I had bought this stock at around 80 and the though process was that the value of the business which company retained CANNOT be less than the business it had sold(from the numbers and AR it was evident its superior business.)
The long term dividend compounding rate was also compelling(17% yoy). and in the past 3-4 yrs it has been around 25%compounded.
I also thought since its a business its very difficult for someone to sell his/hers house silver,so thepromoterhas a game plan.Also anti-diversification appealed to me.
I also thought that since the company does business with croll-reynolds which holds stakes in it and thepromotersare buying the stocks theinterestof thepromotersare insync with the minority shareholders…
And lastly the quality of earnings was/isextremelygood.
I am waiting/hoping/praying for badquartersto increase my stakes.
The topline has increased for the 3rd successive quarter however the bottomline has disappointed this quarter. The March quarter is generally one of the better ones for mazda.
Will have to wait and see in the annual report the break up of inventory of finished goods,work in progress and stock in trade. It is up to a whooping 6.7 cr compared to all previous quarters.
On the positive side, the food division continues to grow well posting the highest revenue and profit so far. It will well in the next quarter as well looking at the growing demand of bcool drinks in summer season.
The 4th quarter has also seen investments go up to nearly Rs 19 cr from Rs 13.83 cr. Cash and cash equivalent is Rs 5 cr. The entire company is available for Rs 45 cr.
has anyone tried talking to the promoters? I sent a mail to CS, but no response yet. They used to respond promptly in the past. For the last six months no replies from their side.
Though the Q4 is a bit weak but the full year performance is pretty good and the co has also increased the dividend to Rs5. I think given the co has done pretty well given the weak industry picture.
Additionally,for Mazda NWC + Cash + Investment is less than market cap. And the prices is going down!
Another interesting fact is the food business is growing well consistently for many quarters with improving margins. Even though, on overall basis, its share is still miniscule. the trend indeed is encouraging.
All in all, good value at this level, though, the risk of challenging industry environment and hence couple of bad quarters remain.
Good sales number and a drop in bottomline in this quarter and people start selling it. That too as Ayush pointedgiven the weak industry picture. Wonder if we have missed something others can see or is it just people are scared to hold to it.
So Mazda is back to cheaper valuations again and time to accumulate.
That’s typical small and mid cap stock response in market corrections. They would fall without any rhyme or reason and when they go up they tend to shoot up like crazy.
Also wanted to check if any engineers out there or ppl from related industries can through more light on the industry prospects and specific moat Mazda may have …
Had briefly chatted up with an employee of Mazda recently, General takeaways included a good respect for the owners and company, increasing competition mainly from non organised sector, product superiority in quality, enjoy a higher pricing which may be put to test as the demand is under pressure for the sector as a whole.
Unfortunately could not get specific numbers, but this seems to be more about the slack demand of the sector and industry per se … how long the poor demand continues cant be said, though value @ 40 crores market cap seems to be covering for price risk. Time risk is a more difficult unknown.
Export increased by 70% (low imports)(augurs well with cheap rupee) This would remain thanks to Croll Reynolds and also new tie up with Inven Absorption, Germany.
Sector facing slowdown though.
Divorsification of food division also contributing well; turning into a known brand Bcool.
Dividend increased to 50%(Rs5)
ICRA ratings increased.
Promoter increased stake in July. Buy price was 111.
Export increased by 70% (low imports)(augurs well with cheap rupee) This would remain thanks to Croll Reynolds and also new tie up with Inven Absorption, Germany.
Sector facing slowdown though.
Divorsification of food division also contributing well; turning into a known brand Bcool.
Dividend increased to 50%(Rs5)
ICRA ratings increased.
Promoter increased stake in July. Buy price was 111.
I want to be clear on the low promoter stake and why management buying at such slow rate from the market.
The precise role Croll pplays in Mazda Ltd.
The future management: family run or?
The scope of B-cool and the expected revenues from it?
The allocation of capital and concentration on b-cool?
And most important: Is the moat around supplyingsteam jet vacuum systems and condensers for process and power industry sustainable? Will Mazda Ltd continue to remain sole major player in this segment or do they face threat?
Missed your post earlier, else would have had a few questions myself to add to Mokhtars. Did you get a chance to do the management Q&A, and if so what did they mention about current and future business plans since they were planning expansion if im not wrong.
I was there during the management Q&A so let me share pertinent points mentioned by the management wrt to your questions.
For current year, it is difficult to reach the top line of the last years as slow down in India has taken its toll while export also is slow. They are expecting turn over in the range of around 100 odd crores for current FY.
They have already started the 4th Unit which added 15-20% capacity. However current utilization of 4th unit is low due to reduced order book.
They have bought land in one of the industrial zones near Ahmedabad to relocate and expand existing capacity. The land acquired is big enough to accommodate 3 times current capacity. However, the process of documentation of land and getting clearances is still on. They expect at least 2 years before they can relocate to new place. Capacity addition will depend upon the prevailing market and order book condition nearer to start of the relocated units.
Overall we got a feel that management is quite conservative and company is content with 15-20% growth going forward.
