Write the investment memo for a specialty chemicals exporter with 62% of revenue from three customers, a 24% EBITDA margin and a new plant that doubles capacity next year. What goes in, in what order, and what is the recommendation?

Lead with the view and its number, then key figures, thesis, quantified risks, valuation and what would change your mind. The numbers: if the new plant reaches 65% use, year-2 EBITDA is about Rs 679 crore and the stock trades at 10.3x it. At 14x, discounted back, fair value is only about 9% above the price, too thin for the customer concentration. Positive on the business, wait on the stock.

Think of a doctor's referral letter: the diagnosis and the request come first, the history after, because the reader has ten other letters. An investment memo is written for a portfolio manager who decides in the first two lines whether to read on, so it opens with the view and the single number that carries it. Then come the few figures the call rests on, the thesis in a sentence or two, the risks with numbers attached, the valuation, and the evidence that would change the view. Background goes last or nowhere.

Model it with contribution, because a plant's economics are fixed costs against filled capacity. Today, 40% contribution on Rs 1,500 crore is Rs 600 crore, and EBITDA of Rs 360 crore implies Rs 240 crore of fixed costs. The new plant breaks even at 23% use, where its contribution covers its own Rs 150 crore of fixed costs; above that, every rupee of extra revenue adds 40 paise of EBITDA. At 35% use in year 1 revenue is Rs 2,178 crore and EBITDA Rs 481 crore, a dip in margin to 22.1%; at 65% in year 2 it is Rs 2,672 crore and Rs 679 crore, a margin of 25.4%.

Quantify the concentration instead of listing it. Losing the largest customer would remove 28% of the existing plant's revenue, about Rs 179 crore of contribution, half of today's EBITDA. That risk also bites harder now, because the new plant is expected to sell mostly to the same buyers. Then the price: the enterprise value of Rs 7,000 crore is 19.4x trailing EBITDA but 10.3x year 2. Valuing year 2 at an assumed peer multiple of 14x, deducting debt and discounting two years at 13% gives about Rs 7,050 crore, 9% above the Rs 6,500 crore market cap.

So the recommendation is positive on the business and patient on the stock: the market already pays for most of the plant filling on schedule, and 9% is not enough reward for a 62% three-customer concentration. Name the trigger that would change it: new-plant use above 50% in year 1, or a fourth customer above 10% of revenue. Either would justify buying, because each removes one of the two risks the price ignores.