Just listening to June con call. Mr. Maheshwri says most states have got rid of PETs and gone in JEE route. Looks like its a permanent move, looks a bit worrying
Posts in category Value Pickr
Ramkrishna Forgings (20-09-2015)
Summary of MM Forgings AGM:
The forging capacity utilization was
around 80% in FY2015. So, the company is in the process of expanding its
forging as well as machining capacity at a cost of Rs 125 crore over
next few months. Under this capex programme, the forging capacity will
expanded to 65000 tonnes per annum. Between 2008-2015 production
capacity was increased to 46000 TPA. Existing plants has enough lands
for future capacity expansion. Growth in manufacturing sector around the
work is expected to be sluggish in 2015-16, which in turn could
adversely impact demand for forgings. However the company could mitigate
this over time with its focus on development of new parts.
Of the
73-76% share of export in sales about 10% is accounted for by South
America and balance is equally from North America and Europe. The South
American market continues to grow. The company is confident of
sustaining the Q1FY15 revenue growth and operating margin for the entire
fiscal. All the factories of the company are located in Tamil Nadu.
Power costs in this state are escalating and supply is erratic. Other
input costs such as raw material and manpower costs are also rising
steeply. The company is relentlessly focuses on bringing costs down
especially energy cost.
By connecting the plants directly to the
grid and by tying up with private sources of power, the company has
effectively eliminated its dependence on highly expensive diesel
generation sets. Only about 15% of power requirement is currently bought
from grid. Similar focus on tool costs, low cost automation are also
yielding fruits. The company is also adopting low cost procurement of
raw material both domestic and overseas. All these are facilitating
margin expansion along with better capacity utilization.
The recent weakness of the rupee would be in favour of the company
but maintaining costs down in FY2015-16 will be a tough as power costs
in TN, where all of the company's plants are located, escalate and
supply continue to be erratic.
MM Forgings Management has indicated 5-7% growth in FY16
Common theme that arise out of both these companies (RKF & MM):
1. Growth will primarily be driven by exports for both the companies.
2. Outlook remains positive as they are undergoing capacity expansion to cater to futuristic demand.
Chembond Chemicals- A Perfect Misvalued Bet (20-09-2015)
Catch the bus soon before the stock flies. Closely accumulated by Sheth family who know around 10% of the company. They had a similar exit from Sudarshan and hold major stakes in companies such as Bharat Forge, Asahi India etc. Big story in here, just keep accumulating for multibagger returns.
Ramkrishna Forgings (20-09-2015)
Summary of MM Forgings AGM:
The forging capacity utilization was around 80% in FY2015. So, the company is in the process of expanding its forging as well as machining capacity at a cost of Rs 125 crore over next few months. Under this capex programme, the forging capacity will expanded to 65000 tonnes per annum. Between 2008-2015 production capacity was increased to 46000 TPA. Existing plants has enough lands for future capacity expansion. Growth in manufacturing sector around the work is expected to be sluggish in 2015-16, which in turn could adversely impact demand for forgings. However the company could mitigate this over time with its focus on development of new parts.
Of the 73-76% share of export in sales about 10% is accounted for by South America and balance is equally from North America and Europe. The South American market continues to grow. The company is confident of sustaining the Q1FY15 revenue growth and operating margin for the entire fiscal. All the factories of the company are located in Tamil Nadu. Power costs in this state are escalating and supply is erratic. Other input costs such as raw material and manpower costs are also rising steeply. The company is relentlessly focuses on bringing costs down especially energy cost.
By connecting the plants directly to the grid and by tying up with private sources of power, the company has effectively eliminated its dependence on highly expensive diesel generation sets. Only about 15% of power requirement is currently bought from grid. Similar focus on tool costs, low cost automation are also yielding fruits. The company is also adopting low cost procurement of raw material both domestic and overseas. All these are facilitating margin expansion along with better capacity utilization.
The recent weakness of the rupee would be in favour of the company but maintaining costs down in FY2015-16 will be a tough as power costs in TN, where all of the company's plants are located, escalate and supply continue to be erratic.
MM Forgings Management has indicated 5-7% growth in FY16
Common theme that arise out of both these companies (RKF & MM):
1. Growth will primarily be driven by exports for both the companies.
2. Outlook remains positive as they are undergoing capacity expansion to cater to futuristic demand.
Varun 2020 portfolio – 2 strategies (20-09-2015)
Varun - You are right about 70 to 80 % of your portfolio similar to others, interesting aspect is buying at low values with lot of MoS. Thanks for your reworking of Aarti drugs intrinsic value
GRUH Finance – mini HDFC (20-09-2015)
The revolutionary effects of payment banks and small banks have been talked up by market commentators and tech barons.
Small banks have a tech based low cost set up plus a mandate to lend 75%of its loans to the privileged sector - below Rs 25 lakhs. As this article points out small banks will affect existing institutions which lend at a higher to this category.
This will affect Gruh, Repco HFCs and shorten their runway significantly.
Does gruh and repco have a economic moat in its experience with credit appraisals of unsalaried / privileged segment? Credit appraisal skills which will take time to develop for the new small banks?
Pls share your views.
Varun 2020 portfolio – 2 strategies (20-09-2015)
Raj - Partly agree with your view. Care earnings should rebound in second half of calendar yr and its in such a niche business with so huge an opportunity size that one cannot ignore the likes of these business. You can either get good news or good prices and we are buying it for long term and looking at what is going to happen in FY16.
Varun 2020 portfolio – 2 strategies (20-09-2015)
DBcorp and care look very interesting wrt price now, but they have poor earnings visibility till atleast fy16 end ( May be even fy17 if Capex recovery and consumer sentiment did not pick up quickly)
So even though prices are fine now to enter, yet to decide..
Bayer cropscience (20-09-2015)
Thankyou for the information. The Buyback by company at Rs 4000 speaks of confidence in business in times to come. Its a kind of stock you never want to sell.
Disc: - Invested 2 yrs back