OMMetals Infraprojects – Vikas Kothari, Director

OMMetals Infraprojects – Vikas Kothari, Director – 13-04-2018

  • Bagged order worth 157crs from SJVN
  • Order book of 700-750 odd crs contains about 14 projects
  • 10 projects to be completed in next 1-2 years and remaining 4 projects will take 3-4 years
  • FY 19 we are expecting good growth of around 20% in revenues
  • Ebitda margins are over 15% and Net margins are around 8-10%
  • As on today our core business is engineering and construction, real estate is an opportunistic investment
  • Real Estate – Expected revenue of 1000 crs from projects under execution / sale at kota, hyderabad and jaipur – 200 crs already recognized
  • Rest 800 crs will come in FY19 and FY20
  • Real estate land bank has negligible debt, finance cost have shot up because of working capital loans
  • Standalone debt is around 40-50 odd crs – Avg Wcap utilisation – 30-40 crs (9M FY18 Finance Cost = 13crs) 
  • Total debt (incl some packaging debt = 80 odd crs) Borrowing cost as per Mgmt = 13%; Nos dont add up; Mgmt will check and update
  • Continuously looking to monetize 1 road asset; not able to find the buyer; NHAI looking over to takeover the road
  • Once NHAI takes over the road, they’ll take the debt portion – debt shall reduce by 150-170 crs at consolidated level
  • Total land bank – 26000 sq.m. in bandra; 4-4.5 acre land in jaipur; 10 acres in hyderabad; 10 acres in kota
  • Baring the Bandra project, everything is being monetized


Full Interview :



Vmart – Lalit Agarwal, CMD

Vmart – Lalit Agarwal, CMD – 13-04-2018

  • People in smaller towns wants to buy good products from good places
  • With GST coming in, Organized retail is getting the benefits
  • Products that are selling in Tier-1 are also getting sold in Tier-3 and Tier-4 towns
  • We operate in clusters so we dont need too many warehouses and distribution facilities
  • Currently we have single warehouse in gurgaon (2.5L sq ft), will have to open few regional centres
  • Capex – ₹450mn-500mn; Around ₹12mn/store and open about 30-35 stores plus some back-end investments
  • 10 players like Vmart can be accommodated as the market is too large
  • Mkt share of Vmart today is < 5% in the market they exist
  • Promoter entity has not increased any stake, just consolidated stake to one entity
  • We are focusing on tier 2 and tier 3 cities as that is where large amount of population lies
  • Our customer focus is people who earns ₹20-50K/month
  • Since 2012 all the stores we have opened up are without FMCG (Kiraana)
  • We are doing good in apparel business which is appreciated by the customers


Full Interview :

Sequent Scientific – Manish Gupta, MD

Sequent Scientific – Manish Gupta, MD – 12-04-2018

  • People confuse animal health to human pharma
  • Ours is a similar indutsry to FMCG
  • Animal health business is close to 900 crs on annual runrate basis
  • 70% revenue comes from europe; India is less than 10%
  • We are the only to have US FDA Approved Vet facility in the country
  • Aspiration is to be in global top 10 in next 4 years – Revenues of 2000 crs  (Current 800 odd crs)
  • Expecting improvement in margins of 200bps yoy – will be closer to 20% in next 4 years time
  • Growth will come from
    • Organic growth – as it is branded generic industry; every year we claw some shares of other
    • New product pipeline – 28 products under development
    • Inorganic strategies – for some of the unrepresented market in our portfolio
  • US and Australia are important veterinary geographies – Area of focus for inorganic growth
  • API – As we grow in US – Growth will be price driven and not volume driven – will translate into margins
  • We are focused on food producing animals (60% of global demand is in food producing animals)
  • With demerger of human API business, we now are pure play animal health company
  • Post demerger – effective debt is ~300 crs; have cash of 50 crs and investments in strides shares; net basis we are zero debt co.


