Tilaknagar Industries: Picture Tau Abhi Baaki Hai!!

Tilaknagar Industries:

CMP:21.55

Market Cap: 268.85Cr

March 2017

Consolidated Sales: 490Cr 

Net Profit: -ve 276Cr(loss)

Tilaknagar is up about 100% from its 52 week low 10.2

Tilaknagar Industries Ltd. (TI) is a leading player in the liquor industry and manufactures Indian Made Foreign Liquor (IMFL). Established in 1933 as Maharashtra Sugar Mills Ltd. (MSM), the company transitioned to the liquor business in 1987. Over its 75 year existence, TI has grown to be an organisation committed to quality, excellence and integrity.

TI which is the erstwhile "The Maharashtra Sugar Mills Limited" (MSM) was promoted in 1933 by the illustrious industrialist and visionary Shri Mahadev L Dahanukar popularly known as Babasaheb Dahanukar. The company was then engaged in the manufacture of sugar and allied products.

Babasaheb’s efforts were guided by noted freedom fighter Lokmanya Balgangadhar Tilak, and he named the factory complex 'Tilaknagar' as a token of respect for Lokmanya Tilak. The company had an unfailing record of paying dividend for more than 50 years. In deference to the policy of the Government to have all sugar businesses in the country under the control and management of Co-operative Societies formed by farmers, the Company had to stop its sugar business in 1987.

Tilaknagar Distilleries & Industries Ltd. was promoted as a 100 per cent subsidiary of The Maharashtra Sugar Mills Ltd. The year 1973 saw TI diversify into the businesses of Industrial Alcohol, Indian Made Foreign Liquor (IMFL) and Sugar Cubes. Both Maharashtra Sugar Mills Ltd. and Tilaknagar Distilleries & Industries Ltd have been merged to form Tilaknagar Industries Ltd. with effect from August 6, 1993.

Since then TI has been engaged in the business of manufacture and distribution of spirit and Indian Made Foreign Liquor (IMFL). There has been no change in the promoter of the company. The ‘Dahanukar family’ continues to be the promoter of TI(Tilaknagar Industries), sharing the same vision and values of the founders.

Due to its core competency in alcoholic beverages and conscious efforts, TI swiftly established its distinct identity in the liquor industry. Today TI’s brand portfolio consists of unique and diverse brands that enjoy excellent consumer preference solely due to their quality and value for money.

Looking at the long term charts we can see that TI is quoting close to lifetime Lows..

999EMA (5 yrs exponential moving avg) is: 24.89
On 27th Nov 2017 TI days high was 25(above its 5 yrs EMA) stock closed @ 23.95

looking at the chart the stock seemed to have bottomed out...

Looking at the consolidated balance sheet: we can see the reason for dismal share price..

We can see that:

- Reserves are negative. the book value is -ve... company seems to have run out of reserves as it has been reporting losses for past few years..(visible in income statement)

- Long term debt 190cr (2017) is lowest in past 5 yrs.. looks to be a good development but short term debt 633cr (2017) is at highest in past 5 yrs. As we will see the company is having problem raising finances.. and seems to be using short term loans to meet its funding requirements.

- Capital work in progress of 124Cr ( for past few yrs) for a company with 509Cr of Tangible assets is way too high.. something is not right with this number.. either the capital work in progress is actually on hold.. or something else.. 

- Bonus in Equity share is 108Cr while equity is 124.75Cr so 86% of equity capital is bonus.. so the company seems to have given liberal bonus to shareholders and it indicates a shareholder friendly management.

Income statement is also not a pretty picture.

- sales have increased to 490cr (2017) from 461cr a growth of 6%..

- cost of Material/Total revenue = 62% (2017) Vs 44% (2015)

clearly a price increase is required..

- Finance cost has increased to 156.4cr(2017) from 125cr(2016)

Important to understand that interest cost is different from finance cost.

Finance cost = interest cost + other finance related expenses.. dont know if repayment of loans is also included in financial cost?.. having said that in AR-2017(Annual Report March 2017) the debt has increased..

Total debt 31 March 2016: 945.125cr , 828.45cr (secured debt including interest due) & 116.66cr unsecured debt (including interest due)
Total debt End of 31 March 2017: 1077.348cr, 970.73cr is secured debt(including interest due)  + 106.61cr (unsecured debt including interest due)

so there is an increase in debt by 132.23cr.., unsecured debt is down by 10cr..

Sept 2017 Quarterly  results(not yet out) include half yearly data and balance sheet data.. so we will get some idea about how things have progressed.. in past six months.. Personally I feel we will not see a reduction in debt.. as company still needs additional cash for working capital.. we might however see an increase in topline sales..

Till now there is nothing to say that tilaknagar is still tumbling down the rabbit hole or its digging its way out .. well I was looking at the financial ratio data..

ROA(Return on Assets), ROE(Return on Equity), ROCE(Return on Capital Employed) all are deep in negative territory.. and that's not a good sign..

