Birla Precision Technologies: Comeback kid!!

Birla Precision Technologies

CMP: 8.17

Market Cap: 43.02Cr

Sales: 155.37Cr (March 2017)

http://www.birlaprecision.in/company-profile.html

Birla Precision Technologies Ltd (BPT) the erstwhile Birla Kennametal Ltd was established in 1986, as a joint venture company between YBG (Yash Birla Group) and Kennametal Inc, USA In July 2007. YBG acquired the stake of Kennametal in the JV consequent upon which Birla Kennametal was renamed as “Birla Precision Technologies” (BPT). BPT continues to be a primary vendor of Kennametal worldwide –USA, Germany and APAC supplying rotating tool holders in AT3 class. Besides, BPT also exports in a large way to other major customers in the USA, Europe and in recent times to the Far East including China

Leveraging its core competency of machining, forward integration into machining of precision components and castings was a natural progression and catering to global giants like Cummins, Knorr-Bremse, Husco International .

Yash Birla Group sold its Dagger Frost cutting tool division to Samvardhana Motherson Group (SMG) in 2009 .. though the remains of the cutting tool business with Yash Birla Group is a division of Birla Precision called "Indian Tools Manufacturers" https://www.indiantool.com/

The other division is: Birla Kennametal division which makes rotating tool holders AT3 Class.. Here Kennametal shareholding has been bought by Yash birla Group and name of the company was changed from Birla Kennametal to Birla Precision Tools. http://www.birlaprecision.in/index.html

The third division is "machine casting division" which makes Automotive components and exports it to automotive customers like Cummins and Honeywell.. this division was done in collaboration with "Perucchini of italy"

Birla Precision had debt restructuring and as part of it all companies related to automotive tools have been merged into Birla Precision as separate divisions mentioned above.. (consolidation of business) 

Now the promoters have recently (April 13,2018) passed a resolution for preferential allotment of shares to promoter company in Birla Precision. 

The company shares are also at rock bottom prices and turned bullish (golden Cross)

Conclusion: Book value is 18, cmp is: 8.17 and has recently shown some movement..

Considering the consolidation of all automotive and tools related business with Birla Precision and the subsequent preferential allotment to promoters.. Birla Precision looks like a long term bet on the Yash Birla group turning the company profitable.. Birla Precision has all the right ingredients just needs to think big.. and work towards it.. Invest is my view..

PN: this is not an investment advice.. it is my though process and a timeline for my point of view.. Pls consult a SEBI registered advisor.. and do your own deep dive..

=happy investing

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Manugraph: Bullish undertone..

Manugraph

CMP: 47.5 Mcap:144.47cr..

Was just looking at Manugraph.. 

Feb 7,2018 outcome of Board meeting states:

Board approves proposal to merge 100% subsidiaries and group companies with Manugraph..

WOW!!! Thats BIG Really BIG News!!

now if I look at companies with similar addresses as manugraph

it states there are 2095 companies with similar addresses.. I checked a few... not all 2095 companies have same promoters as manugraph..(the one marked is not a promoter company)  but to say the list above is the complete list of companies owned by promoters would also be wrong..

So all said and done.. the statement that promoters are going to merge group companies into manugraph.. means we are going to see value unlocking.. 

predicting when that will happen .. would be speculating.. 

No of shareholders:

Dec 2017: 11,221 

Dec 2016: 11,942

Dec 2015: 12,248

Dec 2014: 11,873

Dec 2013: 12,404

lowest no of shareholders in past 5 yrs!!

Lets close by saying this is an interesting development to be kept in mind.. with bullish undertones..

=happy investing

whatsup-indianstockideas.blogspot.com

Eastern Silk: Discounted stock.. Exporter of Silk

Eastern Silk Industries

CMP:3.40

MCap: 27.08cr

March 2017: Sales:63.42cr, Net Profit: 45.06Cr

http://www.easternsilk.com/

ESIL a Kolkata based company incorporated in April 9, 1946 before Independence and it got its current name in 1975. The chairman is Mr. Shyam Sunder Shah. The company is engaged in various multifaceted activities like manufacture of silk yarn, fabrics and made ups, home furnishings, fashion fabrics, double width fabric, scarves, laces, melts and embroidered fabrics.

