Arun the Stock Guru as Stock Tips service provider for Indian share market via Stock Tips providing tips on Sensex and nifty,BSE NSE stocks. In short you get best share tips on Indian stock information about share market investment. Instant Share market Live tips are provided too. Disclosure: It is safe to assume that I might have the dkiscussed companies in my portfolio and hence my point of view can be biased.
The app has been downloaded over 60000 times in the last few months and has changed the landscape for retail investors. Note: I have talked about the turnaround PVC player a number of times in my tweet. Let’s summarise what the company is all about with some history,the issues they faced and the present situation which is so distinctively different from the horrible past. Please treat the post as educative or the way which one should analyse a company. I have tried a 360 degree view of the company. Hope it helps and you get to learn few things from it. Promoters were trying to set up factory in Telangana but were struggling with petition so they tied up with a factory to do job work for them.
Signed a contract which would be exclusive to them. Orissa, they have filed a case against Orissa government to allow other players to come and do business. Company planning to keep just 4 factories and will get it down through contracts in different region of countries, to satisfy the proximity parameter. HDPE pipes would grow double digit, industry would grow drastically as reliance and IOC are setting up Polyethylene plants which would reduce the cost to manufacture products from Polyethylene. Good supply would reduce the prices of HDPE.
Jain is the biggest to manufacture those pipes. In adhesive for pipes, KM were pioneers in India, were the first to launch it. Furniture is Rs 3000 crores market and was been a dream project of Mr. Company use to manufacture coolers for symphony in past as there was machinery lying idle and use to take contracts from them.
They planning to start it again, as the only investment required are moulds. Cello also used to do job work for symphony. Company is taking advantage of shortage of certain products in market. Would manufacture any product where customers demand and competitors don’t have it. Gave an example that if a guy in some outskirts wants those products means 1000 other people in other parts of country want it.
Distributors are easy to break as they have to introduce a pipe which is in niche category and would then give better margins. Once they get entry with single products, then they enquires keep coming to them. Also when competitors are increasing the price, company takes hit on margin and would start pushing their products with competitor’s distributor and would take a price hike later on. This is giving them push in markets. They have always been the second call and that is working well for them.
They have maximum number of SKU’s compared to all other peers in market. Company has shut down 2-3 factories in recent past and has shifted that machinery to tarapur plant. This is now the biggest plant among the 5 factories remaining. How is pricing of a product calculated? 22 hours a day factory would be running and 27-28 days a month.
Cost of whole month is divided by number of units a mould gives in a month. This helps them in pricing the product better in market. Company plans to shut down their Dewas plant which is situated in MP. It has a capacity to manufacture 8856 tonnes of agri PVC pipes. But as of now they don’t plan to do so as their brand is strong in MP and they feel there is psychological effect in their minds of consumer which would hamper their brand. Would be expanding through job work model on exclusivity rather than setting up their own factory. Finolex have 3 owned factories and 7 outsourced one.
Company would be liquidating assets worth Rs 35 crores which is sufficient to fund bank repayments for next 2 years as their monthly payments are around Rs 2 crores a month. Raw material is bought from Quality suppliers. Company goes directly to customer rather than having middle men. KM has 10 offices across India covering all major cities. 3000 strong dealer network out of this 500 are exclusive. Father and son duo are now handling business.