5 reasons the bull run in sugar is not over
Posts tagged Value Pickr
Shalibhadra Finance – Steady Growth NBFC (13-10-2015)
Today's delivery %age looks awkwardly low.
Shalibhadra Finance – Steady Growth NBFC (13-10-2015)
Strangely, FY15 AR has neither reached my mailbox nor is on BSE; AGM was supposed to be in Sept end.
Also dividend hasn't been credited.
Anyone got the AR or the dividend?
Disclosure- Minor Holding; looking to study more
Ambika Cotton Mills (13-10-2015)
Couple of links from Capitalmind highlighting potential issues for Yarn Industry.
1)The Trans-Pacific-Partnership-The US, Canada, Japan and 9 other countries are getting their free trade act together.
2)30% crash in Yarn prices since last year
two-danger-signs-for-the-yarn-industry-which-will-impact-our-exports-big-time
Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains! (13-10-2015)
Excellent work on the inventory data. If the international prices firm up the debt level of Balrampur , dhampur , dalmia , dwarikesh will come down well. ( in the balrampur conf call they said its possible to export the excess inventory with govt help. Modi govt has promised help in clearing the excess inventory through exports. It has been done before .)
These 4 companies have two more similarities.
• The 'cash profits' they make even while posting net losses should be looked at. For eg Dwarikesh posted 20 cr cash profit both in 2013 and 2015. This cash profit is probably due to the high depreciation amount they carry on the books.
• They have paid dividends in the good times(05-06). Balrampur and dwarikesh with high payouts.
Orient Bell Limited (13-10-2015)
Kunal
- I am talking about the more important number here, operating cash flow here and not net profit. The number ranges from 45cr. to 55cr in the last 4 years
- Yes you are right about the acquisition part. But lets take the sales numbers before acquisition. 111cr in 2005 to 291cr in 2011. This equates to a cagr of 15% over 7 years, which is a reasonable rate of growth right?
- I personally think the acquisition was not a sensible one back in time. Yes they did dilute and did increase debt. But you can also see some advantages. Distribution and branding opportunities to name a couple.
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Just look at the balance sheet post acquisition. Debt, working capital and cash positions have improved in the last 4 years.
btw just got an update that they have launched a new website: www.oblcorp.com.
Arvind infrastructure: Godrej Properties in the making? (13-10-2015)
Out of that 2500 Cr revenue, they will get only about 2000 Cr. because most of the development projects are in partnership with land owners who will take away the remaining revenue. - No 2500cr is their share from JD
Most of the development is not yet started and real estate being a highly regulated sector, not sure if they can deliver in promised timelines. - all the ongoing projects shown in the prez have already started, some since last year and some since last 2 years
Ashiana is selling at similar valuations I think. - Ashiana is in diff segment - which is affordable housing. As per management they want to be in one notch above affordable housing segment
They are not a well known group. Which known brand do they have? In Gurgaon, a well known inverter maker Microtek is launching RE products but should they be considered a well known brand in an unrelated field? - Yes you are right that they r nt wellknown, but thats y they r available at 180-190cr valuation. If all the story would have already played out than they wouldnt be available at such valuation. So thats y u go through management interviews, annual report etc and try to find out what they want to do and see if they are capable or nt.
Compared to their main business, this business is really small so not sure how much management bandwidth will they spend on this. - Management has thats y designated a professional management team for this business and seperated it in a diff entity. They have a lot of land parcels of their own and as per management interview they are positioning themselves in same line as godrej. Again they r ofcourse nt as big as godrej but "positioning" themselves in tht manner
I think price captures all positives. Now they need to execute really well to grow but that's true of any company. - U r right... This is true for any company that you will be buying
Orient Bell Limited (13-10-2015)
akshay let me disclose first ,i hold orient bell but it is less than 5% of my portfolio. so let me clarify i am bullish b'cos of cheapness and some other factors mentioned above but we have to be realistic when we evaluate stocks we hold.
1) 50 cr. profit i dont know how did u get that figure . it is at best OP and u must deduct interest and taxes. ( u may count dep. and PAT for interest repayment)
2) real estate slow down is valid concern as u pointed out.
3) 20% sales growth was due to acquisition of bell ceramic and they diluted equity for same and had taken debt and still paying large part of EBIT towards interest charges for same.(with hindsight we can say that if they did not acquire bell and had JV/outsourcing as kajaria did they would be in much better shape )
Arvind infrastructure: Godrej Properties in the making? (13-10-2015)
- Out of that 2500 Cr revenue, they will get only about 2000 Cr. because most of the development projects are in partnership with land owners who will take away the remaining revenue.
- Most of the development is not yet started and real estate being a highly regulated sector, not sure if they can deliver in promised timelines.
- Ashiana is selling at similar valuations I think.
- They are not a well known group. Which known brand do they have? In Gurgaon, a well known inverter maker Microtek is launching RE products but should they be considered a well known brand in an unrelated field?
- Compared to their main business, this business is really small so not sure how much management bandwidth will they spend on this.
I think price captures all positives. Now they need to execute really well to grow but that's true of any company.
Arvind infrastructure: Godrej Properties in the making? (13-10-2015)
- Who invests the capital which is required for the construction ? It is invested from AIL's books ? – Most of the construction cost is borne from sale proceeds and some initial approvals cost and JD payment is borne from balance sheet. which as per their interviews all their projects have become cashflow positive.
- In 6/12 projects under development are 100% AIL owned (no JD), so we need to have some understanding on Q1. Who will invest the money for construction, who owns the land currently, is it owned by AIL ? – In all the projects taken by Arvind on JD, construction cost is to be borne by Arvind and major cost will be funded from sales (verified in a call with company)
- In the other 6/12 AIL's share is also north of 50%. Who will invest the money for such projects ? – Major from sales and initial approvals cost from balance sheet
- Arvind probably is a good brand in Gujarat. But at all India level, I doubt it has any of the quality factor's associated with it, like Godrej brand. – Arvind as a brand is mostly famous for denim and textile – they are slowly launching “Arvind” as an individual brand which will be than used for many of its products including real estate like what godrej has done for all of its products
- Next few years companies fortunes are tightly tied to upland properties fortunes as 50% of projected revenues are tied to it. Feels risky.- Yes that’s true
- Perception that "Beyond Five" project is only residential plotting and very little needs to be done probably isn't correct. Check our their plans – checked with company – its a plotting project wherein company on its website has given some model designs of bungalows or row houses which they can build for u if u r ready to pay for it http://www.arvindinfrastructure.com/about_beyond_five.php#horizontalTab22
Also fact that their proportion in the project is 45% probably means, they will realize a revenue of 45%*600 cr = 270 cr. and have to spend on all the amenities listed above from that. Probably the land owner get's the 330 cr. as cost of land and no more expenditure form his side. That's how most JD works. – All the figures of sales written in the presentation are of company’s share and not total – so 600cr revenue means 45% of total and hence approx 1300 cr is total revenue - In Godrej properties case, the group land is owned by Godrej Boyce (Group company). Cost of the project development is also to be borne by Godrej Boyce. GP get's a 10% share of revenue mainly for marketing activities, hence providing higher visibility of earnings without putting to much at stake. So we need to understand what's the equation for AIL on these parameters. – In arvind’s case apart from the given info its nt known what structure they will do for their other land parcels. The intention of management is to separate real estate business into other entity and let a professional team focus on it and they focusing on their core business. Its written in the management discussion part of 2015 annual report.