Madhav marble

Aro granite

both madhav and Aro are smaller player compared to Pokarna

Aro no no!! only granite business

Madhav is very small

but I don’t see lot of growth anywhere in annual report

madhav has windmills

So madhav also looks okay

either madhav or pokarna

madhav can buy now

pokarna later

While Aro the biggest player is not making any sales or profit this small player madhav is making avg result so may be there is something here .. Also Tamil nadu has put a hold on it’s mining even then

Brazil benefits from proximity to north america and color

The company since inception had primarily 2 business divisions, one was the marble processing facility in Udaipur, Rajasthan and another one is the granite processing facility in Tamil Nadu which continues operations till date.

Madhav is net net graham style cheap at 8o rs and right now selling at 65 which is very less.. but there doesn’t seem to be any favourable head wind

some regulations change favourable gov in tamil nadu etc can prove to be good otherwise can just remain like this.. what to do?

can buy for really long term or can buy a small tracking position

can buy on dips for madhav marble just keep your options open


No madhav no

what did i learn

keep your checklist on no rely on external a lot .. you read external and decide only if your checklist are done

in case of pokarna at least your checklist are okay except the debt part

Alarming amount of debt

if cash generation pauses it will be in soup

The new Quartz capacity will kick in Dec 2017 and IKEA will start absorbing capacity from then on. So another 4 quarters of flat results. Further, with addition of debt I wouldn’t be surprised if the company posts some losses too. However, we an expect the company to repay its debt of 230 Cr in less than 2 years from then. So after Q4’20 we should see a clear picture of earnings improvement.

  • Partnership with IKEA. They will gradually ramp-up their business in India.

ashish kacholia increasing his stake is a positive sign too. other triggers could be appointment of professional COO/CEO and better quality board members. For a 20-25 % eps grower, 8.5 ttm pe is quite cheap imho.

Madhav marble granite debt is less

lot of margin in the product so even small increase in sell is big

china still tops the export in stone

china brazil india

Annual report wise looks average there is very less far sightedness what if

only thing is herd mentality? for me why because of Low P/E ? what else?

Sector has future good can remain in business for upcoming years a lot of years ..

advantages? I don’t think so or not reserached upon may be may be not ..

Lot of debt

  • Quartz uses a polymer and is not a straight extraction like granite. Polymer is driven by Crude prices. This is a positive as Crude price falls. (Not a big positive in my view as I read somewhere that polymer is a small component. Will need to check)
  • Branding is through Quantra and it is doing well. Pokarna will have step up efforts to improve this.

Too much govt and policy dependency .

Company has to pay royalty to the government (As per AR 2015,there is a mention of Royalty on quarry land of Rs.7.45 lakhs and Government royalty and dead rent of Rs.7.15 crores) on a total granite sales of around Rs.193 crores.)

(Unprocessed granite is currently under import restricted list and if you own a quarry abroad only then you are allowed to import unprocessed granite,not sure how the company is able to import 30% of their raw materials without owning any quarry outside India).

7% of polymer resin is added to the quartz slabs during processing.Generally,ploymer is expensive however Prices of polymer is directly linked to crude and falling crude will help in improving margins this year.


Breton has a policy of one company in one country for its exclusive license,they dont want to dilute their exclusivity by offering it to multiple payers.He also mentioned Pokarna had an exclusive relationship with Breton before and now it is lapsed (not sure what it means).

To set up a new line with Breton,it needs atleast 2 years.Currently the company has only one line established,its competitors like Caesarstone has 8 lines running.It has provision to add second line within the current facility(brownfield expansion).Even if a new company tries to get Breton tech,it takes 2 years to establish the line.Hence,threat of other companies getting in quickly is low.

Globally 12-14 sizeable manufacturers are producing quartz with Breton tech

Lastly, small cap businesses contain inherent risk of capex going wrong. I see higher rewards in this business as the valuations are comfortable. If the capex go wrong then yeah, the company may die but the reward look sufficiently high to me to take the risk.



No new upcoming development in pokaran so can wait for long like 5-6 month time period before making a move in pokarna

what say you

2017 end IKEA store

 Regulatory/environmental issues, shutting down of quarries, and inordinate delays,

 Higher competition and lack of pricing discipline among competitors,

 Debt Obligation, Downturn in US housing market,

Pokarna along with its subsidiary has a sizeable proportion of loans outstanding. Any failure in cash flow generation following business slowdown could impair the

Company’s ability in its meeting its debt obligation on time.

Higher competition and lack of pricing discipline among competitors: 

Next couple of quater will be mute so can delay investment here sure delay actually


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