Portfolio Update – Period of inactivity in this week. Portfolio performed slightly better than Nifty benchmark. Good traction seen in Care ratings, HSIL, Gati, DHFL and Kaveri seeds which help outperform the index marginally.

Stocks to ponder over and research further
a. Camlin Fine sciences
b. TCPL Packaging
c. Edelweiss finacials
d. SPARC

Thoughts – Patanjali growth can be slight disruptive event for many FMCG companies. Need to carefully watch out the FMCG stocks we are invested in.

Hitesh,

It is a Channel BO also. Sorry was late in posting this chart. As long as the upper channel intact, the uptrend will continue and a buy every dip till that line.

Rgds,

APLLTD.jpg1366×768 158 KB

Lets not base our decision based on what p/e investors are doing. They have deep pockets to take risk and even if something goes wrong they will be compensated behind the screen. Listing can be an exit route for p/e investors.

See the total debt level.Consolidated debt of Rs. 3,800 Cr. as of February 15, 2015. d/e 3.90.
The Company faces competition from QSR – McDonald’s, Dominos, Dunkin Donuts, KFC, Pizza Hut, etc in addition to pure coffee chain. Mr Ambaliga who has worked in the Group has commented that the company is incurring losses on coffee shops and it tallies with closure of 175 shops.

They are in the business for the last 15 years and why still losses. Its arms are also making lossess. No dividend history. When such a business with a long existence is still making losses and using IPO money to pay off debts, it is not a good business.

It may be a leader with 1500 outlets ( far ahead of Barista) but whether it makes cashflow that is important. A good business pays off debt by internal accruals and again equity financing is expensive than debt.

I have given the facts and view and it is for the individual to take a call. My single biggest risk factor is debt and would refrain from posting further on this.

Rgds,

Key points from Mr Nrupesh shah’s interview on Bloomberg.

Regarding MKE acquisition:

1) China has a trade agreement with several south east Asian nations. Symphony sees this as a doorway to that market.
2) While Indian exporters have to go and search for customers in the international market, western companies approach Chinese manufacturers on their own. Symphony sees this as a opportunity for accessing this western mkt.
3) MKE’s R&D facility is one of the best in Asia. Better than symphonys, it matches US & Australian standards.

Regarding new competition in domestic MKT:

• Symphony has been in the air cooler market for 27 years. They ‘know’ the customers and the traders expectations. Air coolers while looking like a simple white box has 200 parts in it. Symphony’s 100% focus on air coolers allows them to provide better products, newer products with customer centric features and esthetics ( in comparison to air coolers just being one other product in competitors portfolio).
  They are confident of maintaining their market share (45%-50%). + growth from the unbranded to branded aspirational shift .

Future growth drivers:

1) Domestic market – Short term to medium term growth
2) International market – Medium term to long term growth . International mkt currently contributing 15%. They will take it to 50%.
3) Industrial coolers – Long term growth.

@Lynchfan Really useful guidance!

But on point 2 – I thought the same as well. However, markets have a mind of their own.

Just look at Kaveri Seeds – the stock has completely destroyed wealth and more than halved from its highs.

I’m treating it as an exception to the rule. But this is where diversification saves you as most other companies with 0 Debt and 15-20 P/E and same yoy profitability won’t half in value.