backed by superior service

Leading manufacturer of steel files with corresponding advantages of scale economies

Dominant supplier in India with high brand recall among technical professionals

Wide pan-India dealer and agent network, with significant cross-sale synergies across a distribution channel spanning Africa, Asia, and Americas


Real Estate 


Raymond Realty TenX Habitat Presentation Video


https://youtu.be/cGv4R_wgQCE





Raymond has forayed into the Real Estate business in FY19 with the launch of its ‘Aspirational’ 10 Tower project in Thane Mumbai.  Raymond has a land bank of around 120 acres in prime location at in Thane Mumbai.  Out of which the company is building a real estate project in the 20 acres with 12 towers.  Ten X Habitat 10 towers will be developed first with the saleable area of ~2.7 mn sq ft comprising of 1 and 2 BHK flats.  Remaining  two premium towers Insignia will be later launched with the saleable area of ~0.3 mn sq ft comprising of 4 BHK flats. 






Another 20 acres of land is allocated for the school which is held by Raymond’s school trust.  Standing tall, this maiden project is a spectacular addition to the city’s skyline and has successfully sold over 60% of total launched inventory. The project is progressing in full swing. Total inventory sold to 1,387 units till Mar-21 with a saleable area of 1.18 million sq. ft. having a booking value of  Rs 1,324 crores in the 10 towers


The overall  current real estate project is expected to fetch the company revenue in the range of Rs 4,000- 4,200 crores with a PAT of around Rs 800-1,000 crores.


JK House





JK House is 37-storied building built on a 1-acre plot in  Breach Candy area in Mumbai. Raymond own this property since 1945, went for redevelopment in 2007 at the cost of 270 crores.  Valuation of the property is around Rs 7000 crore. 



FMCG Business 


http://www.jkhc.com/


http://www.parkavenuegrooming.com/






Raymond is amongst the top player in Fragrance and Sexual Wellness categories, with aspirational brands like Park Avenue and KS in personal care, Premium brand in home care segment  and KamaSutra brand in sexual wellness segment. It is selling FMCG products through its associate company Raymond Consumer Care Ltd (RCCL). FMCG business earning is not consolidated in the  Raymond financials because Raymond holds only 47.7% stake in it and the balance is held directly by the promoters.





The FMCG business includes products such as deodorants & perfumes, talc powder, hair gel, soaps, shaving foam and gel, shampoos, room freshener and  sexual wellness products. The company has developed some of the most reputed brands in the FMCG market such as Park Avenue, Kama Sutra and Premium which are well accepted by the consumers.


Last year integration of all the FMCG business was done to  increase the synergy and reduce the cost for the company with economies of scale. The distribution network of the FMCG business covers over 3,50,000 retail outlets including pharmacies in India. The company is also focused on increasing the global footprint of Kama Sutra and Park Avenue brands. Recently company extended  sexual wellness category and introduced women-centric products like Act 72 pill (emergency contraception) and VHealth (intimate wash). Both are OTC products and widely available through  strong chemist distribution network





Maintaining leadership across core segments of personal care and sexual wellness categories.

KamaSutra is a strong international sexual wellness brand in 20+ countries through exports

Building growth categories as future pillars in Personal care & hygiene segment through soap category. Foray into unisex proposition with natural extension of shampoo category.

Entry into women fragrance segment through meaningful market disruptions

Upscaling of digital platforms, increased visibility on e-commerce marketplaces and an increased focus on supply chain capabilities.


Promoters


Gautam Hari Singhania, chairman and managing director of the company has excellent leadership qualities. He has the ability to transform the company with the changing trends and consumer needs for future.


He has formed external independent advisory board to revamp the company business and to raise the level of corporate governance and transparency.


