The way I see it, I think OCCL is running at 100% capacity utilization. The downsides to this are that sales are not going to improve till capacities are expanded (unless price is hiked). However, it is a good sign that the company can sell everything it produces. We should see a meaningful growth in financials when the expanded capacities come online in 2016. Till then, only de-bottlenecking of production lines and price hikes would lead to top line increase.
Posts tagged Value Pickr
Indian terrain—play on consumption (13-11-2015)
True that, but sometimes synergies are not immediately apparent to outsiders. The biggest positive I see is in the long run, elimination of rent from expenditure. In the bigger scheme of things, 16 crores is not a huge number. If it is partly funded with debt, it should not take more than a year or two to pay it off with internal accruals, especially with the improved performance.
Q3 should be better than Q3 of last year purely due to diwali falling in Q3 as opposed to Q2 last year. So a few bumper quarters and the company should have sufficient funds to comfortably acquire the warehouse and not impact performance.
Can anyone highlight if the purchasing of warehousing would affect the working capital/inventory scenario? I do not think so, the operations will go on as before, only ownership will change. Still, asking if anyone has any insights in such a situation.
Kaveri Seeds – Temporary thread for clarifications (13-11-2015)
The promoter shareholding Q-o-Q has increased from 56.76% in June 2015 to 57.49% in Sept'2015. That's an increase of more than 5 lac shares in the promoter shareholding.
All the additional shares have been purchased by G.Vanaja Devi.
Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains! (13-11-2015)
Enjoy the great sugar rally till it last. Some smart money is also started entering into the sector. Mr Vallabh Bhanshali of Emam fame has invested in Balrampur for his family account.
Akash Bhanshali disclosure
REPCO home finance – another Gruh in the making? (13-11-2015)
I am not doubting potential of HFC's. Just being cautious about rosy picture we all build and assume things would continue for 10-20 years at same pace.
Sriram, Sundaram, Chola and Bajaj all have substantial portfolio in housing now. These are not players we can ignore. I remember back in 2006-7, investors on TED were saying HDFC is 25% grower for 10 years. We all know that growth rate did not continue. HDFC is doing 12% growth for past 2-3 years. 10 years is very long period to predict even if macro's and big picture is favorable right now. We should assume things for 2-3 years and keep checking the story.
Lastly if real estate slowdown continues, many HFC's and NBFC/Banks will have have LAP portfolio defaults. In that case even if Gruh/Repco are not affected as much, entire sector will be de-rated. When a stock gets 20 PE from earlier 40, it wipes out 2-3 years of investor gain. That's what I would be worried about in near future.
Disc - Repco is more than 10% of my portfolio.
REPCO home finance – another Gruh in the making? (13-11-2015)
Nikhil, getting into a business is easy but maintaining profitability, growth may not be easy. I wld like to draw your attention to the rush into airline business in mid 90's, rush into software in late 90's. Similarly rush into the auto sector in the US in the begining of the 20th century. So 60-70 more HFC's, but how many wld remain, time will tell. Secondly the story sld be more than a 10 yr story because urban housing shortage is approx 20 mill and about 8 lacs or so new units are added p.a. And according to estimates about 30 cr pepole expected to move to citites by 2030 ( source: nhb.org.in/publications). The 8 lac figure is frm elsewhere, forgetting the source. Rural housing shortage is even more.
Regards
Discl: invested
Canfin homes ltd (13-11-2015)
It came in ET day before yesterday full page, I think they are preparing before their IPO
REPCO home finance – another Gruh in the making? (13-11-2015)
@RamanTiwari: Repco is one of my largest holding. Still I would like to disagree with couple of points.
Growth visibility for 10 years - HFC space is now super competitive with 60-70 HFC's. Every NBFC is now into mortgage lending. So consistently growing at 25% for 10 years is difficult task. 15-18% over that period is reasonable.
Price doubling every 3 years from this point looks almost impossible. It's not every day that an HFC is valued at 30-40 PE. This is bull market and we should not forget that valuations are much higher than they normally should.
Canfin homes ltd (13-11-2015)
Could you let us know where you have found the financials of PNB Housing FInance?
Kaveri Seeds – Temporary thread for clarifications (13-11-2015)
i think the company turned a loss in a qtr for the first time since 2008.