Aksh Optifibre fundamental analysis

(weblinsolutions) #161

I found the website for this company online. [http://unitape-mandovi.com/]. Although, it is redirecting to a UK site.

(Meetesh) #162

See their website unitape.co.uk . Unitape had manufacturing plants in north Carolina as well as India. I assume they have sold their Indian factory to Aksh

(Meetesh) #163

As per zaubacorp the authorised capital of unitape Mandovi was 4cr and the paid up capital 3.33 cr . So does the acquisition perhaps work to around 3 crores ???

(Manish) #164

Aksh optifibre completes 100% shareholding in Unitape Mandovi India which is the manufacturing plant of UNitape UK in India … they have acquired in all cash deal … but will they have debt or internal accural in unknown …
my guess is that may be the reason why Usha Jain sold her holding to generate cash for the company , i may be totally wrong … looking forward to our Fundamental and Technical expert of Aksh optifibre @Mehnazfatima post eagerly :slight_smile:

here is the Unitape UK company announcement for India Plant …



(Mehnazfatima) #165

I would look at it a bit differently…Aksh has a FRP rod manufacturing capacity of 1.6 million kilometres and this after completion of capacity expansion will be 5 million kilometres…on the other hand Unitape has a FRP manufacturing capacity of just 2 lakh kilometres…so how does acquisition of Unitape help the topline or bottom line of Aksh significantly?

Unitape acquisition does not make much economic sense …unless the management plans to drastically scale up the FRP capacity at Unitape and use it to cater to the domestic market (as in a tax concession zone of daman and Diu)…

Already the management has indicated that the FRP rods is special area of expertise for them and they get quite good margins from them. I guess, the management will go for capacity expansion at Unitape and …then it will add very significantly to the bottom line of Aksh…

(Mehnazfatima) #166

In fact the delaration specifically states that Aksh has acquired the Unitape to maintain market leadership in FRP rod segment…how does a present turnover of just 3 crore rupees help Aksh maintain market leadership…unless there is going to be huge capacity expansion at Unitape…and why buy a company in Diu …unless it is for tax benefit purpose.

(Meetesh) #167

Very true Mehnaz. If that is not the game plan then it doesn’t make sense to buy unitape. Also i think it opens up the business for them as they can now supply unitape UK for all their requirements as well.

As for Usha Jain’s shares I am quite optimistic that it’s been taken by market savy investors who can use it to Jack up the share price.

Aksh is in a segment which will be in focus for the next few years and lets not forget that in the dot com bubble of 2000 Aksh traded around 170-200. Though stock price is driven by market forces and may or may not re occur all the ingredients are in the right place for Aksh at present.

I will be more than glad if Aksh can live up to its fundamentals and the promise it holds.

DISC : AKSH has a significant weightage in my portfolio and my views are thus biased.

(Mehnazfatima) #168

Meetesh: I would recommend all Aksh investors to read the ICICI direct report on Sterlite tech…the kind of margins that are expected from sale of oprtical fibers and cables are fantastic…and in this industry Aksh is supposed to be the most cost efficient producer…If they too are able to get those kind of margins, then Aksh reaching all time high share price does not look soo far fetched…

And as already stated earlier, my views too have a bullish bias.:slight_smile:

(Manish) #169

Thanks for all your fundamental updates @Mehnazfatima … its really been encouraging …
Sorry to play a a spoil sport , i just have 1 confusing doubt if you or someone may clear …
when finally after so many years of downturn and not much of a growth for optical sector as a whole…
when now things are looking so bright and futuristic and best time for Aksh Optifibre as a company with this expansion and surge in demand … Why would Usha Jain sell her stake in a Company which has such a bright future and thus the Share price may increase … why would she SELL All her huge chunk of holdings at this juncture and such a low valuation when we all foresee huge surge in price in time to come ??? more than Us she knows the sector and company is my feeling … so why Sell now ?
Anyways may be some personal reasons or anything for Usha Jain … where she may regret later :stuck_out_tongue:

kindly post your Technical set up as Aksh is at All time high :slight_smile: it will be highly useful for all of Us !

(Mehnazfatima) #170

After the death of DK Jain, there is a property dispute going on in Jain family (Delhi High court website)…in such a scenario family members in whose name assets are there will try to encash those assets before a stay order is obtained by other family members . hence, Usha jain too is selling…but on the day when she sold 64 lakh shares, there was a jump in stock price…this means that there was already a prearranged buyer for her shares…I am given to understand that in such cases, in addition to the official exchange traded price, the buyer gets a good amount in cash too…therefore, let us not be under the impression that the seller has got just 22 -23 rupees…the total payment may be much higher…

and with regards to the timing of the sale, that’s how it goes in case of disputes…either you sell immediately or you suffer as the assets get locked in a legal dispute which goes on for years and years…

This is all just speculation on my part…it may or may not be correct…just hoping that it is correct and acting on that assumption / hope.

(Mehnazfatima) #171

I have noticed a particular pattern when the shares are hugely accumulated by a BIG INVESTOR…if you look at HCL info…on accumulation of stock by Radhakrishna Damani and Prof Shivanand Maishkar…there was a sudden spike in volume and price…and once the accumulation is over, the stock again fell back to its earlier range…thereafter, it took about 10-12 months for the stock to again breakout…

I see a similar pattern in Aksh too…the earlier spike was in August 2015 when the FCCBs were converted and sold …there was accumulation by some well informed BIG PLAYER…after that it took almost one year for the stock to again breakout…

A lot of stocks show such pattern before a long and sustained rally…since past few days I have been extensively studying this pattern on monthly charts…it appears to be quite a reliable pattern for making long term investments in fundamentally good stocks…and now quite a few small and microcap stocks are showing this pattern…looks like exciting times ahead for traders and investors…some such stocks now are…

bafna Pharma
Butterfly Gandhimati
Bhanshali eng Polymers
Dolphin Offshore
fedders Lloyd
Bindal Agro
Nitin fire

(Mehnazfatima) #172

there was a good upmove of 11% with stupendous volume…the stock closed below the resistance line on daily chart…I look forward to seeing todays bulk deals data…exit of Usha Jain is almost a foregone conclusion. It is quite possible for the stock to consolidate for a few days…but I would still bet on the continuation of the rally…posting the daily chart for your reference

(dr sunil t deshmukh) #173

(Meetesh) #176

Well Well. Aksh has now crossed 27.90 with tremendous volumes. Now will patiently stay invested till march 2018 and beyond. Its been a fantastic ride thus far for all the patiently invested shareholders. A special thanks to Mehnazfatima who has gone indepth and spread her knowledge through this forum as well as MMB.

(Mehnazfatima) #177

Key takeaways from todays conference call by Sterlite Technologies…

The orders for fibre optic cables to be realeased by Indian telecom players 9post spectrum auction) in second half of the present financial year…

Good orders on account of smart cities project and the national rural broadband project…

Good international demand…

Margins for optical cables is around 12% and for fibres is around 30%…blended margins for cables and fibres is around 20-22%…

Analyst from ICICI specifically asked about competition from Aksh Optifibre…The Sterlite mngt chose to mention Vindhya but deliberately sidestepped question about aksh …seems like aksh is growing and competing well with Sterlite Tech…

Sterlite expects the products (optical fibre /cable) business to double in h ecoming financial year…if the same thing happens in the case of Aksh Optifibre too, then that would mean Aksh becoming a 500 crores turnover company by end of present financial year and a 800-900 crores tuenover company by end of next year…

My suggestion would be not to monitor the progress of Aksh on day to day basis…but on longer term monthly charts and use any fall in stock price as a buying opportunity…

(Meetesh) #178

The best part is where the management of Sterlite states that orders worth 10000 cr are in decision stage. The opportunity for Aksh is thus tremendous not only for its optic fibre but also the frp rods in which it the world’s largest manufacturer.

(ssharma) #179

Thank you Mehmaz … I know it is just beginning of a long but stupendous journey :slight_smile:

(Mehnazfatima) #180

(valuebuyer) #181

Data showing the internet penetration in India and the potential opportunity still available for companies like Aksh to capitalise i.e ard 2/3 rd of the market is yet to be explored

(Alphin) #182

Results are out, very poor numbers. I had sold off all stocks in morning before result.

Though it is mentioned that poor results are due to expansion. It needs to be checked if there is a fundamental problem in the industry like cyclically.

I compared Aksh to other cable and OFC suppliers and 5 out if 7 companies had negative profit growth in screener.

Add to the fact that virtually there is no moat as OFC is sort of like a commodity.

Also the fact that promoter and concern like usha jain had dumped their stocks.

These factors very bugging me and I had lost the conviction in the stock. Other stock holders should review their thesis and post their inputs.