There is however one Financial Ratio: Cash Conversion cycle... which has turned -ve (and that's good) -ve 41.18

Cash conversion cycle is nothing but : Net Current Assets. A -ve net current asset means the company is generating a float from its operations. Current Assets -Current Liabilities.
------------------------------
The Company in its every day operations buys raw material(inputs) and Sells its product(output)

The raw material seller (input provider)gives a  say 60 day payment period. (current Liability)and
The Product Buyer (Output buyer) also asks for a 60 day payment period..(current Asset)

Now if we say Ask the Input provider for 70 Days payment period.. And(increasing Current Liability)
we ask the Product buyer also to pay by 45 days ..that means effectively (decreasing Current Assets)

70-45 = 25 days... I as the producer will get 25 days float!!. interest free... effectively the 70 day payment period provided by the supplier is enough for me to sell the product and get the payment back.. and infact I can earn 25 Days of Float!!..
------------------------------

Looking at the cash conversion cycle.. it looks like Tilaknagar is generating a 41 day float..
total sales is 490Cr assuming 200 days in a year (stock market is open for 200 days in a year)
that's like 2.45Cr of sales in a day.. float of 41 days means = 41x2.45 = 100.45Cr of float (1 day)

Now you might say all this is wishful thinking .. well lets look at a Super Blue Chip Like Hindustan Unilever Ltd and look at its cash conversion cycle..

Holy Cow!!!..
Cash Conversion Cycle: -ve for past 10 yrs..
10 yrs Avg Cash Conversion Cycle for HUL: -ve 30.94!!
and look at the ROCE, ROE,ROA.. Off the Charts!! HUL is like google.. generates only free cash !!!

Also March 2017 Annual report indicates some big name investor (Chug family) invested in Tilaknagar Industry stock..

Conclusion:  Tilaknagar is still swimming with the sharks.. but if you see carefully the management is improvising.. changing strategy .. looking to turn around the ship .. towards safer waters.. Its still not shipshape .. but within a few years I bet we will not be able to recognize Tilaknagar. Company was formed in 1933 and has faced tough challenges before.. Mansion House is a well established Leading Brand of Brandy.(2nd largest selling brandy in India). Mansion House Whiskey is also very good!! (I dont drink but my dad does)  I'm sure the current management has the tenacity to come out of this in flying colours.. Long Term INVEST.. CHEERS!!

PN: This blog is not for suggesting or giving any investment advice.. it is more of a time log of my investment journey.. Pls do your own deep dive and get advise from a SEBI registered investment advisor  (I am not an investment advisor!!)

=happy Investing
whatsup-indianstockideas.blogspot.com

How Are We Doing Diwali 2017

Wishing All Investors. Readers & Visitors A Very Happy, Healthy and Prosperous New Year...
Let us start with a review of performance of stocks reviewed/recommended in this blog.

A total of 34 stocks have been reviewed in the blog.  Hypothetically anyone who invested 10,000/- in each recommended stock (at the recommended price) would have invested 3,40,000/- and on Oct 20,2017 the market value of the stocks would be 14,11,393/- giving you an absolute value of  315% increase in your investment... including dividend it would be 330%. 

If invested in only recommended best buy stocks (GAEL,NHPC, Tata Communications, Tata Power) would have resulted in an absolute value of 359% increase

If invested in only dividend paying stocks the absolute value return is: 406.85%..

Nifty and Sensex over the same period have given absolute return of 134% and 127% (approximately 15% per annum) our returns have been around 315%  (approximately 37.5% per annum) 

of course these are not strictly comparable.. as NIFTY does adjust the stocks that make up the index... while ours is a constant list.. with only additions and no subtractions...

The markets are doing well and will continue to do well.. the underlying reason is the rush of liquidity..

At an international level a large part of the bank funds (Quantitative Easing money ) was parked with the  FED earning some 0.25% and importantly outside the financial market hands....With increase in FED rates.. This QE fund has moved out of the FED books into the financial market increasing liquidity.. 

In India the sudden interest of indian public to invest in financial assets instead of gold and real estate has increased the amount of domestic capital available..  pushing FII money to the "back bencher" state 

also with govt interest in identifying the true owners of assets by linking them with Aadhar numbers (biometric identity) it is removing duplicate PAN number holders.. 

HNI investors who were hiding their wealth using multiple/fictitious  PAN account numbers are now feeling the heat and so we are seeing that everyone is coming clean with their assets..

Banks under strict Basel-III guidelines are giving loans to financially sound companies.. forcing management to report strong cash flows and healthy bottomlines.. 

with India entering into the golden age with highest population of working age indians..(also known as Demographic Dividend)  we can expect demand for goods to be steadily increasing for the next 10 years..

All things are pointing to a steady increase in market value of stocks.. we will see corrections but should be small corrections.. 

There are possible bottlenecks.. One thing that could be a black swan event is "peak oil" i.e. oil price rising to economically unsustainable levels..(which could manifest in global escalation in conflict)   BASEL-III though is sapping out liquidity by reducing the turnover rates of money.. it could result in demand contraction world wide and have -ve side effect on indian growth story.. 

Conclusion: India should see steady increase in demand due to good demographic data.. growth in India is given.. so its positive for companies. most stocks are priced to perfection but there are stocks discussed which are still fairly priced.  remain invested is the suggestion.. as corrections will be short lived.. (Not counting Peak oil Black swan event..) 

=happy investing

Kulkarni Power Tools: Deep Value.

