Quarterly Results Update (Q3 FY12)

Q3 results have been generally good and most of our stock ideas have posted good performance. Here is a brief evaluation of their performance:

1. Balkrishna Ind: The company has yet again posted an excellent set of numbers and has surpassed the expectations. It is fantastic for a company with as large a turnover of about 2500 Crores to grow at 30%+ per annum. The company is in process of a greenfield expansion which should double their capacity in 2 years and hence the company has potential to keep growing at 30% p.a. for next 2-3 years. They are targeting 10% market share worldwide by 2014.

The stock has been a major outperformer in this market. Yet the stock is trading at just less than 10 times earnings. I do expect it to get further re-rated upwards with bigger investors coming in.

Particulars Dec 11 Dec 10 % Variation FY 2011
Sales 757.08 492.93 53.60% 1996.94
PBIDT 133.47 86.60 54.10% 370.70
Tax 35.02 18.37 91.87% 89.38
PAT 72.88 38.21 90.70% 185.66
EPS 7.54 6.54 19.21

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

2. Astral Polytechnik: This is another GEM of a company. The company has delivered a growth of 60%+, much more than the expectations. This quarter results were expected to be bad because of the abnormal forex movement over last few months (company imports majority of raw materials and the Indian rupee has fallen from about Rs.44 levels to Rs.54 against the dollar in a span of few months). But the rupee has now recovered to Rs.49 levels and as the company has also done some price hikes in last few months, we may see some fantastic numbers in upcoming results.

Particulars Dec 11 Dec 10 % Variation FY 2011
Sales 160.51 98.49 63.00% 410.82
PBIDT 11.35 13.86 -18.00% 57.50
Tax 1.19 1.55 -23.20% 8.60
PAT 4.74 8.38 -43.40% 33.59
EPS 2.11 3.94 14.95

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

3. Oriental Carbon: Though we were expecting a good performance in the 2nd quarter itself, the same has come up in this quarter due to delay in starting of new plant. The company has done quite well and if the trend is to continue, the stock is cheap at these levels. Would recommend investors to accumulate the stock at current levels of Rs.125.

Particulars Dec 11 Dec 10 % Variation FY 2011
Sales 62.62 41.64 50.40% 158.24
PBIDT 17.81 13.66 30.40% 51.80
Tax 2.82 1.11 154.00% 6.25
PAT 9.69 9.39 3.2% 37.38
EPS 9.41 4.38 38.30

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

4. Atul Auto: The company has once again posted an excellent topline growth of about 50%, though the net profits grew around only 20% due to an exceptional item of about 1.1 Cr (towards provision in diminution in value of investments) and lower operating margins. With the given numbers, upside might be limited for short-term but if one looks at the prospects over next 1-2 years, the stock can do very well. The company is going PAN India and is in process of doubling its capacity in next few months at a very small capital expenditure of just 8 to 10 Cr.

Particulars Dec 11 Dec 10 % Variation FY 2011
Sales 79.61 50.95 56.30% 201.07
PBIDT 6.06 4.97 21.90% 20.03
Tax 1.84 0.98 87.8% 4.64
PAT 3.09 2.51 23.1% 9.43
EPS 4.32 3.67 13.79

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

Among new ideas, we had mentioned Ansal Property in last post. Though the Q3 numbers haven’t been good due to some reversal on a project and cleaning up of balance sheet but the long-term story and hidden value remains intact. The company has developed huge land banks in Tier 2 & 3 cities, where they are building huge modern townships. These projects are getting a huge success and may lead to huge re-rating in coming years. Will do a detailed post soon. We are also looking at Liberty Phosphate.

  • Nikhil Jagawat

    hi ayush,
    what about symphony ?
    Should i buy at this levels ?

    • Ayush

      Hi Nikhil,

      We don’t track the company hence no comments.

  • Nikhil Jagawat

    what about SE investments ?
    future growth prospects ?

    • Ayush

      Sorry don’t track this one also. For a stock to qualify in our investment category, it should have some specialty and should be available at cheap or decent valuations. Do share your investing logic for the above ideas if you feel they have lot of potential.

      • Dmehta1311

        I like Suryalakshmi Cotton (521200) and Rajvir Ind (532665).
        Your views.

        • Ayush

          Sorry don’t track the same. In the textile space we are tracking Welspun Syntex, discussed earlier at our blog.

  • Rajat

    For OCCL, do you any idea about the debt position. Have they incurred more debt for the expansion of Phase II? Or is it largely funded by internal accruals?

    • Ayush

      The expansion is a mix of both debt and internal accruals. The debt might be close to 100 Cr now.

      • Respondvignesh

        hi Ayush,

        is oriental carbon the only company in India to manufacture insoluble sulphur?

        • Ayush

          Yes and among the few globally

  • NR

    Ayush,

    Just wanted to bring in your attention to Selan, Advanta, Wimplast & Eros. Whats your views on these as i hold these in my long term portfolio

    Thanks
    NR

    • Ayush

      Hi,

      These are good cos…but not much idea as we don’t track them closely.

  • Nikhil Jagawat

    hi ayush,
    what about essel propack and godrej industries from long term point of view ?

    • Ayush

      Have a look at Manjushree Technopack. We feel its better than essel.

  • Guest

    Hi Ayush,

    Views about Liberty Phosphate plz…

    • Ayush

      It looks good. To increase exposure, we are trying to get more details.

  • NR

    Ayush,

    Earlier you have shortlisted Thangamayil in your watchlist. I wanted to compare Thangamayil with Shree Ganesh. How can you help me.

    Thanks

    NR

    • Ayush

      Hi,

      Shree Ganesh is a tougher business model to understand hence not much inputs from our side.

      Ayush

      • mathew

        hi ayush,

        wats ur take on nile,nitco,arshiya international,aries agro and liberty phospate?all seems interesting.expecially arshiya and liberty..

        • Ayush

          Hi,

          Nile is into the lead recycling space in which we already have exposure and like Pondy Oxide. Liberty Phosphate also looks good as valuations are quite cheap. Don’t track others.

  • Roberto el Sandriano

    Hi Ayush,

    What is the impact of high crude oil prices on Astral and Mayur Uniquoter? Say, if crude touches $150.

    Roberto

    • Ayush

      Hi,

      High crude prices can put pressure on margin of Astral. In case of Mayur, there shouldn’t be much of negative effect as they have been able to pass on costs.

      • Roberto el Sandriano

        Thanks as always Ayush for your response.

        Roberto

  • Pankaj Vaidya

    Great blog.
    Found you on Indiblogger.
    Plan to read through all you blogs as and when i get time.

  • Any updates on astral poly .can it still be purchased .the growth in future n track record is stupendous. Now the question with expanding EPS could the PE could also expand n under what circumstances.?

    Does apcotex also enjoys such huge size of opportunity? Is there any moat with this co n any china threat . Kumho Korea n Rishiroop rubber is their competitor? Will this sector remain a perennially low PE sector.Better stay away from Low PE sectors ?

    What’s your take

    • Ayush

      Astral Poly is a fantastic long term stock idea but the co might report weak nos for Q1 due to forex issues and may be a good correction if any would be a good opportunity.

      Apcotex is not a typical “moat” company. Its more of a growth stock with good promoters and high dividend payout. I don’t think it can get re-rated in a big way until their margins expand. Its not into much of rubber area now…the contribution from synthetic rubber is going down…they are more of a chemical co now.

      The logic here is that the promoter’s profile is very good and they target to expand product portfolio to maintain 25-30% growth for next 3-5 years. If done, stock should also do well.