pondy sep 2010 qtr results are out.
standalone sale at 64 crores for qtr vs 36 cr and net profit at 1.5 cr vs 1.26 cr(y-on-y)
Half yearly sales at 127 cr vs 67 cr and NP at 2.9 vs 2.26 cr.
Half yearly standalone eps at 2.87.
In footnotes, they have given consolidated half yearly figures.
Sales at 159 crores for half year and net profit at 5.1 cr which gives around 5 rs eps for half year. There is no figure to compare previous year consolidated numbers.
Absolutely at 30 it was (maybe still is ) an excellent buy . The niggling thing at the back of my mind is that why didnât i hold on to thisinspiteof the gut saying something other than the HDFC Sec Report . I had bought at 23 odd and averaged it at 18 and sold at 28 odd. Maybe I will learn with time . HDFC has recently recommended Plastiblends and Maithon Alloys . Please take a look at them too .
Hi Paul
My limited experience to take the facts from the broker reports, assimilate from all sources you can, but take the valuation decision on my own!
Like the Guru says, valuation is not a complex exercise. If there is compelling value, it will be so self-evident, you will not need complex models -the value will scream at you. Pondy Oxides at 30 was screaming value, wasnât??
theirassessmentas
what impact wil gravita india ipo coming at pe of 12 will have on pondy oxides ?
Have posted a comparison between the two:
We came across the IPO document of Gravita India. It is one of themajor competitor toPondy Oxideand both are operating anidentical business. Interestingly, Gravita despite being a smaller company when compared to Pondy, is going publicat more than 3 times the valuationscommanded by already listedPondy Oxide. Here is a quick comparison sheet to highlight the huge valuation gap between two companies: As highlighted by Gravita in its various articles and documents, the lead recycling business has great potential due to strong battery demand, we feel Pondy Oxide is a much better bet when compared to Gravita as the valuations are very attractive inPondy Oxide. With the IPO of Grativa opening tomorrow, investors will get more informed about this sector and might discover the undervaluation in Pondy Oxide. http://dalaal-street.com/valuation-of-gravita-india-new-ipo-vs-pondy-oxide/
Comparison sheet
Pondy Oxide
Gravita India
Capacity (MT)
32000
24000
Standalone Turnover
158
105
Standalone NP
5.8
5.77
PE Ratio
7
22
Consolidated Turnover
232
159
Consolidated NP
12.31
13.23
PE Ratio
3.25
9.5
M Cap
40
170
Notes:
1. Capacity is calculated on Standalone basis and
addition of various sub-segments
2. M Cap of Gravita is based on price at upper band
Gravita India Website|Pondy Oxide Coverage
Pondy Oxides goes up by ~20% today, touches 52.
Any positive newflows? Else, Ayush your comparison with Gravitas, hit the nail:)
thanks for this excellent pick Ayush ji,would you advice some profit booking tomorrow?
Dear Ayush, fantabulous job!!! The timing of the gravita news was just perfect! What was the subscription % for gravita IPO? Considering the price bands offered Rs 70 be a fair price for Pondy.
A 19% run up yesterday, followed by a 13% run up today!
If we look at the volumes today,17,37,657 BSE and16,02,061. Over 33 lakh. BSE average volumes (3m) has been 1,09,076! If we double that including recent NSE listing, average volume is 2 lakhs a day.
Time to book some profits? What are our Tech analysts saying, Hiteshji?
Another 10% today!
Most of you who would have got in early have seen a 100% appreciation already:). vs expectations of a 50% appreciation in 6 months!
So charts or no charts, one should be happy to book profits although gradually.
And as our friend Ayush keeps telling us, reinvest this where you find more value. Someone gave me a nice paradigm recently to look at behavourial traits of trying to cream the last. He said look at your best investments - can they double form here in 2-3 years? If not, get out and get in somewhere where it still can double in 2-3 years. That may be tough to find, but thatswhy we are here.
Cheers!
today,17,37,657 BSE and16,02,061.
Hi Friends,
Thanks for appreciation. Yes, the stock has done really well and price has quickly raced to our long term price objectives.
The IPO of Gravita has got a huge over-subscription of about 42 times. Hence as per the grey market the IPO is expected to list at a premium of atleast 30-50%. May be this is the reason why Pondy is getting so much of attention.
Friends have told me that analysts are CNBC Awaaz are giving target of 90-100 
Nobody can time things to perfection, hence I would recommend partial profit booking in several lots at rises. This is automatically give a good average if the stock continues to rise.
Just wanted to get some attention to this thread. Pondy has come a full circle within a short time. The latest I hear is the talk of merger with Lohia Metals, and the market doesnât seem to like it.
I personally think if they merge the 51% subsidiary (Lohia Metals) fully into Pondy Oxides, it is good for the larger entity.
Growth may not be a problem, but I want to see improvements in Working Capital Management, debt reduction with growth - due focus from the company on that, before deciding to re-invest.
Though the stock has come a full circle-this time round there are many other good opportunities due to the secular fall in small & midcaps.
Disc: I have zero position in Pondy Oxides currently
Hi donald,
Any idea about the contours of the merger? Is there going to be equity dilution?
Good thing about this merger is that markets will be presented with good consolidated numbers every quarter post merger and hence there might be heightened interest from a valuation standpoint.
Concerns you mention do remain but seems to be priced in somewhat at cmp of around 32-33.
Disc: no holding but had a wonderful ride earlier.
Hi Hitesh,
We have to wait till Monday for details on the merger and the results.
Meanwhile after todays fall, Pondy is at 28!
Will wait before rushing in.
The kind of volatility this stock has, itâs really not the kind which you could buy and sleep well. Its a bit hard to understand how the stock jumped to 60+ a few months back & is back to where it has traded historically. I saw the chart of its historical prices and its nothing to write home about languishing in the 20s or so. A commodity company with a leveraged balance sheet & poor historical valuation, is a pass for me.
Hi experts,
Any update on merger news,secondly i didnât understand why such high valuation is given to gravita india.
Great research on Stock - Pondy oxide.
Just curious to know views of seniors on comparison of what management has guided and what actual situation panned out.
This will be important to understand managment philosophy - aggresive / realistic / conservative guidance.
Would be glad to know view of seniors.
Thanks
Hello Seniors,
After commissioning of new plant in APâŚwhat are the prospects now?
Do we see a significant change in the future outlook?
Please guide
Hey, any updates about this company? Looks an interesting pick at current levels
Suggest your opinion as to can it be bought at current levels for long term?
