Granules India Ltd

(mrai74) #723

The crude oil prices made big dent in last quarter, If I observe correctly from below graph, the crude oil prices were

Q3 (Oct’17 - Dec’17) : $50 - $60
Q4 (Jan’18 - Mar’18) : $60 - $66
Q1 (FY18-19) Current quarter : $62 - $72

The quarter wise price trend is still northward (although eased a little bit in last few days but overall its more than previous two quarters) . As we have just 3 weeks left in this quarter, is it safe to assume that current quarter will also have impact on bottom line until unless management is able to pass on all impact to customers. I am aware that they confirmed that they pass on this burden with lag of a quarter.

Views from seniors invited, which seriously impacts our investment decision

(lastgenesis) #724

Will get passed on with a quarter lag one way or the other, so no medium term impact. In any case things like acetic acid are probably more important than crude for their P&L. Crude can definitely impact on a quarterly basis but I would not think of this stock as one where there is any story in next 1-2 quarters, it is a longer play.

Not sure if it is a good thing or bad but I am pretty much incapable of thinking on quarterly basis for any company, I strongly believe that one should take a minimum 2-3 year view on a business. If the idea is to trade, one is better off looking at charts than numbers.

(amolk) #725

Management has guided for 19% ebita for first 3 qtrs of fy19 and 19+ margin for the last qtr. At the time of giving the guidance, the crude had already ran up from last qtr level so I don’t know what gave confidence to management to give 19% margin . With 1 qtr lag I would think that it would have some impact on this qtr as well before it stabilize

(Tarun_1984) #726

Agree. Crude technically has been correcting since 20/5 now and hopefully if any further meaningful correction will provide more impetus to Granlues at CMP…Believe they had a stronger pipeline deployment in 2019/20