Q3 FY'16 Result Updates Continued...

1) Camlin Fine Sciences:
This is one company which is placed in a sweet spot because of its great product pipeline, where they find hardly any competition in India, as well as not much competition globally. In spite of such position, the numbers this year has not been up to the mark. All the 3 quarters have seen de-growth in sales, which is tough to believe.
On the positive side, the company has setup a new plant in Dahej, which is likely to boost their sales further as per management. It is expected to operational by FY'19. On the other hand, the company has acquired 65% stake in Mexican company for 53 Cr. The company manufactures specialty intermediate chemicals for feed and food manufacturers, pet food manufacturers and industrial customers.
It will be important to see how these 2 things pans out for the performance of the company in future, as it seems that there is no value unlocking left at this price. However, with company looking to expand in different geographies, there might be a scope for better performance in future and accordingly the price should move. Till then, I continue to remain neutral on it and hope for a better FY'17 in terms of numbers posted by the company.

2) Gulshan Polyols:
After a series of good quarters by the company, we finally saw a poor performance. For the first time in past 2 years or may be more, the company has posted a de-growth in sales for the quarter ending Dec'15. Even in the press release, there is nothing specific about the poor show in sales, but it seems that the overall poor environmental conditions in India could be one of the reason.
On completion of first 9 months, the growth still looks decent with 6% growth in topline and 18% in bottomline. After making a high of 450, the stock has now again started trading below 10 P/E, may be triggered by poor quarterly results.
Overall it still looks better poised for good performance going ahead, based on the updates that were posted here earlier.

3) Plastiblends Ind:
The results might not look the best, but the potential is certainly there. Currently the company exports to 60 different countries, and exports form around 35% of their total revenues. The company is likely to end the year with flat sales around 500 Cr, but the profit has improved by more than 20% over last year.
The company has setup a 4th plant in Kolkata with 66 million pounds capacity to cater to increasing demand in eastern India, which should be operational around Dec'16. Also, its 3rd plant in Surat is about commence operations in next 2-3 months.
Since the inception of discussion on this blog, it had already grew more than 4 times to make a high of about 520, and then on account of overall market conditions, it has consolidated a bit.
For longer term perspective though, it seems that numbers will improve going forward.

4) TCPL Packaging:
So far so good for the company. They have been able to post consistently strong numbers and the same has reflected in their price. It was discussed here 1.5 years back, around Jun'14, when it trading around 100 Rs. It made a high of 700 Rs, which implies staggering growth of investors money in very short period of time. On top of good growth in sales, the company has managed to post a significant jump in net profit over past 6 quarters which has led to such appreciation.
So far in FY'16, the company has showed 18% growth in sales and 23% growth in net profit.
The company's approach towards growth and modernization is quite evident here:
http://www.indianprinterpublisher.com/news/Significant_investment_at_5053.html

5) Steel Strip Wheels:
It is purely a case of one big negative holding all the positives back. The numbers have been fabulous even this year from the company. On top of it, the promoter buying from open market and one of the Korea's largest company in its sector investing in the company at 640 Rs per share are huge positives, though it seems to be completely ignored by the investors.
The biggest problem continues to be their debt levels, which is way too high but it is noticeable that Debt to Equity ratio has improved a lot in past 3 years. For the first nine months ended Dec'15, the company has posted flat sales growth of 2%, but a huge profit growth of 55%, which speaks volumes about company's increasing efficiency. Flat sales is mainly because of general slowdown in demand, but if one goes through the company's filings in last 2-3 months, we can see company has won significant amount of orders from various companies and countries, which should help them sustain growth in future.
If one asks for my opinion on this, I would say, patience and debt management is the key here.

6) Control Print:
Repeatedly giving good performance across the year has finally paid the investors of Control Print, a great return over their investment in past 9 months. On top of it, such a small company giving bonus shares, added fuel to fire, which escalated the stock prices. However, because of overall market falling severely, good consolidation was seen off-late. Such a small company consistently posting 20% net profit margins is a huge achievement. For the first nine months, company has posted 20% sales growth and 26% profit growth.
Company has consistently paid good dividends and have maintained almost debt free status so far.
Overall, the business prospectus looks positive.

