Positive report by hedge fund Torrent Capital on Electrovaya Summary
Electrovaya remains a core holding within Torrent’s investment portfolio.
The Company is a standout performer in the cleantech space and has a clear value proposition; its lithium-ion batteries offer superior economics in the MHEV segment when compared to combustible engines and lead acid batteries.
We are Charged Up about Electrovaya
Posted on April 19, 2021
At Torrent Capital, we run a concentrated investment portfolio comprised of high conviction small cap names. Our core holdings have a defined value proposition, a clear competitive advantage, barriers to entry, strong management teams, and are due to enjoy a rerating in the market or enter a phase of accelerated growth.
We are inclined to support these companies as they move through their lifecycle by adding to our position during times of weakness or we take part in capital raises to fund future growth. Our ongoing involvement hinges on management achieving key milestones, demonstrating the creation of tangible shareholder value and maintaining a leadership position in their respective segments of the market.
One such holding is Electrovaya (EFL:TSX, www.electrovaya.com). We initiated our position in EFL during Q3 2020 and have been adding to our holding at opportune times.
Electrovaya is a pure play lithium-ion battery manufacturer that is a standout in the increasingly crowded and highly promoted cleantech sector. We have seen a wave of green economy investments come across our desks and all too often these companies are defined by lofty promises, questionable economic propositions, unproven technology, no clear competitive advantage, and frankly, limited probability of success as investment flows into the sector moderate and investors become more discerning.
EFL is growing revenues at a sector leading rate, is focused on profitability, has proven technology with deep IP, has fortune 500 clients and is on strong financial footing. Select investment highlights include:
Anchor clients consisting of Walmart, Mondelez, and Raymond Corp (a Toyota subsidiary), with yet to be mentioned Fortune 500 clients across multiple industries;
Proven battery economics with industry leading cycle-life, safety and power dynamics;
Deep IP with 100+ patents covering electrode manufacturing, composites, cell design and battery management systems;
FY2020 Revenues up +196.4% YoY and TTM Q1 FY2021 revenues up +315.4%;
FY2020 EBITDA margin of -4.1%, with +10.4% margin in Q3 FY2020 and +11.6% in Q4 FY2020;
An improved balance sheet with total debt of US$8.2M in Q1 FY2021 (-33.3% YoY);
Near term growth optionality in the nascent e-bus, e-truck markets and energy storage.
That is beginning of 9 page report, lots of graphics, etc. Looks like well researched, am half thru it but thought should post it to others. torrentcapital.ca/...