Freshtrop Fruits Ltd

Freshtrop Fruits Ltd Other Agricultural Products

Market Cap.: ₹ 110.20 Cr.

Current Price: ₹ 90.70

Book Value: ₹ 42.84

Stock P/E: 12.61

Dividend Yield: 1.10%

Face Value: ₹ 10.00

Company has good consistent profit growth of 231.86% over 5 years-

Company has been maintaining a healthy dividend payout of 17.05%

Cons:- Company might be capitalizing the interest cost

Sales increasing at consistent pace

Net Profit 8.74

margin seems less.. but packaged fruits has huge potential

but not huge margin what about local players and the shops itself doing the same like Godrej or Big basket etc also have packaged fruits from their own vendors branded 

irregular growth Climate dependent

Return on equity is not so  good 15% not great 

Freshtrop Fruits Limited is engaged in the business of exporting fresh fruits and vegetables to supermarket chains in various parts of Europe, Russia and Far-east, as well as in domestic market. The Company is engaged in the processing of fruits and vegetables. The Company’s segments include Fresh Fruits and Food Processing. The Company is involved in producing fruit pulp and concentrate for both the domestic and international customers. The Company offers pomegranate arils. The Company offers grapes, such as Thompson seedless, flame seedless and sharad seedless. It offers processed foods, such as pomegranate, mango pulp, alphonso mango pulp, kesar mango pulp, totapuri mango pulp, guava pulp, tomato paste, amla (gooseberry) pulp, and red papaya concentrate, puree and pulp. It has approximately three pack houses and cold storage facilities located in the state of Maharashtra. The Company has a juice processing plant at Nasik, Maharashtra, approximately 180 kilometers from Mumbai.

So price seems okay if growth remains as it is

cash is not there ??

Does freshtrop has own land for fruit crop?

what if India consumes all fruits and nothing remains for export business?

1). Promoter selling just before the results were declared!

1). Low ROE/ROCE business.2. Seasonality and affected by nature’s vagaries.

IIT Mumbai pass out management.

buy freshtrop then …

MD  is one of the first movers in the industry and seemed to have done several innovations.

However, one must remember that the business is quite seasonal and prone to some issue or the other.

1). Fresh fruit

2). Food Processing

Fresh fruit segment involves mostly exporting of grapes and the grape season starts from January and ends in June every year. This segment contributes around 80% of the top line and more than 100% of profit. That is why around 85% of their sales is in Q1 and Q4 of every year.

Food processing involves processing of food pulps primarily mango pulp, pomegranate pulp, tomato puree, guava pulp etc.

Not a great shareholder letter no futuristic discussion

 

Low temperature storage of fruits is not economical and hence not in practice for domestic  market while raisin making solves the problem of grape perishability to some extent but the price realization is not stable.

Govt help and funding is there for food processing.

The sourcing of fruits is very difficult. There are businesses in their vicinity which have closed or are doing losses and have high debt.

There are not many listed companies in the food processing sector (Jain Irrigation has food processing segment but it is small in the overall scheme of things). It’s a tough sector to get into with considerable investments required in it. There is very few to none success stories in food processing sector.

What’s the “moat” in this business – food processing gets constrained on the supply side beyond a certain point unless it’s a branded play.

1). The no. of certifications the company has, which it has been renewing for many years.

2). Its long standing direct relationships with big clients like ASDA, Tesco, etc.

4). Improving Sales/Invested Capital with improving margins, is another excellent indicator of improving competitive advantage and therefore, presence of moat.

can be beneficial investing at this point in time because of good march and june but overall for long term doesn’t look so good ..

no visual growth no futuristic thinking

can take a tracking position though

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Pokarna Ltd

Pokarna Ltd Construction Materials

Market Cap.: ₹ 739.26 Cr.

Current Price: ₹ 1,192.20

Book Value: ₹ 211.63

Stock P/E: 9.44

Dividend Yield: 0.84%

Face Value: ₹ 10.00

sales profit both increasing 

initial look good

– Company has a good return on equity (ROE) track record: 3 Years ROE 71.56%

How come return of equity so high for this business?

why sales not increased this year ?

It is one of the largest exporter of finished granite from India, dealing in over 70 premium colours.

