Hi,
Quarterly results are out.Revenue has jumped from 317 crore to 401 crore,And profit jumped from 33 odd crores to 39 crore.It seems to be a good result and market giving its a thumbs up.
Board Outcome attached.
8f7a325c-ef98-42f1-a2be-ee80621712a8.pdf (1.8 MB)
Thanks,
Deb
I think small retail customers have little incentive to stay with the bank now. 4% interest rate now for amount less than 10 lakhs when compared to 7% earlier. How does this serve the purpose of granualized deposits.
Most chemical sector stocks which were running on narratives (of being speciality players 
) are now down and out. A lot of these largely commodity kind or quasi commodity kind of companies were touted to be weather proof and immune to vagaries of demand and impact of raw material prices. Problem is not with the business or promoters per se, but the kind of valuations given to these companies. Commodity companies which attain speciality companies’ valuations would often find it difficult to live up to market expectations and hence there will be meltdown. This happens with most sectors at some point of time during their market fancies. But there will be exceptions to these sectoral meltdowns in most instances. And there will be reasons for this phenomenon.
The kind of companies that have remained aloof from the meltdown in the chemical sector are the ones which I think are the real speciality companies with a sort of moat (at this point of time, mind you. Things can change over time here too) In such companies, the narratives are matching the numbers reported by the companies. And that’s what seperates boys from men. (again at this point of time) How long this party lasts is anybody’s guess, but as long as numbers keep chugging along, valuations will sustain and even probably grow in terms of PE being accorded.
Navin reported decent numbers if compared to a lot of other companies from similar space. Personally I feel at cmp, valuations are stretched inspite of good numbers. But who am I to question market wisdom? Maybe there is a clear road map drawn for near 20-25% growth for next 5-10 years. (I don’t track it so not much idea, but price action does indicate market confidence in the company) Against that, today I saw numbers from a smallish (in terms of sales not valuations or market cap) company named Tatva Chintan. Revenue drop, profit drop, margin being affected, everything going in the wrong directioin. Stock price has corrected from highs of near 3000 to current levels of 2370. On charts there was a clear double bottom breakdown below 2320 with a potential downside of nearly 700 rupees. But till now price has managed to hang on above and around 2300 levels. One of the reasons could be high promoter holding of 79%. Or could be some other reason. These are the kind of situations I keep in my study list to see how price action plays out to what I feel are poor results. You keep observing these things and try to keep learning how markets work.
I do not track Navin closely so not much idea about whether valuations are justified or not. However I do own and track Guj Fluoro and looking at global situation in fluoro polymers, there still seems to be strong tailwinds for this particular sector and the company itself. But the proof of the pudding will lie in the eating, and hence I would keenly watch the quarterly results due to be out and management commentary. As of now, the stock price seems to be showing strength and resilience.
My idea in riding this company is to enjoy the music till it lasts and keep on lookout for any signs or newsflows contrary to my investment thesis.
I’d recommend everybody to read into Tanlas previous bullish run. Some of it has been mentioned in the fraud thread at VP.
All things which tanla has right now, relationship with Voda, Brokerage reports with buy target, promoter open market purchases, cash on books, high growth, is what tanla boasted in the 2007 era. Many veterans on VP have made losses in it in the past.
Not saying they are fraudulent, but links to the current CM of Andhra are proven with the promoter.
Also read the forbes article on Dasari Uday Kumar Reddy, it seems off to me(as though it has been made to create a halo around promoter, speculating not sure how true what I’m saying is, just keep the tone of that article in mind)
Disc – exited a month back at minor profits.
Indeed! It could be very beneficial.
Topline grew by 32%, however gross margins were severely impacted due to Euro weakening vs USD. Management is confident of recouping margins and is guiding for 15-20% sales growth & 18-20% EBITDA margins in FY23. Concall notes below.
FY23Q1 concall
Disclosure: Invested (position size here, sold few shares in last-30 days to bring position size closer to model portfolio)
Regarding tax calculation in ITR
1.Having STCL of 3000
2.Having LTCG of 1000
LTCG less than 1 lakh is tax exemption.
But in ITR form it is setting off Current Year Capital Losses with Current Year Capital Gains(LTCG)
so i have only loss of 2000 to carry forward to next year. why it is calculating LTCG which is in tax exemption. or we no need to show LTCG with in exemption limit in ITR
The recent dramatic drawdown and now the disappointing quarter!
I am afraid that possibly somebody else may be eating Tanla’s lunch.
“We are progressing well on our one platform strategy-Wisely. Q1 had some operational headwinds in the Enterprise business, but we have our building blocks in place to accelerate our momentum in the coming quarters. We have a strong balance sheet and excited by the opportunities ahead of us.” – Uday Reddy, Founder Chairman & CEO
“Market disruption: We saw market disruption of pricing both in NLD and ILD business in select customers which impacted our EBITDA. We have been quick to respond by taking an approach of making focused investments on our priority customers.”
Could somebody who speaks “management” decode this? To me, it appears competitors provided better pricing forcing Tanla to reduce their pricing? The usage of “priority customers” is very worrying. This means some big customers are bargaining hard on pricing.
If my understanding is correct, THIS SHOWS MINIMAL SWITCHING COST FOR CUSTOMERS- a definite negative for Tanla?
“From an internal perspective, we had some challenges in scaling our legacy infrastructure as our volumes have scaled substantially over the years.”
This is very worrying. Tanla keeps accumulating cash and does not upgrade infrastructure on a timely basis? Have they been boosting free cash flow at the expense of timely upgrade of computing infrastructure. Quite shocking tbh.
For now, my call is to sit tight. Will await Q2 results and take a call whether to REDUCE. I am afraid the stock will take a major beating in the coming days for sure.
Disc – Invested and hurting bad. Clearly, you should not take my words as
investment advice.
Another example of How peak PE+Peak Margins+Peak narrative can be deadly in the short term.
Realizations led growth in Q4 and that has reversed. Thus, it pays to track end product pricing in B2B businessess. Severe margin contraction in Q4 results
Disc: invested with 1% allocation. Looking for pain here as medium term seems solid.