Thursday, July 25, 2013

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.

17 comments:

  1. How did this company incur forex loss this time while rs @ >55 ?? Can u explain how these policies work at company level ?

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  2. If we include forex loss in p&l account, isn't it a loss making quarter for the company?

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  3. loss of 1478.51 lakhs was transferred to fix assets... Kindly explain this sentence.

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  4. Hey Anand,

    First of all, I think you are misinterpreting the term Forex loss.
    When can a company report forex loss?
    Lets say, for an example, that Granules India has to pay an interest, on loan borrowed in US currency, or any imported product from US.
    Lets say, they have to pay 10000 Rs in interest.
    Now, with Rs depreciating, they might have to pay 11000 Rs (Because the interest decided was in terms of dollars). So, in that case, what a company does, is that, they keep that 10000 Rs as interest expense, and take 1000 Rs as Forex loss.

    Lets take another simple example.
    I borrowed 100$ in 2011, when 1 dollar was equal to 50 Rs.
    I re-payed the whole amount in 2013, when 1 dollar is equal to 60 Rs.
    Ofcourse, I will have to pay more, because of rupee depreciation.
    So, whatever extra amount, I had to pay because of rupee depreciation goes into Forex loss.

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  5. Thanks for reply... But i have learnt that forex loss because of just currency pledging is not a real loss and compensate during next pledging round if fluctuations in currency not steep... But loss because of overseas loan payments is a real loss... Accounting method is saving them but i think outgo of rupee is there and its a real loss.

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  6. Secondly, if you want to go into the detail about the notification they are talking about, you can refer
    http://www.aubsp.com/2013/04/exchange-differences-recognition.html

    In short, what they done is that, the loss faced from forex is transferred to fixed assets. Refer this link:
    http://www.moneycontrol.com/financials/granulesindia/balance-sheet/GI25#GI25

    The loss will be deducted from the asset value shown in the above link, and not considered in the results shown today.

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  7. Thanks for that info....

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  8. Updated one more link above, about management talking to CNBC TV18....

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  9. Money Matters Financial Services Ltd has informed BSE that the name of the Company is changed from "Money Matters Financial Services Limited" to "Capri Global Capital Limited" with effect from July 24, 2013. A Fresh Certificate of Incorporation consequent to change of name is issued by Registrar of Companies, Maharashtra, Mumbai dated July 24, 2013.

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  10. June shareholding pattern announced on BSE for Photoquip ! Increase in Promoters shareholding is because of shares acquired on 28th March 2013 which could not be transferred in Promoters' individual account by 31st March 2013. However, during 2012-12 as usual they have increased their holding by 4.78% under creeping acquisition route. But now it's very difficult to acquire sizeable lot from the market. More than 1% shareholding reveals only 3 shareholders holding 4.64% shares. Otherwise, some proxy has to again collect shares for promoters from the open market.

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  11. Granules India: Attractive valuations, buy for an upside of 34%
    Link: http://www.indianotes.com/uploads/article_pdf/hem_Granules_23Jul12.pdf

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  12. Its been 3 days now that stock has gone untraded for the whole day...
    To acquire 5% this year, its very important that stock comes out of illiquid category..
    Otherwise, we need some strong set of numbers, which can attract few investors and traders to increase transactions in the counter...

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  13. I actually had this thought in mind yesterday, that after so many quiet days, who might have bought so many shares of Gulshan Polyols from open market.
    Today, we have the report of promoter buying there:
    http://www.moneycontrol.com/livefeed_pdf/Jul2013/Gulshan_Polyols_Ltd_260713_SAST.pdf

    This move just ahead of quarterly numbers is a good sign...

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  14. But who has sold this quantity !!!!

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  15. Pharmaceutical ingredients maker Granules India expects to post a growth of nearly 25% in revenues this fiscal thanks to fresh capacities that are available from Rs 115 crore expansion program.

    While some fresh capacities from the expansion program were made available during June quarter, the company expects availability of full capacities during December quarter.

    Chief financial officer VVS Murthy told ET, "We are expecting Rs 950 crore of turnover for FY14 compared to Rs 764 crore in the previous fiscal as we are going to utilize the full capacities from October onwards."

    Managing director Krishna Prasad described the June quarter results as harbinger to full year. During June quarter, the company reported 134% growth in consolidated net profit at Rs 15 crore, while revenues saw 21% growth at Rs 228 crore compared to corresponding quarter last year.

    "The fiscal year, particularly the second half, will be exciting for us as we continue to shift our sales to formulations as our production ramps up," said Krishna Prasad in a statement.

    Source: Economic Times

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  16. Granules India: Annual Report for the FY 2012-13
    Link: http://www.granulesindia.com/Granules_AR.pdf

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  17. Sales figures from Ajanta Pharma is not great ... hence stock will go down in slightly...
    Long term investors dont need to panic....
    Will come up with new post soon ...

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