Sunday, April 27, 2014

Cera Sanitaryware - Q4 FY'14 Result Updates

Financial Results for March 31, 2014
Link: Click Here

Board recommends Dividend:
Cera Sanitaryware Ltd has informed BSE that the Board of Directors of the Company at its meeting held on April 25, 2014, inter alia, has transacted the following:
-Recommended a dividend of Rs. 5/- (100%) per fully paid-up equity Share of Rs. 5/ each.
-Re-appointed Shri Vikram Somany as Chairman and Managing Director for a period of 3 years w.e.f. July 01, 2014.

Results Press Release
Link: Click Here

The growth shown by Cera Sanitaryware is almost unbelievable, considering the sector it operates it.
Commenting on above statement, Vikram Somany, CMD, Cera Sanitaryware, said that "Cera has once again demonstrated that it enjoys overwhelming customers' preference and support. This is evident from the fact that our growth has been achieved in spite of market witnessing signs of slow down".

According to Business Line, Cera has maintained key position in the country’s sanitaryware market, which has a total size of Rs 2,700 crore with a market share of 23% from 18% earlier.
According to management, after success on market acceptability with Sanitaryware and faucets, Cera has now forayed into tiles more aggressively. The company offers tiles consist of HD digital wall tiles with matching floor tiles and also digital polished glazed vitrified tiles.
Broking houses see promising future for the company. An Angel Broking report on Cera after the results announcement said, “Considering the low-penetration level of sanitation in India, change in lifestyle of the people, increasing nuclear families and real estate growth; the sanitaryware industry growth is on an uptrend. Thus, with increasing awareness about the brand ‘Cera’ and its recently expanded capacity, Cera is well placed to benefit from the growth in the sanitaryware industry.” 

Talking about numbers,

For Q4 FY'14,
Revenues stood at 218.19 Cr Vs 154.56 Cr YoY, a growth of 41%.
Net Profit stood at 19.34 Cr Vs 13.93 Cr YoY, a growth of 39%.
EPS at 15.28 Vs 11.01.

For the full year FY'14 against FY'13,
Revenues stood at 663.69 Cr Vs 487.87 Cr, a growth of  36%.
Net Profit stood at 51.91 Cr Vs 46.21 Cr, a growth of 12%.
EPS at 41.02 Vs 36.51.

My Views:
Sales growth of more than 40% in a sector, where other major companies are struggling to show positive growth, is a big achievement. The net profit this quarter is highly satisfactory, unlike last quarter, where it showed a decline, compared to previous year. With EPS of 41, the stock is trading at a P/E multiple of 21, which is higher than industry P/E. But the way, company is growing, it definitely deserves whatever the markets has to offer.
In the notes section of result, the company has mentioned that "As part of Green Initiative, the company has decided to install Solar Power Energy at Kadi for Captive use." Good to see that company is also concerned about the environment. Its a matter of pride being a shareholder of such a company.
Despite being an expensive stock, I would recommend a hold at current market price, for long term.
Investors with good patience and longer term view, can even make fresh entry at current levels, and use every dips to buy more.
Not changing my initial recommended target of 1000 Rs for now.

Thursday, April 24, 2014

Granules India - Q4 FY'14 Result Updates

Financial Results for March 31, 2014 
Link: Click Here

Board recommends Final Dividend:
Granules India Ltd has informed BSE that the Board of Directors of the Company at its meeting held on April 24, 2014, inter alia, has recommended a final dividend of Rs. 3.50 per share representing 35% of Paid Up Capital for the financial year 2013-14.

Press Release:
Link: Click Here 

New Investor Presentation:
Link: Click Here

The stellar performance continues for Granules India with company clocking highest ever revenues once again, and it seems that the company met all the expectations from the utility of capacity expansion at Gagillapur facility, which commenced a year ago.
The company during Jun '13 mentioned that, with expansion, they are expecting the sales of 1000 Cr for the full year, and they almost got 1100 Cr.
The R&D expense has almost gone up by 200%, which further enhances the confidence about the future of the company.

Last year, Finished dosages accounted for minimum sales, among API, PFI and itself, and this year, they were able to turn it around with finished dosages accounting for maximum sales out of 3. Its good for the company, as finished dosages is the highest margin business among the 3. Hence, if it continues to improve, we might see further growth in net profit compared to sales.
The company is confident of improving utilization further in future, as they did this year.