Full Interview :

Apollo Tyres – Neeraj Kanwar

  • Last year has been challenging in terms of margins – Raw material prices have gone up – Revenue side has been positive
  • Demon, GST, Anti duming duty has impacted Chinese imports in India. From nearly 30% of truck radial mkt they are down to 1/3rd of that
  • RM costs still have some pressure on margins due to oil prices, carbon black availability – Causing challenge to bottomline
  • Going forward seeing upwards momentum on both PV and CV side
  • See double digit growth coming in Q1 and Q2
  • Today demand is more than supply in terms of what we can cater to PV and CV segment
  • Times on revenue side are good
  • 60-65% sales comes from CV segment
  • We have 28-29% share in truck bus radials
  • Expect CV segment volume growth in high teens
  • Capex – doubling capacity in chennai 6000 to 12000 tyres/day (Currently at 9000 tyres/day)
  • Hungary plant – invested 500 mn euros – (Currently at 8000 tyres/day in PV); By Sept trying to reach 16000 tyres/day
  • TBR tyres to be launched this May-June in Europe
  • We have done very well in europe , gained mkt share there
  • Signed with AP Govt – cannot say the amount of money to be invested – still at project stage
  • Looking at building capacity of 16000 tyres/day in AP – but investments will start in FY20
  • Free cash flows will come in from FY19-20
  • Rubber prices – not been coming off – margins would be under pressure in Q4
  • RM basket still remains challenge for us and the industry

Full Interview:



TK Chand, CMD, Nalco – 10/04/2018
  • Alumina tender prices moved from 390 to 473 i.e. 21%
  • Around 3M tonne (1.5 lac tonne p.m.) alumina will not be avl as partial shutdown of brazilian refinery
  • Every month 1.5 lac tonne shortage will be there is alumina
  • Mkt price of alumina will certainly remain at curr prices of 350-360$ levels; expect it to move to 450-490$
  • Last qtr 13 shipments were made; will likely do 1.3 million tonne exports this year; 9-12 shipments made in this qtr
  • Refineries working at 100% capacity
  • Caustic soda is main input cost – prices gone up by 5% in last 2-3 months – it will sustain at this price – 40-40k/tonne – may be peaked at this  level
  • If this kind of prices sustains, will certainly be ebit positive
Full Interview:

NMDC – DS Ahluwalia, Director-Finance

NMDC – DS Ahluwalia, Director-Finance – 11-04-2018
  • This year we have done highest sales of about 36 mn tonnes
  • In March 2018 we have done 4mn tonne
  • From now on the pricing will be oscillating in a range
  • Sales for FY19 – 39 mn tonne can be a possibility depending on demand
  • As of now we have not reduced the pricing, but we are open to change as per market trends and adjustments
  • We have got the permission to produce upto 14mn tonnes in Karnataka, by mid of this year we will be able to start
  • Only problem is if the supply will increase, there will be impact on prices
  • Have started production at Donimalai pellet plant, now there are just some minor issues left to clear
  • Our pellet is well taken in market
  • Nagarnar steel plant – as of now its not readily available , we are doing activities which will enable commissioning the plant

Ashok Leyland – Defence Expo

Ashok Leyland – Defence Expo –  11/04/2018
  • We are largest providers of logistics vehicles, primarily to Indian Armed Forces
  • Earlier we used to move only people (2% of defence budget), now we move everything from missiles to bullet proof vehicles (22% of defence budget)
  • Defence takes a long period, but once it comes it stays for a long period of time
  • Almost 800 crs of our business will come from defence
  • In last 1 year we have won 12 out of 15 tenders. these tenders are for developmental orders, once it starts converting into real things we will get cumulative orders of 5000 crs in next 5 years
  • It works in stages – RFI – RFP – Make a vehicle – Development order – Trials – then bigger orders
  • It is a long gestation business but not cyclical, once you are in, you are in for a long period of time
  • Will stick to our core competency of automotive technology and not get into something like submarines, missiles, guns etc


Midcap Funds Underperformed in 2017 because of Vakrangee Limited ?


