It has been a debt free company since its IPO. they have squandered all the funds that were raised. Learnt a hard lesson as I had invested in this company long time back on the debt free premise.
Not tracking the current business situation, however would advise a big caution.
Posts tagged Value Pickr
Tanla Solutions – a niche player in m-commerce space and a turn around story? (09-11-2015)
Deccan Cement : Dull company.Dull business.Big wealth creation opportunity (09-11-2015)
Yes, it seems in Jun-15 qtr it got fuel expense benefits. Generally their fuel expenses (to sales) ratio is between 27-29% but in Jun-15 qtr it was in 21% which gave it approx 11-12 crs of fuel savings. This qtr is back again to normal levels, still profits are up. Need to demystify it
POKARNA LTD ( Stock opportunities ) (09-11-2015)
Last year AR had a line item for Other Long-Term Liabilities to the tune of Rs.21 crores which is cleared now in the last quarter.
Other Long-term Liabilites had 2 items:
Security Deposits : Rs.06.0 crores
Interest accrued but not due on borrowings: Rs.20.92 crores.
I guess this must be the interest that was due to the promoters for their loans to the company. Not sure how the market will read it :
a)Why they paid their due first when they have over Rs.100 crores outstanding long-term loans.They really worked hard to keep the company going during tough times,they do deserve it.
b) They still have Rs.200 crores long term loans ( Term loan Rs.110 crores and Unsecured loans from directors/inter corporate depositsRs.87.16 crores)
and Rs.59 crores short term loans(working capital loans).
From next quarter onwards,it will be interesting to see which one they will pay back first.
Now coming to the valuations,Pokarna currently trades at an Enterprise value to sales of 2.33 ( Market cap of Rs.673 crores + Debt of Rs.260 crores) / Sales of Rs.400 crores.
Despite having superior margins of OPM over 25% and net profit of over 10%,end of the day it is a building materials company.So,not sure if it will get better valuation than this.Going forward,growth will be incremental tracking the earnings data.
Other building material companies like Kajaria,cera are trading at 3 times the market cap to sales.
Disclosure: Invested.
Sandesh Ltd. – A Rare Cash-Rich Play on Print Media & OOH Segment (08-11-2015)
Sandesh posted decent results
Q2Fy16 Revenue – 90.4cr against 84 of Q2FY15
EBITDA – 29cr against 22cr
NP – 19.8cr against 13.6
Duke Offshore – Hidden Gem? (08-11-2015)
Hi Friends,
Planning to invest in this company, so doing my analysis step by step:
Duke Offshore
Market Cap.: 23.66 Cr. Current Price: 48.00 Book Value: 25.48 Stock P/E: 6.19 Dividend Yield: 1.14%
Face Value: 10.00 52 Week High/Low: 77.95 / ₹ 17.85 Debt: ₹ 0.00 Cr. Debt to equity: 0.00
EPS: 8.84 ROCE3yr avg: 40.45% Quick ratio: 2.22 Current ratio: 4.09 PB X PE: 11.64
Debtor days: 53.29 Profit growth 3Years: -11.68% PEG Ratio: 0.15 Promoter holding: 70.61%
