Meghmani Organics Ltd


(Ashish Kumar) #65

The trailing 12 months net profits on consolidated basis is Rs.189.67 crore. On equity base of Rs. 25.43 crore, this gives us an EPS of Rs.7.46 which translate into PE ratio of 13.68 considering the price of 102.


(anisingh) #66

You mean the stock is fairly valued?


(Ashish Kumar) #67

The concept of “fair value” may differ from person to person. I am personally invested in the stock from 37 levels. I recently up averaged it after seeing improved results.


(anisingh) #68

Where do you see this stock/business 3- 4 years down the line assuming same growth?


(Jose) #69

Okay…thank you…earnings were diff when I checked.I think it was on a standalone basis


(Sandeep Patel) #70

Caustic Soda Price Trend

January 2018
Caustic soda prices increase around 43% y-o-y in January 2018. Prices rule between Rs.47-58 per kg
December 2017
Caustic soda prices rise 28-33% in y-o-y December 2017. Prices rule between Rs.42-54 per kg.
Caustic soda production grows 12.6% in December 2017. Output up 5% during April-December 2017.
November 2017
Caustic soda prices increase 27-32% y-o-y in November 2017. Prices rule between Rs.39-49 per kg.
Output of caustic soda increases 11.6% in November 2017. Owing to healthy demand from aluminium and soaps & detergents industries
October 2017
Caustic soda prices continue to increase at robust pace in October 2017. Prices rise by 29-32%.
Caustic soda output grows 6% in October 2017. Production stands at 234.1 thousand tonnes.
September 2017
Caustic soda production grows by 4.7% y-o-y in September 2017. Output stands at 229.1 thousand tonnes.
August 2017
Caustic soda prices rise at robust pace in August 2017. Prices increase by 24-32%.
Caustic soda production grows by 2.2% y-o-y in August 2017. Cumulative output increases by 2.1% during April-August 2017.
July 2017
Caustic soda prices rise at robust pace in July 2017. Prices to increase by 7-12% in 2017-18.
Caustic soda output falls by 2.9% y-o-y in July 2017. Production increases by 2.1% during April-July 2017.
June 2017
Caustic soda prices touch all-time high in June 2017 Prices increase by 28-32% during April-June 2017.
Caustic soda production grows by 1% y-o-y in June 2017. Cumulative output increases by 3.9% in June 2017 quarter.
May 2017
Caustic soda prices increase at robust pace in May 2017 Prices to rise by 4-6% in 2017-18

Source: https://industryoutlook.cmie.com/


(Ranjan K) #72

Just one small disconnect here, we need to see TTM earnings after minority interest which is Rs. 145 crore…the caustic soda subsidiary which is Meghmani Finechem Limited is only 57% held by MOL…rest shares are held by IFC and MOL’s promoters…so the 43% earnings of this subsidiary actually accrue to IFC and promoters directly and should not be included in the earnings available to MOL’s shareholders. With that said, the the PE ratio based on adjusted TTM earnings and at today’s price would be close to 17x…there is a scope of both earnings growth (supported by ongoing expansions) and re-rating…


(anisingh) #73

How does re-rating happen? I mean how does pe expand?


(Rohit) #74

When market realizes the true potential of the company. When earnings expands and their are no corp governance issues / Scams etc and earnings are real and high visibility of growth. Market finds that its undervalued and starts giving higher PE multiple.


(anisingh) #75

When you say market starts giving high PE multiple, you mean the price of a
stock increases which will eventually increase the PE multiple?


(Ranjan K) #76

Yes…the market participants will be willing to pay a higher premium on company’s earnings when the earnings power and its longevity are demonstrated…this PE expansion can either lead or lag the earnings growth depending on macro factors and general market sentiments as well…e.g post NDA win in 2014, the PE multiple for almost all good companies expanded significantly as market saw a stable government and hence improved business visibility…that said, the key is earnings power…if a company can demonstrate solid earnings growth and its sustainability, the market will re-rate the PE sooner or later…


(duranvskp) #77

What is happening with Meghmani it is on a continuous decline from the past 5 days. Is this a intermediate correction or is the market reacting to some negative news flow which we retail investors are not aware of?

Disclosure: Invested at Rs 115


(starman) #78

@duranvskp This is mostly because of huge market correction this month. NIFTY is down by almost 700 points this month making it one of the largest corrections (points wise) in the last few years. Many small and mid cap stocks corrected more than NIFTY 50. If you are in it for long, ignore these small corrections.

Disc: Added small tracking position this week.


(Pratik) #80

Hi Sandeep Patel, the trend you shared doesn’t tie up with industry prices - in below interview link caustic soda prices are said to be around Rs. 39/kg.


(Sandeep Patel) #81

Difference seems to be in wholesale v/s retail price. NALCO talking about wholesale price and https://industryoutlook.cmie.com/ about retail price probably.

I would prefer focusing on price trend (up or down) rather than absolute price. Seems both sources have unanimous opinion on price trend currently i.e. going up. Need to see how long the trend will last.

Additional source to track prices of various chemicals, including caustic soda (thanks to @zoro99)
http://www.adinathpetro.com/productlist1.asp

Cheers


(Raj A A) #82

One of the promoter bought 10000 shares in the open mkt @Rs 100/- on 16.2.2018.

Source: BSE


(duranvskp) #85

yea got it:

https://www.bseindia.com/corporates/Insider_Trading_new.aspx

Thank you


(Manohar T. Patil) #86

Are there any other major larger players which produce Caustic soda along with Meghamani


(duranvskp) #87

http://ama-india.org/membership/list-of-members/

I don’t think all members are listed in stock market.


(duranvskp) #88

How much of Meghmani’s revenue come from Caustic soda sales in total?