Man Industries - Educational analysis

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Stock Analysis: Suyog Telematics

Hi All

My next stock which i have found extremely exciting in the current market scenario and the growth the company has shown is Suyog Telematics

Current Price as of 21-01-2019	207.6
Market Capitalization (Cr)	217.3

The Company is a passive telecom infrastructure provider, engaged primarily in the business of Installing and commissioning of poles, towers and optical fibre cable systems since 1995. 

It is registered as Infrastructure Provider Category-I (IP-I) with Department of Telecommunications (DoT).  The company has a strong presence in the government sector in Mumbai supported by the fact that it has sole licensee to install towers and poles for Mumbai Metropolitan Region Development Authority (MMRDA) and Mumbai State Road Development Corporation Ltd (MSRDC) sites across Mumbai region such as flyovers, sea link and skyways. The exclusive licence from government agencies ensure stable revenue growth and profitability.


STL also has signed master service agreement with all the major telecom operators and caters to companies such as Reliance Jio Infocomm Ltd , Vodafone India Ltd , Bharati Airtel Ltd and various other service providers for installing the signal towers and poles. 

Recently on 17th Jan 019, it has successfully able to obtain License from Mumbai Metropolitan Region Development Authority (MMRDA),for installation of cellular equipment across all 17 Monorail stations of Mumbai which in my view is a big news for this company and the potential it might have.

https://www.bseindia.com/xml-data/corpfiling/AttachHis/2c9f373f-e8e5-4ba3-85df-51646298276d.pdf

Shareholding

- 49.63% promoter holding ( 39.29% of Promoter holding is Pledged)

- 50.37% Non Institutional holding

Raw Material : Fibre & Metal Products, Cables, Pipes and Other Items

Products

1. Tower Business : The are in the business of installing Mobile Towers and providing the same to telecom service providers on a sharing basis. They have a tenancy ratio of 1.8 per tower. These telecommunication towers are being used for all technologies like CDMA, 2G, 3G, and 4G. Their Towers are normally in range of 6 meters to 30 meters in height and are considered structurally stable assuming a wind speed of 180 km per hour. 

2. Poles Business :Since it is not possible to erect regular network towers etc atop flyovers/bridges they have spearheaded the concept of Poles for telecom infrastructure. They have deployed a huge number of Poles and Infrastructure on lease over several MSRDC Flyovers, Bandra - Worli Sea Link Project, MMRDA Flyovers as well as Skywalks in and around Mumbai and have also installed BTS equipments on poles for the telecom service providers. They have covered all the 3 Main Routes of Mumbai (Sion Panvel Highway, Eastern Express Highway & Western Express Highway) along with critical South Mumbai Area through our innovative pole concept solution. They have recently started working in NHAI projects & are installing similar flyover sites in Bangalore. Further, they have also worked on the concept of installing BTS on Poles in local areas where there is severe traffic and congestion in collaboration with the local Police Authorities, whereby they install poles in places such as Check Naka’s, Near Railway Stations, Near Market Areas, Slum Areas etc and also install CCTV Cameras for the Police Department in such Poles in order to help them with their surveillance mechanisms. Clients using their poles infrastructure include Airtel, Reliance Jio, Vodafone & Idea Cellular. 

3. Optical Fiber Network Business: they have set up our own optical fiber cable network of about 200 km from Thane Ghodbunder Road to Kalamboli & on all flyovers, skywalk & FOB Sites in Mumbai Metropolitan Region. In addition, their OFC network, fiber has been laid in ducts intended to provide added protection and to allow us to lay more fiber as demand increases. We have provisioned extra ducts throughout our OFC network, with the majority of our OFC network having been laid with eight ducts. The average age of our ducts is thirty years, and the expected life span of such ducts is approximately thirty years. Our OFC network is laid about 2 ft below the ground for protection against natural elements and human intervention. They have also started laying our Fiber Optic Network in Bangalore Circle.

Valuation Parameter:

1. P/E : 9 vs Industry Peer ~21 (eg: Bharti Infra)
2. Sales growth in Last 5yr 57%
3. EBIT growth in last 5yr 60%

While Price has fallen has fallen around 50% of the company, earnings have increased by 20% during this time and at this moment P/E looks extremely attractive.

