📊 Top 4 Defence Exporting Stocks to Add to Your Watchlist 📊

1️⃣ Hindustan Aeronautics

Hindustan Aeronautics Ltd (HAL) is an aerospace and defence company, owned by the government of India.

2️⃣ Bharat Electronics

Established in 1954 in association with CSF France, the company is now a government aerospace and defence company.

3️⃣ Bharat Earth Movers

Bharat Earth Movers formerly known as BEML is a prominent public sector undertaking (PSU) in India that specialises in manufacturing a diverse range of heavy equipment for various sectors, including mining, construction, defence, rail, and metro transportation.

4️⃣ Mazagon Dock Shipbuilders

Mazagon Dock Shipbuilders holds a unique position as the sole company in India, specialising in building conventional submarines and destroyers for the Indian Navy.

Case Study

🫧SHEELA FOAM LIMITED 🫧

Sheela Foam Limited (SFL) was incorporated in 1971 and it is a top player in the mattress and foam products industry in India. It is the largest polyurethane (PU) foam manufacturer in India. Its flagship brand Sleepwell was launched in 1994 and this brand has established itself in major overseas markets too. Its flagship household brands Sleepwell for mattresses, Feather Foam for pure PU Foam, and Lamiflex for polyester foam laminates have achieved global recognition. The company has strong presence in West & North regions of India. It acquired Kurlon Enterprises Limited (KEL) in 2023 and now commands the de-facto leadership in the branded mattress segment with more than 30% market share. It also acquired 35% stake in Furlenco, (a platform to rent/buy branded furniture) to foray into branded furniture market.
The combined entity (SFL +KEL) now has a global

The combined entity (SFL +KEL) now has a global manufacturing footprint with 21 nationwide manufacturing plants in India, 5 in Australia, and 1 in Spain. They have an integrated manufacturing facility of 1,29,000 MTPA in India, 11,000 MTPA Australian manufacturing capacity, 22,000 MTPA Spain manufacturing capacity (catering to Europe & US markets) and 17,000 MTPA of Kurlon. It has a robust distribution network and with KEL's acquisition now it has 100+ exclusive distributors, 6,100+ exclusive brand outlets (EBO's), and 12,000+ multi-brand outlets (MBO's). Currently, it is focusing on establishing the 12th manufacturing plant in Maneri near Jabalpur, which will specialize in foaming and foam processing. As on 31st March 2023, the company has six subsidiaries and five step down subsidiaries. It has a subsidiary, Joyce Foam Pty. Ltd (Joyce Foam) in Australia. Joyce Foam IS the largest producer of foam (~40% market share) in Australia and supplies its foam to global mattresses and furnishing companies and serves a variety of markets, including bedding, furniture, medical, and specialised industrial applications. In addition, the company has one more overseas subsidiary, Interplasp in Spain which caters to 1% of Europe's market.

PRODUCT PORTFOLIO

Mattresses segment includes foam mattress, spring range, technology range, comfort cell range, back support range, flexi puf range, showroom range, economy range, Sleepx online brand.

Technical Foam Segment includes the following- 1) Automotive foams- Seat cover, sound absorption systems, sun visors, headliners, etc 2) Reticulated foam- Filtration systems, ceramic foam filters, outdoor furniture, microphones and headphones, safety fuel tanks, ink cartridges. G Ultra Violet Stable foam- Sportswear, innerwear & lingerie, clothing, swimwear, comfort accessories for shoes. P slientech foam- Automotive, diesel generator canopies, theatres, auditoriums, indoor stadiums, broadcasting rooms & recording studios, industrial silencers, engine testing rooms, etc.
Furniture foam includes an array of furnishings such as sofa sets, chairs, custom sofas, sofa- cum-beds, and more. Its furniture cushioning range includes Sleepwell Resitec (it uses advanced high resilience cushioning technology which provides personalised comfort experience), Sleepwell Cool Gel (particles used herein are a scientific breakthrough in furniture and cushioning that dissipate heat easily and offers cooling) and Primo (incorporates unique cushioning composition and extra thickness for enhanced comfort and support).
Comfort foam and home care products includes foam sheets, foam blocks, comfort range accessories, foam cores, furniture cushions, pillows, bedsheets, comforters/ blankets, mattress protectors, sofa-cum-beds.

SALES GROWTH

In 9M F¥24, the net sales was ₹2,137 cr v/s ₹2,144 cr in 9M FY23, a decline of 0.4% YoY. In India, it sold 15 lakh units of mattresses in 9M FY24 v/s 15.1 lakh units in 9M FY23. Technical foam and comfort foam observed
strong growth in volume terms for 9M FY24. The revenue for Kurlon in Q3 FY24 was ₹175 cr (for 72 days). International business registered steady revenue on a YTD basis.
5 Year CAGR: 7.5%

EBITDA GROWTH
In FY23, the EBITDA declined to ₹297 cr. The decline was owing to high cost inventory and rise in employee benefit expenses. Toluene diisocyanate (TDI) and Polyols are key raw materials of the company and are derived from petroleum products.
In Q4 FY23, TDI & Polyol prices stood at ₹231/kg and ₹130/kg i.e., exhibiting YoY a decline of 1.8% and 27%, respectively

PAT GROWTH
In FY23, the profit stood at ₹203 cr and saw a decline of 7.3% YoY. Tax rate in FY23 was 25.6%. In 9M FY24, the net profit stood at ₹126 cr v/s ₹157 cr in 9M FY23, witnessing a decline of 19.7% YoY. This can be attributed to increase in depreciation expenses and finance cost owing to the acquisition of KEL.

