Dhanuka Agritech Ltd - Is it too late or sometimes it's never too late?

An Appreciation of 118% in past 2 years, but sometimes, its never too late, especially in fundamentally strong stocks. The major benefit in such investments is that we almost eliminate the risk of losing over money over a period of time. Even if you see the strong stocks falling, use that opportunity to buy more, as the company will surely hit the interests of big investors in times to come. We have seen such scenario earlier with Ajanta Pharma, Cera Sanitaryware, Dewan Housing, to name a few.

Dhanuka Agritech Limited manufactures a wide range of agrochemicals like herbicides, insecticides, fungicides, miticides, plant growth regulators in various forms – liquid, dust, powder and granules. The Company has a pan-India presence through its marketing offices in all major states in India, with a network of more than 7,000 distributors/ dealers selling to over 75,000 retailers across India and reaching out to more than 10 million farmers. The Company has technical tie-ups with 4 American, 5 Japanese & 2 European Companies.

Talking about valuations, I understand that stock has done too much in past already, but the company is not sitting with same set of products, it is putting continuous efforts to build its product portfolio, by introducing new products every year. The company launched 4 new products in FY13, 3 so far this year. According to management, they are planning to launch at least 2 new products every year going ahead.
Company is right now trading above industry P/E, but I expect margins to improve going ahead in the long run.

The company has already started work on its new facility at Keshwana, Rajasthan, which is expected to be commissioned in Q3 of FY15, which is a year away from now.

Talking about Q2 numbers, the revenues grew by 23% and net profit grew by 36% on back of good monsoon this year.
Overall result of H1 FY14, shows growth of 34% in revenues and 42% in net profit over H1 FY13.

Talking about scope, I found some stats from HDFC Securities report, which says, that although India has the largest area under cultivation in crops such as paddy and wheat, it is lagging behind in total production. As much as Rs.1.2 lakh crores worth of potential crop production in India is destroyed due to insects, fungus and weeds.
It has been estimated that the country is losing food grain production worth Rs.2.5 lakh crore per annum. At present, the pesticide use is only for a few crops and in a few States only. Thus, there is a vast scope for expansion in area and crops under assured plant protection coverage.

Few recent Achievements:
1) The company has been assigned 4/5 Fundamental grade by CRISIL, which suggests superior fundamentals of the company.
2) The company has been presented precious award for branding excellence in Agrochemicals by ABP News during 22nd World Brand Congress.
3) For the 3rd time in past 4 years, the company has bagged a coveted place in prestigious "Forbes Asia - 200 Best Under A Billion" list in Asia Pacific region

The company has taken many initiatives to strengthen its brand image like signing Amitabh Bachchan as brand ambassador of their company.

The management has a strong vision of achieving revenues of 1000 Cr by FY16.

Latest Ad Of Dhanuka Agritech (Just a latest ad, plenty more available on youtube):
httpv://www.youtube.com/watch?v=SohnelnwQIk

Stock Price Estimates:
Being a stock in agrochemicals sector, the major revenues are generated in Sept Qtr of every year. Remaining quarters are slightly subdued on account of lesser demand. Taking that into account, I expect the total revenues for FY14 to be somewhere above 700 Cr, which would be great. If that happens, and we have good monsoon in next 2 year also, I don't doubt management saying that they will achieve 1000 Cr revenues in FY16.
Keep in mind that stock is trading above its industry P/E. Kindly do all required analysis from your side before investing.

Note:
I am closely tracking JB Chemicals & Pharmaceuticals, Vardhman Textiles, Plastiblends and few other stocks, which are looking good for long term investments. Will come up with separate post on those stocks very soon, if everything seems fine about them.

Updates On Cravatex, Infinite Computer and Capri Global Capital

As I missed the post on these 3 companies after Q2 results, here is the brief about their numbers and expectations. There were no major attractive factors in any of the company, hence I avoided the post at that moment.

1) Cravatex Ltd:
Even in slight subdued markets, the company was able to show a growth in sales, which is good, but the downfall in net profit, because of Rs depriciation, is still, a major concern for the stock. In Q2, the company was able to show a sales growth of 18% YoY, and 45% QoQ, which was slightly above expectations. But the net profit figures are going from bad to worst.
Net Profit declined 64% YoY, and it was close to flat QoQ. Already there was higher cost of raw materials consumed, but Finance cost, which grew from 1 Cr to almost 2 Cr this quarter, made it worst for the company.
Those with big hearts, can continue to hold for longer term, hoping that some day, Rs might recover, and company might again be able to post an EPS of above 10 per quarter.

2) Infinite Computer Solutions Ltd:
This company, when suggested on this blog around 80 Rs, looked quite undervalued, which was major reason for the suggestion. The performance of the company doesn't look as good as expectations from IT companies in current scenario, where they are heavily benefitted from Rs depriciation.
Company was able to show a 37% growth YoY in revenues, which was lesser than expected, mainly because of under performance of their standalone business.
Net Profit was down 16% which was the biggest surprise, under current circumstances.
With current set of numbers, I feel the company is fairly valued at this price, wnless, we have some announcements, or strong numbers going ahead.
I booked some profits around 125, holding minor quantity now, if there is any surprise in store.

3) Capri Global Capital Ltd:
Lack of volumes in the counter is major concern, due to which we are not able to see movements in stock price. There was a time earlier, when we used to see, a unbelievable sort of growth in sales, and net profit, mainly because of the fact that company had a new beginning from scratch after the scam that happened in late 2010. That growth on quarterly basis, seems to have come to a halt now, as they might have got the confidence of clients back, and now they are sitting with healthy set of customers.
On net basis, the revenues in Q2 grew by 18% YoY, and 16% QoQ.
Net profit remained flat, both on QoQ and YoY, basis.
Valuations point of view, the company is still undervalued, but it is observed that most of the movements in stock prices comes after promoters gallop 5% shares from open market around April.
On current numbers, company seems to be fair valued around 200, but stock price is not something we can control. Hold for now, is my call, rest is upto the person to decide, as always. :-)

Few Interesting Micro-Caps That May Have Bright Future

First of all, I would like to make it clear that, all the stocks mentioned below are very very small companies with market capitalization of less than 50 Cr (except 3) and free float of less than 10 Cr approx.
Such stocks can swing very heavily in either direction. Hence, I am not suggesting anyone to buy/sell, but this post is just based on some research that I have done.
According to current scenario, I rate these stocks high and likely candidate for multibaggers in future. It may change later.

1) Dai-Ichi Karkaria Ltd:
Dai-Ichi Karkare Limited (DIKL) was set up in 1960 as a private limited company for the manufacture of speciality chemicals. The Company entered into technical collaboration with the internationally known speciality chemicals manufacturer Dai-Ichi Kogyo Seiyaku Co. Limited of Kyoto, Japan (DKS) and commenced commercial production in 1963. The Company's plant is located at Kasarwadi, Pune. Speciality chemicals belong to a class of products which are tailor made and function specific. These Chemicals find use in a wide range of industries.

Not one, but there are plenty of indicators that suggests this stock becoming a huge multibagger in the long run.
Promoters of the company are contantly buying shares from open market, and that is very well reflected through the consistent performance of the company in past few years. The growth rate is not great but its consistent.
Off-late, they have been able to post some good numbers, especially Sept'13. May be its an indication of sales picking up, as I could not find anything in press release which shows benefit from any other operations in this quarter. The company has healthy number of assets, due to which the book value stands at 90 Rs vs current market price of 54 Rs. The debt is also very low at 1.13 Cr. The company has always made good profits from their operations. Considering the FY13 EPS of 6, the company at current is trading at PE of 9 vs Industry PE of 27. EPS for Sept'13 quarter alone was 10.5. The company is regularly paying good dividend, and because of good performance, they paid a small special dividend also, this year.
All these factors makes it an interesting script to have a look at.

2) Paushak Ltd:
Paushak is part of the Alembic group of companies situated in Gujarat, India. Alembic Ltd is the oldest pharmaceutical company in India founded in 1907 and has celebrated a "hundred years of excellence". Over the years Paushak has established a multi-product capability in Phosgene & its derivatives manufacturing.
Strengths:
a) 35 years of safe Phosgene handling
b) 100 year history in chemical synthesis
c) In-house R&D and process development capability
d) Infrastructure for progressive scale-up 5L to 10KL
e) Robust quality and safety management systems
f) Continuous cost optimization program

Another low debt company, which has been consistently performing well, and the business seems to have picked up since last year. In FY13, they showed a sales growth of 51% and Net Profit growth of 125% approx vs FY12. After completion of H1 FY14, it seems they will again be able to post a sales growth of close to 40% and net profit growth of 75% approx for the full year. The company has strong promoter holding of close to 67% and they have regularly been paying good dividend. The debt stands at a meager 1.17 Cr, and the book value of 118 Rs is again, higher than the current market price of 104 Rs.

3) Superhouse Ltd:
Superhouse Group , is a multi- unit and multi- product conglomerate with brand leadership in the field of footwear manufacturing and exports. The Group is well equipped with the most modern machineries and a specialized workforce and produces all types of quality leather, leather goods and textile garments that are appreciated all over the world.
A US $75 million group, Superhouse Group has 15 units, with a workforce of over 5000 and a presence in more than 35 countries. Our commitment to quality is reaffirmed by our ISO 9002 certification. Stringent EN 345-norms make us one of the most respected manufacturers amongst importers from European countries. Being equipped with requisite infrastructure and strict adherence to high standards of quality, we are able meet CSA, ANZ & and SABS standards.