The company has been recognized as a Golden Star Export House by the Government of India. Sales are mainly from export markets. US and Europe account for about two – third of the company’s exports. Other export destinations comprise Australia, Middle East, Canada, Japan, New Zealand and Scandinavian & EFFTA countries. Its equity shares are traded on the Bombay Stock Exchange and National Stock Exchange.

ESIL is one of the largest high – end fabric manufactures in the World. Facilities at ESIL’s factory and design center are constantly upgraded as new technology is developed, to keep it on the cutting edge of industry. A wealth of technical and designing expertise accumulated over the years is put to work in developing new designs/blends.

The engineers, technicians and Supervisors in the production units are experienced and well qualified. The production is done round the clock. The whole production units are humidity and temperature controlled. The highly automated production facilities and through control systems are both highly efficient and environmentally friendly.

Manufacturing Facility

ESIL is a composite unit having the entire operations from softening, widening, doubling, twisting, dyeing, weaving and embroidery to finishing under one roof. Sophisticated processes from design to weaving are performed by the latest computerized systems,. The result is a co oriented and continuous operation that provides maximum efficiency and productivity. These steps have boosted ESIL’s reputation as a producer that can respond to customer demands for unique and sophisticated products.

Design Studio

ESIL has made an impact on global decorative fabrics industry with its world class designs and technology as well as diverse product lines, ranging from pure silk to blends from decorative furnishings to bridal wears. ESIL is constantly expanding its line up of value – added products and extending global distribution network to improve the quality of services it provides to their worldwide customers.

unit 1: 

411, Telugarahalli Road, Anekal

Bangalore – 562 106

unit 2:

No.39, Kammasandra Agrahara,

Kasaba Hobli, Anekal,

Bangalore – 562 106

unit 3:

Plot No. 209, Phase 3

Bommasandra Village,

Attibele Hobli

Bangalore - 560099

unit 4:

Falta Special Economic Zone,

24 Paraganas (South)

West Bengal

The company was referred to BIFR (Board for Industrial & Financial Reconstruction) but in Dec 2016 the company was removed from under BIFR. The company has been paying back its dues to banks/financial instutions and ARC (Asset Reconstruction Companies) on a one time settlement basis.. all these One time settlement done with ARC & Lenders by the company has resulted in 119.96Cr Waivers (last year: 58.24Cr)

Another point worth mentioning is that the company has Preferential capital of 14Cr while Equity capital is: 15.79Cr.. Preferential capital is supposed to receive preferential dividend which the company has not distributed so most likely the equity shares will not receive any dividend in the near future (preferential capital has first right over dividend distribution..)

Looking at the stock price the stock has been in dumps and it seems to be just turning around.. at current prices there is not much to loose..

if you look at the cash flows from operation

March 2017 Cash Flows from Operations before Exceptional Items: 29.19Cr

March 2016 Cash Flows from Operations before Exceptional Items: 30.38Cr

March 2015 Cash Flows from Operations before Exceptional Items: 7.92Cr

March 2014 Cash Flows from Operations before Exceptional Items: 47.74Cr

March 2013 Cash Flows from Operations before Exceptional Items: 6.41Cr

 5 yrs avg cash flow from operations: 24.32Cr

Forgot to add export data.. (latest that I have .. pls dont ask how i got it.. :-))

Conclusion: Eastern Silk is a well established company.. with regular exports from Bangalore and Calcutta.. Preferential equity means most likely no dividend payout by the company to equity shareholders .. The company as such seems to be well established and has positive cash flows.. With the change in govt attitude and banks lending to only solvent companies we can expect companies to start reporting profits... in year 2011 Eastern silk had sales of 600cr @ Mcap of just 27Cr when 5 yrs avg cash flow from operations is:24.32Cr I think its highly undervalued and we can expect market to give it a better capitalization in the future as the company fortunes turn for the better... Stock price seems to be just rising above its lows breaking above the 5 yrs EMA: 3.88.

PN: this is a blog of my thought process.. pls do your own deep dive before investing.