Another very important point to be kept in mind which is often ignored but has very very serious long term implications is the amount of amortization charged to the P&L account to arrive at net profit/EPS.
For this quarter as was for previous quarters....the amortization charged was rs 11 cr. This amortization was charged because JLL had acquired Henkel a few years ago.
If you think deeply, the brand/goodwill/franchise value of Henkel brands is only increasing under JLL. But still, as per GAAP, (ALAS!!!) they need to wear it down to zero in their balance sheet by charging it in their P&L account.
So, in order to calculate owner earnings (so to say....i m quoting warren buffett here) we can safely add back Rs 11 crore and hence actual net profit would be rs 49 cr instead of 38 cr....a jump of whopping 30%(aprox)
On an anualized basis ( if we double up the half year earnings of JLL and add 30%) the total nett profit will be Rs 84cr*2=Rs 164 cr plus 30%= 212cr (APROX)....which will amount to an EPS of Rs 12
If you also add Rs 36 cr charged on anual basis against ESOP as it will not exist by next year....you get a net profit of Rs 240cr and an EPS of Rs 13.5-14.

All this will make JLL really attractive!!!

Views on the analysis are invited from fellow members
Regars,
Ranvir Dehal

My key learning has been that just as there is such a thing as over diversifying your portfolio, there is also such a thing as over concentration. Get this balance right is still work in progress.

Hrfacebuk,

Your post is clear and cogent. Thank you for that. In fact, it acted as a trigger for me to check out the data. Below are the data for total income for the first half for the last five full financial years. Except in Sept 12, they has not been a half yearly degrowth.

   Sep-15	Sep-14	Sep-13	Sep-12	Sep-11	CAGR
243.33	230.96	200.58	129.37	148.28	13.18%

As far as quarterly numbers go, it is clear that Q1 numbers look a lot weaker than Q4 of previous year and this is evident when one looks at the numbers and has also been reiterated by management multiple times. But Q2 numbers almost always look stronger than Q1 numbers; including for this year.

The abiding concern ( even for someone like me who inherently sees a lot of growth left in this company) though is that management needs to be more nuanced in their guidances, especially since now the stock is under the limelight. The days of escaping unscathed from over ambitious guidances are over for this stock. It has to pay the price of being an outperformer and that normally is nuanced and conservative guidances.

The multiples are coming from growth estimates. Underpinning them is the degree of credibility of these estimates; both on a numerical and time scale. If over time there is an established pattern of over guidance and achievement of targets, but over delayed time horizons, one can be sure the multiples will very quickly reflect that.

Having said this, I agree with your behavioural observations. My only fervent request to the management is to get their guidance philosophy right. And the deeper concern is whether this tendency to over guide is a reflection of a mindset which is getting increasingly disconnected with ground reality; given the spectacular growth over the last few years.

I also agree that it is not a bad idea to discount management guidance in this case. Keep in mind, if everyone does this, that is essentially a PE erosion which is the direct outcome of their cowboy attitude to guidance

The next quarter holds the answer.

I stay at Mulund near Kelkar company ( as we call it)

There are many companies situated in that compound (as one can see from sign boards), i m not sure if it is subsidiary of SHKelkar or private entities of promoters (Pls chk related party transactions)

Company has good land, approx around 20 acres, stretched from Balrajeshwar road, till Rmall on LBS marg, i am not sure if land holding comes under SHK or promoters private property.

Request members to please re check before investing

Disc : Not applying for IPO.

Thread seems to be dead for long.. No one sees value even with SEBI-FMC merger lingering?.. thanks