Growth Plans The Company is growth oriented in its approach and has made certain decisions for expansion of its operations:

• The company has extended its operations into NHAI projects.
• They are expanding our presence in Bangalore Circle with plan of rolling out 1000+ flyover pole sites
• They are also planning to expand our presence in Gujarat Circle in current FY
• The company is focused to increase the slum site tenancies from existing 1.8 to 2.
• The company is planning to provide fiber connectivity to all Reliance Jio & other incumbent operator sites in Mumbai & Bangalore – mainly flyovers, skywalks, and FOB sites. This initiative will ensure strong presence of the company is fibre business.
• They would also be capitalizing on their expertise in rolling out Small Cell Sites which is the next wave of deployment growth.

Profit & Loss
Report Date	Mar-15	Mar-16	Mar-17	Mar-18
Sales	21.71	43.75	60.54	84.61
Operating Expense	13.14	20.17	31.73	51
Raw Material Cost	0.82	16.89	26.58	38.87
Change in Inventory	0	0	0	0
Power and Fuel	0.02	0.01	0.02	0.04
Other Mfr. Exp	0	0.01	0.07	0.11
Employee Cost	1.14	2	2.59	4.3
Selling and admin	0.83	0.81	2.39	2.49
Other Expenses	10.33	0.45	0.08	5.19
Operating Profit	8.57	23.58	28.81	33.61
Operating Margin (%)	39.5%	53.9%	47.6%	39.7%
Other Income	0.01	0.11	3.06	2.38
Depreciation	1.5	2.73	3.16	4.42
Interest	1.69	2.69	5.09	7.64
Profit before tax	5.39	18.27	23.61	23.92
Net profit	3.37	12.06	16.95	18.48
Quarters
Report Date	Dec-17	Mar-18	Jun-18	Sep-18
Sales	22.63	22.39	24.2	26.52
Expenses	11.5	18.72	12.46	12.06
Operating Profit	11.13	3.67	11.74	14.46
Operating Margin (%)	49.2%	16.4%	48.5%	54.5%
Other Income	0.6	0.97	0.48	0.51
Depreciation	1.11	1.21	1.42	1.43
Interest	1.87	1.86	1.67	2.21
Profit before tax	8.75	1.57	9.13	11.33
Net profit	6.18	2.8	7.02	7.59
BALANCE SHEET
Report Date	Mar-15	Mar-16	Mar-17	Mar-18
Equity Share Capital	8.46	8.46	10.15	10.15
Reserves	14.53	26.59	41.5	59.52
Borrowings	12.62	27.35	60.59	61.05
Other Liabilities	7.89	21.61	25.85	29.18
Total	43.5	84.01	138.09	159.9
Net Block	20.25	39.36	67.64	86.42
Capital Work in Progress	2.29	4.33	5.5	4.73
Investments	1.08	1.08	1.08	1.08
Other Assets	19.88	39.24	63.87	67.67
Receivables	2.69	10.98	12.98	11.77
Inventory	0.79	0.41	1.08	1.54
Cash & Bank	0.23	4.28	1.45	1.88
others	16.17	23.57	48.36	52.48
Total	43.5	84.01	138.09	159.9
CASH FLOW:
Report Date	Mar-15	Mar-16	Mar-17	Mar-18
Cash from Operating Activity	3.88	1.84	-0.79	32.73
Cash from Investing Activity	-10.55	-10.55	-26.56	-21.03
Cash from Financing Activity	6.58	12.75	27.76	-12.01

With all these factors this company can certainly be an interesting company to watchout for :) Please note that i am not a SEBI registered analyst and my views are purely educational. I have investment in this company so my views might be biased

Regards

Microcapblaster

IPO Review: Axita Cotton

Hi All - Upon multiple requests till now to reviews upcoming IPO, i have added this feature in my sites so that can do fundamental review of the company.

AXITA COTTON : AVOID

Links:

Prospectus
website

Stock analysis: GNA Axels

Hi Friends - Market has started to recover from it recent lows and last week have seen quite a lot of stock recovering by 15-20% from its lows levels.

My next stock which i am analysing today is GNA Axles.

