My estimate of PAT for 2016 is 125-135 crores and for 2017 is 150-160 crores on conservative basis, so after deducting research expense say 85 crore in 2016 and 115 crore approx. in 2017, PAT for both years would be 40-50 crores. These R&D expense of so huge amount would be one time and done in subsidiary, so it will be reflected in consolidated figures only.
Posts tagged Value Pickr
Avanti Feeds (17-12-2015)
Seafood imports from Thailand may be banned after shrimp products were traced to slave labor
http://www.ibtimes.com/shrimp-slaves-boycott-thailand-slave-labor-controversy-sparks-call-ban-seafood-2228049
Disc: Invested. >10% of PF
Tree house education and accessories ltd. – Potential candidate for improvement in RoE (17-12-2015)
Summary of Shares pledge, released and sale since 1st Oct’15
Date-wise Pledge created Since 1st Oct’15
Date-wise Pledge Released Since Oct’15
Promoter Sold in total 4cr shares (Geeta – 247000 and Rajesh&geeta – 153000) on 3rd Dec’15.
From the summary table – promoter pledge has come down drastically from 43.2% as of Sep’15 to 0.3% as per my workings based on disclosures company has made on BSE
I think @Lynchfan and @hazariwalapu indicated, and it gets clearer that sale of shares is primarily to release shares
Hope this help
Disclosure: not invested, will monitor further developments before taking a plunge..inclined to invest
Suven Life Sciences – Embedded triggers (17-12-2015)
Sumit,
Imho, equity raising was very prudent decision. Had they taken debt, thought interest on debt is tax deductible, but along with interest principal will also have be to repaid in due course, that would take away minimum 300 crores (200 cr debt and 100 cr approx. interest) from balance sheet of suven. And in case of failure, this would be too huge burden.
Think it in other way, though as per accounting practice they will be debiting this research expense in PL, but actually it is not being paid from profits of suven. They have issue fresh equity of Rs. 200 crores and this is being used. Thus there is not strain on Balance sheet for that expense.
Companies affected by Chennai Flood (17-12-2015)
Intellect Design Arena has its main office in Chennai
Forensics and the art of triangulation (17-12-2015)
Another interesting way to boost earnings by massaging accounts, courtesy Valeant.
Suppose you have Company A that has to incur heavy R&D expenses for drug discovery purposes. GAAP requires these to be expensed in earnings. But suppose the same company does not do any R&D and acquires another company that does exactly the R&D it wants and pays up for it by exactly the amount spent. In such a case the amount will be shown as an intangible assets and amortised over a long period of time which period would be far longer than the expense period. This is allowed as per GAAP.
The net effect is that you take a far lower amortisation every year and thus smoothen earnings.
This tactic was learnt in a fantastic article in WSJ link behind a pay wall – Valeant an accounting pioneer too.
It says ” Valeant’s approach to research and development also leads to favorable accounting treatment.
When drug companies spend on research in-house, they record quarterly expenses that eat into profits. But research gained through acquisitions is treated as an intangible asset that can sit on companies’ balance sheets indefinitely at full value.
That means that by buying, rather than creating, most of its drugs, Valeant can avoid recording big quarterly R&D expenses, thus lifting its earnings.”
Thanks,
Omkar Speciality Chemcials Ltd — OSCL (17-12-2015)
Its a 2- step downgrade from BBB+ to BB+ . Its skipped BBB and BBB- in between. If you consider the outlook then it adds more steps to the downgrade as it has moved from BBB+ Negative to BB+ Stable (skipping Positive , Stable and Negative outlooks at each of the ratings).
Same goes for short term ratings – from A2 to A4+. Here the skipped steps are – A2-, A3+, A3 and A3-.
The link is attached:
http://www.crisil.com/Ratings/RatingList/RatingDocs/Omkar_Speciality_Chemicals_Limited_December_04_2015_RR.html
http://www.crisil.com/ratings/company_fact_sheet.jsp?ID=OSCPL#
The rating report has no new information that was not already known. While the multi step downgrade is meaningful and worrying, it looks like they are behind the curve.
One item I am not clear on, is that if you look at the “View” in Instrument Details for Long Term (in the 2nd link), it says “Proposed Long Term bank facility of Rs 863 million”. This is at variance to what the management has been maintaining – that only 25-30 crores (dont remember the exact figure) of additional debt will be taken which is only of routine capex maintenance nature. All other debt for expansion has already been availed and that debt levels would see a gradual reduction from Sep’15 levels (I particularly remember Pravin Herlekar stating this).
Discl – hold Omkar as a small portion of the PF from 170 levels bought in the last 1 year.
Ranvir’s Portfolio (16-12-2015)
Tata Coffee had/has a few instant coffee brands like Tata Kaapi from long time. Maybe they were predominantly in Southern markets. So we now have 2 related companies trying to target the same set of customers. Or maybe their focus are on different regions.
Suven Life Sciences – Embedded triggers (16-12-2015)
Suven will charge it to P& L as is their stated policy is my view ( if they capitalise this it will be taken as bad governance by market in any case is again my view ) – Which means the final EPS on consolidated basis for next 2 years ( 31.03.2016 and 31.03.2017 ) is going to be bad/flat – Can anyone confirm their estimates of such likely eps for 31.03.2016 and 31.03.2017 ?
Spenta International (16-12-2015)
Sorry Hitesh,
I didn’t know about this policy.
Dis closer :- I do not hold any position yet in this company bust very interested to take position very soon. If any one has any information in this company kindly share. I will also update on the business in this very chain as I was waiting for the reply from the management.