Oh. No Jaman Ji. I was talking about standard Industries. It got mixed up. And just one thing I would like to state. Even I am invested in Add Shop Retail. It has been on a growth spree. Definitely a good script to hold long.
P. S. As both of the script discussion was about promoter shareholding and matched with the point I made on SHP of standard Industries, got mixed up
Fundamental Snapshot
Market Cap - 246 Cr
P/E - 6.20 (Industry P/E - 23.0)
PEG - 0.09
ROE - 63.5%
ROCE - 53.2%
EVEBIDTA - 4.55
Seems to be an undervalued pharmaceuticals company.
Please share your views
Found one company DCM Nouvelle Limited at interesting point of CMP: Rs.180. PE is lowest in the industry with highest ROE :50% and ROCE:42%
Add-shop promoters sold more than 10% stake there by suppressing the price of share and now going for right issue almost 1/3rd of their sell price. Is this kind of activity is common or is it a king of red flag of the management? Can any senior comment of the issue please?
Disc: was holding 10% of PF but sold after right issue announcement, thinking this is not a good governance practice and mgt has manipulated the stock price.
The merits of a rights issue depends on several factors such as the resulting dilution (if there are 5% more shares after the rights issue, the dilution is 5%), historical dilution, previous cash flows of the company and so on. In case of Add-Shop, I checked the company is repeatedly dilutingâI do not find this encouraging.
right issue almost 1/3rd of their sell price
This is not uncommon. Another company that allocated preferential shares (this is different from rights issue to the existing shareholders) at 1/3rd of CMP is Creative Newtech. It is not illegal but it is against minority shareholders, and thus unethical. I consider this as a red flag and am wary of such companies, but I know some other people do not consider this a big deal. Rights issue at 1/3rd is slightly better (less unethical, probably, since existing shareholders have the rights) but favors big shareholders.
To contrast with a positive example, I know another small company that brought preferential issue for a new shareholder at close to CMP (the dilution was only 5%).
Sale of 10% stake, if it happened, is another red flag. So, Iâd say your decision to exit is good.
Disclosure: Never invested, not interested in this stock.
Thank sir for your Reply.
I do not have an issue with the right issue price rather it is better if one consider being in the company. But I feel like price has deliberately been suppressed to bring it down from above 150(they start selling from this point) to sub 100 and now the right price @54/-. you are right some big HNI investors have entered gradually and promoter sold gradually. Now with that money promoter will buy almost 3 times the shares. I have only issue with deliberately suppressing/manipulating with the stock price actively. On other parameters, the company is very good but I am not comfortable with the mgt now. Became more confident after your explanation. Thanks once again!
The stock had a huge run from 100 and peaked at 165 in less than a month and then started the downward trajectory. Doesnât necessarily mean that promoters took it down.
Also its a right issue which every stock owner can apply for and not a stock warrant which are exclusive to whoever the board decides to offer.
ANG Lifesciences break out:
Looks really attractive at this price for value investing In ANGL. Though My concern is 44% promoters pledged Holding. Any idea, do they have any oncoming capex plan?
Yes. You can go through their investor presentation, they are expanding in huge way, they did couple of asset purchase of indo swift units last yearsâŚIn last 3 years company is in large expansion mode, numbers have just started reflectingâŚhence i believe pledged holding
Enkei Wheels Ltd
Market cap: 780 crs
Enkei Wheels Ltd is a MNC Company (ENKEI Group Japan), EWIL produces aluminium wheels for automobiles and motorcycles, and supplies them to the Original Equipment Manufacturers (OEM) only.
Old Capacity: 4W: 90,000 pcs Per Month and 2W: 120,000 pcs Per Month
Triggers:
Cap Ex and falling raw material (aluminium alloy ingots) prices. Plus the Auto industry is set to revive in coming years.
Brief info about the Cap ex, as mentioned in the AR 2021:
Recently the company has completed a long awaited capex plan of adding capacity which was delayed due to COVID. The New facility also known as MAC5 completed and inaugurated for its production on 03rd May, 2022. Cap ex is funded by Foreign Currency Loans from Banks and External Commercial Borrowings for which the rate of interest is very low.
This will add 40,000 pcs to 4W capacity. Plus new facility for Paint shop with capacity of 180,000 pcs will be completed by December 22.
MAC5 line is the latest line of the Enkei Group, and EWIL will be the first company to introduce M3 full-line installation in EK group overseas company. This should be a major change and evolution that will remain in the history of EWIL
Additional Cap Ex:
The next project planned after the start of MAC5 operation is considering the conversion of the existing MAP3 line to MAT. We have targeted to complete this project by the end of FY 2022. We are also planning to promote further expansion of production capacity
Disclosure: Invested in family account.