Current Price as of 18-12-2018	357.6
Market Capitalization (Cr)	767.49

About the company:
GNA Axles Limited (GAL) is a Jalandhar based company, incorporated in the year 1993. GAL is the flagship company of the GNA group, set-up in the year 1946 for manufacturing of auto components for commercial vehicles, tractors and offhighway equipment. The company is engaged in the business of manufacturing and supplying axle shafts and spindles (ranging from 2 kg to 150 kg) to OEMs and Tier-1 suppliers. GAL has its manufacturing facilities located in Hoshiarpur, Punjab with an installed capacity of ~4 million pieces per annum, as on March 31, 2018.


Products

(i) Rear axle shaft
Rear axle shaft is the primary product of the Company which contributes to 82.73 % of its revenues and 77.22% of components manufactured in FY18. The Company has a large variety of axle shaft s ranging from 1.5 kg to 65 kg and with a capacity to manufacture up to 165 kg. Our long-standing global presence is owed to the experience in development and manufacture of this product.

(ii) Spindles
Spindles GNA manufactures spindles for on-highway vehicular segments. Spindle is a part of axle housing assembly of an automobile. Spindles contributed to approximately 12.01% of its FY18 sales and 12.58% of components manufactured in FY18.







(iii) Other shaft:  GNA manufactures other shaft s including drive shaft, power take-off shaft s, hydraulic lift shaft s and transmission shaft s. These shaft s are a part of transmission assembly of an automobile. Other shaft s contribute 5.26 % of its FY18 revenues and 10.20% of FY18 components manufactured.

Customer base:
GNA’s customers have been an integral part of the 25 years of success story. The Company works in tandem with the customer’s requirements across the automobile segment and delivers solutions as per their needs. Today 100% of the customers have been with the Company for over 15 years. The Company’s customers include global OEMs and tier-I suppliers such as Dana Limited (USA, Mexico and Brazil), John Deere (Brazil), Kubota Corporation (Japan) and Meritor HVS AB (Sweden, Italy, Brazil, USA, China and Australia), as well as leading Indian OEMs and tier-I suppliers such as TAFE, International Tractors Ltd, Escorts Limited, Axles India Ltd, Automotive Axles Limited and Mahindra & Mahindra Ltd.

Growth Drivers:

One of the major factors driving the growth of the rear axle market is increasing global automotive production. Further, the increasing need for high capacity lift ing applications is fuelling demand for the rear axle market. Moreover, logistics operations of heavy weight equipment such as electrical machines and new vehicles is expected to increase the adoption of rear axles in the near future. OEMs forming strategic alliances with manufacturing equipment providers to cope with the demand from vehicle manufacturers is a major trend identifiEDd in the global automotive rear axle market.

During the year they successfully installed new capacities and also debott lenecked our production facilities. 

The effect of this has been seen in their sales and revenue and should only improve and consolidate their position with time to come.

For the year 2018-2019 they are focusing on the following parameters to achieve our targets:

1) Increasing our capacities to meet the enhanced demand  to increase their market share in both Domestic and Export Markets.
2) To Strengthen their operational efficiencies.
3) To penetrate into newer markets and new customers. they are looking to further strengthen their relationship with our Customers both in the Tractor segment and Commercial Vehicle Segment in India and overseas and are also working to establish their foot print in the new segment i.e SUV Axle Shaft .



As they are operating in the Auto Component Industry, their performance is dependent on the fortunes of the auto Industry. Indian Automobile sector is on a growth path and is poised to grow on the back of growing Incomes in the rural areas and the growth impetus given by the Government to the Rural Economy. The Commercial Vehicle segment is also poised to perform well due to increased infrastructure and economic activity in the country. The commercial vehicle industry in North America and Europe is faring well and the growth of the same is also expected to continue in the future years also.

Risk:

(i)  Any downtrend in the abovesaid sectors can hamper the growth momentum of the Company. To mitigate this risk, the Company has decided to venture into a new segment of SUV Axle Shaft. The Construction of the factory shed is complete for the said Unit and the machineries have started arriving and the management expects to start the commercial production from the said unit in the fiscal 2019-20.

(ii) GNA has certain key customers which are core for its business and its growth and while the business with key customers has increased, the Company, as in the past, has been trying to mitigate the risk of its dependence on certain customers by making its customer base broad and also diversifying its product portfolio.


