A K Capital Recent results Q4 and for full year FY11 is hardly encouraging. There is actually degrowth! Unusually bad last Qr! ruboff from the negative reports?
Feedback received earlier on A K Capital:
AK isinto fee based financial services, and within that too mainly into debt placements & syndications. There were reports implicating their name inarecent scam, no idea of truth (their denial pasted below). What turned out in another peer company - Money Matters (of LIC Housing Fame) does not help it either.
Issue is this business runs only ongoodwill and networking, so management quality is essential, unlike a manufacturing company which will bounce back on the back ofsheer business performance. I would prefer an institutional name to take exposure in this sector. Having said this,AK typestock can run wild in a bull market.
Sooner rather than later, they will enter into fund based services (impossible to avoid that temptation) and then its financials will start looking just like any other NBFC. An avoid for me.
Very thinly held. 1906 shareholders in all.Volume islow - last trading day was 356 shares.It can go topsy turvy without much “effort” -retail investors are seldom lucky inthese rides. Personally, i won’t risk with such a small finance company.
AK Capital denies involvement in loan scam, rubbishes news report
MUMBAI, NOVEMBER 26: AK Capital Services Ltd denied media reports stating that it was involved in the housing loan scam that was unearthed two days ago.
The Economic Times Friday published a news column saying that AK Capital’s shares fell 10% Thursday as it has been named in the multi-crore property loan-scam.
The company’s name is not mentioned anywhere in the proceedings or enquiries being executed by investigating agencies and neither has it received any intimation or notice in relation to this, AK Capital said in a media statement Friday.
Any movement in the share price of the company is co-incidental and dependent on various micro and macroeconomic factors, the company said.
A fall in the share price is not to be attributed to the wrongly alleged involvement of the company with the loan scam, it said.
“The aforesaid news article carries a dubious claim that goes clearly to tarnish the image of the company in the financial markets,” AK Capital said in the statement.
On JHS I agree that quite a lot of shares are pledged. But the company’s business is still good and stable. There definitely is some margin pressure too, due to inflation / higher raw material costs. Some of the pledged share have been revoked in the last two quarters or so, if this offers any comfort.
I guess now we need to wait for the merger of their group companies, which is underway, to know the exact dilution and the revenue accretion from the merger. I personally see this dip as a good opportunity to average the cost of investment lower. But will probably wait till the merger is complete.
)- SBI Mutual Fund has sold 124,000 shares on Jul 4, 2011 out of a total holding of about 6.6 lac shares i.e. approx 20% off their holdings
)- Also Pivotal is off the holders of equity more than 1% and this is not due to dilution after PE fund infusion as after that dilution too their holding as on 31st March 2011 should have showed up in the 30th Jun 2011 list
Since insiders are selling this may be a red flag.
This is 5 year old post but just trying to see if there are any fresh views on JHS, to me it looks like a turnaround story, the stock has gone up nearly 4 times in last 1.5 years and reported small profit first time in years.
Just wondering if anyone is tracking this stock off late.
The current Annual report from the company is extrenely flashy with quotes from Muhammad Ali! The company is declaring itself a turnaround story in the AR. The primary reason for that being:
Earlier they had 80% revenues from 1 customer and that customer backed off leaving JHS in a hole. The current strategy says that they will not depend more than 20-25% on any single customer
There are names like Dabur and Patanjali as current customers
They are also trying to achieve 50% revenues from their own brand by 2020 rather than depending solely on contract manufacturing for these customer. Currently around 12-14% of their revenues is from “Aqua White” and rest all is from customer contracts.
They have mentioned of expansion by investing in a state of the art manufacturing Unit using a capex on 40 cr. They are projecting earning of 500 cr from this unit in the future.
Also they have divested their stake from a loss making detergent unit.
They may come up with newer products under “Aquawhite” theme in the future and and the penetration(using advertising) of these products needs to be watched with time.
So all in all, the vision and strategy is in place as per the AR notes. However execution is key and we need to closely monitor the company health every quarter at least for the next 2 years.
So a major avoid.