Wednesday, January 17, 2018

BHANSALI ENGINEERING POLYMERS LIMITED - RESULTS FOR Q3 FY 17-18 - Q/E DEC'2007


BHANSALI ENGINEERING POLYMERS LIMITED

RESULTS FOR Q3 FY 17-18
Q/E DEC'2007


BHANSALI ENGINEERING POLYMERS has declared excellent Results for the third quarter ending December'2017. The results are here under.

BHANSALI has also chalked up impressive expansion plans for the future.

The company says the following in its Results :

1. The effort to tie up Technology and selecting the Port-based Green field project location is shaping up fast.

2.Captive manufacturing programme for HRG and Bulk SAN at this location will be based on state of the Art technology. substantial savings in logistic cost and benefit of economies of scale result in cost and quality competitiveness against International Giants in ABS manufacturing field.

3. This project is likely to be commissioned by 31.03.2021 (and not 2022 envisaged earlier).

4.At Abu Road, - capacity expansion will be - (i) 100 KTPA ABS capacity to be completed by 31.03.2018 at Rs.20 Crores. (ii) 137 KTPA by 31.12.2018 at Rs.30 Crores. Total Rs.50 Cr.

5. Growth momentum minimum at 15% CAGR beyond 2019 - through imports

6. R&D centre at Abu Road is likely to be completed by 31.12.2018 at Rs.20 cr. Later, it will be shifted to New R&D cemtre at Port based location.

All this indicates that company's expansions will be continuous and will cater to all domestic needs in future, import substitution and potentially, exports to other countries also later in the future.



BHANSALI ENGG Dec '17 Sep '17 Jun '17 Mar '17 Dec '16 YOY QOQ
Net Sales 257.93 247.94 224.03 192.73 122.95 109.78 4.03
Other Operating Income -- -- -- 0.12 --

Total Income 257.93 247.94 224.03 192.84 122.95 109.78 4.03
EXPENDITURE






Raw Materials 147.31 142.53 152.55 158.63 113.44 29.86 3.35
 Traded Goods 35.99 13.68 4.16 -- --
163.08
Increase in Stocks -0.11 22.08 11.34 -13.8 -22.98 -99.52 -100.5
Employees Cost 10.83 8.91 7.8 8.54 6.2 74.68 21.55
Depreciation 1.55 1.54 1.52 1.37 1.37 13.14 0.65
Other Expenses 20.61 22.93 18.65 17.55 17.18 19.97 -10.12
P/L Before Other Inc. , Int., Excpt. Items & Tax 41.76 36.27 28.01 20.55 7.74 439.53 15.14
Other Income 5.56 2.04 0.83 6.39 0.44 1163.64 172.55
P/L Before Int., Excpt. Items & Tax 47.32 38.32 28.84 26.94 8.18 478.48 23.49
Interest 2.25 2.48 1.11 2.61 2.29 -1.75 -9.27
P B T 45.08 35.83 27.73 24.33 5.9 664.07 25.82
Tax 16.02 10.73 10.84 9.26 2.84 464.08 49.3
Net Profit 29.06 25.1 16.88 15.06 3.06 849.67 15.78
Equity  16.59 16.59 16.59 16.59 16.59 0 0
Basic EPS 1.75 1.51 1.05 0.91 0.18 872.22 15.89
Diluted EPS 1.75 1.51 1.05 0.91 0.18 872.22 15.89
MP 195.7





PE 27.96








Note : This does not constitute a BUY / SELL / HOLD RECOMMENDATION

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STOCK INVESTMENT AND PORTFOLIO MANAGEMENT - PRINCIPLES AND STRATEGIES (Part 2)


STOCK INVESTMENT AND

PORTFOLIO MANAGEMENT

PRINCIPLES AND STRATEGIES
(PART 2)

Before you read this second Essay on stock Investment and Portfolio Management , you must have read the first Essay on the subject. at the link :



We will continue from where we left off in the first Essay.


1.  Do you think ,  (1) knowing about your country's economy, (2) knowing about sectors which are growing vs those which are sluggish, (3) knowing about companies which are growing vs those that are not growing ...etc is tough? Not at all.It is easy. Read any economic News paper, or read on financial web sites, or listen to any TV business channels - very quickly you will understand all these things. A 10+2 student can understand all this very clearly. Some of the most successful investors started their most successful investments at the age of 11 or 12.

2. There are so many wonderful web sites, which specialize in stock analysis and investment advice - like Moneycontrol.COM, Rediff, SCREENER.IN, ECONOMIC TIMES MARKET, INVESTING.COM, LIVEMINT, NSEINDIA, BSEINDIA, ETC as below :

3. Go to these web sites, thoroughly examine each feature and try to use them. You will in due course find great use in each of them for stock analysis, selection, buy and sell and so on. There are many other stock related APPs for your cell phone also like stockedge etc. All of them have wonderful features to enable you to make stock selection easy.You will in time establish some preferences. stick to them. They will be your friend, philosopher and Guide.

