MARKET MIND
There is nothing in the numbers to suggest a simmering volcano. But, remember the principal behind this company, ~394 crore in customer advances on its books likely to become revenues in FY17, an impending net worth-enhancing Zandu Realty merger (with a disproportionately lower increase in equity capital), asset-light pan-Indian project launches — and a market cap of only ~165 crore at a time when the illustrious parent is valued at ~23,500 crore. Opportunity.
Shilp Gravures: The company is a leading Indian engraving house with a chemical etching facility, offering electronic engraving for gravure printing, specialised coating applications and flexo printing. The third quarter results were a downer: Ebitda precipitated from ~4.19 crore in the second quarter to ~2.76 crore. This is why I would back the management: The company reported 23 per cent Ebitda margin in the second quarter and 17 per cent in the disastrous third; in the worst quarter, interest cover was in excess of 9x. If (big if) the company can merely replicate Q2 across the four quarters of 2016-17, that would be an Ebitda of ~17 crore. A steady other income indicates around ~10 crore cash on the books against a market capitalisation of less than ~50 crore. By jove.
Haldyn Glass: Revenues across the last two quarters increased ~3.46 crore; Ebitda increased ~3.58 crore. Interest cover in excess of 55x indicates the company is funds-flush in a capex-intensive business. Consider the Ebit momentum across five quarters: ~3 crore – ~3.37 crore – ~2.96 crore – ~4.89 crore – ~8.38 crore. Market cap around ~235 crore. There is a new twist to the story: Haldyn Glass is on the verge of commissioning a joint venture with Heinz Glas International GMBH, Germany, for the manufacture of perfume and cosmetic glass bottles, benefits of which should reflect from 2017-18.
Webel SL Energy: The company is engaged in the manufacture
MUDAR PATHERYA
of solar photovoltaic cells and modules. Ebitda increased from ~4.58 crore in Q2 to ~7.97 crore in the third quarter. This is what I like: Capacity increased from 120 Mw to 200 Mw effective December 2016; it is virtually zero-debt following financial restructuring; it is adequately de-risked from sectoral price meltdown; interest outflow was negligible, order book is multi-month, production take-off has commenced and this is perhaps the only listed presentable post-restructured balance sheet in a loss-laden sector passing through its biggest expansion phase in its history. Market cap: ~113 crore.
Asian Oilfield: The new management assumed control in the second quarter of FY17. The management turned the company around in Q3 (its first in control). I have three broad clues on the way forward: Bullish downstream prospects, dearth of listed seismic exploration players and a hefty inflow of maintenance orders. The stock did a rope trick on Friday, so I am keeping vigil for an opportune decline.
In the meantime, can anyone lend me some punt money?