Besides finished granite company also exports natural quartz based engineered stone under the brand name ‘QUANTRA’ .

l there is still room for further margin expansion as engineered stone business is running at 50% capacity utilization.

From an interview

Getting mining lease is a long-drawn-out process. If it is a large quarry, then one has to go to Delhi to get the ‘environmental’ clearance. And all that takes years together. It’s not easy to do quarrying in the country. It doesn’t matter whether it is ownership land or lease land; it’s always difficult. The process is rather time-consuming.

In same interview Mr.Gautam Jain says

*Daltile, a company based in the US, happens to be one of our biggest customers. It has also been my biggest distributor for the last twelve years. One of its representatives, who visited us a few days ago, said, “Mr. Jain, you need not be so perfect; even if sometimes you give us not-so-good materials, we will accept them. In the last twelve years, you have not given us a reason to complain.

Caesarstone, Cambria, Bretten are the companies competitor.

Caesar doesnt do any mining activity but buys most of its ‘raw material’ from eastern europe and Asia for Quartz.

Engineered stone business has good competitive advantage. Pokarna has unlimited supply from its own mines. The market is huge and it comes down to their marketing and distribution abilities. Caesar has done exclusive deals with IKEA US and Canada so their advantage is branding, distribution and reach.They are bullish and adding capacities in North America despite raw matl shortage. Pokarna hugely benefited because of cost reduction.

Again US

trump fear

On the question of other Indian Quartz manufacturers, there are many doing it.There is nothing unique that Pokarna does except it is the exclusive licensee of Breton technology from Italy to make Quartz stones which gives an edge over others.

what if India disallow stone mining?

Environment issues ??

80% export business

Alpha ideas copy paste gokarna looks great

The Flooring in US is 50% carpet, so stone has to mostly to the kitchen counter top (except hotels and malls, offices, whos construction has saturated). But in India flooring is mostly tiles and stone, and stone (granite) is increasing.

Considering Quartz stone replacing Natural (granite) in developed market, it can happen in India also gradually. And as the income levels go up, tiles might be replaced by stones for flooring.

They sell quart stone to Lowes, Home depot, Costco, Sears. They said top seller for them is Viatera. Confirmed Saesarstone was most expensive.

 

In India,Shobha is one of their clients which uses granite countertop in their high-end residential projects.But most of the sales are coming in from exports through B2B sales.

Upside is huge with uptick in demand for housing in US and other markets.

You are right promoters lent money to the company which was interest free. Pls check Q1 FY16 ppt they have mentioned that interest is payable @14% from Q1 as things have improved. This fact alone is a major comfort factor regarding promoters.

India accounts for around 20% of the world’s resources

of granite and as per Indian Bureau of Mines the country

Management is good business wise but may be unethical I guess

Arihant Capital Markets Ltd

Arihant Capital Markets Ltd Other Financial Services

Market Cap.: ₹ 111.82 Cr.

Current Price: ₹ 53.70

Book Value: ₹ 45.75

Stock P/E: 8.46

Dividend Yield: 1.40%

Face Value: ₹ 5.00

Looks like a good bet

Net Profit: 13

Arihant looks great 

Check for capability of management focus on shareholder letter how is business.

It has generated positive operating cash flows and negative financing cash flows for most of the past 10 years. In fact it has generated hefty 65 cr operating cash flows over the past 10 years despite operating in the cyclical capital markets industry. Being asset light, these operating cash flows are reflected in the zero debt status and cash balance of 60+ cr (excluding cash belonging to creditors).

Also company is carrying too much of cash on books deposited with the banks ( 60 Cr +) .

Based on companies investment portfolio I can say that management is good.

Company purchase freehold land of abt 5.4 cr in FY 12 and 5.6 cr in FY 14.

ARIHANT FUTURES AND COMMODITIES LTD.

ARIHANT FINANCIAL SERVICES LTD.

ARIHANT LIFESPACE INFRA DEVELOPERS

ARIHANT INSURANCE BROKING SERVICES

AHINSA LIFESPACE INFRAHEIGHT LIMITED

ARIHANT HOUSING FINANCE

Business:

  Equities and Derivatives Broking

 Online and mobile trading

 Currency Derivatives Broking

 IPO, Bonds (including NHAI, REC, NABARD)

  Mutual Fund Investment and Advisory

  Merchant Banking (Category I)

Website also looks good.

