Win Win wrote: Equityinvestor wrote: Mithooshan wrote: Win Win wrote:HAYC came again to Rs.500
Next DIPD for Rs.400
@WinWin - What is your take on covid vaccines and future earning potential of Dipped ?
I would greatly appreciate your view on this matter. I don’t see any immediate impact but i know you have studied a lot about the company and have a much better idea than me.
Thanks in advance.
As per sources, order book is full for 2H of FY 2021
Dear Mithoo
DIPD progress we can see in first 2 quarters were not totally come with Covid, it was an effort on strategic developments and plan from 3 yrs back. I agree there is 20% favorable impact on Covid for last reports.
As per the my analysis, DIPD Group have invested 2.3 / 2.4 Bn in last 1 & half years for expansions under both sectors in Gloves & plantations. This year, DIPD have invested heavily in Glove Manufacturing and outcome will be reflected from 3Q.
Under glove manufacturing, they are tending and more focus on high-end glove types and industrial and synthetic based gloves. The company has introduced many new developments and they own few patents also. The companies overall margin level has almost increased 30% from these high-end glove types specially electrician gloves & supported gloves. We need to be proud DIPD is the one and only electrician glove producer for all capacities in south asian region and they had increased its capacity in last year end. Further, this year they had invested many high value glove manufacturing plants. Increasing natural rubber prices will affect minimal to companies bottom line due to two reasons such as DIPD has more with synthetic materials as well as they have own sources of rubber with good supply chain (Own Plantations as well as long-term company's suppliers with pre-agreed prices). Their Medical glove plants got advancement from Covid, but it has give less contribution with limited capacities. Glove Manufacturing Operation is under diversification stage and will boost their margins on these diversification to high-end customer focus products like sleeve products and new high end products like TPR. DIPD is ready to bring new developments and capture and expand market areas.
DIPD hand protection is getting more orders upon USA vs CHINA barriers and it will be very healthy for future expansions.
DIPD had introduced automation practices for their plants which increased their capacities with cost efficiencies. They are practicing their own cost efficiency programme with lean, six sigma practices and derived marvelous cost reduction and successed to capture new markets as well as customers while catering superior quality. They had reduced waste % to below 1% almost 50% reduction from previous year. The key success factor of DIIPD was manufacturing & operational excellence for premium quality product with driving cost efficiencies and innovations like process automated and new developments as well as product diversification.
When comes to COVID impact, the whole world is going to normalize covid and try to live with covid. 99% countries have opened their countries for normal economic activities with safety. This will boost glove demand not only medical type gloves, but mostly synthatic & industrial based gloves. DIPD has great opportunity to cater their products. DIPD is already started for offshore expansion of manufacturing facilities in order to capture this opportunities and it will add more profit to the companies future reports.
DIPD has superb chances with other favourable factors such as appreciation of FCY, low interest rates & will add more value from upcoming budget.
No need to explain TPL & KVAL who are leading price takers for TEA & RUBBER.
I believe that world will live with Covid and it will be normalized by aging of the time with 2 3 yrs. I do not have any information on order book for DIPD. But, onthemonet has written a great report on DIPD future and it can be agreed with the outcome of my studies. As per the reports, we can identify the potential of DIPD with 1 / 2 years future order book with present despite of already capitalized capacities. Therefore, they will invest more capacities in addition to current developments. This will be very healthy for top & bottom line with same overheads.
I am sure, DIPD will record more favourable quarter in Q3 than Q2 and I believe Estimated EPS of Rs.90 can be exceeded if DIPD success to capitalize opportunity and their started capacity expansions as at planned dates. Q1 & Q2 reflected their previous expansions including high-end product of electrician gloves and Q3 reflect more high-end value added diversified products. They are nicely handling operations under Covid specially manufacturing plants. It ensures that they have energetic management who are focusing and ensuring results oriented plans.
Considering Est EPS and other shares in the market, DIPD is the best investment in CSE. DIPD can reach Rs.600 to Rs.650 by the Jan 20. Further, give a clue for success. All directors in other companies sold shares at the peak. But, DIPD & HAYC directors did not sell and will not sell by considering future potential of these companies specially DIPD. This is the best evidence for the future potential.