Problem is not the operations, but the interest cost. Interest instead of declining has increased to 89Cr from 74Cr. That itself is approx. 40paisa pre-tax impact when cost should have declined.
Any number of questions on how the interest cost is raising despite lower cost KKR debt has met with opaque answers.
Anyway, I am unable to judge the operations as there are not enough metrics to see / evaluate.
They have a leathal combination of poor transperancy and inability to meet guidance - and I am less hopeful than ever. Maybe time to change ship in this market, when there is atleast the option to recover lost capital is more !
Yes, my average cost is 60 and was a bit worried few months back when it started tanking. But now with every stock down 50%, think will transfer to another stock. Making back the money should not be difficult in this market.
Any thoughts of where way you are going. I am thinking EPC companies or maybe YesBank.
Am hunting for value in Capacite Infra - EV EBITDA of 5 (so yes EPC) and no debt. Ahluwalia contracts is another bet.
Some NBFCs are attractive like hell, but who knows how long the wait there is
Maybe we take this conversation offline, incase you have any other ideas to discuss or have feedback on the above, may not be relevant for others in this forum !
Borrowing more or less around same levels with Cash & Cash Eq. going down by 230 cr. Where has the cash gone?
Quarter after quarter some stories but NO PROGRESS ON DELEVERAGING!!!
Oil prices, $ value, delayed payments from govt orders all not in their control BUT what explains not deleveraging (which is 100% in their control)?
Anybody going on the call today might want to raise it - unfortunately I wont be able to
Company in the conference call told that they have paid 200 cr debt. However due to rupee depreciation the debt looks elevated. Given the way the company and mgmt has guided earlier I am not sure if we can trust the current explanation.
Coming back to my running commentary on Sintex. Still hold at 60Rs.
Why has the company not hit Re.1 EPS which should be normal earnings. ONE REASON. Interest cost. Interest cost went up by 13Cr which is Re.0.2 impact to earnings (0% tax assumed)
By my calculation interest actually should have been at 70Cr or in earnings terms Rs.0.3 impact to earnings which would have given you Re.1 earnings.
Reason for interest cost at this level.
- Company said 9Cr impact was from forex translation which makes sense.
- Due to working capital they could not reduce debt much (Rs200 cr stuck overdue)
Company reduced debt by 288Cr but gross debt looks same as 1400Cr is dollar denominated, which again makes sense. Whether you believe the management or not is another question.
Growth is slack but I was not baking in any growth this year. With all the changes, difficult for any company to turn around in 2-3 quarters.
Disc - Was thinking of selling it but after call think will hold on for another quarter. Guess Monday will be in red.
Adding more from the Q2-FY19 conf call:
Less margins due to:
i) High crude oil prices impacted - raw material and transportation costs
ii) Weak Rupee against Dollar increased the interest cost
Pledged shares details:
- Debt taken from the NBFCs and the shares are pledged to them.
- The Warrants will continue to be converted at Rs. 90 per share.
Future Guidance: Hope to increase the revenue by 3X in next 6 years, reasons given:
i) A large range of water tanks will contribute lots of revenue
ii) The urea tanks for diesel vehicles, reservoir tanks will start contributing in revenue from Sep 2019.
iii) Mass transit (Metro train) products will start contributing in revenue from 2022.
The prodcution/revenue of some of the products kept down (in control) to avoid the high cost and less margins due to high crude oil prices, it was a concious decision henec less revenues in Q2. Also pre-fab revenue declined which is as per plan.
Total capex of H1 was 117 Cr only (India capex = 24 Cr, Foreign capex = 93 Cr), which seems very much under control.
Disclaimer: Invested, hence views may be biased. Its not a buy/sell recommendation.
the management has been saying for the past 1 year tht thy r bringing down the gov aka prefab revenue wch has infact transpired but though the sales in prefab r down by 600/700crs thr hasnt been a reduction in working capital loans nor has thr been a reudction in long term loans evn though promoters gv infused 350cr worth of capital via warrant conversion
IIFL has given a positive view on SPTL…
Sintex Plastics, a leading player in composite plastics space, is a re-rating candidate owing to better cash flows from shift in business focus and promoter infusion leading to deleveraging; valuing at 8x FY21E EPS.
Today management has issued a notice that they are doing everything possible to deleverage the company in the interest of shareholders, this is probably being done to address the recent stock crash from 25 to 18…But can someone tell me why the leverage doesnt appear on the balance sheet . Is it due to “fccb” as already discussed above on the thread? I am referring moneycontrol march 2018 data…
Hi I am new to valuepickr and a prospective investor in Sintex Plastics. I found some discrepancy in the note no. 3 of the latest results. Their total revenue ‘not reviewed’ (679.2 + 2965.83) for 9 months ending is actually more than the total revenue reported for the same period by about 2.48 cr. How is this possible? Am I missing something? Screenshot_20190209-150555_Adobe%20Acrobat|243x500
IIFL has been harping it since it was 80/- what of the investors who took their advice then?
I HAVE CERTAIN RESERVATION ABOUT THE WORKING OF THIS COMPANY AND I FIND KEY RISK ON THE COMPANY AS SUCH
• WHERE IS THE CATCH?
• VERY ROSY PROJECTION PROVIDED
• ALL SEEMS GOOD OR VERY GOOD
• STRATEGY SEEMS ROBUST – VISION 2020-22 PROJECTS VERY ROSY PICTURE
• BUSINESS IS GENERATING PROFIT AS WELL AS FREE CASH FLOW
• DEBT IS REDUCING CONTINUOUSLY: FCCB CONVERSION / PROMOTER EQUITY / CASH FROM OPERATION. STILL INTEREST COST IS INCREASING
• CLARITY ON REVENUE AND PROFIT NOT PROVIDED DIVISION / SEGMENT WISE
indent preformatted text by 4 spaces
Are u still holding STPL. What’s your take now ?
SPTL has definitely increased its advertisements at neighborhood shops, advertisements on moving vehicles etc. in Hyderabad.
Does anyone has any idea if the company has recently communicated on the speed of execution or plan to increase sales?
Most importantly, if the company increased advertisement spends all over India, does it have the game plan to increase revenues and profits?
Absolutely horrible results by the company. Not only did they miss guidance, but the company reported loss for the quarter. And to think that the management wants to sell off their ‘growing’ Automotive division, which was expected to significantly contribute to top and bottom line from FY21 (owing to BS VI norms)
Don’t think any reversal would be possible from here. I exited sometime back.
All the best to those still invested.
Good you booked loss and exited, seems like a slow death is coming! Very bad judgement made in this group, big big lesson, stay away from Companies with debt!
Agreed. Expensive lesson learnt.
How could we have spotted this issue? Debt is one. But value investors do invest in companies with debt. Can a veteran value investor in this group, do a post mortem?