Financial performance:

- The Company posted a net operating revenue growth of 30.53% this year up from 51340.96 lacs in FY2016-17 to 67013.52 lacs in FY2017-18.
- The Company posted an EBITDA growth of 27.08% this year up from 8334.78 lacs in FY2016-17 to 10591.96 lacs in FY2017-18.
- The Company reported a PAT growth of 71.92% this year, up from 2959.73 lacs in FY2016-17 to 5088.43 lacs in FY2017-18.
- With the overall support and good performance by team GNA the production and the sales volumes touched new peaks couples with the improvement in all spheres. The operating revenues grew by 30.53 % touching 67013.52 Lacs and the net profi t jumped 71.92 % to cross the 5000.00 lacs milestone. The production volumes increased on the back of increased demand for all the product segments of the Company both globally and domestically.
- Their Export volumes growth was on the led by robust demand of the Commercial Vehicles in Europe and North America which are our key export markets. As India sold a record number of tractors touching 7,11,000 units in the year 2017-2018 helped the Company to grow its sales domestically as well.

Profit & Loss
Report Date	Mar-15	Mar-16	Mar-17	Mar-18
Sales	430.07	508.52	513.41	670.14
Operating Expense	369.67	426.17	432.96	567.09
Raw Material Cost	293.4	330.34	322.75	458.16
Change in Inventory	14.89	12.83	4.21	33.14
Power and Fuel	30.01	36.96	40.64	47.82
Other Mfr. Exp	19.29	18.05	19.14	21.49
Employee Cost	18.47	23.72	27.12	31.85
Selling and admin	23.16	29.41	26.78	39
Other Expenses	0.23	0.52	0.74	1.91
Operating Profit	60.4	82.35	80.45	103.05
Operating Margin (%)	14.0%	16.2%	15.7%	15.4%
Other Income	0.57	0.42	2.9	2.87
Depreciation	22.98	27.17	23.94	24.8
Interest	17.26	16.29	12.52	7.09
Profit before tax	20.74	39.31	46.89	74.03
Net profit	21.6	25.96	29.6	50.88
Quarters
Report Date	Dec-17	Mar-18	Jun-18	Sep-18
Sales	167	204.52	212.58	227.25
Expenses	140.14	175.01	180.96	191.37
Operating Profit	26.86	29.51	31.62	35.88
Operating Margin (%)	16.1%	14.4%	14.9%	15.8%
Other Income	0.42	0.67	0.13	0
Depreciation	6.2	6.26	7.94	8.62
Interest	1.34	1.85	2.3	1.8
Profit before tax	19.74	22.07	21.51	25.46
Net profit	12.68	16.45	14	16.24
BALANCE SHEET
Report Date	Mar-15	Mar-16	Mar-17	Mar-18
Equity Share Capital	15.17	15.17	21.47	21.47
Reserves	97.64	123.14	275.44	319.96
Borrowings	153.22	138.63	117.29	142.32
Other Liabilities	160.43	169.59	163.04	198.54
Total	426.46	446.53	577.24	682.29
Net Block	159.33	147.31	131.74	190.69
Capital Work in Progress	0.42	0.05	2.53	0
Investments	0	0.01	0.01	0.01
Other Assets	266.71	299.16	442.96	491.59
Receivables	121.85	162.08	182.27	235.47
Inventory	91.94	91.37	110.29	153.64
Cash & Bank	0.42	0.67	72.45	26.09
others	52.5	45.04	77.95	76.39
Total	426.46	446.53	577.24	682.29
CASH FLOW:
Report Date	Mar-15	Mar-16	Mar-17	Mar-18
Cash from Operating Activity	27.01	74.47	-90.3	59.71
Cash from Investing Activity	-14.46	-16.38	-7.96	-78.36
Cash from Financing Activity	-12.65	-58.36	97.97	18.71

Please note that this is a educational website . I am not a SEBI registered analyst and my views might be biased. I have not got any consideration from the company to write this report not do i have any holding/interest in the company in last 30days.

Stock Analysis: Vedanta Ltd

Hi All - My today's analysis is rather on a large-cap company instead of a small cap. Its none other than Vedanta.

