Hi Manish,
Yes, if you look at the nos and performance of GRP till 2012, it had been spectacular. This co has had one of the best ratios, growth, business model & leadership. Having been following this co since 2004 or so, I feel its a very good co.
Over last 2 years, almost everything that could go wrong went wrong - they had undertaken a major capex and the timing went wrong. The new plant at TN had severe power cut problem…the power cut was for about 14-15 hrs vs 2-3 hours when the plant was being set up…and power being a material cost, this capex has been a problem for them. Also, the rubber industry went through a lot of slowdown (while at the time of capex they had demand more than the capacity) and hence they couldn’t pass on the price increases like they used to do it in past.
The increase in energy prices has been sharp at their other plant locations also.
Coming to the positives -I’m happy with the way they handled these problems and are recovering quickly. As per the FY13 annual report, they say they continue to retain their leadership position and excellent relationship with top MNCs.
As of now they would be running at low capacity utilization of about 70-75% but as and when demand comes back, I expect the co to do very well.
Regards,
Ayush
Disc: Invested