I think you meant 'pledged shares will be REVOKED' and 'it will be risky if INR APPRECIATES'
Just correcting so that somebody else doesn't misread it.
Rgds,
HR.
I think you meant 'pledged shares will be REVOKED' and 'it will be risky if INR APPRECIATES'
Just correcting so that somebody else doesn't misread it.
Rgds,
HR.
Nikhil nim is function of leverage , spread is not.
let me explain if comp has 100 Rs. as capital and 400 Rs. of debt and has advances of 500 Rs. lets assume cost of funds at 8% and yield at 10% so spread is 2%
nim in Rs. will be (500*10%) - (400*8%) = 18 Rs.
nim as % of advances will be 18/400 = 4.5%
now if they have lower leverage say instead of 400Rs. debt 350 Rs and capital of 150 Rs.
(assuming same cost of fund and yield)
nim will be (500*10%) -(350*8%) = 22 Rs.
nim in % will be 22/350 = 6.2%
@nikrod12 , pls help with the following -
If a bank earns say 7% on its tier 1 capital lent to the govt. , does no other borrowing and lending, what is the NIM in this case? (7%?)
Just to clarify NIM is not function of leverage. NIM is function of cost of funds and yield you generate on assets.
Leverage is how much assets/loans you give out on your capital base. Increasing/decreasing amount of loans will not have any effect on NIM.
And yes ROA is most important measure to judge performance of financials.
I have recently entered Cupid Ltd. Very small portion of the portfolio, may increase with my conviction. I have no fresh cash, so these are just portfolio adjustments.
I have explained in a small post the rationale behind the entry. I think, we have enough revenue visibility for next 2 years with positive order wins as we go along, margin expansion will kick in, promoter pledge coming down, dividend started coming in from the company. All signs of a typical TURN AROUND in place. Not much capex, so free cash flow over next 2-3 years unless company wants to invest big in new product lines that that company is talking about.
Hello friends, my name is shital patel.i am a student and i love to learn new things. right now i am learning about commodity market. but i have ni idea that how can get proper instructions so if anyone have any suggestion according to it than please give me.
Co promoters HP Singh is a CA & his brother Satvinder Singh is a MBA from IMT ,.They are coming from a service class background & enjoy good reputation in NCR where the co is headquartered.
As such HP Singh is a first gen entrepreneur with growth mindset.The type of growth they have shown is superb over last 4 years with EPS increasing from 0.78 in fy 11 to 12 in fy 15.This year EPS may touch 20 as last qtrly EPS was 4.5 & there is good infusion of funds by PE players.
Co had come with IPO in 1996 & got listed at DSE.It transformed into MFI in 2008 & sinc ethen has been on strong growth path.It got recently listed at NSE only.
Almost 50% equity is with quality PE players like Currently, it has 5 foreign investors - ShoreCap, Danish Microfinance Partners K/S, Microvest, Norweign Microfinance Initiative Fund and SBI FMO Emerging Asia Financial Sector Fund Pte Ltd - who jointly hold 48.98 per cent stake in the company.This is a big comforting factors as these instt are specialized MFI investors who wud have invested only after doing their home work.
The first investor Lok Capital has already got a successful exit in 2013.
With 35% stake with promoters issue is of liquidity.Some shares are still in physical form.
But bank was unsuccessful in getting a small bank license alongwith SKS micro while 8 MFIs have got the license.
Overall the co qualifies my checklist of good promoters,good opp size & return ratios.
Discl- recently invested @223
Thanks for your update Rajeev.
No one noted, but promoter Mr. Garg has released 1/3 of the pledged quantity as per information to exchanges on 28th Sep. Looks like over time all the pledged shares will be invoked. All round positive vibes. Pledge down from 14.34% to 9.01%.
Recent Govt. win is not informed to exchanges as this might be a normal course of business procurement, but is this the large govt. order that the company is talking about off late (in AR, Investor presentation)?
Agree to your assessment that if there is no hedging, then the benefit of recent rupee depreciation will directly flow to bottomline (should be around 50 lakhs - 1 Cr). But again, as posted above, it will be risky if INR depreciates, I hope management has a framed policy as currently its majority revenues are from exports.
As per your expectation, if the company declares dividend, there could be further re-rating as people will be convinced about its cashflow and revenue visibility.
I think the main thesis here is 1. Revenue visibility and bumper margin expansion as no CAPEX in the foreseeable future also leading to free cashflow and dividend.
Initiated a small position, volumes are really low with no institutional/FII interest as of now, which is a big positive I think. Based on Q2 results, will further invest into this company.
Good analysis but i feel we need a company visit/ meeting the management.Thanks again
Business Line's Buy recommendation: Gruh Finance: Home in on this niche player
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