Rain Industries - An oversold de-leveraging play

(malikvikrant00) #298

U.S. Gives Rusal Path to Escape Sanctions
Aluminum giant’s owner EN+ Group was at risk of a delisting from LSE without Treasury reprieve

(sunilgct) #299

I am not good at charts But can some one correct me if i am wrong.

Is it a nice triple bottom confirmation with twice retraced from 50% levls and most importantly volumes are decreasing with each bottom

(manan1379) #300

so what does tht mean ?

(sarmams) #301

Vedanta has declared their quarterly results

There has been a solid growth in top line from Aluminimum segment during Q4 (qoq- 16%, yoy- 66%). Expect, raw material suppliers to Aluminium industry like Rain should continue to benefit from this uptick in Aluminium sales (have read that even Alcoa in their conf call mentioned that raw material prices are firming up).

Disc- invested in Rain from lower levels and added further to my position in last 1 week. Not a buy/sell reco. Pls do your own due diligence.

(Valcyc) #302

Koppers in its carbon business reported EBITDA which was double the prior quarter level and almost 7x versus the prior year quarter. They mentioned strong pitch, naphthalene and carbon black feedstock demand as the main drivers. Their business competes with Rain’s distillation business (Rutgers). Also, a CP coke competitor in the US reported a very strong quarter. By extension, if Rain is able to achieve similar margin, it would imply a strong quarter as well, perhaps around Rs 11 to 12/-

(Saji John) #303

A simple explanation of Rain price action https://twitter.com/prashmundu/status/993910425229066240

(dhiresh17) #304

Apple invests $10 million in carbon-free aluminum production project.

Not sure if they mean that CTP/CTC will not be used for producing aluminium. The technology will be available in 2024 as per the article.

(Akshay Kumar) #305

It appears material used anode of the new technology is different from conventional method

(GSrikan) #306

If it works out, it is going to replace CPC anodes (and CTP too if I am right) used in aluminium manufacturing process. The anode will be replaced by some inert anode made from undisclosed material. In one of the articles it is mentioned that Alcoa is already using this method sine 2009. They themselves are setting a target date of 2024, with lot of unknowns. The cost of manufacturing the new inert anode is going to be primary. Since the carbon anode is made from byproducts of other manufacturing processes, the carbon anodes are cheaper (my estimate). They did not mention anything in press release about cost factor of new process.

If it works out, it is good for the world and Bad for carbon companies like Rain, Himadri etc. The investors need to keenly watch the developments on this front over next few years.

Disc: Invested & is significant part of PF

(Rohit) #307

Results announced , seems ok to me , why stock falling 7% …I dont track this company. Can any one please analyze the results and share your views

(utsav_garg) #308

exactly, results are not that bad either… the profit seems to have declined due to tax expenses which were very less in previous quarter (could anybody please explain me the reason for this?) … Rain is right now down by more than 15+ % at the time of posting this message.

(pla7yer) #309

Pretax net profit is still higher than last quarter
406 crores vs 322 crores (Ending Dec’17)
Deferred tax costed them 140 crores this quarter
(which is a one time factor)
So a net profit of 265 crores this quarter
There was one time accounting benefit in Q3 which increased the overall after tax net profit
Barring the deferred tax this quarter result looks very good IMO, considering the fact that this is the highest pre tax net profit ever!
Revenue is also up from 3147 crores to 3306 and carbon segment revenue is also up
Only cement sector didn’t perform well

Again good results for me

(Manohar T. Patil) #310

Investor presentation -

Press release providing detailed information about Capex plans and Debt situation

(GSrikan) #311

Q3FY17 had one exceptional item which brought down the pre tax profit. So, ideally profit wise, Q3 was best quarter.

The CPC volumes were down marginally due to extended negotiations with indian customers over import duty (from presentation). The current quarter’s tax % would be standard going forward (my guess not sure though). The US and Belgium tax reduction benefited rain to reduce tax by about 3-4%, thus bringing it down from 34% to abt 30%. There are some oblique pointers regarding China. Finance cost reduction qoq is good. The inventory increased by 500 cr qoq is also good if demand stays intact.

From presentation management is optimistic abt rusal sanctions and Brazil alumina company’s production coming back to normal in 6 months.

New CPC capacity to come online in 1and half yrs from now.

Market is seeing something which we don’t know of. The apple, Alcoa could be one.

(Mahendra243) #312

Seems BNP sold huge chunk today

(naruto) #313

That would explain the sudden 17% drop.

(praveengowdadm) #314

@naruto : If you see the trade value, they have sold stock only after it went down more than 15%. So, that may not be the reason.

(naruto) #315

Thanks for correcting.

(Valcyc) #316

Good quarter but probably expectations were high. Stock sell off could be due to lack of pricing power in CP coke. China exports are again a factor. But China is also starting new aluminum smelting capacity, so exports could decline. Comments made that volumes and margins will be maintained. Should be ok if that comes true

(Vijayk) #317

This Bnp Paribas fund entered recently only as it was not in shareholding pattern of Dec 2017. The fund manager did something similar in fortis healthcare. It bought fortis in feb end at 155 and sold in March end at 123. 123 was the bottom of Fortis stock. It seems the fund bought rain in first quarter of 2018 and sold today. It is an arbitrage fund with very poor returns in last 1 year.