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.

Q3 FY'16 Result Updates

First of all, let me clarify that whatever views that I post here are my personal views on quarterly results posted by the company.
Please speak to your financial advisor before taking any actions on any of the below mentioned names.

The views on result expressed below are mostly about company's performance rather than evaluating whether the company's price is fair or not.

1) Ajanta Pharma:
Another strong set of numbers by Ajanta Pharma. The price movement before the quarter indicated that most investors are under impression that their Africa revenues would be affected by slowdown in their currency. However, company duly informed that all the transactions in african countries are happening in USD, as far as what I understood. The same thing got reflected in their results, with revenue growth in african countries turned out to be 40% (probably the best among their geography :)). This could be one of the reason why the price didnt fell much in last week carnage in stock markets. Not sure about that though!!! However, in our discussion here, we are least concerned about stock price movements. In terms of growth yoy, company showed 16% jump in sales and 20% jump in net profit.
Net margins continue to remain near 25%, which is great. The company in their filing has also mentioned that their new facility at Dahej has started taking regulatory filing batches, and the company has started contruction of their new plant at Guwahati, which is expected to be operational by March next year.
All in all, I am still positive about the company and their growth story.

2) Granules India:
Good set of numbers by the company, as net sales were up 8% and profit was up by 15%. The company mentioned that some of their product's pricing is directly linked to raw material prices. Hence with falling crude, they were able to post sales growth of only 8%. The good thing that margins have continued to impress over past 6-7 quarters, and management is still confident of improving it further. The management is expecting 15% revenue growth in Q4, and 15-20% growth in FY'17 over FY'16. If these numbers are delivered and that too, with further improvement in margins, it could be great for the company. The net profit by the next year, could very well be above 150 Crs.
One more positive news came in for the company, which stated that company will start trading in F&O segment from 26th Feb. We can see even more participation from FIIs then. Not sure of its impact on price, especially in current circumstances. :)

3) DHFL & Can Fin Homes:
The overall finance sector has been under tremendous pressure, and most of the companies have been affected because of that. Still, in my opinion, both DHFL and Can Fin Homes continue to look good based on their strong numbers. When discussed here for the first time, DHFL was already a midcap name and Can Fin Homes was small cap co then. Considering that, it was expected that Can Fin Homes is likely to give more returns if conditions are favorable. That was exactly what happened. Now since both are decent size companies, they are expected to follow the market trend in terms of price movement, but their performance is likely to be good, and likely to be better than some of the peers in the sector.
However, considering the current scenario, it is advisable that you take inputs from a finance expert before taking any decisions on these two names, as my knowledge in finance sector is limited.

4) Suven Life Sciences:
This company can be considered as one, where we had plenty of expectations and which has disappointed big time, since past few quarters. Obviously, when we started discussion, it was trading cheaply at 24 Rs. Since then the returns may be good, but their performance off-late has not been upto the mark, and which has reflected in their market cap reducing almost 40% from the highs.
However, they are in business, where their successful research turning to commercial returns could take a bit of time, and hence one has to show patience, if one wants to remain invested here. Lots of commercialization of their products is likely in next 2-3 years.
One can refer to the investor presentation published by the company which is quite elaborative:
http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/B31E1ECC_932E_434A_9C79_EB18ACAD11FF_115122.pdf
The decision in this company can be taken based ones own conviction, as the numbers in this company is not as predictable as may be something like Ajanta Pharma.

5) Cera Sanitaryware:
The company even in the worst of times, is still able to post more than 10% growth in sales, which is commendable. The revenues this quarter were up by 12% and net profit up by almost 25%. The company has attributed the current slump in demand, as a reason of posting lesser growth, as they had guided for 20-25% revenue growth for FY'16, which doesn't seem to be happening after the end of first 3 quarters. The company as usual, gets good amount of government orders in Mar quarters, which is likely to aid growth this time also, as per management. On top of it, their recent acquistion of Anjani Tiles, is about the commence production in middle of march, which will aid some growth for the next year. Till then, it seem, we have to wait for improvement in macros, for company to get back to their historical growth every quarter.
Again, it can be considered as a conviction bet, especially in current circumstances. If one believes, that schemes like housing for all, and few others will succeed, then it will definetely lead to better performance from this sanitaryware giant.

