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Posts tagged Value Pickr

GoodLuck Steel Tubes (08-12-2015)

Businesses

Goodluck Steel tubes is engaged in manufacture of Steel pipes and sheets diversifying into more valued added products like forged components for auto & railway industry and structures for power, telecom and solar industry.

Expansion

GoodLuck Steel Tubes has lined up following expansion over next one to three years.

  1. 30 crore expansion of new Structures unit. Should start production by March 2016. This expansion will expand companies margin.
  2. Setting-up a new Auto Tubes, Heavy Support Structures & Forging plant in Gujarat at cost of 260cr.The project will implemented in two stages first will be Auto Tubes & Heavy Support Structures and second stage will forging.

Financials

Q2FY16

Long term Debt = 76 cr
Short term Debt = 220 cr
Cash = 8.4 cr

Current Assets = 382 cr
Current Liability = 307 cr

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Key Concerns

  • Future profitability depends up on the managements ability to successfully diversify into more value added products.
  • Implementation of expansion projects in-time will be critical for growth of the company.

Key Positive

  • Investment at current market price provide good margin of safety. TTM PE = 5.95

  • Company is showing improvement is OPM over several quarter from 5.x% to 9.x%

Disclosure
Invested with tracking position

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Tree house education and accessories ltd. – Potential candidate for improvement in RoE (08-12-2015)

Its not a sale.

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Tree house education and accessories ltd. – Potential candidate for improvement in RoE (08-12-2015)

More like a sale of pledged shares, right? This is bad for the company and the promoters, especially if other lenders take the cue.

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Tree house education and accessories ltd. – Potential candidate for improvement in RoE (08-12-2015)

My trust on myself has started coming back! Though my average is quite high but I am glad that I averaged :smile:

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Avanti Feeds (08-12-2015)

Board Meeting on Dec 18, 2015 08 Dec 2015 17:52
Avanti Feeds Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on December 18, 2015, inter alia, to consider the following:

  1. Approval of Business Transfer Agreement (BTA), in connection with transfer of Shrimp Processing Business to Avanti Frozen Foods Private Limited (a wholly owned subsidiary of Avanti Feeds Limited), to be effective from November 01, 2015, at a slump sale value of Rs. 128.00 crores.
    (the Members of the Company approved the transfer of Shrimp Business of the Company to Avanti Frozen Foods Private Limited by way of slump sale which shall not be lower than the net book value of assets and liabilities by a Special Resolution through Postal Ballot, the results of which were declared on October 26, 2015).

  2. To consider subscription of 60,00,000 equity shares of Rs. 10/- each a premium of Rs. 131/- per equity share, aggregating to Rs. 84.60 crores in connection with the Rights Issue made by Avanti Frozen Foods Private Limited.
    http://www.bseindia.com/corporates/anndet_new.aspx?newsid=afa2953e-2efe-440d-a215-efeaa25960f7

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Renaissance Jewellery (08-12-2015)

Hi Saurabh,

Your and @Nirav8 doubts are very reasonable but since we are in business of separating the wheat from the Chaff, we need to give company a chance.

Debt- Equity ratio of company for last 10 years

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Related-parties according to AR 2014-15 are

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The company has also details of related-party transaction in Annual report. Note 26 of note to financial statement. @constantseeker_ Can we use this information to cross-check revenue figures?

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Tree house education and accessories ltd. – Potential candidate for improvement in RoE (08-12-2015)

Release of pledged shares:
Capital first has released all 44,600 (10.54% of total share capital) of the pledged shares.

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Moneyball – what’s Baseball got to do with Investing? (08-12-2015)

Amazing post – I have been a big believer of charlie munger’s horizontal thinking and your post got me excited.

A few points are to mull over are :smile:

  1. if you are a disbeliever and someone else brings in data based evidence, learn to trust it
  2. one of my biggest learnings is that the less gifted but passionate like billy beane – the extraordinarily gifted seldom make good analysts or coaches because the pieces come together so effortlessly for them
  3. making the change and wiating for it to yield results is the tougheest part of the process – people want fruits to be borne out as soon as they water the plants. How do you assess progress without seeeing the fruits of it is something no one has figured out completely. But like ian cassel says “if you are doing better than what you were two years back, you are on track” and not necessarily doing better than your perceived competitors. That’s the tough part.

good effort !

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Forensics and the art of triangulation (08-12-2015)

Hi @varadharajanr

The report does not seem to be available – can you point us to the link?

Separately, I just read about the Olympus Scandal ( Wikipedia on Olympus Scandal) along with the book by the CEO; who infact became a whistle blower – Exposure – the story behind Olympus.

In a nutshell a fraud was carried for 23 years to hide losses as the Japanese bubble burst. Initial losses were attempted to be recovered by speculative investments; and such investments were doubled downed when losses increased. The Japanese had a nice sounding word for it called the ‘tobashi’. However hiding ever increasing losses became more and more difficult as accounting rules changed. The fraud was perpetrated institutionally as the outgoing chiefs passed out the fraud baton to incoming ones.

Ultimately it became too difficult to hide and one incoming CEO, a gaijin (or foreigner in Japanese), a Brit, who was an Olympus lifer climbing the rungs from a salesperson blew it up.

The book talks more about the cultural turmoil, but an investigative report ( Official Investigative Report Summary ) lays out in some broad detail how the fraud was supposed to be hushed up in the books. At its core the idea was to smoothen losses – via amortising goodwill.

But as the amounts got larger, auditors balked, red flags were raised and the organized fraud was exposed and taken to completion by a dogged CEO.

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NCL Industries – Resumption of growth? (08-12-2015)

Q2FY16 Nos. analysis by Nirmal Bang-

NCL Industries Ltd reported QoQ decline in operating profit due to seasonal volatility seen in cement prices. Demand across the Southern region continued to remain weak but price discipline is still followed by cement producers in the markets.

1. Revenue during the quarter increased by ~8% QoQ which is led by higher capacity utilization at 65% in Q2FY16 from 60% in Q1FY16. NCL continued to register healthy sales volume growth of ~7% QoQ and ~31% YoY to 2,41,396 Mnt.

2. EBITDA had declined by 18% QoQ to Rs. 32cr due to higher freight cost (Rs. 27crs in Q2FY16 vs Rs. 22crs in Q1FY16) and drop in cement realization at Rs. 6572 in Q2FY16 vs Rs. 6746 in Q1FY16. The decline in realization was due to seasonal declining in its key markets, where cement prices has seen correction of Rs.50 per bag. Cement EBITDA/tonne fell sharply by ~36% QoQ to Rs. 727/tonne from Rs. 1136/tonne in Q1FY16. General Administrative expenses increased by 85% QoQ to Rs. 14crs in Q2FY16 from Rs. 7.6crs in Q1FY16 which includes onetime expenses also increases in some variable expenses.

3. Freight/tonne had increased by ~24% QoQ to Rs. 849/tonne from Rs.735/tonne in Q1FY16 due to company entering new location which have lower realization and high lead distance.

Discl: Invested from much lower levels (10% of portfolio at present). As disclosed in Deccan Cements thread earlier, I had sold 1/3rd of my holdings in NCL at 160+, reason being portfolio top slicing from an allocation pov.

Note: I have just pasted the analysis of numbers selectively from the report. Report can be found here (Nirmal Bang NCL Q2FY16 Result Analysis).

Kind Regards.

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