Bhai log bilkul sahi tulsian ji jo boltay hai uska ulta hotha hai sahi hai. I have closly observed his analysis from last 2years. When he suggest some share will go up after 2-3 it will start falling like anything. Becareful bhai log apna paisa math dalo.........
Company is proposing to put 40MW solar cell manufacturing plant. Solar cell is required to make solar module which produces solar power and one requires solar wafer as input to make solar cell. Solar cell manufacturing line has nos. of chemical and mechanical processes and transforms raw polysilicon solar wafer into a solar cell.
Assuming company produces full scale production from day 1 then at 1.8$/wattx50rs.x40mw/10=360cr. as revenue. Considering 30% ebidta and deducting interest and depreciation, company can theoretically make 85cr. as PBT. Considering it sells 100% in India, it will not enjoy tax benefit and thus PAT works out to be 55Cr. Say Company makes 5cr. profit in present business line (mfg. of CDR disk). Thus in best case scenario company can make 60cr. profit. Company’s IPO valuation is 180cr. So theoritically, on full scale production and present mkt. prices shares are available at 3PE.
However that was a theoretical case, world over analysts are predicting solar cell prices to drop 1 to 1.2$/watt (almost half), due to massive capacity expansion in china. Company does not have any control over it’s raw material prices (solar wafer), and if solar cell prices drop, margin can evaporate. Some of the Chinese manufacturer are fully integrated and can weather out margin erosion due to high control over input prices.
Also company have not yet indentified client and thus have high risk of plant idealing, as most of solar module mfg. in India have either tied up overseas for solar cell sourcing or have plan to mfg. cell themselves. Solar module makers (like Webel SL, Tata BP solar) are better placed as they make solar module plus solar cell manufacturing facilities. They sell Solar module in retail thus have less volatility in Revenue.
Company’s management are genuine people, but their past issue “Euro ceramics” has eroded shareholders wealth.
Considering all above and High risk associated with the project it is better to avoid the issue.