Comparison of Stocks against Sensex

A review of FY12 Results [Updates]

Comparison of Stocks against Sensex

The annual results are coming out and it’s a good time to re-evaluate the portfolio and also start considering what lies ahead for FY13. Here is an update on the performance of some of our ideas:

Gujarat Reclaim Rubber: We had first discussed about this idea at 875 levels and provided multiple updates. The stock did very well despite the weak markets. The Q4 nos are pretty weak and below expectations in terms of profitability though the top-line growth is intact. We feel that one should consider the annual performance also wherein the company has grown the topline by 30% for the year and net profits by 45% despite the weak Q4. It may be just a weak quarter due to several reasons like – write off of Plant & Machinery due to fire in the last quarter and loss of production (majority to be recovered by way of insurance), increase in employee cost due to one time bonus etc. and fluctuation and appreciation of rupee resulting in lower margins.

As per notes to accounts, the company has partially started the new production capacities and may be the growth will bring back the profitability. For FY 13, we do expect the company to grow 25-30% once again.

The stock might correct due to weak results but any sharp correction to say 1400-1500 levels and below might be a good opportunity to accumulate for long run. The company has a fantastic track record of consistent growth, business leadership, transparency, high ROCE and high dividend payouts.

Particulars Mar 12 Qtr Mar 11 Qtr % Variation FY 2012 FY 2011 % Variation
Sales 60.49 50.02 20.90% 240.28 185.56 29.50%
PBIDT 7.97 7.66 4.00% 49.38 33.19 48.80%
Tax 2.13 1.78 19.70% 12.83 8.14 57.62%
PAT 2.64 3.93 -32.80% 25.52 17.62 44.80%
EPS 19.82 29.47   191.41 132.16  

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

Avanti Feeds : First discussed at 33 levels, the stock has been a multibagger. The company has once again come out with good set of numbers with topline growth of 55% and Net profits growth of 430%! Company has done an exceptional write off of investments worth 1.53 Cr in this quarter to clean up the accounts.

Particulars Mar 12 Qtr Mar 11 Qtr % Variation FY 2012 FY 2011 % Variation
Sales 69.98 45.30 54.50% 374.56 199.62 87.60%
PBIDT 6.68 2.82 136.90% 46.91 12.38 278.90%
Tax 2.27 0.37 513.50% 12.78 1.69 656.21%
PAT 3.18 0.60 430.00% 27.48 3.42 703.50%
EPS 3.98 0.75   34.35 4.97  

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

This year has been an extra-ordinary year for the company due to the huge turnaround in the fortunes of this industry. The company is one of the biggest player in this industry. The industry is expected to continue doing well and grow at the rate of 15-20% for next 2-3 years. For Avanti Feeds, we may see another 20%+ growth for the coming year but the margins may come under pressure due to stabilization and growing input costs. One may continue to hold and do partial profit booking sharp rises, if any.

Apcotex: First discussed at 163 levels, the stock has been stable and currently trades at 150 levels. The investing logic was the high dividend yield and the strong pedigree of the management. For FY 12, the company has raised the dividend from Rs 7 per share to Rs 8 per share. At CMP of 150, it offers a dividend yield of more than 5%.

The company has grown at a CAGR of 25% for last 5 years and they do target to scale up and be a 500 Cr turnover company over next 2-3 years.

Particulars Mar 12 Qtr Mar 11 Qtr % Variation FY 2012 FY 2011 % Variation
Sales 66.89 59.98 11.50% 254.62 202.62 25.70%
PBIDT 7.65 5.46 40.10% 23.08 20.27 13.90%
Tax 1.41 0.98 43.90% 4.85 4.35 11.50%
PAT 3.47 3.00 15.70% 11.46 10.72 6.90%
EPS 6.70 5.79   22.11 20.68  

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

We feel it’s a good idea to be part of portfolio to enjoy consistent growth and high dividend yield.

Indag Rubber: Initially discussed at Rs 110, less than a year back, the company has been coming out with excellent results and the stock has also more than doubled. It remains a good simple business with good cash flows and other ratios. The stock is trading at a PE ratio of just 5.50 and seems to have potential ahead. We recommend investors to hold the same.

Among new ideas, we are working on Kakatiya Cement & Sree Rayalseema Hypo.

Happy Investing!

  • Ah

    so was there an actual fire in gujrat reclaim or you just quoted the statement as an example?

