read this article
so if the plants are outdated what does leel intend to do? Also we really need to keep a track of porinjus invesment. If that starts going down its going to really hurt. Anyone getting any news of selling by Porinju or other bulk sales please post here…will be useful for everyone
If you get a chance, please go to a distribution center and look at the manufacturing /import details printed on the carton box. You will get an idea of where they are sourced from !
Vijay are you trying to say that still ac’s of Havells brands are manufactured by lloyed ? Then why sales reduced by 1/3 ?
There is a very detailed analysis of the current valuation at https://stockswithmargin.wordpress.com/2017/08/31/81/.
I am saying they are imported as Lloyd’s not able to meet after star rating change.
Management has said in a conference call that even when Lloyd was with LEEL, more than 50(?) of its products were being outsourced. I can only assume this strategy was to balance the different aims of both the Cons Durables unit and the OEM unit.
It is worth looking a little closer at the YoY change in sales. It should definitely be expected that they reduce, but not by the entire amount of the FY17 Cons Durables business.
Did anyone understand how the finance cost more than doubled and trade payables increased more than 2.5 times in the quarter ending 31st March 2018?
It was only the compressor that was not made by them.
Please refer to the special conference call prior to the demerger. Management clearly says Lloyd gets 30% of its products from LEEL’s OEM segment, and outsources the remaining 70%.
Yes. Compressor is a major part of an AC. They dont manufacture that. Most of the rest is done by them.
Yes, that’s when Lloyd were selling more than ACs. Those LCD TVs and other consumer durables were outsourced. Now LEEL are just HVAC/AC/Heat exchanger components manufacturer.
Sales increased, other expenses and finance cost reduced ,eps 2.25×4=9 at pe of 15 .price comes at rs 135
Sale of foreign subsidiary for a consideration of around 13 cr
At today’s exchange rate it is closer to Rs.14Cr. I’m glad that this disastrous acquisition is finally gone, I wonder where it went wrong. Can anybody get access to Janka’s financials? The LEEL website is taking forever to load.
Since the book value is Rs.38Cr, does this mean that we will see an exceptional loss of Rs.24Cr next quarter?
Yes u r right it would be shown as exceptional loss
Thanks @lsubs for sharing. Very detailed analysis and very informative facts.
I Seek co-investors and Seniors on this forum to give their valuable opinion, on the status of current LEEL valuation, is it a value trap or value bargain?
My rationale to invest into LEEL was their CD, which was scaling up nicely and company was available with reasonable valuations (well before Co decided to seel CD division) there were lot of projections for future growth. But after CD business is sold out , the very valid reason for investment, got off, however the slump sale deal price was ok reasonable, and thinking that sale proceeds would be used to retire the debt on books, i kept invested into LEEL infact kept averaging on downside. But stopped doing it when share price started free falling for every wrong reason and lack of transperancy from management.
I need to ask Seniors, whethere can this be called as conviction (not selling even share price sliding and not perfforming for many quarters) or it is act of sticking on to a mistake not selling when CD division is sold out ?
As i keep hearing from sesoned investors, Investment needs Conviction, discipline, patience…,
so do i need to be ,ore patience, waiting for any good step by promoters which comes as a respite for this free fall of price?
or shall i wlak out of this story by booking losses (almost 50% of losses) and look for the several good companies avaialble with reasonable valuations ? available in the current market conditions?
How seniors would handle this kind of situations? if they can share their opinion, that would be great for my learnings.
Thanks in advance.
My advice would be to book loss, i wss sn invester in LEEL for 4 years, came out in June after company declared loss of more than 300 cr. Promotor has lost focus and siphoned off money.
It’s not right to look at this loss in isolation, without looking at the exceptional gain of Rs.1500Cr. It is important to realise that the company’s business model has significantly changed and they and the market are still getting used to it. I liken this situation to a classic spin-off where the entity that remains is less glamorous (contract manufacturer) than the divested entity (No. 3 consumer brand in India).
How has the promoter lost focus? Aside from general uncertainties about the Lloyd deal value, how has the promoter siphoned off money? (EDIT: I now realise there may be some foul play with subsidiaries).
To the previous poster, you need to look at your investment thesis again and see if it is still valid. If it hinged on Lloyd, and Lloyd no longer exists, how can you still have conviction? It seems like you should have sold when they made the announcement to sell Lloyd.