MANAGEMENT

Sheela Foam Ltd Rahul Gautam is associated with the company since 1971 and has been the managing director since 1996. He has over 46 years of experience in the home comfort products and PU foam industry and is the Chairman Emeritus of the Indian Polyurethane Association. On 2nd NOV 2023, Rahul Gautam resigned from the post of Managing Director and has been appointed as the Whole-time Director and Chairman. Tushaar Gautam has been appointed as the Managing Director from immediate effect. As part of the post acquisition structure, it is anticipated that none of the founders of the target companies will hold any directorial position on Sheela Foam's board,

Future Outlook

It has taken certain pricing actions
post-acquisition, however on a dealer level, no tweaking has been initiated and it shall consider about the same, going forward. Tarang mattresses are currently ocused towards customers who use cotton mattress and it is priced at ~₹2,000/unit. The initial response from the customers ras been encouraging post launch. Company is progressing well towards making Furlenco profitable The company stated that synergy benefits of the acquisition has been reflected in Q3 FY24 and shall be visible more clearly from Q4 FY24 onwards. In Small Town India (rural segment) it sold 10,000 mattress units and had revenue of ₹1.7 cr for the quarter. Towards e- commerce segment it sold 56,000 units of mattress and achieved a revenue of ₹21 c for 1 the quarter. USA has imposed an anti-dumping duty of ~27%-30% on mattresses, which has made exports from India questionable. In response, the company has reassigned the export-dedicated manufacturing unit as the centralised manufacturing unit for SFL and KEL. This will have added cost advantages of supplying to the western region in India.

🫧End🫧

☀️☀️Solar Stocks in India

⚡Tata Power
⚡ Waree Renewables
⚡ Borosil renewables
⚡ IREDA
⚡ SW Solar
⚡ Websol
⚡ Adani Green
⚡ Gensol Eng
⚡ Surana Solar
⚡ KPI Green
⚡ Solex Energy
⚡ Insolation energy
⚡ SJVN

915 to 1395⚡️Long term level hit 😍

One more pick

Kirloskar oil Engines 1000-1250
Expected level 1500
Support 930

Top performing PSU stocks under Modi 2.0 Government

1⃣Hindustan Aeronautics
CMP: ₹4,963.45
5 Years Returns: 1,362.42%

2⃣Rail Vikas Nigam
CMP: ₹367.65
5 Years Returns: 1,336.13%

3⃣Garden Reach Shipbuilders & Engineers
CMP: ₹1,397.35
5 Years Returns: 1,071.78%

4⃣Cochin Shipyard
CMP: ₹1,771.50
5 Years Returns: 858.34%

5⃣Hindustan Copper
CMP: ₹377.25
5 Years Returns: 797.15%

6⃣Bharat Dynamics
CMP: ₹2,746.80
5 Years Returns: 790.08%

🌍🌏Companies involved in Manufacture Spacetech Equipment in India 🌏🌏

In a triumphant moment for Indian space exploration in 2023, ISRO's Chandrayaan-3 mission successfully delivered the Vikram lander and Pragyan rover to the Moon's south pole.

📮 This accomplishment not only brings immense pride to India but also marks a significant milestone in the nation's spacefaring ambitions.

1️⃣ Avantel
2️⃣ Data Patterns
3️⃣ Larsen & Toubro
4️⃣ MTAR Technologies
5️⃣ Mishra Dhatu Nigam
6️⃣ BHEL
7️⃣ HAL

📮 Moving forward, the Indian government's decision to allow 100% investment under the automatic route for manufacturing components, systems, and sub-systems for satellites, along with the facilitation of FDI in various aspects of the space sector, signifies a significant step towards fostering growth and innovation in the industry.

NMDC Ltd:
It is involved in exploring and producing iron ore and diamonds, manufacturing and selling sponge iron, and generating and selling wind power.

🔹M Cap: ₹81,984 Cr
🔹P/E: 14.2
🔹CMP: ₹280
🔹3 Years Sales Growth: 15%
🔹1 Year Return: 162%

⚡️NTPC Ltd

It is primarily involved in the generation and sale of bulk power to State Power Utilities.

🔹M Cap: ₹3,54,898 Cr
🔹P/E: 18.2
🔹CMP: ₹366
🔹3 Years Sales Growth: 17.2%
🔹1 Year Return: 111%