YoY numbers are flat. Company has reported decrease in long term borrowings while short term provisions have gone up.
Disc :- I hold
YoY numbers are flat. Company has reported decrease in long term borrowings while short term provisions have gone up.
Disc :- I hold
Thanks guys..Just went through the thread..very insightful
I think the main concern in this story is the growth. I have no doubt that this is a strong business. However it caters to a structurally weak industry and hence I feel there is only a limit to which it can grow. I have been thinking if the business still has some runway. The growth of the business will depend on the following factors-
Increase in Passenger traffic- Since their revenue is based on per transaction basis this becomes an important criteria. As per the forecasts, passenger traffic is expected to grow at the rate of 4.9% for the next 20 years. What do you guys make of this?
Profitability of airline sector- The medium term outlook is good due to fuel costs. Also, I believe the software cost will be a minor portion for the customer compared to other expenses. Accelya Kale will lose the customer only if it goes completely out of the business. Since their softwares are based on financial solutions, Kela is focusing on the pain point of the industry. As per a Forrester Research report(that Kale paid for) the ROI for the airline will be 77% on a risk adjusted basis with payback period of just 8 months.
New products- One of their main products is RIVERA which is considered one of the best in the industry. All other products , I believe will be cross sold to its customers. The company has been innovating and coming up with new products. Whether these products are good enough to be sold individually is yet to bee seen
New customers - The top 15 players account for more than 50% of the revenues in the industry. . The top 20 players account for 80% of the passenger volume.
If I go through the list of customers on their website then out of the top 15, Accelya Kale has tapped into just two players - Air France and Cathay Pacific. The total market Kale caters to in terms of revenue is less than 20% of the industry. However, as per an ICICI report, Accelya Kale boasts of 17 of the top 20 companies as its clients. Can anyone verify on this? If its the latter then the scope of growth is lower right?
Would request fellow boarders to share their views on the above issues.
Concall details:
Day/Date: Wednesday, October 28, 2015 Time: 12:00 noon
Access Numbers
Primary Number: +91 22 3960 0711
Secondary Number: +91 22 6746 8311
Toll Free Number:
USA: 1 866 746 2133
UK: 0 808 101 1573
Singapore: 800 101 2045
Hong Kong: 800 964 448
I too have attended the con call and Rohit has summed it up well.
I think it was fairly understood that organic growth will be 10% thereabouts in the near future while inorganic growth through acquisition(s) will be responsible for revenue doubling. With 175 odd crore in mutual funds and with person like Nishith at the helm and with patience the right acquisition will happen, it is only a matter of time. Any acquisition related question is answered by Nishith and rest of the questions Rahul answered.
I hold MPS stocks as per my portfolio thread and I'm holding my position as is, so I may have a vested interest in my posts. MPS as a company has a long way to go. Once MPS attains a certain scale which it is trying to, revenue growth will also gather pace like a snowball effect. The company is trying its best to get into this 'top tier' vendor bucket is what I understand.
I bought this stock when I first posted it here. Still holding. Lets see. I donot want to do over engineering with balance sheet and nos. But would like catch some fraud if highlighted.
Regards
av_30.
MPS results were fairly good.
Revenues up 13%
PAT before exceptional items up 24% to 17.5Cr
Trailing EPS is now 34.8, so at current price of 835, it trades at 24x trailing EPS.
EBITDA margins have come down to 35.1 from 38.7%
Top 5 client contribution has gone up to 70% and top 10 are 88%.
Cash on books is now 185cr.
I attended the concall. Here are my notes
EBITDA margins are down because of the acquired businesses.
Someone pressed the management about the reasons for poor growth inspite of the big opportunity size. Management said that the momentum is slow but numbers will eventually come in. They said that the clients generally test the vendors and then slowly increase outsourcing. Even an existing client, when outsourcing a new kind of work/project, starts small and then scales up.
Management said that they are growing at par with the industry. They said they have USD35mn revenues and the biggest player is USD100mn. (I am beginning to think that they are facing challenges in growing. The response was not convincing enough for me. They should be growing faster than the industry)
Rahul and Nishit reiterated that they wanted to double in size through a mix of organic and inorganic growth. But I felt they were not sure when this will happen. They said that it may take 2-3-4 years or a bit more.
Reply regarding acquisition was on the same old lines. They dont want to overpay. Someone asked that when company raised capital, it was assumed that they were already in advanced stages..but then nothing has happened for 6 months. Nishit Arora said they will not overpay 20% just because the money is there, and asked investors to be patient.
Some announcements:
*** 22- Sep- 15 ****
Natural Capsules Ltd has informed BSE that the Company has completed the various documentation (Share purchase agreement, Share Subscription agreement and shareholders agreement) pertaining to the investment of acquiring 40% of equity shares from M/S. Supreem Pharmaceuticals Mysore Pvt. Ltd. The Company is in the process of investing the first tranche of investment Rs. 5,00,00,000/- (Five crores) and the balance installment investment of Rs. 6,50,00,000/- (Six Crores and Fifty lakhs) will be invested on or before March 31, 2016.
**** 26 - Oct - 15 ******
Natural Capsules Ltd has informed BSE that the Company has added one dedicated line to manufacture of 360 million HPMC (Hydroxy Propyl methyl cellulose) vegetarian capsules. This is expected to approximately 15% to the company top line with a much higher operating margin. The line was designed and engineered by in house engineers at a cost of 300 (Three hundred) lakhs funded out of internal accruals.
Members tracking please share your views.
Cash & bank balance has increased to 241 Cr from 203 Cr in Mar 15. This is lot of cash, almost 2.5 times FY15 profit.
Fabric segment (71 Cr) has more capital employed than garment (110 Cr). The EBITA contribution from fabric segment is hardly 1 Cr. On the other hand, Garment segment contributed 43 Cr.
Why such low returns in Fabric segment as compare to garment?
And also what happened to the merger? It was expected in this quarter
This is very very small company. Revenue declined from 45 cr 2005 to 0.95 cr in 2015. Why even you want to look at such small company? I generally avoid companies with market cap < 200 cr.
raj_kalyan just now
The key implication, based on preliminary research is as follows -
The Yarn Forward Rule
This stipulates that in order to escape duty in the U.S exporters must use yarn or fabric manufactured in member countries. Currently India exports yarn an fabric to those countries who then export textiles. Member countries will push to create local yarn and fabric production with clear implications for Indian exports of yarn and fabric.
If Kitex uses Indian yarn and fabric then it ends up paying anywhere between 18 to 34 percent duty on its finished products exported to U.S, while a Vietnam for example pays zero duty.
Request people with detailed insight on Kitex yarn sourcing to evaluate this.
Solicit a view from Kitex watchers and stakeholdets
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