Speaking of consolidated numbers,
For Q4 FY'14,
Revenues stood at 317 Cr Vs 204 Cr, registering a growth of 55%.
Net Profit stood at 23.62 Cr Vs 12.41 Cr, registering a growth of 90%.
EPS stood at 11.68 Vs 6.18

For full year FY'14,
Revenues stood at 1096 Cr Vs 764 Cr, a growth of 46%.
Net Profit stood at 75.23 Cr Vs 32.57 Cr, a growth of 131%.
EPS stood at 37.2 Vs 16.21

My Views:
The company was surely able to justify the severe rise in stock price over last 1 year from 100 to 310 levels. But it seems that the story is not ending here. If the results continue to impress in same way, we might see another such journey in times to come. With annual EPS of 37, the stock is still trading at a P/E below 10, even after more than 200% rise in last 1 year. That speaks largely about the undervaluation still existing in the stock price.
With management looking confident of achieving similar growth going ahead, it raises the confidence level of investors in the company.
Still won't be giving any specific target on the counter, but looks like, one can continue to buy/hold for long term. I will keep on posting further updates if any.

Recommendation made above is without considering the hazardous impact that election outcome can have on stock markets. So, one has to take his/her own decision based on ones own belief.
All the best!!!!

Saturday, April 5, 2014

Plastiblends India - Merging Ideas And Surging Ahead

Plastiblends India Limited is India’s largest manufacturer and exporter of Colour & Additive Master Batches and Thermoplastic Compounds for the Plastic Processing Industry.
Masterbatch is a solid or liquid additive for plastic used for coloring plastics (color masterbatch) or imparting other properties to plastics (additive masterbatch)

Plastiblends is headquartered in Mumbai. The company's world class manufacturing facilities are located at Daman, Gujarat & Roorkee, Uttarakhand with an annual manufacturing capacity over 75,000 MT. The company produces masterbatches for Polyolefins including BOPP, PET, PBT, ABS, HIPS & EVA.

The company exports to more than 40 countries worldwide and have a strong foot hold in the global market.
The company's production capacity has grown more than 10 times since the year 2000.

Serving Markets:
1) Agriculture
2) Household Appliances
3) Automation & Transportation Industry
4) Electrical, Electronics & Telecommunication
5) Healthcare & Pharma
6) Packaging
7) Textiles
8) Wire & Cables

The Masterbatch market in India is expected to grow at a CAGR of 23% till 2018, which means, the good performers in the sector have plenty of scope to improve their growth.
Link: Click Here

The company is looking to double its capacity by 2015. Along with some nominal expansions that will take place at its existing plants that are situated in Daman and Roorkee, the company is looking forward to set up a new manufacturing unit.
Link: Click Here

Speaking of numbers, the company has been growing steadily over the years, and this year, has not been an exception. The company has grown with a CAGR of 20% in sales, from 2009 to 2013. The profits growth has been varying because of instability of production cost over the past few years. The situation is getting better off-late.
For the first nine-months ended Dec'13, the company has shown,
Sales growth of 16% and Net Profit growth of 84%.
The company has consistently paid good dividend, and is expected to continue the trend.

My Views:
Again historically, March quarters have been good for the company, and considering a moderate growth of 16% again for this quarter, the company should post a total sales of 132 Cr, which will take their annual sales to 475 Cr, from 408 Cr last year. We might see a big jump in net profit for the full year, where I am expecting the company to end the year, with net profit figure of 26 Cr Vs 15 Cr posted last year. That will take their full year EPS to 20. Taking that figure into mind, the company is trading at a P/E multiple of 6 as against industry P/E of 22. Historically, if you see, the stock has never traded above P/E multiple of 8. So, even if we consider the P/E of 8, then stock should be around 160 levels.
Important thing to note here is that, since Aug'13, the stock has already jumped more than 100%, hence one can expect sub-dued stock performance for some time, or even mild downside, we don't know, but again, taking all above factors into consideration, stock is looking very good for long term right now.

As we all know, General Election 2014 is about to commence from 7th April, and results are expected to be announced on 16th May. The outcome of elections may have hazardous impact on stock markets, if results don't turn out to be favorable. So, if you are a very safe player, its better advised to enter post result declaration, in any of the recent stocks discussed here. If you have some risk appetite, you can invest in these testing times, and wait for things to settle down after elections, if something favorable doesn't happen.
All the best!!!!