How many clients it has although I don’t see lot of opportunity here not a bank or not like new technology dependent Investment broker like Share khan, Zerodha?

what about % of total profit from baking service

  •   Capital market risk is inherent in our business: The major sources of our revenues are derived from equity brokerage business.
  • Hence, like other players in the market, our business is highly sensitive to economic and political conditions prevalent in the
  • country and across the globe. Any sustained downturn in general economic conditions or Indian equity markets and severe
  • market uctuations would likely result in reduced client trading volumes and net revenues, and hence, will have a material
  •   Technological risk plays a signi cant role in our industry: The substantial amount of costs involved in deployment of technology
  •   Systems failures, delays and capacity constraints could harm our business
  •   We are subject to various legal actions led against us by interested parties: In our ordinary course of business, investors,

Arihant looks okay good investment in good companies established companies .. can buy but I don’t see a very long term prospect with current scenario as brokerage firm doesn’t have any aha factor. It is not offering something which other players are not offering. Share price will go up as overall the sector is growing but can it get a chunk out of other companies in the same sector?

Check how is infra business how are the buyers are they satisfied or angry ?

 

Kitex

<b>Kitex</b>

Market Cap.: ₹ 2,058.18 Cr.

Current Price: ₹ 433.30

Book Value: ₹ 91.14

Stock P/E: 18.64

Dividend Yield: 0.35%

Face Value: ₹ 1.00

looks like good management but some problem with investment. Many good investors have pulled out because of the way management keep profit in foreign currency I guess.

Fully mechanized robotics is used in industry

Yarn is raw material Kitex doesn’t make yarns use yarns to knit wear

So I guess high margin?

Looks great buy .. why sales are low now?? is market saturated?? why not growing at same pace as earlier?? Some clients have pulled out like Jockey.

Children’s wear market is one of the most 

profitable segments in the global apparel 

industry. This segment was not a ected by the

child birth are in foreign countries is falling so kitex??

depends on three major buying factors – the number of

babies born, and the purchasing power of parents and

the safety and quality standards of the apparels. The key

drivers of the infant wear market are as follows.

Kitex supplies its products such as USA and Europe

organized retail accounts for 80% share of the total

retail market. This makes the shopping convinenent with the added bene ts of quality and safety of the products available.

Demand for Comfort and Quality: The selection of clothing for babies is done judiciously by parents as they choose the ebst products for their newborn

• Growing popularity of online shopping: The internet is valuable source of information for parents. The number of parent who research, deliberate, discover, and compare children’s products on the internet is increasing each day ( courtesy : Technavio)

n USA. Various studies/private research reports shows that Kitex has a 70% market share in the import exports of baby garments. 

Kitex Unique Advantages 

The key advantage of Kitex is its trained manpower and vertical value chain consisting of state of the art process machines, international quality check systems and nal delivery of customized items to the customers.

so has some leverage IP

Your company exports all the products to
USA and other European countries. Any volatility in the currency market can impact the overall pro tability

Trump effect???

Good information in annual report everything seem to be out in open

To me this looks great.. see why people are exiting what caused it and what is wrong with management about cash debt and hoarding money in foreign currency..

just Prof Snajay bakshi is with this company now rest most of the people have left like All Value picks Donald and Ayush

Holding debt and cash together.. not sure what is happening with financials

P/E is still a lot growth is okay but still looks like costly stock

need 20% growth at current profit

Shemaroo Entertainment Ltd

Shemaroo Entertainment Ltd

Movies & Entertainment

Market Cap.: ₹ 1,138.25 Cr.

Current Price: ₹ 418.75

Book Value: ₹ 154.85

Dividend Yield: 0.33%

Face Value: ₹ 10.00

sales and profit increasing

Net Profit: 67.23

look good

One of the top 3 content aggregators in India, growing it’s youtube views rapidly (60-80% y/y) now at 100M page-views per month. Amazing business, and growth.

Check for management ethics and capability.

Today, we are one of the largest independent content

aggregators in Bollywood. Our Content Library consists of

over 3,400 titles spanning recent Hindi films like Jab We

Met, Ajab Prem Ki Ghazab Kahani, Om Shanti Om, Golmaal,

Dedh Ishqiya amongst others to all time blockbusters like

Beta, Dil, Disco Dancer, Bobby, Sarfarosh, Amar Akbar

Anthony, Namakl Halal, and evergreens like Madhumati,

to 10% of the revenues. Shemaroo typically participates

in the second and subsequent cycles of film monetization.