The stock was always in the eyes of investors, but I think there was a wait for a dramatic quarter, which could bring the interest back, and it did came in Sept'13 results. Since the day when results were out, the volumes have suddenly took off even when the stock is in PCA segment, with maximum amount of shares going into delivery. The stock price has jumped by 44% in 6 trading sessions after results. Promoters have time and again bought shares from open market in small quantities. The sales growth again is not huge but still consistent. The portability is good. Annual EPS is increasing by 2 Rs every year since FY11. This year, the expectations are much more with very good performance is first 2 quarter of this fiscal mainly because of good earnings from export due to Rs depriciation. The debt is slightly on the higher side in this counter, but still company sits at a strong book value of close to 150 Rs per share vs current price of 75 Rs. Based on FY13 numbers, the company has a PE of less than 4, even at current market price vs an industry PE of 28.

ALL OF THE ABOVE STOCKS ARE TRADING IN PCA SEGMENT.

Apart from these stocks, there is one more which is worth mentioning, thanks to Ipogenius, Arrow Coated Products.
The stock looks very strong fundamentally. I will post more details about it, when I have enough information. The good point is that, it is already suggested by many experts, and hence you will be able to find all the details over there. I will try my best to get something, which is not mentioned on other blogs so far.

Disclosure: I have not invested in any of the stocks mentioned above. Because of PCA segment, and low market capitalization, there is enough risk associated with such stocks. Hence, take your decisions wisely and according to your risk appetite. To an extent, I love taking risk with small amount of money, hence I will try to get into all of these stocks soon, with a small amount.

Photoquip India - Q2 Result Update

Financial Results & Limited Review for Sept 30, 2013
Link: Click Here

Management on CORVI Products:
We have very ambitious plans for our CORVI range of products and we are on course. As of date we have logged a turnover of Rs. 1,162 lacs since the commencement of the operations in December 2012. Out of this Rs. 250 lacs was in the the previous financial year 2012-13.
Additionally this month we are launching 3 new products to expand our current range from 4 to 7 products. With their colour / wattage variations the total product portfolio is 72 SKUs as of now.
To repeat we foresee a bright future for CORVI.

Management On Slowdown in Sales of Digital Studio Flash Lights:
Yes, the market for Digital Studio Flash Lights is sluggish, especially on the export front. The off-take is slow as compared to the past. But traditionally the second half has always been better than the first half as it coincideds with the beginning of our festive season and Christmas / New Year abroad. So, even though the demand is sluggish, we hope to bounce back in the second half.

New Ad Of CORVI LED Lights (Thanks to ipogenius for this link):
httpv://www.youtube.com/watch?v=wSiLIlvGY6k

Talking about Q2 Numbers, the biggest positive was that the company has again started making good profit, which was seen after a break of 2 quarters on the account of commencement of new venture by the company, which involves lots of expenses.
Revenues were up by 20% from 15.73 Cr to 18.93 Cr YoY, on the back of good sales of CORVI Products.
Net Profit was up by 45% from 0.6 Cr to 0.88 Cr YoY.
EPS is standing tall this time at 1.82.

My Views:
Everyone knows, that I am not a big fan of net profit, I would rather prefer company showing more growth in sales. But this time, coming to profits was necessary for Photoquip, because many many investors, who believed in bright future of the company had lost interest in the company, because of past few results.
I agree to the fact the company is not able to improve sales in Photographic products, which was their core business, but still it has started its new venture, which is doing slightly better than expected.
As of Oct end, we have a data saying that the total sales of CORVI range of products is 11.62 Cr, out of which 2.5 Cr was in FY12-13. Hence, so far in 7 months, they have been able to sell products worth 9.12 Cr. Going by this pace, if they are able to show a figure of 20 Cr sales by the end FY13-14, I would be more than happy, as it will be considered a very good start for a new venture.
I wont comment much about the stock price movement as of now, but certainly, future looks bright to me.
I, myself is a big fan of innovations, and this company has time and again showed that in their business, hence I am loving it.
One can certainly invest at the current market price.

Suven Life Sciences - Q2 Result Update

Financial Results with Results Press Release & Limited Review for Sept 30, 2013
Link: Click Here

Communication to investors - Sep 2013
Link: Click Here

Once again the company was successful in delivering numbers which proved to be way beyond expectation of many, and hence the stock continues to be in strong upside momentum.
Below post was written on 4th June 2013, when the stock was trading around 25 levels, and in just 5 months, it has appreciated to 80 levels, the growth of more than 200%.
http://fundamentalstockideas.in/few-more-multibaggers-for-long-term/

Sales showed a 202% growth from 50.3 Cr to 151.5 Cr YoY.
Revenues showed an even better growth of 602% from 6.5 Cr to 45.5 Cr YoY.
As per company, the major thrust in net profit was due to in 1 new product, in addition to 2 products which were already commercialized during first quarter.
EPS now stands at 3.9 from 0.56 YoY.
There was something exciting in Expense segment also, where the R&D expense shooted up to 17.9 Cr from 6.83 Cr last year, which might further help the company in growing stronger.

My Views:
Not sure about new entries, but those holding can continue to hold, if they still have guts to hold for longer term. I am also positive for new entries also looking at the R&D expense of the company. The only worry is that the stock price has already appreciated more than 200% in last 5 months, but still, you never know what levels are sufficient to justify strong growth performance by the company.

Ricoh India - Q2 Result Update (Delisting Approved)

Financial Results & Limited Review for Sept 30, 2013
Link: Click Here

Outcome of Board Meeting (approves Delisting Proposal)
Link: Click Here

There is nothing more left to say in this counter, as almost none was interested to have a look at results today. Only a sparkle, in form of news that mentioned that the board is planning to delist Ricoh India from BSE on Friday, was enough for the stock to hit 20% upper circuit today.

Ricoh India said that the main objectives of the delisting is to obtain full ownership, which will provide the promoter group with increased operational flexibility to support the company's business and to provide an exit opportunity to the public shareholders.

In all of these, one should not forget the fact that, the company came out with very strong set of numbers today.
Revenues stood at 296.22 Cr Vs 159.68 Cr YoY, which means the sales grew by almost 86%.
Compared to the loss of 6.23 Cr last year, the company managed to post a meager profit of 96 Lacs, but still thats an achievement considering the fact that, they suffered a huge 43.75 Cr loss due to rupee depreciation, which was nil last year.
Considering that in profit, the company would have reported an EPS of close 10-11 vs -1.57 last year.
But due to that loss, the EPS stands at 0.01, which is still good when compared with -1.57 last year.

Here, I am not mentioning anything about the target price and all, because now, the prices wont react to current numbers or future speculations anymore. The news about the delisting date and price, would decide the height the upside left in this counter.

Gulshan Polyols - Q2 Result Update

Financial Results & Limited Review for Sept 30, 2013
Link: Click Here

Rising Demand from Paper and Plastic Industries Drives the Global Calcium Carbonate Consumption, According to New Report by Global Industry Analysts, Inc.
Link: Click Here

Above is one of the reports on demand of Calcium Carbonate, which is encouraging, as Gulshan Polyols Ltd produces over 19 grades of Calcium Carbonate. I found similar reports on demand of Sorbitol also, which shows that sales of Sorbitol will continue to grow at 3.5% till 2018.

Looking at this quarter's number. the sales did continue to grow in the manner it has been in last 4 quarters. But the stock still looks far away from getting the correct valuations, based on its strong book value and consistent profitability.
Net Sales stands at 77.65 Cr Vs 68.39 Cr YoY, which shows 14% growth.
Net Profit stands at 5.13 Cr Vs 4.74 Cr YoY, which shows 8% growth.
Hence the EPS now stands at 6.07 Vs 5.61 YoY.

My Views:
There is still nothing wrong in investment made in Gulshan Polyols at this point of time, but only issue is that, we are not sure when it will start moving up. If you look at any fundamental data, all will suggest you to buy this stock, but still it is stagnant. Promoter holding as on Sep 13 has jumped to 71.94% from 68.87% last quarter. Book value of the company stands at 174 Rs.
Half yearly EPS stands at 14. Even if it continues to report same sort of numbers, it will be able to make annual EPS of close to 30. P/E ratio will come out to be only 2 at current market price, where as the industry P/E stands at 28.
What we can do, is to wait for the stock to get re-rated. Until then, if you are a long term investor, you can definitely make an entry at this price. Otherwise, wait for the stock to start moving up with strong volumes, and then make an entry. The only assurance that can be made now, is that the downside in this stock is very limited.

Granules India - Latest News

Granules India to buy Auctus Pharma for Rs 120 crore:

Tablet maker Granules India has entered into an agreement to acquire Auctus Pharma, a manufacturer of Active Pharmaceutical Ingredients (APIs), for Rs 120 crore.
"The acquisition of Auctus fits into our strategy of being a fully integrated manufacturer, while diversifying our product portfolio by adding high-value products with significant market demand. Auctus provides Granules with a meaningful API platform with a US FDA approved site to strengthen our finished dosage division,’ Krishna Prasad, Managing Director of Granules India, said in a release issued on Monday.

Auctus manufacturing units:
Hyderabad-based Auctus has two manufacturing facilities, an API facility at Pharmacity in Visakhapatnam and an Intermediate facility in Hyderabad. The API facility has approvals from leading regulatory agencies, including the US FDA.
Auctus’ product portfolio includes 12 APIs as well as key intermediates of those APIs.

