1) Ganesha Ecosphere:
After 2 flat quarters this year, we finally saw company posting good results on both revenues and profit front. In Q3, company posted 13% growth in sales and 37% jump in net profit. However, considering the overall pressure on markets, it was expected that such a result would be considered a non-event as far as price movement is concerned. There was a common observation in this quarter numbers, that if you give good results, your price will continue to be there or will see only mild negative impact on the price. However, if the posted numbers are weak, 20% downside is bare minimum that you will have lose. Obviously, it is a short term trend. Eventually, performers will be rewarded. The flatness in sales and negativity in profits for the first 2 quarters was mainly on account of major fall in crude prices over last year, because their product prices vary based on raw material cost, and crude oil is one of the major. The demand is going up by 10% annually, as per management, but if they are able to attract more customers, and improve execution, it will surely reflect on their numbers going ahead and eventually lead to better market price.
2) Somany Ceramics:
This company has been like Cera Sanitaryware, and can be considered as one of the better performing company in its sector. In sales term, it was very good to see that the company posted close to double the growth posted by Kajaria, which is considered the leader in the sector. Somany Ceramics posted 11% growth in sales and 26% growth in net profit. Time and again, government has put more and more emphasis on Swatch Bharat mission, which is likely to aid Somany Ceramics in future. Via QIP, company recently raised 120 Cr, which was mainly done to strengthen the balance sheet.
As per management, they are expecting to grow at 12% in FY'16 and then 15% in FY'17. Currently they are investing heavily in branding activities, which will strongly benefit them in long run. They are also strongly looking to expand their presence in tier II cities.
Overall, in Somany Ceramics and Cera Sanitaryware, I strongly feel that in even is subdued markets, decent growth will continue for both, especially because of their sector, where there is always a huge scope when your country is on path of becoming a developed nation.
3) Garware Wall Ropes:
Superb R&D team has led the company hit new highs in terms of their business expansion. Another company, where we saw a sudden jump in share prices, however, consolidated later on account of poor market conditions. Inspite of flat growth this quarter, the company still managed to post 43% growth in net profit yoy. The net profit for first nine months also stands at 45% over previous year, which has taken the EPS to 20.38 so far. EPS is likely to be around 25 for the year, which makes the stock cheap considering its business model, growth prospectus and other fundamentals.
Company looks good to post revenues around 850 Cr this year, and to achieve their expected target of 1000 Cr sales by 2017, if things goes well for them. More details about this company has been posted earlier on this blog.
http://www.newsvoir.com/release/garware-wall-ropes-captures-new-heights-in-the-geo-synthetics-sector-5671.html
Continue to remain positive on their business prospectus.
4) FIEM Ind:
Another strong quarter posted by the company at a time, when almost all the companies are facing challenges because of slowdown in demand. For Q3, it posted 27% growth in sales and 55% growth in net profit, which was way above expectations. The higher sales was largely because of 45 Cr which came from LED segment of the company, which used to produce meager sales till then. For first nine months, the company has registered a sales growth of 18% and net profit growth of 31%. They are likely to end the year with around 53 Cr net profit which will translate to an EPS of around 40-45, which makes the stock still trading at a P/E less than 20, for such a fundamentally sound company.
The company has setup a new plant in Ahmedabad for manufacturing of automotive lightings and plastic parts. It has started commercial production from 11th Jan 2016. Also their Rajasthan facility is undergoing expansion, which caters to LED products. In terms of their total LED bulb and LED street lights order, till Dec'15, they have not even supplied half of it yet, which speaks volumes about the scope left in this segment for them in future.
The only downside is still their heavy dependency on 2 clients, one is Honda and other is TVS. Both of them together forms about 70% of their revenues. Unless they keep on delivering quality products, I don't think even that is an issue. Overall, I still remain position on their prospectus.
5) PI Industries:
The stock after fighting so much against the overall market fall, finally gave up after company was not able to live upto the investors estimate for 2nd time in a row. In Q3, the company once again posted flat sales, but net profit was up by almost 17%. Once again, the company attributed the lower sales to deferment of payment especially in CSM segment, which is why investors were not happy as they gave the same reason for flat growth in Q2, and said that H2 for the year would be better, which didn't turn out to be in Q3 atleast. CSM segment was expected to post growth of around 20-25% this quarter, which turned out to be only 9% because of above mentioned the reason.
The company has cut its revenue guidance for the full year from 18-20% earlier to 11% now.
They have however, maintained the 18-20% guidance for the next year. The other positive being that their order book for CSM has gone up by 50% yoy, inspite of overall dull market. Their Jambusar plant phase II and phase III has been commissioned recently. Talking about negatives, slow down in domestic demand has been a huge factor. However, believing in the fact that rainfall is expected to be good this year, one might see demand coming back in domestic markets as well.
Fundamentally, still, it continues to be one of the better placed company in its sector.
