I just came across this tweet, can you explain what does it mean? Thanks.
The post talks about how much the reported Operating Profits (OP or EBITDA) get converted in Cash Flow from Operations. It’s very difficult to track from a single year of reporting. But basically, if you plot EBITDA and OCF of a company, it should largely coincide. For PC Jeweller Ltd, it looks like this:
You see how the Reported Profit rise smoothly and the OCF fluctuate wildly? It’s not necessarily fraud or manipulation, but it shows poor financial management skills of the part of the management.
I think on a year to year basis, swings should be common to high working capital companies with receivable cash being recovered in a non linear manner. Sum of EBITDA n CFO could highlight if there is trend of improvement or deterioration or it’s mere accounting but no cash. So, agree with u difficult to say something just on this metric
If you plot it for Titan, it will be no different or even worse. One needs to look at the industry dynamics and trends to take a coherent call.
Brahmal Vasudevan’s Idria Loses Fortune In ‘Pump N Dump’ Stock While Fears Plague Kenneth Andrade’s Fav Stock
PWC has appealed against sebi order.Secondly, if it’s resignation is because of sebi ban, it would not be restricted to one company as I believe PWC must b auditing at least 100top companies in India.If they HV come across something wrong or suspect, they should bring it to the notice of sebi
A meeting of the Board of Directors of the Company will be held on Friday, May 25, 2018, inter-alia, to:
consider and approve the audited standalone and consolidated financial results of the Company for the quarter / financial year ended March 31, 2018;
consider recommendation of dividend on preference shares for the period from April 1, 2017 to September 1, 2017.
consider recommendation of dividend, if any, on equity shares for the financial year 2017-18.
consider the proposal for buy back of fully paid-up equity shares of the Company.
Too much similarities between vakrangee and PCJ. Vakrangee also declared 1000 cr buyback, but after announcement there is no update on it in more than 2 months (Except for appointment of merchant banker). And PCJ has announced board meeting on 25th may. Why wait for about a month to have a board meeting???
Moneycontrol showed a block deal of Rs. 437 crore on PCJeweller at around 2.30pm on Friday. That truly concerned me. I wrote to the cs to try to get some details on the so called gifting of shares and why are promoters selling. CS did not have much to share, and only says that the business growth is strong, promoters are passionate, it’s a family business, bear cartels n some other sources are pulling the price down, etc.
This is not very assuring. The price is going to be volatile over the next few days.
The buyback coming out seems to be interesting. It looks to be the promoters methods to increase their stake back in the company, but by using shareholder’s funds.
This got me thinking. Last year they issued bonus shares. Post that the promoter group share selling started. They again used the shareholder funds to increase the number of shares, and then started selling. This makes me question the management integrity.
What made the investors jittery is “Did promoters exited ?”. On the first look, it seems like they want to bring back the confidence by shares buy back. But this needs more investigation. But the vakrangee story is bit different from PCJ. Atleast PCJ doesn’t have fake stores.
If they wanted to make some money, they could’ve don’t it in a honest/transparent way, instead of gift -> sell. That’s why market is punishing.
Here the issue is not only just gifting the shares, but selling/dumping them as soon as gifted…and surely the guy who received the gift shares made money, lots of money.
Guys its our hard earned money…to protect it think reversely to our law system:
Guilty until proven innocent. .
“Post that the promoter group share selling started”…I thought this was the first time promoters have sold (gifted). We do not know if they were sold or not for sure.
This was the first instance of gifting. However other than Balram Garg and his family, there were other family member promoters who held stakes mostly from PC Gupta’s side and have sold all their shares starting from September last year.
Got this by comparing the shareholding pattern since September last year
PCJ had convertibles which got converted to equity which brought down promoter stake not total shares.
These companies traded high quantity on 26-Apr. There was no disposal in bulk deals from one particular person/entity between 23-26 Apr.
WAY2WEALTH SECURITIES P LTD (it’s website says, it’s a coffee day company)
SHARE INDIA SECURITIES LIMITED (a broker)
ALPHAGREP COMMODITIES PRIVATE LIMITED (as per its website, a trading company)
To be fair to PCJ, I really cannot see much dirt in the financials. My bias is restricted to one lot of F&O at 210 protected by 150 PE, so max loss of 70. So maybe I will be happy if it goes to the dogs today again. But coming back to the financials:
- Cash tax of 189/139/128 crs over the last three years.
- The company shows interest income on deposits, so cash balance is not fake.
- For march ending 2017 (year of demon), no abnormal increase in sales or receivables (something which should be there if there were fake sales?)
- There is a sharp increase in the purchase of stock in trade. Do not understand that much. Are those wash transactions (buy from another jeweller and resell it with wafer margins)? Maybe.
- No increase in debt (rather decrease in 2017 from 2016). Cash of 822cr
- Really not gone into days receivables analysis. Not worth for 1 lot.
Thinking of adding in cash today.
Brother reputaion of mgmt & their actions are more important during time of crisis here i see none.
In Indian context, in time of crisis only three things really matter…A.) Do they have cash flows and are they real? B.) Are there are pledged shares C.) Are they overleveraged with debt payments in near short term.
If you are clear on these three you will have a hard time finding a share which has totally collapsed. Not saying this will not be down 25% again today, but you can short a decent stock only that much.
As per your First two lines one name comes to my mind Vakrangee. All ingredients where their in this company but than also everyone knows what happened. They spoke on Buyback & its more than a month & no talks on buyback by Vakrangee.
In PC Jeweller case what bothers is to whom where the shares gifted ?? may be latter on we get to hear its some one from Vakrangee mgmt.
My thoughts only . Dont take them seriously cozz if after May 25 the share reaches 1k than u will abuse me .LOL
To Consider Buyback on May 25th
MCAP: 7015 Cr
Networth (Sep-17): 3642 Cr
Cash, Bnk & Crnt Inv (Sep-17): 1398 Cr
How Much Can they Buy?
With Board Approval: 364 Cr
With S/H Approval: 911 Cr