Vikas Ecotech - Chemical Company

(Darkwanderer79) #264

Yes I did.

My worry is about when the implementation will take place…according to the roadmap. The more delayed it is as per the “roadmap” it reduces the advantage of Vikas

(Meena) #265

As per me , Vikas is running its capacity for internal use (within india) and Export also.
They are looking for USA market soon and MOEF and india decision to use Organtin will be a gradual increase in their business, in their concall they told, this change in india will be gradual as MOEF will give time to all pipe manufacture to change. If this change happens it will be 8 to 10 times the current capacity size. This is a big statement from Mr.Vikas Garg.

We need keep a close watch on how the management is moving forward ahead. As now thier PAT is increasing qoq which is a healthy sign.

Remember companies needs time to grow big.

(khushi) #266

Q3 Results out ! Seem to be very good.

Revenues registered a year-on-year increase of 30% at INR 110.57 crore in Q3 FY18 as compared to INR 84.84 crore for the same period in FY17.

EBIDTA during the quarter registered a robust increase of 38% to INR 21.06 crore as compared to INR 15.23 crore in Q3 FY17.

Company’s net profit is 44% higher at INR 10.78 crore as compared to INR 7.46 crore in Q3 FY17.

Disc : invested since 32 levels and have been adding at 37, 40…See it as a potential multibagger in 2/3 years.

(Meena) #267

Result are quite statisfactory, based on segmental revenue, PBIT for chemical manufactrung is 1934 Lakhs and Chemical Trading is 70 Lakhs.

Now i am bit worried , what will happen after the Demerger , VML (Vikas Multi crop) will have a low PBIT and PAT ? , if i am wrong , please enlighten me.

(khushi) #268

Exports are on rise on YoY and QoQ basis while on QoQ basis domestic demand is somewhat flattish.

Once the lead stabilizers are banned by NGT then I expect domestic demand to pickup.

(khushi) #269

You might be right @Meena. Once the demerger happens i think to sell off Vikas multicorp and a good price and hold on the manufacturing division as I see a potential multibagger in it.

Views of senior members invited.

(Ram Arvin) #270

Trading business is a no margin or very less margin business and it was dragging the margins down. They don’t have assets as well. My plan is to sell the trading business and hold on to manufacturing business alone. Even manf business is not making operating cash due to high receivable because of which debt is increasing, it’s a deadly combo…now the stock price is increasing only on hopes, so need to carefully watch…

(Claude Sylvanshine) #271

I was under the impression that it was the trading business (the division that is getting demerged into Vikas Multicorp) that was suffering from high receivables, not so much the manufacturing business. I believe the working capital position will take a turn for the better post the demerger.

(Darkwanderer79) #272

For that to be verified we need to watch a couple of quarter results post the demerger then.

(cool_gaurav) #273

Guys, pl. go through the Auditors report. There are so many red flags (1) Company has not deposited TDS as well as not file the return for the review period. (2) Company has not deposited GST as well as not filed the GST return for the review period. This is absolutely non compliance and i think it is because of severe liquidity crunch. DO THINK BEFORE INVESTING IN THIS COMPANY. I exited completely after such remarks in auditors report.

(Claude Sylvanshine) #274

Are you referring to the Annual report 2017? Could you please point me to the specific page number as I could not spot any details. Thanks.

(cool_gaurav) #275

Not Annual Report. Recent results Auditor report (Link Below):

Go through page 3 -Emphasis of Matter

(Claude Sylvanshine) #276

Cheers, interesting!

(yudiagg) #277

Very Interesting. However, there is no such observation for Q1 and Q2 -
especially TDS. Therefore issue does not appear to be that serious.But we
need to keep a watch.

(Meena) #278

Nice point, really appreciate your detail view.
Regarding (1) Company has not deposited TDS as well as not file the return for the review period.

In Q3 report, Tax expense of 570.75 lakhs has been subtracted and then only PAT has been mentionend. So they have made the calcualtion report right , but just not yet depoisted the money to the government tax. This is what i understand.

But ehat is GSTR 3B , can someone englight me.

(cool_gaurav) #279

TDS is different from Income Tax. GSTR 3B cannot be filed unless you have deposited GST for the month. All the points mentioned by Auditor indirectly means severe liquidity crunch in the Co. This are basic compliance requirements which every company has to follow,

(Meena) #280

TAx deduction on Source is for the income of the company, which they r paying via income tax ? , am i wrong here ?

(cool_gaurav) #281

NO. TDS they have to deduct while making payment/crediting to other parties and then have to deposit and file the return within the specified time limit.

(Kumar Saurabh) #282

@cool_gaurav Gaurav, if one opens last 5 year of AR, it so obvious how loud mouth the management is which I have highlighted in earlier posts. Right from doing PR of R&D strength where 5 year R&D expense is only 9 lakh rupee, then, specialty chemical. Specially chemical is a niche skill demanding at least 10% PAT margin. and then, so are so many financial and accounting issue. But then, null markets run on hope and stories and investment is a personal decision. So, I hope I am proven wrong in long run (3-5 year period) and people make money on this counter but seeing historical foot prints the management has left, probability looks very less. Disc: not invested

(khushi) #283

Some issues might be because of financial crunch and can be solved without much of an issue.

Before investing in this counter inquired about the company and its products.

Inquired about it to sources close to one of its key customer and one of the big shareholder of the company.

Company really supplies products which is always claims to manufacture which is important for me.

I have invested in this company purely on hopes of better growth when NGT passes the law to ban lead based stabilizers.

I would be ok with some irregularities …at least this company (as of now) seems to be better than some others where FRAUDS are happening…and some other companies that are claiming a lot in air but nothing much to be seen on ground.

Disc : Invested since last few months. Look to hold it till i am able to see good growth in the company, especially after NGT Bans Lead based stabilisers.