My only word is caution I see several red flags in the story which makes it a strict no-no for me. Incase your conviction in the story and trust in promoters is high I am happy to be proven wrong.
Discl. No holding
Posts tagged Value Pickr
Emkay taps and tools (22-12-2015)
Hi Anant: Please look at the “objects of the issue”, it says ‘to gain
benefits of listing’ Company didnt raise money, it was all secondary sale.
SEBI mandates them to sell 25% minimum. This objective is meant for people
who want to sell their stake paying STT thus saving capital gains. Surely
we are looking at an eventual sale out in the company. Of course, promoter
has a lock in and all that, but its clear why the listing happened. Given
the margin profile, sale may happen at seriously high valuation.
My view on IPO valuation is that since the offer for sale is promoters own
(last issue @ 192, see RHP) and its done at depressed valuation, likely to
save capital gains for the seller.
On the burgeoning receivables what you say is only half the stories. The
methods you indicating are accompanied by growth in sales which leads to
believe the company is aggressively growing. This is a company which
supplies to capital good and auto industry, and we all know how the topline
growth scenario has been off late.
Regards,
Nakul Sarda
+91 97021 77729
Emkay taps and tools (22-12-2015)
Co has paid Tax of 6 Crs. So the profits are genuine. Pray do tell me in how many Cos are independent directors really independent, not more than 200 out of 6000 listed.
Keerthi Industries (22-12-2015)
Its just a little below .6mtpa. That makes it fairly valued, IMHO.
TAKE SOLUTIONS LTD- will you take it? (22-12-2015)
Taxation
Tax expense for the current year FY 2015 stands at 54 Mn from 10 Mn last year, resulting in an increase in the effective rate of
taxation from 2% to over 6%. This is due to increase in the deferred
tax expense for the year offset by drop in current tax component as
well downward revisions to tax pertaining to prior years. Deferred
tax expense is a function of the difference in carrying amount of
assets considered for tax reporting purposes and for GAAP reporting
according to laid out Accounting Standards.
This is from Take solutions 2014-15AR. Can somebody explain in simple terms what the highlighted line means?
Economic Value added (22-12-2015)
Anupam,
I believe our current calculation of returns in India in automated software is not correct for the following reason. Hence the hurdle rate has to be corrected for this anomaly.
Take two companies having 100 crores profit – One with 20% dividend payout ratio (avg pvt sector) and another with 80% (good PSUs) have effective return of 96 and 84 crores after reducing their DDT of 4 and 16 respectively. ROCE calculations in US assumes dividend tax in the hands of the owner whereas in India it is different. Whether it is good or bad depends on your personal tax rate.
Then comes CSR of 2% on 3 year avg PBT. I am still not clear about its accounting. Can anyone help? Is it shown as an expense? Else it needs to be taken out of ROCE again.
Taxation Queries (22-12-2015)
Thanks for the response.
Lets take cases like Bharti Infratel and IDFC Bank (both listed companies) by the parent Bharti Airtel and IDFC respectively. When Airtel sold 2000 crores last year in the market, what tax would they have paid?
Is it seen as a capital gain with indexation (indexed 20%) or with STT benefits (LTCG – 0%). Can they claim 10% without indexation?
Or is it seen as business income taxed at 30%+ surcharge + cess etc?
Interestingly, I saw a Colgate Palmolive case where the loss of a 100% unlisted subsidiary was argued as a business loss with IT Tribunal. So, what is seen as business income, other income with indexation ?
Portfolio check up (22-12-2015)
I have not been following axis bank closely. Yes bank seems good but be aware of its low CASA and low NIM.
Electric Cars/Bus :: Call it a Disruption? (21-12-2015)
I would not be surprised if Tesla sets up a factory in India. Like sandeep17 said, Tesla plans to have stations in US (starting in CA) which replace your battery with a charged one in a couple of minutes. Network effect would be huge if this takes off. Remains to be seen how economically viable this seems after the cheap credit stops sloshing around. Electric buses being charged at designated bus stations seems more feasible for starters.
Economic Value added (21-12-2015)
Hi seniors,
Does that mean EVA=ROCE-WACC. Can you share where can I get EVA data, quarterly or yearly for Indian companies. If I assume WACC to be flat 15% then any company having ROCE> 15% would generate +ve EVA. Is that correct way of thinking. Also why is it that cost of debt is 9-10% and cost of equity is 15-18%. This will encourage to take huge debt as co can show +EVA as WACC will be lower than ROCE.
I am a learner thus getting bit confused