Auctus product portfolio:
The portfolio includes APIs in several therapeutic categories such as Antihistaminic, Antihypertensive, Antithrombotic and Anticonvulsant as well as other therapeutic categories.
Auctus currently sells its APIs and intermediates to customers in 50 countries. The team and assets from the acquisition will initially operate as a separate division with Granules.
The acquisition process would be completed in the next three to six months, the Hyderabad-based company said in the release.

R&D unit in Hyderabad
Granules also announced the opening of a 10,000 sq. ft. R&D facility in Hyderabad.
The new R&D unit will focus on full-scale generic API development and will supplement the company’s existing R&D facility in Pune which currently focuses on sustainable technology development.

Source: The Hindu Business Line

About Auctus Pharma:
Auctus Pharma Limited (APL) is amongst India’s top manufacturers of Active Pharmaceutical Ingredients (APIs) and Drug Intermediates for both Domestic and International customers. Our other successful group company (Neo Medichem Pvt. Ltd) was merged with Auctus Pharma Limited. This move shall add strength and synergies to the company, which is promoted by a dynamic team of techno-commercial professionals with extensive experience in the line.

Auctus Pharma operates from their state of the art manufacturing facilities, out of which one unit I situated near Hyderabad and other one at Visakhapatnam. The Company has an R&D intensive work ethic as a result of the futuristic and progressive outlook of the promoters. The full fledged R & D laboratory is therefore, constantly updated with the latest equipment and is always completely geared up for every requirement.

Using their vast and varied expertise, Auctus Pharma manufactures Active Pharmaceutical Ingredients (APIs), Fine Chemicals and Intermediates for their wide clientele across the world

Cera Sanitaryware - Q2 Result Update

Financial Results & Limited Review for Sept 30, 2013
Link: Click Here

Results Press Release
Link: Click Here

Company Report
Link: Click Here

Excellent sales growth shown by the company, but was disappointing to see the Net Profit go down YoY basis. But the sales numbers were really impressive considering their majority of India based business.
Revenues stood at 158.76 Cr as against 111.36 Cr a year before, which shows a jump 42.5% in sales.
Net Profit actually came down to 10.62 Cr from 11 Cr a year before. The reason being the Power and fuel expense went up, which is always expected in growing business and high fuel prices, and higher employee benefit expense, up by almost 50 lacs compared to last year, which is good for the future of the company.

My Views:
This is one stock, which is trading at a P/E, which is higher than overall industry. The reason being, investors have lots of confidence in the future prospects of the company. That's why I said earlier, that Cera is definitely not a multi-bagger candidate, but can give you very good returns. If it would have been rightly identified around 200 levels last year, then it would have a multi-bagger from those levels.
Again, before the results, it made a high of 625, but the net profit figures, brought it back to 570 levels. Once it comes to around 550 levels, one can make a fresh entry, for those who missed it at 500 levels. A fall in net profit is never appreciated by short term traders, and hence it is witnessing some profit booking, but I am sure, it will make a comeback, once trader are out.

Granules India - Q2 Result Update

Financial Results with Results Press Release & Limited Review for Sept 30, 2013
Link: Click Here

Outcome of Board Meeting:
Granules India Ltd has informed BSE that the Board of Directors of the Company at its meeting held on October 30, 2013, inter alia, has decided to close M/s Granules Singapore PTE LTD, wholly owned subsidiary of the Company, located at Singapore.

Granules India eyes Rs 1,000 cr turnover this fiscal
Link: Click Here

Granules capacity utilisation efforts drive Q2 profits
Link: Click Here

The company has declared numbers which very rightly justified the stock performance in past 6 months. If one has observed carefully, in Mar-Apr 13, the stock made a low of 90. From there, it has already doubled in past 6 months. The numbers posted by the company is exactly in line with the high expectations of market.

The Revenues have gone up to 266 Cr from 175.5 Cr last year on consolidated basis, that is growth of 52%.
The Net Profit has gone up to 15.1 Cr from 8.1 Cr last year, that is growth of 87%
Hence, EPS jumps from 4.03 to 7.5.
As nicely pointed out by management, that the total net profit made by the company in FY13, is already made by it in just 2 quarters of this fiscal.

The formulations facility at Gagillapur continued to scale-up production which improved capacity utilization. The company expects a majority of customer approvals to be in place in the second half of the fiscal year.
Granules is expecting at least Rs 50 crore revenue next fiscal from its 50:50 joint venture with Ajinomoto Omnichem, which is setting up the manufacturing plant at Visakhapatnam in Andhra Pradesh. This facility will supply products to the regulated markets such as north America and Europe. The revenue from this venture could reach around Rs 160 crore over the next couple of years when fully operational.
One can go through all the details in links mentioned above.

My Views:
I am very happy with numbers posted by the company. I never judge anything, based on sudden move seen here and there in stock prices in 1-2 days. Today, once the results were out, it immediately made a high of 185, and as soon as the news regarding GIL Singapore came in, the stock saw a low of 169. For me, that is not at all a big event. It wasn't a huge revenue generator for the company. I continue to be a very long term investor over here. It seems nothing wrong, even if one buys the stock at these levels. And a buy on every dips is higly suggested.
I am eagerly waiting for company to deliver Q3 and Q4 results, because, company has been very optimistic about the second half of this fiscal from the beginning. Again, here, I am not setting any targets, would just advice one to buy and hold for long term.
Happy Investing!!!!!

Can Fin Homes - Q2 Result Update

Financial Results & Limited Review for Sept 30, 2013
Link: Click Here

Once again, the company is out with decent set of numbers, as they have been doing since last 2 years or so. The revenues and net profit continues to rise, slowly and steadily.
The revenue growth of last 6 quarters now looks like:
84 Cr -> 93 Cr -> 103 Cr -> 113 Cr -> 126 Cr -> 138 Cr
Consistency at its best!!!!!

Lets go through the numbers now.
The revenues stands at 137.91 Cr Vs 92.72 Cr YoY, which shows growth of 48.74%.
The net profit stands at 18.74 Cr Vs 14.44 Cr YoY, which shows growth of 29.78%.
Hence the EPS now stands at 9.1 Vs 7.1 last year.
The difference in percentage growth between revenues and net profit is due to the Income Tax paid by the company, which has almost doubled from last year, and higher finance cost.
The management is very optimistic about the sustained growth which will continue going forward.
The company is planning to have about 85 branches by the end of this fiscal. Till Mar '13, they had 69 branches across India.

My Views:
Even at 140 or 150, I feel Can Fin Homes is a very good bet for long term.
The company is sitting at a P/E ratio of 4.91 Vs industry P/E of 21.87. Book value of 191.44.
The most important thing that attracts me, is the consistency factor.
Obviously, we can't take the past for granted and hence will continue to keep an eye on its numbers going ahead also.
But for now, it looks like a good buy for long term.
RBI Policies and Government moves will always continue to act as a barrier or support for such housing finance companies, due to which we might see, many ups and downs in the stock price, and hence its always advisable to be a long term buyer in these stocks including Dewan Hosuing

Thangamayil Jewellery - Q2 Result Update

Financial Results for Sept 30, 2013
Link: Click Here

Thangamayil Jewellery sales, profit dive
Source: Business Line
Link: Click Here

Extremely disappointing set of numbers from Thangamayil Jewellery. One thing is for sure, company cannot become a multibagger with such results, no matters whatever may be the situation in the country. The company has blamed the poor macro economic data, for the severe fall in revenues and net profit. The only hope now, is the ongoing festive season, which will take gold to higher levels and that might help the jewellery companies post good set of numbers in next quarter.

The company reported revenues of 240.75 Cr from 373.09 Cr last year.
Net profit stood at 0.6 Cr from 12.54 Cr last year.
EPS has declined to 0.44 from 9.15 last year, which sums up the horrible set of numbers.

The company said the fall in profit in the Q2 of this year was due to the “steep decline in topline caused by adverse macro economic factors faced by the industry”.

Earlier, in an interview, the management said that in spite of some poor scenario, we should be able to make 1500-1600 Cr revenues this year. But with such results, I seriously doubt if that is possible, unless we have a spectacular Q3.

My Views:
It is important that we wait for other Jewellery stocks to come out with numbers, and then compare the performances, as that will give us a better idea, on what impact did hiking the import duty on Gold had on jewellery companies actually.
But in current scenario, with government trying to reduce the Gold Import through newer and newer policy time and again, it will be very very difficult for jewellery companies to make a strong comeback. As I pointed out earlier, the only hope left is the performance in this quarter, with increasing demand for Gold and Silver, on account of festive season. Gold has already appreciated to 31k, with Diwali coming closer, and this time, the rise is just because of rising demand, unlike 3-4 months back, where it was mainly due to rupee devaluation. The Rs has stayed flat against dollar in last 2-3 weeks, but still prices of gold has appreciated from 28.5k to 31.3k as of today.
For now, I dont consider this as a multibagger candidate, and would only hope that it gives a decent returns in times to come, of course not in short term. We should wait for some more clarity from management on what went wrong in this quarter, and what they are expecting out of next quarter.

Ajanta Pharma - Q2 Result Update

Financial Results with Results Press Release & Limited Review for Sept 30, 2013
Link: Click Here

No words to describe such a result.
Now after so much of surprises from the company time and again, it seems that we should stop considering any targets for this company. From the day, it was mentioned on this blog till today, it has appreciated more than 200%. And I am seriously not sure, how much more upside is left in this counter.