Kulkarni Power Tools:

CMP: 30.05

MCap: 10.22Cr

Sales March 2017:69.22Cr

Net Profit: -7.16Cr

http://www.kpt.co.in/

KPT.. Where Positive Change is the Only Constant

Over the last 25 years, since its inception, KPT has kept pace with change. An in-depth understanding of changing customer requirements has guided us into delivering world-class quality, in the manufacturing and marketing of electric power tools.

The story of KPT goes further back. It was founded in 1976 as a Joint Venture with Black&Decker, USA. The first sign of radical change occurred in 1993, when KPT celebrated its independence.

Today, our state-of-the-art plant at Shirol, Maharashtra, specializes in manufacturing Electric Power Tools, Spares, Control Motors and Blowers.

Over the years, our quality products, supported by our sincere service has helped us garner the faith of many discerning names, as loyal customers.

But for us at KPT, that not a reason to celebrate, but to reinvent ourselves. So that we can address the rapidly changing demands of the 21st century. 

KPT has three Divisions:

• KPT Blowers
• KPT Power Tools
• KPT Shakti Tools

KPT Blowers: In 2004, KPT entered in business to manufacture Roots (Positive Displacement) Blowers / Exhausters. These Blowers / Exhausters are required for Water / Effluent / Sewage Treatment Plants, Pneumatic Conveying Systems, Dairy and Bakery Industry, Petrochemical, Chemical, Fertilizers, Glass, Power Plants, Mining, Agriculture, Food Processing Plants, etc

Applications: 

Ore Processing :- Cake Blowing, Combustion air, Vacuum filtration

Distilleries: - Liquor moving, Conveying Of grains etc.

Fishery :- Aeration of fish Tanks, Removal of eggs from fish, Agitation of washing tanks

Glass : -Pneumatic Convey of vac. Holding of sheet glass for transfer ,Evacuation of test chamber

Steel mills – Blast furnace air supply, coke oven exhauster, fly ash collections, combustion air for open health furnace.

Coal :- Coal Washing, Tunnel ventilation, Dust Collection

Conveying :- Pneumatic, Vacuum, or combination for material such as coal, salt, cement ,sand, feeds, fly ash, sugar, starch, carbon black, transfer material from trucks, hoppers

Food Processing :- Flower / sugar Conveying,

Sugar :- Pneumatic Conveying, sulphdization, Aeration of storage bins, vacuum filtration

Water Treatment :- Saline Water, Desalinization, salt water Desalinization

Sewage: - Aeration in activated sludge plants – Industrial, municipal, communities.

KPT Power Tools:- KPT product range includes Drills, Angle Grinders, Sanders, Polishers, Tile Cutters, Cut-off Saws, Valve Master Refacer's, etc.

KPT products are used in - Bus Body Building, Rail Coaches, Ship Yards, Fabrication Work, Pipe Laying for Refineries, for electrician / plumber / wood working etc.

 KPT Shakti Tools:- KPT introduces a new range of SHAKTI TOOLS & many more...

SHAKTI TOOLS range includes Garden Tools, Pressure Washers, Vacuum Cleaners, Drills, Grinders, Rotary Hammers, Demolition Hammers, Diamond Tools, Wall Chasers, Mixers, Water Grinders, Vibrators, Marble Cutters, Planers, Routers, Trimmers, Saws, Cordless Tools, Car Polishers, Sanders, Bench Top Tools, Detectors, Measuring Lasers and Artisan Tool Kits.

Clients:- Voltas, Infosys, Wipro, Crompton Greaves, Kirloskar, Prism Cement, Aditya Birla Cement, Ambuja Cement, Alstom Projects, Asian Paints, Forbes Gokak, Bhushan Steel, Tata Steel, Siemens, NALCO, NMDC, HEG, INDOFIL, Indian Oil, IPCL(Reliance Industries), Mahindra & Mahindra, L&T, Ranbaxy, P&G, Coco Cola, GSK, Nestle, Jubilant, NTPC, Thermax, BGR Energy, ITC, Rainbow Papers, TNPL, Taj Hotels.

Power Tools, Blowers and spares are the three main segments, Grinders & sanders make up 23% of sales, Root blowers: 18%, Drills :13% (Business activites contributing more than 10% of sales)

KPT exports its products to Middle East, Africa, Nigeria and South Africa, South East Asia and SAARC countries under brand name "POWERMASTER".

Annual Report -2016-17
Annual Report-2015-16
Annual Report-2014-15

KPT seems to be a well run company..reporting losses as promoters are increasing stake in the company..
June 2014: Promoter holding: 43.8%
June 2015: Promoter holding: 48.04%
June 2016: Promoter holding: 48.08%
June 2017: Promoter holding: 48.22%

looking at the Cash Flows from Operations: 10yrs Avg Cash Flows from Operations: +ve 6.95Cr while current market cap is: 10.22Cr (CMP:30.05) The promoters are it seems of conservative in nature...

5 yrs EMA is 36.94 so right now you can buy kulkarni power tools at a price below its 5 yrs avg price of 36.94..

Conclusion: KPT initially started off with Black & Decker and has the right lineage.. with experience they decided to part ways and build their own Power Tool Brand (KPT, Shakti, Power Master).. the company prefers to maintain a low profile.. Power Tools increase the productivity of employees and the country as a whole.. I'm sure as India moves to the next level.. Power tools demand is going to increase through the roof.. and KPT will be there to benefit from it. With GST in place we can expect a more level playing field against chinese imports and KPT and indigenous manufacturers need to lobby for better protection.. I went to a shop to buy a drill and there it was a Chinese drill and it had a market price of 500/- INR printed on it.. I protested to the shopkeeper.. that's its written 500/- and you are saying its cost is 1800/- well he said that to avoid taxes the printed price is always like this for Chinese products.. Players like KPT should step forward and get meaningfull/effective legislation.. well further research landed me to KPT...so some good came out of it..

