@hitesh2710 sir what is your view on Srf? Business momentum in chemical segment is gaining strength by every passing quarter. Would appreciate your views.
I dont track caplin point. You can get more information from the relevant thread on the company.
Fundamentally I dont track srf too closely but technically it has broken out of a weekly flag pattern with target of close to 3900.
disc: not invested in either of the above companies. SRF remains on the watchlist due to its technical picture.
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Birla corp is mainly into cement besides a small presence in jute business. It has outperformed the industry growth since past few quarters and q2 fy 20 has been no exception. It belongs to MP BIrla group and now run by Harsh Lodha whose father was gifted this company by Priyamvada BIrla.
The annual report clearly mentions the measures lined up for cost cutting and improving margins. Main among them is the savings in logistics costs by various measures. Another is setting up of Waste heat recovery plant which should reduce the energy bills. They also have started a railway siding in one of their plants which is likely to again reduce transportation costs.
All these measures have helped to improve the margins and shore up the bottomline esp during the first half of 2020. from 44 crores for H1 FY 19 to 170 crores for H1 FY 20. Sales has improved from 2070 crores to 2442 crores. Company is operating at capacity utilisation of more than 80% which is an important metric to follow in cement companies as it leads to a lot of operating leverage.
It has 15 million ton capacity and with addition of Maharashtra facility production and some improvement in existing capacities, total operating capacity will increase above 20 million ton per annum. I read an analyst presentation on cement wherein it was mentioned that once a company crosses a threshold of 15 million ton per annum capacity the valuations tend to improve. Need to see how it goes here.
The big risk here is big debt on books due to acquisition of Reliance cement plants from ADAG group and capacity expansion undertaken by the company.
Technically it took support from its long term trendline stretching from 2013 at 450 and 510 twice during past 1 year. Now it has crossed its 200 dema post good q2 results and seems to be consolidating.
disc: invested in the company as a techno funda bet.
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Hi Sir, Can you please share your views on Shivalik Bimetal? Thanks
Dear Hitesh, Can you please share your views on IDFC FIRST Bank? The CEO of the merged entity now (IDFC Bank + Capital First = IDFC First Bank), Mr. Vaidyanathan has a decent-to-good track record with Capital First. Most of the legacy issues of bad loans of IDFC bank seems to have been provided for now. Their strategy to increase retail loans as part of overall book to 70% in 5 years seems to be on track for now. They are posting decent PBT as the incremental bad loans seems reasonably small. One aspect to notice is that as they want to increase the retail book composition as part of the full book, they are running down the existing corporate book as well, so the total book size doesn’t grow much. But on a positive note, the profitability and returns ratio has good scope to increase on the same book size, which is perhaps a good thing for shareholders.
This is what I generally gather by looking at past few quarterly results and investor presentation. Please do share your valuable insights on the same. Thank you
Shivalik has had a dismal couple of quarters in terms of numbers and the stock price has corrected in relation to it. They dont meet analylsts or give out press release or hold analyst calls and so attending the AGM becomes the only resource of getting information about the company besides whatever is communicated in the annual report.
The company did look promising based on consistent results for few years prior to FY 19 but now seems to have hit a road block. How and when it gets past this needs to be seen. As of now, it seems to be facing business headwinds.
I am invested in it but disappointed with the quarterly numbers since past 2 quarters.
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Post the demerger of IDFC a lot of investors and some very savvy among them were excited at the thought of owning a new generation bank led by a fancied person. But since past few quarters the numbers needed to get any kind of returns from the stock have been missing. To get significant returns especially from banks and NBFCs (and most other companies too but more so in these) , there needs to be consistency and predictability from the entity. That time seems some time away in case of IDFC First.
This increasing the retail loan book and reducing corporate loans and thus aiming to have a more granular loan book and reducing the risk of defaults are all the kind of talk investors and analysts alike want to hear and most managements know that. Even if they manage to do that, they first need to address the issue of what to do with the kind of NPAs and stressed assets sitting on their books.