Most importantly he has succeeded to protect and safeguard the interest of retail shareholders. He has brought the resolution and voted against it to reject the proposal to sell the 4 duplex flat in Raymond owned JK House to four Singhania family members ( Veena Devi Singhania, Vijaypat Singhania, Madhupati Singhania, and Akshay Pat Singhania)  for   Rs 9,200 per square foot of carpet area at over 90% discount to market rates. The  agreement was made by his father Dr. Vijaypat Singhania with its wholly-owned subsidiary Pashmina Holdings Ltd in March 1994, pursuant to which it granted a lease of four duplex flats situated in JK House.


This action has created rift between Gautam Hari Singhania and his father along with other family members. 


https://www.bseindia.com/xml-data/corpfiling/CorpAttachment/2017/6/ee24e414-e067-4711-8805-29b332b3d517.pdf


https://www.bseindia.com/xml-data/corpfiling/CorpAttachment/2017/6/92637f3a-2bfc-413c-9d0d-ae12eba50e6c.pdf



Investment Rationale


Demerger - Value Unlocking





Raymond had announced a demerger of its Lifestyle business in FY20 which includes branded textile, branded apparel and garmenting business. The demerger will help to unlock potential value from each of the businesses through focused strategy and simplification of the overall group structure. Through the demerger, Raymond is positioning the lifestyle business as an independent consumer business capitalizing on its century-long brand reputation. The other business will stay under the main company i.e. Raymond Ltd and will house the remaining businesses like real estate, HVCS, tools & hardware, automotive components. The FMCG and denim business will still be under the same organizational structure as before. 


https://www.youtube.com/watch?v=HQnQZZV2eNA


Raymond has received the approval from the SEBI for the demerger scheme. The company has already filed the application with the NCLT for the demerger for which the order is awaited. Once the permission is received from the NCLT, the lifestyle business will list on the exchange. The new lifestyle company would issue shares to the shareholders of Raymond Ltd in the ratio of 1:1 and the shareholding pattern of the Lifestyle business will replicate that of the Raymond Ltd.


The demerger will help Ramond Fashion Retail to trade at par with industry peers. It is expected to trade with market capitalization around 5 -6k crores. Which is almost double than current market cap of Raymond.





Raymond is a market leader in deodorants under the brands of Park Avenue and Kama Sutra (KS).  FMCG business has highest growth potential. At present in normal business condition its sales will be around 1000 crores and it is expected to double in next 2-3 years. Company has plan to list it separately and it will also unlock decent value for Raymond shareholders.


The 80 acre land at prime location in Thane Mumbai  gives 8 - 10 years fair business visibility to Raymond Realty execute its future project with good profit margin above 20%.

Ramong has already huge manufacturing capabilities with latest machines and technology so it is not required any major capex in next 3-4 years.

Raymond has created iconic brands over the last 9 decades of its operations. 'Raymond Brand' itself add significant value to new products or brand extension.


Raymond is doing cost optimisation exercise and re-calibration. It has achieved significant cost saving through digitisation of stores, rationalisation of capex and reduction in discretionary expenses.


The company is expanding its network through an asset light franchise model and closing the non performing rented stores. Raymond is gradually moving towards omni channel business with impetus on digital and ecommerce business model. 


Raymond has an extensive sales network with 20,000+ unique touch points spread across 600+ cities and towns in India. The company has established its retail footprint in 1486 stores across Tier I-VI cities and towns in India and 47 international stores in nine countries such as Kuwait, Bangladesh, Pakistan, Sri Lanka, Saudi Arabia, the UAE, Bahrain, Nepal and Oman. Raymond has a retail footprint of a total 2.5 million sq ft with around 80% of the stores covered under the franchise model.


The textile and apparel business is expected to grow at double digits in future. Raymond has dominant position in its several business segment with huge manufacturing capacities. Garmenting, High Value Cotton Shirting and UCO Denim are already well set to meet the increase in future demand. It is going to benefit immensely.  


The company is constantly adding new and innovative products along with the launch of new segments such as Ethnix, Style Me and Khadi among others to attract a wider customer base and enhance the customer experience. 



Raymond is also the market leader in steel files and tools market which is another growth driver for the company. The Automotive component business has also turned around and is one of the highest margin business of the company. 