=happy investing
whatsup-indianstockideas.blogspot.com

CenLub Industries: Hidden Gem..

CenLube Industries:

CMP:56.50 

MCap: 23.28Cr

Consolidated March 2017: Sales: 35.53Cr, Net Profit: 1.74Cr

http://www.cenlub.in/

Annual Reports

Lubrication is a prime requirement for all machines, equipments or plants as it adds to the life and efficiency of the the machine by reducing wear and tear of its parts. The lubricating oil forms a film between the moving parts which results in lesser friction and correspondingly less heat generation in the machine, thereby keeping the working temperature of machine parts within safe operating limits. Wear and tear of parts is thus greatly reduced resulting in fewer breakdowns, greater machine utility, lower maintenance cost and longer machine life.

Cenlub Industries Limited, a Public Limited Company having its registered office at Plot No. 233-234, Sector-58, Ballabgarh, Faridabad - 121 004, Haryana. Basically the company is in the field of design, manufacture and supply of Centralised Lubrication System for various Machines, Plants and Equipments.
Registered office / Plant-1

It is a listed company at Bombay Stock Exchange incorporated under the Companies Act, 1956 by Registrar of Companies, Delhi & Haryana in the year 1992.

The company has been promoted, mainly, by Mr. V.K. Mittal , Managing Director - a Mechanical Engineer with M.Sc. (Physics), M.Sc. Mech. Engg. specialization in Machine Tools from Moscow. He has worked at senior position in TELCO for more than a decade. He started working on import-substitution of lubrication systems for machine tools in 1977 and has been instrumental in making the company a profitable concern in this field. In recognition of his capabilities, Haryana Government bestowed "Prize for Enterpreneurship" on him for 1987 - 88. He has widely travelled overseas and is fully aware of the latest trends in this field.

The company has 17 offices all over India to take care of Sales and Service i.e. Aurangabad, Ahmedabad, Bangalore, Bhuvaneshwar, Dhanbad, Chandigarh, Chennai, Coimbatore, Faridabad, Hyderabad, Jamshedpur, Kolkata, Mumbai, Pune, Rourkela, Rajkot and Visakhapatnam.

The company is having 3 manufacturing units as under, which are totally independent:-

The total number of employees are around 225.

The company has its own proprietary items of Lubrication Pumps and Accessories and most of them are existing for the last 35 years.

The company has the capability to take turn-key projects from concept to commissioning. These projects are basically related to Plant Lubrications for Steel, Power, Paper, Sugar etc. which are normally approved on blue print stage before taking up for manufacturing.

The company has bagged the following prestigious awards :-

• "FIE foundation" award for import substitution activity at IMTEX'86 exhibition.
• Transworld Trade Fair "Gold Medal" selection award in the year 1987.
• "Entrepreneurship" award by Government of Haryana in the year 1987-88.
• "Best display" award in the 9th Indian Engineering Trade Fair in the year 1991.
• "Business Sphere" award for the year 2008-2009 for most respected No.1 Company in Lubrication System.
• "Udyog Ratan" award by Institute of Economic Studies (IES) in the year 2009.

Client lists is like the who-who's of indian industry:

Machine tools:

ACE DESIGNERS, ACE SYSTEM, ALEX,BATLIBOI,BFW,CADMACH,EMTL (ELECTRONICA MACHINE),GALAXY,GEDEE WEILER,GH INDUCTION, HARISH,HEC,HILDEN, HMT, IMPACT, ISGEC, JYOTI CNC, LMW,LOKESH, MAC POWER, MARSHALL, MICROMATIC,NUGEN,PARI, PMT, PRECIHOLE, PREMIER, SCARLO, TAL MANUFACTURING, WINDSOR, ETC.

Steel Plants:

ADHUNIK METALLIC,ARMECH,BEEKAY ENGG.,BHUSHAN STEEL, BHUVEE PROFILES, BHUWALKA STEEL, ELECTROSTEEL CASTING, ELECTROSTEEL STEELS, ESSAR STEEL, GRADUATE AGRO, H.N. CONSTRUCTION, HULAS STEEL INDS., INDIAN METAL FERRO ALLOYS, ISPAT METALLIC, JINDAL ISPAT STEEL,JINDAL STEEL- HISSAR, JINDAL STEEL-RAIGARH, KINNERA STEEL, KUDERMUKH IRON & STEEL, LLOYDS STEEL,LOI WESMAN, MAHARASHTRA SEAMLESS, MAHINDRA UGINE, MALVIKA STEEL, MIDEAST INTEGRATED STEEL, MUKAND, MULTIFORM MACHINERY, REMI METAL, RENUKA EQUIPMENTS, REYMONDS STEEL, ROLLCON INTERNATIONAL, SAIL - ALLOY STEEL PLANT, SAIL - BHILAI STEEL PLANT, SAIL - BOKARO STEEL PLANT, SAIL - DURGAPUR STEEL PLANT, SAIL - INDIAN IRON & STEEL CO., SAIL - ROURKELA STEEL PLANT, SAIL - SALEM STEEL PLANT, SAIL - VISVESVARAYA IRON & STEEL, SARDA ENERGY & MINERALS, SUNFLAG IRON & STEEL,  TATA METALLIC, TATA STEEL GROWTH SHOP., TISCO, TRF, TUNGBHADRA STEEL, UNITED SEAMLESS TUBULAAR, VIDYUT METALLICS,VISAKHAPATNAM  STEEL PLANT, WELSPUN STEEL, ETC.