“Mid cap category was the worst hit, with 62 per cent schemes underperforming. We had a total of 34 mid cap schemes in our list.”

From this Nov 2017 article.

A lot of Midcap Mutual Funds underperformed the Benchmark – Nifty Midcap 100 in 2017.

One of the reasons was the huge move in Vakrangee Limited and a little bit of a outperformance move in Rajesh Exports. Both these companies have almost zero Mutual Fund Holdings . ( good to see such a boycott.)

But the index calculation does not care for valuations or any other governance concerns. Its a free float survivorship index. For example RCOM was the 7th Largest weight in Nifty in 2007 peak.

Stock Value – Dec 2016 Weights – Dec 2016 Value – Dec 2017 Weights – Dec 2017 Value – Feb 2018 Weights – Feb 2018 Returns Dec16 to Dec17
Rajesh Exports 462 1.18% 805 1.47% 837 1.52% 74.24%
Vakrangee 137 1.58% 421 3.47% 163 1.34% 207.30%
Nifty Midcap 100 4402   6697   6199   52.14%

Of the 52% return in 2017 almost at 3-4% impact came from Vakrangee !!!

Control Print – Quick Notes from QIP Placement Document

Starting a new series on quick notes from the QIP Placement Document shared by the companies. We find this document to be more detailed in comparison to the Annual Report. The most detailed document is the DRHP but that comes out only for new listings.

This is not a Buy/Sell Recommendation. We may only post on companies we track.

All QIP documents generally updated on this link –

Control Print – QIP Placement Document


· Company is one of India’s leading Coding and Marking solutions provider for printing variable information such as batch numbers, manufacturing and expiry dates, maximum retail prices, serial numbers, special markings, logos, company names and barcodes

· Vertically integrated company, involved in the development, research, manufacturing, marketing and commercializing of printing machines, spare parts, consumables (fluids) and associated services

About Industry – Coding & Marking

· Industry growth is closely co-related to packaging industry growth and the manufacturing sector growth as a whole

· Dominated value-wise by 4 players (Videojet Technologies, Domino Printech, Markem-Imaje India and Control Print) with our Company being amongst them

· Consistent growth of 15%+ over the last decade and is estimated to grow at similar rates approximately 10-15% revenue growth in the near future

· North America accounted for the largest market share of approximately 31% of the global market in 2016

· China, Japan, and India are three top countries contributing towards highest market size in the Asia Pacifc region

· Worldwide Coding and Marking market can be segmented on the basis of technology

(1) Continuous Ink Jet Printer (CIJ)

(2) Piezo Ink Jet Printer (PIEZO)

(3) Print and Apply Labelling Products (PALM)

(4) Thermal Ink Jet Printer (TIJ)

(5) Thermal Transfer Overprinting Printer (TTO)

(6) Valve Jet Printer (VIJ)


· Continuous inkjet (CIJ) coding is presently the most preferred technology in the global coding and marking system market due to its ease of installation

· Indian Coding and Marking industry is estimated to be worth 1000 crores.


· Continuous Inkjet Printers (CIJ)

· Drop-on-Demand Valvejet Printers (LCP)

· Thermal Transfer Over-printers (TTO)

· Thermal Drop-on-Demand Inkjet Printers (TIJ)

· Laser Coders

· Thermal Ink Coders

· High Resolution Piezo Drop-on-Demand Inkjet Printers (HR) and

· Related consumables and spares.

CIJ printers have been growing at a stable rate of 7-8% annually. However, increasing adoption of TIJ, TTO, and LCP printers is expected to drive the industry growth higher

Manufacturing Facilities

Two manufacturing plant across India, one at Nalagarh, Himachal Pradesh (37,316 sq ft), and other at Guwahati, Assam (65,000 sq ft) and One Research & development centre at Vasai Maharashtra (4500 sq ft).

