Management commentary is quite encouraging where in they are talking about buying stressed assets as well. All in all good to hold for long-term. I am not going to sell this one at throw away valuations. I am expecting company to announce another bonus next year.
Absolutely, considering Govt’s Steel policy and strong Alloy Prices complemented by moderate raw material price (Manganese) , I guess it has a long way and definitely worth more than ~7–8 PE
[Edit] Disclosure: Invested and planning to add more
On Technical too it looks good and seems to have formed Cup and Handle … hope it gives a nice break out from here
It would be a good practice to disclose your interests in the stock if any
Is there any reason Mainthan Alloy cracking despite good results ?
Well only reason I could guess is people speculating Metal/Alloy rally to have peaked out hence not willing to put there money on this scrip.
[Edit] : Even during last quarter result mkt perception was similar but Q4 results proved them wrong . We just need to keep an eye on the Manganese based alloy market
Correct - This company keep on surprizing everyone…people leave on result day leading to reactions and then enter at lower levels. results are tremendous…Even during lower times for Manganese the co has done well…I am in from lo levels…however still scratching my head why markets is not valuing it at Par.
Last time,the stock price dropped to 370 from 470-480 and then bounced back in few days. I feel the price will bounce back anytime. Q4 numbers are much better than last year q4 numbers (Pl. read note no. 5). Have patience and hold the stock for long term.
Ok, Will try to keep patience. My funda logic says that I should keep it for at least one more quarter to gain fully. Anyway, market is at high and value buy is not easy. This is a value buy.
But another view tells me if these cyclical has their time and their PE is low because cycle is at peak and it is time to go down for these! I am not very good in Metal cycle.
Nice presentation from company regarding current scenario and outlook
For a company selling commodities, inventories and receivables is too much, almost 45% of total assets. this is a red flag to me. Commodity sellers should get paid fast as margins are low.
Source: Company presentation.
They are not getting any credit from their suppliers
Source: Company presentation.
I compared couple of other companies in similar business and I would agree receivables are high, however that very well reflects in the PE mkt has assigned. Still considering the growth and being one of the premium alloy companies it deserves a better rating.
So far Manganese based Alloy prices are at same level as Q1… which gives me hope for this quarter results to be good as well.
Some related news articles:
RM and Product Price history:
Good Anlysis…I exited 50% just before result and holding 50% with 390 stoploss…All post result reactions since last Aug hv been likeat we r witnessing in last 8 odd days…hopefully it will make new 52week high by Aug 10…unless of course cracks
I talked to investor relations ppl and they told trade receivables are majorly due to one of major customer in India ( PSU which constitute 25–30 % of their sale ). Even though payments are delayed but they are assured being a govt company and Since company has plenty of cash which helps them with working capital in spite of delay in receivables.
I have asked few more queries and response is awaited, will keep this thread posted incase of any useful additional info is received.
Some more info on MA in ICICI report
IDirect_MaithanAlloys_MgmtNote.pdf (226.6 KB)
Got update from the Investor Relations , another reason for high receivables are due to several international clients where company has started dealing directly, from last few years, instead of contractors/Agents/intermediators.
And many of the clients have some policies of making payments little late to suppliers.
And as per management this is going to stay and receivables may not come down anytime soon.
nothing new in this report from what company has disclosed already.
disclaimer - owns a small quantity from lower levels.
PS: last couple of days good buying coming in from lower levels.
thank and regards
Would any of the vp boarders have any idea/update why the share is not holding levels…seems to be coming down from 485 from the past week. Comparable companies - IFMA and Sandur Manganese have gained traction in the past weeks already.
As expected, Maithan delivered excellent set of numbers. PAT almost 3 times YoY
Stock price is stagnant. Few reasons I could think of ( Rest boarders can add their views):
- Its already operating at near full capacity hence further margin improvement only after it acquires something
- Metals are operating at its peak price hence possibility of mkt suspecting this cycle to reverse.
- Due to point number 1, company may have to do some Opex , which mkt is not very sure how well it will do.
Another questions I got was about one of their Subsideries “Anjanya Ferro” , this company is in loss , any Reason why Maithan acquired that ? Are there any valuable assets it hols which can help Maithan ?
Not sure why its still stagnating for the past 4 months now…superb resuts nevertheless…Even if Anjaneys results are consolidated they are still doing pretty well… Held positive in todays session…
Disc: Invested @ 450 since May’17