Raymond has also moved towards omni-channel model by offering the entire EBO products through its online ecommerce platform myraymond.com The company is also offering the customers the facility to buy the product online and pick up  from the nearby stores.


Raymond has successful diversification from its legacy Textile Business . It generates around 33% of its business from other segments such as Garmenting, High Value Cotton Shirting, Engineering and Real estate business. The contribution from these segments is expected to further increase with faster growth in these segments than the legacy textile business.



Conclusion


Raymond is clear market leader in several business like Suiting - Shirting Fabrics, Fashion Retail, Engineering Business,  Fragrances and Sexual Wellness categories. All business verticals have huge growth potential and company is well set to capitalise opportunity.





The effect of the ongoing pandemic will reduce in coming quarters. It is expected that Raymond will have very strong business growth.

Demerger of its Lifestyle business is going to unlock potential value for investors. Raymond stock at cmp 453 is giving excellent investment opportunity for  short term to long term ( 1 year to 5 years ). It can be bought + / - 15% from cmp with 10 - 20 % allocation. 




Saturday, July 10, 2021

Update on Next Stock

Dear Blog Members,



We are going for next  stock in the coming weekend. In several comments our blog members have asked some details like business sector, stock price range and product of the company. 

The company is market leader in most of its business verticals with best brand image. The valuation of each business verticals is higher than current market cap of the company. This stock must be in the portfolio for  all those new investors who don't have any multibagger stock or missed the past opportunities. Rest of the details will be posted on this blog  on 16 July 2021 (Friday  after market hours). 



Friday, June 11, 2021

Magna Electro Castings Limited - Transforming For The Future

 


CMP = 157



Magna Electro Castings Limited was incorporated as a public limited company in 1995. Magna is specialized in the manufacturing of  castings and machined components of ductile iron, grey iron, spheroidal graphite iron,  iron alloys, castings-machined, unmachined and steel components. It manufacture the castings in the weight range of 300 grams to  2000 kilograms. Magna also adds value by heat treatment, surface treatments and machining so that the products are ready to assemble. 


It caters to various end-user industries like auto components, railways, agro, tractors, textile,  refrigeration, turbo chargers,  printing, hydraulics, cement , electrical machinery, earth moving machinery, power equipment, defense equipment, valve, windmills, transmission, etc.


Corporate Video


https://www.youtube.com/watch?v=6lG0k49TzXc



Manufacturing Facilities


The company has  state-of-the-art factory with built in area of 25000 sqm ( 6.1 acre). As part of the green initiative of clean energy the company has installed wind mills with aggregate capacity of 4 MW for captive consumption purposes and the power generated from the wind mills feeds more than 60% of the power requirement of the company.


Casting Facilities


Magna has best in industry casting facilities include pattern-making, sand plant, coreshop, melting, green sand moulding, furan fast loop line , heat treatment, and fetting facilities. 


Machining Facilities


Machining Facilities has modern hi-tech CNC machines capacity of 24 CNC machines include Horizontal Machining Centers, Vertical Milling Centers and Vertical and Horizontal Lathes. Machine Shop has Robust Fixture design capabilities using 'Solidworks' software and is backed up with 'EdgeCAM' software capable of programming Milling, Turning and Mill-Turn machines to eliminate manual error in CNC Programming. 


Process Facilities


Magna has accredited metallurgical laboratory, non-destructive testing and metrology departments have facilities to carry out OES, combustion and gas fusion chemical analysis, hardness testing, microstructural examination, sand testing, radiography, dye penetrant, magnetic particle, ultrasonic inspection, Fully Automatic Brown & Sharpe CMM and laser scanning.


Development Capabilities


Magna is using the best technologies available, paired with tried and true foundry practices to create tooling and process techniques that reliably and consistently meet the casting needs of  customers.