6) Dhanuka Agritech:
Finally, some respite for this agri company, as after 2-3 very flat quarters due to monsoon deficiency, it has finally got back to growth days. Revenues this quarter were up by 15% and net profit was up by 3%. The environmental conditions in India has kept the company's growth in check this year, but still they were able to post decent growth this quarter.
Once we have a good monsoon, the company would be one of the bigger beneficiaries.
The company's 4th facility at Keshwana, Rajasthan is expected to be operational very soon.
Their distributor network has more than doubled in past 8-9 years, which is good to see.
The company operates in one of the better sub-sector in agro-chemical space, which is plant protection, where the consumption is still lowest in India as compared to other countries. We all are aware of how much crop is destroyed by Insects, Fungus and Weeds every year.
All in all, it seems the company has very high capability of delivering good numbers! Let's hope for some respite from rain gods this time!!!

More result updates to follow!!

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.
 

How Important Is Knowing Your Risk Apetite?

Off-late, we have seen tremendous amount of volatility in markets, and people have started wandering where they should put their money. Ofcourse, I am not authorized to guide you on where should you put your money, but I am just presenting my views on overall scenario at present.

The Repeated Market Behavior:
               Time and again, we face situations where markets starts behaving violently in series of global events, which triggers fear among many investors including the large institutional investors. However, they as an investor or trader, have full time job in market, and they will definitely find a way of making profit even out of the worst scenarios, may be few of them!!!
However, we as small investors, have lesser choices, and we mostly prefer deploying our money in equities, and that too, mostly as medium/long term investor, rather than being a trader. We go by this method, as we are not able to spend enough time in market activities, and be a full time trader.

This probably can prove to be the biggest boon for us, if we are in long term bull market, and similar could prove to be worst of curse in longer term bear market. Hence, we need to understand what we are capable of, and then take our actions.

The Concept Of Risk vs Reward:
              I, as an investor has followed one policy from the beginning and that is, I will invest only that amount in equities, which I can afford to lose. So, in circumstances, where I see a risk worth taking, I don't mind going ahead with it. Simple example being, that after buying Granules India some 3.5 years back at 18 Rs (adj), it went down to 9 Rs (adj) within 3-6 months, where it became highly risky and people were hesitent in buying the same. However, I had some risk apetite and I utilized the dip to buy more, because I was ready to lose my money. if anything goes severely wrong from there. Now after 3 successful years for the company, we know it is not the same company it used to be then, in the eyes of investors today. Obviously, that can change anytime based on future performance.
This may not be true for every company and the policy might not be the same for everyone.
I have seen people investing in markets with a sole purpose of earning few extra bucks, even at the cost of risking the much needed money in hand.
Thirdly, there are also people who are relatively safe players and not ready to take risk in smaller companies even if they like their fundamentals.

The theory says that the amount of risk that you are ready to take is, most of the times, directly proportional to the reward you are expecting to get out of your investment. That happens because of the fact that reward is generally more in micro to small caps where value unlocking is pending, and we invest in those names considering the possible bright future of the company based on our conviction. Now, that can lead us either ways. In good scenario, the company will outperform consistenly and slowly move on path of transforming from small -> mid -> mega, whereas, in some bad scenarios, the company might not be able to sustain in highly competitive market, and finally investors might lose their hard earned wealth. Any stock which was discussed earlier on this blog with market capitalization of less than 1000 Cr can be considered in this category.

On the other hand, most of the companies, which has strong presence in markets, and are growing at 20-25% CAGR, which is also likely to continue for next few years, because of the growth visibility in the respective companies, are most of the times faily valued, and one can expect mediocre returns out of it, if market is stable/good. The good thing here is that in case there is a major downfall in overall market, the downside risk is limited in such companies, atleast less risky than some of the small cap companies. For e.g. companies like PI Ind, Ajanta Pharma etc today.

