Its a bad business with bad management , Plus risk of something coming out like pincon spirits …
Its better to stay away from these companies.
sin-tax.
if anyone who could attend the conference give a summary it would be good.
The title more aptly should be “Don’t ‘blindly’ believe on what analysts say”. I have been tracking Sintex from before demerger times. Have seen it decline for months now post-demerger. Got interested when it came below 80. Valuation criterion differ for each investor. I arrived at 75 which is a level where I feel all ills are accounted for. Accumulated it all the way from 75 and down to 68 with an average of 72. Its only in FY19 its growth will be visible I believe, so I am sitting tight after getting the required quantity at my desired price. 
Why broadly? Topline has declined for which the management guidance was already in place. Prefab is the business which is troubling at the moment and not custom molding. Company expects to see good growth in custom molding going forward while the Prefab unit will pick up from FY19 Q3. I still have to go through their presentation for more details.
Results were a mixed bag. Management highlighted following points in concall. Since this is all I could remember, I would request others to add any point I have missed out on.
- Promoters wanting to increase stakes by 11% to total 40% by next FY end.
- Govt. business getting headwinds and willfully being less pursued by company. Planning to phase out govt. business slowly. Retail private business growing well. Retail business working cap is very low so cash conversion is quick, while govt contracts are heavy on balance sheet and cash realization takes time.
- Targeting 35%+ market share in tanks and 22% in factory molded doors
- Margins would be around 15.5-18 percent
- Total debt reduces by 300 cr .Now debt stands at 3331 cr down from 3628 cr from Mar-17
- Pre fab order book just 450 cr. which is low
- Six months orders already there going by current run rate
- 423 cr CFO from nine months after working capital adjustments
- Custom molding can grow strongly in FY 18-19. Europe is reviving…aerospace is gaining traction (More business from these sections of the market). Locally in India, retail and electrical business would do well. India business growing by 20%…exports business to increase by 10%. 18-22 percent revenue growth expected in India retail business
- EBITDA to Debt of 2 is their target. Once this target is reached more acquisitions/expansion may be pursued
- Debt to reduce by a minimum of 300 cr in FY19
- ECB loans around 55 ml. US$. Agreement in progress with KKR to reduce interest by 1.5% and improve liquidity and increase maturity period. In next two weeks they may close it and announcement will be made
- In 4th qtr, prefab would be stronger. Custom molding would be 2-5% heavier than average of qtr 1,2 and 3
- FY 19 q3 prefab would see traction. Coming up with new products with CSR focus
- They will disclose depreciation numbers to clarify differences between EBIT and EBITDA margins after the call
Thank you for the timely help. 
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Is this debt reduction mainly on account of FCCB conversion ?
They mentioned during call that they have zero FCCBs, they only have ECBs. All FCCBs were transferred to Sintex Industries during demerger they said. But, frankly even I did not fully understand this.
That’s not true. If we go by their press releases to the exchanges it clearly mentioned that X FCCBs got converted many times.
We may have done some calculation mistakes but FCCBs are there for sure.
Regards,
Suhag
What does this mean? can you elaborate
When promoters forecast their % holding instead of company profitability and ROCE, what we should understand?
In Indian stock market there are plenty of clean and green opportunities are available then why we should waste our time & money behind the company where (even) we have doubt about promoters integrity and values. Move on …
Will their products be used by electric vehicles?
Since FCCB were taken before demerger they have to give both sintex industries as well as sintex plastics stocks
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seems more equity dilution, 
http://www.bseindia.com/xml-data/corpfiling/AttachLive/c8fb39a9-b70d-4487-8b94-8ce89a9729db.pdf
Issue of warrants to promoters on a preferrential basis to be used to repay debt. Seems like good news
FY18 Q4 - Warrants issue to promoters.pdf (263.4 KB)
FY18 Q4 - Warrants issue to promoters - 2.pdf (270.6 KB)
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so the conversion rate is Rs 55? for raising the 600cr?
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I guess one needs to wait for the conversion price (Wonder why management has not decided that yet).
If you purely go by the amount of dilution and money raised, it is Rs.54.57
Many Promoters use warrants method to transfer wealth from Public shareholder to themselves. But optically it looks like they are trying to put in there Money and Reduce Debt. The plastic business can throw enough cash for them to reduce the Debt from cash flows over next fews years. And this bussiness is also not capex intensive.
The best would be for them to state 3 year plan to reduce Debt from Free Cash Flows they generate. That would be good from corporate governance perspective.
IF they did this to Sintex Industries which is capex Intensive then some merit can be seen.
Would be happy to get views from all of you.
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The issue price and context will help understand the intent, overtime hopefully !
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Pricing of equity shares 136[- Frequently traded shares]. (Page 47)
- (1) If the equity shares of the issuer have been listed on a recognised stock exchange for a period of 137[twenty six weeks] or more as on the relevant date, the equity shares shall be allotted at a price not less than higher of the following:
(a) The average of the weekly high and low of the 138[volume weighted average price] of the related equity shares quoted on the recognised stock exchange during the 139[twenty six weeks] preceding the relevant date; or
(b) The average of the weekly high and low of the 140[volume weighted average prices] of the related equity shares quoted on a recognised stock exchange during the two weeks preceding the relevant date.
Holding this stock for long term in portfolio since 95 price levels. Would appreciate enlightening views from how this may pan in couple of years ahead. I see promoters reducing their stake and quarterly results disappointing - not much data available - qualitative views as well - management quality etc?
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Am quite positive on the stock, primary reasons being
- Attractive valuations compared to peers, who are not sector leaders - even when they are comparable in terms of long term EBITDA Margins and returns.
- Management issuing warrants (currently shareholder approval being taken) at a time when price is falling, resulting in them willing to pay Rs 90 (much more than current price) per share on conversion. They are shelling out Rs. 600 crore for a 10% increase in shareholding - think this is a big signal on how optimistic they are
- Concalls and investor PPTs indicate that they are aiming for a turnaround over the next 2 years
I intend to track quarterly performance for the next 2-3 quarters before concluding on how effective their transformation journey is
If all goes per plan, expect stock to be in the range of 150 -180 in 2 years
Disc: Substantially invested, >10% of my PF
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