4. There are other tools also. I listen to all successful and established stock investors on YouTube. There again, you will like some better than others. Listen to them now and then. Don't go by their choices of stocks. But, their advice will be good. You must make your own personal choice of stocks to BUY and SELL always, even if you like some of your favourites' choices also.

5. You can also subscribe to some News Letters from reputed stock investors and Journals. If you like them,continue with them. Else,discontinue, if you find no real use.

6. Stock Market Operations can be clearly divided into the following segments : (1) Futures and Options (2) Initial Public offerings or IPOs (3) Margin Trading (4) short term Investing of less than one year (5) long term Investing of one year and more

7. I strongly advise you not to get into Futures and Options or speculative segment - unless and until you have sufficient money to bet and lose. Some people do succeed in them. But, most people lose their shirt in them. This is what some of the most successful stock Investors advise and I totally agree with them. But, you can always buy some good books and learn about them also - when you have some good gains in long term investing. Futures and options is - betting on the short term price movements with almost no regard for the fate of the underlying company's fate. Personally,I can predict long term trends of  most companies but not their day to day trends and hour to hour trends.  For me, that seems to be just Betting and pure speculation. Futures and Options traders use TECHNICAL ANALYSIS much much more than FUNDAMENTAL ANALYSIS. TECHNICAL ANALYSIS uses charts and Graphs of price Trends over a period of time and tries to find TRENDS. Then, the F&O TRADERS will bet on various stocks, based on these Trends.

For every Trader who feels the price will go up, there is another who feels, price will go down. Money gets transferred from one to another ultimately. Somebody has to lose and somebody has to gain. All may lose some times. Some times, you gain a few times in a streak and you feel like an expert - until you lose big. This happens often and on - until you realize that you are not an expert all the time. Huge Discipline to stay away from the trading when it is not opportune, discipline to book profits and losses in a timely fashion and huge amount of guts and patience (and luck) are required for success in F&O. 

I am in stock market to make money, not lose money. I am willing to wait for an year and more for making money. No problem.

8.INITIAL PUBLIC OFFERINGS : Long ago, the prices of the IPOs were controlled to ensure that investors have some initial gains at least on their purchase. I used to subscribe to IPOs till 2 decades earlier. Thereafter, the price control mechanism vanished. Today, most IPOs are highly priced and you never know if there will be some initial gains or huge losses on the very first day of listing. Some IPOs are good and predictable. Other than them, there is difficulty in predicting their future price trends. Therefore, readers are strongly advised to read all expert opinions, and assess if an IPO is worth subscribing for.

9. MARGIN TRADING :  Some brokerages offer you the facility of Margin trading in which  you pay just a small fraction of the amount for buying a particular company's shares, the balance amount being loaned to you by the brokerage. Buy first and then sell quickly, make your money with profit or loss and pay off the amount loaned to you by the brokerage.In general, I am averse to taking and using any LOANS for any share purchases - except in rare occasions. When you own a good company's shares already and the company is offering you a RIGHTS ISSUE at s very attractive price and you don't have money for buying the rights shares,  you may go for a short term loan or pledging your original shares for the loan. Otherwise, never go for loans for share purchases.

10. SHORT TERM SHARE TRANSACTIONS : People Buy shares today and dispose off in less than one year for various reasons like (1) domestic urgent needs  (2) after attractive price increase in the short term (3) to buy more attractive shares you discovered recently (4) to fund your rights issue purchases - and so on. Short term sales of shares with profits attract INCOME TAX and you must be prepared for it.  Brokers like ICICI Direct give you complete details of your short term gains on which you are liable for tax and  you can pay the tax on it. Some other brokers may or may not give the details in which case, you must keep track of them and pay the tax. This tax is called SHORT TERM CAPITAL GAINS TAX.

11.LONG TERM  SHARE TRANSACTIONS : If you keep your shares for one year or more than one year and then sell, the profits are not liable for INCOME TAX. Most successful stock investors prefer to keep their shares for long term. They say, this is the MOST PROFITABLE WAY  of stock investing. Make all your analysis before BUYING a good company's shares. Then, if you are satisfied BUY the shares with the amount you want to invest and just sit tight. Watch the quarterly and annual results,  expansions and other important events of the company. Do not bother much about day to day price rises and falls. In the long term - of one year and more, the company will certainly move up well and give you wonderful gains.

The capital appreciation will be very satisfying. Now, Government seems to be toying with the idea of taxing the long term transactions also to some extent. Personally, I feel, these must not be taxed at all. Investors, who stay with a company for one year and more, give great stability to the company and its operations. They feel like real owners of the company and participate in its progress in many ways. The company's income is any way already taxed, which means, the income of these owners, is any way, already taxed. Above that, whatever, dividends are given, they are again taxed at source itself. So, already, owners are taxed TWICE. taxing them a third time through LONG TERM CAPITAL GAINS TAX is unwise, unjust and bad for the corporate health also. Any way, we will see what the Government will do in the Budget.