This phase is relatively lower in risk as movies’ connect

with audience is already established. The revenue in

https://www.youtube.com/user/ShemarooEnt/videos

https://www.youtube.com/user/shemaroomovies/videos

its maximum potential. Our content is today distributed

over various internet video platforms like YouTube,

Hooq, Hotstar, Apple iTunes, Google Play and Spuul. We

platforms. With the advent of 4G and better Broadband

14% projected growth of the sector for India

but I guess shemaroo will initially take the bigger chunk

with digital rev in india more ways to monetize this.

Why not open a movie channel in India ?

Management salary not much so good.

No real futuristic steps nothing looks too promising except business model can be good. They can think of so many ways to monetize the movie rights or not so?

The business has potential to grow at much faster rate > 30%-50% y/y next few years.

This whole entertainment space is full of corrupt people and Eros Entertainment was recently under the for cooking the books. New copyright purchase of movies can be source of black money? There is no break-up for this.

I think perpetual rights are good property where you have rights for lifetime rented rights can be loss business if in given period It doesn’t generate enough revenue.

With 4G people watching the content will increase but will that actually transforms into profit is a good question. In India with so much piracy very less chance of people paying directly. Advertisement in between content is a good model but is that enough? Mobile ads, It is like those click to purchase banner ads. Is this advertisement business sustainable? Business to DTH operators tv channels is good.

If company is generating cash right now with the current model it will generate more cash when same model is going to expand with growing 4G and mobile users. Isn’t it?

They are not into big banner new releases which are risky and lead to unpredictable and volatile earnings.

When you are purchasing rights of old movies , you already know whether the movie is good or bad, what kind of audience would enjoy watching such movies and i believe that the management would have an idea of the kind of revenue the movie would generate for them.

Entry of Netflix is also a positive. Launch of home video on Airtel and Tata Sky is a positive. Company seems to have done well on capitalising the digiital segment.

Now netflix etc will buy rights for these ?

Zubin Dubash is a Senior leader with 20+ years of success in managing businesses in mobile applications, telecom, and digital domains. Before joining Shemaroo Entertainment Ltd, he was working in the core team of Apps Daily Solutions, as Chief Product & Strategy Officer and played an active role in product creation/innovation, strategy and Strategic partnerships. Prior to this he was at Tata Docomo as Vice President/Group Head- New Businesses. He has also worked with companies like Vodafone etc earlier.

Pros:

1.Content bank(which they can loan out to the netflixs and hotstars of the world)

2.Youtube channel(great subscriber count and hence a ready made audience)

3.Their domain knowledge which allows them to find sources to milk their assets such as:

4 Dish,tata sky and other packaged offerings

5. Splicing content from movies into clips and other compilations to drive viewership

Possible avenues of revenue in the future:Their film themed merchandise called yedaz which they are experimenting with now looks very interesting.

Film Merchandise is a huge industry overseas and my sense is that india should soon jump on that bandwagon. Their huge range of content rights the hold should hold them in good stead here.

Business model is tough to understand not sure what happen with amazon prime and netflix

New player can send Shemaroo out of business right away isn’t it. They are huge Amazon Prime/Netflix they are more experienced technically advanced. Also old movies become worthless as the number of new big banner movies are increasing.

Youtube pays almost 50% of advertising revenue to content provider. I see bumper increase in new media for Shemaroo.

Shemaroo owns a Youtube channel Filmi Gaane2 which has 1.38 million subscribers.

Songs are significantly more popular than movies .

Uses industry sources to Estimate how much Gangam style made on YouTube. Roughly 1 million dollars for 1 billion views.

Donald is invested with 10% of his portfolio many investors from Valuepickr are invested but it doesn’t look very nice to me. I mean not like game changing for long term I guess it is like average stock with may be 2-3 years of growth prospect.

In Donald’s words

Whenever we come across what seems like a superior business – we like to immediately ask – Isko hilaega kaun how difficult is it to dislodge this business from its perch?