Sponge Iron Plants:
A.S.R. MULTIMETALS,ACTION ISPAT & POWER, AGNI STEEL,AIRAN STEEL & POWER, AMBAY SPONGE, AMOD SPONGE, ANAND ISPAT, ANIDITA TRADE & INVESTMENT, ANKIT METAL & POWER, AYARSE PLC, ETHIOPIA, BASAI STEEL, BHAGWATI SPONGE, BHASKAR STEEL, BIMALDEEP STEEL, BINDAL SPONGE, BMM ISPAT, BS SPONGE, CP SPONGE IRON, CREST STEEL & POWER, DAMODAR ISPAT, EVEREST IRON & STEEL-ETHIOPIA, GAGAN RESOURCES, GRACE INDS. LTD., GREWAL ASSOCIATES, HIMA ISPAT, HINDUSTAN CALCINED, HI-TECH MINERAL, HYDERABAD INDS., IDCOL KALINGA IRON, IND AGRO SYNERGY, IST STEEL & POWER, JANKI CORP LTD., JHARKHAND ISPAT, JINDAL SPONGE, KHETAN SPONGE, KOHINOOR ISPAT AND POWER, LAKSHMI GAYATRI STEEL,MA CHHINNAMASTIKA STEEL, MA SAMLESHWARI, MAA CHINNAMASTIKA ISPAT, MAA MAHAMAYA INDUSTRIES, MONNET ISPAT LTD., NAVKAAR ISPAT, NR SPONGE, OCL, PADMAVATI FERROUS, PHIL ISPAT PVT. LTD.,PT DELTA, INDONESIA, RAIGARH ISPAT & POWER, RAJURI STEELS & ALLOYS, RASHMI METALIKS,REACTIVE METAL, REAL ISPAT, RELIABLE SPONGE IRON, RLJ CONCAST, RUNGTA MINES, S.K. SARAWAGI & CO.,SAI SINDHU SPONGE IRON, SATYA POWER AND ISPAT, SEN FERRO ALLOYS, SESHA SAI ISPAT, SHIVALAY ISPAT & POWER, SHREE BAJRANG POWER & ISPAT, SHREE METALLIC, SHREE NAKODA ISPAT, SHREE RADHA INDS.,SHREE SHIVSHAKTI STEEL, SHYAM STEEL, SMC POWER, SUMI VAYAPAAR, SUNVIK STEEL, SURANA INDUSTRIES, THAKUR PRASAD SAO & SONS, TIRUPATI UDYOG, TRIMULA SPONGE IRON, USHA MARTIN, VENKATESHWARA SPONGE, VIJAYA SPONGE & ISPAT,VINAYAK STEEL, ETC.,

Cement Plants:

ABG CEMENT, ACC, BHAVYA CEMENT, BINANI CEMENT, CHUNAR CEMENT (JAYPEE),DALMIA CEMENT - ARIYALUR, DALMIA CEMENT - DALMIA PURAM,DALMIA CEMENT - KADAPPA,ECO CEMENT, FALCON - BEHRAIN., GRASIM CEMENT, GUJARAT AMBUJA, J.K. CEMENT, JAYPEE BALAJI CEMENT, KAMDHENU CEMENT, KARCEMENT, KAZAKHSTAN, LAKSHMI CEMENT, MADRAS CEMENT, MAIHAR CEMENT,   MILLENIUM CEMENT, ORIENT CEMENT, PRISM CEMENT, SAGAR CEMENT, CEMENT, SHREE CEMENT, STAR CEMENT, ULTRATECH, VASAVADATTA CEMENT, VIKRAM CEMENT, ZUARI CEMENT, ETC,

Sugar Plants: We are the original equipment supplier to Sugar Plant machine manufacturers such as ISGEC, KAY IRON, CIMMCO, TRIVENI etc. We have already supplied our lubrication systems to various major Sugar Plants in India as well as abroad and some of them are:

