Tuesday, April 3, 2018

Interesting Companies From Interesting Sectors

With this post, my focus would be to talk about companies which have attracted me with continuous out performance over past few quarters and that too, from some of the unpopular sectors.

I have always written about the companies we are following since long, but this time, since I don't have many new updates, am using the opportunity to write about some of the new names I have been following.
Obviously, if any one has any question on our regularly followed companies, please drop a question in comments section and I will reply to it as soon as possible.

1) Shivalik Bimetal Controls:

Came across the name when I was asked for my views on it by one of my friend. Initially because of some personal reasons, I was not able to dig much into it, however have tried off-late and it seems I am in a position to call it one of the companies nicely poised for growth.
It is mainly engaged in manufacturing of Bimetals and Shunt Resistors. The company went through a bad patch earlier when Television technology was growing fast and people moved from usual old school screens to LCDs and LEDs, as it used manufacture CRT tubes.

Starting with current business, first thing is obviously Bimetals as the name suggests, which as per wikipedia means an object that is composed of two separate metals joined together. Instead of being a mixture of two or more metals, like alloys, bimetallic objects consist of layers of different metals. It is used where you need to detect the temperature or current for e.g. fire alarm. It might sound small, but has huge number of applications. The areas covered by the company are nicely listed here:

The second important product manufactured by the company are Shunt Resistors. They are low resistance precision resistors used to measure AC or DC electrical currents by the voltage drop that those currents create across the resistance. They form an integral part of Battery Management System or Intelligent Battery Sensor for vehicles as well as Electronic Energy Meter. For more details, follow:

For both the products, they have very solid customer base, and this is one area with high entry barrier, hence it is not easier to find much competition that could lead to much of a pricing pressure. Currently, their customers supplies BMS mentioned above to the Electric Vehicle Manufacturers. In future, they are targeting to supply themselves, which could bring them in limelight and hence better market share.

Coming to good and the bad part together, which is their current valuation. The company is already trading around 35 P/E, which is much higher than what we usually expect from small cap company. However, the growth is very attractive and on top of it, the application of their products excites me about the possible growth in future.
Historic growth has been modest, but if you look at past few quarters, the growth is improving by leaps and bounds. For the first 9 months of FY'18, they have posted a sales growth of 28% and profit growth of 90%.  The balance sheet seems very stable and reduction of Debt:Equity ratio every year is also appreciable. It is very good dividend player as well. Last year, they declared a bonus of 1:1 which is also commendable for such a small firm.

All readers can go through the company's detail and share their thought on the same.
Once again, this is not at all any recommendation. I have just shared a company name which impressed me with its numbers.

2) Kingfa Life Sciences:

Kingfa Science & Technology is a leading manufacturer and supplier of high quality Reinforced Polypropylene Compounds, Thermoplastics Elastomers and Fibre Re-Inforced composites. The applications of said products is available here:

If I start writing here, I might make it huge post in terms of length. Instead, I decided to just share the pic listing their clients which I found on google:

I would like to speak more on its numbers. It was one of the loss making companies until FY'15. Even though the company is still not making huge profits, but it has been a good ride up since then. The margins are very very low, but they have been improving each quarter.
The balance sheet also have some positives. Again till FY'15, the reserves were nill against debt of 75 Cr, and at the end of FY'17, they stood at debt:equity ratio of 0.3. From just 200 Cr in FY'15, it is likely to post annual revenues of about 600 Cr this year. Profitability wise as well, this will be one of better year for the company.
Coming to major negative, which is very heavy dependency on crude. The impact is not much seen on numbers because of modest profits in prior quarters, but going forward, it will be interesting to see how company copes up with the situation. Also, if we look at the current valuations, it is trading at P/E of more than 50. It can be called over-valued, but I would slightly differ in saying that it is trading based on forward earnings. The profit growth is likely to be more than 100% for next year or 2, but now with crude challenge, it has come under scrutiny. Let's wait and watch.

I have also been studying few more companies, but not able to reach conclusion yet. Hence thought of posting at least these 2 companies in the meanwhile, so that you guys are start research with me on those. 

I am not a research analyst, nor an investment adviser. Through this post, I am only putting my views, and which has nothing to do with any action that can be taken by readers on any specific company.

Thursday, January 11, 2018

Q2 FY'18 Result Updates

One more time, have to apologise for being so late in updating the results. Professional life is taking some toll on my passion. :)

As you know, SEBI guidelines doesn't allow me to recommend stocks through this blog because of justified reason. Hence I will focus on just discussing about the possible growth prospects of each company.

Views shared below are solely mine and not to be considered as advise to buy or sell any stocks.

Markets these days seem to be in no mood to give up its amazing ride. Most of us surely have a doubt if the market valuations are getting over-stretched. But do the markets actually trade on basis of valuations?
Since last few quarters, every time we feel the results are not as good as expected, but still prices have gone up. We start believing that next quarter would be good, and valuations will become justified. However, the same story repeats. In spite of all these, the market is still able to find investors money coming in, may be because people are ready to accept slight impact of 2 major reforms India has gone through in last 1 year.
Apart from that, one more boost came following the slight hiccup in Gujarat Elections as people are now almost confident that the budget this year would beat expectations of one and all. In my opinion, markets are running more on sentiments now. When those same sentiments goes down, then also, it won't care about the valuations. So, we better stick to our thinking of being stock specific.

Let's reverse the trend and start with companies in hot sectors. Also, the focus will be more on new names this time.

Srikalahasthi Pipes, PSP Projects & Kolte Patil Developers:
Each of them were able to show tremendous growth in past quarter, and somewhere are proving the point why Infra is one of the favourite sector right now.
Srikalahasthi Pipes, we have been discussing for long now. The fundamentals have been intact. The performance has been impressive, but still seems to be going through challenges in terms of valuations, especially when we compare it with peers. The reason is already discussed earlier. It seems to be because of other companies being held by promoters and their financial stability. One can look at prior post to get into more details about the same. Somewhere though, we have seen a slight improvement in valuations, it could be either because of continuous out-performance or could be because people are slightly more confident about the promoters. The result this quarter might look unbelievable at first look, as they were able to post 94% sales growth, however, one has to consider the fact that company had annual shutdown of about a month during same period last year. So, it is not exactly comparable, though I don't deny it still looking good. Higher prices of coking coal is one of the major reason why company is not able to show great profit numbers in spite of heavy revenue growth. The cost seems to be reducing, and it should benefit their margins going forward.
One can see in the last post, that one of the new companies we started discussing about, was PSP Projects. The stock has seen a great run up in last 6 months. Results also seems to have justified the uptrend. The company has about 2700 Cr worth orders which are to be executed in next 24-30 months. Looks amazing when you know the coming is currently having annual revenues of about 400 Cr. One of the major reason is the Surat's project worth 1575 Cr. If this order gets executed in perfect manner, it could take company to new level and they could easily mark their presence in the industry as of the finest developers. They continue to remain focused on projects in Gujarat only. Should they start looking for projects outside Gujarat or should they continue to concentrate on orders in hand and look to deliver those in best possible way. The debate is never ending. Let's see how things unfold.
Kolte Patil Developers, another sound company in its space. I had given all reasons in previous post on why I like the company so much. Somewhere it is also because I have seen their projects and the standard of construction. The rise that came in last 4 months was always on cards. Had to happen some day with the kind of fundamentals the company has. Results were once again impressive with sales growing 72% yoy and profit about 50% yoy. The latest investor presentations says a lot about company and leaves me with no other things to be discussed. One must read that and take their own call.

