@mantri – great work. we learn from each other. Find attached something I read recently – read through the entire blog slowly – its quite a revelation.

http://azvalue.blogspot.in/

sort of reminds one of the Yudhishtra’s ashwathama story. there is often a lot of feedback that I get that the company is exporting and I can see the data and hence cash must be real. This a fallacious argument – yes, the company could be exporting and generating cash – BUT, that does not mean that it is generating as much cash as it is showing. You need another data point to figure that out. That’s why it’s called triangulation – you need three independent data points.

Also, your valuation is not a function of sales, profits or EBITDA margins – its a function of free cash flows. That’s something that gets forgotten in pursuit of growth sometimes.

For the record, valeant is a company that has been in the centre of a controversy much like herbalife – no one knows what’s the truth but if you follow the arguments you get to learn a lot.

Trying to put in a case study soon.

I read through the AR – I like the management’s candidness in highlighting issues that they faced last year. the two points that were disconcerting were
– auditors and registrar/share transfer agents are both karvy
– the consolidated cash flow and stand alone cash flow were the same – I think there was a clerical error here. they should have been marginally different.

otherwise, they had given detailed split of cash, liquid investments etc.

Invested and looking to add more at Rs. 2300 levels

The expected cyclical up trend is still some time away.
-The current supply glut from Brazil’s ‘bumper’ harvest will take it down further.
-The artificial substitute ‘sucraloses’ from China dampens the China growth factor.

Reading the AR for FY14-15, few questions that came to my mind:

• A quick google search revealed a lot of stainless steel manufacturers in India (e.g. Apex, Suraj, Aakar, SLS, JNB).
  As per SIMDEX (http://www.simdex.com/resources/tube-manufacturers-map/), there are 31 SS manufacturers and 63 CS manufacturers in India alone. The graph also gives good idea about global manufacturers.
  So what is it that Ratnamani is doing so well in this crowded space?
• How are the steel biggies and steel tube companies related? e.g. Does TATAs and Mittals of the world provided steel sheets to Ratnamani and then they create pipes/tubes?
• What are the various steel tube/pipe products? Are all of them easy to make or some of them are very difficult to make?

I have no experience in steel industry at all. Fellow investors who understand steel industry, kindly help. I will try to pursue these questions as well.

Thanks,
Rupesh

In my opinion the sugar price may continue to rise following such a strong bullish divergence or the sugar prices may again fall after 1-3 months(around Oct – nov) when the tug o war between all the stake holders (mills, state govt and farmers) begins over fixation of Sate Advisory Price for procurement of sugarcane by the UP / TN sugar mills. And also the announcement of aggressive sugar export subsidy policy by the central government.

If the prices do fall again, in all probability it will lead to formation of inverted head and shoulder bottom formation and then the cyclical uptrend in sugar sector will begin.

By April / may, India would have exported its excess sugar at a subsidised rate, manufactured record quantity of Ethanol for the ethanol blending programme and also sugarcane farmers would have finally shifted to alternate crops. Thus heralding a two year long rally in sugar stocks.