ACUCAREIRE XINAVANE, MOZAMBIQUE, AMR SANGAM SUGAR, AP SUGAR, BAJAJ HINDUSTAN, BIJNORE SUGAR MILL, CHADHA SUGAR MILL, CHANDPUR SUGAR MILL, CONSOLIDATED FARMING, ZAMBIA, D. S. M. SUGAR MILL, DALMIA SUGAR, DAURALA SUGAR,   DHAMPUR SUGAR MILLS, DSCL SUGAR, EASTERN SUGAR, NEPAL, ENERAGRO PROJECT, ECUADOR, HUTATMA KISAN AHIR SAHAKARI, INDIAN CANE POWER, J.K. SUGAR, JAY MAHESH SUGAR,KAMLAPUR SUGAR MILL, KHOTOLI SUGAR, KISAN SAHKARI CHINI MILL, LOKMANGAL SUGAR, MAWANA SUGAR, MODI SUGAR, MUKERIAN SUGAR, MUZAFFARNAGAR SUGAR MILL, NANDGANJ SIHORI SUGAR MILL, NORTHLAND SUGAR, PALWAL SUGAR MILL, RAMGARH SUGAR, RAVALGAON SUGAR, RELIANCE SUGAR, NEPAL, SAKHOTITANDA, SAKTHI SUGAR, SARASWATI SUGAR MILLS, SARAYA SUGAR MILLS, SHAMBAHOLI SUGAR MILL, SHREE TATYASAHEB KORE WARANA, SIEL SUGAR, SRI RAM SUGAR MILLS, NEPAL, SUGAR CORPORATION, UGANDA, SUPREME RENEWABLE ENERGY, SYAN SUGAR, TITAWAI SUGAR, ETC
 

Power Plants:

 ADAMTILLA, ADHUNIK TPS, ADITYA MAHAN, AMARKANTAK, ANPARA TPS, APGENCO RAMAGUNDAM PS, AZARBIZAN HEP, BAIRA SIUL, BAJAJ HINDUSTAN,  BAKRESWAR, BANSAGAR, BARAGRAN, BASKANDI, BHOOPALAPALLY THER.POWER, BHUSAWAL TPS, BUDGE-BUDGE, CHAMERA, CHANDIL, COAL INDIA,DB POWER, DEHARKHAND, DVC- CHANDRAPURA, DVC DURGAPUR, GANGUWAL, GGSR BHATINDA, GIRAL LIGNITE POWER, GNTPS, BHATINDA, GOKAK FALL HYDRO, GUNGWAL & KOTLA, GGS REFINERY(CAPTIVE POWER), HARIDWAGANJTPS, HARINAGAR, IOCL - PANIPAT, JINDAL DERANG, JPL RAIGARH, KALI NADI, KAPHERKHEDA TPS, KHADANA, KHANDONG, KODERMA TPS, KOPILI, KOTLA, KUTTIYADI, MALANA, MATHON TPS, MODIPONE, MUKERIAN, NAJHARI, NTPC ARAVALLI, NTPC BONGAIGAON, NTPC DADRI, NTPC ENNORE, NTPC MAUDA, NTPC NABI NAGAR, NTPC RIHAND, NTPC SIMAHDHRI, NTPC VINDYACHAL, PARAS TPS, PARBATI, PARLI TPS, RAICHUR TPS, RAIPUR POWER N ISPAT, RAJGHAT, RANJIT SAGAR, REL DAHANU, RELIANCE ENERGY, ROURKELA STEEL PLANT, ROURKELA TPS, SANTHALDI TPS, SANTHALDIH TPS, SARAVATI HYDRO ELECTRIC, SARDAR SAROVAR, SATPURA, SHREE SINGAJI, SIKKA TPS, TALA, TAMILNADU STATE ELECTRICITY BOARD, TATA JOJOBERA TPS, UKAI TPS, VASANTHARAO DADA PATIL SSK, VIJAYAWADA THERMAL POWER, VIKAS SSK, ETC
 

Paper Plants/Mills:

ANDHRA PAPER MILL, BINDLAS PAPER MILL, CENTURY PAPER MILL, GRD PAPER, ITC- BHADRACHALAM, K.R. PULP & PAPER, MADHUBATI PAPER MILL, MAGNUM VENTURES,MECANO PAPER, MOHIT PAPER MILL, MUKERIAN, MULTIWAL PULP & PAPER, ORIENT PAPER MILL, RAMA PAPER MILL, RAMA SHYAMA PAPER, SATIA PAPER, STAR PAPER MILL, UNITED PAPER MILL, ETC.

Miscellaneous:

BALMERLAWRIE, BOSCH, DANIELI,DLW, FL SMIDTH, GODREJ, HINDALCO, HONDA MOTOR, HUMBOLT, HV TRANSMISSION, KIRLOSKAR BROTHERS, L&T, KANSBAHAL, L&T POWAI, LEITNER SHRIRAM, MAHINDRA & MAHINDRA, MOHIT PAPER MILL, MARUTI, NUPOWER, PAHARPUR COOLING TOWER, PARADEEP PHOSPHATE, PP ROLLING, PRAJA MECHANICAL, RCF, RENUKA EQUIPMENTS, RIETER, SAMKRG PISTONS, STEEL STRIPS, TOSHIBA MACHINE, VAYUNANDANA,VELJAN, WMI KONECRANES, ETC

Exports to Countries: Initially for two decades the company was busy in catering to the Indian market and prior to the inception of the company, basically lubrication units were imported. Having catered efficiently the Indian market, the company started contributing to the world market. Now the company is exporting its products to :- BAHRAIN, DUBAI, ETHIOPIA, FINLAND, GERMANY, HOLLAND, HONDURAS, INDONESIA, IRELAND, ITALY, KENYA, MALAYSIA, NEPAL, PHILIPPINES, SAUDI ARABIA, SHARJAH, SOUTH AFRICA, SRI LANKA, TANJANIA, THAILAND, UGANDA, USA, VIETNAM, ZAMBIA, ETC.

