La Opala RG - Aspirational consumer story


(Gyan Roy) #41

You can add Cera to the list where also promoters are buying in small chunks.


(nabendu) #42

Exited completely at 380/- Reasons to exit -

a) sharp run-up to my selling price which aligns to future P/E of 10

b) its already a 3.8 baggar at my selling price

c) last 2 days (20% circuit) delivery % is very low at 12.8 and 9.5

d) though i tend to hold long, have been slowly learning to cash out at sharp run-up, valuation catch-up (influence of valuepickr) and also it has to do with learning from mistake of unjustifiable long-holding of few stocks - Sumeet Industires, Arshiya - to name a few.

e) on the hope that i will be able to enter it at a lower price as we do have future earnings visibility.

Mr. Market always teaches us and i won’t be surprised to get a lesson one more time.


(Subash Nayak) #43

Hi Nabendu,

Doesn’t seems like a bad decision to me.

But with a guy like me with ~40% short-term gain, selling now implies a 6% sort-term tax loss, and ~1.5% brokerage charge (buy+sell). So it is around 7.5% friction cost. So I shall gain 2.5% after 10% fall in price. Doesn’t seems to me an exciting case for selling it.

It is fall around 20%, which I think is very unlikely, than I will be at a loss of 12.5% by not selling now. It that case, I shall buy more of La Opala, as it will be much more attractive fundamentally.

Betting on falling of price of a stock doesn’t go well with my kind of investing.

Regards,

-Subash


(vinay ambekar) #44

Subash - could you kindly explain how you calculated 6% short term tax loss? Have been trying to arrive at some such calculation myself to be able to decide when it is beneficial to buy back having once sold, but am not able to generalise them. Short term cap gains tax is 15% on the profit value. Brokerage and commission are on the total value of the transaction. Hope you can help reconcile. Thanks.


(Subash Nayak) #45

Hi Vinay,

My calculation is not exact. Say I have invested 100, got a profit of 40, paid a tax of 6, and @1.5% brokerage, brokerage will come to 2.1 rs. So total outgo is 8.1rs at CMP 140. Which is 5.8% of my current market price, and 8.1% of purchase price.

Well, the calculation will get really difficult, when you add margin of safety for the possibility of error in your transaction, or in the case where your buying date is 7-11 month before.

I have tried to solve a simpler case, and put the result in my blog.

http://art-of-mental-modelling.blogspot.in/2013/01/deciding-when-to-sell-simple.html


(Atul Garg) #46

I exited my positions in la-opala as well.Though I don’t sell my holdings unless I feel fundamentals are deteriorating, This is first instance where I have sold because of sharp runup (hopefully to catch at lower prices as I have seen seniors doing that time and again so giving it a try ).


(Subash Nayak) #47

Hi Atul,

In this process, what you forgot is to ask seniors a very pertinent question - “Have they taken care of the tax outgo issue when deciding sell after a sharp run-up”. Without considering this, mere selling will give you illusions of false higher gain.

well.Though


(Subash Nayak) #48

La Opala up 10%, hitting UC


(Subash Nayak) #49

A month old research report by Nirmal bang on “La Opala”

http://www.valuenotes.com/uploads/article_pdf/Nirmal%20Bang_La%20Opala_6th%20Mar%202013.pdf

2 month old research report by Firstcall on La Opala

Disc: Invested in La Opala, and is my 2nd largest holding.


(Subash Nayak) #50

La Opala will get added to S&P BSE smallcap index from may 13

http://www.valuenotes.com/Press-Release/Review-amp-Replacement-in-SampP-BSE-indices/182222/3/T


(Deepak Swamy) #51

Q4/Fy-13 Results out…

Total Income up 31.2% to 39.93 Cr from 30.44 Cr.
EBIDTA almost doubled to 11.64 Cr from 6.08 Cr.
Net Profit almost doubled to 6.33 Cr from 3.19 Cr.

EBIDTA margin is 29.2% v/s 29% (Q3-13) and 20% (Q4-12)
NET Profit margin is 15.9% v/s 18.5% (Q3-13) and 10.5% (Q4-12)

Total Raw material costs as a %ge to Income is 18.2% v/s 20% (Q3-13) and 25.7% (Q4-12)
Employee costs to Income is 13.2% v/s 10.6% (Q3-13) and 13.7% (Q4-12)
Power & Fuel expenses to Income is 16.8% v/s 14.8% (Q3-13) and 17.1% (Q4-12)
Advertisement expenses to Income is 7.3% v/s 13.8% (Q3-13) and 6.3% (Q4-12)
Other expenses to Income is 15.3% v/s 11.8% (Q3-13) and 17.3% (Q4-12)

Financial costs to EBIT is **10% **v/s 8.8% (Q3-13) and 35.8% (Q4-12)
Tax Rate 31.8% v/s 24.2% (Q3-13) and 29.9% (Q4-12)

Fall in Total raw material costs and lesser increase in other expenses helped EBIDTA.
Steep fall in financial costs helped Net profits.

