certainly very very good results… management is walking the talk… The stock will get a rerating soon.
Some recent good news on the company.
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I see it as a positive news for JHS, does any one have more information on this.
Why HT media is investing in JHS ?!!
Disc: No additonal purchase from last 6 months and consists <2% of my PF
These days most media houses take equity stake in exchange for ad space… This is something I have seen in many companies. The logic is to get adspace without impacting the p&l. Companies do it generally when they are small and need to spend relatively large amount as compared to their profits.
Recently Kwality did the same and few other companies
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It looks like a fantastic model for HT media. They invest 8 cr. and have an agreement with JHS to spend 10cr with them in the next five years. It ends up looking like a loan of 8cr plus 2 cr interest and HT keeps the equity of JHS free of charge ?
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HTML is giving 8 cr loan to JHS, which will be paid back after 5 years. Assuming 12% COC to HTML, interest will be close to 6.2 cr, JHS on the other hand agrees to give business to HTML of 10 cr over next 5 years. So, HTML is getting close to 4 cr out of this deal (secured loan type of arrangement).
For JHS, this is a good deal seeing its requirements for marketing. At the end, JHS will be paying 10 cr, for which they have managed to get working capital loan of 8 cr (for next 5 years). Assuming they had raised these from somewhere else at 12%, it would have costed them close to 6.2 cr (interest).
So bottomline - JHS is getting ad space worth 10 cr for next 5 years at mere 3.8 cr.
Correct me if i am wrong.
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Also JHS share holders have to share/devide its profits to the extent of equity dilution
If I understand it correctly, the brief is as follows…
- JHS will issue HTML 18,60,465 (4.34%) shares Rs. 43/Share on preferential basis for Rs. 8 Cr.
- JHS will place advertisements of Rs. 10 cr. with HTML in next 5 yrs. at prevailing prices.
- Security Deposit of Rs. 8 cr. to be refunded back to HTML after deductions, if any, at the end of Term. i.e. 5 yrs.
I fail to understand, what JHS has to really gain from this?
Q3 FY17 Results
http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/422238C1_7C38_47FB_90E8_2FE736CFC8F4_173357.pdf
Top Line 22.72cr (Dec '16) vs 25.35cr (Dec '15)
Net Profit 1.70cr (Dec '16) vs (1.54)cr (Dec '15)
Today its price raised more than 17% but I am not able to find any news about the co. Anyone knows what is the reason for this price increased?
Disputes at various courts between the company (JHS Svendgaard) and various group companies of Procter & Gamble Inc. in India, have been settled with mutual consent and liabilities of 206 cr will be cleared from JHS balance sheet…
thanks for the update. this appears to be very good news and should help in further re-rating.
Can someone explain why this is a great buy given these results? The patanjali link above says the company is expected to operate at 100% by end of year. So even if its operating at full capacity, its making around 5 Cr. profit per year. If approx 200 Cr rupees were freed up post settlement with P&G then after reducing that from Mcap, it still trades at 10-12 times PE. We can argue that it should trade at higher PE given the sector but unless they improve their margins, and given its a small cap, the current PE is not unreasonable. Thanks.
The settlement does not result in any freeing up of cash but it optically improves the balance sheet. A contingent liability is in any case something that has not crystallized and I do not think the company has provisioned that amount.
Earlier in this thread, people were saying they provisioned for it. If they haven’t then for a company making 5 Cr. annual profit, how do we justify an MCap of almost 50 times the profit? This is a small cap and their profit from brands is on the lower side. Contract manufacturing will not yield them much margins. And they are almost operating at capacity. What am I missing?
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What are the products percent-wise?
Is it only toothbrush or something else too?
Company also says that it is building its own brand. How much revenue from own brand and how much from contract? Quarterly data about it?
I read mouthwash etc too but why I feel that is almost absent.
If possible please post link for this news:
New expansion plan underway should be operational from June 2017
Recently management said about it. I tried searching about it but could not find detail about it.
where did management say about it. can you pls share that?