The Best Facing The Worst:
        Obviously, the scenarios mentioned above are not considering any major postive or negative news flow, which can drive stocks to any levels. The examples of worst being happening to some of the best names can be seen in case of Kitex Garments and Marksans Pharma off-late. There may be more names, but these are the ones I am aware. In bear market, investors/traders are looking for that one trigger which could lead to heavy downside in any company with any sort of fundamentals they have or had before the trigger.
Both the companies has lost more than 50% from their highs on account of different reasons.
Kitex was once considered a model company, and people used to study its details for good understanding of a fundamentally strong company. However, now every body seems to be off-loading their stakes in the company, as many people have found corporate governance issue, many have found results to be very poor, and few have some issues with Balance sheet.
In Q1, company said that their order book is full for the year, and they are not going to take any more orders for this year and they are expecting about 600-650 Cr revenue in FY'16. However, after Q3 results, it is highly unlikely that company will be able to reach those numbers.
Conference call with the management will be very interesting this time.
In case of Marksans Pharma, everything was going buttery smooth, until there was a news on Economic Times which stated that "Marksans Pharma Goa plant get notification of deficiency in GMP from UK MHRA. 40% of Marksans Pharma revenue comes from UK."
As per the clarification from management, it seems those were minor observations, and company has responded to those observations in time. They also mentioned that their supplies to UK has been continuing, as of now.
Now, there is either a disappointment because management was not prompt in reporting the same to SEBI as and when the observation were informed to them, or there is something unexpected coming out from company sooner, which few insiders may be aware off. Lets see what happens in coming days now.

These sort of things are quite common in markets from time to time, and hence I used to mention, again and again, that distributing your money in various companies is the way to go and not lay all your eggs in one basket. Sometimes, it takes only one quarter for a company to become fundamentally weak from being fundamentally strong in the eyes of investors.

The Zero Risk Investment:
             If you are a highly safe player and are looking for zero risk investments, then also we have options in equity markets called Liquid Bees. It is an Exchange Trade Fund (ETF) by Goldman Sachs. The price of single unit of this fund is 1000 Rs (face value), which will not change. The only way to earn is by getting dividend which is calculated on daily basis and deposited to your account on monthly basis. If I am not wrong, you will not get dividend in form of cash in your account, but as new units of same fund. One can check internet for more details on the same.

The Final Word:
                The conclusion out of all these would be to first figure out your risk apetite in the market. If you are looking to take risk, then always assume as if we are not that far from dooms day and then decide what is the amout that you are still ready to invest (ofcourse if you want your lost wealth to not affect your health :) ). If you are a long term investor and want to play relatively safe, then you can look at some of the decent companies, with good history, good management, good balance sheet, and good growth visibility.
For poeple who are new to markets, it is always advisable that you first be aware of all the basics and history about market & its behavior and then invest your money wisely into the same.
The most important thing, especially for new investors, is to make sure that you are not investing in markets only to earn, but to learn and invest in good companies, which you can be proud off. Earnings will definitely follow, sooner or later.
All the best!!!

These are solely my views and I will add more to this later.

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.
 

Q2 Result Updates

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.

Updates

Its been long since I posted anything on this blog, primarily due to busy personal schedule. Hearty apologies for that as I too miss readers company on this blog. Some of you have been very helpful in providing me with the valuable details and others have given me motivation to go ahead with this blog, irrespective of any material gains.

Off-late, I have had some free time and hence I thought I would put something on the blog, so that discussion can proceed as earlier, which might enhance our involvement in individual companies with some numerical as well as factual data.

As you all might be aware, the new SEBI rule doesn't allow any individual to recommend a buy/sell/hold call on specific stock or on overall markets, without being registered as Research Analyst certified by SEBI. The rule is definitely for the betterment of common people, and there is no point on being against the rule.
Since I am not a research analyst, nor an investment advisor, I wont be giving any specific call of buy/sell/hold on any company. I am only an investor in Indian Markets and expressing my opinion based on my limited knowledge. My comments on any company should not be taken as recommendation. It will only be my persoanl views. Each reader is requested to do his/her analysis, and consult their financial advisor before taking any decision.

