Rain Industries - An oversold de-leveraging play


(khushi) #66

i feel hype is created so that big investors who bought it around 45 - 70 levels a year or half back can slowly start exiting.


(Akshay Kumar) #67

To my knowledge, Phillips Carbon is not comparable
Read through the forum or atleast last 20 posts to understand yourself


(ishandutta2007) #68

Can you explain this part ?


(sunilgct) #69

The results is spectacular

Topline is robust at 3050 cr vs 2293 cr :
EBITDA HAS jumped Strongly to RECORD 674 CR VS 453 Cr which is Spectacular
net profits has surged to 253 cr vs 166 cr this despite tax expenses has risen sharply to 166 cr vs 35 on yoy basis,

with such stellar results, inspite of muted chemical vertical performance, rain industries should come under coverage of "major institutional funds of varied kinds, and fresh re-rating is on cards in the coming weeks. the dec qtr is a seasonally slight lower qtr due to winter months/holiday periods, but 2017 dec qtr may see record profits of conservative 175-200, cr, which will give total yearly profits of massive 655-700 cr with record eps of 19-20 for 2017, which will set the stage of re-rating.
rain has outbeaten its total half profits of 220 cr with 253 cr net profits this qtr which is a stellar acheivement


(Jiten Parmar) #70

Yes. Superb results. Stock is 10x for me in 2 years. Amazing ride.


(sarmams) #71

I think EBITDA is much higher ~ 650 crores I guess. Good turnaround and well poised ( in terms of favorable macro environment) for a great year in 2018.

Disc: invested


(fairmont) #72

can anyone predict what would be eps of Rain industries in FY20E ??


(madhavikkutti) #73

After looking at the Q2 results, Motilal has upgraded the target price to Rs 492 (from Rs 362 per share):


(ishandutta2007) #75

https://www.platts.com/latest-news/coal/houston/us-petcoke-exports-drop-308-on-year-in-sep-due-21492339

Aany idea if this is going to benefit indian players or have they been already counted in last quarter?


(Akshay Kumar) #76

Rain having plant in texas has got impacted , otherwise result would have been even better. To answer your question, it is already counted in sept quarter.


(Nolan) #77

This was quite expected from August itself and has been factored in.

supplies of so-called petroleum coke will be limited for months to come, which will ultimately increase the cost of doing business — costs that will be passed on to customers when they pay for everyday products. Petroleum coke, or petcoke, is a carbon-rich material that is derived from oil refining.
https://www.environmentalleader.com/2017/08/harvey-also-hits-chemical-companies-manufacturing-enterprises/


(Bhavesh) #78

I think risk -reward ratio is very favourble in Phillips given lot of deomestic presence. Valuation too around 11-12 time FY19 earnings cheap still. Like the stock best amongst the three.
For Rain, its not expensive firstly. After stellar results last night, its ROE expected at 26% in CY18. Its trading 6.0x EV/EBITDA CY18. Like the stock for Target of 450.
Goa Carbon - no idea on valuation. But it makes Calcined Pet coke where prices have jumped 50% in last three months. Demand -supply favourable.


(madhavikkutti) #79

http://www.moneycontrol.com/news/business/stocks-business/rain-inds-good-results-confirm-strong-tailwinds-for-carbon-products-in-metal-industry-2434853.html


(ishandutta2007) #80

@jitenp What made you invest in 2015 ? I was struggling back then, wasn’t it ?


(ishandutta2007) #81

Can you name which big investor exited which stock in this sector ? I couldn’t find any


(Jiten Parmar) #82

That’s a good question. A lot of that thought process is there in my Cyclical/Commodity presentation.
Anyways, coming back to Rain, I have been tracking this company for long time. Just see the financials for CY 11, 12, 13, 14. OPMs consistently falling from 23%+ to 7% over these 4 years. And company was still eking a net profit, despite big leverage. Somehow, I had a sense that things can only improve from here. So, basically it was buying it at almost peak pessimism.

In cyclical investing, u buy when ratios are bad. And u have reasonable confidence that company will survive these bad times. Hope this helps.

-Jiten Parmar


(khushi) #83

Today Rain Industries, HEG, Philips Carbon, Goa Carbon all Lower Circuit …

A similar pattern in all stocks…

Surely seems operator play…

Views invited …


(AbhijitMani) #84

IMHO, such falls are part and parcel of the stock markets.
If we are perturbed by these falls, then one should introspect as to why it was bought in the first place :slight_smile:


(pla7yer) #85

Are we nearing the end of metals rally.I thought Rain had more steam in it


(kartiks) #86

@khushi
in my opinion - just opposite
today’s LC is retail investors’ play
yesterday’s UC was operators’ play