Control Print, Ganesha Ecosphere, Garware Wall Ropes & Talwalkar Fitness:
As mentioned last time, this is the most stable set of stocks we have. Each of them have given good returns and are now sitting pretty at those levels. The results for each of them were decent this quarter considering the impact of GST.
For Garware Wall Ropes, most of their Q2 revenues comes from fisheries. However, as we all know, such segments take their own time to settle down with tax reforms, which is why, company had a slight impact on their revenues. The positive news for the company though is that the government has reduced GST on fish nets and few other agricultural products, the company deals with.
Talwalkar Better Value Fitness recently announced that the company is planning to open 100 gyms in Sri Lanka.
Will definitely share more on these companies if there is any twist in fundamentals.

Dhanuka Agritech, PI Ind & Shree Pushkar Chemicals:
Good recovery in all the above stocks after some hard time post Q2 numbers. Probably because of high expectations from Budget 2018 for this sector. In my opinion, irrespective of how the budget turns out, I don't think any of these names are going to face issues in posting decent growth in coming years. Each of them are having strong presence in their respective segments. In our earlier posts, we have discussed a lot about PI Ind and Dhanuka Agritech.
Shree Pushkar is relatively new on this blog and hence would like to update on it a bit. It is going through an expansion phase which is going smooth. Recently the company announced that an additional capacity of 3000 MTA of the dyes plant has been created at its the plant and has commenced trial runs in end November 2017. The management has already guided for 400 Cr revenue this year, which means we can expect close to 225 Cr from last 2 quarters. So far, company has never even achieved 100 Cr in 1 quarter, and hence makes it interesting to watch out in next 2 quarters. May be the recent rise to new highs could be on account of the same. Let's see.

Plastiblends Ind, Poddar Pigments, Gulshan Polyols & Dynemic Products:
The specialty chemicals segment continues its nice journey which started way back in 2014, and each of these companies has enjoyed its ride along with the sector. However, the big negative for these names is coming in form of crude price rise in last few months. It has started impacting margins for various companies.
One company that didn't enjoy an equivalent ride as others is Gulshan Polyols. The reason is quite evident. In spite of good revenue growth, company is not able to convert it into good profit, which is why it looks fairly priced even without any major price rise. The reason is the rise in crude prices, which is not in company's hands, though it will be interesting to see if they take any steps to mitigate it, as it is one of the main raw material for the company. The most interesting part in one of the concalls or may be it was AGM, I saw company claiming to achieve around 700 Cr revenues this year and around 1000 Cr in coming year (Not sure where I read this.) I am eagerly waiting to see if that is actually possible. Though in my opinion, unless they improve margins, not sure if investors would give enough attention.
The other 3 companies are doing good, but it will surely be important to watch how they are able to manage raw material price rise.

Steel Strip Wheels, Force Motors, FIEM Ind & Pricol:
Auto sector is catching up with Infra in turning out to be one of the most sought after sectors in Indian market. Luckily we do have few companies in our list. Most of them though are actually auto-ancillary, which in a way, I feel is even better placed. That is because with initiatives of transitioning from BS-III to BS-IV and from BS-IV to BS-VI later, auto companies have to take some hit of managing inventory. But for auto ancillary companies, the demand is not going to stop. With each upcoming vehicles, they will always get indirectly benefited. On top of it, if we have a company which is a step higher, by penetrating equally well in overseas markets as well, then it is certainly icing on the cake. Yes, I am talking about SSWL. Amazing journey it had since last few quarters. Just imagine, every quarter, management coming out and saying that next quarter we will have our highest quarterly revenues, that speaks volumes about the management integrity and excellence. Sales is shooting up with increase in Chennai plant's capacity utilisation. Profit not yet catching up, still enough to give company a decent valuation now.
Force Motors continues to face some heat in their core business. However, contract manufacturing can provide huge opportunity for them going forward, with some of the industry majors being tied with them. In addition to Mercedes and BMW, we saw Rolls-Royce also joining the league of tie up with force motors. It will be interesting to see how the story unfolds, though it will definitely take some time. Surprising when company declared its monthly numbers for Dec'17, we saw a huge increase in production volumes. Not sure why was that, but it makes one think about upcoming quarters. Or it could just be my optimistic thinking.
Pricol remains where it was. No major price increase or decrease and neither any shift in fundamentals. Hence nothing more to update on it since last thread. Still waiting for numbers to stabilise post amalgamation events.
After facing challenges for 3 quarters, the Sept quarter numbers looked pretty decent for FIEM Ind, especially considering the impact of GST. The sales were up 12% in Q2, which is close to their average growth. Profit also quickly catching up. Let's see how quickly the company start posting their usual growth. Don't think its too far.

Cera Sanitaryware & Somany Ceramics:
Both hitting all time highs in anticipations of great infra & housing push from government. Results were flat for both the companies because of obvious reasons, though Cera atleast posted around 20% sales growth even in such environment which is commendable. Once GST stabilises, these companies are likely to see maximum benefits. As such, no updates since last thread.

Dewan Housing, Can Fin Homes & PNB Housing Finance:
It came as a big surprise for every one when suddenly the investors interest started moving away from housing finance names. That is exactly what happened with PNB Housing Finance and Can Fin Homes. However, that had to happen someday. Both of them had an unbelievable journey in last year and half. In last 5 months though, both the companies lost close to 30% from their highs. Dewan Housing is an exception among these names, may be because it was not as higher valued as the other 2. Who knows. But fundamentally, there are no changes in any of the names in my opinion. Results should remain as impressive as some of the past quarters.

Ajanta Pharma, Granules India & Torrent Pharma:
This is one of the most discussed sector in history of this blog. Hence thinking of keeping it short this time. In any case, I don't have much to update. When I look around, it seems people have started writing off pharma saying their time is over and all, but frankly speaking I doubt such opinions. Whenever cyclicals have outperformed, defensives have taken a hit. That's common behaviour, and that is what is happening with pharma. However, I don't deny the fact that there has some impact, but such things are part and parcel of company's or even sector's life cycle. The competitive ones will eventually come of this phase and prove themselves. Out of the 3 names we are tracking, each of them seems capable enough to do so. For Torrent Pharma I feel the base is now settled. Last year almost during the same time, the benefits of gAbilify subsided. So, from next quarter onwards, it will be interesting to watch for the growth, the company is able to post.

I saw few queries about my holdings. Currently, I am holding most of the names above except few where I have booked profits. Apart from that list, I hold NOCIL, Banco Products and Bhansali Engg Polymers since last 6 months.

I am not a research analyst, nor an investment adviser. Through this post, I am only putting my views, and which has nothing to do with any action that can be taken by readers on any specific company.

