If you see the earnings graph of Kingfa, Profit & Sales Cagr in all time frames are very encouraging and long term stock price has also rewarded as per the reported numbers. Reminds of the quote βIn the short run, market is a voting machine but in the long run a weighing machine
What really hampered investors confidence is the window between 2018 to 2021, which we can refer as the stagnant phase. As we are aware the auto industry went through multiple headwinds in the last few years including Covid and transition to BS VI.
It's important to analyze for investors, what steps did the company take for improving the long term business trajectory. Why Kingfa did not do well last 4 years ? And what exactly has transformed in the company during the last 7-8 years.
Earlier Kingfa had just Renault & Hyundai as their customer. Today they have everyone right from Maruti to VW to M&M , Tata motors, Hyundai as their customers. You name the OEM player , they are their customers.
Earlier they where just in Auto, today they are present across many sectors like Auto, white goods , appliances etc. with Carrier, Daikin. Symphony, Samsung, Havells and many more as their customers.
In 2014 , they hardly had any exports. Today they exports to South Asia countries, Africa, Europe etc. In 2014 They had 70000 tonnes annual capacity, today they have more than 4 lakh tonne capacity.
Today they have valued products like Long Glass Fibre, Nylon 6 and many more which are in pipeline. It takes time and effort to reach critical milestones. As a shareholder we need to understand the challenges a sector is facing before commenting on the capabilities of the mgt
Let me remind between Year 2014 till 2022, Indian Auto had close to zero growth. Kingfa moved from 12000 tonnes annually to close to 1 lakh Tonnes annual runrate now. Stock has delivered a whopping 32x returns with 10Y Sales Cagr being 21% and 10Y Profit Cagr being 68%.
Now, With new plant fully operational, high margin product being launched, the best of Kingfa Science is ahead for shareholders . In Q2 FY22, Kingfa posted highest ever topline and bottom line, and this is just the beginning of what they are capable off.
Everyone dreams multibaggers, but rarely investors realize, prepare and discuss about the process they need to follow during steep drawdowns without which huge wealth cannot be created. Direction being more important than speed, always focus on long term business trajectory.
The whole purpose of writing this thread was to enlighten the investors about long term wealth creation n holding on to good companies during bad times and how they reward you handsomely in long run.
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