On the face of it, no significant change in status quo. It reported a standalone Ebitda (earnings before interest, tax, depreciation and amortisation) of ~270 crore in the second quarter of the current financial year. Assuming it maintains this run rate across subsequent quarters, it should report an Ebitda in excess of ~1,000 crore, against prevailing market capitalisation (mcap) of ~4,000 crore. The two probable triggers that could re-rate the company: Revenue increase and decline in interest outflow, a good incentive to stay plugged in. Godawari Power & Ispat: It is riding a sectoral rebound. Consolidated EBDT (earnings before depreciation and tax) has strengthened dramatically in the past four quarters —from ~8.01 crore to ~8.55 crore to ~72 crore to ~87 crore. Interest outflow has been relatively steady, around ~66 crore, across the quarters. The m-cap appears modest at ~590 crore; those who buy into the counter would be happy for another unmistakable flash: Increased revenue and decline in interest outflow (quite like dear J Saw). Dixon Technologies: Not the kind of company – manufacturing consumer electronic products - that one would give a second glance because of the sector, but wait, look at the numbers. It is not the sharp revenue growth from ~430 crore in the first quarter of FY17 to ~685 crore in the first quarter of FY18 to ~877 crore in the second quarter that surprises. It is something else that evokes a wow: Interest outflow was around ~3.5 crore against an Ebitda of ~37 crore in the second quarter, indicating even as the sector might be challenging, the company’s operating model could well be the stuff they write case studies about. M-cap: ~3,800 crore (oh no!).
Automotive Axles: Just when one would have assumed the automotive sector would have affected the balance sheets of most ancillary companies, here comes this surprise. Ebitda increased from ~30 crore to ~41 crore across successive quarters. Interest outflow is down to a few lakhs, which means only one thing: The company is virtually swimming in cash, at a time of sectoral take-off. M-cap: ~2,000 crore. MIRC Electronics: The only reason to review this company for the second time in the past few months is perseverance. When no one would have touched an Indian electronics product company, MIRC has surprised: It has beaten its March quarter record Ebitda performance of ~15.93 crore with ~16.84 crore in the September quarter. My first crosscheck: Is the company ‘ buying’ revenue? The fact that interest outflow continued to be below ~5 crore for a third successive quarter indicates a compelling story brewing here.