6) Indo Count Ind:
Outperformance continues for the company with another strong set of numbers. The company posted 17% growth in sales and 45% growth in net profit, in a quarter where all the majors of the sector were able to post flat or negative growth. The shift in company's focus to higher margin business of home textiles has led to significant jump in company's margin, and if I am not wrong, this quarter saw the highest margin ever posted by the company. The shift will also help the company in maintaining the profit growth over next few quarters.
The company is likely to post revenues in excess of 2000 Cr for the first time and profit in excess of 200 Cr, which will turn out to be a great achievement. The company ranking recently elevated from 13th to 11th in Home Textile Supplier segment to USA. In terms of bed sheets supply to USA, they are currently among top 3. Both ROE and ROCE has continued to remain above 40% including the current year which is exceptional. If one needs to have a look at some more facts and details about the company, one can review their investor presentation in this quarter. It is highly informative.
Still remain positive as healthy growth is likely to continue.
7) Lincoln Pharma:
There were strange series of events that happened with this company after it was discussed here for the first time. The first time I took the name of this company, it was trading around 160 Rs. In few days time, I went on with the discussions of few new names with their Q2 result analysis, where Lincoln was one of them. At that time, it was trading around 225 Rs. And again in no time, it went straight upto 300 Rs. To make all the bullish buyers turn into bearish sellers, one news was enough. The news said that Tanzania banned Lincoln Pharma's bacteria fighting injection in the country. As per the management, this was one of their major revenue generator. The stock which was already dispatched was also asked to be kept on hold and destroy. Due to this their raw material and packaging material for the same had piled up in their factory and is finally going as loss to the company. The language used in putting this notice seemed to be rude, especially when it was coming from company's management.
One more thing, in the Q3 result press release, it was mentioned that "Since the revenue from different segment is less than 10% of total revenue, segment wise results are not given."
If it is so, than why they feel the ban of one injection could affect their revenues so much.
However, because of the same news, the company lost almost 50% of its market cap from highs.
When Business Line had chat with management, they informed that "The ban came due to technical and administrative reasons. There was nothing wrong with the quality of the product. The registration of this particular product was due for renewal last month. We could not do it on time. We have taken up the action for renewal. The ban is not going to affect the overall business of the company in the African region."
After all the drama ended, the company came out with spectacular numbers. The company reported 67% jump in sales and almost 150% growth in net profit. However, till then that markets started its major fall, and it remained as a non-event in terms of price changes.
It will be interesting to see how Q4 pans out. Till then, safe investors could stay away, as I think there seems to be some management concerns in the company.
Discloure:
I am not a research analyst, nor an investment advisor. Through this post, I am only putting my views, and which has nothing to do with any action that can be taken by readers on any specific company.
After 2 flat quarters this year, we finally saw company posting good results on both revenues and profit front. In Q3, company posted 13% growth in sales and 37% jump in net profit. However, considering the overall pressure on markets, it was expected that such a result would be considered a non-event as far as price movement is concerned. There was a common observation in this quarter numbers, that if you give good results, your price will continue to be there or will see only mild negative impact on the price. However, if the posted numbers are weak, 20% downside is bare minimum that you will have lose. Obviously, it is a short term trend. Eventually, performers will be rewarded. The flatness in sales and negativity in profits for the first 2 quarters was mainly on account of major fall in crude prices over last year, because their product prices vary based on raw material cost, and crude oil is one of the major. The demand is going up by 10% annually, as per management, but if they are able to attract more customers, and improve execution, it will surely reflect on their numbers going ahead and eventually lead to better market price.
2) Somany Ceramics:
This company has been like Cera Sanitaryware, and can be considered as one of the better performing company in its sector. In sales term, it was very good to see that the company posted close to double the growth posted by Kajaria, which is considered the leader in the sector. Somany Ceramics posted 11% growth in sales and 26% growth in net profit. Time and again, government has put more and more emphasis on Swatch Bharat mission, which is likely to aid Somany Ceramics in future. Via QIP, company recently raised 120 Cr, which was mainly done to strengthen the balance sheet.
As per management, they are expecting to grow at 12% in FY'16 and then 15% in FY'17. Currently they are investing heavily in branding activities, which will strongly benefit them in long run. They are also strongly looking to expand their presence in tier II cities.
Overall, in Somany Ceramics and Cera Sanitaryware, I strongly feel that in even is subdued markets, decent growth will continue for both, especially because of their sector, where there is always a huge scope when your country is on path of becoming a developed nation.
3) Garware Wall Ropes:
Superb R&D team has led the company hit new highs in terms of their business expansion. Another company, where we saw a sudden jump in share prices, however, consolidated later on account of poor market conditions. Inspite of flat growth this quarter, the company still managed to post 43% growth in net profit yoy. The net profit for first nine months also stands at 45% over previous year, which has taken the EPS to 20.38 so far. EPS is likely to be around 25 for the year, which makes the stock cheap considering its business model, growth prospectus and other fundamentals.
Company looks good to post revenues around 850 Cr this year, and to achieve their expected target of 1000 Cr sales by 2017, if things goes well for them. More details about this company has been posted earlier on this blog.
http://www.newsvoir.com/release/garware-wall-ropes-captures-new-heights-in-the-geo-synthetics-sector-5671.html
Continue to remain positive on their business prospectus.