12. Most of my advise relates to LONG TERM INVESTMENT in shares - which I consider as the MOST PROFITABLE WAY  of investing. You will find that many great Investors keep their shares for several years and even decades and don't bother about day to day price trends. Their Net worth has been increasing 100 fold and thousand fold too in course of time. That has not been the case with either speculators or short term investors.

13. Well. Their share investments are lasting several decades and even a life time in some cases. I will hazard a Guess work here. Another secret of these successful long term investors seems to be - their marriages also are lasting a life time !!! Stable here. Stable there. Patience here and patience there. For huge long term gains.

14. So, while selecting your companies (shares) and while selecting your brides, exercise all caution - and then stay with them happily.

15. We will continue with our principles of stock Investing further in the next post.


*  *  *  WILL CONTINUE  *  *  *






Sunday, January 14, 2018

INFOSYS - RESULTS FOR Q 3 FY 2017-18 - (Q/E DECEMBER 2017)

 

INFOSYS

RESULTS FOR Q 3 FY 2017-18

(Q/E DECEMBER 2017)


INFOSYS has declared its results for the third quarter ending December 2017.

Salil Parekh, the New CEO and MD told the infosys employees says -

SALIL PAREKH


“Thanks to your tremendous hard work, we had a strong performance in Q3. I have spent the last few days meeting several of you to learn as much as I can about Infosys....”

“Whether you are just starting out in the tech world or have been on this journey for a while, each one of you has such a passion for the work you do, such deep pride in being part of Infosys and the teams share such strong commitment to the Infosys values. It has been very energising for me...."

He added that he has reached out to clients who have responded with “similar enthusiasm,” and that “their messages endorse the strong partnerships that Infosys has built with them over the years, and there is so much respect in the way they see Infosys and the work we do for them”.

Salil Parekh talked about the digital disruption impacting the IT industry and all the client industries that Infosys serves.

“The opportunities in the market for us to create new areas of potential growth for them (clients) is immense,” says the New CEO.

"At Infosys, we have the strong foundation of our business. We have over 1,100 clients that trust us. 200,000 passionate employees- like you. The results of all your work in Q3 FY 18, that we announced earlier today, stand testimony to this,” he says.


“It’s important that each one of us stays focused on executing on our current priorities and reaching the goals that we’ve already set for ourselves. This will make it easier for us to move into action faster in April and achieve all that we will set out to do,” he adds.

Infosys Q3 revenues grew year-on-year by 8.0 percent in USD terms and 5.8 percent in constant currency terms. Operating margin improved to 24.3 percent from 24.2 percent in Q2 FY 18. Utilization excluding trainees rose to an all-time high of 84.9 percent, and FY18 revenue guidance in constant currency was retained at 5.5 percent-6.5 percent.

Profits for the three months ended December 31 rose to Rs 5,129 crore from Rs 3,708 crore for the year-earlier period, Infosys said in a press release.

The 38.3 percent jump was largely due to a $225 million (Rs 1,432 crore) tax reversal in the US, the company’s biggest market. Profit fell about 0.3 percent, excluding the one-off benefit, roughly in line with street expectations. 

December-quarter sales rose 8 percent to $2,755 million from $2,551 million a year ago, and increased 1 percent from the previous quarter. That compares with the 0.7 percent sequential rise and 7.7 percent gain on the year-earlier period.

Infosys expects to finish the year ending March 31 with revenue growth of between 5.5 percent and 6.5 percent over the previous fiscal year, the company said in its press release, retaining its October forecast.

Increased adoption of our digital offerings and new services helped stabilise billing rates, COO Pravin Rao said in the press release. Rao had served as interim CEO between August and January as Co-founder Nandan Nilekani, who returned to Infosys as non-executive chairman after Sikka quit, led the search for a new permanent CEO.

“My interactions with Nandan (Nilekani, the chairman) and the board led me to believe we were here to build a stronger Infosys. That confidence led me,” to make the decision to take on the CEO’s job, Parekh told reporters in a conference in Bengaluru.

Highlights of financial results

Q3 revenues grew year-on-year by 8.0% in USD terms; 5.8% in constant currency terms

Q3 revenues grewsequentially by 1.0%in USD terms;0.8% in constant currency terms

Q3operating margin improved to 24.3% from 24.2% in Q2 FY18

Q3 EPS at $ 0.35,year-on-year growth of 46.1% and sequential growth of 38.2%

Q3 EPS of $ 0.35 includes positive impact of $ 0.10 from Advance Pricing Agreement (APA)with the US IRS

9 months year-on-year revenue growth at 6.5% in USD terms; 5.6% in constant currency terms

Q3 cash flow from operating activities were at $ 657 mn, compared to $ 441 mn in Q2 18

Utilization excluding trainees at all-time high of 84.9%

Q3 standalone attrition declined to 15.8% from 17.2% in Q2 18

FY 18 revenue guidance inconstant currency retained at 5.5%-  6.5%

FY 18 operating margin range unchanged at 23%-25%
 
 RESULTS SUMMARY
 
Revenues were $2,755 million for the quarter ended December 31, 2017

Operating profit was $ 669 million for the quarter ended December 31, 2017  QoQ growth of 1.4%;YoY growth of 4.5%