    • Ayush

      Couldn’t get your query…yes, there was an actual fire and it was disclosed in quarterly results of dec.

      • Rareinvestor

        Current value of investment holdings of HEXANo. of shrsCMPValueNalwa Sons Investments 267,723671179642133Jindal Stainless Ltd 4,931,17574364906950Jindal Steel & Power 39,449,46045517949504300JSW Steel 12,128,9156201319927300Shalimar Paints 300,000446133800000Jindal South West Holdings 94,21452048991280Total value (INR mn) 19996771963Value of investment (INR/share) 363.5776721Discount80%

  • Fantastic performance! Kudos – keep it up. And yes, keep educating. Wonderful picks.

    • Ayush

      Thanks, Kiran

      • Guest

        Hi Ayush,

        I am currently tracking “Asahi Songwon Colors”. Company looks good: decent performance, good margins, low debt. Any views on it.

        • Ayush

          Yes, it seems to be a good company. We have some

        • Omprakash

          Due to stringent environmental issues and high labor costs most of the companies in advanced countries stopped production of manufacturing pigment Cpc blue.This presents good opportunity for companies like ASCL.With strong relationship with reputed MNC like DIC,Sun chemicals,Clariant company is growing well.Latest results are good with 27% growth in sales and 48 % growth in PBT.With increased tax outgo PAT up by 12 %.Last five years sales CAGR is 25 per.Company exports about 85 per of its sales So with rupee depreciation it is in sweet spot.Management is investor friendly announced 30 per dividend last year.This year too they paid enhanced interim 12.5 %.So i Am assuming 35 % dividend this year(final 22.5%).So,with good growth prospects and at 5 % yield i think it is good investment opportunity.

      • Guest

        Whats your view on Asahi Songwon Colors?

        • Ayush

          We do like the co and own some.

  • Tony

    I am an ardent follower of y ur blog and value pickr. IFB AGRO recently has been hitting the lower circuit. Any reason for this? Any alarm bells which i do not hear?

    • Ayush

      Hi Tony,

      Yeah, the lower circuits are a bit surprising as we have also not come across any particular negative news. We are waiting for Q4 results to take a call…in the meanwhile small buyings can be done on falls.

  • Tony

    Thank you Ayush. I have been buying regularly at lower levels. Hope the tide changes as the company have performed well in the recent past too. What is your take on Ajanta Pharm and Mayur Uniquoters which is discussed at length by Donald and his team.

    • Ayush

      Mayur Uniquoters is a very good long term choice. Ajanta is also good.

  • Nikhil J

    what is ur take on IFGL refractories ?

    • Ayush

      Sorry, we don’t track the same

  • Roynaveen

    Dear Ayush,

    Please share your thoughts on SML & Eicher Motors. Also TTK Healthcare & Hikel

    Regards

    NR

    • Ayush

      Hi,

      Don’t track these closely hence can’t comment.

  • respondvignesh

    Respected Ayush,

    This question is not related to this post. since i dont know wer to ask questions, i m posting it here. I wud like to know how much does CFA help in equity research? Since ur profession is equity research, i feel u wud be able to answer this in the best possible way.. If doing CFA benefits in doing equity research, plz let me know how it helps…Thanks. Awaiting ur reply eagerly

    • Ayush

      Hi,

      CFA does help in equity research as the theoretical knowledge is important to form a solid base and understanding.

      What is your educational background?

      • respondvignesh

        Engineer. 3+ yrs of exp in the software industry. Going to do my post graduation this year in IIM Indore. I am investing for over 2 years now and learning about it practically. So, i am thinking whether i should put 600 hours of efforts to learn theory or analyse different stocks and different sectors where i learn a lot of things real time………

        • respondvignesh

          and i am regularly reading your website which gives a lot of insight and updates

        • Ayush

          As you already have nice educational background and your interest is more for personal investing, may be practical learning will be more useful. There might not be a need to do a complete CFA course.

          There are lots of fantastic books, blogs etc which will be more helpful in practical learning.

          • respondvignesh

            Thanks a lot for your suggestions Ayush. I read the book ‘The Intelligent Investor’. plz suggest other fantastic books too… bw, i wud like to ask whether u did CFA?????

          • Ayush

            You may go through our book shelf link at the top.

            No, I’m CA by qualification 🙂

  • Nikhil J

    hi Ayush,
    What about Gandhimathi appliances at this price? march results are very good. Can you pls give some insights?

    • Ayush

      Sorry, don’t track the same.