Calculating FCF for textile business is merely optical illusion.
This industry requires huge capex and you never know a single capex can eat up 3 years of FCF.
Posts tagged Value Pickr
Waterbase – Can it be Next Avanti Feeds? (26-08-2015)
Waterbase Limited announces merger ratio for merger of Pinnae Foods Limited
- No cash outflow for the merger
- 4 shares of Waterbase Limited will be given for 17 shares of Pinnae Feeds Limited
- Pinnae Feeds Limited has an installed capacity of 75000 MTPA at Nellore
- Capacity of Waterbase Limited will triple from 35000 MTPA to 110000 MTPA
- Expected completion of merger by Q1FY17
- KPMG is the advisor for the transaction
The paid-up capital of Pinnae Feeds Limited is Rs. 10 crores and with this merger ratio, the equity capital of Waterbase Limited will increase by 2352941 shares or Rs. 2.35 crores... Debt as per CARE rating is Rs. 77.20 crores... These are my assumptions as per data available on internet...
Negative:
- Debt will increase, but Waterbase has almost 30 crores cash... So, shouldn't be high I feel...
Note: Have vested interest... So, take my assumptions with a pinch of salt...
Ambika Cotton Mills (26-08-2015)
1..I have carried forward Amit's assumption of 44 million
Nt sure how he arrived @ 44 million
But my excel giving different values
2..FCF growth rate for first 5 years = 13.7 % ( taking FCF growth rate for last 10 years and dividing by 2) ???
I am also not able to get How Amit get it?
@ amitverma21
Ambika Cotton Mills (26-08-2015)
@vinamrachaware - good effort.
Couple of questions:
1. How did you arrive at the FCF figure of 44 million?
2. Assuming the initial cashflow as 44 million, what is the logic behind growing it by 13.7%?
I am raising this question because textile industry by nature is very high capex intensive i.e. in simple terms it needs frequent upgradation of technology, machinery etc to compete with other players
If you see the historical FCF generation of Ambika, I think it has generated positive cash flow in only 4 out of last 9 years which includes major capex in 2007, 2008, 2011 and 2014. If you apply negative FCF every alternate year based on historical trend, I guess the fair value will go below CMP.
Indocount notes from AR (26-08-2015)
- 70% export from US. Most of the export market is developed country and hence get INR depreciation advantage for this year.
- Some one can expect 30% EPS growth expected in FY16.
- Debt can be 0 in FY18 basis if they grow only 15-20% on current earnings.
- Huge potential at current level at 19 p/e with long term prospect of 3-4 years. Very rare combination we can get for such company.
NGL Fine Chem-Re Rating Possible? (26-08-2015)
ICRA Upgrade the NGL rating from A3 to A3+
ICRA ratings for Indian debt instruments-Aug 26
NGL Fine-Chem Ltd ST: Non-FB A3+ 35.5 Upgraded from A3
Hitesh portfolio (26-08-2015)
@kapil1301
http://www.forcemotors.com/page/index/assembling#&panel1-1
Though not too much information is given.
Hitesh portfolio (26-08-2015)
Hi Hitesh,
I wanted to know ur views regarding Force Motors.
My rationale for it is
Market Cap of 3100 CR Debt To Equity 0.02 Mcap To Sales 1.29
Although we cannot directly compare it to Atul Auto But it seems cheaper on above parameters.
Also it manufactures Engines for Mercedes and BMW.
There Operating Margin Seems to be Stabilizing near 11 (Quatrely OPM)
They are a Dividend Paying Company
Comapany is is operations Since very long have been acuired by Jaya Hind Group
Above points Plus the Strong Presence of Their Force Traveller and also increasing number of luxury cars in India (BMW and Mercedes) Gives me Confidence.
(Form My Office to Home in a stretch of 9 Kms I almost site 40 Force travellers)
However I went Through their last Annual Report in that there was no mention of manufacturing of engines
for Merc and BMW also on their site their is no information of these products.
Also one general question
What do you do in such situations where U r seeing the the Company products are being used company posting decent numbers paying dividend but information about their products are not fully covered in their Website or AR.
Regards,
Kapil