Though there is a risk of Chettinad cutting supply to Pokarna but I see risk and reward hugely in favor of investing in Pokarna. I will increase my stake tomorrow. The only thing now left is the cleansing of Balance Sheet, which is messed up due to related party transactions and their cloth business (atleast this was the case when I checked last time).

Can anyone clarify why the tax rate is so low historically, unable to understand. @Chaitu_1614

Hi Mahesh,
As mentioned, game changer for the company is Kerry agreement & Lactulose (capacity 2400MT/annum).
Impact of Kerry agreement will be partially in FY16 and fully in FY17. Similarly Lactulose plant will come on stream in FY16 and will be ramped up in FY17 and FY18.

Lactulose accounts for 55-60% of capex incurred (Rs 30cr). Next 2 years (FY17 & FY18) will see impact of capex incurred over past 3 years (FA - on stream increased from Rs 28cr in FY14 to Rs62cr in FY15...hence impact will come now). Also, capex of Rs 10cr has been done through client funding (Kerry and Sanofi) which will help higher return ratios.

ROE & ROCE will be high when numbers will come over next 2 years. Just to give sense...last 4 quarters EBIDTA has been Rs 6.7cr (this without any significant benefit of capex). EBIDTA can jump to Rs 16cr and Rs 25cr in FY17 & FY18 respectively.

My sense is Lactose India can do EBIT of close Rs 12cr & Rs 21cr respectively in FY17 and FY18 while PAT could be near Rs 7.5cr and Rs 13cr in same period.

These are my estimates Mahesh based on Capex done and limited interaction with management (in AGM).

Sir,

thanks for the reply.

I'm a new learner to this world, requesting you to share one stock example analyzed with the checklist and if possible please share your portfolio.

Thanks
Mahesh

http://www.stoneupdate.com/us-stone-imports/statwatch-monthly-report/954-statwatch-no-dog-days-for-imports