Q2 Results continued to be mediocre. EBIDTA margin has seen slight improvement to 3.8% sequentially from 2.1%. Y-o-Y sales growth at 5% with both India and KME growth slowing down. 35 new Kaya Skin Bars opened this quarter though. No. of customers contracted in Kaya India while they grew marginally in KME.
In short, the struggle for the company continues.
Posts tagged Value Pickr
Marico Kaya (MaKE) (05-11-2015)
Cranex Ltd : A Material Handling Company and a value buy (05-11-2015)
- Que : why should i look at Cranex when i have so many other “sure
shot ” 20% cagr opportunities ? Ans : In Cranex we are betting on
non linear lumpy growth which if it works out will give us much
bigger upside with limited downside risk.Conservative capital
allocation of < 1% gives us the flexibility to “buy,ignore and watch
” this opportunity.
Que : Do you know or trust the management ? Can you give some
pointers ? Ans : No I do not . I have not seen any red flags yet .
However low ROE,low stake,and low npm makes me cautious in committing
not more than 1%.
Que : Have you sold or added to your holdings more post your initial
original post ? Ans : Added small portion – Will update the day i
sell .
Que : Whats your timeline for holding ? Ans : At this point of
writing wish to give them 2 years till Sep 2017
Que : How to get more info about the co ? Ans : AGM is the best bet
. Otherwise specific ques can be addressed either in this board or
better still one can write to the md/cfo thro’ investor relations
email id available in their website.
Que : Do you think mgmt will share information if i ask ? Ans : Cant
say but my gut is that they will not share much as their priority
would be to hike their stake.
Que : Whats your current strategy for this stock ? Ans : My current
plan is to sell half of my holdings at a certain price so as to make
the remaining half zero cost and then let it ride.
Que : Are you a “materials handling ” sector expert ? Ans : No . I am
a learner.no specific expertise .As good (or as bad) as anyone else.
Que : Is this stock suitable for concentrated PFs ? Ans : I dont
think so . I will advise this for those who want to take a lottery
type bet with very limited downside as part of diversified
portfolios.
Granules India Ltd (05-11-2015)
Motilal Oswal Target 185
Results Overview- Above est. quarter; EBITDA margin expansion by 180bp leads to PAT growth of 40% Revenues at INR 366cr, +19% YoY were 2% above our estimate of INR 360cr. The expanded PFI capacity of 4,000 tons commenced operations during the quarter in addition to the existing capacity of 14,400 tons. This contributed to incremental growth from PFIs which was affecting revenue growth since the last four quarters. We believe revenue growth should accelerate moving into 2HFY16.EBITDA at INR 68.9cr, +32% YoY was 13% above our estimate of INR 60.8cr. EBITDA margin at 18.8% was higher by 180bp YoY and 90bp QoQ against our estimate of 16.9%, a beat of 190bp. Management is targeting EBITDA margins of 20% over the next couple of years. PAT at INR 31.0cr (+40% YoY) is 16% ahead of our estimate of INR 26.7cr
Valuation and view
Granules is a high quality play on the mid-cap pharma space. The company is climbing higher in the pharma value chain by focusing on formulations which is expected to reach 65% of standalone revenues from 32% in FY15. While we expect the base business to solely drive profits until FY18E, we expect Auctus and the Omnichem JV to start contributing meaningfully to profitability by FY19E.
Based on the strong margins displayed by the company in 1HFY16, we raise our margin assumptions for FY16/17 by 1.5%/1.6% to 18.1%/19.3% and accordingly raise our EPS estimates by 15% for FY16/17. Overall, we expect the company to grow its Revenues/EBITDA/PAT at 17%/27%/34% respectively over FY15-18E and improve pre-tax ROCE from 19% in FY15 to 28% in FY18E.
We value the business at 20x Sep 2017E EPS which is a 10% discount (being a B2B player) to the mean multiple commanded by midcap formulation companies and maintain BUY rating on the stock with a target price of INR 185 / share (earlier INR 160).
