Here are some of the companies which have shown good performance over past years and are well placed in my opinion, to continue such performance going ahead
These, by no means, are indication of any action that can be taken by readers on any stock.
1) PI Industries:
In Q2, the company delivered numbers that were quite below the street expectations. The sales were up by 5% yoy, and net profit up by 19%. Though the entire sector delivered poor performance on account of deficient rainfall this monsoon, the experts expected PI to still deliver good numbers, as good part of their revenues comes from CSM segment, which is less affected by rainfall.
Considering the first half of FY'16, company has delivered 11% growth in sales and 21% growth in profit, which is still good compared to its peers.
Talking about poor growth in Q2, the company mentioned that CSM growth was flat during the quarter and it is likely to grow well in second half of the year, which is why they have maintained their full year guidance.
Morever, as per management, new plant as Jambusar is commissioned and will be operational in phases by the year end, and also, their plans of commercializing new molecules every year, should result in further improvement in CSM revenues.
I think, currently in terms of performance, it is probably the best company in the agro-chemical sector, considering its future outlook. It has good balance sheet as well.
Off late, promoters divested 6.4% of their holding which seemed to be taken negatively by market, however, good part was that, 50% of those shares were taken up by institutional investors.
It will be interesting to see how Q3 and Q4 pans out, as the company needs to deliver strong numbers to maintain their annual guidance.
2) Indo Count Ind:
Every reader of this blog is aware that I mostly dislike textile sector, but time and again I find a company which is worth going through. This doesn't necessarily mean that we should invest or we should not. It is just for our learning purpose and actions has to be decided by the person himself/herself, based on his/her conviction.
Even when I didn't like the sector, I discussed about Garware Wall Ropes earlier, which at that time, was looking unique to me. Till date, it has already appreciated by close to 200% since then. I was not at all expecting such appreciation, but was still in there because it attracted me a lot at that time.
Talking about Indo Count, in 2008, this company went for debt restructing and was going through tough times, and today when we search it in google, it says that stock has appreciated by 5600% in past 2 years. Quite Amazing!!! From a loss making company till 2010, it is likely to post profits in excess of 200 Cr this year. In terms of sales, from 360 Cr in 2010 it is likely to post 2000 Cr in FY'16.
However, with current valuations, it is good to see that stock has been respected by most and it is sitting pretty with market cap of more than 4k Cr today.
Considering the first of FY'16, the company has posted 36% growth in sales and close to 80% jump in net profit. The continuously growing net profit has made sure that company is still trading at 20 P/E, even after 5600% rise in price in past 2 years. Also, among all major textile players, it is best placed in terms of debt to equity ratio.
The million dollar question is will the company be able to sustain its growth and head to glory.
Rs devaluation is certainly helping them to an extent, as major part of revenues is coming from US.
3) FIEM Ind:
Fiem is probably the first company in India which introduced LED lights in two wheelers.
From there it has widened its product portfolio by entering into LED luminaires for Indoor and Outdoor applications as well as Integrated Passenger Information System (IPIS) for Railways & Buses.
Even in phase which was called slightly tough for auto and auto-ancilliary companies, it has never failed to post good growth. In Q2 again, the sales were up by 12% and profits were up by 18%. The company is continuously increasing its LED capacity which is good to see, considering the fact that there has been a good pressure from government on use of LEDs. According to management, they are expecting to close the year with 1000 Cr, which implies the sales growth of 21%. On top of it, the management is expecting it with even better margins, which is likely to keep the P/E ratio in check even after the current surge in prices. When I took the name in my last post, it was trading close to 650 Rs. Today it is already at 800 Rs. However, I won't be commenting on any price movement that has happened, or which is likely to happen.
Even if we take a look at the past, it has grown with 23% CAGR in sales and 31% in profits for past 5 years, which is quite decent.
Let's see, if company is able to sustain its growth over coming years.
http://economictimes.indiatimes.com/et-now/corporate/orderbook-full-till-2017-fiem-industries/videoshow/43796545.cms
4) Lincoln Pharma:
Another pharma company which is showing steady growth over the years. Constant growth, almost every quarter, in past few years is rare in such a small firm. It has been growing at sales CAGR of 13% and profit CAGR of 20%. In Q2, the sales were up by 20%, but profits showed slight de-growth, which is fine if they are able to recover by year end. For the first half of FY'16, the numbers are looking better. Sales are up by 35% and profits by close 30%.
Recently the R&D team of the company launched a cough syrup with brand name Namcold-DX.
It is said that normally the cough syrups are effective for 4 hrs or so. However, Namcold releases periodically, and hence it will last longer than normal syrup. This is what makes the syrup unique, and because of such uniqueness, it is expected to gain some market share going ahead.
However, predicting long term growth for any small firm is always tough, and hence it will be interesting to watch how things goes for Lincoln from here.
Not to forget, this is another case, where the stock has appreciated a lot, especially in recent times. When our last post was published, it was trading at 160 levels and today it stands at 225.
I will come up with quarterly/yearly performance details of some other companies soon. As mentioned in earlier post, apart from the names discussed above, I am also tracking Patel Airtemps and Talwalker Better Value Fitness.
Disclaimer:
None of the details mentioned above is an indication for readers to take any action on the specific stock. These are just my ideas, facts and figures about respective company.
I am not a research analyst nor is this a research report. There is nothing written here with an intent of any material gains.