Vedanta
- Market Cap 80K Cr
- Current price - 214.3
- 52 Wk H/L : 355/197


About the company- Owned majorly by Vedanta Resources, a metal, mining, power, and oil-and-gas company- Vedanta Resources holds 50.1% stake in Vedanta- The group's copper, iron ore, aluminium assets at Jharsuguda and Lanjigarh in Odisha and power divisions (2400-MW and 1215-MW captive power plants for the aluminium business), are in Vedanta. The group also has aluminium operations through Balco.- The copper business comprises mining and smelting operations in Zambia.

Key Financial Indicators: ParticulaRs. Unit 2018 2017 Revenue Rs. Cr. 92,975  73,091 Profit After Tax Rs. Cr. 13,692 11,316 PAT Margins % 14.7 15.5 Adjusted Debt/Adjusted Net worth Times 1.3 1.7 Interest coverage Times 5.7 4.4

Key features which actually makes this company extremely attractive at this share price

(i) Promoter holding is > 50% ... its 50.14% as per the latest shareholding statement
(ii) Current price of 214 is almost a 40 % correction to its 52 week high of 355 . The company fundamentals have only improved post its acquisition of Electro steel (90% stake ) while continuous growth in the profitability. It's just a matter of time before it goes back to its previous levels.
(iii) The complete portion of the company holding is unpledged.
(iv) Price to earning is just 6.55 which is almost 1/2 of its closest peer of Hind Zinc of 13 which again is pretty cheap on how the company has been performing.
(v) The company has a dividend yield of ~10% which is extremely good in current market conditions.
(VI) The company has good consistent profit growth of >25% over last 5yrs and its expected to keep growing at CARG of 25% for next 2-3yrs at least more.

With all the above features and good growth aspects in mind - do you think the above price justify an investment in this company? i think the answer is Yes.

Note: I am not a SEBI registered research analyst. I have an investment in this company around the current market price so my views might be biased.

Stock Analysis: Companies which are betting on massive investment

Hi All

Today I will talk about three companies all of which are betting on a massive investment. These stocks have a long gestation period, however, I am very confident 2 out of these will surely be able to product 2-3x return.

All of these company have four things in common

(i) Capacity expansion almost 2-3x of its current capacity
(ii) Massive capital expenditure for future expansion almost 2-3X of its Market cap
(iii) No fancy historical statement so the historical analysis is irrelevant for these companies as these are potential small cap companies from its current phase of Microcap
(i) due to small-cap and mid-cap crash, the company share price has dropped to almost 52 week low which makes it extremely attractive given above three fawith

witho above three themes in mind lets examind the three companies

Stock 1: Shri Keshav Cement & Infra Ltd (CMP: 81)

Market Cap: 41Cr
If you look at the past performance of this company then you won't find anything fancy to be honest. Profit has been all time low.

Lets now focus on the recent cash flow of the company . we can see that company has made massive investment in the plant and machinery which is almost 2 times its market cap of 40cr.

The company did disclose in its annual report that company it has set-up 20 MW Solar plant at Bisarahalli Village in Koppal, Karnataka. The project was financed by Bank and successfully commissioned in March 2018. Due to Karnataka State policy to promote Solar investment, company is exempted from Wheeling & Banking charges and cross subsidy charges for Ten years. Currently Wheeling & Banking charges are 7% and Cross subsidy charges are INR 1.52 per unit. The power cost is expected go down significantly and expect new revenues from selling excess power generated.

Just few days after that company also did the below BSE announcement:

With respect to the above stated subject, Karnataka State Government permitted M/s. Shri Keshav Cements and Infra Limited to sell the excess solar energy produced in open market.20 MW solar unit was commissioned in March 2018.

link :https://www.bseindia.com/xml-data/corpfiling/AttachHis/0a85df3d-878f-483f-a3c7-e193fa201bd3.pdf

Given this mega update, i do expect company to show much better financials going forward.

Stock 2 : Damodar Industries Ltd (CMP :100)
Market cap :110Cr

The Damodar group is in the textile industry for more than three decades which has helped the company to establish strong relationships with almost 500 customers such as Arvind Mills Limited, D Decor Exports Private Limited, Donear Industries Ltd, and Siyaram Silk Mills. Moreover, it has an established clientele in China, South Korea, Bangladesh, Europe, the United States of America, and Egypt. Also, the Damodar group has established relationships with suppliers such as Reliance Industries Ltd 

Now like above company, there is nothing fancy with the past performance of the company while looking at the cash flow , this company is also making a huge expansion which is almost 2 times its market cap which caught my eye.

