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3,2,1,0 …..The mission, The Countdown and The Launch.  

The mission that once again ignited India’s dream to be number 1 in space tech.The countdown that made every Indian teary eyed. The launch that glued everyone in the country to their mobile phones at 2:35 PM. Yes, I’m talking about none other than Chandrayaan-3’s launch from Sriharikota, Andhra Pradesh. I’m not going to lie but this week’s newsletter is going to be a little bit filled with pride, with a promise to be emotionally fulfilling and at the same time discovering what India’s ISRO is headed to. So sit back and enjoy reading!

First, let us discuss the ins and outs of Chandrayaan 3. As put up by Indian Space Research organization (ISRO) itself, “Chandrayaan 3 is a follow-on mission to Chandrayaan 2 to demonstrate end-to-end capability in safe landing and roving on the lunar surface. It consists of lander and rover configuration”. 

I do not like to say it again and again and I definitely do not like to remember the dejection that came after the Chandrayaan-2 crash landed on the moon and partially failed. They say that learn from your failures and ISRO aptly fits the phrase. Terming it failure would be wrong as long as you bounce back with greater vigor and strength. So, what makes it different from Chandrayaan 2? I’ll try to keep it in pointers and I’m not going to use any technical jargon.

• First things first, the cost of the project. The total cost of the rocket has come out to be roughly 615 crores as compared to Rs. 970 crores of Chandrayaan 2. 

Fun Fact: People have been comparing it to movie budgets of Adipurush which  failed immensely at the box office. Indian Jugaads once again shined, this time in space. 

• This might be a little hard to understand but while Chandrayaan 2 comprised Vikram lander, Pragyan rover, and an orbiter, Chandrayaan-3 will launch with just a lander and a rover. A propulsion model has been added in place of the orbiter. Chandrayaan-3 will reportedly use the Orbiter already hovering above the Moon launched with Chandrayaan-2 for its communications and terrain mapping requirements. Brilliant strategy, right?
• Date with the moon: While Chandrayaan 2 was expected to land on the moon in 48 days, its successor is expected to have a date with the moon in 42 days. A failure-based design has been adopted in the Chandrayaan-3 mission instead of the success-based design in Chandrayaan-2. The failure-based design assesses the potential problems that can arise and measures to deal with them.
• Furthermore, the Vikram lander will have stronger legs than the previous version. The landing velocity has been increased from 3m/second to 2m/second. That means even at 3m/sec, the lander will not crash or break its legs. Vikram lander also has additional solar panels on other surfaces to ensure that it generates power no matter how it lands.

Okay enough with the differences but what is the big deal here? It’s not like India is the first country to do it but what matters here is that India could be one of the very few countries succeeding in this. 

Let’s discuss what makes this mission a Mera Bharat Mahaan moment. 

• After the landing India will become the fourth country to achieve this feat after the United States, China and the former Soviet Union (Russia).
• The landing is scheduled to happen on the south pole on the moon. Not on its equator which is the popular landing spot. India could be the first one to do so.
• If the mission is successful, which I’m sure will be, it is going to place India in a different league.

What does this hold for India’s space industry?

Finance Minister Nirmala Sitharaman’s recent budget for the financial year 2023-24 included an allocation of Rs 12,543 crore for the department of space, which oversees the operations of ISRO. Although there was a slight decline in the budgetary allocation for this fiscal year, the funding for the space department has experienced a noteworthy increase over the past six years.

With ambitious space endeavours like the Gaganyaan mission, a 10,000 crore mission with first manned flight on India’s horizon, the allocation of budget has gained even greater significance in ensuring adequate funding for ISRO projects.

India stands 8th in terms of space budget, the first two positions being held by the US and China. Nonetheless, India is one of the five most technologically advanced nations in the world. India is known internationally for its low-cost satellites and launch vehicles. The ISRO had earned approximately ₹1,100 crore in the last five years from the launch of foreign satellites. This launch is also going to open new gates for foreign countries to get first hand experience of ISRO’s expertise.

New door unlocked for India’s Startup in “Space” Space

There has been a multifold increase in India’s startup space with many companies going for funding, exploring new and high tech products. The number of start-ups starting operations in the space sector has touched an all-time high with a strong growth seen in the last few years. Air, Space, Defense and Research, these sectors are not just economically significant but they are of national importance. While these sectors were always thought to be government led, we have seen growing interest of private sectors in this space. For instance, it is evident from the graph below that space startups have seen a 7x growth in merely 3 years. Lets unlock this with a few examples.

1. Pixxel– Focuses on creating a cluster of 24-30 compact Earth-imaging satellites. This constellation enables continuous real-time monitoring of the Earth. With the potential to revolutionize sectors like agriculture, mining, and urban planning, Pixxel’s technology offers real-time data and analytics. The company has secured substantial funding from investors like Techstars and IvyCap Ventures to support its ambitious objectives.

2. Bellatrix Aerospace–  plans to launch its rocket, named Chetak, soon. The two-stage rocket is powered by Bellatrix’s Aeon engines and uses liquid methane as fuel. In 2019, the company announced plans to use water as the propellant for an electric propulsion system. On February 8, 2021, Bellatrix announced a partnership with Skyroot Aerospace, another startup

The list does not end here. There are many startups which are still at nascent stage and yet to make their mark on the world. But the private sector is going to play the pivotal role here. And it is only going to happen with government’s support. India will leave a mark on the world if it becomes successful with its Chandrayaan mission and this is only going to add to every child’s dream of becoming an astronaut, again!

Stock Specifics: Manali Petrochemicals Ltd.

Have you ever read the list of ingredients on your favourite pack of snacks to the end? Went through the series of components with complicated names on a pack of toothpaste? If you have, you’d have noticed some codes on the food packets and complex names of chemicals on personal care products. Today, we are talking about Manali Petrochemicals, a small cap company which manufactures two very important chemicals – Propylene Glycol and Polyol. 

Manali Petrochemicals has been in our smallcap compounders smallcase. The company is the leading manufacturer of two chemicals – Propylene Glycol and Polyol. These are just weird names to read in text but in very important raw materials for multiple industries like food, pharmaceuticals, personal care, automotive, paints, and many more. MPL, is one of the only companies that manufactures these chemicals in India and the largest producer of Propylene Glycol.

Let’s look at some numbers!

Here are some pointers on its financials. 

• The company has one wholly-owned subsidiary and five step-down subsidiaries.
• Debt has been reduced and the company has negative debt.
• The company reported topline growth on a quarterly basis but saw a 19.5% decrease compared to the last year.
• Profits have significantly decreased in comparison to the previous year, net profit margins are negative.

Here’s the thing, the stock has not performed well of late with its financials sinking, but we are still holding onto it. Why? 

• MPL acquired Penn Global of UK in November 2022 for British Pounds 21 million. Penn is a market leading manufacturer of anti-foaming solutions and related chemical products.
• The company is increasing its production capacity from 22,000 tonnes to 102,000 tonnes This is accounted for in current work in progress as the capacity will be added in phases in the next two years.
• MPL recently struggled because a new competitor entered the market but it continues to have the upper hand in the industry. It is the largest producer of Propylene Glycol and will benefit from increasing demand.

In all, Manali Petrochemicals has struggled to show growth in terms of numbers, but we continue to have conviction in the company’s business and potential.

CURRENT ECONOMIC EVENTS

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Green Portfolio is a SEBI Registered (SEBI Registration No. INH100008513) Research Analyst Firm. The research and reports express our opinions which we have based upon generally available public information, field research, inferences and deductions through are due diligence and analytical process. To the best our ability and belief, all information contained here is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable. We make no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results obtained from its use.