Q3-FY12 Result Updates

Dalal-Street Updates

When the majority were bearish, the markets surprised them by giving a strong upwards swing. Most of the stocks prices have improved by about 20%+ in less than a month. This is why it is always advised not to time the markets. Rather than remaining on sidelines, one should target companies doing well and yet available at sane valuations. The Q3 results look good till now. Here is an update on some of our existing ideas:

1. Indag Rubber: The company has posted yet another good set of results. Top-line grows @ 55% and Net Profits @ 85%. Yet the stock is still available at less than 5 times earnings. It looks to have good potential ahead.

Particulars Dec 11 Dec 10 % Variation FY 2011
Sales 57.45 37.17 54.60% 149.47
PBIDT 7.77 4.44 75.00% 16.69
Tax 1.59 0.85 87.10% 2.89
PAT 5.31 2.88 84.40% 10.75
EPS 10.12 5.48 20.48

*All Financial figures are in crore rupees (except EPS).

2. IFB Agro: The company has posted steady results with strong improvement in margins from the liquor business. The stock seems cheap as it is trading at just 4.5 times the earnings. Technically too the stock seems to be heading for new highs.

Particulars Dec 11 Dec 10 % Variation FY 2011
Sales 120.97 106.80 13.30% 422.82
PBIDT 14.82 7.73 91.70% 36.27
Tax 4.14 1.86 122.60% 8.40
PAT 8.23 3.47 137.20% 17.82
EPS 10.28 4.33 22.26

*All Financial figures are in crore rupees (except EPS).

3. Gujarat Reclaim: The company remains to be our favorite with its repeated stellar performance. If one considers the superior business quality of the company, superior ratios, management quality etc., we feel this company deserves much higher valuations. Over next one year, the company is in process of expanding its capacity by about 40%+. This stock should get a high allocation in the portfolio.

Particulars Dec 11 Dec 10 % Variation FY 2011
Sales 62.68 46.20 35.70% 185.04
PBIDT 15.23 7.43 105.00% 33.19
Tax 3.96 1.56 153.80% 8.14
PAT 8.53 3.97 114.90% 17.62
EPS 63.98 58.12 132.16

*All Financial figures are in crore rupees (except EPS).

4. Nesco:The results are ok with steady performance though the growth has been nominal. Given the upcoming prospects, Nesco remains a fantastic long term stock idea.

5. Apcotex: The results are decent and it remains a safe and steady stock idea with good dividend yield. Further buying might be done either on declines or growth ahead.

6. Smruthi Organics: Company has continued to deliver growth of about 30% year on year and it remains a very good choice in the pharma sector. The company still seems under-researched and is trading at attractive valuations.

7. Avanti Feeds: The company has posted very good results though the stock price has corrected by about 20%; perhaps due to higher expectations as the Q2 results were exceptionally good. We should remember that due to seasonal nature of the business, H2 is always weaker when compared to H1. Stock is trading cheap at CMP of about 100 and as the company is expected to continue growing @ of 20-25% for next couple of years. It continues to be a good stock idea.

Particulars Dec 11 Dec 10 % Variation FY 2011
Sales 75.86 49.21 54.20% 199.62
PBIDT 8.34 3.07 171.70% 12.38
Tax 2.30 0.04 5650.00% 1.69
PAT 4.71 1.23 282.90% 3.42
EPS 5.89 1.50 4.24

*All Financial figures are in crore rupees (except EPS).

8. Poly Medicure: The company has once again posted solid growth and very good operating margins but the net profit is down due to forex loss of 4.25 Cr. As per update, this loss is on the existing-open forward contracts done during 2008-09 maturing over the next 6 months. So If the stock corrects due to this short term negative, it might be an excellent chance to accumulate this gem.

Other new ideas which are attracting us, as we dig them further are – Ansal Property, Avantel & Mayur Uniquoters.

As always, we are loving the views of our readers and encourage them to keep sharing their ideas too.

Happy Investing!

22 thoughts on “Q3-FY12 Result Updates”

  1. Hi Ayush,
    Triveni Engg looks quite interesting … You are just paying for sugar business assuming worst case possible sugar co valuations right now, with other businesses like gears, water,cogeneration, stake in turbines etc. coming for free…

    Ashish Kila

    1. Hi Ashish,

      Please forward me the details. On the face of the nos, didn’t find something interesting here. Profits have been falling since some time…also what about the promoter quality?

    1. Hi,

      When the acquisition happened, it was indeed a huge surprise to even paper industry as valuations were steep. The price has has come back to the levels of pre-deal time. Usually paper stocks get low valuations due to the commodity nature of the industry and limited growth.

      If one wants to have a look in this industry, have a look at – Sree Sakthi Paper, Sangal Paper & Shri Ajit Paper.

  2. DFM foods is a hidden gem. The makers of crax and natkhat chips having wonderful growth rates with healthy margins and great returns on capital. Its needs a deeper study by the great analyzers on this forum: Ayush, Donald, Rohit, Ninad and Niraj. Thanks to all in advance.

    1. I remember discussing DFM with Neeraj when it was in double digits but by the time we were researching, the stock just ran up too much 🙁

      Though it has a good business model and brand but valuations seem expensive as of now.

    1. Hi Ankit,

      The fall is small and seems to be more due to re-classification of shareholding among promoters. If one observes closely, the promoters (promoters + friends + relatives) easily have more than 65% shares.

  3. Gujarat Reclaim is defintely a wonderful business available at very decent value. In my opinion Mayur Uniquoter, Cera Sanitaryware are two other good businesses available at reasonable valuation.

      1. What happened to Mayur today.We were expecting the price to fall post arrival of bonus shares instead it shot up.
        Any updates on the same.
        Can it still be bought at current price ?
        Similarly what abt astral poly what to do buy or sell?

        1. Mayur is a fantastic long term stock idea and the rise is very much normal given the good earnings and outlook. If one has zero exposure, then it still can be bought and accumulated on declines.

          On astral those holding may continue to hold and if exposure is high, one may do some profit booking to buy back in case of sharp declines, if any.

  4. Any views on recent price movement of Mayur Uni and updates. The delivery percentage was quite high on increased volume at 77,84 and 64 on last 3 days of trading. Any news on institutional action n advise for future.

    Any other stock pick you like ?

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