Donald,
Assuming your interpretation on management’s response to query on interest cost is right, two questions arise: -
The appointment of new Director - Finance with specific focus on Finance costs also indicates some stress the management is facing in managing its financial costs.
Your thoughts please.
Hi Sandeep,
I am not sure you are looking at the right data.
The Interest costs for every quarter last 5 quarters,
1.22, 0.84, 1.17, and a big jump 3.01 in Q4FY11, and then1.90 Cr in 1QFY12
The reduction we are talking about is from Rs.3 Cr to 1.90 Cr between Q4 last and Q1
The difference was mentioned as accrued Bank Charges and Commission fees being accounted for in Q4FY11. Bank Charges and Commission fees are on top of the Interest costs.
I am not an accountant, so can’t comment on how irregular this treatment is or isn’t. Ayush?
The real issue we should concentrate on is higher Working Capital requirements, going up to 82 Cr in Q4, 38% of Sales from 22% of Sales a year back. This is a pattern that is likely to repeat because of the seasonality in Sales, and rising Inventory carrying through Q2 & Q3, which gets converted fully by Q4 and Q1. This is a business reality, and I am not too comfortable with that.
But despite these peaks, the company seems on course to register a 30-40% growth in Earnings.See if you find that reasonable.I will work out detailed projections in some time - travelling from tomorrow.
-Donald
Point taken. Banks do levy commission/fees, etc on renewal of loans. So quite possible that some of them might have been incurred in Q4FY11. Hence, we need to keep this in mind as this could again recur in Q4FY12.
Thanks
I think there was nothing wrong as such in accounting for bank charges etc in one qtr if they came to know about the same in that qtr. I think these are small adjustments which will keep happening…we need to concentrate on the bigger picture.
The imp takeaway from this is - the financial costs haven’t gone out of control.
Regards,
Ayush
Clarification received from Manjushree Management on the issue
It is not that the bank charges for the year were accounted in the last Qtr.____
Bulk of the charges were confirmed by the bank in the last Qtr and accordingly were accounted in the qtr.
Manjushree Technopack Management Q&A updated. [based on further feedback from Management]
Revisions apply only to these 3 queries, as reproduced below:
As on 31st March we had 36000 MTPA capacity. About 27500 is for Preforms and 8500 for Containers. Capex incurred in FY11 was ~25 Cr. Capacity utilisation has been at 90%. Plan for FY12 is to reach 40000 MTPA.
Today its roughly 60:40 between Containers and Preforms business in Value terms. Preforms production share is more like 70% as a significant chunk of that is through jobwork basis. Container business is steady and does not see the seasonality like in Preforms.
We had to account for additional Banking & Finance charges in Q4 FY11.Bulk of the charges were confirmed by the bank in the last Qtr and accordingly were accounted in the qtr.
hi,
I have a few basic questions regarding the Q2 results of Manjushree. ?
1). Note is the last line in the Q2 results.
Profit before taxof Rs 356.63 lacs for the quarter ended 30th Sept is after providing for foreign exchange loss os Rs 262.94 lacs (out of which Rs 150.16 Lacs is accounted under “interest and financial charges” and balance of Rs 112.78 lacs is included under A and S expenses) on account of reinstatement of unpaid foreign currency transactions.
Does anyone know if this foreign currency translation expense is recurrent or not? If this is not recurrent, than my understanding is that the interest cover as a percent of sales must come down. Is that right?
2). The loans and advances has swollen up from 19.17 cr to 47.43 cr. Thats like half of the company debts. Why is to so high on the books?
Regards
Anand
The forex provisioning is significantly hurting the reported net profits. Not sure how this should be treated.
Q4 & FY12 results along with press release:
http://www.bseindia.com/xml-data/corpfiling/AttachHis/Manjushree_Technopack_Ltd_210512_Rst.pdf
Good results from Manjushree.
