Meera Industries : Worth a look

(M S S Murthy) #72

The yarn division has been started primarily to demonstrate the functioning of the machinery to the buyers since the machinery involves modified technology developed in house and varies from the traditionally designed machines .This division in situated in th same premises Where the machinery is fabricated. So I think the economics of this division may not be viewed from the angle of a full pledged yarn manufacturing unit . This is my layman’s view.Any body more acquainted with yarn manufacturing business may please opine on this.

(M S S Murthy) #73

I mean it could be basically a demonstration demonstration unit , distance from a profit center.

(Radiozammy) #74

@MSSMurthy- Thank you for taking time and sharing your thoughts. Let me first apologize for not replying sooner due to a personal health emergency.

My thoughts on the yarn business are- Even if the yarn business was supposed to be a demonstration division, it is commanding nearly 30% of overall revenue. Any portion of the business that contributes so significantly to topline should be looked as a profit generation division. Playing devils’ advocate, this is a division which can slowly turn from profitable to negative and suddenly we will be staring at losses and some cooking of books. Nevertheless, i am optimistic about the company and its promoter and will keep tracking it until the next results are out. Unless, there is corporate governance issue, this can hopefully become a decent size player with good returns for all investors.

PS: Not invested, but tracking.

(M S S Murthy) #75

(M S S Murthy) #76

Meera Industries has announced regarding securing orders amounting to USD 130000 from three new countries adding to a total of 23 countries for its twisting machines . Achievement indeed for a micro enterprise .On the existing base of sales registered for FY2018 being Rs 21 crores this order seems to be significant . Watching the developments with interest.

(Ashwini Damani) #77

I’m yet to get an answer as to how a company which manufactures machines has such a small asset base.

This is an asset intensive business. Virtually impossible to trust the numbers. How can an asset intensive business have RoA of 7 times

(M S S Murthy) #78

Asset turnover ratios of many other manufacturing companies , for instance Symphony Ltd is as high as 10 as against the figure of 7 obtaining for Meera Industries . Don’t you think such a high ratio is an indication of the healthy demand for the innovative products of Meera whose details are available on the website of that company.While I note your view that the numbers of Meera cannot be trusted , I am optimistic on the ability of the company to deliver which would be relatively easier from the present small base . I continue to hold.

(phreak) #79

Meera’s topline has grown alongside yarn twisting machine exports. Looks like the market was good for this between FY14-FY18 but FY19 looks to be showing a slowdown (its 6 month data though).


I think this is a small market that wont attract big players and it is sort of believable why they could be exporting these machines to developed nations. The low asset base as well I can live with, because I think this is more material and labour intensive than fixed-asset intensive. These must be indigenous machinery but nothing that would have a strong IP and hence a big pricing power. However, the valuations here are very high and if we annualise FY19 numbers so far, there might be a drop in topline in FY19 which will be a risk for investing here.

Disc: No Interest

Symphony is a branded play. They outsource manufacturing which is why their asset turns are high. In Meera’s case, going by their margins I wouldn’t compare asset turns of these two simply because their margins aren’t comparable.

(AmitContrarian) #80

and that too they are going making in America whereas the American companies moving their manufacturing to cheap destinations.

(Ashwini Damani) #81

Manufacturing Cost is just 5% of total cost

Employee Expenses is totalling to 1.5 crore of which 0.51 crore is paid to CEO and CS and MD so that leaves u with 1 crore i.e. just 5% of Sales

So neither is it asset intensive, nor labour intensive, nor process intensive.

(Ashwini Damani) #82

Very very difficult to trust numbers. This is a stock worth avoiding

(M S S Murthy) #84

(M S S Murthy) #85

Announcement to BSE to the effect that the company is acquiring land adjoining the existing premises for expansion , and proposal for raising funds for the acquisition .

(AmitContrarian) #86

I think same MRSS operators were active in this stock too … better to stay away.

(M S S Murthy) #87

Just saw your post.I am invested in Meera based on what I perceive about the company .Monitoring the same and continue to contribute here as and when I see any new developments. I don’t see any ‘ operator ‘ here , either some body who want to jack up or any person with vested interest to bring down the stock in any artificial manner in order to corner . If you have specific information if somebody creating volumes in the stock kindly furnish the details on the forum for benefit of members . In the mean time let us continue discuss with facts and perceptions rather than implications which I feel is not fair. As for MRSS I am not able to comment as I am not tracking that company nor invested in that.

(Sumit 2.5 C) #88

Meera imported and installed new ultra modern Lazer cutting machine

(M S S Murthy) #89

The company’s installation of laser cutting machine to improve quality of manufacture and its intention to procure more machines in future for enhancing production capacity augers well for future growth .

(Ashwini Damani) #90

How much did the new machine cost. Meera has till date spent peanuts on such machines, so let me know cost of new machine.

Why can’t someone else procure same machine.

(Ashwini Damani) #91

Well, in past your analysis has been wrong in more than one stock, and mostly you have been invested in stocks where stock has fallen tremendously . Price is separate, in most cases the business itself has done very very bad. So you should revisit your investment habits. Hence one gets the image of a operated stock. Even in this case , I have many times pointed out that numbers don’t add up.

(vipsy) #92

For sake of knowledge, I tried to check the machine from it’s photo.
It looks like a this or a variant of it.

Googling around, some sites mention price around ~1CR, may be base price, but I am not good at estimating final cost.