Quarterly & Annual result update…


Its results season again and a good time to monitor and shuffle your portfolio. Like we used to have exams earlier, similarly its result time for the stocks we invest into.

In the mid/small cap space hardly 10-15% of the companies have come out with their numbers. Till now the results have generally been on the softer side. The companies are growing but there is lot of pressure on the margin side due to inflation and other factors. Some of our companies which have come out with numbers are:

ABC BearingCompany has posted very good numbers and it seems the expansion we had talked about in our initial post has finally kicked in. At current market price of Rs.150, the stock is trading at about 6 times FY 2011 earnings. Continue holding.

Balaji Amines The numbers are below expectations. Though the topline and operating profits have grown inline with the expectation, but margins have gone down + interest cost have increased + company has provided for a lot of taxation. For the full year the turnover has increased from 262 Cr to 355 Cr and Net Profit has increased from 20.64 Cr to 25.40 Cr. At current market price of about Rs.41, stock is trading at 5 times FY 2011 earnings. We advice a hold at current levels.

Facor AlloysThe numbers are inline with expectations. At CMP of 5, here is a debt free company available at a PE multiple of just 3 and Book Value of 7.

Mangalore Chemical – The March quarter numbers are weak. As per notes to accounts, the turnover has been lower in this quarter due to – “lower availability of raw material and imported fertilizers and annual turnaround of urea plant in march 2011.” The company has also provided for an impairment loss of 7 Cr in this quarter. Despite the weak quarterly number, the annual turnover is higher by 20% than last year and Net Profit is higher by 35%. The EPS for the year 2011 is approximately Rs.6.5 and Book Value is 36.

Nitin Spinners – As per the March qtr results, the company has changed its accounting method for depreciation and higher depreciation rate will be applied going forward. Hence the company has provided excess depreciation of 21 Cr for the earlier years and 5.4 Cr for current year. If one looks at the operational level, the company has done well as per expectation. But given the policy change, one may reduce exposure.

Smruthi Organics – The company has posted very good numbers once again.The numbers are better than our expectations and we feel it’s a good pharma company available at attractive valuation. This company has been growing at a CAGR of 25%+ and yet available at a PE multiple of 6. One may consider accumulating the stock.

Among new ideas, we liked Indag Rubber and are studying the same.

Among our other stock ideas, we have been getting very positive response on Astral Polytechnic, Poly Medicure & Gujarat Reclaim.

10 thoughts on “Quarterly & Annual result update…”

  1. I have been an investor in Indag Rubber for sometime now, although have a very low exposure. It has pretty low volumes. The business is good and has been reporting good results consistently over a period of time. However, they have a fair bit of competition from the unorganized sector.

    I had written about it briefly sometime back:-




    1. Hi Abhishek,

      Yes, the stock has remained cheap for sometime. But interestingly, till last year the co wasn’t paying taxes due to tax benefits etc and that used to be my concern. This year the taxes have been provided and yet the EPS is about 20 for the year. Stock is trading at just 5 PE with good dividend payout and clear balance sheet.

      It seems to be a good safe stock idea to me.


  2. Hi Ayush
    What is you take on Jaihind Projects at the current levels? The stock seems to be at attractive valuations.

    1. Hi,

      Rising interest rates is a big negative for infra cos…especially like Jaihind, which are highly leveraged. Also in the last few months the co hasn’t shown much growth while its loan has been increasing. I would wait for for growth and better clarity.

      Better option in this space might be Pratibha Ind.


  3. Hi Ayush
    What is your take on SREI Infrastructure Finance Ltd. The company was doing very well till recently but i have not been following that of late. The current price of 39 odd looks undervalued. Is it worth iniitating a position at the current levels?

    1. Hi,

      Haven’t tracked the company closely. Have heard good things about the same and will keep a tab.

      Do post a summary of yours.


  4. Hi Ayush,
    Guj reclaim came out with good results.I observed opm decreasing continuously since last three quarters.This quarters opm of 13 per is lowest among last ten quarters.I think raw material and employee cost dwindling the OPM’S.Please comment on latest results and capacity they enhanced.If possible please post update note on previous one.

    1. Hi @779cf6d9b8b2cc6d32d99975308ca5da:disqus ,

      Yes, Gujarat Reclaim has posted good nos though margins are under pressure.

      One of the reasons could be that the co is on a expansion phase and hence there might be pressure on margins. Even otherwise, there are indications of continued growth by the company for next 2-3 years.

      It remains one of the most stable and growing stock idea to be invested in.


  5. hi i have some legacy holdings of abc bearings. the auto downturn has hit the co. hard. Do we just sell or hold? thanks usha

    1. Hi,

      If one looks at the past track record of ABC, the co has been a dull performer. Others from the industry have grown much faster. Even the good cos are down, and hence I think it would be a good option to convert it into better ideas.

      ABC will also rise when the industry situation will improve but the better cos might deliver better returns.

Leave a Reply

Your email address will not be published. Required fields are marked *