Investing 25-30 crs into premium IMFL business every year. Sales is small now but it’s a high growth business
Economy brand business growing at about 8-10% every year
Rajasthan is a biggest state, followed by Haryana and then West Bengal
Bihar Distillary – Is for ethanol policy – Large part of capacity will go to OMCs – Will start in next 2 months – Will add about 100 crs of revenue to our business on annual basis – Margins will be north of 20%
Have taken price increase and that lead to increase in margins
Margin increase due to ethanol is not yet played out
12% margins can be safely assumed this year and will increase once ethanol is played out
Rajasthan is over 30% of our revenues and most profitable state, don’t see much change in buiness due to elections
There will be some capex in Bihar and Haryana for ethanol
FPI portfolio: Top 40 stocks Forty stocks account for 74% of FPIs’ equity portfolios in India
Mutual fund portfolio: Top 40 stocks Forty stocks account for 63% of MFs’ equity portfolios in India
LIC portfolio: Top 40 stocks Forty stocks account for 83% of LIC’s equity portfolio in India
Of the 223 issues, 216 were from the private sector which raised ` 68,870 crore compared to 118 issues that raised ` 31,683 crore in 2016-17.
In the cash segment, the turnover at NSE increasedby 43.1 per cent during 2017-18 compared to 19.3 per cent growth in the previous year. The turnover of BSE too increased by 8.5 per cent during 2017-18 compared to 34.9 per cent growth in the previous year.
The turnover of all stock exchanges in the cash segment increased by 37.4 per cent to ` 83.2 lakh crore in 2017-18 from ` 60.5 lakh crore in the previous year.
Of the aggregate turnover, NSE accounted for 87 per cent of the total turnover and BSE accounted for 13 per cent of the total turnover.
Over the years, index options have emerged as the most traded instrument in the Indian derivatives market. During 2017-18, the share of index options in total turnover at NSE increased further to 81.8 per cent from 77.1 per cent in the previous year.
So far, under mass media campaign, more than 67,980 TVCs, around 2, 25,040 radio spots, over 5,200 insertions in various print editions, around 962 screens in cinema halls were covered under the campaign. Further, around 53 crore bulk SMSes in various languages were sent cautioning investors against Ponzi schemes/unregistered CIS
During 2017-18, the total amount of fees and other charges received was ` 624.44 crore (audited) as against ` 518.75 crore in 2016-17 (audited). The recurring fee was 48.90 percent in 2017-18 as compared to 60.70 percent in 2016-17 of the total fee collected. During the year 2017-18, the largest recurring fee of ` 78.00 crore was collected from Derivatives Members registration followed by ` 40.82 crore collected from Stock Brokers and Sub- Brokers. In non-recurring fee category, the highest fee was collected from Offer Documents and prospectuses filed (` 112.24 crore) followed by Buy Back of Share (` 106.12 crore) and Takeover Fees (` 29.70 crore).
As on March 31, 2018 the total number of employees in various grades is 794 (including employees on deputation/ contract), out of which 698 employees are officers and 96 employees comprise secretaries and other staff. The male and female composition is 527 and 267, respectively.
There is a very long section on SEBI orders which is very interesting to see actions taken and how much time it takes.
Some more snapshots from the report
Mumbai continues to be the leader in turnover.
Free Float Market Cap at 45% of total market cap.
Only 3121 stocks trade for more than 100 days.. No of listed maybe 5200.
Only 1730 stocks have traded from more than 100 days regularly on NSE.
CDSL catching up in terms of investor accounts but value-wise NSDL is way above.
CDSL leads in geographical spread of DP locations.
Options share increasing. But its due to calculation on notional value of the contract.
Good increase in AUM and no of clients in PMS.
AIFs picking up big time.
Not a major jump in FPIs
USA followed by Mauritius on in Assets Under Custody
No of SME listings are ramping up in a very big way.
Market cap is still small.
