@varadharajanr Sir as we are discussing about the CFO and building up of inventory topic, I want to talk about Lloyd Electric. Their management said that they are using push through method to promote their product and that method deteriorated their Balance sheet and increased their Working Capital They said they initiated that strategy 3 years back and now they are reaping the benefits of it. The point I am trying to understand is that what amount of WC increase is right? They said it took them 3 years but you said (I trust your analysis because you have seen so many companies) that 3 year increment is a red flag. Can you give your comments on that? because I feel (but I have not done industry analysis) for companies which trying to become Business to COnsumer companies, 3-4 years of WC can be quite natural.
Posts in category Value Pickr
IDFC Special Situation September 2015 (01-10-2015)
Price discovery is being conducted between 9 AM to 10 AM. You will get the IDFC price post 10 AM.
IDFC Special Situation September 2015 (01-10-2015)
Dear Chandresh
I thought Oct 1 was the ex date. But today, IDFC Ltd. seems to be trading as per the usual price.
Regards
Samir
Control Print – Deservers attention? (01-10-2015)
@dd1474
I am happy we are engaging in a good constructive discussion here. Do not look at CFO in isolation but look at it before and after WC changes and find out what constitutes it - for eg., in company A's case if there was a build up of FG and it translated into sales (next year there was a decrease or very small increase), then the company was on the right path in stuffing the channel sensing a growth opportunity.
However, a relentless increase in FG over 2-3 years is a flag and similarly so with RM inventroy and WIP inventory. I spend time trying to visualize what the promoter would be saying by drawing a mental tree in my mind and see if the numbers fit in. for eg., increase in FG for a year means bullish times ahead. Increase in FG for two years ahead of sales growth means an amber flag - for three years is a red flag.
and aman's point is valid about interest expense getting added to CFO to give an artificially high figure. The CFO I use is "owner's earnings" - EBITDA adjusted for WC plus maintenance capex. The issue with CP is the adjustment for WC, which is relentless across years.
MPS Ltd (01-10-2015)
Might be a silly question.. But what would be the opportunity cost for an early investor to still hold on to MPS?
If one were invested at 100x levels for more than a year (assuming no taxation from capital gains), would it make sense to switch now to better growth stocks or do you forsee MPS to be better valued at current levels to deliver the next stage of growth?
Also had a chance to talk to someone i know from digital publishing industry, he said the prospects of growth in US looks extremely promising wherein the average vendor spends have seen increase by about 1.5x with strengthening of dollar. However Europe seems to still struggle a bit where vendor spends are low.
Regards
Sreekanth
Hitesh portfolio (01-10-2015)
Hi Hitesh,
What is your view on Mayur? It seems it has fallen out of the radar of most of us in spite excellent track record and return ratio.
Regards,
Raj
Torrent Pharma Ltd (01-10-2015)
Sorry for my lack of knowledge but I have a basic question ....How reliable the data from Zauba is?
Torrent Pharma Ltd (01-10-2015)
A sale of 225 million USD p.a. will give us a run rate of 55 million USD per quarter. As they had exported close to 100 million USD last quarter itself and there is a possibility that the sale ramp up would have taken some time in the last quarter, it is highly likely that in q2 they might not have exhausted all the supplies of q1. So, essentially export data of q3 will confirm the real picture to us.
Though export data confirms that they may not have much sale from ablify for this quarter.
Hitesh portfolio (30-09-2015)
The inverse is happening now, Hitesh. The market is hating KSCL (~10 PE, a high ROCE business). And is now loving CanFin quite a lot (~3x book, at 18% ROE in best-case). 
Time to make the trade the other way round, this time? 
Piramal Healthcare (30-09-2015)
Hi Dhawanil,
Thanks for your prompt response. Very helpful.
I took the investments from Balance sheet schedules, both current and long term. I couldn't find a way of sorting them into pure investments vs part of nbfc book. If a transaction is part of nbfc business, should it appear as investment at all or it will be treated as an advanve. Eg, sbi will not classify my home loan with them as investment but rather as an advance. In essence can a transaction be a part of loan book as well as investment.
Second, i didnt include alt asset mgmt/piramal realty because i was not clear of their ownership pattern. Are they held by Piramal enterprise or a group holding company. So conservatively avoided them.
Thanks, Sai