Monday, August 21, 2017

Q4 FY'17 & Q1 FY'18 Result Updates

It's been a long since we had any discussion on this blog.
I apologise for the same but was too much occupied in the professional life.
Anyways, I have not been recommending any new shares on this blog, just sharing my views or my vested interest in stocks. Readers can always ask any queries, I will always try to answers those as soon as possible.

The Indian market in past year, has gone through many hiccups, and it is still near the all time high levels. We saw demonetisation impacting the company's numbers in Q3 FY'17, then we had BS IV transition which had an impact on auto numbers in Q4 FY'17 and now GST roll over impacting in Q1 FY'18. On top of it, every one is aware of how pharma and IT sector has lost its shine, especially pharma sector, with increased competition, export price erosion, stricter USFDA and price regulation enforced by Indian government working together. In spite of these, if your market is still at its highs, it speaks volumes about the strength of the Indian market, as well as the trust shown by FIIs and DIIs.
On current earnings, the market might look expensive, but it seems to be trading on forward earnings expecting some benefit from GST for organised names, great push in infra spending, and housing for all by 2022 promised by government. Also, the auto sector seems to have better growth prospects on increased standard of living and 7th pay commission.

In this post, I will talk more about the companies which have been under pressure, and less about the names where everything is going well.

Ajanta Pharma, Granules India & Torrent Pharma:
The sector has faced tremendous heat in past 6 months, and it is likely to continue with above mentioned reasons. However, I still feel that we are tracking 3 of the better companies in the sector, where I expect the least impact. For Ajanta, the profits have shown decline which has led to its downfall. However, if they atleast keep on growing in sales, they will catch up with profits sooner or later. The silver lining for Ajanta is their new beginning in US markets. It had negligible presence earlier, but now with few approvals, it has started delivering good numbers. The growth in US market is likely to continue which will offset the pressure company is getting from African market. This quarter was also under pressure on account of GST transition in India. They have had history of giving 12-15% growth in India every quarter, which was down 12-15% this quarter yoy. One also has to consider the fact that because of all negatives, the fair value for pharma companies has also come down. At one stage, because of its fundamentals, Ajanta was trading at 40 P/E, which is now down to 22 P/E. All in all, we need to keep an eye on how sector pans out, and each one should take their actions accordingly based on their investment time frame and risk appetite.

Granules India, I don't see a reason why stock price has declined, because the company has not had almost any impact seen on the overall sector. Infact, this quarter, the company showed 10% growth in sales, which they were not able to show in past 5-6 quarters. The profits were flat this quarter just because of the fact that Omnichem JV didn't contribute at all this quarter, where it had given around 9-10 Cr profit last year same quarter. However, the management has informed that the overall sales for the year is not going to be impacted, it is just the nature of business where income might move quarter to quarter. Recently the company has received EIR for Gagillapur facility from US FDA. Also, last year US FDA gave 7 observation to Visag facility of Omnichem, where they have now mentioned that they don't want further inspection and EIR might come anytime. In short, lots of positives for the company, and it will be interesting to watch full year numbers this time, as company earlier mentioned that they are expecting blockbuster FY'18 and FY'19.

Torrent Pharma falls is one of the recent companies that we have started tracking, but again, there has been no appreciation. Performance wise, it still looks good to me, but you never know these days. The company has started consolidating on the high base set by gAbilify sales last & last to last year, but the price erosion has started taking toll on its profit. In that case, I would put it in league with Ajanta Pharma, where it will be interesting to see if out-performance in the sector could still help these companies turnaround in future.

Dewan Housing, Can Fin Homes & PNB Housing Finance:
Housing Finance companies have been on a roll with terrific performances and very bright prospectus. The government's effort in the mission of housing for all by 2022 through the concept of affordable housing is giving a great push to these companies.

We have been tracking Dewan Housing Finance and Can Fin Homes since very long, almost 3 years now. Apart from these, as mentioned in my last update, that was in Feb'17,

We had started tracking PNB Housing Finance. It has been the fastest growing HFC in past many quarters, and management has confidently mentioned that they are going to outperform the overall industry in FY'18 also.
As such, there are no new updates or threats to these companies, so we will keep it short.

Cera Sanitaryware & Somany Ceramics:
While the companies in this sector were just getting ready to get rid off all demonetisation blues, they had to face GST transition pressure this quarter. Cera might not have come up with numbers yet, but Somany declared a weak set of numbers on roll out with GST. But overall, if you look at the sector, there are many unorganised players. So GST roll out will eventually be extremely helpful to these companies, as the gap between organised and unorganised companies will end in terms of taxes, which would result in higher sales of branded products. Also, if we say that government's push in housing for all by 2022 is going to succeed, then this is one sector which is going to benefit indirectly. Overall a positive stance on these companies once GST transition process stabilises.

Steel Strip Wheels, Force Motors, FIEM Ind & Pricol:
As discussed already, if we are positive on Auto sector for long term, then we have to be positive on Auto Ancillary space. In case of Force Motors as well, rather than its core business, I am positive on the division which supplies engines-axle to Mercedes Benz and BMW in India. The reason being, with increased standard of living, and new models launched by BMW and Mercedes Benz which fits into budget of higher & higher middle class people in India, the sales are likely to zoom in next few years for these car makers. As per HDFC securities report, the sales of luxury cars in India is expected to triple by 2020. This indirectly makes the picture rosy for Force Motors. Obviously, their business is also pretty good and they are enjoying a sort of monopoly in few models.

Steel Strip Wheels has been performing pretty well. The result for Q1 FY'18 might look flat, but the reason behind it is the reduction in raw material prices seen till May-June'17. In terms of volumes, their sales were pretty good even in Q1. Now, since the raw material prices have gone up and last 1 year being the one where prices declined by 20%, the result for next few quarters are expected to be good. The volumes are increasing plus prices have increased, which was the reason why company was able to post 41% growth in turnover for July month. The trend is likely to continue which is why management has confirmed that this quarter is going to be the best in terms of revenues.

Pricol has seen almost no movement since we have started tracking. But still, I am positive on the business, especially considering its product line and the sort of market share it is having in those products. The primary reasons for no appreciation since Nov last year, was selling of shares by promoters and amalgamation process apart from other casual impacts on the sector. It will be to interesting see the numbers going forward, especially after Q3 this year, as they will become comparable yoy post amalgamation process.

FIEM Ind faced its worst quarter in Q4 FY'17 because of BS IV transition. The sales of 2 wheeler vehicles were badly impacted because of the same, where 96% of its revenues are coming. The sales for the month of Apr May and Jun have been relatively better, which will start having positive impact on the results of the company. Wait & watch here.

Plastiblends Ind, Poddar Pigments, Gulshan Polyols & Dynemic Products:
Some of the leading experts have said that if we consider 2010-2015 as the golden years for IT and Pharma sectors, then the years from 2015-2020 are going to be for Specialty Chemicals. It seems that their analysis was perfect looking at the returns most of the companies in the sector has given in past 2 years. Most of the companies we are following have been giving decent numbers and have seen good appreciation from when we started tracking them. One of the weaker link has been Gulshan Polyols but in terms of sales, I think they are doing pretty well. It is their profit which is not catching up that can boost the market demand. But as always, I am fine if company is growing in sales.