Balance Sheet

Income Statement:

CashFlows:

 

Company seems to be very small considering the client base.. so either there are other ways the company management seems to take out benefits .. else the client list is rock solid.. Capital investment for March 2016 is 3.5Cr out of which 3.4Cr is in buildings.. 1Cr invested as advance for flat at Noida and Faridabad, 45 lakhs for a flat in banaglore,  so company is moving into the business of property management.. 

March 2015  3.2Cr spent for plot in Faridabad .. wonder where that went in 2016?.. 

Latest announcement 13 July 2017 to BSE indicate that the subsidiaries and associates have been merged with CenLube Industries. ie. MiniHyd Hydraulics Limited & Ganpati Handtex Pvt limited. If you look at the consolidated data subsidiaries will add additional debt burden to CenLube and zero topline.. which is negative but consolidation of nonlisted associates and subsidiaries should result in increase in promoter shareholding.. and hopefully better disclosures and higher EPS in the future..

Conclusion: Cenlube Industries and many similar small/microcap companies which are market leaders are feeling the pressure of Modi-nomics. better income disclosure, tightening of loans by basel-III also is reducing the possibility of nonlisted entities from getting credit.. if you dont have sufficient income  it will be difficult to get credit lines from banks.. I expect Cenlube to start reporting "realistic numbers" which should translate to higher topline and bottomline and higher stock prices.. Since the merger of associates and subsidiaries is after July we will have to wait for September shareholding data to see how much the promoter shareholding has increased...over past 5 yrs promoter shareholding has increased by 2% I would recommend "BUY Now" as company is undiscovered and still very attractively priced..7-8Cr cash in hand 23.8Cr market cap..its attractively priced.. and actual sales numbers and profits should improve in the future.

Bemco Hydraulic: Hidden Gem

BEMCO Hydraulic
CMP:185.6
Market Cap: 40.59Cr
Year Ended March 2017
Sales: 42.53Cr
Net Profit: 3.62Cr (includes: 2.82Cr Exceptional item)
http://www.bemcohydraulics.net/
http://www.fluidik.co/
http://www.bemcohytech.in/

Bemco Hydraulic was incorporated in 1957. It is now a premier producer of Hydraulic press equipments.

BEMCO, originally an Engineering Craftsman's shop in the late thirties has risen to be a premier manufactures of Portable re-railing equipment, Light weight re-railing equipment, Hydraulic Re-railing equipments, Re-railing Systems, Hydraulic press, Wheel fitting press, Straightening press. Our Portable Rerailing Equipment is designed for re-railing cars and locomotives. The light weight of the rerailing equipment makes it a useful tool in solving re-railing problems safely.
BEMCO now has a well planned and adequately equipped manufacturing setup where every infrastructure is available to design, develop and produce a mega range of Hydraulic press and Light weight Portable re-railing Equipments.BEMCO, by collaborating with Vogel of Germany and Towler Brothers of U.K manufactured the first ever indigenously produced Hydraulic press.
 Re-railing and rescue Equipment catalogue

BEMCO major clients are:
1. Indian Railways, 2. BHEL, 3. BEML, 4. ESCORTS, 5. NFC(Nuclear Fuel Complex), 6. BARC(Bhabha Atomic Research Center), 7. HMT, 8.Ministry of Defense, 9. Kirloskar, 10.FORCE Motors, 11.Siemens, 12.ABB, 13.AMCO, 14.Ashok Leyland, 15.BFW(Bharat Fritz Werner), 16. L&T, 17.CA, 18.Denso, 19.Eicher, 20.FAG, 21.TIMKEN, 22.GRSE, 23. Hero Group, 24.HCL, 25.Honda, 26.Indo Nippon Electricals, 27.Atlas Cycles, 28. Jai Parabolic Springs, 29.Kalyani Group, 30. Lemken, 31. KEC International, 32.Whirlpool, 33. KSB, 34.Lucas TVS, 35. Brakes India, 36. Avon cycles, 37. Mahindra, 38. MICO, 39.NBC Bearings, 40. New Holland, 41.NRB Bearings, 42. Indian Ordinance Factories, 43.Panasonic, 44.Piaggio, 45.Rane (Madras), 46.Rane, 47.RSB Group, 48. Salem Steel, 49.Sintex industries, 50.Sona Steerings, 51.SRF, 52.SUNFAB, 53.Sundram Fastner, 54.Suzuki, 55.TELCO, 56.TAFF, 57.Toyota, 58.TTK Prestige, 59.TVS, 60.Vespa, 61. Vikram Sarabhai Space Center, 62.Voltas, 63.Bharat Forge, 64.Wheels India, 65.ZF India.

Bemco Total Issued Equity Capital:  5.39Cr out of which Equity Capital: 2.19Cr, Preferential Equity:3.20Cr
Bemco Hydraulics has Preferential capital which is being given 11% interest..
March 2013 Equity Capital: 1.45Cr, Preferential Capital:3.38Cr
March 2014 Equity Capital: 1.79Cr, Preferential Capital:3.20Cr
March 2016 Equity Capital: 2.19Cr, Preferential Capital:3.20Cr

the Equity capital is increasing while the Preferential capital is reducing.. which is an indication of better days for equity shareholders.

