Renjit Thomas

Kiri Industries I have listened to the last 2 concalls of Kiri, read summary of even earlier concalls, watched promoter's yesterday's interview with CNBC TV18. The existing business of Kiri - it's Dye business isn't that lucrative. Recent Stake Sale in dyStar It has received 5200 cr for its stake sale in DyStar. Approx. 10% would be paid as dividend and 90% would be utilised in its new businesses. New businesses It has already ventured into the copper smelting business. It took a loan on March 25 (Judgment funding) of approx. 1100 cr for working towards copper smelting plant and fertilizer project. (which can be seen from balance sheet too) The CEO appointed for the above business ( Indo Asian copper ltd.) is Ranjit Singh Chugh, who has worked in leading position at Pradeep Phosphates, Hindalco, Zuari Agro etc. and is a B Tech Chemical Engineer from NIT Warangal. Might test patience and hence allocate wisely The main thing which might test patience is that a copper plant would take approx. 24-36 months to come up and we might not see good results for the upcoming 2 years. Guidance for FY28 and FY29 Post that the guidance given by management is huge.. They expect approx. 12000 cr in FY28 and more than 30-40k cr sales in FY29. Tough to gauge the behaviour of the stock price for the next 1 year So, it's very tough to gauge how the stock price would behave in the near term for the next 1 year, whether the market would appreciate the stock price because of the receipt of huge funds from Dystar case or whether market would wait for 1-2 years to see how things Pan out with the copper and fertilizer business id difficult to judge. My view 1. They had already taken a big loan for their new businesses in March 25 itself and started working towards it, in anticipation that the loan will be repaid from the judgement money, which now will be repaid. 2 Appointed a good leadership Team for new businesses The above 2 points show their intentions that they want to create big in new line of business. Challenges and Risks 1 Still Management's execution capabilities are not established in the new line of businesses, so there is an execution risk. 2 Risk if loose our patience - Market will carefully evaluate their capital allocation and stock prices might test patience and may face drawdown in the short term too.