Diwali shopping normally happens for customers 15-20 days ahead of Diwali and stock gets purchased by franchisee nearly a month ago, last year Diwali was at around 20-22 October, so sales of Diwali season was fully booked in sales figures of Indian terrain or for that matter all garments company in Q2 only, this year Diwali was on November 11th, so much of Diwali season sales would have been booked in October month. Only Q3 figures would tell actual figures. Fingers crossed....
Posts tagged Value Pickr
Hester Biosciences – Growing Steadily (13-11-2015)
Can someone tracking this provide insights as to why the Nepal plant has been such a drag? The first post on this thread way back in Dec 2012 mentions that it was expected to be ready by Feb 2013, and we have now seen three years go by and its still not up? Is this because of pending client contracts? regulatory approvals? government clearance? The annual report and stock market filings do not give out much except for the Nepal earthquake which happened in early 2015.
NCL Industries – Resumption of growth? (13-11-2015)
I think we still are not sure if there was any shutdown in Q2. We need to wait for the confirmation. Atleast to me it was not enitirely clear from the mgmt. interview as to when was the shutdown. But if that might be the case then this would be good set of nos.
In the meanwhile: The Board approved the proposal for issue of Secured Non Convertible Redeemable Debentures (NCDs) for an amount up to Rs. 320 Crores on a private placement basis to be deployed for the following:
(i) Repayment of the dues for the existing Term Lenders.
(ii) to finance augmentation of the capacity of Cement & Boards Divisions.
NCL Industries – Resumption of growth? (13-11-2015)
Despite having almost 20 days of maintenance shutdown they have posted wonderful results , As stated by mgmt second half is usually good than first half , this combined with full utilization can fuel EPS in north of 7-8 ! , FY 17 Eps is estimated at around 30-35 , Multibagger in making !!!
Indian terrain—play on consumption (13-11-2015)
Diwali always comes in Q3 more often than not and so was the case last year as well 
NCL Industries – Resumption of growth? (13-11-2015)
NCL numbers are out.
http://www.bseindia.com/xml-data/corpfiling/AttachLive/000884E0_1C03_4E6F_93B6_C21770137CBD_154812.pdf
Cursory glance tells me that -
YOY in Crs.
Sales- 187 to 247,
OP- 11 to 26,
NP- 1.9 to 15.14 &
EPS- 0.55 to 4.12
However I was expecting better QOQ numbers.
QOQ in Crs.
Sales- 232 to 247,
OP- 33 to 26,
NP- 20 to 15.14 &
EPS- 5.54 to 4.12
Cement Division Nos. QOQ. in Crs.
Sales- 199.3 to 207.7,
PBIT- 29 to 18,
I was expecting better QOQ numbers in the Cement division. OP Expns. have risen and have had impact. I was expecting better capacity utilisation in this quarter or maybe I read it wrong and what @NikhilJain was stating above is right that there may have been plant closures for maintenance activity. We may know after mgmt. speak.
Any initial views @varadharajanr and others who are tracking?
Regards.
Oriental Carbon and Chemicals Ltd (13-11-2015)
Typo there, I meant 2017 (starting from 2017, I mean).
Oriental Carbon and Chemicals Ltd (13-11-2015)
If I am not wrong, expansion is in April 2017 and April 2018 as mentioned in the footnotes of Q2 results
Sterlite Technologies | Digital India play (13-11-2015)
Sterlite Technologies:
They are the largest manufacturers of Optical Fibers and Optical Fibre Cables (OFC) in India with around 35-40% market share. Their USP is vertical integration - they are the only player who manufacture silica from sand and then turn it to optical fibres. They have facilities in China and Brazil as well
One of the biggest beneficiaries of data explosion and digitization. To give you some context here - India today has around 70-80 mkm fibres laid out Vs close to a billion km laid out by China and 500 mkm by South Korea
The current airwave mode of data transfer in India is not sufficient for 4G roll out and they require optical fibre. Reliance Gio, Vodafone and Airtel have huge capex planned for 4G which will require overhaul of existing towers as well as new towers with optical fibre connectivity
Government has huge plans for fiberization. Read this
Demerger play: The company today has 2 businesses - Telecom and Power. By end of fy16, the telecom division will be demerged and the power business will be taken private. Total company today is valued at around 4000 Cr mcap and the unlisted business will be worth 800 Cr. If you wish to exit the power business, you will get around 22 Rs preference share within 30 days of demerger. Read the demerger details here
Valuation of telecom business: Telecom business will do EBIDTA of around 450 Cr. They have already done 250 Cr in H1 Fy16. Total debt transferred to telecom division is around 1000 Cr and the interest outgo will be 100 Cr. Post depreciation of around 19 Cr per quarter and tax of 28%, the PAT comes to be around 150 Cr. At market cap of ~2600 Cr [3400*(86-22)/86] of the telecom business, you are getting this business at around 17 PE. Telecom if a 20+% EBIDTA and 25% ROCE business. So, I think it is a good buy
Management reported that they plan to take their revenues from around 1500 Cr today to around 8000-9000 Cr in the next 5 years.They are doubling the OFC capacity from 7 million cables to 15 million cables by Q4FY16...this should provide a revenue & PAT boost to the company since capacity utilisation is high...However margin will deteriorate since OFCs have a lower margin than plain optical fibres...But management has guided for EBITDA margins in the range of 21-22%
End to end solutions provider: Currently, around 10% of their revenues come from service and solutions- design, implementation, software etc. They plan to grow this business going forward.
Sterlite’s telecom division acquired Elitecore Technologies last quarter (Revenue: 147 crore; EBITDA: 16 crore; debt free company). Elitecore’s CAGR is 25%; company has been profitable for the last 7 years
Another important point is that company has a large NFS order in J&K (~Rs1300 crores). The revenue impact of the order starts from Q2 onwards..In FY15 company had just recognised 68 crores of this revenue.
Risks to this thesis:
Considering the bad management reputation (Vedanta group - Anil Agarwal), I am sceptical that a plain commodity like OF and OFCs have EBITDA margins of 21-22%. My suspicion is that the company is transferring the power segment profits to the OF/OFC segment. This makes the power segment numbers look bad enabling the company to take the power division private since most shareholders will opt for preference shares looking at the bad nos. The major risk is that the telecom division margins suddenly drop off after the demerger...If you have a look at FY14 and FY13 nos...telecom segment had decent margins of 12-13% which have now increased to 22%...The management attributes the increase in margins to improving capacity utilisation and operating leverage...But is such an expansion in margin really possible due to increasing operating leverage only ??
Mgmt salary is really high...however I wouldn’t want to miss out on a stock on just this fact alone....The cost of missing out is high...
Government orders such as NPS etc generally have payment issues and can impact receivable days
Overall, we are getting a great business with 25% ROCE at less than 20 PE. I am expecting a good rerating post demerger. Many past demerger plays have been very rewarding - Entire Alembic group had market cap of 900 Cr in 2010 and now Alembic Pharma itself is 13000 Cr and Alembic ltd is 1000 Cr. Inspiration has been Joel Greenbalt's book - You can be a stock market genius!
Disclosure: Invested at 86