Dear ValuePickrs,
This is my first post + 3 months investing experience - so may not b able to answer your queries (but will try as much as possible)
First of all humble gratitude to Prof. Sanjay Bakshi - who has taught so many students (actively or through his blog). Got interested in equity investment after reading his post on - Seven Intelligent Fanatics From India.
Shree Hari Chemicals
Listed in 1992 by ex-Birla guy (K.LRamuka - no public info about Ramuka)
Market Cap - 36cr
Cash in Hand - 35.5 cr
No debt (short term or long term)
Total Shares - 44 lakhs
Promoter Holding ~ 48% (promoters were buying from open market few months back)
Public Holding ~ 52%
get a loan of 18cr become majority share holder and get access to 35cr cash + business
repay back your loan of 18cr with 35cr cash (net net - u will get access to 18cr + business for free - I am aware this is unlikely to happen - just thinking aloud)
About Product
Manufactures - H-Acid (80% contribution to revenues) - used as an intermediary product in Dye-Chem industry - commodity product - exported to multiple countries
Competition - China / Local Manufacturers
Pricing - v.competitive with China (as per mgmt - during my call 1-2 months back)
Balance Sheet
No Debt
Cash in Hand ~ 35.5cr
Account Receivable (13.75cr) ~= Account Payable (10.4cr) - if not zero / negative (Buffet's float money) - net account receivables is v.low
P&L
growth in earnings observed in past couple of years - mainly due to China factories were closed down - pollution issue. Highly regulated industry by Pollution board. Even Shree Hari factory was closed in Mar'13 compete financial year and approx 1 month in Q2FY16. Company reported a loss in Q2FY16 - i guess mainly for 2 reasons
1. Factory was closed - hence sales dip
2. Bureaucrat expense - to get the factory operational (though I guess Pollution norms must have been met - after Mar'13 issue - just guessing)
High Margins - in spite of low cost manufacturer
High ROE - due to low equity base
High ROCE
cash rich
Disc - Invested - tracking state
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