Net profit was $796 million for the quarter ended December 31, 2017 QoQ growth of 37.6%; YoY growth of 45.4%
 
Basic EPS at $ 0.35 for the quarter ended December 31, 2017
 
During the quarter, on account of the conclusion of an APA with the US IRS, net profit has increased which has led to an increase in Basic EPS by $ 0.10 for the quarter
 
 
Consolidated results under International Financial Reporting Standards (IFRS) for the nine months ended December 31, 2017
 
Revenues were $ 8,134 million for the nine months ended  December 31, 2017  ; YoY growth of 6.5% in reported terms; 5.6 % in constant currency terms 
 
Operating profit was $1,966 million for the nine months ended December 31, 2017; YoY growth of 4.3%
 
Net profit was $ 1,915 million for thenine months ended   December 31, 2017;YoY growth of 19.9%
 
During the nine months period ended December 31, 2017, on account of the conclusion of an APA with the US IRS, net profit has increased which has led to an increase in Basic EPS by $ 0.09
 
“It is a privilege for me to beappointed as the CEO & MD of Infosys, helping our clients navigate the digital future and employees build new skills and capabilities. Our Q3 performance is strong. We had 8% year-on-year growth and 24.3% operating margin with US$ 593 million of free cash flow.” said Salil Parekh, CEO & MD.
 
“We are progressing towards stability and are well positioned to serve our clients in the new areas of demand” he added.
 
“Increased adoption of our digital offerings and new services
helped stabilize price realization. We were able to grow client relationships across revenue categories.” said Pravin Rao, COO. “
 
During the quarter, we provided compensation increases and higher variable payouts to our employees. Our investments in employees continues to deliver results as reflected in lower attrition.”
 
“Our operating margins were stable on the back of broad-based improvement in operational efficiency parameters. Our cash generation continued to be robust during the quarter.” said M.D. Ranganath,CFO. “
 
We successfully executed the share buyback of Rs. 13,000 crores in line with our capital allocation policy.”
 
Outlook for FY 2018
 
The Company’s outlook (consolidated) for the fiscal year ending March 31, 2018, under IFRS is as follows:
 
Revenues are expected to grow 5.5%-6.5% in constant currency.
 
Revenues are expected to grow 6.5%-7.5 % in USD terms based on the exchange rates as of December 31, 2017
 
 
 
 






 

Saturday, January 13, 2018

PORTFOLIO MANAGEMENT - SOME PRINCIPLES (Part 1)



PORTFOLIO MANAGEMENT 
SOME PRINCIPLES (Part 1)


If you are a Direct Stock Investor on the Indian Stock Exchanges, and are buying, holding and selling stocks, you own a Portfolio of stocks that you purchased so far and are yet to sell.

STOCK MARKET INVESTING (and Portfolio Management) -  is both an Art and a Science. Stock Market is the easiest and safest place to invest. Returns can be Good - to - Fantastic depending upon your level of carefulness. 

A careless fellow should neither invest in stock market nor cross a Road nor marry a person of the opposite sex. All these are risky!!! If can cross a city road carefully or marry a person of the opposite sex and live with him/her, congratulations, 

YOU CAN BE SUCCESSFUL IN STOCK MARKET INVESTING also, if only you are just that much careful. So, what should you do, before you invest in stock Market and while you invest in stock market. Here is the first batch of guidelines for you : 

In stock Markets, if you are dabbling only in F & O segment or buy today and sell within a month or so, you don't own a portfolio in the conventional sense. In my view, those who hold stocks on a fairly long term basis of say one year or more - own Portfolios of stocks and need to understand about Portfolio management principles and strategies.

Now - why did you BUY what you bought when you bought and why did you sell what you sold when you sold? These are the two questions you must have a clear cut answer for, if you must succeed as a stock investor.

If you have a clear cut, well thought out strategy for Buying, Holding and Selling stocks - You are managing your Portfolio of stocks  reasonably well. 

As already said - Portfolio Management is both an Art and a Science. And, it is evolving with every thinker and practitioner of this art and science. Among the practitioners across the world, there are many, many extraordinarily successful individuals, who rose from rags to riches and to super riches.

Warren Buffet is of course the most famous stock Investor in the world. There are many others like him in all countries who are great successes in building up wealth of unimaginable proportions through stock market investments and trading.

In India too, there are many success stories of rags to riches and super riches. Many new stories are in the making in many states in India. Rakesh jhunjhunwalla, Ramdev Agrawal, Radhakishan Damani, Porinju Veliyath, Dolly Khanna,vijay kedia, Ashish Dhawan, Nemish shah and so on are now well known names in the investment world of stocks.

There are many strategies which successful investors employed, for building up their Portfolios. we will discuss a few of them here and hereafter :

1. A good investor must have a reasonable grasp of the country's economic profile, its strengths and weaknesses, its government policies and the directions in which the economy is progressing. In short, a SWOT (strengths, weaknesses, opportunities and threats) analysis of the country we live in is of great help for stock investors.  Budget time is always a good time to revisit the SWOT analysis each year.