We will only use this blog as a medium to discuss the companies that I or you, think, is having a possible bright future or even just for knowledge purpose.

At the onset, let us revisit all the stocks that have been discussed so far on this blog in present scenario:

1) Ajanta Pharma:
The company continues to outperform, with its sales and profit growth over the years, and last few quarters has not been an exception to that. The stock price has been under pressure for last few months, but that short term behavior hardly matters, when business is growing so well.
The stock has already gone up close to 13 times since we started discussing it, even at current price.
Looking at financials of the company, I am still positive, and with 2 new plants close to commencing operations, I think the growth rate might continue at same pace.
The company's operation efficiency is improving with every quarter. The net profit margins are nowadays close to 25.
Apart from good CAGR in sales and profit, other performance ratios like ROE, ROCE, D/E are also looking great for the company.

2) Granules India:
There has been so much buzz about this company nowadays, that now I dont think, I need to post any details about company's result or other financials, to prove how well, the company is growing.
Almost all the research house are coming up with the positive report on Granules India.
Earlier, there used to be times, when I had to fight many people on this blog to prove that Granules India will be doing good in future with their agrresive expansion plans and improvement in operational effiency. I feel the company has proved me right as far as last few results are concerned; otherwise as you all are aware, nobody can predict the future. :)

3) Ricoh India:
This company is on a dream run, and its performance over past few quarters have justified such a run up. The stock has already gone up by 20 times from the date it was first discussed on this blog.
Still positive on the company's performance in the long run if things go on as expected by management here:
http://www.thehindu.com/business/Industry/ricoh-india-bets-on-it-services-to-sustain-growth/article7689846.ece
http://www.business-standard.com/article/companies/ricoh-india-aims-to-quadruple-revenues-by-end-of-fy17-115042000967_1.html

4) Dewan Housing Finance:
This is still one of my favorite company as far as housing finance names are concerned.
The results have been good over the years, and as I said earlier also, if Prime Minister's vision of Housing For All by 2022, comes true, then this company should benefit.
We started discussing the stock here when it was trading at 158 Rs (unadj), which implies a price of 79 Rs as of today, after 1:1 bonus declared by the company.
In my views, the company should perform well in coming quarters/years, however, one's own conviction is very important in this sector.

5) Can Fin Homes:
When we started discussing this company here, very few people were aware of this name. However, their past growth and quick expansion were too attractive at that time for me to post my views on it. The stock was languishing at price of 140 or so at that time.
However, based on its continuous positive performance, it has caught attention of many investors by now and the stock was accordingly rewarded.
At current price, I would remain neutral on it.

6) Suven Life Sciences:
Fundamentally a good company, but, the it has not been able to deliver as far as results are concerned for past many quarters now. However, management is quite hopeful of resumption of growth from next year. Off-late, they have got plenty of product patents in various countries as well as many of their molecules going for clinical trials in US.
All these should contribute to revenues sooner or later. The company is mostly into high margin CRAMS business, which is why all the ratios based on returns are looking awesome.
If we look at it with a longer term perspective, the company is not very expensive even at these escalated levels. Once growth returns, the P/E should come down considering current market price.

7) Gulshan Polyols:
When we started discussing the stock here, it was a case of sheer undervaluation. The stock was trading around 75 Rs with a P/E of close 2. Generally, those kind of valuations are seen in companies with some or the other fundamental issue like high debt and other. However, that also was not the case with Gulshan Polyols.
Today it is trading aroung 420 Rs, but still, if we consider P/E ratio, it is still close to 10.
Strong set of clients, and introduction into grain base liquor business, still keeps me positive about the company's performance in longer term. Plenty of other details about this company can be found by using Search functionality on this blog.