Fy-13 v/s Fy-12:
Total Income up 33.8% to 153.92 Cr from 115.01 Cr
EBIDTA up 53.4% to 41.19 Cr from 26.85 Cr
Net Profit up 82% to 22.88 Cr from 12.6 Cr

Reported Full-Year EPS 21.59 v/s 11.89

On 10/05/2013, Friday, stock on BSE closed at Rs. 378/-
(Results declared on 11/05/2013)


(Subash Nayak) #52

I think this is very good result from La Opala. Because of buying pattern modification depending upon festivities, Dec quarter tends to be the best quarters. Sales and NP slowly decreases in Mar and Jun quarter, and then again pick up in September quarter.

So like Kaveri, its result can’t be interpreted in q-o-q basis. It has to be y-o-y basic only.

Looking at the trend they should be able to 5+8+12+8 = 33 eps in FY14. So they have a FW eps of ~11, which I think is a good valuation. At a conservative trailing pe of 18 odd, its price should reach ~600 odd in next 1yr, which will be a nice 59% up from current valuation. Need to look out if the story is panning out as expected on not in quarter by quarter basis.

Disc: La Opala is my 2nd largest holding


(JatinK) #53

Mar-12 sales were nearly same as Dec-11 sales.

So, sales drop from 50 crs to 40 crs in this quarter was bit of a surprise to me.

May be that Dec sales of 50 crswas some kind of special/ unique quarter.

I think we need to becareful while assuming future growth & if doesn’t grow at 20-25%, it is expensive at 17.5 PE.

Disclosure- No holding but under watchlist


(RsKm) #54

It had one-time large b2b orders in dec12.


(Subash Nayak) #55

New, and nice looking website of La Opala - soothing to eye

http://www.laopala.in/


(Gyan Roy) #56

UC today. Any news?


(Nitin Jain) #57

the stock has gone up by almost 300% in past 12 months…what a discovery on this group !! I dont have much to add at this point in time, but feel that from now on, we cant expect anything about 15%-25% returns, with lot of troughs on the way.

The unorganized sector is here to stay…and anti-dumping duty wont last long, else we can expect similar duties from other parts of the world…which can directly impact export volume and bottom-line, significantly !


(Nitin Jain) #58

At 10%, the Import Duty in India on Opalware is still among lowest in the world (barring Middle East)

http://www.dutycalculator.com/dc/172507124/home-garden/kitchen-dining/tableware-kitchenware-other-articles-of-bone-chinaware/import-duty-rate-for-importing-opalware-from-turkey-to-india-is-10/

So growing exports to Europe will remain a challenge for La-Opala moving forward.


(Deepak Swamy) #59

Q1/Fy 13-14 Results out…

Total Income up 19.4% to 32.18 Cr from 26.96 Cr.
EBIDTA up 49.3% to 8.2 Cr from 5.5 Cr.
Net Profit up 61.1% to 4.5 Cr from 2.79 Cr.

EBIDTA margin is 25.5% v/s 29.2% (MQ-13) and 20.4% (JQ-12)
NET Profit margin is 14% v/s 15.9% (MQ-13) and 10.4% (JQ-12)

Total Raw material costs as a %ge to Income is 27.1% v/s 18.2% (MQ-13) and 34.1% (JQ-12)
Employee costs to Income is 14.2% v/s 13.2% (MQ-13) and 13.3% (JQ-12)
Power & Fuel expenses to Income is 14.5% v/s 16.8% (MQ-13) and 14% (JQ-12)
Advert& Sales expenses to Income is 6.6% v/s 7.3% (MQ-13) and 4.1% (JQ-12)
Other expenses to Income is 12.1% v/s 15.3% (MQ-13) and 14.1% (JQ-12)

Financial costs to EBIT is 14.1% v/s 10% (MQ-13) and 19.5% (JQ-12)
Tax Rate 25.4% v/s 31.8% (MQ-13) and 28.7% (JQ-12)

Total Raw material costs which is down 5.1% and lesser rise in other expenses helped EBIDTA. Lower Tax Rate helped net Profit

EPS 4.25 v/s 2.64
Recorded TTM (sum of 4 quartr) diluted EPS: Rs. 23.21

At 12:50 pm on 13/08/2013, stock on BSE trading at Rs. 429/- up 3.3%


(Subash Nayak) #60

Excellent set of result from La Opala. I expect similar 40-50% NP growth for next qtr too, which should take the price to 500-520 range in next 3-6 month, a cool 20% off return in 20%. December qtr should be a flat/negative growth qtr.

I feel La Opala is a fairly valued, consumer-themed, growth stock, which is worth investing at cmp. Its growth give good feeling in a time one after another stocks in its sector are giving disappointed qtr (like TTK/Hawkins).

Disc: La Opala is 9% of my pf, and hence my views may be biased.