A thread I had done in sugar industry last year. A few things could have changed. But, I think there are huge challenges to the E20 story. Do we have underlying dynamics in place. Do read how much time it took for Brazil.

Disc: Invested in sugar only as tactical play.

Sugar Industry Insights (Feb 25, 2020)
Last few years sugar industry has been a beneficiary of government largesse. Sugar cycle turned in 2015. Post that there has been surplus production.
— Jiten Parmar (@jitenkparmar) February 25, 2020

More from Jiten Parmar

Jiten Parmar
@jitenkparmar

A thread on my experience and observations of the grocery delivery apps in India.

@Grofers @bigbasket_com @JioMart @flipkart supermart, @amazonIN and DMart Ready.

Live in Pune. So my experience is of this city. User experience may vary according to location.

1/11

1)@Grofers - good app, good delivery timelines, decent prices, limited selection, delivery free above a certain threshold is a negative, point and Grofer cash not very good. Offers on checkout not proper and visible . Limited vegetables.
2/11

Private label selection, prices decent. Overall decent experience.

With advent of others may face stiff competition. Maybe acquired or merged with someone.

3/11

2) @bigbasket_com - good app, good delivery, timelines, decent prices, decent selection, delivery free over a threshold is a negative. Overall decent. Will face stiff competition. Will be acquired by someone.
4/11

3) @JioMart - started poorly. But improving by the day. Each experience better than prev one. First delivery was 4 days, then 2 days, then 1 day. Last delivery on same day. Not intimating delivery schedule is an irritant and needs improvement.
5/11

Jiten Parmar
@jitenkparmar

A recently listed IPO (Sep 21). Promoter did OFS at X alongwith fresh issue. Made record for highest subscription ever. Company currently at more than 5X of OFS price.

Let's glance a bit on Financials.
1/2

Mcap - 3500 cr
Company does about 150 cr revenue. And about 15-20 cr in profits.

I am at a loss of words on valuations.

Maybe market is smart, promoters dumb and value investors like me dumber 🙂

My exp of almost 3 decades in the market tells me, this will end badly.
2/2

Jiten Parmar
@jitenkparmar

Sugar Industry Insights (Feb 25, 2020)
Last few years sugar industry has been a beneficiary of government largesse. Sugar cycle turned in 2015. Post that there has been surplus production.

Government has helped the industry by various incentives like export subsidy, ethanol blending, allowing cane juice to ethanol conversion, msp, etc. UP and Maharashtra are the 2 major states in sugarcane plantations.

The 2 largest players in the world are Brazil and India. In Brazil sugarcane is used for ethanol a lot lot more than in India. Brazil is way ahead of any country in ethanol from cane.

US is the largest producer of ethanol in the world followed by Brazil. US uses mainly corn for making ethanol.

Indian sugar scenario: Sugar still constitutes 85% of revenue in sugar companies. So, essentially it has to do well for sugar companies to be profitable. We have had record production in last couple of years. Sugar opening stock at end of last sugar year was 14.5 mt.

Jiten Parmar
@jitenkparmar

@Sanjay__Bakshi @katalystwealth Yes Sir. Extremely difficult to predict the top. Often top comes much before the best results. One needs to have some kind of strategy to exit. Maybe something like a multiple of replacement cost, P/B, historical upcycle margins, etc. But there is no exact science to predict top.

Jiten Parmar
@jitenkparmar

EV/tonne of the mentioned companies currently

Anjani - 100
Deccan Cem - 40
KCP - 44 (will be lower if value to other biz given)
NCL - 61 (has boards biz too)
Sagar - 59

EV/tonne of the companies in that region.

Anjani Portland - 42
Deccan Cem - 20
KCP - conglomerate (has Vietnam sugar, hotel, engg too) - 43 (on mcap)
NCL - 31 (has boards biz too)
Sagar - 47

No recommendations. Just data.
— Jiten Parmar (@jitenkparmar) July 8, 2020

More from Sugar

Siddhartha Bhaiya
@sidd1307

The other just entered into quality territory today 😜

Quality hone ke liye HIGH PE hona jaroori hai

Ethanol plants need incineration boilers
There are only 2 major manufacturers in India

One is thermax. The other is homework \U0001f61c #valueinvesting #Investment #investing #aequitas
— Siddhartha Bhaiya (@sidd1307) June 29, 2021

$Varinder Bansal \U0001f1ee\U0001f1f3$

Varinder Bansal 🇮🇳...
@varinder_bansal

Sugar Is New Steel !!!

Sugar Is New Steel?

Center-South Brazil H1 April sugar output plunges 35.75% on year https://t.co/ysJgGfTJLq
— Varinder Bansal \U0001f1ee\U0001f1f3 (@varinder_bansal) April 29, 2021

Unknown Market Wizards
@WizardsUnknown

@soicfinance Pat Dorsey as well. On mistaken moats:-

Compounding Capital
@CompoundingCapp

Sugar industry is poised to change drastically over the coming years from cyclical to structural.
We can fall in the footsteps of Brazil which produces ethanol and sugar equally from sugarcane and reduce the overcapacity issue of industry.
A thread

Retweet if you find it useful

Let's first understand how a sugar factory works:
Sugarcane is crushed in a sugar factory that primarily extracts sugar syrup and fiber which is called bagasse. Bagasse is used to generate electricity, the excess power generates is then sold to the electricity companies.

Sugar syrup is then boiled to extract sugar, the syrup can be boiled up to three times to extract maximum sugar, and the residue left is known as molasses
Molasses can be further processed to generate ethanol and alcohol

The sugar syrup if being boiled twice generate B heavy molasses which has more sugar content hence can generate higher ethanol, the syrup boiled three times leaves C heavy molasses which has very low sugar content having lower ethanol yield

Ethanol can also be extracted directly from sugar syrup without making sugar, this leads to the highest ethanol yield and also fetches higher ethanol prices in the market.

$Varinder Bansal \U0001f1ee\U0001f1f3$

Varinder Bansal 🇮🇳...
@varinder_bansal

Brazil June Sugarcane crushing down 22% YoY to 29.6 MT #justinfo

How to Get Rich (without getting lucky):

Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.

Understand that ethical wealth creation is possible. If you secretly despise wealth, it will elude you.

Ignore people playing status games. They gain status by attacking people playing wealth creation games.

You’re not going to get rich renting out your time. You must own equity - a piece of a business - to gain your financial freedom.

Anastasis
@OrdersofM

https://t.co/6cRR2B3jBE
Viruses and other pathogens are often studied as stand-alone entities, despite that, in nature, they mostly live in multispecies associations called biofilms—both externally and within the host.

https://t.co/FBfXhUrH5d

Microorganisms in biofilms are enclosed by an extracellular matrix that confers protection and improves survival. Previous studies have shown that viruses can secondarily colonize preexisting biofilms, and viral biofilms have also been described.

...we raise the perspective that CoVs can persistently infect bats due to their association with biofilm structures. This phenomenon potentially provides an optimal environment for nonpathogenic & well-adapted viruses to interact with the host, as well as for viral recombination.

Biofilms can also enhance virion viability in extracellular environments, such as on fomites and in aquatic sediments, allowing viral persistence and dissemination.