Revenues has jumped from 186 Cr to 280 Cr YoY, which shows a growth of 50%.
Net profit has jumped 22 Cr to 56 Cr YoY, which shows a growth of 155%.
Hence the EPS stands at 15.88 Vs 6.23 YoY, adjusted according to Bonus.
Exports contributed 64% of the total operating income.

Company has filed 3 more ANDAs with US FDA in this quarter, which takes the total ANDA filed to 18, out of which 16 are pending and 2 are approved.

My Views:
I dont think there is any point in setting any targets for Ajanta Pharma now. The stock has continued its outperformance, and this time the results are way above expectations. There were definitely, lots of expectations set by many experts before the results itself, and hence it already appreciated about 20% from last quarter results till yesterday. But since they have declared the results which was above expectations of most of them, the stock, even after so much appreciation since January this year, is again up 10-15% today.
I am still waiting for company to announce updates on 2 new plants coming up in Gujarat. According to news earlier, they were about to start the operations in those plants in FY15 i.e. anytime after Mar 14 till Mar 15.
So for now, I would only say that, those who can wait longer can continue to hold or else, even if you sell few shares at this price, there is nothing wrong in it.
I would take this stock, quarter by quarter, and hence will wait for company to announce next quarter numbers, till then, will continue to hold (Or may be, sell about 20% shares, if needed)

Dewan Housing - Q2 Result Update

Financial Results & Limited Review for Sept 30, 2013
Link: Click Here

The company was able to show only single digit growth in the quarter on sequential basis, mainly because of sluggish economy.
Revenues stands at 1166 Cr vs 816 Cr YoY, which represents a growth about 43%.
Net Profit stands at 125 Cr vs 86 Cr YoY, which represents a growth of 45%.
So, all in all, very decent set of numbers when compared with previous year, but is more or less flat, on quarterly basis, which is not a surprise, it was expected.

DHFL expects to disburse loans worth Rs 15,000 crore in the full year.

So far, it has disbursed loans worth Rs 6,874 crore.

Much of the demand for home loans, the company spokesperson said, is coming from the outskirts of tier-I cities and from tier-II and tier-III cities.

The stock had outperformed the market over the past one month till 21 October 2013, rising 33.16% compared with the Sensex's 3.11% rise.

My Views:
The company has posted a good set of numbers and it is justified by the performance of stock in past 1 month or so. But again, would advice, not to get carried away by movements here and there, as it is a long term story. Those who are already holding can continue to hold, if ready to wait for longer period. One can even buy at current price for longer term, and keep on averaging it, on every dips.

Cera Sanitaryware - A Safe Investment

I know I have been very late in suggesting this stock, but the stocks seems to follow "its never too late" strategy in investment.
You won't believe that when I was first told about this script, it was trading around 205. I still remember that, as me and one of my friend were tracking it and it went 7-10% up on that same day to levels of 230 or so. We both were like, let's wait for some correction in the script, and then we will invest. I think this was about 14-15 months back, and then we both seriously dont know, when this stock reached 500, as we just kept on waiting and watching.
It is definitely not one of those which will prove to be a multibagger, but definitely it can give you decent returns on your investment. (Far better returns than investing in banks. :-))

I can't think of any other company right now, where the growth has been so steady and so consistent. Each of our company had atleast 1 year, where the linear pattern of growth is affected, but this is an exception.
It has been growing at a steady pace with growth(%) increasing every year.
The growth in past 5 years is 20% -> 27% -> 32% -> 52% (From 2008-09 to 2012-13)

Recently I visited Amanora Town Center in Pune, which is considered one of the largest malls in Pune. The entire mall had Cera products fitted in the rest rooms. When such a reputed mall uses certain products, definitely many other small and large malls coming up sooner or later will get inspired. This is what I believe. :-)

I also found this in report from Angel Broking which further grows our confidence in the company:
"CSL has expanded its capacity of sanitaryware unit from 2.0mn pieces per annum (p.a.) to 2.7mn pieces p.a. in FY2013 and is planning to expand it further to 3mn pieces p.a. in FY2014. The expansion will thus enable CSL to en-cash on the opportunity emerging from the consistently growing sanitaryware demand owing to factors like urbanization, rising standard of living, changing lifestyle, growing construction activities etc. Simultaneously, high brand visibility, due to consistent marketing efforts (marketing cost has grown at 46.3% CAGR over FY2008-13), is expected to further boost revenue growth going forward."

Stock Price Estimates:
The stock is slightly expensive at this moment, but still looks a good buy. More than the current performance, the stock is more trading at this price, because of speculations regarding the bright future of the company. As I said, it may not become multi-bagger from these levels, but definitely can give you good returns in long term.

Capri Global Capital Ltd (MMFSL) - Q1 Result

Financial Results & Limited Review for June 30, 2013
Link: Click Here

There was a major delay in posting the details about the Q1 Result from Money Matters (Capri Global Capital Ltd) from the day when they actually declared the result. The reason was, I wanted to understand the change they have made in showing the results from this quarter onwards. I mailed the company also, regarding the same, but they didnt reply as yet.

Hence finally, I decided to get into it myself, and found out the changes. It was simple.. :-)

If we consider the way they used to declare results earlier, then Revenues have once again jumped 400% from 190 Cr to 836 Cr YoY. (Check Point No. 8 in Press release to get this detail)
But, we wont be considering that method now.
We will start analysing the results according to new method.
The change in method is mentioned in Point No. 7 of Press release which says that "The company was earlier presenting the operating income on Gross Basis showing the sales in Bonds and securities and corresponding purchases and inventory movements seperately. However to reflect the net income generated from such activities, the company has decided to show revenues from operations on net basis from this quarter onwards. According the previous quarter numbers are recasted and reclassified."

This means that according to new method, the terms "Purchase of Traded Goods" and "Purchase of Traded Goods" in Expense section of result sheet, will be deducted firt from Gross Revenues and then, the net revenues will be shown. If one opens the result, he/she will understand this. So, in the result sheet from now on, you will not see any amount in the terms mentioned above, because they are already deducted.
Gross Sales = Total Sales in Bonds + Securities
Net Sales = Total Sales in Bonds + Securities - "Purchase of Traded Goods" - "Purchase of Traded Goods"
Net Sales will be considered as Revenues from now on.

Taking that consideration, lets look into results now.
Net Revenues stands at 34.15 Cr from 27.77 Cr YoY, which is 23% growth and from 33.54 Cr QoQ, which is almost flat.
Net Profits stands at 17 Cr from 13.61 Cr YoY, which is close to 25% growth, but it has come from 22.26 Cr to 17 Cr QoQ.
All in all, seems a good result in bad times.

My Views:I maintain my view here that it is an excellent stock for long term investment. Business is growing steadily, and now with this new collabration with Capri Global Capital, it should grow further. The only problem with this script is that it is very very illiquid. The general behaviour shown by this kind of scripts is that, they start moving up suddenly with volumes, achieve the levels it wants to, and then again goes into silent zone like it is right now.
If one takes my advise, I would say, dont miss a chance to enter the stock, whenever you get one.

Cravatex Ltd - Q1 Result

Financial Results & Limited Review for June 30, 2013
Link: Click Here

Outcome of AGM
Link: Click Here

Extremely poor numbers reported by Cravatex, which exactly justified the fall in stock price from 400 odd levels to 250.
Revenues have gone down from 39.71 Cr to 35.40 Cr. We cant blame rupee for decline in revenues. If it could just have been a matter of less profit, then it would still have been acceptable. But decline in revenues is a serious reason to worry.
Net Profit has gone down severely from 1.76 Cr to just 0.78 Cr. Because of such profits, EPS has gone down from 6.82 to 3.03.

My View:
Doesn't look like there is any point in investing in Cravatex at this moment. As I mentioned earlier, decline in revenues this time, is big reason to worry. This means that either they are not able to compete in this market or there is a serious decline in demand of such fitness and sporting products because of depression. Once again, we have a case similar to Photoquip. It will only be wise on our side, to invest in these companies, once they start moving up. For those who are already holding, can wait for some more quarter to see if business improves, or if rupee becomes stronger, to see some upside in this counter.

Photoquip India - Q1 Result

Financial Results for June 30, 2013
Link: Click Here

Details Related To CORVI
Link: Click Here

Photoquip Magazine ad
Link: Click Here

Result for this quarter is neither so impressive nor so disappointing.
Revenues stands at 22.58 Cr from 19.01 Cr YoY, which represents about 18% growth.
The company reported a net loss of 0.4 Cr vs a profit of 1.17 Cr YoY, which was expected.

My Views:
Nothing much left to say in this counter now. It makes no sense in investing in such scripts where average volumes per week is about 50. It is always advisable to enter such scripts once they start moving up with strong volumes. It may happen that you might get a chance to enter at 50 Rs then instead of 40 Rs today, but it should not matter, because we don't know when this script will start moving up. It might even take 2-3 years. In that case, its better advised to keep your money in bank, rather than investing in Photoquip.
Those who are already invested and believe in company's fundamental, can continue to hold for long term, but for new entrants, I would advise to invest, only when stock starts shooting up with good volumes.