DIL is undertaking capital expenditure to set up a manufacturing facility at Amravati, budgeted at Rs 172 crore, funded in debt-to-equity ratio of 2:1. Phase 1 of the facility became functional in May 2018 and phase 2 is expected to be operational in August 2018. The entire plant is expected to be commissioned in April 2019.

 The company has already commenced the land and site development work, building & civil work, etc. The company has already initiated procurement of plant and Machinery and looking forward to its delivery, erection and commissioning of the same. On the basis of the progress made so far, the implementation of the project is going as per schedule and barring unforeseen circumstances the project would be completed as per schedule


Stock 3 : Manaksia Coated Metals & Industries (cmp: 8.5)

Manaksia Coated Metals & Industries Ltd (MCMIL) was incorporated on March 25, 2010 and was a dormant company till October 01, 2013 when the coated metal division and mosquito coil division of Manaksia Ltd (ML) were transferred to it under the scheme of demerger.

MCMIL has a colour coating line capacity of 39,000 MTPA in Kutch, Gujarat. The company is also into manufacturing of mosquito repellent coils. MCMIL is setting up a 1,08,000 MTPA Continuous Galvanizing line (CGL) for manufacturing of Galvanized steel coils/sheets at its existing plant at Kutch, Gujarat at a cost of Rs.74.61 crore. The project is expected to become operational in Q4FY18.

PLEASE NOTE THAT I AM NOT A SEBI REGISTERED ANALYST. I HAVE HOLDING IN THESE COMPANIES AROUND CURRENT PRICE AND MY VIEWS MIGHT BE BIASED.

Stock Analysis: SREI Infrastructure Finance Ltd

Company name:  SREI Infrastructure Finance Ltd
CMP: 38
Stock P/E : 5.27


(1) Company Overview

• SREI Infrastructure Finance Ltd, a Kanoria foundation entity, is one of India’s largest holistic infrastructure institutions delivering innovative solutions in the Infrastructure space.
• It has been engaged in leasing and hire purchase / hypothecation financing of construction equipment and financing of infrastructure related projects. 
• The company has been in this business for nearly three decades, and with a customer base of 77,000 and over USD 7 bn of consolidated AUM. It is one of the largest player in the infrastructure segment.

(2) Key Businesses And Strategy

(3) This was the main reason for my recommendation.  In the 2018 annual report, we can see that a company has made fixed asset investment which is more than its market cap which was the main thing which caught my eye. Imagine a company with a market cap of 2,300 cr making an investment of 2700 cr.

We will now look into below what is company plans

Asset Finance Business

• Leading financier in the Construction, Mining and allied Equipment (“CME”) sector in India offering loans and leases for new as well as used equipment • Promoted and 100% owned by Srei Infrastructure Finance Limited which has over 27 years experience in CE finance 

• Over 32.7% market share1 and customer base of 64,000+ current customers2 

• Distribution network of 89 branches across 21 states, 77 additional satellite locations and an employee base of 2,005 employees2 

• Strategic pan-India penetration through 120 SEPs2,4 and 191 OEMs partnerships2 

• Present across Tipper, IT, Farm & Medical Equipment Financing segments 

• Gross Earning Assets of INR 254,171 Mn2 with a 2.5 year CAGR of 15% 

CME Financing Industry: Poised for Growth

 Better geographic reach 

 Offer faster TAT1 

 Tailor made schemes 

 Higher LTV2 than banks 

 Simple documentation 

 Flexible terms

 Key Business and Strategy

Well positioned to access customers in the growing Indian infrastructure financing sector

 Since FY11, CME financing industry was dominated by NBFCs and select Banks 

 Currently, SEFL is the only end to end solution provider across the entire CME value chain 

 Disbursements of SEFL are the highest among the top five CME finance companies 

Equipment Centric Model Pushed by Long Standing OEM Tie-ups

• Financing of new and pre-owned Equipment 

• Equipment maintenance assistance through spare parts financing 

• Deploying financed equipment to projects 

• Branded refurbished equipment financing solutions 

• 77 stockyards across the country offer exit services efficiently 

Srei Entrepreneur Partners (SEPs)