Dhanuka Agritech, PI Ind & Shree Pushkar Chemicals:
Again a sector which has faced some heat off-late. Both of our companies came out with sluggish set of numbers, but by no means have the fundamentals changed. Dhanuka still remains one of the better bet in agro-chemical sector. The product line is very strong with good acceptance among farmers. The balance sheet and all return ratios are pretty good.

PI Ind as always, I see it as the model company in terms of balance sheet strength, margins, return ratios, heavy order book and management's vision. The flatness in result was mainly due to GST destocking and some CSM orders getting deferred to coming quarters. Overall company has guided 10% growth in spite of weak Q1. Order book in CSM is still at 1 billion $. The management is quite confident about second half of this fiscal.

New name I am tracking in the sector is Shree Pushkar Chemicals & Fertilizers. The company is consistently delivering good numbers. Even in this quarter, when the prices of Vinyl Suphone and H-acid had fallen from past year and there was some GST Impact, company still came out with 23% growth in sales. It is virtually debt free company. The management has guided for total revenues of around 410-425 Cr as compared to 324 Cr last year. It is by no means cheap in terms of valuation, but still with this kind of growth posted, one can definitely have a look at this.

Control Print, Ganesha Ecosphere, Garware Wall Ropes & Talwalkar Fitness:
When things are going perfectly fine, you are not left with much to say about. That sums up all the companies in this segment. Each one is growing at a decent pace and are mostly outperforming their sector. As such, valuation wise also, I see each of them getting well appreciated since we started following these companies. Nothing new to add.

Indo Count Ind, Lincoln Pharma & Salzer Electronics:
I see these companies as the ones who have been poor performers in this mega market rally. The reason for Indo Count is again the sectorial problem where all textile companies have failed to deliver good set of numbers. On top of it the base of last 2 years was very high as it used to grow at 20-30% in that period. Now it has started consolidation and the market is not happy with that. On books, they are still standing tall. The debt:equity now stands around 0.33, which is rarity in the sector, and this is one company which has come back from debt re-structuring. Frankly speaking, I am not sure on its future looking at how market is reacting to consolidation phase, and hence I won't be presenting my stance on it.

Lincoln Pharma also in seeing de-growth but that is more because of the fact that they have stopped one of their businesses which was eventually loss making for them and now they have shifted entire focus on pharma range. The good part is that most of their sales are coming from Indian markets so in a way they are safe from US FDA strictness. :) As such I don't see much issues overall, but you know Mr market, they believe in proof. Unless they see performance, people will keep themselves away from such names. And in a way, that is right as well.

Salzer Electronics is altogether a different case. I don't see much negatives surrounding it, but no movement in price. The good part is the company has been introducing new products in market and receiving contracts from high tech foreign agencies. Promoters have increased their holdings recently. I am eagerly waiting to see how numbers this year pans out.

Srikalahasthi Pipes, PSP Projects & Kolte Patil Developers:
Coming to the most talked about sector of markets these days. People see this sector especially the organised players as the one of the mostly likely to benefit from government moves. Srikalahasthi Pipes has been the one we have been tracking since long. There has not been any change in fundamentals since then. In fact this quarter, the company saw 53% jump in sales, which is quite pleasing to eyes. The management concerns has still kept price in check. Let's see if it can overcome it any day.
The 2 new companies from this sector that I have started tracking are PSP Projects and Kolte Patil Developers. Both these companies are concentrated in specific regions and hence the size of the companies are small. Their vision though are not, and they have been doing well to achieve that.

PSP Projects has been recently listed company which caters to industrial, institutional, government, government residential and residential projects in India, mostly though in Gujarat. They have very good reputation of delivering almost all projects before time, which is one of the reasons why they have very strong order book from government organizations.

Coming to Kolte Patil Developers, most of their projects are concentrated in Mumbai, Pune and Banglore. The good part is that all 3 cities have many service class people who are looking for affordable housing properties, where Kolte Patil has good presence. The growth off-late because of the same reasons have been very strong and is likely to continue in my opinion. RERA introduction is also expected to help some of these branded companies in real estate, as they have already been more or less compliant. The small builders are expected to face some pressure out of it. It is now up to these companies to utilise the opportunity well.

Among our overall list of stocks, the ones I have stopped tracking are Capri Global, Camlin Fine Sciences, Suven Life Sciences, Swiss Glascoat, TCPL Packaging and Flex Foods. It is not that I have lost confidence in these companies, but it is more because of limited number of companies that I like to track on regular basis. The above listed companies might be performing well, but still, I am not in position to give my detailed look into it. Some of these names have already given multi-fold returns since we started discussing here, but from now on, I won't be giving a detailed views on these.

I am not a research analyst, nor an investment adviser. Through this post, I am only putting my views, and which has nothing to do with any action that can be taken by readers on any specific company.

Tuesday, February 21, 2017

Q3 FY'17 Result Updates

I am sharing few thoughts initially, which are strictly mine and has no intention of driving any investors to any conclusion.

This was probably the most anticipated result season for past many quarter, as Indian economy went through a major reform in form of demonetisation of major currency notes with an intention of curbing the black money. The same was bound to have negative impact on various sectors and their growth, and eventually the growth of nation, as one cannot deny the extensive use of black money in India, especially among the companies from un-organised sector. Among the organised ones, the impact was expected to be maximum in real estate & construction sector, followed by auto sector and then to some of the sectors which are directly related to those 2 sectors like furnishing, cement and auto-ancillary, to name a few. Every body was anxious about how the numbers would turn out to be for companies in those sectors, and how management would ensure investors confidence in their respective companies.

The above para negative mindset about the government's move on Indian market, however, as usual, there are always 2 sides of the coin, and demonetization was no different. There are few positives as well, but most of them will take time to reflect in form of numbers, and hence are lesser discussed then the negative ones. The move is expected to improve government spending, especially in infrastructure, which would benefit the nation and indirectly benefit some of the companies from the most beaten down sector i.e. construction and real estate. The move in fact, is also expected to bring down inflation and hence the interest rates, which would enable common people to invest more in properties and their vehicular needs.

Coming to numbers, I feel that they were not as bad as it was expected,.

Ajanta Pharma continues to post decent growth, aided by huge growth coming from US market, where it had almost negligible presence till last year. The growth from some of its larger export market seems to be flattening, which can be considered as a reason to worry. But if US and India continues to contribute well, they should not see a major impact in their overall growth. Margin continues to outperform peers which is a big positive. The stock might still continue to act as steady compounder for next few years.

Granules India also posted decent numbers. With company trading around 18 P/E and having lots of positive triggers in next 2 years, most of the brokerage houses are bullish on the company and have given their targets in the range of 150-220. Recently, one of World Bank unit IFC has confirmed investment up to 47.5 million dollars in the company, which shows their confidence in future of the company.

Can Fin Homes and Dewan Housing has shown superb run away rally in past few days, as it is assumed that NBFCs are most likely to benefit from the government's move. Both of them are well on track and have continued their performance even in last quarter. Capri Global somewhere falls in the same category and hence is also likely to benefit. Some of the new names that I have come across in the sector, are Bajaj Finance and PNB Housing Finance, which obviously have run up a lot in past, but still from a business perspective, they seem to have very bright future. Currently, I am not holding either of them, on account of lack of cash in hand.