Quality Management 


Magna has all inhouse testing facilities to ensure the alloy performance properties are to the specifications of the customer. Casting alloys are typically specified as per ASTM, AMS and SAE alloy specifications.  Magana is certified for ISO 14001:2015 and IATF 16949:2016 certification by Bureau Veritas. Pressure Equipment Directive standards 2014/68/EU and Marine Certificate under DNV GL Rules for Classification of Ships. It ensure the high quality assurance that meet or exceeded all contractual requirements of products.



Investment Rationale



Indian foundry sector is lagging far behind in adopting the efficient and productive technology. From last few years, Magna is adopting the latest technology at decent pace to  modernising its casting division such as 3D sand printing and use of robotics.  3D printing technology enable to print the mold and cores within days and deliver the prototype casting within weeks. It completely eliminate the old lengthy process of mold making. The company has installed robotic machines to perform several critical operations to eliminate the human error and improve the product quality.






https://www.magnacast.com/news.php


Magna Electro is utilizing the Engineering Services capability and the leading edge 3D printing technology of its sister company Magna Digitech to leverage New Product Development for its customers. This one of a kind unique selling proposition (USP) puts Magna in an enviable position to provide solutions to its customers right from the Design Stage to Engineering to Prototyping to Validation and to Production lots to its customers. Magna aims to become the Go To supplier for Casting Technology.


Magna Digitech is aiming to modernise the entire Indian Foundry & Casting Industry.


https://www.amchronicle.com/insights/magna-digitech-strides-in-modernising-the-foundry-casting-industry/



https://www.youtube.com/watch?v=6GumWWQY4Tw


Over the last 25 years company has built a solid knowledge background and pool of extensive experienced people. It enables the company to meet stringent requirements on quality control for complex jobs. Now company is coupling experience of past with fast-emerging technology of the future.


The company also adds value by heat treatment, surface treatments and machining so that the products are ready to assemble. This Company also produces fully machined components, utilizing its in-house CNC machine shop and other facilities as well. The Company has developed 118 new products which includes proto parts and other regular parts. Further to that the Company expects to derive benefit from such new developments in forthcoming years.

Export of casting products from India is very insignificant as compared to the global industry demand. Hence the opportunity is there for the company to tap the export market. The foundry products are used in  its sustainable growth has become more important today than ever before given the emphasis of the government on 'Make in India'. The company is already doing around 50% of its business from export, it supplies industrial components  to the leading OEM across the world. 






Magna has established warehousing in the USA, this facility along with bi-weekly container shipments, allows the company to cater to low volume requirements. The warehousing capability enables it to supply products just in time  to the customers in  USA and Europe.


Magna is accredited  with different  international standard specified as per ASTM, AMS and SAE alloy specifications.  Magana is certified for ISO 14001:2015 and IATF 16949:2016 and 2014/68/EU. All these increases opportunity for getting orders from across the world from different industry.


Mr. Krishna Samraj is  the managing director of  Magna Electro Castings Ltd. He is also ex-president for Institute of Indian Foundrymen (apex body for foundry in India). Promoters have raised their stake 20% in last 10 years. Shareholding of promoters  has increased from 32.41 % in 2011 to 52.58% in 2021.


You will get some insight about vision and personality of company MD Mr.  Krishna Samraj, even though it is eight year old interview.


https://www.youtube.com/watch?v=Ulz9A3BW2vA


Magna Electro has gone for buyback offer @ Rs 175 per share in Oct-Nov 2020. Company is debt free and paying regular dividend since last 15 years. 


Conclusion


Magna Electro Casting has well established state-of-the-art infrastructure and cutting-edge technology. The company is continuously upgrading its facilities with latest technology since last 3 years. From last two years industrial growth is subdued due to Covid-19 impact in India and across the world but now all the stage is set to reap the benefit of these investments. The company is going to give robust growth in the coming quarters. Stock at cmp 157 is giving best investment opportunity  in this segment  for both mid  term and long term ( 2 year to 5 years ). It can be bought + / - 15% from cmp with 10 % allocation.