 Exclusive distribution partners, SEPs, help in sourcing customers and ensuring regular repayment  Local risk insight and ground presence facilitates: • Customer acquisition • Screening • Broadening of market coverage 

 120 SEPs across the country

(4) Key Investment Highlights

A- Strong Growth Outlook  

• Increased outlay for Infrastructure & affordable housing to boost demand for CME 
• CME Finance expected to grow at a CAGR of ~ 19% up to FY20 
• Srei being the market leader is best positioned to ride this growth

B- Diversifying within Core Business

• Expanding Segment CME - Material Handling Equipment, Tipper , Used Equipment and Spare Parts 

• Expanding the Asset finance portfolio beyond the traditional CME segment i.e, Healthcare, IT, Rural 

• Provide Asset life cycle solution 

• Moving towards complete digitized platform to enhance customer experience

C- Improving Underwriting

• Leverage experience of being into infra sector for the last 28 years

• Improved credit underwriting through better insight & data analytics through digitization 

• Strategy beyond Asset writing - Down selling of portfolio to increase income through velocity

D- Cost Improvement

Maximize return through 

• Focus on PSL portfolio – Increase Securitization 

• Optimise borrowings and explore alternate avenues of funding to reduce cost. 

• Operating Leverage – Larger scale will optimize cost 

(7) Company price

Company price has corrected from a high of 120 in Nov 17 to almost 50's while the company has continued to report good profit on continuous basis QoQ. This fall is more due to small cap crash rather than company fundamentals. This makes the company price extremely attractive.

When compared with Peers, its not only one of the cheapest P/E share available right now but also one which has been declaring consistent dividend and showing consistent profit growth

As we can see below, the company has continued to show a strong profit and sales growth despite a decline in stock price 

Given the strong investment made by the company and the recent correction in share price while company constantly displaying strong financials makes this company an extremely attractive in current market condition.

Please note : The above case study was more for educational purpose. I am not a SEBI registered research analyst and my views might be biased. I have no investment in above stock.

Stock Analysis: Ahlada Engineering

Website: http://ahlada.com/
NSE SME IPO : Open till 18th Sep

Its a must subscribe IPO...below are the details about the company and why i am super positive on it

(1) The company is in the business of manufacturing steel doors and windows (steel-frame) and we cater to customers across various segments and industries. They currently have our facilities spread across 3 manufacturing units in addition to one assembling unit and stockyard, with an area admeasuring 34,211 square yards on the outskirts of Hyderabad. Additionally, they are also in the business of manufacturing cleanroom equipment for our customers in the pharmaceutical, biotechnology and food industries.

Below are the products of the company

(2)  Gradually expanding our manufacturing facilities and have over the past decade, expanded the facilities to its current form and capacity. Presently, they have an installed capacity to manufacture 11,000 doors per month.

(3)  Revenues and profitability for the last three years are depicted below:

(4) Ahlada is shifting its focus from clean door to steel door. They have got a big order from Tata steel for Pravesh door brands and this is the main reason why they are going for the IPO so that they can scale up their operation and meet the order

https://www.business-standard.com/article/companies/ahlada-engineers-takes-ipo-route-after-exclusive-biz-deal-with-tata-steel-118091000378_1.html

Also go through the website which will give you further information about this order

http://www.tatapravesh.com/

Management wants to expand their door supply from 11000 doors to 36000 doors per month with the proceeds of this IPO. 

Below are the IPO Details

Issue Open Date

11-09-2018

Issue Close Date

18-09-2018

Listing Date

N/A

Face Value (Rs)

10.00

Offer Price/Range (Rs)

147.00-150.00

Issued at (Value)

Premium (140.00)

Issue Size (Retail)

1131900.00Shares@150.00/share

Issue Type

Public Issue (Book Building)

The asking P/E of this IPO is around 24 however if we focus on the massive expansion which is expected then Forward P/E is in the range of 6-7 which I think its extremely cheap and with strong order book giving the backing to the management, this looks an extremely lucrative IPO to apply for esp with TATA backing.

Please note that I am not a SEBI registered. This is an educational website and given that I am applying for this IPO too so my views might be biased.