Now coming to one of my favorite sector, which unfortunately took a hit on account of demonetization i.e. home furnishing, where we have been tracking Cera Sanitaryware and Somany Ceramics from long time. The good part was that both the companies outperformed their peers and posted results which were much better than expectations, and accordingly market has rewarded them. Even in times of crisis, both of them are not very far from their all time highs. I continue to remain positive on both of them.

Coming to another sector which was indirectly expected to take a hit on account of such move, is auto ancillary. We have been mainly tracking SSWL and FIEM Ind from that sector. The results were surprisingly contradictory. Even in such a quarter, SSWL showed 19% growth in sales which is phenomenal. The same was mostly aided by sales in truck and tractor segment which has seen significant uptick in recent times. In fact, on account of that the company even raised its sales target for this quarter. The profit saw a decline, but as I always say, I won't mind company posting de-growth in profit for one or two quarter, if their sales growth in on track. And as such, if you see, the company is still trading around 15 P/E. I know debt is a concern, but one needs to consider nature of business and the fact that they have not let it increase in past 4 years. The stock has already appreciated close to 200% from the time we started the discussion here. Talking about FIEM, the sales saw a decline, which was quite obvious, as 2 wheeler sales were most impacted in the auto sector, and 96% of their revenues come from there. Even in that sector, Honda Motors saw the biggest de-growth which is the highest contributor to FIEM revenues. So, considering all these, I don't think the numbers were bad. I won't comment on price, as it has already seen good appreciation from the time we started its discussion.

No change in views for PI Ind and Dhanuka Agritech. Both seems to be doing very well, and accordingly they are trading at almost their all time high levels.

Garware Wall Ropes is getting better and better with every quarter, and seems to quite easily achieve the management's vision of 2020. Sales growth was moderate on account of decline in domestic sales due to demonetization but it was offset by higher exports, which is very good sign. Growth would certainly be higher once the domestic impact is over.

Lincoln Pharma has continued to see a decline in sales, because of the fact that they have stopped their trading business in India. However, the sales of their core products is growing fast. The decline in sales seems temporary. The margins are also improving thick and fast. The contribution from exports of branded products is also increasing and management is expecting it to contribute 50% of the total revenues in next 3-4 years. It might look cheap at current market price, but may be market is in a wait and watch strategy, as it might not be fully convinced with management words. Who knows!!!

Salzer Electronics has continued to face challenges, on account of lesser orders from EMS compared to last year. Also sudden rise in commodity price kept the profits under check. The company has decided to increase the price from Jan onwards, which will help regain their margin levels. Good part is that the company has received order worth 18.7 Cr in that segment recently. The other positives being that the company has started the commercial production and invoicing of Three Phase Dry Type Transformers from Jan'17. Also the company received its first order from Smith's Detection which is a German based company manufacturing Airport Security X-Ray Machines and received first order from Alstom. All in all, it seems that they have few triggers for growth in future. 4th quarter numbers will be interesting to watch out for.

Srikalahasthi Pipes, one of the companies we started discussing off-late, is also from a sector which was likely to get impacted. However, the impact in results seems to be very limited. The growth in sales and profit both were flat yoy, which is not bad considering the situation in the sector. Also, the margins continued to remain at same levels, and much higher than its peers. If we go by what management said while the shutdown was going on in Q2, the Q4 numbers should be pretty good, as they did not reduce their annual guidance, in spite of one month shutdown in that quarter. Higher debt levels, lesser transparency of management towards investors, and non-performance of other group companies continues to keep the stock below 10 P/E, but lets see for how long, if they keep on performing well. The increased spending in infra, post demonetization should also help the company get good number of orders.

Next in the list is Force Motors. Results as expected saw a 15% decline in sales as well as profits. One of the reason was mild decline in sales of luxury cars (Mercedes and BMW), which is very likely to recover in Q4, and hence indirectly helping Force Motors. Company is having very good market share in LCV segment, where demand is expected to rise after one lackluster quarter. Also with new models launched by the company in that segment, their market share might increase further.

Kitex Garments posted another strong set of numbers, and it seems that the management confidence as seen in the concall post few major concerns in the past, does not seem to be over optimistic. However, market will always take its own time, before giving back the similar valuation to the company, as it had in the past.

Poddar Pigments also delivered good numbers, and it continues to enjoy decent market share along with Plastiblends in the sector. Plastiblends has been followed here since long time, but with the expectation of masterbatches industry growing at around 15-20% CAGR for next 5 years, I thought it isn't a bad idea to go ahead with 2nd largest company in that sector as well. Plastiblends has already given multiple returns since we started discussing.

Pricol also saw a minor impact on account of government's move. However, even there the impact is not expected to last long with most of the auto companies getting their sales back on track. The company was not getting traded from Dec to mid Fed on account on procedural reasons due to the amalgamation taken up by the company. With excellent customer base, both from domestic as well as international auto companies, and with good market share of some of its products in the industry, the company might well get back to good growth from Q4.

I am not a research analyst, nor an investment advisor. Through this post, I am only putting my views, and which has nothing to do with any action that can be taken by readers on any specific company.

Monday, November 14, 2016

Q2 FY'17 Result Updates

I am sharing few thoughts initially, which are strictly mine and has no intention of driving any investors to any conclusion.

Since the last post on this blog, we had series of events which made the markets heavily volatile. Though some of the government initiatives might prove to be very good for India in future, its short term implications cannot be ignored.
In fact, it is predicted that almost all the sectors will be benefitted from this move, but it will take its own time. The reason why markets might react negatively on this is because of uncertainty that it has imposed. However, I personally feel that the impact could be more on un-organized sectors, rather than on big organized players.
Talking about impact on specific stocks, almost all of us know that biggest loser is going to be Real Estate, as it is assumed that 70% of the cash flow in the sector is in black. This move could lead to a break in demand for the sector, and hence reduction in property prices going ahead.
If demand in the sector is affected, it is indirectly posing a risk to some of the home furnishing and paint companies. This was seen in some of the stocks taking a hit during last week. Apart from some big players, names that we are tracking also saw some negative impact. Cera Sanitaryware fell from 2700 to 2200 and Somany Ceramics fell from 650 to 550 within no time.

Apart from this, there was another big event in past week, which was of course, the most awaited event of this year, US Presedential Election. Again, the results went against what most people were expecting and hence we saw a big fall, at least for some time, on the day following the election results. We cannot assume that everything the candidate spoke about during campaign is going to be followed blindly, as of now.
There was a very good line in media, that followed post his election victory speech:
"President Trump looks quite different from Candidate Trump"
This is always going to be true, during elections in any country. Republicans are now expected to do what is best for the States, as predicted by some experts across the globe.
The fall because of results, was mainly due to uncertainty about the policies that Republicans might implement, unlike the win of Democrats, where policies and approach might have remained as it is.
You never know in such cases. The new things might seem difficult to digest initially, but sometimes can prove to be much better than the old one. Just a thought!!

