Key insights from Hikal

🧪 Lowered interest rates
🧪 Pharma: Growth in generics as well as CDMO
🧪 Crop Protection: Scaleup of a fungicide for a Japanese CDMO client
🧪 Healthy pipeline of new products: Supported by new capacities; Investing in Animal Health & Biocides verticals https://t.co/D70j9oriCa

We have completed Takeaways from 20 annual reports, The Latest 10 👇

Nestle 🇮🇳
Reliance
HDFC Bank
Asian Paints
HDFC Ltd
Tata Consumer
Havells
Kansai Nerolac
Syngene
HDFC AMC

Let us know whose AR insights do you want to read next, in the

This is part of our 'One Annual Report, A day' initiative to educate fellow investors & will be further updated as we write more & more threads.

Targetting 100+ 🌋

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If you wondering from where to get the latest Annual Reports.

@screener_in to the rescue

Real Estate Investment Trusts (REITs) Simplified.

A product that provides a fixed income that is better than FD +an upside like equity.

A Thread 🧵👇

1/ REITs are a vehicle to invest in income-producing real estate properties, managed by professionals.

2/ In India, we have REITs primarily focused on commercial real estate properties having 7-9% rental yields.

In listed REITs, Most of the completed properties are pre-leased to big companies.

Why no residential? As yields of 1-3% make them unattractive to investors.

3/ How do you get the benefit of such yield?

REITs have to distribute at least 90% of their taxable income to their shareholders.

All 3 listed REITs trade at 6-7% dividend yield (which is also tax-free)

4/ Moreover, 80% of REITs total value must come from completed & income-generating properties + it must avoid speculative land acquisitions.

What about debt then? There's a restriction there too.
Not more than 49% of the total equity.

Saregama India 🎼FY21 Annual Report Takeaways

'India's only entertainment company into Music, Films, Web Series, TV Serials and Retail'

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A Thread 🧵👇

1/

India’s Largest Music IP - 130k+ Songs
Content IP rights of - 61 Films

Retail Business

Distribution network - 30k+
TV Serials - Content IP rights of 6k+ Hours of Television Serials

2/

To take pole position as a Pure play content company, capitalizing on the global boom in content consumption

IP CREATION OVER THE NEXT 3 YEARS -

20-25% Market Share in New Music
50 New Films and Web Series
1200-1500 Hours of new TV serials content

3/

Monetization of Existing IP

Through licensing to EVERY 3rd party digital and TV platform

Carvaan transitioning from being a Product with only a one-time margin to a Platform with upfront margin and recurring advertising and subscription revenue

4/

Building of New IP

Cementing leadership position with New film and non-film music acquisition across Hindi, Tamil, Bhojpuri, Punjabi, Gujarati, Telugu, and other regional languages.

Producing Thematic films & series, with Story as the only hero, targeted at youth.

Greenpanel Industries FY21 Annual Report Takeaways.

'27% market share of the Indian MDF market & growing'

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A Thread 🧵👇

1/ Basic facts about the business:

- Leader in wood panels in which their principal product is MDF (Medium Density Fibreboard)
- Demerged from Greenply in 2018
- 2 plants in UP & AP (this one being the largest MDF plant in the world.

2/ Product Offerings are dispersed over multiple types of wood panels: From MDF to specialty plywood to veneers.

3/ Challenges faced by the company in FY21 (Pic 1)

& How they tackled them (Pic 2)

4/ Financials: Performed better on all metrics.

Rev up 20%
Expanded EBITDA margin by 420bps
Net profit up 370%
Strong Cashflows
Receivables cycle down to 28
Paid back 157crs of debt

Talks of sustainable growth with a focus on cashflows & lower working capital.

Godrej Agrovet & Astec Lifesciences FY21 Annual Report Takeaways 🌳

'Improving the productivity of farmers by innovating products and services that sustainably increase crop & livestock yields'

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A Thread 🧵👇

1/ About the company:

The resilience of the Agriculture sector (3.6% growth vs economic contraction)

Focusing on People, Planet & Profits: Investments continue in Animal Feed & Astec's businesses

One of the challenges that management overcame was robust distribution in COVID.

2/ From the desk of the chairman (Mr. Nadir)

- Strong performance in Animal Feed biz (margins expanded) & Astec Lifesciences
- Being in 5 cyclical businesses, is a hedge as the outperformance of a few compensates for others
- Will continue to invest in R&D & a +ve outlook.

3/ Numbers that matter

Rev down 9%
EBITDA margin of 10%
PAT (ex. one-offs) up 60%
Weak cash flows: led to jump in debt

Diversified: 47% Animal Feed | 17% Crop protection | 16% Dairy | 11% Vegetable Oil | 9% Poultry & Processed Foods
4900+ Employees
15cr R&D Spend
256cr capex

4/ Agricultural sector macro overview

- Vaccination program is the only key to riches here
- FY21 was a windfall for Agriculture: Rainfall which was highest in last 25yrs, higher sowing, higher food grain production
- FY22 has started on a +ve note with better Rabi harvest YoY

Hikal - for me a high conviction bet now as buying volumes are high and stock is retesting the support. SL 495. Buy zone 525-535

HIKAL

Double Top Buy triggered above 554.72 daily close on 1% Box Size chart.