Production Process

· Pre-dominantly an assembly process starting from the semi-fnished goods (SFG), followed by the assembly of printers and the testing procedure before dispatch of the printers

· Production of SFGs

· Production of Printers

Ø 1st Stage/Housing Assembly

Ø Final Printer Assembly

· Testing of Printers

Raw Materials

· Electronic & pneumatic components printer assembly and dyes & chemicals for consumable production

Customers and Geography Catered

· We provide our goods and services to a wide range of industries including Personal Care, Food & Beverages, Pharmaceuticals, Construction Materials, Cables, Wires & Pipes, Metals, Automotive & Electronics, Agrochemicals, Chemicals & Petrochemicals amongst others

· Registered office is located at Andheri, Mumbai and branches located at other prominent cities of India such as Delhi, Chandigarh, Kolkata, Jamshedpur, Hyderabad, Chennai, Bengaluru, Colombo (Sri Lanka), Pune and Ahmedabad

· Targeting the markets of Sri Lanka, Nepal and Bangladesh

· Countries to which we export our products are Germany, China, Sri-Lanka, Nepal, and Bangladesh


· One wholly-owned subsidiary – LIBERTY CHEMICALS PVT. LTD.


· 328 sales and service field staff across 13 branch offices in India and Sri Lanka

· The total manpower strength of our Company as of March, 2017 is 665 employees.

· As on March 31, 2017, our sales and marketing team consists of 110 employees

Use of Proceeds

· Primarily for the purpose of capital expenditure for ongoing and future expansion projects, acquisitions, working capital and general corporate purposes

Revenue Breakup

· Income from operations substantially comprises of sale of Printers on outright basis, Printers on Rent and on Cost per Print basis, sale of consumables like Inkjet fluids, Ribbons and Ink-rolls, Annual Maintenance Services

· No Single customer above 5% revenue


Industry Revenue Breakup


Expenses Breakup

· Expenses comprise of operating expenses, employee benefts expenses, fnance cost, depreciation and amortization and other expenses

· Operating expenses constituted for 40.46%, 39.93% and 41.42% of our total revenue for Fiscal 2017, Fiscal 2016 and Fiscal 2015

· Employee benefit expenses constituted for 18.73%, 19.42% and 18.69% of our total revenue for Fiscal 2017, Fiscal 2016 and Fiscal 2015

· Finance costs accounted for 0.72%, 1.21% and 0.92% of our total revenue for Fiscal 2017, 2016 and 2015

· Depreciation and amortization expenses accounted for 2.69%, 2.13% and 1.87% of our total revenue for the Fiscals 2017, 2016 and 2015

· Other expenses (includes rent and repairs / maintenance of office premises) accounted for 14.55%, 13.85% and 14.93% of our total revenue for Fiscals 2017, 2016 and 2015

LT Foods ( Daawat )–Quick Notes from QIP Placement Document

Starting a new series on quick notes from the QIP Placement Document shared by the companies. We find this document to be more detailed in comparison to the Annual Report. The most detailed document is the DRHP but that comes out only for new listings.

This is not a Buy/Sell Recommendation. We may only post on companies we track.

All QIP documents generally updated on this link –

LT Foods ( Daawat )

Company’s History


Company has 11 subsidiaries in India, nine subsidiaries outside India, two joint ventures, and three associates.


We sell our products internationally under various key brands, including “Daawat”, “Royal”, “Devaaya” and “EcoLife”.

Introduced quick cooking brown rice, sauté sauces, ready to heat range of products.

Acquired brands such as “Gold Seal Indus Valley”, “Rozana” and “817 Elephant” in the past to gain presence in new geographies

Products can broadly be divided into the following six categories:

(i) basmati rice;

(ii) value added staples;

(iii) organic products;

(iv) regional rice;

(v) rice based snacks; and

(vi) other products.

