Yes Hitesh. What a fantastic find this has been from you.
Thanks also are due to Nagabrahma (who had the conviction to go to Jaipur from Bangalore just to visit the company) whose detailed inputs on the company, made it possible for us to document the excellent Mayur Uniquoters Stock Story and Mayur Uniquoters Stock Analysis
Those who do not have Mayur Uniquoters top of mind, may refer to the two docs above and re-inforce why this is a long term stock to hold on to for next 5 years.
What I like best from these results:
1). Strong growth momentum continuing- Sales growth at over 50% and EPS growth at 55%. If you study the sales growth over the last few years you cant help notice that the trend is accelerating! no cyclicality -simple qr on qr growths for the last few years.
2). Sustainable & Increasing margins - I had raised doubts if net margins can be sustained at FY10 9%+ levels (since it had jumped from just over 5% in FY09). The company has done better and increased net margins to 10.17% for FY11. Operating margins are marginally better at 16.44% (16.13%).
3). Increasing efficiency & profitability - confirming the earlier trends
The company has done better on debt Management -both working capital & overall. No wonder that Debtor days are down to 46 (54) and Inventory days are down to 21 from 28 days a year ago.
Return on Assets has gone up to 35.71% from 34.91% as has RoE has gone up to 41.42% from 38.57%. If you want to quibble about something, okay RoCE has gone down a bit to 55% from over 57% a year back.
4). Strong balance sheet - Debt/Equity remains low at 0.13
What can you fault in a company like this?
a) perhaps expansions should have been completed by Q4 in readiness for FY12. The company is already operating at 100% capacity. It announced in April that it will install and commission by July 2011 another coating line to take capacity to 1.9 million linear meters from 1.4 million linear meters. This is a ~36% increase in capacity available for some 8 months.
It should be noted that 1QFY11 sales were at 54 Cr vs latest Qr at 72 Cr, a 33% rise.
So it looks like growth momentum at 30% plus will continue for sure. which means this is a fantastic growth story still available to you at less than 5x 1 year forward PE! I am buying more into Mayur.
Disc: I have a big vested interest in Mayur Uniquoters, So take all above with a pinch of salt. This is one company I haven't yet met Management, but continue to increase my positions - simply by observing how it has been quietly delivering (without aggressive expansions, et al) quarter on quarter.