Sir,
Do you still track PI Industries? How you see it from 2-3 years perspective? It’s revenue growth was OK but profit grew very well. And seems to me good play on Agri. Do you see valuation still stretch?
Thanks in advance.
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Hitesh bhai I m learning many things reading ur responses to all . I am tracking Aditya birla fashion retail Ltd (ABFRL) .it’s owning all top brand of Madura coat like Louis Phillips, van housen. Stock is consolidating at around 140-150. Seems to be good value unlocking. What’s ur view on ABFRL. Thanks in advance hitesh bhai.
Just curious. Why do you think its value unlocking for ABFRL?
Its trading more than 10 times its book value, zero dividend yield, NET loss in last 2 years, negative cash flow, debt to equity of more than 2…Return on equity is 0…Are there any future triggers?
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@hrishi, PI inds seems to be a good compounding machine. And with it getting into pharma CSM kind of biz there can be another avenue of growth. The recent run up has taken a lot of sheen off the valuations though.
@Mukesh, I like the products of ABFRL. Van Heusen, Louis Philllipe etc are great products. Problem is with the company as an investment bet. How profitable will be the growth of this company is a moot question. And the merger of Pantaloon Fashions into ABFRL has brought on added problems. In fact I dont like the merger and demerger antics of the Aditya Birla group. Its often difficult to be abreast of developments. So although I like the products, being a happy customer, I have the company only in my watchlist.
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@hitesh2710 bhai,
When you receive annual report of a company in which you are invested in. How do you go about reading it? Do you reread previous years annual reports ? How do you correlate facts with previous annual reports?
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HI Hitesh bhai a quick question… A pharma company goes through USFDA audit in 2015 and recieves form 483 with observations. This year receives the EIR report, now again receives form 483 from USFDA as part of Prior Approval Inspection. Is there any difference in this 2 inspections? its for the same plant. Thank you
Hiteshji,
What is your opinion about Udaipur Cement Works? The cement plant is near to it’s completion and the management is expecting the production to start from December 2016.
@sunil surana, While going through the recent AR of a company it is helpful if we can go thru the previous couple of years of AR to get a feel of what management has promised (if at all it has promised) and what has been delivered. Most of the good companies tend to maintain a fair level of continuity in their communication in the annual reports besides pointing out the subtle changes in business trajectory or growth strategy. There are guys like ankit gupta who go through past 10 years annual report while analysing a company but I dont belong to that camp (I tried it but found it was not in my comfort zone) . I usually peruse the past 2-3 years AR to get a feel about the company and go through any concalls/research reports if they are available.
Just to give u an example, I recently went through Suven Pharma AR and they begin by stressing the point that going ahead the lumpiness in revenues would not be there and biz is likely to be more stable. Of couse how it plays out needs to be seen. (not invested in suven)
dipen, I think if the company receives another 483 after getting the EIR there’s cause for worry unless the matter in the 483 observations are very minor.
weblinsolutions, I dont track Udaipur cements. U can start a thread with all the homework u have done on it if a thread is not there on VP on the company.
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Hiteshbhai,
Can you list some stocks which may reinvest their earnings at high ROE i.e. 20 percent + for more than 10 years ? Please ignore the question if VP value system does not allow this question. I am asking this to get some stock ideas to research, track and have a feel what I have learned here.
Hi Sunil,
You will have to realise one thing that Hitesh Bhai is way ahead of us in recognising success patterns of the companies. To be very frank it is something wired in his brain. We can take days to work on a company but he might not even take more than few hours.
I get a feel of the company only if I read its ARs for the past five years if not ten. I actually know quite a few friends who even read twenty year’s ARs 
Its time consuming and takes weeks and sometimes months to work on a company (at least for me since I am a part time investor). I think all the newbies should at least read past five years ARs especially for companies which don’t have many research reports.
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Hi Ankit,
Really great to know that you read AR of past so many years. I recently started reading the AR of companies I hold or track. Could you talk more about your process of reading the AR? Do you make notes ?
Are there any particular contents in AR that you pay more attention to? Finally, is there any guide available to completely understand the AR?
Thanks in advance.
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@ramanhp http://www.drvijaymalik.com/2014/10/selecting-top-stocks-to-buy-part-4_25.html# Not a guide but a fairly detailed blog on what to look in AR.
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Hi Hitesh,
Since you mentioned reading AR on Suven, wanted to get your thoughts. How do you view the risk reward associated with the company, especially considering their flagship candidate SUVN502
Hi Raman,
I usually read AR fully including notice for AGM, management discussion and analysis, director’s report, auditor’s remarks, details about shareholding patterns, profit and loss account, balance sheet, cash flow statement, schedules, notes to account, any quantitative details, intercompany transactions etc.I think its very important to look at management commentary and their view about the business (albeit with a pinch of salt). One should look at details of the products, the markets they cover, any new products or capex they are coming up, operational details, management’s views on growth and profitability, goals, vision etc. Try to look at under the line items.
For eg. Prof Bakshi during the last VP Meet highlighted the FY16 annual report of V Guard, where he showed us a commentary where the management had stated that they were just breaking even now in some of markets like north India (V Guard is predominantly a south based player and has been trying to establish itself in other market). So, it given an indication that their current operating margins have been affected by lower profitability in northern markets. If the company is able to successfully penetrate northern market, the operating margins will increase.
I also look at financials in details and check about increase in debt, working capital requirements, detailed schedules etc. One thing I like to check in a growing company is their cash flows which is an indicator of the health of the company. Check for cash flow from operations after working capital increase, increase in fixed assets etc. I used to take notes of key points in a word file I maintained but have recently started using evernote to highlight and annotate.
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Hi Hitesh,
By any chance do you track divis labs? . Such a phenomenal track record, yet hardly anyone talks about it. Its also the 7th largest in india in terms of market cap.
Is it (low profile) because its an API player?
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The 40% margins for an API player is phenomenal in entire Pharma sector around the world. Yet the company is doing it consistently year after year.
Always been my favourite, but unfortunately never took a large position. Looking forward for Hitesh bhai’s view on Divis.
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Hitesh jee, was checking HMVL charts
20 days sma has touched and up from 50 day sma ,again, all 3 (Short term moving avg, medium term and long term moving avg ) in uptrend , signals r similar to previous 2 breakouts, volume r building up, momentum is positive n building up, Bollinger bands also reflecting the same. Fundamentally next 1-2 months will be festive season , so, consumer ad revenues would be up.
How do you read this chart ?looks attractive ?
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HMVL is a solid company. You can expect an annualized return between 15% to 25% over the next 10-15 years (and much beyond). But don’t expect very very high return.
At the bare minimum you will not be in loss with HMVL and you will have a very decent profit if you hold mid to long term.
Since HMVL is sitting on a very high cash, it may possibly foray into another venture (depending on how things unfold in future in media space) in future.
I dont look at too detailed charts loaded with indicators but a look at the chart of HMVL tells me that the stock is in uptrend.