If we find, We can’t find an easy answer to that, that’s a very good sign

If the answer to that is Yes – very very difficult to dislodge, then we like to get a feel for – If the Management can execute well, Where is this business likely to be, in next 2-3 years?

Deliberating on above, if we find “Hey, should it continue to execute well, this business will be at a different level in 2-3 years **” – that’s probably pointing to a winner

3.What leads to superior stock market returns? Most folks answer that with different nuances, but if we think clearly – there is only one definitive answer

That there’s probably a GAP between how the business is being perceived today versus where the business is likely to be in 2-3 years time.

Ayush & Hitesh taught us how to relax the thresholds a bit – when we detect a business in transition – as long as there are sure-shot signs of improving trends. If we can’t do that and remain rigid, we would always miss out on an Avanti Feeds, and an Atul Auto, even an Ajanta Pharma – while in transition to those wonderful EPA numbers they soon start spewing out – remember how the numbers transformed!! If they somehow continue to execute well, these are usually the fastest wealth creators too!!

Doing a simple DCF (7.2 cr growing at 10% for 20 years @ 18% Discount rate) this comes to about 426 cr. The company already is at a market cap of 1000 cr.

If we just go by copy paste copy cat a good business numbers are also good .. business overall is good but I am not sure about profit.. and also with new big players how this will play out..

Can take a position though just for the sake of it .. need to bring this in circle of competency the business is less understood..

Tv is only thing I see can be profitable but tv business is bad in India too much latest content

what about management check there annual report how good is management? family owned or now?

are they thinking about new endeavor inventing things

\The parent company have some partially owned subsidiary LLP. Is that alarming can profit be compromised by this?

Poddar Housing & Development Ltd

Poddar Housing & Development Ltd

Realty

Market Cap.: ₹ 614.49 Cr.

Current Price: ₹ 973.00

Book Value: ₹ 354.29

Stock P/E: 68.81

Dividend Yield: 0.15%

Face Value: ₹ 10.00

Company has reduced debt. => Good to hear

Company is virtually debt free. => Very good

Company has good consistent profit growth of 73.97% over 5 years

Promoter’s stake has decreased.

sales is increasing

margin is less though Isn’t real state margin is lot? May be value homes.

Net Profit  15.76 8.20

net profit is decreasing

investment 126.43

Stock P/E is a lot

too costly company

Eimco Elecon

Eimco Elecon (India) Ltd

Industrial Machinery

Market Cap.: ₹ 230.80 Cr.

Current Price: ₹ 400.00

Book Value: ₹ 386.79

Stock P/E: 14.20

Dividend Yield: 1.25%

Face Value: ₹ 10.00

Company is virtually debt free.

The company has delivered a poor growth of -5.42% over past five years.

Company has a low return on equity of 9.50% for last 3 years.

Net Profit: 16.25

For me doesn’t look good. 

Eimco was first to introduce intermediate technology of Side Dump Loaders (SDLs), Load Haul Dumpers (LHDs) & Rocker Shovel Loaders in India to partially mechanise the underground Coal and metal mines.

Eimco later introduced Face & Roof Drills, Coal Haulers, different models of LHDs / SDLs, etc. for underground mines. Eimco has also started manufacturing equipments for the construction segment.

Mining Industry:

Eimco has cash and liquid investments of around INR 115 cr which is 48% of the current market cap.

Eimco depends on Coal India for around 85% of its revenue. Management is trying to reduce dependence on Coal India by developing new products lines.

I can’t rely on government of India though .. they can void the contract give it to some other company

How automated is CIL?

Management efficiently launched Drill Machine product line. The trials started in 2009 and manufacturing in 2010. Eimco got the manufacturer status in 2011.

Valuation by cash flow and cash investment: 

Average CFO for Eimco Elecon over 5 years: Rs. 27 cr.

Cash & Investment in mutual funds/stocks at the end of FY2016: Rs. 115 cr.

If free cash flow can cover 1/3rd of the interest part that much money a bank can give comfortably so even at 12% interest rate a bank can give  75 cr with 9cr as interest per year

If Eimco Elecon borrows Rs. 75 cr, the overall cash position will improve from Rs. 115 cr to Rs. 190 cr (115+75). Eimco Elecon has outstanding shares of 0.6 cr.

New cash & equivalent per share = (190 / 0.6) = Rs. 317