@Raaaajaaaat, This forum is not for stock recommendation hence no one would suggest you whether to buy or not.
Regarding, your point on last quarterly result - Indeed the results has been poor. I am planing to write to company about the reason behind the same. Did you get access to the “management commentry” after Q4 results. Would be great if you can share the same.
Stock has taken a beating in past few days probably on account of the poor quaterly results.
DISC-Holding at higher levels
Thanks Manohar. Enclosed is the link to the management commentary. It is very brief. https://www.bseindia.com/Include/images/pdf.png
result is pretty decent. Slight decrease in receivables as well.
There was heavy Tax in 4th quarter, so PAT was low.
YOY, revenue and PBT are pretty good.
Rci industries work in very feeble margin.
Plus the changes in tax free status of Baddi region will be there going ahead.
There is lot of changes in the company and capex, but having said so, it has to show it in numbers.
Valuations are very cheap, but so has been their performance.
Corporate goverance is a doubt mark.
Profits have doubled on a full year basis. Should have tripled at-least.
doubled on standalone basis- which is mostly manufacturing
Dubai subsidiary is in trading.
That hardly make sense, with such high sales, even imagine tax exemptions going off will cause losses.
They are moving to manufacturing but that doesnot show up in numbers.
Capex is unclear.
Just valuation is not a metric.
There is a very little information available about the company and its plans. Its fund management. The company does not conduct a conference call after the results. They have just begun to release the “press release” which is too abstract and focus only on positive outcomes ignoring all areas of concerns such as drop in consolidated revenue for gone by quarter. Copper prices are firming up. But there is no visibility and assurance from management on their ability to pass increase in raw material prices to its customers. Only, few parameters are readily available - however there are several other aspects around the company operations which are missing out. I have written to the company secretary yesterday asking for some information. Lets hope they share it. There is lack of information which is preventing from being convinced about company’s future performance.
There is all possibilities that the numbers also cooked.
No transparency,
No details of operational activity on baddi and how and where capex going.
Nothing.
Adjust cost here and there and pat will double.
Hi folks!
Had an opportunity to visit their Baddi factory two months back. Indeed expansion going on in full swing.
From the view point of an visitor totally messed up environment inside the factory. Construction, repair, civil and electrical work, all going onnnnn along with production. But as an investor, I appreciated that at least the production hasn’t been stalled due to expansion.
No management personnel was available to provide more insight. Later on, Mr. Gupta was available and declined my proposal for a one to one talk citing busy schedule.
No clarity on how much they paid for buying the adjoining factory. Seems they may buy another one in the same lane. Going forward company intends to add up coins to its product list and has engaged experts from related industry.
As far as transparency and reporting is concerned it may take time for them to evolve/mature and come out of the mindset of sme environment.
Disc. Invested small tracking qty
I like to add some simple questions i have in mind
Just asking questions ,as i was not able to collect anything more than data known to guys here, looking for investing , if it looks worthwhile in some point of view…
Auditors resigned.
As I mentioned, stocks shall not be bought on hope.
Rci is very shady in terms of transparency.
But with all pessimism accounted one can make a bet as per own analysis.
current auditor was small CA shop…probably they are going for a reputed auditor
u can’t expect small cos to hire top Investor relations. Reputed guys need good fees also!
One can get on with any investor relation firm, what I am pointing out is having a shady firm.
History repeats,
Satyam and vakarangee had same auditor.
Which was earlier indicated to be fudging figure.
Always take a skeptic view on stocks and companies.
Love affair with stock will take one down.
Keep sharing more on RCI.
Happy discussing.
PWC does audit of thousands of big companies globally.
As per this, one should short all companies where PWC is the auditor?
At the end of the day, In India, if the promoter wants he can siphon off all the money.
It can be a Nifty co like satyam or a small co or whatever. Auditor doesnt matter in my view and not the mkt cap as well.
That is fair point but that gives good reasons for an investor to study deeper, look data from devil’s eye.
The same would have helped in above said companies.
What about change in Baddi region tax status, even transparecy on part of management is an issue.
Margins are so low even operating in tax free zone,. Imagine otherwise.
that is true for all the companies.
right now, dubai subsidiary is all trading and pays zero tax and will continue to pay zero tax in future as well.
Indian ops are still mostly trading…baddi plant has just started and manufacturing machines etc are still being installed…thats why indian ops margins are low.
@shreys Sales is driven mainly by volume growth. How they achieved this phenomenal volume growth - God knows. Looks too good to be true. Either they have genuinely become aggressive or numbers are lying.
Margins have been improving marginally yoy. but not substantially because it is a commoditised trading type business. low barriers to entry, any tom dick and harry can start copper trading business. Nobody will buy if you try to increase prices, there are 1000s of suppliers available.
May be this will change once manufacturing takes off in a meaningful way and they have some value add (Eg: Defense & mint as indicated by management) to their offerings.
Looks like their numbers are cooked? Possibly aggressive revenue recognition through channel stuffing. Their EBITDA and CFO just don’t converge over the years.
