In today’s briefing:
- Gensol Engineering: Debt Woes, Management Assurances and Lingering Red Flags
- Hindalco (HNDL IN): Several Positive Triggers
- National Aluminium (NACL IN) New Capacities and Cheap Valuations to Drive Returns
- Jai Corp Ltd Under CBI Investigation: Allegations of Fund Diversion and Money Laundering
Gensol Engineering: Debt Woes, Management Assurances and Lingering Red Flags
- Gensol clarified that debt woes are because of short term liability mismatch which contradicts with Lender’s clarification
- Promoter said they will buy from the open market and will also infuse money into company but their recent stake sale again contradicts.
- 2nd CFO Resignation within 6 months further raises alarm over governance issues.
Hindalco (HNDL IN): Several Positive Triggers
- Play on rising aluminium demand. Aluminium demand has outpaced supply with strong Chinese demand.
- Management has guided better margins at Novelis which faced a temporary drop in margins due to scrap shortages.
- Hindalco’s Indian operations are fully integrated with captive bauxite, alumina and to certain extent for energy. Trades at a 20%+ discount to its historic PE multiples.
National Aluminium (NACL IN) New Capacities and Cheap Valuations to Drive Returns
- NACL posted its best ever quarterly performance in 3QFY25, driven by a sharp spike in alumina prices. Alumina prices have since cooled off but remain elevated at above US$450/t
- NACL is set to expand its alumina capacity by 33% over the next 12 months. This will help double its external alumina sales from 1mt to 2mt.
- Trades at 25% discount to historic PE of 13x despite record earnings, healthy balance sheet and strong near-term volume growth driven by brownfield expansion.
Jai Corp Ltd Under CBI Investigation: Allegations of Fund Diversion and Money Laundering
- Jai Corp Ltd (JFI IN) allegedly misappropriated INR2,434 crore from investors, diverted funds offshore, and engaged in fraudulent trading, triggering CBI probe into financial misconduct, money laundering, illegal stock manipulation.
- The Bombay High Court directed a CBI investigation after allegations surfaced of fake exports, foreign currency loan diversion, and fund rotation through shell companies in Mauritius and Jersey.
- Jai Corp claims no official notice of the FIR yet but pledges full cooperation; investors await regulatory actions from SEBI, RBI, and ED, which could impact the company’s financial standing.
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