@Vineetjain111 – I never heard back from AGL’s IR team on (1) Associate/Trading, and (2) own production vs. outsourced production margin.
However, while skimming through last con call transcript of Cera I came across a similar question from analyst…though it pertains to sanitary-ware business but we can use it as a rough benchmark (?)
Thanks @Apurva_Dubey
Not surprised your didn’t hear back from the management!
We probably can assume that it will be similar for AGL. So long as outsourcing is not margin destructive, it should be ok I guess.
I’m more worried about the selling though. I spoke to a lawyer friend about the disclosures and he wasn’t convinced that the shares were sold to other promotor entities. The entire persons acting in concert bit it’s a bit confusing - it doesn’t reflect a transaction between the two entities necessarily. Will have to wait till the end of the month for clarity I guess.
This might help. Thank you @Apurva_Dubey,@Vineetjain111,@kalidasa and others for tracking and continually updating about the stock.
Disclosure: invested around 175 .my biggest allocation.
Thanks @Karthikbaskaran, this is helpful.
Between the two quarters in FY 18 and 19 we can see that margins are the highest for Associate, followed by own manufacturing and lastly outsourcing. Also interesting to see that in the two years, the proportion of Associates has increased. Is this going to be the trend going forward as well, or is there any way of estimating future mix?
What channel is Associate though? Is it the same as trading that was mntioned in the investor ppt? Or is it non-core products like sanitary ware etc which is neither self manufactured nor outsourced for manufacturing?
Keeps getting murkier. Now the chairman of the audit committee has resigned. He continues to be on the baord as an independent director. For me, the risks are now beginning to outweigh the potential rewards.
I called up multiple tiles dealers today to inquire about AGL’s tiles and products. Almost all of them said that AGL products are doing well and are at par with Kajaria and Somany in quality – which was reassuring.
I asked one of the dealers for anti-bacterial tiles (wanted to make sure that this product isn’t an elaborate hoax), and he sent me buying options…so, I feel, the management isn’t lying through the teeth.
Further update
I called up dealers in Madhya Pradesh yesterday (6/20) – Katni, Guna, Sagar, Indore, Ratlam – and all of them said AGL’s business is going strong. One of them said that AGL is now #2 after Kajaria (I didn’t ask and he didn’t tell the measure on which AGL is #2).
I got additional collateral from them on WhatsApp which I have attached with this this message.
ANTIBACTERIAL FINAL.pdf (1.6 MB)
Disc.: invested
The CFO has commented on the promoter stake sale
Tracking this company for last few months, have ppl who are close to management, asked to stay away as company has corporate governance issue.
Not invested only tracking.
Thanks for sharing this @Forum_Makim
So promotor stake is down to 26% as they wanted funds for their family business. That’s never reassuring for the street. Also makes sense why they ran all those ads on CNBC in the past two months on their revenues and growth etc to prop up the stock price so promotors can get a better exit. Definitely poor corporate governance.
Seems like the business will continue to do well though. Now the question is will the market reward business performance or not. My experience tells me that this can be a trading bet at best when the stock proce does start moving. Investing in a company like this is risky as this kind of random promotor activity can happen at any time and the stock price can plunge.
Disclusure: Holding a small tracking quantity. Not planning on selling or adding.
I crossed checked with a reliable source about the company, the feedback I received is not very encouraging for investing our hard earned money .
Below is the feedback, I received:
Not a very transparent company. One of their directors was jailed by ED for tax evasion case.
Acceptable quality, have a large dealer network, price leader sort of , generally quotes lowest price to builders when compared with organised sector players,Just one step above unorganised sector.
Hi Apurva, sorry cant share some confidential pointers here. Really sorry but it is clear avoid for me till things improves. I shall be keeping it in my watch list, not invested, was planning to but later changed mind after discussion. May consider in future.
Hi @sidbest
Don’t share confidential pointers or any specifics / names. But it would be useful if you can share the nature / type of corporate governance issues you have heard of. Is there swindling of money? Are there audit issues? Something else? If you can share soe qualitative pointers, it will be useful to us and won;t violate any confidentiality.
Hi @Vineetjain111 , I had very short chat with the guy, (1) family issues (2) money issues (3) Mgt is not open, not professional, another what I think is may be trading & Mfg issue, … neither he nor I dug more in , these things stopped me, I need a clean and open management for investment. As you also mentioned that Promoters taking out money by selling own stake for their family business !! I mean who does it. Such things makes a investors think twice on his/her investment bet.
There has been a lot of de-pledging over the past couple of days - almost 11 lakh shares. So at least Kamleshbhai is putting the proceeds from sale to depledge his holdings. How do we see the total number of shares that are still pledged?
https://www.bseindia.com/corporates/sastpledge_new.html?scripcd=532888
I believe the next 2 quarters will give indication about the secular trend of this company. Since real estate is also reversing, this company could benefit due to upcoming tailwinds. It might take another 3 to 5 years for the story to play out. However, I see the promoter to be the single most risk as they have had questionable corporate governance practice earlier.
Not sure if this will be streamed live. If yes, then maybe they will have a Q&A too via chat. But nevertheless I am sure questions will be asked on the selling and other matters.
One more board meet to raise funds.
We hereby inform that a meeting of the Board of
Directors of the Company will be held on 14th July, 2021, to consider the proposal for raising
of funds by issuance of equity shares or convertible bonds or debentures or any other
securities, through permissible modes including but not limited to a rights issue, preferential
issue or qualified institutions placement, as may be permitted under applicable law and
subject to such regulatory/ statutory approvals, as may be required.
Got to see if they take equity route and if so, what’s the price.