P. I. Industries Ltd. – A Unique Business Model can make it a Great Play on Agri & CSM Space (05-11-2015)
Motilal Oswal : Target 800
Growth to rebound; margin expanding due to better mix
Revenue growth below estimate; to recover in 2HFY16, driven by CSM: PI reported overall revenue of INR4,461m (est. INR5,204m) in 2QFY16 as against INR4,266m in 2QFY15, a 4.6% YoY growth. Domestic agri-inputs registered a 10% growth while CSM exports growth was flat during the quarter. Despite a poor south-west monsoon, the company’s performance in the domestic-agri business was encouraging—driven by growth in branded portfolio of products. In the CSM business, the management informed that revenue has been deferred to 2HFY16 as the off-take was lower in 2QFY16.
EBITDA margin expands 200bp; adj. PAT below estimate: EBITDA margin expanded 200bp to 19% (est. 18.1%), led by better mix of products within the domestic agri and CSM exports business coupled with softening of raw material prices. EBITDA during the quarter stood at INR848m (est. INR942m) as against INR726m in 2QFY15, up 16.7% YoY. Adj. PAT grew from INR455m in 2QFY15 to INR550m (est. INR598m) in 2QFY16, a 21% YoY growth. Tax rate was lower at 27.7% due to higher capitalization; the management has guided for 30% rate for the full year.
Outlook remains strong: Jambusar Phase II is now operational and Phase III will be operational by December 2015 (income tax exempt for first 5 years); coupled with commercialization of 1-2 molecules every year, this shall drive the CSM revenue going ahead. The order book in CSM as on September 30 is USD610m and the company has received 20% more inquires than last year. The long-term outlook in domestic agri-business continues to remain strong with the launch of Vibrant and re-launch of Bio-Vita expected by year-end.
Valuation and view: With best-in-class capital efficiency (40% RoCE), insignificant debt-to-equity and robust growth outlook (21% revenue CAGR and 26% PAT CAGR), we believe PI is one of the best plays on India’s agri sector and CSM opportunities. We believe mix change in favor of the R&D-intensive CSM business would continue to drive rerating for the stock. PI trades at 31x FY16 EPS and 23x FY17 EPS. We maintain Buy rating with a target price of INR800, valuing the stock at 28x FY17E earnings.
Tera Software – any value? (05-11-2015)
Hi guys,
tera software is a 70 cr market cap software hyderabad based company which recently got a 300 cr order form the AP govt..what do you guys feel?
the one big negative is the huge amount of recievables on the balance sheet.
Lincoln Pharma … the next mid-cap pharma in the making …? (05-11-2015)
Yeah Mann…. 
I got my error.
Thanks and cheers 
MPS Ltd (05-11-2015)
Great work @ayushmit, @rohitbalakrish_, @aveekmitra and of course @Donald for making this all available to the forum.
One aspect which might add to the margin of safety for fresh buys at current levels is the possible exit route through a takeover of MPS itself!
Assuming that MPS reaches the 500 Cr sales over next 3 years (through both organic growth and acquisitions) at that time it might become a lucrative enough takeover candidate for biggies looking to enter the segment for sticky revenues (remember the entry barriers!)
And given both the larger peers SPI Global and Aptara got acquired (Links here and here) this might provide a possible exit route. With Nishith having nurtured and sold businesses at attractive valuation earlier this option might indeed play out.
Astral polytechnik ltd (05-11-2015)
Yet another quarter of very impressive top line growth but bottom line degrowth
I have been observing the results of a lot of companies. One common thing I observed is that, very poor top line growth. but very good bottom line growth. ( operating leverage, cost cutting whatever you call it). But astral is just the opposite.
Lincoln Pharma … the next mid-cap pharma in the making …? (05-11-2015)
I am just pointing out to the data that you have posted… Don’t take it offensive… When we are putting data in public domain, we have to be careful… That’s it… No comments on the stock or its performance or your comments… Hope you understand…
Automated Stock Analyzer (05-11-2015)
Sorry. I am pretty sure – checked a couple of stocks before responding. Has nothing to do with closing and opening. The VBA error is a sign that the site is not opening via Excel. Seen that in other users.