Earnings yield: 19.11% Dividend Payout: 10.76% Mkt Cap To Debt Cap: 0.49 OPM: 46.50% OPM 5Year: 53.67%
Volume: 4,839.00 Sales growth 5Years: 30.31% Interest Coverage: ₹ 30.00 Market Cap to Sales: 2.51
Average return on equity 3Years: 21.74% Dividend Payout Ratio: 10.76% Change in promoter holding 3Years: -0.49%
Financial analysis
Sales Growth:
years 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 10-Mar 11-Mar 12-Mar 13-Mar 14-Mar 15-Mar
Sales 0.02 0.03 0.08 0.03 6.33 2.47 0 8.48 5.66 6.56 9.28
CAGR = 24%
Result: The sales growth is good
Profitability:
year 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 10-Mar 11-Mar 12-Mar 13-Mar 14-Mar 15-Mar
Sales(A) 0.02 0.03 0.08 0.03 6.33 2.47 0 8.48 5.66 6.56 9.28
Operating Profit(B) -0.14 -1.16 -1.4 -0.36 2.61 0.38 -1.15 5.73 3.1 3.56 4.85
OPM%(B?A) -700 -3,866.67 -1,750.00 -1,200.00 41.23 15.38 67.57 54.77 54.27 52.26
Other Income© 0.01 0.86 0 0.19 0.14 0.09 0.13 0.16 0.12 0.42 0
EBIDT* (D=B+C) -0.13 -0.3 -1.4 -0.17 2.75 0.47 -1.02 5.89 3.22 3.98 4.85
Depreciation (E) 0.02 0 0 0 0.02 0.03 0.41 1.05 1.2 1.08 0.74
Interest (F) 0.01 0 0 0 0 0 0.1 0.24 0.09 0.03 0.15
Profit before tax (G=D-E-F) -0.16 -0.3 -1.4 -0.17 2.72 0.44 0.84 4.61 1.95 2.88 3.97
Tax (H) 0 0 0 0 0.34 0.07 0.26 1.41 0.63 0.97 1.46
Net profit
(I=G-H) -0.16 -0.3 -1.4 -0.17 2.38 0.37 0.58 3.19 1.31 1.9 2.51
NPM% (I/A) -800% -1000% -1750% -567% 38% 15% #DIV/0! 38% 23% 29% 27%
After mar 12, the NPm is in good shape
Tax:
year 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 10-Mar 11-Mar 12-Mar 13-Mar 14-Mar 15-Mar
Profit before tax A -0.16 -0.3 -1.4 -0.17 2.72 0.44 0.84 4.61 1.95 2.88 3.97
Tax B 0 0 0 0 0.34 0.07 0.26 1.41 0.63 0.97 1.46
Tax% B/A 0 0 0 0 12.5 16 31 30 32 34 37
Tax%>30 is good and here it is around 30 from last 4 years
Interest coverage:
year 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 10-Mar 11-Mar 12-Mar 13-Mar 14-Mar 15-Mar
Operating Profit(A) -0.14 -1.16 -1.4 -0.36 2.61 0.38 -1.15 5.73 3.1 3.56 4.85
Interest B 0.01 0 0 0 0 0 0.1 0.24 0.09 0.03 0.15
Interest coverage (A/B) -14 NA NA NA NA NA -11.5 23.875 34.444 118.67 32.33
Last four years the interest coverage ratio is in good shape
ANALYSIS OF BALANCE SHEET (B/S):
Debt to Equity ratio (D/E, Leverage):
Year 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 10-Mar 11-Mar 12-Mar 13-Mar 14-Mar 15-Mar
Equity Capital 4.98 4.98 4.98 4.98 4.98 4.98 4.98 4.98 4.98 4.98 4.98
Reserves -3.37 -3.67 -5.07 -5.24 -2.86 -2.49 -1.91 0.99 2.16 4.06 6.31
T sh funds
(E=1+2) 1.61 1.31 -0.09 -0.26 2.12 2.49 3.07 5.97 7.14 9.04 11.29
Sec Loans (3) 0.41 0.38 0.38 0.27 0 0 0 0 0.36 0.83 0
Unsec Loans (4) 1.09 1.3 0.8 0.84 0.62 0.42 2.11 2.26 0 0 0
Tot deb (D=3+4) 1.5 1.68 1.18 1.11 0.62 0.42 2.11 2.26 0.36 0.83 0
D/E 0.93 1.19 -13 -4.2 0.3 0.17 0.68 0.37 0.05 0.09 0
D/E<1 last 7 years – Good
Current Ratio (CR):
Year 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 10-Mar 11-Mar 12-Mar 13-Mar 14-Mar 15-Mar