2. Step.1 above gives us a list of sectors in which we can expect good progress in the next 5-10 years time. We need to understood where the public money will flow in the coming years. This will indicate the type of companies which will see faster progress in the years to come.

3. It is not only the government money that is the criterion.  The general public money spending across the country is a bigger criterion and it is always undergoing change. Spot this change.Where do people Buy, what do people Buy, when and why are all easily knowable if we keep our eyes and ears open. your investment must flow into sectors into which this public spending is flowing more and more.

4. Once you identify the sectors which are fast expanding, now, identify the most promising companies in those sectors.There are some companies which are expanding the FASTEST and some which are slow and sluggish. Some produce and sell the best at best prices and some are inefficient producers. Your task is to find out the companies which are growing the fastest in each sector.

5. identify a list of at least 5-10 sectors and 2 companies from each such sector, which you feel are growing fastest.

6. Well. the task is not yet over. Now, you may have about 10 to 20 companies which are growing fastest and which you like. Now, compare the price per share at which the shares are being sold in the stock market. Keep an eye on the face value of the shares, while making this comparison.

7. The shares you want to buy - must be (i) in sectors which are growing well (ii) of companies which are growing well and (iii) the prices of shares must be  reasonable (and not very costly). For each of these steps, there are again methods, procedures, principles and so on to help you go through each step.

8. A successful investor never hurries to invest in a company without examining all this about the company by himself. Acting on friends' tips,market gossips and rumours and even on TV shows of experts is not a good idea - unless, you invariably make your own analysis of each company before you invest in it.

9.  Can you name a few sectors, say 5 to 6,  which are growing the fastest in India? If not, find out that immediately.

10. Can you name a few sectors, say 5 to 6, which are the most sluggish and in which no reasonable growth is possible for next few years, in India? If not, find out that too immediately.

11. Can you name a few companies, say 10 at least, which are growing fairly fast, in India? Now, check up, if your feeling is really correct. You may not be right in respect of at least a few companies. What grew well 3 years ago - may not be growing at all now! Find out. Find out. Find out. The most famous companies may or may not be growing at all right now.

12. This is the basic preparation you must undergo - before you want to be a successful stock investor. But,this is not enough.

13. Now, what is your planned level of Investment in stock markets? Is it a one time lump sum investment, or, is it going to be continuous, periodical or monthly investments or is it a combination of both?

14. Never, ever, invest borrowed moneys in stocks. Make this an inviolable principle, for a long, long time to come.

15. Never, ever, invest ALL THE MONEY that you have in stock markets however attractive you feel a particular stock may be. Keep sufficient money for your urgent and emergent needs always.

16. Insurance for illnesses, death, assets etc is always an Essential NEED.  It depends on your age, economic and health conditions and family back ground. Assess your Insurance needs and take care of the same. Over insuring and under insuring are both equally bad.

17. House is of course a need. But, you can rent one temporarily. Never go for owning more than one house in the same town - unless your stock Investments are bulging at the seams and you have sufficient profits to afford many luxuries.

18. You can own a car, if you can afford its maintenance and if it is a real need.  Otherwise, make stock Investment the first priority and car owning the second priority.

19. Assess  how much you can easily invest every month. Invest that amount as the first thing you do every month. Spend only the balance. Don't think that you must invest only after all expenses are met and some savings are left. Plan your savings and balance is for expenses.

20. when I say SAVINGS - I mean, your stock investments. Should we put good amounts first in Bank Fixed deposits, chit funds, other debt instruments etc? This was the old idea and is no longer preferred. No debt instrument is saving you from inflation. stocks are more liquid in case of need than most debt instruments. We will examine all these and many others in the next Post.


*  *  *  WILL CONTINUE   *  *  *






Thursday, January 11, 2018

INDUSIND BANK Limited - Results for Q3 FY 2017-18 (FOR Q/E DEC 2017)


INDUSIND BANK Limited

Results for Q3 FY 2017-18

(FOR Q/E DEC 2017)

 

The results of INDUSIND BANK Limited for Q3 ending December 2017 are here under. 

INTEREST Earned has increased by 14.8% YoY.

Net Profits have increased to 24.73% YoY. 

Net NPA has marginally increased by 18% YoY.