Every reader is advised to consult his/her financial advisor before taking any decision to buy/sell/hold any stock.
These, by no means, are indication of any action that can be taken by readers on any stock.
1) PI Industries:
In Q2, the company delivered numbers that were quite below the street expectations. The sales were up by 5% yoy, and net profit up by 19%. Though the entire sector delivered poor performance on account of deficient rainfall this monsoon, the experts expected PI to still deliver good numbers, as good part of their revenues comes from CSM segment, which is less affected by rainfall.
Considering the first half of FY'16, company has delivered 11% growth in sales and 21% growth in profit, which is still good compared to its peers.
Talking about poor growth in Q2, the company mentioned that CSM growth was flat during the quarter and it is likely to grow well in second half of the year, which is why they have maintained their full year guidance.
Morever, as per management, new plant as Jambusar is commissioned and will be operational in phases by the year end, and also, their plans of commercializing new molecules every year, should result in further improvement in CSM revenues.
I think, currently in terms of performance, it is probably the best company in the agro-chemical sector, considering its future outlook. It has good balance sheet as well.
Off late, promoters divested 6.4% of their holding which seemed to be taken negatively by market, however, good part was that, 50% of those shares were taken up by institutional investors.
It will be interesting to see how Q3 and Q4 pans out, as the company needs to deliver strong numbers to maintain their annual guidance.
2) Indo Count Ind:
Every reader of this blog is aware that I mostly dislike textile sector, but time and again I find a company which is worth going through. This doesn't necessarily mean that we should invest or we should not. It is just for our learning purpose and actions has to be decided by the person himself/herself, based on his/her conviction.
Even when I didn't like the sector, I discussed about Garware Wall Ropes earlier, which at that time, was looking unique to me. Till date, it has already appreciated by close to 200% since then. I was not at all expecting such appreciation, but was still in there because it attracted me a lot at that time.
Talking about Indo Count, in 2008, this company went for debt restructing and was going through tough times, and today when we search it in google, it says that stock has appreciated by 5600% in past 2 years. Quite Amazing!!! From a loss making company till 2010, it is likely to post profits in excess of 200 Cr this year. In terms of sales, from 360 Cr in 2010 it is likely to post 2000 Cr in FY'16.
However, with current valuations, it is good to see that stock has been respected by most and it is sitting pretty with market cap of more than 4k Cr today.
Considering the first of FY'16, the company has posted 36% growth in sales and close to 80% jump in net profit. The continuously growing net profit has made sure that company is still trading at 20 P/E, even after 5600% rise in price in past 2 years. Also, among all major textile players, it is best placed in terms of debt to equity ratio.
The million dollar question is will the company be able to sustain its growth and head to glory.
Rs devaluation is certainly helping them to an extent, as major part of revenues is coming from US.
3) FIEM Ind:
Fiem is probably the first company in India which introduced LED lights in two wheelers.
From there it has widened its product portfolio by entering into LED luminaires for Indoor and Outdoor applications as well as Integrated Passenger Information System (IPIS) for Railways & Buses.
Even in phase which was called slightly tough for auto and auto-ancilliary companies, it has never failed to post good growth. In Q2 again, the sales were up by 12% and profits were up by 18%. The company is continuously increasing its LED capacity which is good to see, considering the fact that there has been a good pressure from government on use of LEDs. According to management, they are expecting to close the year with 1000 Cr, which implies the sales growth of 21%. On top of it, the management is expecting it with even better margins, which is likely to keep the P/E ratio in check even after the current surge in prices. When I took the name in my last post, it was trading close to 650 Rs. Today it is already at 800 Rs. However, I won't be commenting on any price movement that has happened, or which is likely to happen.
Even if we take a look at the past, it has grown with 23% CAGR in sales and 31% in profits for past 5 years, which is quite decent.
Let's see, if company is able to sustain its growth over coming years.
http://economictimes.indiatimes.com/et-now/corporate/orderbook-full-till-2017-fiem-industries/videoshow/43796545.cms
4) Lincoln Pharma:
Another pharma company which is showing steady growth over the years. Constant growth, almost every quarter, in past few years is rare in such a small firm. It has been growing at sales CAGR of 13% and profit CAGR of 20%. In Q2, the sales were up by 20%, but profits showed slight de-growth, which is fine if they are able to recover by year end. For the first half of FY'16, the numbers are looking better. Sales are up by 35% and profits by close 30%.
Recently the R&D team of the company launched a cough syrup with brand name Namcold-DX.
It is said that normally the cough syrups are effective for 4 hrs or so. However, Namcold releases periodically, and hence it will last longer than normal syrup. This is what makes the syrup unique, and because of such uniqueness, it is expected to gain some market share going ahead.
However, predicting long term growth for any small firm is always tough, and hence it will be interesting to watch how things goes for Lincoln from here.
Not to forget, this is another case, where the stock has appreciated a lot, especially in recent times. When our last post was published, it was trading at 160 levels and today it stands at 225.
I will come up with quarterly/yearly performance details of some other companies soon. As mentioned in earlier post, apart from the names discussed above, I am also tracking Patel Airtemps and Talwalker Better Value Fitness.
Disclaimer:
None of the details mentioned above is an indication for readers to take any action on the specific stock. These are just my ideas, facts and figures about respective company.
I am not a research analyst nor is this a research report. There is nothing written here with an intent of any material gains.
Every reader is advised to consult his/her financial advisor before taking any decision to buy/sell/hold any stock.
