Agree. Even with very conservative growth assumptions, EPS should be 3.99 fully diluted and once market sees pre-fab stabilizing, PE should expand. It is already at 15x trailing EPS (excluding all the one-time expenses), so normalized will be closer to 20, my guess is. Yes, unless cash flow are are fudged, 95-100 should be easy to achieve in about a year.
Disc: Bought at 75, averaged at 60s. Net cost 69ish.
Is the promoter pledging more shares? I saw on screener
Disc: Invested
There was a substantial increase in promoter pledging ~13.5% increase. Now, the promoter pledge is ~65%, which canāt be comforting for shareholders.
Can anyone share any light on the nature of the contracts in the CM business with respect to input (crude) prices. Are they on a cost plus basis? Similar question regarding the retail business, how often can you pass through price changes to the end customer?
Is this the collaterals they are having to pay, due to fall in share price, wrt prior pledge? Or a true new pledge?
Thereās no distinction to make that assessment. However, given that the price is at all time low, so it can be an enhanced collateral to match pledge.
Same question was raised few quarters back in a ConfCall. CM B2B segment is cost plus with a lag. So margins do not suffer which looks true going by the financials. No idea about retail, must be same like nilkamal or wimplast. Not sure what they do.
Till March 2018 it was 52% of pledge shares (% of promoter holding).
They have pledged from 3-April to 2-May.
They are now 75% pledge of Promoter holding.
Need to find the reason of recent pledge. Working Capital requirements?
Funding the warrants???
While one canāt deny the possibility of the promoter infusing funds by borrowing money from market by further pledging his stake, but we also need to note that the share is trading at an all-time low, so it can also be enhancement of pledge to match the overall collateral. Also, I donāt know whether infusion of funds as equity in the company by promoters, pledging their wealth is a big negative, though its a risk for sure.
Regards
SJ
See the above link which is dated 15-March.
The promoter has already paid the 25% of the warrants in March-2018. Why the pledge now? They would have infused 150 crores approx via warrants which was supposed to be used for reducing the debts.
There is a loss of revenues of 100 crores in custom moulding business and loss of PBT (12.70 crore) in this quarter.Cost of interest has also increased by 12 crores for this quarter.15 crore has also increased in employee benefit expenses.
This overall has contributed to worst results in my opinion.
I am unable to see any hope in this business.
Let us see management commentary on investor meet.
All views are invited. We must discuss the prospects of company and arrive on some conclusion.
Havenāt seen the details yet. however as per MarketsMojo. result commentary has improvedā¦
The reason from Marketsmojo maybe, they do not have any benchmark after the splitā¦ checking the finer print
I attended some parts of the concall today. They have received some RS. 1190 cr from KKR in the their in the customs mouldings entity in an all debt arrangement (clarified several times during the call). The ROI on this will be ~8.75%, whereas their overall borrowing cost is ~10%. He further clarified that the increase in pledge was due to promoter raising funds to subscribe to warrants.
SJ
One positive thing from their presentation was, focus on the debt reduction. Current D/E ratio stands at 0.89. Will have to observe few more quarters to see if they are true to their words.
In an investor presentation , they have mentioned that they do not have to pay debt for next 4 years which according to my understanding that they are going to pay interest for 4 years without reducing debt.Is this a right approach?
Can someone throw more prospects of deal with KKR, and how it is favourable in terms of company and investor.
They wanted to reduce debt by Rs 5000 mn by FY19
An extract from presentation .
Further FY19, we plan to cut down our
debt by another Rs 5000 mn by excercising remaining warrants by
December, and through internal cash generation. The warrants entail
promoter stake wlll increase to 37% from 28% at Rs 90 per share.ā
Stock exchange filing https://www.bseindia.com/xml-data/corpfiling/AttachLive/26803738-b83c-49a1-b134-1e191c6c3d1e.pdf