4) FIEM Ind:
Another strong quarter posted by the company at a time, when almost all the companies are facing challenges because of slowdown in demand. For Q3, it posted 27% growth in sales and 55% growth in net profit, which was way above expectations. The higher sales was largely because of 45 Cr which came from LED segment of the company, which used to produce meager sales till then. For first nine months, the company has registered a sales growth of 18% and net profit growth of 31%. They are likely to end the year with around 53 Cr net profit which will translate to an EPS of around 40-45, which makes the stock still trading at a P/E less than 20, for such a fundamentally sound company.
The company has setup a new plant in Ahmedabad for manufacturing of automotive lightings and plastic parts. It has started commercial production from 11th Jan 2016. Also their Rajasthan facility is undergoing expansion, which caters to LED products. In terms of their total LED bulb and LED street lights order, till Dec'15, they have not even supplied half of it yet, which speaks volumes about the scope left in this segment for them in future.
The only downside is still their heavy dependency on 2 clients, one is Honda and other is TVS. Both of them together forms about 70% of their revenues. Unless they keep on delivering quality products, I don't think even that is an issue. Overall, I still remain position on their prospectus.
5) PI Industries:
The stock after fighting so much against the overall market fall, finally gave up after company was not able to live upto the investors estimate for 2nd time in a row. In Q3, the company once again posted flat sales, but net profit was up by almost 17%. Once again, the company attributed the lower sales to deferment of payment especially in CSM segment, which is why investors were not happy as they gave the same reason for flat growth in Q2, and said that H2 for the year would be better, which didn't turn out to be in Q3 atleast. CSM segment was expected to post growth of around 20-25% this quarter, which turned out to be only 9% because of above mentioned the reason.
The company has cut its revenue guidance for the full year from 18-20% earlier to 11% now.
They have however, maintained the 18-20% guidance for the next year. The other positive being that their order book for CSM has gone up by 50% yoy, inspite of overall dull market. Their Jambusar plant phase II and phase III has been commissioned recently. Talking about negatives, slow down in domestic demand has been a huge factor. However, believing in the fact that rainfall is expected to be good this year, one might see demand coming back in domestic markets as well.
Fundamentally, still, it continues to be one of the better placed company in its sector.
6) Indo Count Ind:
Outperformance continues for the company with another strong set of numbers. The company posted 17% growth in sales and 45% growth in net profit, in a quarter where all the majors of the sector were able to post flat or negative growth. The shift in company's focus to higher margin business of home textiles has led to significant jump in company's margin, and if I am not wrong, this quarter saw the highest margin ever posted by the company. The shift will also help the company in maintaining the profit growth over next few quarters.
The company is likely to post revenues in excess of 2000 Cr for the first time and profit in excess of 200 Cr, which will turn out to be a great achievement. The company ranking recently elevated from 13th to 11th in Home Textile Supplier segment to USA. In terms of bed sheets supply to USA, they are currently among top 3. Both ROE and ROCE has continued to remain above 40% including the current year which is exceptional. If one needs to have a look at some more facts and details about the company, one can review their investor presentation in this quarter. It is highly informative.
Still remain positive as healthy growth is likely to continue.
7) Lincoln Pharma:
There were strange series of events that happened with this company after it was discussed here for the first time. The first time I took the name of this company, it was trading around 160 Rs. In few days time, I went on with the discussions of few new names with their Q2 result analysis, where Lincoln was one of them. At that time, it was trading around 225 Rs. And again in no time, it went straight upto 300 Rs. To make all the bullish buyers turn into bearish sellers, one news was enough. The news said that Tanzania banned Lincoln Pharma's bacteria fighting injection in the country. As per the management, this was one of their major revenue generator. The stock which was already dispatched was also asked to be kept on hold and destroy. Due to this their raw material and packaging material for the same had piled up in their factory and is finally going as loss to the company. The language used in putting this notice seemed to be rude, especially when it was coming from company's management.
One more thing, in the Q3 result press release, it was mentioned that "Since the revenue from different segment is less than 10% of total revenue, segment wise results are not given."
If it is so, than why they feel the ban of one injection could affect their revenues so much.
However, because of the same news, the company lost almost 50% of its market cap from highs.
When Business Line had chat with management, they informed that "The ban came due to technical and administrative reasons. There was nothing wrong with the quality of the product. The registration of this particular product was due for renewal last month. We could not do it on time. We have taken up the action for renewal. The ban is not going to affect the overall business of the company in the African region."
After all the drama ended, the company came out with spectacular numbers. The company reported 67% jump in sales and almost 150% growth in net profit. However, till then that markets started its major fall, and it remained as a non-event in terms of price changes.
It will be interesting to see how Q4 pans out. Till then, safe investors could stay away, as I think there seems to be some management concerns in the company.
Discloure:
I am not a research analyst, nor an investment advisor. Through this post, I am only putting my views, and which has nothing to do with any action that can be taken by readers on any specific company.
