Sanghvi Movers


#21

Hi All,

Anyone has con call details, current debt of company is more than 700 Cr did they manage to pay any amount this Q, where i can find those details.

Regards, Vishal


#22

Hi All,

Can some one throw some light on company logisticBusiness.

please do share segmented result of the company.

Thanks,Vishal


(GreyFool) #23

As far as I know there is only one segment - crane rentals. They buy & lease out high tonnage cranes on project specific basis. Main segments served are Windmills, Power & Refinery.


(Nelson) #24

Hello,

For people who want to read more about the Industry and SM, I had read a report few months back by HBJ…sharing the same with you:

https://hotfile.com/dl/168278029/380a48e/Sanghvi_Movers_Ltd.pdf.html

Please do discuss whether you found the report useful


(T Anil Kumar) #25

Hi

I had done some research on Sanghvi movers earlier but decided not to invest mainly for three reasons. 1) Excessive exposure to Suzlon which contributes almost 30%, whose fate itself is not known 2) deteriorating quality of its receivables. 3) High amount of loan repayment in next two years (approximately 80% of their current debt amounting to 550 crs) I feel because of these three factors stock face high tail risk which is not suitable for a short term idea.

1). Receivables outstanding for more than six months were in control till 2007. From 2008 onwards it has increased from INR 8cr in 2008 to INR 20 cr in 2011 and then declined to INR 10 crs by 2012. But till 2011 there was hardly any provision for doubtful debt though bad debt written off increased from INR 2cr in 2010 to INR 6 crs in 2011. Ultimately they have written off INR14 cr in 2012 and also made a provision for doubtful debt of around INR 7.5crs.

_2). Bills Receivable which are discounted with bankers stands at INR 28 crores for FY12 This is the highest amount of discounting by the company in the last five years which never exceeded INR 10 crores even during the 2008-09 crisis. _Now no information is given whether this discounting is with recourse (company bear liability in case of default by customers) or without recourse. Now receivable and bill receivable together accounts for 51.5% of the sales for FY12.

___3). _A major portion of current liabilities are current portion of long term loan (i.e loan payable within 12 months from the balance sheet date). So total debt is around 660cr, which puts the debt equity ratio at more than 1x which is highly risky in current uncertain times. Loans payable in less than one year is 348 crs and within 1-2 years is 198 crs. Average operating cash flow (OCF) of the last three years is around 200 crs. So assuming OCF remains flat over next two years it will have mere 400 crs to repay debt becoming due of 546 crs. So any slowdown or crisis will put Sanghvi movers in debt crisis.


(Vishnu Ch) #26
Particulars Quarter Ended
Dec. 2012 Dec. 2011 % Var.
Sales 72.53 113.9 -36
OPM % 65.48 70.32 -7
PBDT 33.88 63.41 -47
PBT 3.29 36.5 -91
NP 2.23 24.58 -91

Source:Capital Market


(Ashish Pandey) #27

Anyone has idea about the current status? i think management promised to try to reduce, whats the status?


(Akshay Badjate) #28

Guys I wanted to check if someone on the forum could introduce me to the CFO at Sanghvi Movers? I am based in Pune and would like to meet the management to get an update on the Company.

Believe the stock now looks extremely interesting at this price point - however it is fraught with one significant tail risk in the form of a one-time write off of its +6 months receivables (which amount to +100crs as on March 31, 2013).


(Ashish Pandey) #29

hi,

As per the latest annual report, Long Term Debt is 263 crores, short term debt is 5 crores, total debt is 267 crores. Cash is 18.6 crores so net debt is 245 crores types.Receivables too have gone down from 224 crores to 149 crores, company generated CFO of 300 crores(deducting the interest it paid on its debt) in the last two years.

currently company is in losses, but if we focus on cash profits, its in profit of 104 crores for fy13-14. Depreciation is taking its toll but cash is getting generated and debt is being paid back. Also, as the projects get clearances in near future, i think SML should expect big orders. Capex is not happening till debt gets paid, as per management’s earlier statements and seemd they have stuck to their words.

Anyone have any latest updates, or can anyone do some scuttlebutting on this?


(Varadharajan Ragunathan) #30

Ashish

One of my friends is a small time crane rental owner in west. As per his inputs, which were very good :

)- all of NDA’ governments focus on roads is yet to manifest itself as tenders. Given the state in which most EPC contractors are in, they have no cash and they won’t take up projects until advances are given. So, it won’t be until Q4 when we can see new orders for cranes coming in

)- in the meanwhile, some port construction and reliance’s jam nagar refinery are keeping them busy. Sanghvi unfortunately is not in reliance’s fold.

)- sanghvi now is focussing only on 100 tonne + cranes where realizations are better - however, all of the consumers for this - power, wind are in doldrums.

I will wait and watch this - I like sanghvi as a company but I think the worst is still not yet behind. market grapevine is also that they are yet to take a bath on suzlon on their books


(Ashish Pandey) #31

HiVaradharajan Ragunathan,

Thanks for ur inputs. May i know what amount of write-offs from Suzlon you are talking about? As i mentioned, receivables have gone down, so remaining are from Suzlon majorly?