The dual events together led to the fall of India markets, which was much more than other emerging markets in Asia. The mid-cap and small-cap lost even more than the big players, as there is high uncertainty about the impact of demonetization on such small companies.

I don't think I am qualified enough to speak more on these topics. One can do more research on these, by digging more into the comments made by some experts rather than following me on these topics. :)

Finally, coming to where we have the larger interest. We are here to discuss more on long term prospects of some of the companies followed here, rather than some of the short term impacting events.

As we have started the trend from Q1, we will be focusing more on the new names, unless we have some major positive or negative impact on some of our old names. But still, we will have at least one liners on our old stocks, if not more.

Starting with the oldest and the best, Ajanta Pharma has never disappointed us so far. However, the growth has started to slow down a bit, compared to past few years, when it used to show tremendous growth every quarter. These things are bound to happen as you keep on growing, and eventually, you start posting the growth which is in line with the industry average. Having said that, Ajanta Pharma is still better than the average so far. The growth drivers in future would be the sales coming from US markets, where they had negligible presence so far. Now, they have started receiving many approvals from the country, which is why we are able to see, more than 1000% jump in sales from US markets since last 2 quarters. It might continue at least for short term. Because of the same, currently it is trading at highest P/E among all the pharma names, which are almost equal or greater in size.

Granules India, continues to post decent numbers as their margins have kept on growing owing to the fact that they are concentrating more on high margin products. The Q2 numbers were anyways expected to be subdued on account of negligible contribution from Omnichem JV. As per the concall, the same is expected to contribute slightly more in Q3 and most likely to contribute very well in Q4. If things go well in future, we can expect good things to happen in FY'19-20, looking at their plans as of now.

Capri Global saw a major run-up off-late. Not aware of any major change in fundamentals, apart from some positives in Annual Report this year. No added comments from Ganesha Ecospehere from our last discussion. The results were much better this quarter.

Can Fin Homes and Dewan Housing Finance kept on outperforming the industry for a long time, but unfortunately, last week's event proved to be slightly negative for both. However, I personally feel, this sector is likely to benefit from such moves.
That's my personal opinion.

Cera Sanitaryware and Somany Ceramics posted very good numbers, and they got accordingly rewarded, until last week post the event which might have put them under pressure.

SSWL saw another good quarter considering the fact that they passed some 20% reduction in raw material prices to their customers. Interestingly, even after such run-up in last 9 months, it is still trading around 13 P/E, which is much lower than the industry average.

Garware Wall Ropes saw another great quarter, where their sales were up despite reduction in raw material prices. Profits also shot up heavily, reporting some 70% jump. At this stage, it looks like they are well placed to post an annual EPS of more than 40, which makes the stock currently trade at <13 P/E. The balance sheet has kept on strengthening from time to time and now they are almost debt free. Management is confident of reporting strong numbers in Q3 and Q4 as well.

Camlin Fine Sciences has kept on frustrating me with numbers and this quarter was no different. Views expressed about losing quite a bit of interest remains as last discussed.

Dhanuka Agritech and PI Industries were expected to deliver strong set of numbers on account of very good monsoon this year, and neither of them disappointed. In fact both the numbers turned out to be above expectations. Accordingly both of them have been rewarded with good jump in share prices. The stupendous growth in PI Ind was on account of some orders that were taken earlier then expected. However, management is still confident of delivering 15% growth for the full year. The profits would be much higher, of course. It will continue to be steady compounder. The order book continues to be strong at 800 million dollars.

FIEM Ind posted another good quarter especially in terms of sales growth. 23% growth in revenues can be considered one of the best in the industry. Profit growth was moderate this quarter, but with such high sales growth, future looks good as of now. One of the key growth driver continues to be LED segment. They have invested further in 2 of their plants which is likely to aid further growth.

Lincoln Pharma disappointed to an extent. It was probably the first quarter after long time that we saw company reporting de-growth in sales. However, profits and margins continued to impress, and hence the valuation, to an extent.

Salzer Electronics grew pretty well in Q2 and in line with management's expectations. The good part was that their core business grew very well in the quarter. The profits were in check, mainly because of lack of business from EMS segment, which is their high margin business. Barring the EMS segment, which is quite random from Q2 FY'16 vs Q2 FY'17, the results would have looked quite good. However, I am still very hopeful on the company's growth looking at the performance of core business and their future plans, which is very well described in the result presentation.

The other stocks which I mentioned that I am following since past few months were mentioned towards the end of last 2 posts:

Out of these, Force Motors has surprised the most. There was big re-rating which was seen from our first discussion, where the stock saw almost 100% jump. Again, there was no change in fundamentals, it was just that stock went from being undervalued to being fairly valued now, in my opinion. It has been witnessing very good growth for past many quarters, mainly because, apart from its vehicle sales, they are getting good business from Mercedes and BMW, for which they have separate dedicated plant for making engines and axles.
The only negative that I could think of is management's lack of interest shown towards investors. They have never given much insights about their business in public. In some places, it is acceptable, as there is some confidentiality clause when they deal with Mercedes and BMW. However, there is hardly any detailed info given about their core business also. Being such a big company, they should ideally give result presentations, as well as try to connect with investors through con-call.

Srikalahasthi Pipes was another one mentioned earlier. The company was mainly considered because I saw a big valuation gap when I compared it with APL Apollo Tubes. I understand that APL might be much stronger in fundamentals and may be with future prospects, but still, I don't find it enough to justify the present gap. The margins and return ratios are much better for Srikalahasthi, but still it is lagging. The debt position is almost same for both.
The gap may be because of again, lack of information given by management to common investors, as well as non-performance of other group companies. The result for the quarter is not yet out, but it could be slightly weak, considering their furnace plant being shut down for 1 month in the said quarter. However, management is confident for the full year growth as expected. Let's see how things churn out.

Pricol and Poddar Pigments are delivering very strong numbers and are likely to continue doing same for coming quarters. Both seem to be very well placed as far as business growth is considered.

Kitex Garments and Torrent Pharma, may have disappointed many in this quarter, but I am still hopeful about their business prospects and growth returning back. Both have had their issues which led to such numbers. Kitex had issues with one of its major client, which ceased taking its orders from the company, plus there was some deferment in order delivery this quarter which will be passed on to Q3. Management's confidence in retaining its earlier guidance for the full year, in spite of poor H1 seems to be unbelievable. If that happens, that could reward investors big time. But obviously, it is a big risk.

I am not a research analyst, nor an investment advisor. Through this post, I am only putting my views, and which has nothing to do with any action that can be taken by readers on any specific company.

Friday, September 9, 2016

Q1 FY'17 Result Updates

This time, as I do not see any changes in fundamentals of our old stocks, so I will cover only new names in discussion of Q1 results in detail.

But before jumping onto new names, here is the quick update on some of our old names.

Ajanta Pharma posted another spectacular quarter which led stock to new all time high and a landmark figure of 2000, which makes the stock as our first 20 bagger company in exactly 4 years since its initial discussion here :)

Granules India saw another good quarter, where Omnichem JV started giving desired results. However, according to new accounting practice, the sales from JV cannot be considered in company's income from operations, which is why we saw moderate sales growth. However, profits were included and hence we saw close to 40% growth. The sales from JV is likely to be flat for Q2 and Q3. So, one can expect moderate results in those 2 quarters, as profits will be minimum on back of low sales, but Q4 is likely to be very good. JV is likely to post 90 Cr sales in Q4, and profit share of Granules could be roughly around 5 Cr.

