This Ahmedabad based co with diversified product portfolio of MAIZE STARCH/DERIVATIVES, SOYA PROCESSING, COTTON YARN, WIND POWER has reported Q1 results:
Q1/FY16 Q4/FY15 Q1/FY15 FY15
Net Sales 608 614 582 2524
Profit Before Tax 37.47 10.66 40.76 97.76
Profit After Tax 24.85 20.05 29.75 84.17
EPS Rs 2 FV 1.80 1.45 2.15 6.08
YoY basis, GAEL has reported small decline in its Eps from Rs 2.15 to Rs 1.80., However, co's performance on QoQ basis has witnessed huge improvement. In Q4/FY15, its PBT was 10.66 crores and PAT had increased to 20.05 crores due to MAT credit. Thus, at PBT level, co's profit increased by whoppping 265%.
Now Breaking News: Due to recent fall in corn prices, company is expecting sharp flare up in its profit margins in Maize Starch business in coming quarters. Co derives nearly 1000 crore worth sales from Maize Starch division. On a rough estimate, due to large expansion in profit margins in Maize Starch division , Q2 PAT should be in the range of 45 crores which means approx 80% jump QoQ basis. In fact, H2 may also witness margins similar to Q2. Thus, GAEL might report PAT of 150 to 160 crores for FY16.Stock price can double in 2016 in stable market conditions
Q1/FY16 Q4/FY15 Q1/FY15 FY15
Net Sales 608 614 582 2524
Profit Before Tax 37.47 10.66 40.76 97.76
Profit After Tax 24.85 20.05 29.75 84.17
EPS Rs 2 FV 1.80 1.45 2.15 6.08
YoY basis, GAEL has reported small decline in its Eps from Rs 2.15 to Rs 1.80., However, co's performance on QoQ basis has witnessed huge improvement. In Q4/FY15, its PBT was 10.66 crores and PAT had increased to 20.05 crores due to MAT credit. Thus, at PBT level, co's profit increased by whoppping 265%.
Now Breaking News: Due to recent fall in corn prices, company is expecting sharp flare up in its profit margins in Maize Starch business in coming quarters. Co derives nearly 1000 crore worth sales from Maize Starch division. On a rough estimate, due to large expansion in profit margins in Maize Starch division , Q2 PAT should be in the range of 45 crores which means approx 80% jump QoQ basis. In fact, H2 may also witness margins similar to Q2. Thus, GAEL might report PAT of 150 to 160 crores for FY16.Stock price can double in 2016 in stable market conditions
Thank you for the Recommendation.
ReplyDeleteBetween any views on Kanoria Chemical?
Fundamentally, stock is highly overpriced. Eps for FY15 was just 1.53 which also was bolstered by OTHER INCOME. Promoters are definitely not investor friendly. Promoters sold co's major business of chemicals for a whopping sum but minority/non-promoter shareholders got almost nothing from this booty. If promoters really felt that chemicals business (sold out) had no future, then they should have divested their equity stake and exited the co. What is use of having small
ReplyDeletenotional business with sales of 70-80 crores? It is not very uncommon amongst Indian promoters to sell the business (and retain majority control over the listed entity to facilitate siphoning off funds received from sale of business). Otherwise when Indian promoters sell any major business of a listed entity, they should distribute entire proceeds to the shareholders (How Glaxo had done when sold food product business to Heinz). SELL is the call.
Sir i have a complete opposite view. Have been Holding on to Kanoria for almost 2 years now. My Avg Buy price is Around 34-35. The Stock has Attacked 54-55 for 4 times and has been unable to cross that. I reckon the Stock can do wonders if it crosses that on a Closing basis- Technical View
ReplyDeleteFundamentals Looks Excellent Going Ahead.
KCI has two chemicals manufacturing facilities, one at Ankleshwar in the state of Gujarat, which manufactures Alcohol based intermediates; and the second at Visakhapatnam in the state of Andhra Pradesh, which manufactures Formaldehyde, Hexamine and resins. The company’s portfolio comprises of over ten products, with a market leadership in three and substantial shares in the others.
With over five decades of experience in manufacturing chemicals, KCI has now diversified into renewable energy and knowledge based sectors. It has set up a 5 MW grid interactive solar power plant using Photovoltaic (PV) technology near Jodhpur in the state of Rajasthan.
In the year 2012, KCI acquired APAG Holding AG, the Switzerland based holding company and its wholly owned subsidiary APAG Elektronik AG, Switzerland. APAG is engaged in development and sale of electronic and mechatronic modules and control devices for the automotive, consumer goods, power tool electronics and building automation industries. The designing and engineering facility of the company is located in Switzerland, whereas the manufacturing facility is located in the Czech Republic.
In another diversification initiative, KCI has incorporated a subsidiary company, Kanoria Africa Textiles Plc in Ethiopia, Africa and is setting up a Greenfield manufacturing plant to initially produce 12 million metres of Denim per annum.
KCI has been rated ‘CRISIL GVC Level 3’ for its strong capability with respect to wealth creation for all its stakeholders while adopting sound corporate governance practices. The Company steadfastly believes in the core values of sustainability, transparency, ethical business practices, and maintaining high standards of corporate governance.
KCI is well recognised in the areas of environment management, resource use efficiency and social responsibility. It has been the recipient of several awards, including:
Indian Chemicals Manufacturers Association (ICMA) Award for Water Resource Management in Chemical Industry
ICMA D.M. Trivedi Award for Introducing Advancement in Technology having a Widespread Impact on Chemical Industry
TERI award for Corporate Excellence in Environment Management
Golden Peacock Eco-Innovation Award from the World Environment Foundation
National Award for Fly Ash Utilization jointly awarded by the Department of Science & Technology, the Ministry of Power and the Ministry of Environment & Forests, Government of India
The Indian Chemical Council (ICC) Award for Social Responsibility
KCI has a synergistic relationship with its group company KPL International Limited which is a 20 year old professionally managed international business company, specialising in global marketing and distribution of chemicals, plastics, paper and allied products.
KCIL is a leading manufacturer of chemical intermediates in India, manufacturing over 20 products. These includes at least six products where it has market leadership in India, namely aluminum chloride, ploy aluminium chloride, pentaerythritol, hexamine and formaldehyde. It is one of the largest manufacturers of caustic soda in eastern India. Its products cater to a range of user industries, such as aluminum, paper, textiles, soaps and detergents, petroleum refining, and pharmaceuticals.
Regular Capacity Expansion: Every year the company is expanding its products production at various facilities so as to catch the increased market needs.
I reckon in Years to come v can get a Very Good Price.
Technically i have a Tgt of 150 in next 3 years.
Regards,
Vivek
And ya as u said the promoters are definitely not investor friendly i completely Agree to it. But I reckon the amount of 830 CR which he got by Selling the Chemical Division has been used for expansion and rest of the money has been parked in FD. So i hope the expansion which he has been doing 1ce complete should make the Bottomline improve going ahead. Book Value Stands @ 115. CMP is 52. Trading at Half Book. And Companies Consolidated Result is worth looking into but that it gives only once a year.
ReplyDeleteSir will update immediate target for next week..
ReplyDelete