Inventories (A) 0 0 0 0 0 0 0 0.05 0.08 0 0.15
Receivables (B) 0.56 0.53 2.17
Cash (C ) 1.22 0.204 0.12
Current Assets (CA=A+B+C) 1.94 0.32 0.15 1.14 2.74 3.29 3.24 1.88 0.74 2.44
Current Liabilities(D) 3.56 1.13 0.69 0.79 0.9
Provisions (E ) 0 0.14 0.14 0 0.12
Total CL (CL=D+E) 0.28 0.3 0.1 0.74 0.89 3.56 1.13 0.69 0.79 0.9
CR (CA/CL) 6.9286 1.0667 1.5 1.5405 3.07865 0.92416 2.86726 2.72464 0.93671 2.71111
CA>1.25 …..most of the time…this is good
ANALYSIS OF CASH FLOW STATEMENT (CF):
Year 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 10-Mar 11-Mar 12-Mar 13-Mar 14-Mar 15-Mar
Cash from Operating Activity -0.1 -0.07 -0.09 -0.1 2.71 0.04 1.75 3.27 2.24 3 5.23
Cash from Investing Activity 0 0 0 0 -2.1 1.35 -4 -2.29 -0.9 -4.52 -4.33
Cash from Financing Activity 0 0 0 0 -0.49 -0.2 1.75 -0.03 -1.98 0.49 -0.98
Net Cash Flow -0.1 -0.07 -0.09 -0.1 0.12 1.19 -0.5 0.95 -0.64 -1.03 -0.08
Cash at the end of year 0.2 0.1 0.22 1.41 0.92 1.87 1.23 0.2 0.12
CFO- Increasing YOY
Cash from investing Activity is –ve….confused the meaning
Cash from Financial Activity is –ve….confused the meaning
Cumulative PAT vs. cumulative CFO:
Year 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 10-Mar 11-Mar 12-Mar 13-Mar 14-Mar 15-Mar Total
PAT -0.16 -0.3 -1.4 -0.17 2.38 0.37 0.58 3.19 1.31 1.9 2.51 10.21
CFO -0.1 -0.07 -0.09 -0.1 2.71 0.04 1.75 3.27 2.24 3 5.23 17.88
Here CPAT
Valuation Analysis
Ratio Value ideal Comment
p/E ratio 6.19 <10 Good
PEG ratio 0.15 undervalued stock
PB X PE 11.64 <122 Graham said it should be <122
p/s 2.51 <1.5 if p/s>3: sell the stock
Dividend Yield 1.14% >5% Not so important
EV/EBITDA 4.79 Low meaning undervalued
Ideally this looks a undervalues stock
Business & Industry Analysis
Compare Sales growth rate with peers
Year 5-Mar 6-Mar 7-Mar 8-Mar 9-Mar 10-Mar 11-Mar 12-Mar 13-Mar 14-Mar 15-Mar Total
Duke Off 0.02 0.03 0.08 0.03 6.33 2.47 0 8.48 5.66 6.56 9.28 84.78%
Dolphin
Offshore Enterprises
(India) Ltd 139 183 212 234 352 553 0 200 415.6 357.7 196.5 3.84%
Alphageo (India) Ltd 23.1 23.9 54.3 81.6 63.9 78.33 20.86 25.23 8.66 44.41 63.97 1.78%
Gemmia Oiltech (India) Ltd 0 0 0.45 1.72 3.15 5.52 9.07 8.3 0.18 0 NA
Duke offshore sales growth is better than its peers — very Good sign
Increase In Production Capacity And Sales Volume:
Year 5-Mar 15-Mar CAGR
Production capacity (tonnes per annum)
Quantity sold (tonnes) (A)
Sales price per tonne (INR) (B)
Total sales (INR Cr./10 Million) (A*B)
Not able to find the data
Still analysis is in progress.
Starting a New Thread: Please follow these guidelines (08-11-2015)
I have been going through threads related to guidelines at Valuepickr to come up with a proposed template to initiate a stock story.
Was wondering if we should remove the word ‘Recommendation‘ from the above post in the light of SEBI guidelines etc.,. I understand though that the above post is an old one and posted before the SEBI guidelines were released.
