Singer - Possible turnaround a.k.a. Symphony

(Rajat Setiya) #61

summary notes from AGM:

* Sewing machines is a slow growing business and will continue with a steady rate for many years to come
* Appliances -  
	* FY17 sales was expected top be more than the actual no but demon and GST resulted in less than expected offtake
	* break even at 120Cr of sales
	* expects to do 200-250Cr in next 3-4 years
	* EBITDA margins of 10% 
	* management feels it can keep on growing with such a fast pace as industry size is huge 
	* quality, competitive pricing, after sales service are key strategy points 
	* weak presence in South and west and focus is now to increase sales in these regions 
	* planning to enter new categories of products such as washing machine, microwave cooktop
	* focusing on increasing business from distributors rather than adding more distributors
	* will remain at mass end and not compete in premium end
	* core markets will remain tier 2/3 cities

(Rajat Setiya) #62

i was not enthused by management’s confidence in achieveing stated margins levels

(atulgupta80) #63

Thanks for AGM noted. BTW did you managed to meet Shyam Shekhar?

Reason for grim view about margins? They have just done it and all competition is clocking that number. Why do you feel its unrealistic?

(Rajat Setiya) #64

I dont think he was there at AGM?

Its very tough to make such margins in this industry. Barring few top players, havells and Crompton, i guess no one is making such marigns. have attached a table for ref.

(nartinala) #65

Promoters seems to be continuously selling ; they have reduced stake from 71.69 to 64.20 in the Sep’17 quarter (i.e decreased ~7.5%).

Also, they have sold their entire stake in the SINGER SRILANKA to the Hayleys PLC group in Srilanka few weeks back. They have also exited in SINGER Pakistan last year.

Can we assume their selling in India is part of their strategy to exit from India completely ? If at all they exit, will it be positive for the company?
Views invited.

Disclosure: Hold a tracking position; no trading in last 30 days.

(nartinala) #66

Very good set of results posted by Singer

(Saravanan B) #67

What’s so special about this company?

(atulgupta80) #68

Shyam Shekhar now holds 5%.

(Hashims) #69

Hi @atulgupta80
How to see this latest addition of percentage on BSE till it is updated in SHP in next Qaurter?
As per last update, SHP of Dec’17 shows 2.11% which he holds from Dec’16.

Screen shot from BSE Singer India SHP. I hope ‘S Shyam’ = “Shyam Shekhar”

(Vivek) #70

Company has informed exchange yesterday regarding that

(Hashims) #71

Thanks Vivek.

I tried to see under Bulk/ Block deals section on BSE yesterday, but i did not find anything of these transactions. Does these kind of huge qty buy or sell will not be reporeted in this section? Can anyone please reply and explain where to see these transactions before company or aquirer send messages to exchanges?

(Ashish Rampuria) #72

I had one interesting observation. This is a consumer appliances but the board majorly,if not all, consists of people with finance/ accounts and law background including the independent directors. Does anybody have any view? Also has somebody done any scuttlebutt on this?

(prakhartheinvestor) #73

MARKETSMOJO website revises data after every bulk deal/insider trade and keeps it for notification for one month. More it is not a bulk deal but insider trade.

(Hashims) #74

Thanks @prakhartheinvestor. I will browse this website.

(prakhartheinvestor) #75

caution: Don’t fall for their mojo stocks gimmick return.

(sougataG) #76

Often wondered if it actually works. Found the churn very high.You tried it?

(visanty) #77


Its regarding point 5.
The Singer , no doubt, has a good brand recall. The brands which would come to the consumers mind when talking about sewing machines would be USHA and SINGER. No doubt about that.

But Its very low operating margin indicates that the brand is not producing value, even when the revenues is consistently increasing. So I think it could be labeled under “Brands without a moat” category.

  1. If they come out with new products under the same brand with good margins that could trickle down to the bottom line, could it be considered as investing grade stock generating sustainable value?

  2. Spectacular Income generated during 2008 and 2009 mostly came from other income. In some years the company has not been able to generate positive cash flow from operations.

  3. More over the company has not been able to add more to the bottom line through its capital expenditure as it has done to its revenues. Doesn’t it look like a low margin and highly competitive business?

  4. On the positive side, do you think it would have be a good candidate for value buying when the stock price was trading in the 30’s when the earnings per share was around 6 rs?

(Hashims) #78

Last week Singer India was suggested by Dialwealth blogger.

(atulgupta80) #79

Very generic coverage by dialwealth. No credible reason for Rs 90 in 6 months. Only price of sales logic is little credible. Blogger says good Q4 Numbers. But on what basis ? Does he have insider information ?

(Hashims) #80

Yes, true. Most of the discussion in his blog goes very general in nature not supported by any thesis or numbers. But each stock he goes with some expectations of broad triggers to come in play in due course. Some worked out very well some not.