Hi Vijay, he has already invested in Prakash SAIL and GPIL in steel. And with the miners it’s NMDC NALCO and MOIL.
IMFA
Q2 Results Link: https://nseindia.com/corporate/ImfaUFRandLRReport240917_24102017134721.zip
Tweets by management:
Q2 FY18 impacted by timing of benchmark price finalisation; FeCr prices have since bounced back & Q3 margins will be healthy - S Panda, MD (https://twitter.com/IMFALtd/status/922731525380087808)
Q3 FY18 benchmark has gone up 25% which has been captured in our long terms contracts & will be reflected in the earnings - S Panda, MD (https://twitter.com/IMFALtd/status/922732213619253248)
Foot Notes in results reports:
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Revenue from Operations for periods upto 30th June, 2017 is inclusive of excise duty. Post the applicability of Goods and Service Tax (GST) w.e.f 1st July, 2017, Revenue from Operations for the quarter and half year ended 30th September, 2017 is disclosed net of GST, in accordance with ‘Ind AS 18 - Revenue’ and hence not strictly comparable with previous periods.
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Special Leave Petitions (SLP) filed by Utka\ Coal Limited (‘UCL’, a Subsidiary of the Company) in respect of compensation for land and mine infrastructure of UCL’s coal block Utkat ‘C’ and change of end use of Utkal ‘C’ before the Hon’b\e Supreme Court, are pending for adjudication. Pending resolution of the said matters, no accounting adjustments have been made by UCL in it’s books of account and no provision is deemed necessary against the Company’s net exposure in UCL as at 30th September, 2017 amounting to Rs 111.42 Crores invested as equity and Rs 263.10 Crores given as unsecured loan.
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In view of the circumstances detailed above and considering the probability of economic benefits associated with the transaction flowing to the Company, as envisaged in paragraph 29 of Ind AS 18 on “Revenue”, with effect from 1st October, 2014 the Company has postponed recognition of income from interest on unsecured loan given to UCL.
Due to this, profit before tax for the quarter and half year ended 30th September, 2017 is Lower by Rs 10.12 crore and Rs 19.84 crore respectively.The interest income would be considered as revenue of the period in which it is properly recognised.
Stock tanked -11.70% today. Way off its historical PE’s. Does it make a case for an investment? Good risk reward?
Seniors please advise…
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Perils of buying a cyclical stock late. I remember some friends buying IMFA at 750 a few months back, Had advised that buying late or mid-cycle may have its perils. IMFA, I would buy only at 400-450 levels. I am very conservative.
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Thanks for the reply Jiten for the advise.
Had accumulated IMFA around 500 levels in early August. Sold off my holdings today, may enter at lower levels if they come.
Cheers
AJ
Metals/mining and infra sectors really playing out well.
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Yes Jiten sir. Are you tracking Godawari Power and Ispat. Looking good to me even at CMP for good returns.
Is it advisable to buy any cyclical stocks (metals/mining and infra) now?
On godavari power and ispat, the numbers are compelling and would be a great turnaround story if steel story plays as expected.
However I feel Jindal Steel is a better candidate.
Below link is from a recent investor meet:
https://t.co/L7qQwW08Eh
Discl: invested on JSPL
your post Mr. Jiten is great
My first question how do you decide when to exit from a cycle. Can you break up about each cycle exit point as you said that you have exited completely from paper. what factors help to decide when to exit . I am very new to this market .
also which commodity shares can we enter at this point of time as all shares have already gone up
Yes. Niteen and me have worked on this scrip together. He has done amazing work.
how do you decide your exit
Best exits are generally at peak earnings.
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Do you mean to say in comparison with previous historical high ?
No. Current one’s. And for that u have to understand the dynamics of the commodity/cycle. Unfortunately, there is no set way. Lot of it is experience over the years.
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So would you sell something like heg now?
Another way I look at these is sell these at 5-7 times peak earnings. If HEG peak earning is going to be 300, then it can be a sell between 1500 to 2100 based on this (this is just for illustration, I am not saying HEG will have peak earnings of 300).
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very good observation sir. however how to determine peak earning potential of commodity company? can you please elaborate with example. my calculation for MOIL is as under:
say MOIL achieved peak operating profit of 902.20 crore in year 2009. without taking into account if expansion in mining capacity if we assume that same operating profit will be achieved, as the depreciation and TAX is taken care by other income, applying PE of 7 give market cap of 6300 cr. if we add surplus cash in company the market cap becomes 8500. so upside of 20% left in MOIL.
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that’s very good work.
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thanks for giving your valuable advice .