In Fiscal 2017, basmati rice, value added staples, organic products and other products represented 77.36%, 1.60%, 7.24% and 5.31% of our total revenue from operations, respectively.

The following table sets out certain information on our product categories and certain of our key brands:


The sale of our premium segment products has grown significantly over the years. In Fiscal 2015, 2016 and 2017, sales of premium segment basmati rice represented 10.19%, 9.47% and 9.78%, respectively, of total sales of rice in such periods

In Fiscal 2015, 2016 and 2017, revenue from our organic segment represented 6.34%%, 7.53% and 7.24%, respectively, of our total revenue for the respective periods.

About Basmati

‘Basmati’ can only be cultivated in India and Pakistan, which makes them the sole suppliers in the world. It is grown only once a year, in the kharif cropping cycle, sown in May-June and harvested in September-November. In India, the major Basmati rice-producing states are Punjab, Haryana and Uttar Pradesh, which together account for over 95% of the country’s total Basmati rice production

India’s Basmati rice production is estimated to be in the range of 5.8 million to 6.0 million tons, out of which around 4.0 million tons is exported, and the balance is consumed domestically

Basmati rice exports from Pakistan have declined steadily in recent years.


A majority of India’s Basmati rice is exported to the Middle East followed by the United States and United Kingdom. Demand from Iran, the second largest export destination for India, has been the most volatile. Iran’s rice consumption is estimated at around 3 million tons per annum, which is met through their domestic rice production of around 2 million tons per annum and the balance through imports.

The European Union (EU) is a key market for the industry, accounting for around 8% of the total Basmati rice exports from India. The following chart represents the trend of exports to the European Union over the past five Fiscal years


The following chart represents the key export markets for India’s Basmati rice industry:


A significant amount of time passes between when we purchase basmati paddy and sell finished basmati rice. During this period of ageing, the price of basmati rice may fluctuate. For example, in Fiscal 2015, 2016 and 2017, the average price of basmati rice we sold was ₹ 74,521 per MT, ₹ 59,891 per MT and ₹ 59,008 per MT, respectively. As such, if the price of basmati rice falls during the time it is held for ageing, we may not be able to recover our investment in the basmati paddy and processing operations, which could adversely affect our financial condition

Agro Exports – Share of Basmati and Non-Basmati

India’s total agro product exports was ₹ 520.69 billion in Fiscal 2017; however, almost 75% of the same was contributed by the sale of rice (both Basmati and non-Basmati) clip_image011

Paddy Procurement

Basmati paddy prices declined in the procurement season of Fiscal 2015 and Fiscal 2016. However, Basmati paddy prices increased by 20% to 25% across varieties in the last procurement season (October – December 2016) on the back of relatively lower production

In Fiscal 2015, 2016 and 2017, we procured 450,739 MT, 398,288 MT and 356,663 MT, respectively, of basmati paddy.

How is Basmati Procured


Processing and Packaging Facilities

We operated five processing and packaging facilities in India. Aggregate rice milling and sorting capacity of 86.90 MT per hour, aggregate rice sorting and grading capacity of 72.00 MT per hour and aggregate rice packaging capacity of 86.30 MT per hour

Operated three packaging facilities in the United States, and a processing and packaging facility in Rotterdam, Europe

Storage Capacity

As of September 30, 2017, our aggregate storage capacity (including open and covered warehousing facilities) for paddy and rice was 637,900 MT.

Brand Ambassadors

Movie actor Amitabh Bachchan and Celebrity chef and Sanjeev Kapoor

Procurement Agents and Distributors

As of September 30, 2017, we had entered into arrangements with 210 procurement agents (who work for us on a commission basis, with commission rates of approximately of 1.00% of the sale price), across 200 mandis established by the various State governments

750 distributors across 29 States in India.