Pending actionable grievances being reduced at a great rate.
Sub Brokers reducing !!
Given the high networth requirements doubt no of MFs are going to grow anytime soon.
In our last post we mentioned how Cartica Capital finds Page Ind. is reasonably valued at 90 PE
The interview was aired on 28th June 2018
Looking at the Shareholding pattern of Page Industries we came across that holding of Cartica Capital has come down from 8,62,721 shares to 6,84,058 shares between March to June 2018. Price range of Page Ind. during same time was 21800 to 27800
Shareholding of Cartica in Page Ind. over last 3 years
Last 2 years have taken a lot of hits to get our distribution in place, now expecting a high two digit growth
June July August will have a low base effect so 15% – 20% growth would be normal given good demand this year
Have good orders in EPC business from UP Power Distribution which will tilt % contribution. However we want to maintain it at 50-50 in the long run as EPC gives visibility but is risky business. Core business is consumer product business
We placed bid for 16 projects of low cost housing expecting to get 3-4, but we got it for all 16 projects i.e. order of 5000 crs. Which we do not have capacity for. Luckily in survey we found many houses do not exist, so will have to do orders worth 3000-3500 cr by March 2020
Century textiles, J K Cement, Birla Corp, Ultratech Cement, Sanghi Industries, Star Cement
The demand for cement may continue to be driven further by the pick-up in the infrastructure projects viz. bridges, roads, ports, metro rails and low budget housing segment, bringing opportunities for growth in this sector.
The cement sector may witness incremental demand outpacing incremental supply in the next three fiscals. However, the demand-supply gap will remain, considering the excess installed capacities.
First quarter of FY 2017-18 witnessed a drop of 3.30% in cement production due to shortage of sand, slowdown in real estate activity, drought (in a few States) and transitional issues related to the implementation of the Real Estate (Regulation and Development) Act (RERA)
Cement demand in the second quarter of FY 2017-18 was adversely impacted by the implementation of the Goods and Service Tax (GST), continued sand shortage, intermittent and irregular rainfall in different areas resulting in a meagre growth of 0.62%.
Third quarter (Oct to Dec) of FY 2017-18 cement production witnessed a growth of 11.38% year-onyear, while growth during the fourth quarter (Jan to March) would be about 16%, mainly due to low base in FY 2016-17 on account of the impact of demonetisation.
Outlook for overall cement demand in FY 2018-19 appears to be positive with demand expected to grow at 6-7% p.a. Low utilization levels coupled with increasing power & fuel costs will continue to pose challenges.
The per capita consumption of cement in India is very low at around 225 kg as compared to the world average of about 540 kg and 800 kg in developed countries.
Housing sector is the biggest demand driver of cement, accounting for about 65 per cent of the total consumption in India
Headwinds for Cement industry are expected to continue with companies unable to fully pass on the cost escalations to consumers
J K Cement
Aiming to almost double our grey cement production capacity to 18 MnTPA in the next four-five years. The increased capacity will enable us to reinforce our prominence in the northern and western markets that promise attractive growth
There is increasing presence of small and mid-sized cement players diminishing market concentration
Growing adoption of cement instead of bitumen in construction of roads
As per IBEF Report, June 2018 India has a cement production capacity of ~455 MT, of which almost 98% is dominated by the private sector. The top 20 companies account for ~70% of the total production
Grey cement registered a growth of 16% in production volumes over the last year. North and South region recorded a rise to the tune of 17% and 14%, respectively.