Current Market price is 1700 and PE Ratio comes to 27.47

 

INDUSIND DEC'17 Sep '17 Jun '17 Mar '17 Dec '16 YOY
Interest Earned 4246.78 4208.35

3699.33 14.8
(a) Int. /Disc. on Adv/Bills 3469.61 3,290.28 3,270.70 2,989.67 2,990.45 16.02
(b) Income on Investment 749.46 767.94 726.47 644.05 619.79 20.92
(c) Int. on balances With RBI 36.8 110.8 98.5 153.85 60.88 -39.55
(d) Others 30.91 39.33 39.84 42.44 28.21 9.57
Other Income 1186.76 1,187.57 1,167.26 1,211.30 1,016.80 16.72
EXPENDITURE





Interest Expended 2391.97 2,387.36 2,361.45 2,162.56 2,120.91 12.78
Employees Cost 459.96 445.04 422.17 394.3 394.04 16.73
Other Expenses 956.92 930.02 930.62 912.22 837.84 14.21
Operating Profit 1664.69 1,633.50 1,588.53 1,572.23 1,363.34 22.1
Provisions  236.16 293.75 309.97 430.13 216.85 8.9
PBT 1428.53 1,339.75 1,278.56 1,142.10 1,146.49 24.6
Tax 492.28 459.65 442.01 390.49 395.85 24.36
Net Profit 936.25 880.1 836.55 751.61 750.64 24.73
Equity  599.74 598.87 598.52 598.15 597.42 0.39
Reserves
-- -- 19,673.38 --
EPS After Extra Ordinary





Basic EPS 15.62 14.7 13.98 12.57 12.57 24.26
Diluted EPS 15.47 14.54 13.86 12.45 12.46 24.16
NPA Ratios :





i) Gross NPA 1498.7 1,345.28 1,271.68 1,054.87 971.62 54.25
ii) Net NPA 592.2 536.89 508.26 438.91 400.7 47.79
i) % of Gross NPA 1.16 1.08 1.09 0.93 0.94 23.4
ii) % of Net NPA 0.46 0.44 0.44 0.39 0.39 17.95
Return on Assets % 1.96 1.9 1.86 1.74 1.88 4.26







MP 1700




PE 27.47




 

 

NOTE : This is not a recommendation for BUY/HOLD/SELL

*  *  *  E  N  D  *  *  *

Sunday, January 7, 2018

LONG TERM CAPITAL GAINS TAX - ON SHARE TRANSACTIONS - HOW UNWISE AND DISASTROUS IT IS !


LONG TERM CAPITAL GAINS TAX
ON SHARE TRANSACTIONS


There is a proposal doing the rounds for Taxing long term capital gains in equity share transactions. This was always Exempt in India, for all these decades, for very valid reasons. But, periodically, some one or other makes this hasty, ill-conceived proposal, without considering its far reaching implications for the country"s development. Of course, so far, Governments acted wisely and shelved such proposals.Will it do this, this time also, or, fall for the evil temptation of prioritizing taxation before overall development?

What is the penetration of Equity Habit in India? This is the first thing that we need to know.

Only less than 2% of Indians participate in any kind of equity transactions in India - says one study by Value Research. Only 18 million people participate in equity transactions of any kind - says another study (by business today). Majority of states have very few stock market investors - says another study by Live Mint.

The study says - "Maharashtra alone accounts for more than one-fifth of India’s stock market investors. Gujarat, Tamil Nadu, West Bengal and Uttar Pradesh are the other top five states in terms of percentage share in total stock market investors. These five states account for a little less than 60% of India’s stock market investors. Most of India’s states and union territories have a smaller share in total number of stock market investors than their share in population."

Even these numbers are likely to be overestimates as many people hold more than one demat account - says the study. Thus, the penetration of the equity investing habit is still a rarity in MOST PARTS OF INDIA and needs to be actually promoted and incentivized vigorously by the country.

Would you like to promote the habit or kill the Habit - is the question the Government, especially the Finance Minister must ask himself before considering such hasty ill-advised proposals.

Of this less than 2%, over half are F&O traders who care only for price fall and price rise and give two hoots to the development of the underlying company. This is pure speculation based on technical factors and has nothing to do with the fundamental factors governing the development of the country. Their income is speculative income and they are taxed fully even now and rightly so.

Another 25% to 35% are short term investors who buy, register in their names and dispose off in a short time of less than one year. They too look at price factor only mainly for buying and selling and care nothing much about the underlying companies' health.

Only a Small proportion of stock market participants real care for the long term health of the companies they invest in. They analyze the companies, the managements, their quarterly, half yearly and annual performance, their future plans and flaws in them, if any and so many other factors impinging on their long term health.

Many of this third category write about the companies in web sites, Journals, and so on and participate in General body meetings etc. They hold the Company Managements to account in AGMs etc for all the flaws in the company's working.

It is not the Auditors who care for the growth of the company but its long term Investors.In many wise countries, including India so far, these are exempt from taxation, in order to promote long term equity cult among the citizens which is crucial for the country's development.

EQUITY INVESTMENT IN INDIA :

As earlier said, the number of Long term investors in India is very very limited right now and is slowly increasing, thanks to the transparency introduced through NSE and its wholly computerized operations. BSE followed much later. All other stock exchanges which did not change their old, anti-investor ways completely closed down. This itself was a sad commentary on how badly they were functioning earlier.

If faster development of our country is our Government's Main concern, and if more and more companies must be promoted in all states, the equity investment habit among people of all states must be promoted vigorously and actively by the Government.

Otherwise, how do you expect companies to come up in ALL STATES?

