Sir, Is there anyway to get information on these agents distribution network?
How strong is it?
How have they developed such a successful network?
what are the entry barrier for the same?
Because majority of the business is coming from that channel and goood cash is being generated.
I am not doubting anything here but just want to understand how the whole thing work.
I am new to research field and this is one of the first attempts to understand business..
Thanks.
I have been on this for a while as as per my understanding it’s only once in 2-3 years that you get a rare combination of low crude prices, lots of new airlines forming and international traffic increasing rapidly. The last such instance was in 2004-05 when you had the indigos and now infamous king fishers getting in.
My sense is that a lot of LCC’s are going to come in in asia and africa. I can’t still figure out if that’s the case. any one in aviation industry would be of great help in understanding this.
As for margins, customer loss, I see that to be minimal – the big customer loss happened because of a merger of that customer with someone else and not out of his own volition. As for inorganic, won’t happen as accelya kale itself is on the block for a while now.
I would also appreciate if you can speak to management, aviation experts and chip iwith your views. That can enrichen this discussion.
One thing I have learned from my more than 14 years into financial markets is that never follow a single valuation multiple to evaluate a company…..first look at the business, see if growth is there or is sustainable, look at the business model to check how important company is to its customers, see the margins it is working at and check if they are sustainable, check whether they are paper margins or are getting translated into actual cash, look at the future scenario from varied angles and check where company can go wrong…….like this way there are multiple parameters which form the right valuation for a company.
I will explain you practically why this happens…..valuation is a factor of demand and supply…..if more long term investors get attracted to a particular company then it’s valuation will become far reacher as they see the valuation from financials at 4-5 years down the line and not now…..what company has to do is surpass the milestones expected from it to be surpassed and again 4-5 years down the line valuation will again reflect financials of next 4-5 years…..like this cycle will go on unless the company falters…..this is true for well managed, blue chip companies like Page, PI and of course should soon happen to Syngene too……
As far as my assessment goes, once contract manufacturing starts and stabilises as expected, I expect Syngene to trade at premium to PI and Divis on all valuation multiples be it p/e, EV/ebitda, EV/sales, etc.. The low free float of just 12.2 % should create a scarcity premium that’s what I believe as there are not many businesses with clear growth visibility coupled with high margin of operation and equally high cash generation.
rgds.
Discl. – invested in Syngene
Why to reinvent the wheel? Just follow Buffet’s advice
Check the Fundamentals and narrow down
In Research Bytes site ,we are allowed to upload Annual Reports.So if you put that feature in your site,we will be happy to upload the same,on receipt of AR from companies by mail.
Hi Sanjay,
The new screener is being built from scratch….hence some of these features will take sometime to come back.
Regards,
Ayush
The annual nos are updated after the annual reports are published – so its happening as the reports are getting published.
That makes sense, and its reflecting in NPA increase of manappuram for last 5 years. However gross NPA is still 1% of total assets which is noway near alarming levels and doesnt alone justify such low P/B valuations. There is more to such low valuations than risky assets, and may be regulatory uncertainty is keeping things low. For eg: Gold monetization scheme will hit their business, so certainly headwinds facing gold finance business.
Disc: Invested at CMP.
Hi,
Siyaram Silk Mills. The operating profit figures are not correct.