Latest Year ending March 2017 Results.
Stand alone profits have an exceptional item 2.8Cr which is writeback of "Deferred Payment Liabilities"

Also if you see the Reserves
March 2016: -87.27Lakhs
March 2017: +ve3789.92Lakhs (37.89Cr)

Property Plant and Equipment:
March 2016: 697.52 lakhs (6.9Cr)
March 2017: 4212.35lakhs (42.12Cr)

So looks like the books are being cleaned/strengthened.. so that the company has respectable assets and earnings, liabilities (preferential capital) is being reduced.. I would say its all due to BASEL-III guidelines..
Companies can no longer get access to capital if they do not have a strong balance sheet or income/profits.

Also with AADHAR being linked with PAN .. fictitious PAN/individual investors on paper is a thing of the past..shareholders have to be identified.. and hence stock prices will reflect true value..

CMP:185.6
Market Cap:40.59Cr
March 2017  Total Shareholder funds: 43.29Cr
which means Book Value is higher than CMP..??? EPS with exceptional income @ 16.99
giving a PE of  11, Book Value of 197.6

Another interesting observation is demat shares
Public shareholding: 5,53,430 share out of which only 3,52,700 shares are in demat form (63% available for trading)  ie Free float is: 3,52,700 x 185.6 = 6.5Cr

If you look at the detailed public shareholding.. actual demat shares with public (shareholders with shareholding less than 2 lakh (20,000 shares)) is just 82,659 shares ie 82.659 x 185.6 = 1.53Cr Free Float

Conclusion: Bemco Hydraulic is a well established name in  its line of business.. Hydraulics is required in heavy industry as well as in Shopfloor automation.(robotics). company has also started manufacturing low power consumption hydraulic systems which would be used in automation activites in the industry. With make in India and involvement in Railway, space, defence and heavy industry I expect topline to improve. Management is also converting its preferential capital into Equity which means management expects equity to do well in the future... its a good long term buy.. Hidden Gem.

Manugraph India: Revisited

Manugraph India was recommended in Sept 9,2010 @ 50.10 Market Cap: 152.84Cr
Today Sept 15,2017 Manugraph CMP is: 50.05 Mcap 152.15Cr.

Manugraph is still struggling to report profits and recently reported that its American subsidiary "Manugraph Americas" has filed for bankruptcy protection. There is also report of Workers going on Strike..
Is there something we are missing out here??..

All those who have followed manugraph India know that its the market leader in India with about 70% market share as well as it has developed new presses with double width and speeds upto 70,000 cph(copies per hour) after purchasing DGM, Manugraph has incorporated new technologies and started manufacturing high speed presses of 60,000 to 70,000cph. Manugraph also has the distiction of always paying dividends to shareholders even when it was reporting losses..

So maybe stock price wise... the stock looks like its going nowhere, Manugraph the company is live and kicking.. what caught my eye (and the reason for suggesting a buy is the shareholding pattern for Manugraph.)

March 2016 Largest Public shareholder is : Reliance Mid-Cap Small Cap Fund: 17,09,978 shares.
Total public shareholders in March 2016: 12,369 shareholders

One year later: March 2017: Largest Public shareholder (Reliance Mid-Cap Small-Cap fund) is no longer a  shareholder in manugraph but the Total Public shareholders in March 2017: 12,243 shareholders

So even as the largest shareholder has sold manugraph shares (17 lakh shares)... Number of public shareholders has decreased by 12369-12243 = 126 shareholders.
Ideally when large shareholders dump shares in the market.. the shares should be distributed across number of small shareholders increasing the no of shareholders for manugraph..... but Surprise Surprise

So not only has the 17,09,978 shares been accumulated by strong hands.. It seems the strong hands have accumulated shares from the open market from other small shareholders

HNI(High Networth Investors) holding more than 2 lakh face value shares(1 lakh shares as manugraph is Rs 2 face value shares):
March 2016: No of shareholders: 6, No of shares:11,57,701 shares,  Percentage: 3.81%
March 2017: No of shareholders: 9, No of shares: 19,85,969 shares, Percentage:6.53%
3 people have added: 19,85,969 - 11,57,701 = 8,28,268 shares (@ 50 worth 4.14Cr)

No of small shareholders (holding less than 2 lakh face value shares):
March 2016: No of Shareholders:11,574, No of shares:69,09,845 shares, Percentage: 22.72%
March 2017: No of shareholders: 11,411, No of shares:70,32,023 shares, Percentage: 23.12%

Even in small shareholder category..as the no of shares has increased by 1,22,178 shares, number of shareholders has reduced by 163 shareholders (11,574-11,411=163) there is consolidation at  all levels..

So from what I see Big money is accumulating Manugraph shares..

If you look at the charts.. manugraph has just turned bullish after 8 long years..
200Day EMA (Exponential Moving Average) has moved Above 999 Day EMA (kind of Extra Long Golden Cross)  [Golden Cross is when 50Day EMA moves above 200Day EMA]

Conclusion: On the face of it Manugraph seems to be still in doldrums.. with losses being reported and with Manugraph Americas filing for bankruptcy.. and Workers going on a strike..

But looking at the shareholder data.. there are some big investors who have accumulated Manugraph shares and technically also the share seems to be growing stronger every day..

We as investors have to decide what does our conviction say? I would personally say Buy!!

PN: This is not a recommendation service.. I maintain this blog to review my own thought process and investment logic... Please do your own deep dive before investing