Capri Global Capital and Ganesha Ecosphere's investors finally saw some reward with stock hitting new highs off-late, and showing more than 100% gains from our first discussions on respective companies.

NBFC sector saw a tremendous rally off-late as the future expectations from the sector are pretty high. From our list, we had Can Fin Homes and Dewan Housing, and they didn't disappoint either. Dewan Housing has turned out to be 4-bagger and Can Fin Homes, a massive 12-bagger companies for us, since their respective inception on this blog.

Suven Life Sciences, Gulshan Polyols, Plastiblends, TCPL Packaging, Control Print, Somany Ceramics, Flex Foods and Cera Sanitaryware posted moderate results, and it was one of the reasons, why they didn't participate in recent rally. However, don't think any of them is going fundamentally weak. They have already given us good returns.

Camlin Fine Science has been disappointing from last few quarters, and hence I am losing a bit of interest in the company. The higher valuation is just because of its monopoly in certain products, however, results are not giving good vibes, about the company. Last quarter was slightly better. Since it has already given us more than 700% returns and now trading above 30 P/E, I would be neutral on the company.

The best performers off-late for us are Steel Strip Wheels (SSWL) and Garware Wall Ropes to an extent. SSWL is the classic case of patience paying the investors. For 5 years from Mar 2011 to Mar 2016, there was no growth in stock price, in spite of moderate to good performance over the same period. And since Mar'16 to Sep'16, we saw a 100% jump in stock price. Improving sales in terms of volumes, improving margins, improving return ratios (because of improving margins), continuously strengthening balance sheet, receiving healthy orders from some of the best auto brands, all together led to increasing investors confidence, and some respite for small retail investors like you and me in terms of some good return after long wait.

Now going through results of some of the newly followed companies

1) PI Ind:
This is one company, where I feel the fundamentals are as strong as Ajanta Pharma, in terms of growth, return ratios and strength of balance sheet. Definitely the stock has performed over the years based on its performance, and there is no sign of undervaluation, however, time and again, it has posted numbers which seem to be slightly above expectation especially on profit front, because of its operation efficiency, good product mix and better tax management. On revenue front, where, for first time, we saw subdued performance in FY'16, has also shown good improvement, with sales growing 15% in Q1, on back of 20% growth in CSM business. One of the reason for poor performance last year, was lack of growth in domestic agro chemicals business, which was attributable to poor monsoon. The same is also looking good this year, with country registering normal rainfall. This could lead to even better Q2, where we can see around 20% or more sales growth.
The company order book is continuously strengthening and it now stands at 850 million dollars.
Apart from 15% sales growth in Q1, the net profit growth surprised again with 48% growth yoy.
Company continues to remain almost debt free.
Because of stock already being traded at high P/E, one can think of it as a steady compounder, but if the performance continues to impress, it can lead to even better P/E ratio going ahead.

2) FIEM Ind:
Company continues to be the fastest growing company in auto-ancillary segment, among all the major names. The same is achieved on back of strong performance from 2 of its biggest clients namely., Honda Motors and TVS Motors. For Q1 FY'17, company reported around 20% growth in both sales and profit. Since its initial discussion on the blog, we have already seen 30% jump in stock price, on the back of such strong numbers. The balance sheet kept on improving over the years and this year was no different. The debt:equity ratio is going closer to 0.5 now. The return ratios have been spectacular considering the sector. ROE and ROCE both are close to 25%. Dividend policy also has always been very good and improving.
Management is further expecting the LED business to go up by 4-5 times this year with sustainable margins.The monthly numbers from Honda and TVS motors for the first 2 months of this quarter also has been pretty good, which should indirectly reflect in Q2 results of FIEM Ind.
On top of it, FIEM Ind has signed MOU to set up JV with Su Kam Power systems for the purpose of selling and marketing of LED lighting products. This way, they will make their presence felt in retail market as well.

3) Indo Count Ind:
Following the frightening events of Welspun India, we saw indirect impact on Indo Count. However, the issue has no link to Indo Count, and it would not be fair to assume that the same could happen with Indo Count as well. So far, Indo Count haven't received any intimation from any of its client for quality. In Q1 FY'17, company reported 8% growth in sales and 16% growth in net profit. Company increased its capacity last year to 68 million meters per annum, and they are planning to increase it to 90 million meters per annum by 2017.
Because of continuously management focus on improving margins, the company is currently the best in terms of return ratios in textile sector. ROCE stands at 48% and ROE stands at close to 60%. Almost unbelievable numbers for a company in such sector.
As I always mention, the improvement in balance sheet is extremely pleasing. From debt restricting in 2008, 2016 was the first year, when the Debt:Equity went below 1, almost close to 0.5. The good news is that it has improved further with management reducing the debt further in Q1 FY'17. They are planning to become debt free soon.
Having said all these, there are always some internal risk in textile segment, with some quality issues and fluctuations in raw material prices. So, one has to be careful and be aware, while thinking of investment in this sector.

4) Lincoln Pharma:
Already had so much discussion about the company in comments section even after Q1 numbers, I don't think I have anything more to add. It is good to see that management has started taking every effort possible to regain the investors confidence since the Tanzania ban massacre.

5) Salzer Electronics:
Started following the company since Mar'16, as mentioned in previous post. Its a complete new sector for me, so not much idea about the sectorial benefits or negatives that the company might be impacted with.
It is mainly into 4 types of businesses namely. industrial switchgear, copper wires and cables, building segment and the energy management services. Switchgear business contributes about 40% of their revenues at present. Copper wires & cables business contributes around 45% at present. The energy management business depends on the order book and hence the results or contribution from it could vary. For the year FY'16, the company posted 28% growth in sales and 42% growth in net profit.
For Q1 this year, the numbers were absolutely flat, but that was because the company received a contract from energy management service worth 15 Cr revenues and 1.9 Cr profit in Q1 last year, which was almost nil this year. Barring that, the results in Q1 were also pretty good, and management is confident of achieving 20% sales growth this year as well, excluding energy management service for known reasons.
The company has signed an agreement with IPD group in Australia, one of the leading distributor and wholesaler in Australia. They will be branding Salzer's products in Aus and NZ.
They have already shipped their first consignment for the same.
The company is still pretty small and has a long way to go, but definitely, there seems to be some potential to do so.

Some of the stocks which are currently followed by me but not mentioned here are Force Motors, Torrent Pharma, Srikalahasthi Pipes, Talwalkar Better Value Fitness, Pricol and Poddar Pigments.

I am not a research analyst, nor an investment advisor. Through this post, I am only putting my views, and which has nothing to do with any action that can be taken by readers on any specific company.