Key performance indicators for FY 2011-2012 are as follows (Figures in brackets replesent thefinancial performance in the previous year:
Turnover oI Rs. 30,978 Lacs ( Rs. 21,618 Lacs)- lncrease of 43%
PBT of Rs. 3,033 Lacs (Rs 2,260 Lacs) - lncrease of 34%
PAT of Rs. 2,050 Lacs (Rs. 1 479 Lacs) - lncrease of 39%
A terrific performer in a lousy industry! and in these uncertain markets!
Pls look more closely at the figures and revert with your comments.
“The company also recenfly sel up a 3 MW wrnd power plant atBelgaum, Kamataka as part of its plans to gain energy secunty. While a set amount of the harnessedpower will be used internally, Manjushree also plans to distribute the power to the state etectricity supplycompanies. The company further plans to expand its generation capacity to 20 MW in the next 3 yrs. Manjushree also expects to earn carbon credtts from this investment.”
Not sure this is a good move by the company. Wasn’t it that the depreciation benefits were scaled down pretty much …and companies that had ventured into this were finding it tough to sell…much lower merchant power tariffs than earlier expected, etc.
Pls comment!
Good results from manjushree. With EPS of around 15, at cmp of around 84 there could still be some juice left provided markets strengthen.
Only problem with manjushree is it has to keep on increasing capacities to maintain growth and one is not too sure when real good free cash flow will start and high dividends will be paid.
Yes Hitesh. That happy situation of significant free cash flow/high dividends is at least a couple of years or more away.
As per my talk with Management a month back,
a) The company will keep growing at 30-40% for next 2-3 years - they will need to keep investing in capex for that
b) They have always wanted to consolidated for a year or two after every expansion. But the demand is so huge that they are compelled to keep up with customer demand - else, the business may go elsewhere
c) What goes in their favour is that they have the best metrics among listed/ unlisted MNC/other unlisted packaging players - and so far they have the best execution record. result they are now the largest PET player in the country
d) If they continue to execute well for 2-3 years more, they will start dominating South India market - hopefully demand-supply situation will not be as frenetic, and the company will have space to consolidate
Meanwhile we cant complain about the 30-40% growth:) The nature of the business is very tough, but they are doing a fantastic job. I suspect this may not be a high dividend paying company in near future!
So for me, Manjushree is a undervaluation-game, most times.
talking of demand, this link seems to suggest that the demand will keep on coming
http://www.livemint.com/2012/06/25224946/Liquor-firms-turn-to-smaller-b.html
Coca Cola to invest 28,000 cr by 2020. Might turn out good for Manjushree.
CM has recemtly recommended this scrip an old favourite of we all.
Exports have zoomed it seems n shud be at much better margins leading to increased topline n bottomline.
The promoter is toplclass with excelllent execution trackrecord.
Can it be purchased even now n can still be another Mayur Uniquoters?
I was just going through the result of postal ballot and it seems four family members are going to get followingremuneration
1). 13,50,000
2). 8,40,000
3). 3,45,000
4). 3,45,000
total: 29 lac’s roughly and i consider this is basic and by house rent and all other perquisite will take it to double roughly 60 lac’s a month.
annual salary would come to around 7 cr 10lac’sand it is like 4%commissiontoo need to include to this.
Last year net profit was around 20 cr ( I see in rediff.com). If i go with 25% growth than figure would reach to 24 cr out of which 4% would go incommissionthat would amount to 1 cr.
Total 4 top people are being paid as 8 cr salary.
For me this looks very high salary for a company making 25 cr annual profit.
earlier also when i was following “Tecpro system” and when management given 6 times raise to themselves i stopped following because it is very hard to get good deal with greedy management in long run.
Senior members please comment on this.
Thanks in advance
Milind
Hi Donald/Ayush
Any comment on theremunerationto directors of Manjushree?
Thanks Milind for bringing this to notice.
Regards, Manmohan
In 2011 annual, it says in para 4 , that plant in Bidadi will be ready in 2012.
In 2012 annual, it says it will be ready in q4-2013. Which is 2014 really.
But still claims it is ON SCHEDULE.
