DDev Plastiks & GHCL Deep Dive | Smart Sync Services
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Nice video Dhruv. Would have loved to hear your views on BCL Industries, they were also present in the GIA forum. They most likely will generate around 240 cr EBITDA in FY 24-25, their market cap is around 1500 cr currently. Next year they will have a 75KLPD bio-diesel plant in addition to the 700KLPD ENA+Ethanol plant.
Thanks🙏
I indeed meet the management of BCL Industries, & they discussed some very interesting points like
- They are closing down their Edibles Oil biz & will pay 85 crs to bank for the closure.
- Ethanol industry is going through consolidation which will only increase going forward & it should augur well for companies like BCL who are pioneers in using maize for ethanol production.
- Bengal capex has faced issues & they have stopped selling ENA in that geography.
Main negative point which led me to exit my position was their linking with tibrewala case & more prominently the lack of Cashflows on a 3-5 year period & no apt explanation for the same..even in the current GIA meeting where promoter was not aware about Capex not being a part of Cashflows from operations.
But that being said, if the books are indeed clean, then valuations look lucrative especially with Biodiesel biz expected to ramp up going forward.
They have an edge vs the likes of Kotyark who are struggling to produce due to lack of raw material available Vs BCL.
However, again their key edge was using waste from edible oil biz to ethanol biz, & with edible oil biz shutting down, how will that impact their competitiveness is anybody's guess.
@@dhruvbajaj7865 Thanks a lot for your detailed response. Its very helpful.
Based on the Quarterly calls I understand - Yes they are shutting down the Edible Oil (EO) business but not completely. They will dismantle the current EO unit and sell the 11 acre land. They will keep only the Oil extraction part, they will move the existing related machinery from EO plant to the Distillery plant. This is useful as it acts as raw material for Ethanol + ENA biz. The DDGS produced will then be used as an input for Bio-diesel. Since the raw material is available inhouse and its kind of vertical integration, we can expect higher margins compared to the competition.
Yes, the3 yr OP cash flow/Net Income of around 0.55 can be better.
@@dhruvbajaj7865 Thanks a lot for your detailed response. Its very helpful.
Based on the quarterly calls, I understand-
Yes they are shutting down the Edible Oil (EO) business but not completely. They will dismantle the current EO unit and sell the 11 acre land. They will keep only the Oil extraction part of the EO biz. They will move the existing related machinery to the Distillery plant. This is useful as it acts as raw material for Ethanol + ENA biz. The DDGS produced will then be used as an input for Bio-diesel. Since the raw material is available inhouse and its kind of vertical integration, we can expect higher margins compared to the competition.
Yes, the 3 yr CFO/PAT of 0.68 and 5 yr CFO/PAT of 0.65 has room for improvement.
Thanks again. Keep up the good work.
Mr Dhruv,
Truly impeccable in way you encircle around information from management and team at your end is nuanced and a flavor worth class to be one of the best within the country in time advance
God bless!!
Thank you so much for your kind words❤ means a lot!
English subtitles please
Studied ddev at 80rs price that time it looks interesting...now run up is so much
Their ROCE is only 5%. What makes you say that management is very good capital allocators ???
Reading ROCE during a poor cycle might paint a wrong picture..the dynamics of a cyclical industry like Textiles is such that ROCE expectations can't be that high even in steady state since business economics are not good.
But as the margins will revert back to mean, it should trend upwards.
My comments on capital allocation had more to do with their past history of doing demergers, selling off loss making units prudently & focusing on areas where margins & utilisations are higher despite being in a commodity biz (be it textiles or chemicals).
Regards
Wonderful presentation with many key insights.Thank you for providing such high quality content.🙏
Our pleasure!
Nice work, thanks :)
Oh and If i had a dollar for every time Dhruv said "naturally"..... Lol
Add 'Interestingly' as well😂🫣
Great Informative Video and your efforts are visible in the quality analysis. In GHCL company seems to have good future with improving business conditions and their forward integration plans. But GHCL to me it seems to be trading at a high valuation, PE - 34 , while Ambika Cotton at PE of 14. Any thoughts on this? Even if I look at forward PE metrics for next 1-2 years, it is still higher than what a yarn textiles business would normally trade at
When I check GHCL Textiles on the Screener, it throws up Modern Threads. Looks interesting.
❤ great
Dhruv bhai is a gem at so young age. Imagine how wise he would become at his 40's.
Kudos to you brother🙏. Great job as always.
Thank you so much for your kind wishes🙏
Why promoters holding is only 19% if management is so confident and have such great plans for future
It has been low for a long time now..Its primarily a professionally managed business & promoters act as advisors.
With that being said I would anyday prefer a company having higher promoter ownership. But with companies like GHCL having a rich legacy of more than 30-40 years, I can make an exception.
Really helpful . All ur stocks r with gud future growth .
Have a REQUEST can u plz name some gud clinical Research stock or make a video bcz i think thiz sector will c a boom . Thank you
Nh, yatarth, rainbow
Why promoter holding in GHCL Textile is so low, please comment
It has been low for a long time now..Its primarily a professionally managed business & promoters act as advisors.
With that being said I would anyday prefer a company having higher promoter ownership. But with companies like GHCL having a rich legacy of more than 30-40 years, I can make an exception.
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Tumhare wajah se hmne 80 me sell kar diya😮
dhruv bhai kya mai apko twitter me dm krke trouble de skta ho todha sa??
Definitely