Prakash Industries Ltd. (Prakash)

(Amit) #320

92% utilization From their results.

(GreyCells) #321

The difference between quality promoters and usual one.

Prakash commentary
Company has to pay interest on some FCCB during last quarter so the EBITDA margins were hit.
Didn’t the promoter saw this before giving margins statement last quarter

Company did not meet the guided rev growth as some order where fixed at lower margins which slipped from last quarter to this quarter …
Again we did not forced promoter to give this guidance, can’t you refer it before giving guidance.

(Mayank Narula) #322

EBITDA by definition is earning before interest, tax and depreciation/ amortization.

How can interest outgo affact operating margins.

(ashutosh_shah) #323

Prakash Industries proposed demerger

Entitlement ratio 8 shares in PIL will get 1 share in Prakash Pipes.

Can anyone calculate the Valuation of Prakash pipes based on the Entitlement Ratio.

(learning) #324

Looking at the recent price action…does it mean that market is assuming the current earnings are its peak earning and only way is to go down? Generally i dont look at price action …but in commodites it might make sense to verify the thesis with price action.

What do others think?

(VALUE2017) #325

In my opinion it would be too early and premature to say that the Steel Industry in India has peaked out.
From a broad perspective if we go across the country, we observe that we lack even the basic infrastructure facilities (Roads,Railways,hospital,airports,Schools,Ports,housing etc etc). If you believe in great Indian Story, it is just the beginning. We are 1/10 of China and I strongly believe that have a long way to go ahead…

(VALUE2017) #326

I am trying to figure out the total outstanding liability against the outstanding FCCB to calculate further equity dilution in case of conversion but not able to reconcile.

Please advise if any body has calculated the outstanding FCCB liability as on 31/03/2018 and probable dilution.

(Jiten Parmar) #327

correct. that is indeed the case. since most of power is captive consumption both should be seen in conjunction.

(Jiten Parmar) #328

I think we should discount FY22 projections. And in cyclicals we should never think that long. If cycle stays in uptrend, we keep on holding.

Few points to be noted is that with the start of mines, their margins can improve. 1st mine can open in this quarter.

Also, value unlocking through demerger of PVC division is going to happen, though it is taking a lot more time than envisaged.

(GreyCells) #329

I dont know how much of their first mine will serve their Iron ore needs. But if their complete need of 2.5 million tonnes is done by their mines then they can do 100-150 crs of profits from their mining business (when both the mines starts).

This is on assumption that if NMDC can do 1500 per tonne (efficiently run without any debt) then they could do 500 at the least. I have not considered the debts taken for mining division (that should be deducted from the profits).

(VALUE2017) #330

The Orissa Iron ore mine is comparatively a small mine with total capacity of around 5 to 7 MT with annual capacity of around .75 MT. However the Iron ore mine at Chhattisgarh which is likely to be commissioned within 1-2 year is comparitively a bigger mine, which will full fill its entire requirement.

(GreyCells) #331

Here is a company snapshot on various parameters.
The SGR (Sustainable growth rate refer this has improved thus capable of working efficiently has improved.

The PEG is also good which indicate that it is not even near to it bubble zone (take with pinch of salt)

(VALUE2017) #332

The company is very efficient in managing its working capital cycle. Although the sales has grown by 25% the company has not compromised with its receivables and managed to keep it at the same level in days terms. The receivables /Debtor days is at less then 12 days which as per my analysis is one of the lowest.

Further the 25% or 600 Cr increase in sales has been managed by the company with additional working capital of Rs 43 Cr which is very efficient .

@jitenp I would like to know about your views on the Indian Steel Industry for next 2 to 3 years and growth opportunities for companies like Prakash Industries.

(Akshay Kumar) #333

(GreyCells) #334

(lisa29) #335

Excerpts of meeting with a top executive at Prakash Industries Delhi

Fy19, topline expected to grow by 50% and ebitda expected to be Rs. 1000 cr
Existing ev/ebitda is 5.7 times against industry standards of 7-8 times
If ebitda comes to 1000 cr, ev should be around 6000 cr. After deducting the net debt of 600 cr (700 debt- 100 cash bal), the market cap comes to 5400 cr. Considering paid up capital of 156.88 cr (15.69 cr shares) the expected share price is Rs.344

(BGattu) #336

SH-Ferrous Metals-Q2-1-May 2018.pdf (271.4 KB)

ICRA steel industry outlook partial report predicting further EBIDTA margin improvement.

(Swapnil gangele) #337

I could not see any comment on their critical pledging situation which stands around 77% highest in industry and rare in listed companies. Is only pledging the option for meeting short term funding needs which shows nothing but their tight cash flow situation or something not yet transparent as was in their past

(ashutosh_shah) #338

prakash industries demerger approved by all stakeholders.

(biswarup) #339

Prakash Industries put on ASM (Additional Surveillance Measure) list effective today