Tuesday, July 5, 2016

Q4FY'16 & FY'16 Annual Result Updates - Part 2

1) Steel Strip Wheels:
Finally some good reward for the long awaited story. Have been waiting for many quarters of good performance to reflect in stock prices. But finally, consistency in performance paid off to an extent. Another good quarter by the company with sales going up by 5% and net profit up by a whopping 55%. The sales numbers look flat on account of price reduction passed on to customers because of lower steel prices. In terms of volumes the growth was pretty decent compared to its peers.
For the entire year, company saw a 55% jump in net profit, which had led the EPS for the entire year stand at 40. All the performance ratio have seen significant improvement because of higher profits. The debt to equity ratio also improved on account of higher reserves and debt levels remaining almost flat against last year.
The capacity utilization at 3 of its major plants have gone up by 4%. The management is confident of achieving at least 10% volume growth this year. However, if you see the monthly numbers so far, it is seen around avg 14%, which is very good. Results might continue to impress for few quarters hopefully. Korean company being allotted around 2 Lac shares at a price of 640 Rs per share, is also indicative of business strength the company possesses.

2) Dhanuka Agritech:
So far so good, as far the monsoon is concerned this year, and this would give a huge sigh of relief for the agrochemical companies. One of the bigger beneficiary would be Dhanuka Agritech. The fundamentals of the company has always been strong with a good business model, great management and an impressive balance sheet. The only thing going against the company was poor monsoon in last 2 years. This year, it is looking good so far, and IMD is still confident of country getting 107% of long moving average rainfall in the country. This could significantly boost sales for Dhanuka Agritech. The stock prices on account of the same has already escalated and it is again trading around its all time high levels.

3) Control Print:
Another blockbuster quarter for the company. Net profit was up 85% and sales was up 17%.
No change in views from last post shared here:
Currently the company enjoys 18-19% market share and they are confident of getting to 25% in couple of years.
The company also started trading at NSE.

4) Plastiblends Ind:
No updates on it after the last shared post here:
The result this quarter looked slightly better than the ones posted in past 3 quarters in FY'16.
Balance sheet had a little bit of negative as the debt levels increased from 20 Cr to 70 Cr. However, that seems to be mainly because of their new operation commencements.
One of its competitor is Masterbatches, Poddar Pigments is also looking very well poised for future growth. Both the companies are expected to perform in similar fashion going ahead, with the prediction of this industry expected to grow at 15-20% CAGR for next 5 years.

5) Gulshan Polyols:
After a poor performance in Q3, the company made a strong comeback in Q4, and registered a 21% jump in sales to go with 27% jump in net profit. For the year FY'16, company saw a 10% jump in sales and 20% jump in profit, which is quite reasonable.
I have to accept the fact the company has not shown the growth expected out of it. One of the biggest reason is that they have faced stiff competition in market off-late. Earlier, there were products where they had monopoly of being the sole producer. The situation is not same now, with good competition around. The balance sheet also seemed poor with increasing debt levels.
One of the positives is that the company is conducting trial run of maize based processing plant and aims to start production of starch powder from Q2 FY'17. Also, the company is still trading around 10 P/E which seems slightly less when compared to the industry P/E.
Overall I would be neutral on this company, as I am not sure on how company will deliver in growing competition. FY'17 would be interesting to watch out as far as their growth is concerned.

6) Ganesha Ecosphere:
For the first time in their history, the company has achieved debt to equity ratio of less than 1. The ratio was more than 2 till FY'14, but it has improved significantly in past 2 years. Apart from that, the numbers also has been impressive this year, and the trend is likely to continue. No other updates from last post.

7) Camlin Fine Science:
Again, a bit of neutral view on this. The result for the past year was not impressive. However, they continue to enjoy good market share for some of highly used products. The company is continuously looking for acquisitions to grow further. We will have to wait and watch if that pays well for the company. The company's new presentation look very promising:

8) TCPL Packaging:
Off-late we saw another re-rating, after the first one which was massive and it took stock from 100 odd levels to 500-600 levels. The second re-rating saw it jump from 550 levels to 750 levels in no time. No doubt, one has to agree with the fact that it seems fairly priced now. But, we have seen plenty of reports which says that with monsoon playing out well this season, we could see a uptick in fmcg space, which would indirectly benefit TCPL packaging.
Both ROE and ROCE now stands above 20%, which is phenomenal.
Dividend has also picked up well since last 2 years on higher profitability.
Found one interesting article on TCPL recently:

9) Garware Wall Ropes:
Another company with flat topline growth and again due to lower crude prices. The net profit growth was superb for all the quarters this year, and they finally ended the year with 43.7% growth.
On business outlook, there is no change from the last post:

10) PI Ind:
One more company, which could be benefitted from good monsoon. However, it is not the sole factor for PI Ind, unlike Dhanuka Agritech. Good amount of their revenues comes from CSM segment. For Q4, the company posted 9% growth in sales, and 58% growth in net profit, mainly due to lower taxation this quarter. For the full year, sales grew by 9% and profit by 29%. One has to agree with the fact that this has been their lowest growth for past many years. The management has attributed this to below average monsoon and some deferred payments in CSM because of softness in global markets.
However, on the positive side, the management is confident of achieving 18-20% growth this year. Their CSM order book has strengthened further from 790 mn $ to 850 mn $. Debt to equity ratio stands at 0.11%, which is quite good. Interesting the company mentioned that they initiated business in pharma segment through CRAMS, which will be high margin initiative. 3 of their molecules got commercialized last year, and 3 more are expected this year. With agro chemical spaces contributing about 40% of their revenues, it will be interesting to see, how results will look, if we have above normal monsoon this year. On top of it, we have strong order book for CSM, which enhances my confidence in their growth outlook.

11) FIEM Ind:
Excellent numbers reported by the company, with sales growing 25% and net profit up by 45%. For the entire year FY'16, the sales were up by 20% and profit was by 35%, which can be considered as one of the best performance in its sector. The benefit was largely due to LED segment, which reported sharp growth.
One of the major positives to look forward to is that the biggest client of FIEM Ind, Honda Motors, reported excellent growth in first 3 months this year. This would get reflected in Q1 numbers of FIEM Ind. Infact, sales of its second biggest customer TVS Motors was also pretty good. Also, their order book in LED segment is not yet complete. This will also help in reporting good numbers.
Plenty to look forward to as far as growth in concerned. However, one also needs to note that stock price has appreciated by almost 50% since we started discussion here, and it is now trading very close to 4 figure mark.

12) Indo Count Ind:
In FY'12, the company stood at Reserves of -1 Cr against debt of 350 Cr. In FY'16, the company stands at reserves of almost 600 Crs against debt of 320 Cr. This speaks highly about the management's competency, and the strength of business. The ROE and ROCE both stands at close to 50% this year, which is outstanding. As far as results are concerned, in Q4, they posted 15% growth in sales and 135% growth in net profit, largely on account of CDR payment of 25 Cr last year. Barring that also, the results looked quite decent, and better than most textile companies in India. On business front, there is no change in views from what was shared here:

Apart from these names, off-late, I am tracking Salzer Electronics, Torrent Pharma, Srikalahasthi Pipes, Kitex Garments as a comeback story, Force Motors and Talwalkar Better Value Fitness since past 2-3 months.

I am not a research analyst, nor an investment advisor. Through this post, I am only putting my views, and which has nothing to do with any action that can be taken by readers on any specific company.