Any one has looked at Shah alloy? Can any one share any details?
Promoterâs pledge is too much!!
Anyone tracking Lyka Labs? As per the Joint Management Control Agreement dated November 24, 2021 between Ipca Laboratories & the promoters of the Co., Ipca shall be entitled to increase its shareholding in Lyka Labs upto 51% subject to certain conditions. (Mentioned on page 6, clause 3.1.4 of the letter offer.) It is only a matter of time, before the Ipca decides to exercise its right to increase its stake to 51%.
lLetter of offer Lyka labs.pdf (979.4 KB)
Results for 21-22 have been phenomenal, aided by Covid, but there is more to the Co. Currently the balance sheet is in the process of getting cleaned up with a spate of write offs. The latest AR talks of 50% capacity increase Lyophilised products.
The open offer failed as the offer price of Rs. 130.50 was considered to be too low. Interestingly, the current market price of Rs. 118 has fallen way below the open offer price.
Attaching the Annual Report for 21-22
Lyka Labs.pdf (2.3 MB)
Albert David Ltd. could be an interesting idea with decent potential for growth. Results for June Qtr. came in yesterday, with perhaps an all time high top line of 93.19 crs with its gross & operating margins intact. The results seem to be not so good, due to M to M losses (other income) due to fall in market value of investments as on June 30th.
The pharma Co. which is being run by a professional CEO, is sitting on substantial liquid investments in equities/ mutual funds. If it can continue on its growth path, then future expansions can easily be funded. This would improve the return ratios dramatically as investments in mutual funds dampen return ratios.
Hi, i am tracking or holding small quantity of some less talked companies.
JTL Infra
Ganesha Ecosphere
Mitsu Chem Plast
REPL
Share India Securities
Sheetal Cool Products
TAAL Enterprises
Please share your views on above companies. Ready to discuss more about the companies.
Few updates on Tinna Rubber from my side ( which is not covered in investors presentation, concall or annual report):â
I had attended the AGM on 30/06/2022,
Few notable points are :â
An international tyre company added to its customer list and also received first major order from it in Q1of fy23 that is ATG Yokohama.
Going forward management is very confident of achieving 20% EBIDTA margin.
Because of increased working capital requirements the company may not be able to reduce the Debt level but they are targeting to reduce it by 10% in fy23.
Management told that there is no need of major capex for growth in fy23 as the company has sufficient spare capacity.
They are installing Solar power system in one plant.
Capacity of micronized rubber powder (MRP) is increased to 12000 MTPA from 10000 MTPA.
Projected sales figures for fy23 is 320-350 crs.
Recently management of Tinna Rubber told in a conference that they have started to recycle the passenger vehicles tyre in addition to Truck and Bus radial tyres. They also seeing opportunity to recycle off-road tyre and Agricultural tyre as well.
In concall of Q1 fy23 , management told that Tinna Rubber has the capacity to recycle 75000-80000 MT of waste tyre per annum.
As per Investors presentation dated 12/08/2022 , Tinna Rubber has crushed 15000 MT of waste tyre on Q1 of fy23. So, Tinna has still 30% of spare capacity for volume growth on annualised basis.
More on Tinna Rubber and Infrastructure Ltd :â
Tinna Rubber has an associate company named TP Buildtech pvt. Ltd. Where company holds 49.20% share. An interesting thing is that the other partner is Mr. Mayank Shinghal, who is the promoter and managing director of PI INDUSTRIES LTD.
The financial performance of the TP Buildtech is substantially improved in fy 22. The company has posted a net profit of 15 lakhs in fy 22 against net loss of 2.86 crs in fy 21.
The sales figure of fy 22 is increased to 47 crs against the 28 crs of fy 21. Source of information
https://www.crisil.com/mnt/winshare/Ratings/RatingList/RatingDocs/TPBuildtechPrivateLimited_July%2007,%202022_RR_295035.html
Till company has only one product which is a concrete admixture named Aqualoc-TP. Recently the company has developed and launched the other product named Betonflow-TPCWA, which is a â crystalline Water Proofing admixture '.
In Q1 of fy23 concall, management was very optimistic on the future of TP BUILDTECH PVT. LTD. Till they have two plants and now they are considering to build the third plant.
Management commentry on TP Buildtech on Q1 concall of fy23
Have a close look at Management and Board of Directors.I did
