Portfolio update
Entered a tracking position in Suven Pharma and Route Mobile
Exited Escorts (60% return over 2 yrs) and reduced Bajaj Finserv as part of rebalancing.
Rate hikes likely to continue over the next 4-6 months hence planning to reduce allocation to rate sensitive sectors
Did any one attended Vinati AGM? pls do share notes from AGM, if possible
Did any one attended Vinati AGM? pls do share notes from AGM, if possible
There is no AVANTEL reference, i was correlating on how AVANTEL has disclosed its entry into medical devices market but MOTHERSON is doing it under the hood
There is no AVANTEL reference, i was correlating on how AVANTEL has disclosed its entry into medical devices market but MOTHERSON is doing it under the hood
The father of value investing, Benjamin Graham, famously said that in the short run, the market is like a voting machine – tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine – assessing the substance of a company.
The shares of Reliance Power closed at Rs.19.05 per share on BSE as of 14.09.2022. The stock of the company has gained 26.57% on a YTD basis in the year 2022 so far. But if we look at the 5-year return of the stock then it is down 56.85%. So, before investing we should take a look at the standalone financial position of the company.
The total income of the company stood at Rs.18,406 lakhs in FY22 as against Rs.52,212 lakh in FY21. The decrease is mainly due to one time gain of Rs.28,954 lakhs on NCD ( Non-convertible debentures) and ICD (Inter-Corporate Deposit) restructuring in FY21.
The main source of revenue for the company is by selling energy. In FY22 total revenue from the sale of energy stood at Rs.3,897 lakhs as compared to Rs.3,623 lakhs in FY21, up 7.56%. The company also earned Rs.292 lakhs from the generation-based incentive. Other non-operating income of the company stood at Rs.14,217 lakhs in FY22 as against Rs. 48,305 lakhs in FY21.
In FY22 Reliance Power reported a net loss of Rs.27,040 lakhs from its continuing operations as compared to a profit of Rs.5,534 lakhs in FY21.
The net worth of Reliance Power stood at Rs.9,17,702 lakhs in FY22 as compared to Rs.8,88,664 lakhs in FY21. During the year, the company issued 5,950 lakhs equity shares (“Equity Shares”) and 7,300 lakhs warrants convertible into equivalent number of equity shares (“Warrants”) on preferential basis, at the issue price of Rs.10 each to Rinfra, amounting to Rs.59,500 lakhs against equity shares and Rs.18,250, as amount equivalent to 25% of issue price against warrants, by conversion of its existing debt of an equivalent amount. The balance 75% on the said warrants shall be paid if and when the right attached to the warrants is exercised by Rinfra.
The current Ratio of Reliance Power stood at 0.26 in FY22 as compared to 0.23 in FY21. The ratio is much lower than the ideal ratio of 1.33. it shows that the company may face liquidity problems in near future.
Total current assets of the company stood at Rs.1,97,293 lakhs on 31.03.2022 as compared to Rs.1,82,616 lakhs on 31.03.2021. Current assets of the company include trade receivables of Rs.6,042 lakhs, cash and cash equivalents of Rs.311 lakhs, bank balances other than cash and cash equivalents of Rs.375 lakhs, short-term investments of Rs.72,403 lakhs, other financial assets of Rs.1,18,094 lakhs and other current assets of Rs.68 lakhs.
The total current liability of the company stood at Rs.7,66,025 lakhs as of 31.03.2022 as compared to Rs.7,89,206 lakhs on 31.03.2021. Current liabilities of the company include a Rupee bank loan of Rs.17,213 lakh, a working capital loan of Rs.4,156 lakh, long-term borrowings having maturity within one year of Rs 93,661 lakh, loans from subsidiaries repayable on demand of Rs.3,42,468 lakh, Inter-Corporate deposit from related parties of Rs.54,751 lakh and inter-corporate deposits from others of Rs.41,470 lakh.
The debt service coverage ratio of Reliance Power stood at 0.23 times in FY22. It means that the company may have issues in repaying its debt liabilities.
The company has reported in its annual report that it has defaulted in repayment of borrowings and Interest. The total default as of 31.03.2022 stood at Rs.93,772 lakh and the total Interest default as of 31.03.2022 is Rs.66,551 lakh.
Source:
Studied last few years AR’s using FDA as the keyword.
Inferences/Findings -
**Management's Chutzpah** (AR Commentary) : 2016- From a regulatory perspective: While our formulation facility was successfully audited by the USFDA, we have not grown complacent. We are making sizeable investments in IT infrastructure around data integrity, management and security. We are proactively strengthening our quality management capabilities to fulfill regulatory requirements. | 2017 - Compliant infrastructure: The Company cleared USFDA audits for its API, formulations and R&D units, thereby showcasing the institutionalisation of globally-best systems and processes. All our facilities – API units (at Panelav and Karkhadi) and oral solid dosage (OSD) facility (Panelav) – successfully cleared the USFDA audit, a vindication of our alignment with global best-practices and regulatory standards.**Management's learning opportunities**: 2018 - Formulation Facility (F1) at Panelav with three observations. 2020 - formulation oral solids facility in Panelav (F-1) was audited by the USFDA with four procedural observations. The F-I Facility has been subsequently classified as Voluntary Action Initiated.Harsh (@harsh.beria93 ) - What keeps you optimistic to increase your bet size even though multiple risks (and may prolong) have materialized off-late?
Source - AR’s of various Years.
Disc - No Investment as of now.