8) Cera Sanitaryware:
Close to 4 times from the day we started discussing it, but still, has fallen almost 40% from its high in recent times on the back of assumptions that the company is not able to grow as expected. The minor hiccups on the upside and downside, are part and parcel of life for any country or company for that matter. So is the case with Cera. Off-late, they have not posted growth as it used to post earlier, and also the management has reduced the growth guidance for FY16 from 25% earlier to 20% now.
Even with the modest growth right now, the company is able to grow in all segments which is good to see. The company has recently entered into a joint venture agreement with Anjani Tiles for setting up a plant to manufacture high-quality ceramic vertified tiles, in Andhra Pradesh. The company  has also decided to open offices in Dubai in order to increase exports to West Asian countries.
Overall, I still feel there is plenty of scope for the company to grow at a pace it was growing earlier, and with increased government initiaitves for Swatch Bharat, it seems possible in future.

9) Camlin Fine Sciences:
Nothing more to add as of now, from the earlier discussion that we had on this counter. It has already grown close to 10 times from the day, we started discussion here. One can rely on his/her analysis here, by referring to the facts on this blog, if required.

10) TCPL Packaging:
This company certainly has delivered much more than what I expected of it, in the original post. The results have been above expectations in past 2-3 quarters. The execution is also improving which can be seen through improved margins for the company. The net margins are above 6 now, from 2-3 levels in 2014. It seems the company is likely to sustain those margin levels and accordingly the stock has been rewarded.
The stock is already 6 times since we started discussing here.

11) Steel Strip Wheels:
We started discussion on this when it was trading around 290 levels. The stock has not got appreciated a lot from there, however, in terms of performance, I feel there is tremendous growth potential is this company. They have been receiving plenty of orders, and on top of it, the execution has improved, which is reflected in net profit growth every quarter. The net profit growth has been in the range from 50%-200% yoy for the past 4 quarters, which is very good to see.
The promoters are also aggressively buying in this counter as of now.
Hoping to see even better results in coming quarters.

12) Control Print:
Again, not much to add as of now from our earlier discussion. It has appreciated a lot in recent past, because of consistently good numbers. Management is also very good. Already we have seen dividend coming twice this year, and on top of it, recently, the management has declared Bonus share in the ratio of 1:2. Good to see the management of such a small company looking to share the profits.

13) Somany Ceramics:
Views same as for Cera Sanitaryware

14) Garware Wall Ropes:
Another company like TCPL Packaging which has surprised one and all, with its performance in terms of sales as well as profits.
I am still positive about their business prospectus. Here are some of the links which enforces me to think so:
http://www.thehindubusinessline.com/economy/agri-business/garwarewall-ropes-bets-big-on-protected-farming-aquaculture/article7444111.ece
http://www.financialexpress.com/article/companies/garware-wall-ropes-conferred-with-the-top-exporter-award-by-the-plastics-export-promotion-council/153540/
http://www.business-standard.com/article/companies/garware-wall-ropes-eyes-rs-1000-crore-business-by-2017-115061500585_1.html


It can be assumed that I have either stopped tracking or not deeply into the names which might have been discussed earlier on this blog, but is not seen in the list above.

Currently, the stocks I am studying are PI Ind, Talwalker Better Value Fitness, Indo Count Ind, Patel Airtemps, FIEM Ind and Lincoln Pharma.

I repeat, the above mentioned details, are just my views on the specific companies, and they by no means, imply any sort of recommendation of buy/sell/hold.
Each reader has to take their own decision by analyzing themselves or by consulting a private financial advisor.
 

Temporary Closure Of This Blog

Hello Readers,

On account of other personal commitments, I am not able to spend enough time in stock markets nowadays. In such cases, it would not be ethical if I am post something without enough study, which could misguide readers.
Hence it would be better if I stop putting in new ideas. We have already seen that happening with last post on this blog, where I missed many angles which could prove negative for the stock.
Off-late, one also might have observed that I am not able to answer queries of many readers.

It was a wonderful journey so far, and thanks for all your support. Each of your queries led to further increase in my knowledge. Special thanks to totalview, who was almost a co-owner of this blog, with his highly clever viewpoints.

Going ahead, if I am in a situation, where I have enough time to spare, I will surely do that again.