Infinite Computers - Q1 Result

Financial Results & Auditors Report for June 30, 2013
Link: Click Here

Results Press Release, Fact Sheet Q1 & Analyst Earnings Call Q1
Link: Click Here

SPA Capital Advisors Limited has submitted to the Exchange copy of advertisement published in newspapers on August 09, 2013 regarding completion of 25% of the Buy-Back Offer
Link: Click Here

Frankly speaking, the results were much below expectations, especially considering the fact that the current rupee-dollar environment is very good for IT Companies.
On consolidated basis, the revenues stands at 402 Cr against 319 Cr YoY (26% growth) and 360 Cr QoQ (12% growth)
Net Profit stands at 24.56 Cr against 35.39 Cr YoY (30.6% down) and 29.8 Cr QoQ (17.5% down)

My Views:
Frankly speaking, the stock is going up just because of heavy buy back process going on. Otherwise you cannot get 30% rise in about 2 months, especially with slightly disappointing last 2 quarter numbers. If one asks me, I would advice to book some profit (may be about 20%) at levels around 120, and then wait for next few quarters, to see if there is improvement in numbers going ahead. The delivery percentage was on high side even on the day after such numbers, means that some buy back took place on that day also, which probably was the reason for just a mild downside on stock price. Long term investors looking for price of 150-200 will have to wait for some more quarters to see if numbers improve and then take a decision.

Gulshan Polyols - Q1 Result

Financial Results & Limited Review for June 30, 2013
Link: Click Here

First of all, apologies for posting the details of result, after 10 days of declaration. Was very busy in last few days.

The slow and steady pace of growth continues with Gulshan Polyols. Another good set of numbers posted by the company and with some strong promoter buying even in illiquid category, the future looks very bright.
Revenues stands at 82.69 Cr against 67.49 Cr YoY and 79.91 Cr QoQ (Approx 20% growth yoy)
Net Profit stands at 6.72 Cr against 5.65 Cr YoY and 7.2 cr QoQ (Approx 19% growth yoy)

My Views:
The stock definitely seems to be undervalued at current market price. And now that is also reflected in some actions taken by the promoters. They have been involved in buying even in illiquid category. The volumes in last few days, has improved tremendously, and more often than not, they were the promoters who were involved in buying through some of their sources.
One of the finest bets for long term, with good dividend yield and a steady growth of 20% year after year.

Ricoh India - Q1 Result

Financial Results & Limited Review for June 30, 2013
Link: Click Here

Ricoh India swings to profit in Q1’FY’14
Link: Click Here

Ricoh India seems to be bang on target to achieve 1000 Cr sales in FY14. So far, with respect to the nature of their business, they have always been weaker, when it comes to performance in Q1 of every year. But they have successfully created an exception over here.
Revenues have grown from 97.56 Cr to 171.09 Cr, which indicates 75.36% growth.
Surprisingly, the company avoided the loss for the quarter, and managed to show a profit of 3.18 Cr vs a loss of almost 28 Cr.

My Views:
The script looks excellent prospect for long term investment. Again the script was locked in upper circuit as soon as the results were announced. But somehow, the stock is not able to hold on to levels above 55. May be the pressure on small cap and mid cap stocks is not helping their cause.
Anyways, being a long term investor, one should not worry about those short term factors, and in my opinion, one can still buy at these levels as of now, until we see how the company performs in next quarter.

Suven Life Sciences - Q1 Result

Financial Results with Results Press Release & Limited Review for June 30, 2013
Link: Click Here

Communication to investors - June 2013
Link: Click Here

Nobody would have expected such a strong set of numbers from Suven Life Sciences.
Revenues have grown 57% YoY and 46% QoQ, which was totally unexpected.
The growth in net profit is quite unbelievable, but still it is true.
Net Profit of the company has grown 273% YoY and 244% QoQ.

My Views:
Frankly speaking, the jump of 15% didn't looked that great when compared with the kind of numbers the company came out with. I was expecting 20% upper circuit on the stock after results, but it didn't happened.
Lets see how much upside is enough to give justice to such numbers posted by the company.
However being a long term investor, its always advisable not to get carried away by performance in 1 quarter.
Hence, we will continue to observe the numbers quarter after quarter and take the call accordingly.
For now, its looks good, and people might continue to hold for long term.

Go through the details in Communication to Investors PDF, it conveys lots of important information regarding the growth of the company.

Thangamayil Jewellery sees Rs 1,500-1,600 cr sales in FY14

South-based jeweller Thangamayil Jewellery is expecting sales of Rs 1,500-1,600 crore in the current financial year, with growth, especially seen strong around Navratri, Diwali and the local festival Aadi Peruku, a top company official told moneycontrol.com in an interaction.

Thangamayil's net profit in the April-June quarter declined 9 percent year-on-year to Rs 14 crore, despite a 19 percent rise in net sales at Rs 425 crore.

The profits were impacted by one-time loss in inventory due to a fall in gold price. Also, its expenses rose due to higher fuel and power costs, in the wake of the power cuts in Tamil Nadu, LGY Kumar, GM - Finance, said.

 Thangamayil's total expenses were up 22 percent to Rs 398 crore in the first quarter.

Below is the edited transcript of Kumar's interview with moneycontrol.com.

Q: Your Q1 net profit was lower despite a 19 percent rise in net sales. What were the key reasons for this?

A: Gold price reduction pushed the sales up. However, the company had to take a single time hit for the loss in Inventory due to the said price reduction and power and fuel cost was on higher side due to power cuts.

 

Q: The Reserve Bank of India has announced several steps over the last couple of months related to gold imports. What are your views on it? Is there any impact on your business?

A: We are yet to receive the blueprint for the action plan. Instant demand enabling export is not possible. We are yet to learn about treatment of wastage, value addition and concessions to be extended to the industry to compete in the international market.

 

Q: Now that the wedding season is over, how do you see the demand scenario panning out in Q2 and Q3 at least?

A: On August 3rd is “Aadi Peruku” a regional festival. We feel we will perform better than “Akshaya Trithiya." Offers are already on the anvil, which will continue till the end of August or so. Q3 is expected to perform with Navaratri and Diwali sales.

 

Q: What is your outlook as far as net sales and profits are concerned for FY14?

A: We have planned to sell around 6 tonne gold apart from silver, diamond and other precious articles. We have targeted sales of Rs 1,500-1,600 crore, with 5 percent profit before tax growth.
 
Q: What are your retail expansion plans for the year?

A: For this year we have already launched 5 branches in Tier 2 and Tier 3 cities. We plan to launch 5 more branches in the second half of 2013-14 depending on the Government policies and regulations.
 
Q: Gold prices fell sharply earlier this year. What is your outlook for the rest of the year?

A: It has witnessed the bottom of the curve and now will gradually climb up with higher volatility due to the circulars from time to time on a sudden note.

 

Q: Do you think a fall in gold prices will dampen investment demand for the yellow metal?

A: No, rather it will augment the sales. Buying power of the individual has gone up and one keeps portion of savings as gold reserve.

Can Fin Homes - Q1 Result

Financial Results & Limited Review for June 30, 2013
Link: Click Here

Another solid and consistent performance by Can Fin Homes. But I am not sure, how much it will show in stock price, because of weakness in entire sector.

Revenues have grown from 83.85 Cr to 126.59 Cr, that suggests growth of 51% YoY.
Also, it has grown from 113.23 Cr to 126.59 Cr, that suggests growth of 12% QoQ.

Net Profit have grown by almost 44% from 11.49 Cr to 16.51 Cr YoY.
It has also grown by approx 7% from 15.54 Cr to 16.51 Cr QoQ.

Such high profit has taken EPS to 8.1 Rs for the quarter, which is highest so far, as far as I believe.

My Views:
Numbers looks excellent to me, especially in poor times, where many finance companies has not been able to show good numbers. If you look at last few quarters, company has shown consistent growth, not just YoY, but also quarter after quarter, which has impressed me a lot.
The only problem with this stock is the sector, where almost all the companies are trading at 52 weeks low. Even a company like LIC is also hammered with stock trading at 170 levels.
One has to keep a long term view to get good returns from Can Fin Homes, in spite of tremendous performance from the company, because of heavy weakness in the sector.
As mentioned in earlier post, I still maintain my target of 200, but just that, it might take time to reach there.
We had another disappointment from RBI today, with Credit Policy. The scare of interest rates being increased by Banks might further put pressure on this sector.

Ajanta Pharma - Q1 Result

Financial Results & Limited Review for June 30, 2013
Link: Click Here

Results Press Release
Link: Click Here

Board recommends Bonus Issue:
Ajanta Pharma Ltd has informed BSE that the Board of Directors of the Company at its meeting held on July 29, 2013, inter alia, have recommended Bonus Shares in the ratio of One new fully paid-up Equity Share for every Two fully paid-up Equity Share.
Ajanta Pharma Ltd has informed BSE that the dispatch of bonus shares would be completed on or before September 29, 2013.

Another good set of numbers given by Ajanta Pharma. But still stock has seen some negative movements because of the fact that, we were so far, addicted with record revenues coming up with every quarter since last 1 year. That didn't happen this time. It didn't came in as a surprise to me, because even if you look at earnings last year, the revenues in June quarter were slightly less than Mar quarter. The difference was less last time, but still, there is something which is affecting June quarter numbers. What we consider as base of comparison, is the year on year factor.

Revenues stands at 219 Cr from 174 Cr, which represents growth of 26%.
Net Profit stands at 32.54 Cr from 19.58 Cr, which represents jump of 66%.
EPS for the quarter turns out to be 13.89, which is fabulous, in terms of profits made by the company.

