Meghmani Organics Ltd

(sekhar) #21

Moreover promoters are seen selling; Promoters sold 4 lots of about 50000 shares in the month of July 2016

(TusharSB) #22

Investor Presentation uploaded by the company:

(dhanyatc) #23

In AR 16 there is a receivable of 380cr. This value is increasing every year and was more than 300cr 5 years ago also. In cash flow statement it is shown as last year they have written off 17cr as bad debt.
Can the major part of 380cr is doubtful receivable? Are they extending credit to customers for inflating sales?
2016 2015 2014 2013 2012
Trade Receivables 380.51 302.60 331.17 328.23 321.8

(BreakingBad01) #26

revenue growth, margins, ROE…have all been on an uptick. Multiple is quite cheap at 12-13x operating cash flow. Leverage has consistently come down. Located in the chemical belt in Gujarat and substantially integrated operation. No MF owns any shares as far as I can tell. Looks very interesting.

Discl - Hold shares

(Abhishek Maheshwari) #27

Promoters have not sold. It is re-grouping. One of the shareholders had transferred some shares to other relative who does not form a part of the promoter group on paper.
Its not of any concern.

(GurupdeshCheema) #28

Is the growth sustainable. Has grown substatially in last few weeks

(Nolan) #29

Institutional buying coming in. Looks good to sustain and grow further as the valuations still seem reasonable.

Disc: Invested recently at Rs. 49

(Cshar) #30

This is next Atul Limited in making, kind of expansion plan company have will grow at 20% CAGR from here. Expect this to be a mega multibagger in next 4-5 years. Holding for last 8-9 months with full conviction at 38.

(Nolan) #31

Rise in produce prices would result in improved margins. All segments showing good improvement. Management gives a positive feeler that operational performance is well on track. With 150% returns in last six months already, the results seemingly would back it up well for further upside.

(Mayank Narula) #32

Management has guided for ~Rs. 1000 Crores turnover from all three segments in next 3-4 years. With reduction in debt, PAT margin should be around 10-12%, translating into Rs. 400 crs PAT. 20-25x PE multiple puts company at valuation of 8-10k in next 2-3 years timeframe. With possibility of further upside.

(arvind.calyx) #33

Hi Mayank,

what is the source for your above statement ?

(Mayank Narula) #34

1000 crs per segment turnover is management guidelines (Aug 17 interview on moneycontrol). And I have found company to be consistent in it’s guidelines. For example, they have stuck to their debt reduction plans projected in 2014-15.
Margins and valuation parameters are projections. I think there is a good scope of both P/E and E expansion in MOL.

(BreakingBad01) #35

This company remains very cheap. To illustrate this crudely, their EBITDA is 50% higher than a peer such as Vinati but their EV is 40% lower than that of Vinati. Not the same quality of business, but the valuation is still extreme nonetheless.

(sunilgct) #36

Fantastic Results once again …

Sales rose 18.72% to Rs 460.66 crore in the quarter ended September 2017 as against Rs 388.01 crore during the previous quarter ended September 2016.

Net profit of Meghmani Organics rose 70% to Rs 55.09 crore in the quarter ended September 2017 as against Rs 32.52 crore during the previous quarter ended September 2016.

For Q2 2018 (as compared to Q2 2017), there is

13.1% growth in Total Income resulting in
69.43% growth in Net Profit and
79.9% growth in EPS

For H1 2018 (as compared to H1 2017), there is
15% growth in Total Income resulting in
62.47% growth in Net Profit and
76.3% growth in EPS

and the other important number is EPS for FY17 for full year was Rs 3.45 where as EPS for H1 2018 itself is at Rs. 3.05, which is extremely positive.

extrapolating the same for the rest of FY18 , we should see a EPS of 6-6.5 rupees and assuming average industry PE of 30 , it has enough margin of safety .

Disclosure : Invested

(Nolan) #37

Management confident of continuing good performance in the second half.

(naruto) #38

One phenomenon I observed in this industry is a growth in OPM in Sep 17 calendar quarter from June 17 calendar quarter

  1. Meghmani Organics => 20.75% -> 24.61%
  2. Thirumalai Chemicals => 18.12% -> 25.36%
  3. Gujarat Flouorochemicals => 22.12% -> 26.72%
  4. Vinati Organics => 27.52% -> 31.72%

Might be a hike in the selling price. I will search and see if I can try to get more detail

Source: ValueResearchOnline
Disclosure: Tracking and not invested yet.

(Mayank Narula) #39

Not sure, but can be due to strengthened prices of caustic soda. At least true in the case of Megmani. As per Mr. Soparkar, same trend to follow in Q3, but too early to say about Q4.

(spvk1) #40

Meghmani receives GLP Compliance certificate for Sanand Facility.
Source Rate

Disc. Invested since Rs.17. small qty.

(sunilgct) #41

The share has good potential to grow … with govt increased focus on agro sector .
with great financial ratios ,reduced debt,consistent profit growth and solid managment , expect things only to be better going forward. For some reason market is taking time to give its due…
Good price to accumulate at CMP…

(ASPN) #42

Indianivesh had identified this in stock Aug 2014 when it was languishing at 14/15. Since then it has risen 8 times (52 week high of 129) in just 2 years. IMHO, it needs to consolidate and form good base before starting upmove again.