Business Standard

MARKET MIND

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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!).

MUDAR PATHERYA

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.

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