Export Revenues

In Fiscal 2017 and in the six months ended September 30, 2017, we derived 54.10% and 64.64% of our total income from outside India, respectively

In Fiscal 2015, 2016 and 2017, our income outside India was ₹ 12,827.34 million, ₹ 18,876.37 million and ₹ 17,972.85 million, respectively which accounted for 46.15%, 63.35% and 54.10%, respectively, of our total income in these periods

Top ten export customers accounted for 15.55%, 20.10% and 13.53% of our total income in Fiscal 2015, 2016 and 2017, respectively, while our largest export customer accounted for 6.35%, 9.15% and 3.27%, respectively

The following table sets forth our sales of products from the different markets in which we operate and as a percentage of total sales of products in the periods indicated:


Cost of Materials Consumed

Cost of materials consumed constitutes the largest component of our expenses and represented 78.55%, 75.46% and 77.55% of our total expenditure in Fiscal 2015, 2016 and 2017

Changes in prices 2016 vs 2017

The cost of rice consumed (including broken and unpolished rice) increased by 48.65%

Cost of paddy consumed also increased by 7.18%

Cost of packing materials also increased by 27.60%

The following table sets forth certain information relating to our cost of material consumed presented as a percentage of total income:


Product Innovation Centres

Two product innovation centers, one in Gurugram, India and one in California, United States, with a team of research personnel


Inability to timely procure sufficient good quality basmati paddy at reasonable costs

Failure on the part of such agents to procure, in a timely manner, the desired quality and quantity of basmati paddy

Fluctuations in the market price of basmati rice

Reduction in output due to pest attack and disease

Changing climate conditions and weather patterns

JV’s and Tieups

We have also entered into strategic joint ventures with Future Consumer Limited and Kameda Seika for the expansion of our product portfolio with a shareholding of 50.00% in our joint venture with Future Consumer Limited, and a shareholding of 51.00% in our joint venture with Kameda Seika.

Losses of Group Entities


Key Markets in 6MFY18



There are five major organized players in the basmati rice industry in India, namely, KRBL Limited, LT Foods Limited, Kohinoor Foods Limited, Lakshmi Energy & Foods Limited and Chaman Lal Setia Exports Limited.


Basmati rice export realizations are driven by two key factors – paddy prices (input cost) and international demand.

Fiscal 2017 witnessed the third consecutive year of decline in value of Basmati rice exports from India, despite the volumes holding firm, as realizations remained under pressure. However, there has been a rebound in the current fiscal with the first quarter witnessing 32% growth in exports – driven both by increase in realizations (25%) and increase in volumes (7%)

In the past, an increasing trend for these two factors pushed up average realizations from ₹ 48,448 per MT in Fiscal 2011 to ₹ 77,988 per MT in Fiscal 2014. However higher volatility in paddy prices has exerted continuous pressure on average realizations, which have declined further to ₹ 54,011 per MT in Fiscal 2017.

Branded vs Unbranded

The following table sets forth certain information relating to the quantities, amounts and percentage of our total branded and unbranded basmati rice sold for the periods indicated: clip_image023

New EU Regulations pertaining to chemical residues in Basmati clip_image025

Paddy Prices

As per early estimates, paddy sowing in these states has decreased by 10% to 15% in the current fiscal, primarily due to lower rainfall received in these states as demonstrated below


Paddy prices are likely to remain firm in the upcoming procurement season, with an increase of up to 5%. While this should support the Basmati rice prices for the first two quarters of Fiscal 2018 and Fiscal 2019, it can adversely impact the profitability of operators in case demand declines, especially from international customers.


We typically store the basmati paddy in silos. As of September 30, 2017,
we had an aggregate storage capacity of approximately 637,900 MT for paddy and rice, including covered storage capacity of 371,020 MT and open storage capacity of 266,880 MT

Processing and Manufacturing Process clip_image028

Intellectual Property

As of September 30, 2017, we had various trademarks registered under our Group across over 50 countries. We have over 80 registered trademarks in India, including “Daawat”, “Royal”, “EcoLife” and “Devaaya”. We have also filed applications for registration of certain other trademarks that are under various stages of review