Thursday, October 31, 2013

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!!!!!

Wednesday, October 30, 2013

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

Tuesday, October 29, 2013

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.

Monday, October 28, 2013

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)

Tuesday, October 22, 2013

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.

Tuesday, October 1, 2013

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.