Thanks once again!!!! 

Gujarat Foils - Will Patience Pay Someday?

Gujarat Foils Ltd. is a part of the $7 Billion company, Topworth Group, and is the third largest manufacturer of aluminium foils and sheets in India. The company covers the entire range of products from thin gauge sheets and coils for closure stock used in the Brewery and Pharmaceutical Sectors to bare foils like Fin stock for heat exchanger fins, tagger and lidding foil for the Food & Beverage Sector, as well as consumer house foil.
From an installed capacity of 3400 TPA for sheet/coil in 1992, the company has reached a capacity of 12600 TPA today.

The company's manufacturing plant is located at GIDC, Chhatral, Kalol, Gandhinagar, Gujarat and manufactures aluminium rolled products (Sheet & Foil). The total plot area of this plant is 20,000 sq. mtrs. that includes a 9,000 sq. mtrs. built-up area within for sheds, office buildings, canteens and quarters.
The company also has 20,000 sq. mtrs. of land in Kutch area for a wind mill, and 100,000 sq. mtrs. of land near Dist. Viramgam reserved for future expansions.

As per the annual report, Consumer Products Business division has shown very good growth. Nutriwrap as a brand has strengthened itself among the top brands with national footprint. The division has maximised growth vide improvements in distribution penetration across town classes. Product portfolio has been enhanced. The base building work done provides a good platform for performance in the immediate future.
Aluminium is going through a difficult phase, globally. But, the aluminium market in India is still growing at a rate of 9 to 10% over the last five years and it is going to remain so in the near future.

The biggest positive is that  the Indian pharma companies, with the faster commercialization of product filings due to Generic Drug User Fee Act implementation, will be able to launch their products quickly as a result of shorter approval time. With this, Indian pharma companies will be pushing their products aggressively in regulated markets. With this aggressive approach, pharma industry is expected to do much better than anticipated resulting in further improvement in prospects of pharma packaging industry.

Here is the list of Company's Pharma Cleints:
1. Lupin
2. Sun Pharma
3. Macleods
4. Aurobindo
5. Cadila Pharma
6. Inventia/ Pharose Remedies
7. Impactlabs
8. Anglo French
9. Hetero Drugs
10. Zydus Cadila
11. Ipcalabs
12. Torrent Pharma
13. Ajanta Pharma
14. Granules India
15. Fourts India
16. Caplin Point
17. Alkem Laboratories

Major Risks:
1) Company is currently having very high debt, due to nature of business. The Debt:Equity is more than 2. However, the good thing is that, the debt has not increased for past 3 years. Also, the credit rating agency CARE has been continuously revising its bank facilities as the company's performance has kept on improving.
Here is the latest revision on Mar 11:
http://www.indian-commodity.com/corporate/care-revises-ratings-of-gujarat-foils-bank-facilities.aspx

2) With the Foil Industry showing signs of growth, number of new entrants are already there and more will be further coming in this sector. Cheap import from China after withdrawal of anti dumping duty resulting in cost competition in the Indian Market.

3) Due to the nature of business, and high capital requirement, the company is not paying any dividend in spite of making decent profits.

Talking about numbers, for the nine months ended Dec'14, the company has shown growth of 24% in sales and 33% growth in net profit, The company is likely to end the year with annual EPS of around 14, which means the stock is currently trading at a P/E ratio of less than 5. However, the above mentioned risk factors has been somewhere responsible for such valuations.
CAGR for last 5 years in sales has been 42% and about 101% in net profit which is an incredible achievement in such industry. It is also very tough to maintain good operating cash flow in such businesses. However, if one checks the data for past 2 years, it has been excellent.

Overall, the only questions remains, is that whether the strong numbers will overcome the risk factors in long term? If yes, then we could see a very strong re-rating in the counter, as the market cap of the company is still  a meager 50 Cr, for a company which is likely to post close to 500 Cr sales this year.
Keeping a belief in fundamentals along with good management, I am positive on company's future.
However, it is advisable that readers goes through all the details and take his/her own decision based on his/her risk profile, or if required, also after consulting finance expert.