Maithan Alloys Ltd


(S_Banerjee) #151

Topline growth seen but net profit slightly affected compared to last quarter due to 30 cr inventory increase.

Please correct my observation and add any missing point.


(vikas sinha) #152

Well, “Purchase of traded goods” = 30.89 Cr (2nd item in Expenses)
Inventory has decreased by 8.6 Cr (3rd item in Expenses).
Yes, the 8.6 Cr is added, and the total YoY difference due to Inventory turns out to be 6.5 + 8.6 = 15 Cr.

Equalizing for this, YoY bottomline shows growth of 30%.
Seems a good result!

https://www.moneycontrol.com/stocks/reports/maithan-alloys-standalone-unaudited-financial-results-forquarter-ended30th-june-2018-12103961.html


(lifetrix) #153

maithan is still dealing in traded goods which is not a healthy sign as they should be more focused on the production side. last year they had declared 164 cr of purchase of traded goods and in this q1 result they declared the turnover on it to be 175 cr which is a 11 cr profit or 3 cr every quarter.
if we assume the same turnover for q1 meaning on the 30.88 cr of traded goods bot, it would have been sold at 33.88 cr then the COGS as a percentage of revenue is 47% which is in line with the previous quarter and yoy quarter. the power and fuel expenses too at 22% is a bit higher than last quarter at 20% but same as yoy.
so maithan revenue from core operations was flat qoq and up 5% yoy. the inventory decrease is a healthy sign as maithan has been struggling to improve its inventory turnover ratio but it could be just due to frequent purchase and sale of traded goods so we need to watch out for it. overall a flat result i would say.


(Amit) #154

Good Annual report from a Commodity company.

Maithan Alloys, one of the lowest-cost ferro-alloys manufactures in the world, enjoying an EBITDA margin of 20.91% (FY2017-18) and ROCE (operation) of 70%. This is also helping the Company
to post ROCE (operations) in excess of 50%.

Cons: Top line growth is limited until the green field expansion take place in 30 months time frame,

Maithan A.R.pdf (1.7 MB)

Disc: Hold


#155

MaithanAlloys-Presentation.pptx (528.1 KB)

My presentation on Maithan Alloys…

Disc: Vested interest and biased views


(stephensk) #156

Yes you are correct but never know about the commodity prices after two-three years.


(nitinver) #157

Any other differentiation besides being the lowest cost producer?
If that is so,would it not remain the same in the industry ,even if the commodity prices surge or fall.
Whar are the options companies have besides Maithan alloys?


(James Sebastian) #158

Results kind of flat (less than 10% sales growth and 5% Profit growth). The commentary for the future is positive.

Whole press release can be seen at

disc: tracking position and I do not understand cyclical much.


(Anupam) #159

image

Positives
PE of 4.87, PEG of 0.1, ROCE & ROE > 40% makes a great value buy.

Negatives
Profit growth YoY of 2%


#160

Need to see this company is service provider not as commodity player. They don’t own raw material nor they get in to long term contracts. Spot buying and processing and supply at spot rates.


#161

The alloys are very insignificant portion of whole steel manufacturing part and these guys are well known for quality. Question for you: Will you deploy a cheap variant of electric switch in a crore rupee home? The saving is insignificant but the loss can be huge… Hope this helps, happy investing :slight_smile:


(nitinver) #162

Thanks. This is s a fantastic attribute. This makes the company a standout.


(shyamutty) #163

MCap: 1650
P/E: 5.53
ROE: 40
ROCE: 48
ROIC: 72
Profit growth 3 years: 78.85

is this a value stock?


(learning) #164

Remember - It is a business catering to cyclical end industry - and it is operating at close to 100% capacity that’s why these numbers look high. You should not look at the top of cycle to make a conclusion imho.


(VijayShetty) #165

They have expansion of capacity in the works. But it will be completed only in 2021. But it still seems like a good buy at these prices


(japree) #166

Does anyone know why there is a huge amount of “Purchase of investments” ? Are they buying some assets for the expansion they mentioned in 2021 ?


(Dinesh Sairam) #167

Looks to me like it’s largely parking their liquid cash in short term Mutual Funds.