Thanks


(Varadharajan Ragunathan) #32

Ashish

I wish I knew . Talk to anyone in the market and they will tell you that sanghvi partnered with suzlon during the boom years and apparently they are holding the bag along side suzlon now. I do not even know if it’s true - but that’s what my primary research says.

That probably prompted them to clean up their act fast - the question is, how big is the hole and how quickly can they fill it.

Answer is, I do not know !


(Varadharajan Ragunathan) #33

Ashish

I wish I knew . Talk to anyone in the market and they will tell you that sanghvi partnered with suzlon during the boom years and apparently they are holding the bag along side suzlon now. I do not even know if it’s true - but that’s what my primary research says.

That probably prompted them to clean up their act fast - the question is, how big is the hole and how quickly can they fill it.

Answer is, I do not know !


(Varun) #34

Also just a cursory look through the quarterly financials - ~220 Cr of sales, negligible EBITDA (leave alone negative PAT) and ~620 Cr of Mcap. Too expensive, and too risky a bet, that too when the markets are at good premiums.

For whatever its worth, a no-go for me…


(Ashish Pandey) #35

Hi Varadh,

I think even if the rumour is true, there wont be much write-off to be done. U can check their CFO for the last 2-3 years, they r generating cash, and in fy13-14, even when the revenue went down and they showed losses, receivables went down. They r paying back the debt, interest cost too is going down. What do u think?


(Varadharajan Ragunathan) #36

Ashish, on what basis did you make that statement that there won’t be much write-off to be done ?

Infact, I think quite the contrary - when think, say 20% of your receivables is not going to be come back in a hurry, you are to going to step up on the remaining 80%.

If there is a significant risk, I will not invest until I can ring fence the worst case - what happens if they take a 20% write-down of receivables in one quarter ?

My scuttle butt says they are not doing well- I think I am not smart enough to double guess someone in the industry. Everytime I have done that with wishful thinking, I have got burnt badly.

When in doubt, always invert - think of what the worst possible downside is and if you cannot fathom that, move on and wait.

Ashish

I wish I knew . Talk to anyone in the market and they will tell you that sanghvi partnered with suzlon during the boom years and apparently they are holding the bag


(Varadharajan Ragunathan) #37

Cursory search on teh web shows its exposure to be 30% to suzlon. That’s a material number. No one has any clue how much is still outstanding ?

I am not comfortable until I am sure

Ashish, on what basis did you make that statement that there won’t be much write-off to be done ?

Infact, I think quite the contrary - when think, say 20% of your receivables is not going to be come back in a hurry, you are to going to step up on the remaining 80%.

If there is a significant risk, I will not invest until I can ring fence the worst case - what happens if they take a 20% write-down of receivables in one quarter ?

My scuttle butt says they are not doing well- I think I am not smart enough to double guess someone in the industry. Everytime I have done that with wishful thinking, I have got burnt badly.

When in doubt, always invert - think of what the worst possible downside is and if you cannot fathom that, move on and wait.

Hi Varadh,


(Ashish Pandey) #38

Hi Varadharajan Ragunathan,

I said that based on the performance of company on cash generation front. They r paying down the debt and if u see, revenues have come down from 339 crores to 244 crores but receivable too have come down from 224 crores to 149 crores. This shows they r getting back their money. And on the same basis i guessed that. Anyway, in future, i hope in very near future, we would come to know :slight_smile:


(Ashish Pandey) #39

Moreover, it used to trade at 240 types in not so far past, in 2010. Current mcap is 650 crores, in 2010 it was in the range of 950+ crores, so already 325 crores have gone.

In 2011-12 around, similarly was the case with PTC. They were supposed to get money from TNEB and UPSEB, but SEBs were delaying the payment. Receivable had gone up so share price tanked from 140/- to 34/-. Mcap from 3200+ crores went down to 1000 crores around, and the money held up by these two SEBs was in the region of 800 odd crores. So rise in receivables was surpassed multiple times by the loss in cap and hence it baceme opportunity. I am not saying that i m very sure that write off wont happen or it even if it happens it wont be much or eventually Sanghvi too will get the money from Suzlon. I am just making a case that probably the negatives have been priced in and company is now generating cash. Even if they have to write off something, the cash the generating wont get affected much and given the anticipated growth in infra, they might do very well.

Disc: I have stake in Sanghvi, much lesser than CMP so my views would be biased :slight_smile:


(Ashish Pandey) #40

Moreover, it used to trade at 240 types in not so far past, in 2010. Current mcap is 650 crores, in 2010 it was in the range of 950+ crores, so already 325 crores have gone.

In 2011-12 around, similarly was the case with PTC. They were supposed to get money from TNEB and UPSEB, but SEBs were delaying the payment. Receivable had gone up so share price tanked from 140/- to 34/-. Mcap from 3200+ crores went down to 1000 crores around, and the money held up by these two SEBs was in the region of 800 odd crores. So rise in receivables was surpassed multiple times by the loss in cap and hence it baceme opportunity. I am not saying that i m very sure that write off wont happen or it even if it happens it wont be much or eventually Sanghvi too will get the money from Suzlon. I am just making a case that probably the negatives have been priced in and company is now generating cash. Even if they have to write off something, the cash the generating wont get affected much and given the anticipated growth in infra, they might do very well.

Disc: I have stake in Sanghvi, much lesser than CMP so my views would be biased :slight_smile: