100% agree with you
malli
disc not invested
Just putting down few random thoughts:
This isn't the 1st time that Kitex's H1 revenues are flat or less as compared to previous FY's H1 earnings.
Not the 1st time that Kitex's Q2 earnings are less than Q1 earnings. Last year too similar apprehensions were there on topline growth but mgmt. had said that they wud deliver in H2 or by last Qtr. (which I believe they did).
This year too mgmt. has come on record to say that this has always been the pattern that Q1 is not great and H2 is always better with best earnings normally being reported in Q4.
Mgmt. maybe ambitious in their targets and guidance, but at the same time we do have their previous performance which speaks for itself. They have created state of the art manufacturing unit over the years with good labour conditions etc.,. which is there to see.
Previously there were apprehensions about when would new clients be added, when would the US brand be announced etc.,. That eventually did come.
Few other points:
Earnings can’t always be linear.
We should give good mgmt. time to perform and time to nurture their business. We should allow an investment thesis to play out over a period of time.
If we have a decent mgmt. in a good business that has performed well and has good future potential
then we should give benefit of doubt in terms of delivery i.e. if what the mgmt. says will be delivered in 1 year is delivered in 2 years then still we should persevere as long as we believe that delivery will come [even if with a lag (not saying that this wait should be infinite )].
I think it is also not a bad idea to sometimes discount mgmt’s. plans in terms of time it will take for delivery of the same. Helps keep expectations (sometimes unrealistic expectations) in check.
Would we be have been asking same questions if stock price had reacted positively to same set of results/numbers? Maybe not
Why we might not have raised apprehensions if stock price would have moved up on same results? Maybe coz we like excitement as humans or as humans we always want something to keep happening, and we get that excitement or satisfaction from stock price moving up.
Why do we start asking questions or raising doubts when stock price moved down on same result/numbers? Again maybe coz we as humans always want some action. When we don’t get that action in stock price, then we start finding that action or sense of excitement by trying to find reasons into
why this happened? We try to satisfy ourselves and convince ourselves by trying to justify the so called reasons that we find.
2 years back we may have been happy with this same set of numbers. But we may not be satisfied today coz we have seen a rally in the markets in last 2 years. It becomes more difficult to accept status-quo or inaction when things around us are moving so fast.
If price action from 830 odd to 750 odd makes us think that there is something wrong in the stock, then maybe we should be putting our money to work at some other place and not stock markets. By this logic there might really be something great that might be happening in the company as we have seen price rising from 58 to 750 in last 2 yrs
In bull mkts. we start expecting the businesses also start performing in a fast forward mode (which doesn’t happen overnight, it takes time), which is not fair.
Above are just my thoughts (not sure if they make sense as I am not good at expressing/explaining my thoughts n the best possible way) with all due respect to other people’s views.
Discl: Invested and maybe biased.
Regards.
http://www.livemint.com/Companies/dLNBmSeNsOrnYgTmk8lcRJ/Satin-Creditcare-looks-to-raise-funds.html
Seems there is good demand for quality MFI in the investor community due to huge opp size ,v little NPAs inspite of lending without collateral and quality professionally qualified management a CA Mr HP Singh in case.The recent run up has also been v sharp
Few extracts from above new item
“We have shared our mandate with one fresh venture capital investor and
one existing investor. A larger portion of the equity is likely to come
from fresh investors by February next year. Also, the tier II capital
will be in place by December this year,” said Vivek Tiwari, chief
operating officer, Satin Creditcare.
Existing investors in the company include Danish Microfinance Partners,
Microvest Capital Management, SBI Ven Capital and Shorecap. In 2013, Lok
Capital had sold its stake in Satin Creditcare.
The company has raised Rs.1,500 crore debt this fiscal year and in the next six months, would bring in Rs.2,300 crore through various banks. “The fresh funds would help us tap a 70%
growth in business and cross Rs 5,000 crore gross loan portfolio by next
year,” Tiwari said.
After the Reserve Bank of India granted small finance bank licences
to eight MFIs, the industry hopes the funding scenario would improve,
not just through banks but also the debt markets.
“The sector looks very promising now and is over the hump with strong
reinforcement and governance abilities. It’s not that investors are
suddenly chasing nor are they pulling out. From an equity point of view,
there seem to be more of private equity investor interests than venture
capitalists,” said Kshama Fernandes, chief executive of IFMR Capital,
which acts as structurer, arranger and investor for companies that lend
to the financially excluded.
But why the leader of pack SKS Microfinance falling like a brick inspite of giving stellar results ?
How come the NPAs are so less inspite of lending without collateral?Views invited.
Discl- As disclosed earlier recently invested @ 223
cotton prices didnt go down yesterday to 6 year lows...or last qtr...the price is near low 60's for last 5 qtrs barring intermittent small rebounds...Price action in stock suggests something wrong with the company..
Discl:Not invested..
Eros Tanks as Wells Fargo Analyst Questions Company Metrics
Alex Sherman
October 24, 2015 — 3:33 AM SGT Updated on October 24, 2015 — 4:44 AM SGT
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Shares have retreated more than 54 percent since Oct. 12
Twitter user claims United Arab Emirates sales are fraudulent
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Eros International Plc fell for a fifth straight day after analysts at Wells Fargo & Co. said they weren’t satisfied by answers the Bollywood film producer and distributor gave investors on a call held Friday to combat accusations of fraud posted on Twitter.
Eros slid 17 percent to $14.65 at the close in New York, bringing its loss for the week to 45 percent. Wells Fargo analyst Eric Katz cut his rating on the shares to market perform, saying he wasn’t comfortable with explanations about the company’s growing business in the United Arab Emirates. Eros, based in Secaucus, New Jersey, distributes Indian-made films.
“We still don’t know the largest content buyers driving this increase, and we aren’t fully comfortable with the fact nearly half of the revenue originates outside of India,” Katz wrote in a note.
Eros management spoke with analysts on Friday in an attempt to assuage fears that a spike in revenue booked in the UAE was fraudulent. A Twitter user called Market Farce, whose profile reads, “Focused on uncovering farcical, fraudulent and dishonest financial market activity,” has claimed UAE sales aren’t legitimate and has questioned the company’s ErosNow registered users.
Eros wouldn’t disclose the counterparties driving the UAE sales, citing contract confidentiality.
“We are not going to comment on an unknown person who hides behind an alias on social media to make ridiculous and outrageous accusations,” said Whit Clay, an outside spokesman for Eros.
The stock has been sinking since mid-October, when Market Farce, who declined to reveal his identity when reached by Bloomberg, began Tweeting about Eros.
Eros reported fiscal 2015 UAE revenue of $103.8 million, up from $45.6 million in 2014 and $14.5 million in 2013. The sales are based on a customer’s domiciled location, according to a company filing. Market Farce claimed on Twitter the company boosted UAE sales in quarters when “their movies don’t work.” Eros produces, acquires and distributes Indian language films and has a market capitalization of $843 million.
The company has 30.5 million registered users for Eros Now, its Netflix Inc.-like product that streams Bollywood movies and music, according to a person familiar with the matter. The company hasn’t disclosed how may of these users pay for the service or how many are monthly active users.
“We’re still feeling uncertain about the ErosNow user count,” Katz wrote. “Public websites that track app downloads (i.e. App Annie) show relatively low rankings for ErosNow vs. other Indian streaming services with lower user counts. We can’t reconcile the disparity and it’s a red flag for investors.”
Wells Fargo dropped its price target on Eros to between $20 and $22 per share from $48 to $50. Shares have fallen more than 54 percent since Oct. 12.
Analyst Tim Nollen at Macquarie Research said the shares were oversold for “no good reason.” In a note, Nollen said he spoke with Eros executives “who say nothing has changed and nothing is amiss.”
The company has been in talks with Singapore-based Fullerton Fund Management Co. on a deal that would value Eros Now at as much as $800 million, people familiar with the matter said in July. Those talks are still ongoing and a deal could be announced this month, one of the people said.
Birla fund stated above is an ultra short term debt fund and not an equity fund.
On another note stock split from FV 10 to FV 2 has been approved. This news has been given to exchanges but results have not been notified.
A related party transaction has also been approved where ITFL has bought some property from Celebrity Fashions. Somehow I have never been fond if these 3 words 'Related Party Transactuons' ; awaiting details on this front.
Regards.
AR 2015: Surplus cash has been deployed in liquid funds and one Birla Sun Life Savings Fund - Growth, which is an equity fund. One one side, the company is looking to expand operations, made QIP issue, lowered down their debts and on other side, they invest (or may be trade) in equity MFs. Does not look good IMO.
Has anyone questioned the management on this?
Yes, good set of numbers indeed.
Below are the concall details:
Date: 26 October 2015, Monday
Time: 2:30 PM
Dial-in Numbers: 022-39600659 / 022-67465959
Hosted by: Dr. Omkar Herlekar
Disclosure: Invested
I would have assumed that normally these are long term contracts and pricing would be known significantly earlier. In which case, management should have factored that into guidance.
I am not even sure why they shoot themselves in the foot with this guidance business. They are not obliged to.
The misplaced guidance is doing more harm than good. If you look at the numbers without the context of a hyped up guidance, they are pretty decent.
But that is the crux of the issue - is there an increasing disconnect with ground realities? Is the management entering hubris zone?
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