LTCG TAX is one way of scaring away all potential Equity investors in all states from the equity investing Habit.

In my view, various promotional measures are required to promote equity habit, especially, in all underdeveloped states. For instance, a reasonable share of public issues of companies starting in underdeveloped states may be reserved for people of those states. Many such things are possible. Governments, both central and state, are only talking of development but doing the opposite to kill the equity cult among people. So, most states remain under developed.

Proposals like LTCG TAX actually scare away prospective  investors in stock market. In my view, India does not need any further taxes. It just needs efficient management of the economy. When, Economy grows, more revenues will automatically result to the Exchequer.

But, why did GST revenues come down? When Government reduces the GST drastically on all items without considering their impact on revenues, as a populist measure, why will revenues not fall down?

There was need to tell the public and Tax payers and convince them - that GST was already far less than earlier (abolished) taxes. Some GST rationalisation was of course needed. But, not whole sale downward revision - to satisfy all people - even when the GST was already LOWER THAN  pre-existing tax rates.

But, All GST rates were indiscriminately reduced to  Neutralize Congress and its cohorts. So, GST revenues fell to some extent. It cannot be undone.

Now, proper enforcement and compliance by all tax payers is all that is needed to boost GST revenues. It will happen any way. Governments, Central and state, must focus on GST compliance now. As simple as that. No New taxes are needed. GST Revenues will grow from now on, by efficient tax compliance.

Equity investment - prior to NSE :

The existing Equity investors have a long, harrowing history to tell on the functioning of the stock market before NSE came on the scene. Many people have lost very heavily in the stock market due to the various ills prevailing  in the most inefficient and dishonest stock market-broker system in those days.

The popular saying was - 1.The company makes money. 2.The broker makes money. 2.The investor loses all the money. Of the three participants, Two gain and one loses. So, it is OK. Is it not. It was a cruel joke but was a fact in many cases.

You will find that most people who made  great money in those days are BROKER-INVESTORS (brokers who were also investors) and not pure investors. Yes. Most successful Investors of those days were brokers-cum-investors. Pure Investors who made money were definitely very rare in those days.

The advent of NSE only changed this position to a great extent.NSE introduced a totally computerized and extremely transparent trading and investing system in which the direct  equity investor almost directly trades/invest on NSE/BSE (though through broker's system) and seals his trades/investments almost directly  on the NSE's system. This has drsastically reduced  most of the Broker related hassles and manual trading related hassles.

After this transparent system was introduced, other than NSE and BSE no other Stock exchange survived. They were either totally reluctant to change or very slow to change. Any way, Investors found a great relief in trading/investing on NSE. Even now, more reforms are needed in streamlining the operations at Brokers' ends and making them more efficient and more transparent.  Intensive studies by SEBI are required on this aspect.

LONG TERM EQUITY INVESTORS :

Long term holders of Equity are the real owners of the company and the company's income is their own deemed income. The company's assets are their own. 

This company income, which is their deemed income is already taxed as Corporate tax at the highest rate.Dividends paid out of the income of the company is again taxed at source. So already the income of these long term owners of the company is taxed twice.

Now taxing long term capital gains is taxing him thrice and killing the golden goose.

We will be tempting everybody to become short term players in the market which is suicidal for the market and for the corporates.

Now who will attend General body meetings, who will criticise company performances, who will hold managements to account if everybody is tempted to become short term players by this foolish proposal?

I make long term capital gains. You want to tax me. I make long term capital losses. Will you subsidise me and pay me similar amount? Government cannot act in a one sided way. At any time, for every 100 people who make gains, there are 100 make losses also. Be fair to both of them. If you tax the former, compensate the latter. Please do not kill the golden goose with such foolish proposals.Not only that, when I am making long term capital gains on company X, there may be company Y and Z sitting in my portfolio with huge losses also. Who will compensate me for that?Long term ownership of equity capital is much unlike F&O speculative trading an short term capital gains of less than one year. It is loaded with much responsibility.It is loaded with much responsibility for the health of the underlying Corporate. When the company gets into trouble, all else will be safe. It is the long term owner who bears the burnt. When a company like reliance communications from Rs.154 to Rs.15, who do you think loses heavily? It is the long term investors.When Ajanta Pharma crashed from Rs.2000 to Rs.1100, most Long term investors (including me) were still holding to the compsny's equity - unlike the speculators and the short term sellers.They infuse stability into the functioning of every corporate.

Let the concept of ownership and feeling of ownership not die due to this foolish proposal of tax on Long term capital gains.

Tax is important. But stability and ownership of companies is far more important. Companies are stable not because of Auditors but because of the watchfulness of long term equity holders. Government must not stifle that concept.

I heard, BSE chairman made such a proposal. Did he every consult any companies before that? I heard Porinju Veliyath favoured it. He should ask his PMS clients before forming his opinion. Will they agree?

I am definitely against it because it directly and adversely affects every company's functioning.