Regards.
Cranex Ltd : A Material Handling Company and a value buy (08-11-2015)
I have been holding the company from IPO days and had high expectations from the management but hopes have been unanswered till now.Product range,Technical collaboration all looks good but management seems to be the problem in capitalising the opportunities.Even during growth times of industrial activity they were far behind in increasing market share.
VSt Tillers and Tractors limited (08-11-2015)
I have studied this business and feel that one should give a serious thought on owning this business at the right valuation.
I had a few questions on the business and they are as below.
1) Why is the tiller market in India only 56000 units, in spite of tillers being introduced in India in the 1970’s. In Japan the market of tillers is 6 million units and in China it is 1.9 Million units.
2) Why is no body wanting to enter the tiller business, has it got any barriers to entry ? There are only 3 players in India. VST – 50% share, Kamco ( state government of Kerala) – 25% and Chinese imports 25%.
3) Why is the average price of a tiller Rs 130000, is it the engine that is expensive? otherwise tiller’s body and other parts should not cost that much.
4) 80% of land holdings in India are small, this should drive the tiller sales. Why is the tiller market in India growing at only 10-12%. Shouldn’t it be growing at a much faster rate given that land holdings in India are small and fragmented.
If I am not wrong seniors at VP had meet the management earlier and visited their hosur plant. If the seniors are looking at meeting the management again to conduct a Q&A I would like to contribute. In addition if any of members have spoken to end users, distributors or people related to the agriculture sector please post your findings.
Regards,
Chetan Chhabria
Tanla Solutions – a niche player in m-commerce space and a turn around story? (08-11-2015)
Firstly the disclosure – holding from lower level – 5% of pf
I would supplement few observations:
1. The company has successfully made a turnaround on the back of new strategy of m-messaging.
2. Company has spent large capex over last 4 years in creating infrastructure to support the new strategy
2. The capex spent cycle is complete, so no further capex need immediately.
3. The company never gave guidance on quantum of revenue it may add from the capex?
4. Revenue from overseas Capex spent is at least 2-3 quarter late? Now that the Singapore center is finally operational in Oct-15- more important thing is how much of the revenue materializes now in Q3?
5. It is zero debt, cash surplus company. History indicate that the Management is not debt savvy. A good indicator.
6. m-payment has not grown while management continues to focus on that space.
7. The company is already market leader in India in m-messaging and is aiming to further grow its share.
8. m-messaging seem to have significant growth potential at least for 2 years. Must be on watch for emergence of any disruptive technology to this model.
8. All in all it is a very interesting play at very reasonable valuations at present. The real growth is yet to come!
Thanks
Balkrishna Industries (08-11-2015)
I had doubts on the FX handling of this business. On going through the material on the company my understanding is as below.
1) The company imports its raw materials from outside, hence any appreciation in the USD/EUR (depending in which CCY it pays) will benefit the company. Hence the company needs to hedge on the required CCY (let us call this the first leg)
2) Company derives majority of its revenues from outside, 55-60% from Europe and 15-20% from USA. Hence a depreciating CCY (EUR/USD) will help the company. Company needs to hedge against appreciation (let us call this the 2nd leg)
3) As the company imports its RM, the import and export gives it a natural hedge. However degree of imports need to be weighed against the exports.
4) Company books revenues on the day of generating the invoice, the exchange rate that it takes is the once that is provided by the custom department. However when it realizes the amount depending on what the rate is, it books a profit/loss and puts it on the P&L account.
5) The company realization per tonne may be effected by CCY. In Q1FY16 the management realized 219000 per tonne, the figure for Q1FY15 was 241000. As per the management this is not due to price drop but due to CCY movements which is not hedged uniformly through out the year.
However on going through few of the con calls, the management has not hedged the second leg EUR-Rupee. It seems that the company is taking a bet on the direction of the currency.
The above is my simple understanding. I would like to understand if there is anything more to it and what more does one look at. However one would buy the business based on its operational strength and not on any currency movements.
Regards,
Chetan Chhabria