Went through Stock story & the three interviews. Looks like a good business with nice opportunity size.
Though, projections given by mgt looks a bit optimistic like in the 1st interview, mgt says 30% CAGR was a given for next 2 yrs… while actual turned out to be 22% CAGR.
I largely agree with Donald’s 2014 numbers. 1Q is the worst quarter for sales. 70 crs in 1Q will give 300crs for the year assuming past trends.
OPM has been 25% in last 3 quarters… So, that should stay… So PBDIT of 75 crs.
Then D=16, I=8 & Tax rate 30%, gives PAT of 35.5 crs OR about 9 crs/ quarter.
Last 3 quarters have been at that level. In all probability, we should have 9 crs PAT in 2Q14 also.
That’s a huge jump from 3.5crs in 2Q13.
So, Poly looks a good solid one quarter bet…
Though stock price may or may not rise with rise in Profits in the short run (as we saw with kaveri), but at 15 forward PE & growth of 20%, Poly can be kept for 2-3 years.