My Views:
For long term investors, I would recommend a hold at this price, as we expect the company to grow further in coming quarters. We are still waiting for operations to begin at 2 new plants in Gujarat, which will also start contributing to revenues. But still, as per management those plants will be operational from 2014-15. Hence its about patience of each investor. Overall if you see, the target of 1000 in 2 years, which I posted in last September, is already achieved. But considering the fact that the growth shown by the company is tremendous, and we have 2 new plants getting operation by next year, I expect the stock to go to 1500 or above levels in next 2 years time.

Note: After the bonus is issued, the price of the share will 2/3rd of the last traded price.
Hence, if the stock is trading at 1000 on last day before issue of bonus share, then price will be 666 on the next day, once bonus shares are issued.
Hence the target of 1500 Rs in next 2 years, is equivalent to a target of 1000 Rs in next 2 years, after bonus share adjustment.

Granules India - Q1 Result

Financial Results for June 30, 2013 along with Press Release
Link: Click Here

Management Expecting To Grow At Better Than 30% In FY14
Link: Click Here

The number reported by Granules India comes in line with the expectation.
I would say, in line with expectations, because, the stock has already appreciated about 40% in this quarter.
The numbers are outstanding, comparing with growth in past few quarters, mainly because of the contribution from expansion process.
As the expansion is still not fully scaled up, we can expect, plenty more terrific numbers from the company going ahead.
On consolidated basis, Revenues have grown 21% from 189.3 Cr to 228.3 Cr.
Net profit has grown 134% from 6.3 Cr to 14.7 Cr this quarter, which is phenomenal.
The ratio's are almost similar, on standalone basis as well.

Important Lines From Press Release:
The formulation expansion at the Gagillapur facility commenced operations during the quarter and the company expects to scale up production throughout the year as it receives customer approvals. The company expects majority of customer approvals to be in place by second half of the fiscal year.
Our results are harbinger of what is to come for FY14. The fiscal year, particularly the second half, will be exciting for us as we continue to shift sales to Formulation as our production ramps up.

My Views:
I would suggest people to continue holding and may be average out few even at these levels, as the management is pretty confident of what is to come in second half of this fiscal.
If all what they have promised, turns out to be true, then I would not be surprised to see tha stock above 250 levels in a years time.

Dewan Housing - Q1 Results

Financial Results for June 30, 2013
Link: Click Here

Dewan Housing Finance Corporation: Outcome of AGM
Link: Click Here

Dewan Housing Finance Corp Q1 net soars 54% to Rs 120 Cr
Link: Click Here

Another good set of numbers posted by Dewan Housing where revenue increased 52.5 percent to Rs 1,126.2 Cr from Rs 738.5 Cr and net profit jumped 57.1 percent to Rs 288.3 Cr from Rs 183.5 Cr YoY.

Right now, with most of housing finance company, in downtrend, its difficult to predict the movement even after such strong numbers. At most, we can predict that downside in this counter is limited.
There is a huge upside potential, but I think, it will take some time to unveil that.
Not sure about short term investors, but definitely, long term investors, can hold this stock with confidence, as even promoters have increase their stakes in the company off-late.

Thangamayil Jewellery - Q1 Result

The numbers posted by Thangamayil Jewellery is way above my expectations.

Revenues have grown almost 20% YoY as well as QoQ, even in bad times, largely because of the expansion in form of opening new branches.

Net Profit stands at unbelievable 13.75 Cr, where many expected another loss in this quarter.
In any case, it stands at a net profit of 13.75 Cr Vs a loss of 5.72 Cr QoQ.
On YoY basis, net profit is down to 13.75 Cr from 15.13 Cr, which is marginal, and expected as the gold situation was way better last year.
EPS have gone up from (-)4.18 to 10.03 QoQ and from 11.03 to 10.03 YoY.

Company says that it accounted the entire publicity and advertising expense incurred in the current quarter as per the Accounting Standards Requirement. Whereas the corresponding quarter of last year, a sum of 5.35 Cr were transferred to Deferred Revenue Expenditure. If the same treatment is given for the current quarter, the profits would have been higher by 1.26 Cr on comparable basis.

Company started 4 new branches this quarter and they all are performing satisfactorily.

Link: Click Here

My Views: Excellent numbers have been posted by the company, and I would recommend a strong hold/buy at current levels. With more and more branches coming up, we can expect a very strong performance by the company in coming quarters. The only worrying factor is the prices of gold which is fluctuating heavily, but with their expansion, and probably, very good demand in south india, I dont think company will face any problems in growing their business.

 

Stock Bonus Vs Stock Split

Well, after the announcement of Bonus issue by Ajanta Pharma, I have got this question from many, as to what are the differences between bonus share issued by the company and stock split. Hence I thought of covering that topic with example of our favorite stock, Ajanta Pharma.

To understand the similarities and differences between these 2 terms, it is very important to understand the meaning of company's share capital.

Company's Share Capital is number of shares issued by the company multiplied by the face value of each share. For eg., if a company issue 1000 shares with a face value of Rs 10 each, then the share capital of the company is 10000 Rs.

Stock Bonus:
When a certain company decides to give stock bonus, it eventually results in increase in the share capital of the company. This increase in share capital has to be paid from reserves & surplus of the company.
So, if in above example, the company decides to give 1:1 bonus, each investor will get 1 share as bonus per every share held by him. If he has 20 shares, he will now have 40 shares with him after bonus.
So, to give that extra shares to each investors, company has to generate another 1000 shares of face value 10 Rs each.
Hence the share capital of the company will now rise to 20000 Rs. Face value of the share is still 10 Rs, but number of shares in the market has doubled.
Issuing bonus share is like giving 100% dividend to its shareholders. This, in a way, reflects the confidence of management in the company.

Stock Split:
This is slightly different, in a way, that company does not have a pay any amount in case of stock split. The calculation is very simple.
In stock split, company decides to split the face value of each share.
For eg., in above case, company decides to split the face value of share from 10 Rs to 5 Rs each.
Hence the number of shares in the market will get doubled.
Earlier, we had 1000 shares of 10 Rs each. Now we will have 2000 shares of 5 Rs each.
So, the important thing to observe is that, here, the share capital of the company did not change at all.
1000 * 10 = 2000 * 5
Hence, company does not have to pay any amount to increase share capital in case of split, unlike bonus.
Split of shares is generally done, to increase liquidity in market. For eg., if we have a stock, which is of face value 10 Rs and current market price of 4000 Rs per share. Here, we would rather be hesitant in buying, as it is costly. So, management decides to split the share share into 1 Rs face value from 10 Rs. So the price of share will come to 400 Rs and number of shares in the market will be 10 times. Now we can expect some frequent trading in this stock.

In both the case, price is adjusted according to the ratio of split/bonus.

Lets now put both these events with Ajanta Pharma, as Ajanta Pharma split the stock from 10 Rs face value to 5 Rs face value last year in July, and now is about to consider issuing bonus share.
So, first of all, Share Capital of Ajanta Pharma is 11.80 Cr.
Hence when it came with 1.18 Cr shares of face value 10 Rs each.
Last year, in july, face value became 5 Rs per share, and number of shares in market went upto 2.36 Cr.
Hence Share Capital remained same at 11.80 Cr (2.36 * 5)

Now, if company decides to give a bonus of 1:1 this year, then the total number of shares will be 2.36 * 2 = 4.72 Cr, but with a face value of 5 Rs each, as earlier.
Hence Share Capital of the company after bonus will be 4.72 * 5 = 23.6 Cr.
So, this extra 11.8 Cr (23.6 - 11.8), will have to be paid by the company's reserves & surplus.

I hope I have made myself clear in this discussion.
Kindly put in your comments if you have any queries.

Quarterly interest means depositors lose Rs 2500 crore per year - Interesting Article

Source: Economic Times

Depositors are losing close to Rs 2,500 crore every year because of Indian banks applying interest on deposits every quarter instead of every month, according to a report by the Indian Institute of Technology, Mumbai. This is in contrast to loans where interest is applied on a monthly basis.

To study the impact of this discrimination, one needs to compare the interest liability on a Rs 1 lakh education loan at the end of the year compared to earnings from a fixed deposit assuming interest on both was 10%. While the interest earned on the FD would be around Rs 10,381, the interest liability on the loan would be Rs 10,471. Such comparison is only possible in education loans where there is no repayment in the first year.

At present, the Reserve Bank of India (RBI) mandates banks to apply interest on deposits at quarterly or larger intervals. Banks also calculate interests accrued on a fortnightly basis but only for reporting to RBI.

The technical report by Ashish Das from IIT's mathematics department published this week is expected to be taken seriously by RBI, considering that the central bank itself had raised the issue in the past. The report, titled 'Interest of bank depositors in chaos', has studied interest application frequency on bank deposits and the methodology used by banks in calculating interest income.

The regulator also paid heed to earlier reports from the same author, which resulted in regulatory changes including recommendation that banks apply interest on daily balances in savings deposits. A subsequent paper had suggested that RBI directs banks to reduce fees charged to merchants for settling payments from debit cards since banks were merely transferring funds from customer accounts and not providing a loan to the cardholder as was happening in credit cards.