White cement registered a growth of 2% y-o-y in production volumes, whereas the value-added product, wall putty showed a growth of 14% on y-o-y basis
India’s cement production capacity is expected to reach 550 million tonnes by 2025. Growth in the cement sector in 2018-19 is likely to be fairly high driven by the slew of infrastructure projects like Bharatmala, Smart Cities, PM Awas Yojana and Housing for All. The Union Budget 2018-19 looks promising with increased allocations to infrastructure spending, energising the segment
The cement industry depends on limestone and other raw materials. However, availability of limestone is limited and thus, it is essential to promote the use of blended cement, which uses alternative raw materials such as fly ash and slag. The increase in the cost of these alternative materials — now fly ash is available on auction and slag on the basis of prevailing market prices — may further increase production costs
Cement industry is highly energy intensive and ~23% of its total expenditure consists of power and fuel costs
The domestic cement sector is the second largest market globally and accounts for 6.9 per cent of the world’s cement output
The housing sector is the biggest demand driver of cement, accounting for about 67 per cent of the total consumption in India. The other major consumers of cement include infrastructure at 13 per cent, commercial construction at 11 per cent and industrial construction at 9 per cent
Power and fuel costs increased significantly owing to sharp rise in pet coke and coal prices, lower availability of domestic coal on account of priority given to the power sector and restrictions on pet coke use
Demand in Uttar Pradesh was heavily impacted during the first nine months of the year due to prolonged scarcity of sand and aggregates.
Prices in North India remained subdued and sharp increase in road freight and fuel prices put pressure on margins
Partly compensated by the performance in Eastern Markets, which witnessed an upswing in demand.
Cement companies are likely to face pressure on their profit margins in the near term on rising prices of pet coke, coal and diesel. Higher power and fuel and freight costs in the near term are likely to continue to put pressure on the margins
Non availability of railway rakes is posing a key risk to the industry as the movement of both inbound as well as outbound materials are getting constrained affecting the volumes.
The cement prices are expected to improve in the near future, buoyed by a pick-up in construction activity and easing sand availability. However, if commodity prices do not ease, realisation gains will be offset by higher expenses, keeping margin growth subdued for the industry
India is the world’s second largest cement producer. In anticipation of demand, ~ 90 million tonnes of capacity was added during the past five years
FY 2017-18 was also a year of challenges as major States imposed a ban on sand mining, arising out of environmental concerns and entry of the unorganised sector. Sand is used as raw material by the construction industry and the ban impacted construction activity in Uttar Pradesh, Madhya Pradesh, Bihar, Tamil Nadu, Maharashtra and Rajasthan
Supreme Court of India introduced a ban on the use of petcoke in Haryana, Rajasthan and Uttar Pradesh to curb pollution and even though the restriction was subsequently relaxed, there was a hike in import duty on petcoke from 2.5% to 10%
Overall energy cost rose by 23% attributable to substantial increase in petcoke and coal prices.
The capacity utilization of industry during FY-18 was around 65% against 68% during FY-17
The raw material cost per tonne of sale has increased by around 21% in FY-18 over FY-17
Power and fuel cost per tonne of sale has increased by around 23% in FY-18 over FY-17 mainly because of increase in coal and petcoke cost and comparatively lower production over FY-17
The East India market will continue to be deficit to the extent of 10 million tonnes per annum of cement, making it necessary to import cement from outside East India and other regions.
A cement company that can grow its operations with the least capital is inevitably the one that is most successful.
The manufacture of clinker entails the transportation of limestone and coal to the plant; the manufacture of cement entails the transportation of clinker and other materials to its plant; the marketing of cement entails expenses to reach material to consumers. Inevitably, the Company with the lowest logistic cost is attractively placed to be the most competitive.
Some 210 large cement plants together account for 410 million tonnes of installed capacity in the country, while 350 mini cement plants make up the rest. Of the total 210 large cement plants in India, 77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu.
Cement production in India increased from 230.49 million tonnes during FY2011-12 to reach 297.56 million tonnes during FY2017-18
Export of cement, clinker and asbestos cement increased at a CAGR of 10.37% between FY2011-12 and FY2017-18 to reach US$ 433.87 million.
However, during the same period, imports of cement, clinker and asbestos cement increased at a CAGR of 11.14% to reach US$ 174.36 million.