@rishit.05 wrote:
MMP Industries manufactures atomized aluminium power (AAP), Pyro & Flake aluminium powder, aluminium paste, aluminium foil, aluminium conductors and some other products too where aluminium is the main raw material
It’s products are used in multiple industries like paints, mining, pigments, pesticides, explosives etc
The company has recently moved out from the SME platform and is now listed on the NSE
Positives
- RM prices are passed on almost immediately, i.e. 10-15 days. It is basically an aluminum converter & processor
- 26% JV with Toyal (Japan) - commenced in Feb 2018. It is the only tie-up that Toyal has worldwide. This capacity is in excess of its capacity in china, japan & usa put together. This JV might also help MMP market its own products through Toyals worldwide distribution
- Market leader in its niche categories = 60% in explosives, 70% in AAC Blocks, 70% in pesticides
- Value migration from traditional bricks to AAC Blocks will occur at a quicker pace once real estate picks up
Risks
- Company is bit of an unknown entity. We don’t have a track record of its past performance across business cycles
- It’s subsidiary, Star Circlips (26% holding) makes auto fasteners, the performance of which is impacted due to the auto slowdown
Promoter holding is at 73%. Son & daughter in law are both into the business. Old bridge’s Kenneth Andrade has a decent stake in the company
The company is debt free, ROE’s have been 15%+ and profits have grown very well in the past five years. IPO money has been used to put up capacity which should come on stream very soon.
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