"The application of interest at six monthly rests has been more of a legacy. It was more from the ease and convenience of interest computation at the pre-computer era. Such a scenario no longer exists since the country today has a satisfactory level of computerization in commercial banks," said Das. The report points out that because of lax regulation some banks such as HDFC Bank (effective April 2011) moved from their earlier quarterly application of interest to half yearly application. "Such a move, though beneficial to the banks, is at the cost of their SB depositors," the report said.

If banks were directed to apply interest at the end of every month, the return for the depositor would rise by a around Rs 90 for someone with a Rs 1 lakh FD.

At a systemic level, total savings to banks runs into crores considering that there are 800 million bank accounts with Rs 15.5 lakh crore in savings accounts and Rs 45 lakh crore in FDs.

The study also finds that the amount of tax deducted at source can come down by Rs 400 to Rs 500 crore if banks applied TDS at the end of the financial year and paid the amount out of savings account rather than charging it to the fixed deposit.

Few Good Documentaries on Finance & Financial Crisis

1) Too Big To Fail (Documentary):

Chronicles the financial meltdown of 2008 and centers on Treasury Secretary Henry Paulson.

Link: Click Here (Youtube)

 

2) Life Hidden Truth -  2013 Global Financial Crisis (Documentary):

The 2013 Financial Crisis True Structure Revealed
A must see documentary explaining how the world financial institutes truly operate.

Link: Click Here (Youtube)

 

3) Overdose: The Next Financial Crisis (Documentary):

With the US raising their debt ceiling, are we in a global bail-out bubble that will eventually burst? This doc offers a fresh insight into the greatest economic crisis of our age: the one still awaiting us.
The financial storm that has rocked the world began brewing in the US when congress pushed the idea of home ownership for all, propping up those who couldn't make the down payments. When it all went wrong the government promised the biggest financial stimulus packages in history and gargantuan bailouts. But what crazed logic is that: propping up debt with more debt? "They're giving alcohol to a drunk: it just sets him up for a bigger hangover."

Link: Click Here (Youtube)

 

4) The Ascent of Money: A Financial History of the World

The Ascent of Money: A Financial History of the World is Harvard professor Niall Ferguson's tenth book, published in 2008, and an adapted television documentary for Channel 4 and PBS. It examines the long history of money, credit, and banking.

Link: Click Here (Youtube)

 

Note: All these documentaries exists in different context and are to be viewed independently. None of them are linked with each other. People can select their area of interest and watch that documentary according.
I have seen these documentaries and liked it so much, that I thought of sharing with you guys.
There are plenty more such documentaries, which may be better than this, but since I haven't seen yet, its not proper to post it from my side.

 

Dollar Vs Rupee – The Battle Of Economy

As many of you have asked me about the Rupee-Dollar issue, I thought of putting in my views on it. I will try my best to use simple language, as most of the visitors here are just retail investors and not great financial freaks.

As we are observing that since past 18 months or so, dollar is continuously gaining strength against rupee, we are bound to think that US economy is getting stronger and Indian economy is going weak.

Is the above statement a fact or is it just an irony? Let’s figure out.

We think this way because we feel country’s financial position is determined by the strength of its currency. But it’s always necessary to figure out the reasons behind what is happening in the financial world, and then decide, who should be blamed for the current situation.

1)      Where did it all start?

Some 18 months back, the level of recession was more in US, than in India, and that was the same reason why dollar was going from strength to strength against all the currencies in the world. The big institutions in the US were going through a very bad period and suffering losses from their business. To stabilize those businesses, the only option they were left with was to withdraw all their investments from other countries, which accounted for heavy selling of local currencies in each country and in turn, heavy buying of dollar. (This may well be the factor today, as well, to some extent)

2)      Step from US Federal Reserve:

Ever since the US Federal Reserve has declared its intention to lower the asset purchase program, the country’s economy has been under pressure. Lowering the asset purchase directly means that lesser money will be injected into the system, which in turn, will increase the cost of money in US. This directly means that the inflows in the emerging markets like India will get reduced. And India being a country, which is highly dependent on foreign flows to fund its current account deficit, the rupee will continue to slide down.

3)      Indian equities going down:

FII’s have always been a major investor in Indian markets, and as I have said earlier also, the trades done by FII’s exactly represents the pied piper effect. (If one does, the other follows) Right now, the effect is on the selling side. Heavy selling has been seen by FII’s in recent times, which has led to heavy selling on Indian Rupee and heavy buying of US Dollars. The output of this is quite evident. As per the reports seen on NDTV, this year, FII’s bought shares worth 90000 Cr Rs so far this year.

4)      Current weakness in rupee leading to further weakness:

In simple terms, the depreciating rupee lowers the buying power of India as a consumer and it increases the cost as a producer. Almost every major organization in India has got heavy debts in terms of dollar. This will directly affect the earnings in coming quarters, as the company needs more money to pay the dollar debts. Lower earnings will restrict the number of FII’s investing in Indian company and hence lower money will come into the system, which will further depreciate rupee valuation.

5)      Continuously rising imports and hence trade deficit:

According to reports, Oil and Gold accounts for 35% and 11% of country’s total import. All the buying for Gold and Oil should be done in dollars, which means that Indian companies has to sell rupee and buy dollars, with which they can import Oil and Gold. This also, heavily leads to weakening of rupee. Hence one can see the Finance Minister forcing the reduction in Gold imports, which has heavily impacted Jewellery stocks in India.

Trade deficit, as defined by investopedia, is an economic measure of a negative balance of trade in which a country's imports exceeds its exports. Now it must be quite obvious for people to understand why trade deficit is going higher which is not a good sign for country’s economy.

 

Difficult to figure, whether it’s just Indian macro-economic data which has led to fall in rupee or there has been a heavy involvement of US in this process. Its highly debatable and never ending topic. But the points mentioned above are the prime factors for the fall as far as I feel. Someone may have his own ideas, and he is free to share his own thoughts in the comments section below.

Few More Multibaggers For Long Term

1) Ricoh India Ltd:
Ricoh is originally a Japanese company involved in multinational imaging and electronics business.
Ricoh India has a sales and service network, present across the country with 19 branch offices, 256 dealers, more than 300 company and 300 dealer service engineers, covering the remotest of areas besides being present in small cities and large metros. (This numbers might have increased as of today) :)
Company has been growing strongly since FY11. It has certainly made its presence felt in India.
Company came out with strong set of numbers in this quarter where they reported a 47% jump in revenues YoY. On yearly basis, company made revenues of about 633 Crs. Company has reported a net loss of about 1.3 Crs for the year, but from last few press releases from the company, it seems that they have strong plans ahead to expand their business in India. They are expecting 1000 Crs revenues in FY14
Few link to look at, thanks to my friend R.K. Agrawal for sharing those:
http://www.moneycontrol.com/news/results-boardroom/q4-income48-growth-to-continue-ricoh_889910.html
http://ibnlive.in.com/generalnewsfeed/news/ricoh-india-to-make-city-office-as-primary-data-centre/1252210.html
http://www.thehindubusinessline.com/industry-and-economy/info-tech/ricoh-india-to-expand-it-services-biz/article4769134.ece
More Details will be shared in comments section.

2) Dewan Housing Finance Corporation Ltd:
Another great growth story. Excellent Q4 numbers help them show a 67% growth in revenues YoY, and a 47% growth in Net Profit in that same period. Company has been paying good dividends as well as Promoters have increased their stakes in the company off-late. Personally, I feel that re-rating should happen with this stock soon.
Only worrying factor is that, this company is already popular among investors. FII are holding nearly 40% stake in the company, and that is always worrying as far as I feel. Because, as per my experience, buying or selling by FII's is always like a Pied Piper Effect :) Hence it can take stock equally in both the directions.

3) Can Fin Homes Ltd:
Still a small organization when compared with Dewan Housing, but still, the company has been growing at a good pace.
Revenue growth seen is 23% and 37% YoY for past 2 years resp. Net Profit has been growing slowly, but that is never a parameter when looking for long term investment.
Dividend has also gone up in past 2 years.
Few good links to look at:
http://www.hdfcsec.com/Research/ResearchDetails.aspx?report_id=2993862
http://www.hdfcsec.com/Research/ResearchDetails.aspx?report_id=2990252

4) Suven Life Sciences Ltd:
Another stock in our list from Pharma Sector, but can't hold myself from sharing this also.
Growth Story has not been as great as Ajanta Pharma, but company still has shown enough to get my attention.
Sales has been growing at 20% per year, and we have seen some good numbers off-late posted by the company.
I expect the sales to grow further as company has been able to get patents of several products in past 2 months, and hence, they will also start contributing to sales.
a) Suven Life Sciences Ltd has informed BSE regarding a Press Release dated May 10, 2013, titled "Suven Life secures three Product Patents for their NCEs in Canada and Eurasia"
Link: Click Here
b) Suven Life Sciences Ltd has informed BSE regarding a Press Release dated April 17, 2013, titled "Suven Life Sciences secures 4 Product Patents for their NCEs in China, Mexico and New Zealand"
Link: Click Here
Promoters were buying the stock heavily around March-April, this year, especially the CEO of the company, which further enhances my confidence in the company.

Disclosure:
I haven't made investment in any of the company mentioned above yet, as I am running out of cash for now.
But I have been trying to get into these scripts as soon as possible. Each one can do a bit of their own research before getting into these stocks.

