NCL Industries - Resumption of growth?


(mukesh) #82

Dear I just want to know where you seen results of qrt -3…i think still not come
.


(Satya Prakash) #83

Result is announced on BSE.


(g sanjeevi raja) #84

I see a redflag in the management integrity due to the following reasons

  1. After Q1 and Q2 Management came on TV and projected things are very rosy. In fact Management told that in Q2 the plant was shutdown for two weeks and the capacity utilisation is around 74% and for the Cement industry particularly in AP and Telangana the 2nd Half year is always good.
  2. Management has been selling close to 2 lakhs shares every quarter for the past 3 quarters
    Holdings in crores in the past quarters are given below
    Q3 15-16 Q2 15 -16 Q1 15-16
    1.80 Cr 1.84 Cr 1.85 Cr
  3. Cement price has gone up by Rs.75/- per bag in AP and Telangana. The plant was not shutdown during Q3 for maintenance or any other thing. The Chennai Exposure to this company is very limited. Still the Sales comes down in Q3 and PAT, EPS decreases in Q3.
  4. The management released the Q3 result after the trading hours. But the share tanks more than 10% before the closing of the trading hours.
  5. The result was announced on Friday, But the management has not bothered to give explanation on Saturday in contrary to their behaviour in Q1 and Q2.
  6. I strongly feel the Management has inflated the Q1 and Q2 figures which they are adjusting by way of window dressing now in order to clean it before AR.

Had a huge exposure, sold it. I have made a profit but taken a hit on the profit to a huge extent.


(v4value) #85

Mgmt talking up and seling shares would be expected. how else would they get money to pay down pledges?

Clearly disappointing results but note that the mix of high margin particle busness is increasing.


(ishandutta2007) #86

Both PE wise as well as EV/tonne wise NCL looker cheaper than others

Deccan’s EV/Tonne = (716+190-36)/2.3 = 378
NCL’s EV/tonne = (513+179-5) /2 = 343
KCP’s EV/tonne = (1218+450-40)/2.17 = 750

Deccan’s PE=15
NCL’s PE=9
KPC’s PE=23

Compared to Deccan, NCL’s debt has actually increased, but having seen the surge in Deccan’s prices of late I am still bullish on NCL and would continue to hold.

Disc: Invested


(hemtan100) #87

NCL - why the company is undertaking capex when existing capacities are so heavily under-utiilized? to me, that’s a red flag that management isn’t learning its lessons having just come out of cdr.


(v4value) #88

my understanding is new capacity expansion is for a different line of business- particle board. Not cement. UItilization and returns are higher in this business and I would be fine with management allocating capital incrementally only to this.


(hemtan100) #89

“However, another Rs 200
crore we are spending on the expansion of cements as well as we are
setting up third wood and cement particle board plant. Those two
projects are under execution.”

Read more at: http://www.moneycontrol.com/news/business/ncl-industries-exits-cdr-plans-to-expand-cement-business_6733601.html?utm_source=ref_article"\


(nerolu_praveen) #90

I don’t trust the management. In every interview the MD claims he doesn’t have the actual data & then gives rosy pics. finally finds some natural calamity like Chennai flood for not meeting guidance. I would rather prefer the promoters who do give too pessimistic views.

PS: had invested & sold in loss just after seeing MD giving Chennai as the reason for bad performance. Chennai based sales were very less which he quoted :slight_smile:


(v4value) #91

Thanks for pointing out. Would be good to get clarification on capex split by segment.


#92

Results look very weak. Any comments by the senior members


(Pavas) #93

Cement prices have been weakest in AP/Telangana among entire South region for past few months. Sagar who is predominantly exposed to AP/Telangana, also reported weak numbers. This explains weak performance from NCL. However on the flip side this also gives room for maximum increase in prices going forward. That is also what some South based dealers are saying…
Disc: Not invested


(Pavas) #94

Also one can look at detailed press release from Sagar Cement (available on BSE) to get sense of South India market


#95

What ℅ of sales does this Cement bonded particle contribute ? As AR 2016 YET TO BE PUBLISHED …


(Rohan) #96

Bison board brand business is around 105 Cr (constrained by capacity) and will grow to 125 Cr+ in 2017-18 as they are in the process of expanding the boards division capacity. Any views on how much this business can be valued at? My estimate is around 200 Cr
EBIT - 24 CR
Capital employed ~ 50 Cr


#97

Tried to calculate EV PER TONNE IN DOLLARS TERM----
MARKET CAP + DEBT- CASH= EV
414+201-20= 595 cr
Capacity - 0.27 cr
EV\tonne ($) = 32.89$
Currently any company would require 120$ to setup a new Cement plant
1 $ = 67 Rs
Discl- little tracking qty


(Prasad India) #98

Hi Sumit, Does low EV/Tonne significantly result in higher OPM? When we see the cement companies in valueresearch, the other high EV/T also have same OPM.

Can anybody clear my doubt?


#99

In my view OPM has nothing to do with EV per tonne … due to cycical nature of cement sector we use EV PER TONNE to analyse undervaluation/ overvaluation as PE wont b a good measure.
Only 2 things to look to analyse cement sector-
Increase in demand of cement.
Increase in realisation . i.e selling price of cement .
It is unfeasible for new player to enter bcoz of increase in cost of cement plant


(hazariwalapu) #100

Do anyone has idea about pledge shares by promoters and plans to unpledge it?

Prashat


(varun88) #101

They have borrowed money from Piramal SIG and pledged their shareholding to them. They have borrowed earlier this year and these facilities are typically for 4-5 years

They have borrowed around 325-350crs @ all inclusive cost of 18%p.a