Now, the next time, Forbes forms the list of Indian Billionares, they should deduct the LTCG tax from the net wealth before including their wealth in the list. If it is 15%, 15% goes from their wealth, whenever they they want to sell their stake. It is an atrocious tax.

All readers must express their severe and serious opposition before FM considers this proposal.

There are already many proposals affecting employment in the country and  incomes of vulnerable people like senior citizens.

(a) Bank Mergers : There are proposals for Bank mergers which reduce employment drastically in the country. But, the reality is - we need to create huge employment avenues right now.  Unemployment is increasing in the country at an alarming rate. Such proposals should be postponed till we create employment for the crores of unemployed in the country.

Think of the common man of the country before government makes its proposals. This is Gandhiji's Good Governance.



(b) BANK FIXED DEPOSIT INTEREST RATES :-In recent years, interest on fixed deposits has been sliding down very fast every year. We all know that.This has drastically reduced the money incomes of all individuals - especially the SENIOR CITIZENS who have retired from working life after 30-40 years of working life. This phenomenon of reducing incomes on FD interest has already put them under severe stress and most retired individuals are bitter about these declining incomes. They never know, if next year, their interest incomes on their FDs will come down  by 1,2 or 3 percentages. And, combined with inflation, the real incomes suffer much more drastically. So, what will be their living standard - next year, they never know. There is least certainty on incomes from Bank deposits now.

Government says - it will assure a certain percentage on a certain fixed amount. Is that the way to go by the needs of senior citizens. Take even retired  Government servants. What they draw as Pension + commutation of pension+ Gratuity+ provident fund+ insurance, if any is usually put by them into Fixed deposits. These are legitimate benefits which a retired Government servant (or a PSU employee) gets at the end of his 30-40 years of service - in which he was forbidden from taking up any employment and huge restrictions on stock market dabbling etc. He puts them all in the safest asset like FDs. But, now Government has rendered it as the unsafest asset on which the incomes will comes drastically every year

A life time of service and sacrifice and at the end of it - Government says, we will give you say 8% on some 10 lakhs and on balance, you will never know what you will get each year. It may come down to 1% or 0% even, as it is in some developed countries.I feel, taking care of senior citizens and poor people etc requires a far more sensitive approach, from any Finance Minister and his Government.

How does a retired senior Citizen, who is helpless in many ways, maintain his living standard monetarily, if Government and RBI seek to reduce his living standard by their own initiative-by reducing FD INTEREST RATES every year?

In the circumstances, many of them are turning to Mutual funds / direct investment in shares as an alternative route to retaining their income. Now, that route also is proposed to be taxed !! It is bad. It is unethical. It hits at the very roots of corporate functioning. All readers must bring it to the notice of the Government, the Finance Minister and the Prime Minister and ensure this unwise proposal is shelved completely.

(V.VIJAYAMOHAN)

Saturday, January 6, 2018

GOA CARBON Limited - Results for Q3 FY 2017-18 (FOR Q/E DEC 2017)

 

GOA CARBON Limited

Results for Q3 FY 2017-18

(FOR Q/E DEC 2017)

The results of GOA CARBON Limited for Q3 ending December 2017 are here under. Net Sales have increased by 159.56% YOY . Net Profits have increased to 22.5 Cr against (-)1.09 cr in Dec'16 (last Year). Current Market price is 1013 and PE Ratio comes to 10.298.

 

GOA CARBON DEC'17 Sep '17 Jun '17 Mar '17 Dec '16 YOY
Net Sales 186.6 150.64 78.29 76.32 71.89 159.56
Other Operating Income 0.03 0 0.03 0.05 0.06 -50
Total Income 186.63 150.65 78.32 76.38 71.95 159.39
EXPENDITURE





Raw Materials 132.29 103.68 76.8 66.92 54.41 143.14
Increase in Stocks -1.09 15.69 -25.07 -11.23 2.95 -136.95
Employees Cost 4.47 4.03 4.28 5.11 4.26 4.93
Depreciation 0.47 0.46 0.45 0.47 0.48 -2.08
Other Expenses 12.61 2.16 12.52 12.29 8.7 44.94
P/L Before Other Inc. , Int., Excpt. Items & Tax
24.62 9.34 2.82 1.15
Other Income
1.06 1.6 8.02 1.26
P/L Before Int., Excpt. Items & Tax
25.69 10.95 10.83 2.42
Interest 10.1 4.64 2.12 1.85 4.04 150
P.B.T. 41.26 21.05 8.83 8.98 -1.63
Tax 18.75 7.28 3.08 3.9 -0.54
P/L After Tax  22.5 13.76 5.75 5.08 -1.09
Net Profit 22.5 13.76 5.75 5.08 -1.09
Equity Share Capital 9.15 9.15 9.15 9.15 9.15
Basic EPS 24.59 15.04 6.28 5.55 -1.19
Diluted EPS 24.59 15.04 6.28 5.55 -1.19
MP 1013




PE 10.298




 

 

NOTE : THIS DOES NOT CONSTITUTE A BUY/SELL/HOLD RECOMMENDATION

 

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