Quarterly results are good to introspect the stock ideas we are invested into. We review the performances to stay with winners and switch out of stocks where the companies are not performing as per expectations. It is heartening to notice good performances by most of the companies we are invested into.
Gujarat Reclaim: – The company has posted fantastic Q2 results with an EPS of Rs.58.12 in the quarter. The stock seems to have also given a positive technical breakout on the upside and should create new highs:
*All Financial figures are in crore rupees (except EPS).
Continue reading Results season – Hits and Misses
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 Bearing – Company 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.
Continue reading Quarterly & Annual result update…
A week back we had mentioned about Facor Alloys as one of our Mahurat Picks. The stock was in action today and up by about 16% to Rs 7.73. As the stock is crossing the level of Rs 7 after about 6 months, the action may have just begun.
First of all, I’ll like to thank Rohit for bringing to notice the merits in this company at his blog. He had discussed the stock about 6-7 months back, since then the company has posted much better than expected numbers.
Facor Alloys is in the business of chrome alloys, which are used in the steel industry. The industry is highly cyclical and the fortunes are linked to the steel industry cycle. South Africa is worlds largest producer of Alloys (60% share), over the last few years, India’s alloy industry has gained importance and is growing rapidly due to acute power shortage in South Africa.
Over the last few years, the company has very well re-structured itself. The debt has been wiped off, preference capital paid off + the company now has excess cash on balance sheet of about 35 Cr + Investments of 15 Cr in unlisted group company. Hence excess cash + investments is almost 40% of Current M Cap of about 130 Cr and provides a lot of comfort.
We feel the stock is a valuepick at these levels of about 7-7.50 and a re-rating may happen in the stock. Several positives are:
- The chrome alloy cycle seems to have turned positive.
- Co has been growing steadily by generating cash from internal accruals. This year expected revenues are 400 Cr+
- Co has posted excellent Q2 numbers.
- Cash Equivalent on Balance Sheet is almost equal to 40% of Current M Cap
- The company has been paying a dividend of 15% for last 2 years (FV = 1). Hence giving a dividend of 2%+ at these prices.
- Stock is available at 1.2 times BV of 5.6
- Stock is trading at just 5 times TTM PE
- Being a highly cyclical business, the earnings are highly volatile.
- Its a commodity natured business.
Wish you and your family a very Happy & Prosperous Deepawali!
Previous year has been excellent for Equity Investing and the long term looks equally opportunistic.
On the auspicious day of today, we would like to mention few new ideas which investors may explore and initiate investing on Muharat Trading today:
- Mangalore Chemicals (45.50)
- Facor Alloys (6.60)
- Nitin Spinners (13.50)
- Sree Rayalseema Hi-Strength Hypo (63)
- 3M India (3960)
Looking forward to your views.
Best Wishes. Happy Investing.