Photoquip India - Latest News

Financial Results & Auditors Report for March 31, 2013 (Audited)
Link: Click Here

My Views:
After Thangamayil, this is second company in our list that has reported loss in this quarter.
Somewhere in the back of my mind, this was expected. As per the mail I got from Photoquip's Management, they started sales of CORVI products from 14th Jan 2013. Every new business has its own difficulties while starting.
Marketing and advertising expense is probably highest during the initial phase of new business.
Lets talk about the numbers.
Revenues have grown 31% YoY, and have grown 16% QoQ.
Company has reported heavy loss in this quarter mainly due to advertising and marketing expense of their new venture CORVI, as it seems. The actual loss reported for this quarter is 5.14 Crs, due to which the EPS for the quarter comes out to be -10.
As far as I feel, there is nothing much to worry, inspite of such numbers.
Promoters have been accumulating 5% shares year after year. Even when they did not had good time last year, they were not able to accumulate shares from open market on daily basis, but still, on the last day of FY13, they accumulated 4% shares on a single day to complete their quota of 5% for FY13.
If one is looking at the order placement daily in last few days, one can see that at the start of every session, there is an buy order of 1000 shares at 41 Rs. Whether that order gets executed or not, one can again see that same order placed at the start of next session. There is a very high probability that this again could be the act of proxies who then transfer all the shares to the name of promoters whenever required.
Since past 3 years, money invested in Photoquip is behaving like money kept in locker of Bank. It is still as it is. The price of Photoquip in past 3 years has neither appreciated nor depreciated from 40 levels on an average.
But still I am very much hopeful, because of company's innovations and future plans.
We dont know how much more time is needed for company to make its new business stable, hence we are not in a position to set any targets for this counter.

Money Matters - Latest News

The name of the company is changed and approved by the management and is now called Capri Global Capital Limited.

Financial Results for March 31, 2013 (Audited)
Link: Click Here

Money Matters Financial Services Ltd has informed BSE that the Board of Directors of the Company at its meeting held on May 30, 2013, inter alia, has decided the following:

1. Recommended a final dividend of Rs. 1.50 per Equity share of Rs. 10/- each (i.e.15%) for the year ended March 31, 2013.

2. Appointed Mr. Alwyn D'sauza, Company Secretary in Practice as Scrutinizer for conduct of the Postal Ballot process.

3. Initiated Postal Ballot process pursuant to Section 192A of the Companies Act, 1956 read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001, and approved Notice and calendar of event for:
a. Change the name of the Company from to 'Capri Global Capital Limited';
b. Set up a limit of Rs. 3000 Crores for investments/lending under subsection (1) of section 372A of the Companies Act 1956;
c. Increasing Borrowing Limits of the Company up to Rs. 2000 Crores under section 293(1)(d) of the Companies Act 1956; and
d. Authoring Board to create Charge on assets of the Company to secure borrowings by the Company under section 293(1)(a) of the Companies Act 1956.

My Views:
I have got no words to describe the strong growth that has been shown consistently by the company.
This is second consecutive quarter where company has shown more than 400% growth in revenues YoY.
Revenues has grown from 183 Crs to 836 Crs YoY and grown from 508 crs to 836 Crs QoQ.
Net Profit has grown from 13 Crs to 21 Crs YoY and grown from 20 Crs to 21 Crs QoQ.
Lets evaluate the yearly performance:
Revenues has grown from 556 Crs to 1852 Crs on yearly basis from FY12 to FY13, which is unbelievable.
Net Profit has grown from 40 Crs to 74 Crs, which takes EPS from 11.55 to 21.28
Company is sitting on a cash reserve of 843 Crs which is unbelievable considering the fact that market capitalization of the company is only 596 Crs.
Frankly speaking, I dont know why this stock is only trading at only 170 Rs per share, but that is of course, not in my hands. The reason I feel, could be that, this company, was found involved in bribery earlier in 2010, about which, I mentioned in earlier post on Money Matters.
I suggested this stock when it was around 105-110 levels, and I also mentioned about all the risk and everything associated with this stock. I feel that this stock has got unlimited upside potential, but still, as I said earlier also, it depends on risk taking ability of each person.

Cravatex Ltd - Latest News

Financial Results for March 31, 2013
Link: Click Here

Board recommends Dividend
Cravatex Ltd has informed BSE that subject to approval of Members in the Annual General Meeting, the Board of Directors in their Meeting held on May 28, 2013, interalia, have recommended a dividend of Rs. 3.50 per equity share (35%).

My Views:
Cravatex still has lot of work to do. The standalone results have improved compared to last few quarters.
The revenues has gone up by 21% YoY, and 13% QoQ.
The net profit has gone up by 44% YoY and actually gone down by 9% QoQ.
If I am not wrong, I think this is their record revenues on standalone basis. But still the growth is not impressive.
Cravatex has never been a high dividend paying company, hence a dividend of 3.5 Rs per share is not a surprise to me.
The Net Profit of the company could have been much higher, if Rs wouldn't have depreciated so much. But this seems to be general statement now, with every quarterly results of Cravatex. The way Rs is behaving off-late, it doesn't seem that Rs is going to come down against dollar in near future, but you never know.
After a stupendous increase of revenues in FY12 from FY11, where it grew from 95 Crs in FY11 to 160 Crs in FY12, this time the revenue growth proved to be absolutely flat, where it grew from 160 Crs in FY12 to 171 Crs in FY13.
But the stock price has already depreciated enough because of this fact.
In my opinion, I don't see much more downside from here. The one holding this share can continue to hold and wait if something big happens in the near future.
Its difficult to predict the movement of stock price after this result, as stock has been very very illiquid in last few days.

Gulshan Polyols - Latest News

Financial Results for March 31, 2013 (Audited)
Link: Click Here

Board recommends Dividend:
Recommended a dividend @ 50%, (Rs. 2.50/- per equity share) to the Equity Shareholders of the Company.

My Views:
Gulshan Polyols has posted a 20% increase in revenues YoY and almost 21% increase in revenues QoQ.
Net Profit of the company has increased by a staggering 108% YoY and a meager 11% QoQ.
So, both, in terms of Net Profit as well as Revenues, the result looks outstanding to me.
Annual EPS posted by the company is 27 against the share price of 65, which is quite unbelievable as it makes the P/E ratio standing at 2.4 against the industry P/E of 32.
Dividend declared by the company is double compared to last year where it was 1.25 Rs per share.
Just having a look at all these factors, I dont think I need to mention anything else.

Just thought of posting a comment by my friend totalview on moneycontrol board:
It`s a steal at CMP !!!! An EPS of Rs.27.43 and dividend enhanced by 100%(@ 50% and earlier 25%) !!!! Look at the cash balance of the company, it`s more than Rs.28 crores) and capital is just Rs.4.22 crores !!! It`s discounted PE is just a little more than 2 !!!!! 

Thangamayil Jewellery - Latest News

Q4 Result and Press Release: Click Here

Board recommends Dividend:
Thangamayil Jewellery Ltd has informed BSE that the Board of Directors of the Company at its meeting held on May 24, 2013, inter alia, has recommended a dividend of 50% i.e. Rs. 5/- per equity share of face value of Rs. 10/- each subject to share holders approval in the ensuing Annual General Meeting.

My Views:
As expected, the results proved to be disappointing, and it seems that the trend might continue at least for next quarter. But still there are many positives that can be taken from the results.
If one compares revenues YoY, you will still find around 17-18% growth which is not bad during tough times.
Of course, we should not neglect the fact that this is probably the first time, company has reported loss. EPS of -4.
So its important to know the reasons, apart from recent disaster with gold, that contributed to heavy expenses.
If we look at the press release, it says, that Advertising and Publicity expense, has gone to 13 Crs from 2 Crs last year same quarter (which indicates an expense increase by 650%). To add to that, Employee Benefit expense has gone up to 6.6 Crs from 3.1 Crs.
Both these expenses, looks good for long term, even if it has resulted into loss as of now.
Considering the fact that promoters have been buying around 190-200 levels, and also some buying around 250-275 levels, the fundamentals of the company still looks promising.
With new branches coming up every few days, and no change in demand of gold in South India, I would advice people to still hold and may be buy on dips.
Dividend of 5 Rs per share seems to be disappointing, considering the fact that last year, at around same stock price, they gave a dividend of 7 Rs per share. But that is evident seeing the fact that the net profit for the year ended March 2013 is exactly half to that of year ended March 2012.
Take your own decision after proper analysis, because this stock is dependent on a commodity, and price of commodity doesn't vary based on fundamentals, it varies according to demand and supply.

Infinite Computers Ltd. - Latest News

Financial Results & Auditors Report for March 31, 2013
Link: Click Here

Board recommends Final Dividend
Link: Click Here

Press Release
Link: Click Here

Infinite Computers Enters The Elite List of Respected Software Companies, To Receive Coveted
Link: Click Here

Q4 traditionally weak quarter, Q3 strong
Link: Click here

My Views:
If we just look at the standalone numbers for this quarter, it has been disappointing compared to last quarter i.e. Q3-FY13. But as per the management, "Q3 has always been a very strong quarter, and Q4 has been a weak one for the company."
If we agree with them and go back and compare the numbers with same quarter last year, then one can get a sigh of relief that still there has been a significant growth YoY.
Revenues has grown by 23% and net profit has grown by a staggering 125%, which is not bad.
The company has a record of paying good dividend to its investors, which is another good sign.
Another important point is that, promoters were on a buying spree when the stock was around 150-160 levels, and they haven't sold a single share yet.
Current Market trend is negative for this script, hence it might see lower levels, but its looking good for long term.