I would prefer to buy even at double this price provided the clouds plaguing the bank have cleared. As of now I dont have any idea which way the cookie will crumble.
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Hello Hiteshji ,
I wanted to know your view on cyclical’s like cement( as an industry) and Your views on KCP.
Thank you Hitesh ji, for your feedback.
Regarding the stressed assets that you referred to, the GNPA is 2000+ crores and few accounts that may come under NPA categorization but they have been adequately provided for - This is what I gathered from their investor presentation and I guess both Dr. Rajiv Lal & Mr. Vaidyanathan can be trusted for transparent disclosures (hopefully). If that is true, the total bad loans would still be around a max of 3% if am not wrong. Is this a correct understanding OR have I missed out something regarding bad loans?
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This is so counterintuitive to amateurs like me who might have done the opposite .
Thanks so much for sharing your insights . This is very helpful.
Hitesh Ji , Thank you so very much for responding in continuation to my query there one more querry please bare with me in that , Harsh is younger son of RS Lodha (CA by profession ) who dies in 2008 in London, Harsh is running the business since then , i have an old news where he is held accounted for professional misconduct by his father Late R S Lodha , How this will impact the company in future ?
Hello Hiteshbhai, what are your views on IOL
Hello Hitesh Sir,
I wanted to know your views on Aurobindo pharma and pharma sector in general. Pharma has been performing below par for quite some time now. Is it a good time to slowly start investing here?
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I always take anything written in print or on whatsapp with a huge pinch of salt. A lot of stuff whether positive or negative is usually written with ulterior motives. So one has to try to make sense of what is written. Trying to be too clever by unearthing everything and anything written about a company would land us up with truckloads of information and we will not know what to do about it and start moving in circles. Plus the article you mention seems to be dated back to 2012. I dont know how much weight it should carry at the current juncture 7 years down the line.
Instead of that, its better to focus on what is relevant and rely on facts rather than opinions. Just look at the narration of the management and performance of the company after the Lodhas took over. That should provide insights into what is happening on ground level.
@BD_3924 I dont track IOL.
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@dm88 I may sound like a broken reed but I have been harping about the pharma sector especially the US facing companies being out of favour with the markets. And the scenario seems to be the same/worsening.
The only place which seems to be going strong are the API Players, /CRAMS players and domestic focussed pharma companies.
I am more excited by companies with strong presence in domestic markets because of the govt schemes to provide healthcare to all one way or the other. Plus the outbreaks of viral fevers like Dengue/Chikengunya fevers induces a lot of hospital admissions and consequently improves sales of domestic cos. And the treatment seeking pattern of Indians seems to be gradually changing. Where earlier people used to wait for some self limiting diseases to subside by itself, now everyone wants to get treated at the earliest. And lifestyle diseases like diabetes, hypertension, and other illnesses like cancers etc are on the rise and people need to take medicines for these for prolonged periods and often lifelong.
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Thanks a lot Hitesh sir for your prompt and valuable inputs!!!
Among the API players, do you track Neuland Labs? If yes then can you please share some insights on that.
Hello Hitesh,
My First query to you. I remember you were positive on small finance banks last year but later due to given issues in NBFC and overall sector, stayed away. Considering both Equitas and Ujjivan are trading nearly at all time lows and the demerger-merger expected to complete in next 2 years, economy possibly bottoming out (hopefully), will this be better time to accumulate over next 6 months?
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@hitesh2710 ji, in this regard are you also optimistic about the B2C diagnostic players, like Dr. Lal pathlab?
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hitesh bhai, what are your views on the PSU stocks ? which might be good businesses and at good valuations available at the moment, whilst market treating the Consumer stocks as god.
Dear Hitesh Sir,I have been struggling with my study on API/CRAMS.Since I lack the technical and financial analytical expertise ,I have remain on side line.Always thought those stock on my radar,Divi,Aarti,Atul,Vinati rather expensive.Purely on PE citeria ,IOL looks very attractive.Wonder Sir, if you can share your views on the subject at current valuation.