Sinead O Connor: I Do Not Want What I Haven't Got!!

There is not much to say except that Sinead O Connor's is a must listen!!

Song: Feel So Different!!

Lyrics: Feel So Different!!

God grant me the serenity to accept the things I can not change
Courage to change the things I can
And the wisdom to know the difference

I am not like I was before
I thought that nothing would change me
I was not listening anymore
Still you continued to affect me

I was not thinking anymore
Although I said I still was
I'd said "I don't want anymore"
Because of bad experience

But now I feel so different
I feel so different
I feel so different

I have not seen freedom before
And I did not expect to
Don't let me forget now I'm here
Help me to help you to behold you

I started off with many friends
And we spent a long time talking
I thought they meant every word they said
But like everyone else they were stalling

And now they seem so different
They seem so different
They seem so different

I should have hatred for you
But I do not have any
And I have always loved you
Oh you have taught me plenty

The whole time I'd never seen
All you had spread before me
The whole time I'd never seen
All I'd need was inside me

Now I feel so different
I feel so different
I feel so different

I feel so different
I feel so different

----------------

"I do not want what I haven't got"  was the album which according to the press made Sinead a rock star!! with the world wide chart topping single "Nothing Compares 2U"

Song: Nothing compares 2U 

Lyrics: Nothing compares 2U (original song by Prince)

It's been seven hours and fifteen days

Since you took your love away

I go out every night and sleep all day

Since you took your love away

Since you been gone I can do whatever I want

I can see whomever I choose

I can eat my dinner in a fancy restaurant

But nothing

I said nothing can take away these blues

`Cause nothing compares

Nothing compares to you

It's been so lonely without you here

Like a bird without a song

Nothing can stop these lonely tears from falling

Tell me baby where did I go wrong

I could put my arms around every boy I see

But they'd only remind me of you

I went to the doctor n'guess what he told me

Guess what he told me

He said girl u better try to have fun

No matter what you'll do

But he's a fool

`Cause nothing compares

Nothing compares to you

all the flowers that you planted, mama

In the back yard

All died when you went away

I know that living with you baby was sometimes hard

But I'm willing to give it another try

Nothing compares

Nothing compares to you

Nothing compares

Nothing compares to you

Nothing compares

Nothing compares to you 

-------------------------

Sinead O Connor Website

REC Tax Free Bond Status: Individual Investors can still invest

here is some update with regards to REC Tax Free Bonds which can give a tax free interest rate upto 8.71% for retail investors (investors investing upto 10 lakhs)

The bond size is 1000Cr with oversubscription upto 2500Cr

So total size of the issue is 3500Cr

the issue has been divided into portions for different categories of investors

Category 1: 20% of issue 200Cr (over subscription: 700Cr)

Category 2: 20% of issue 200Cr (over subscription: 700Cr)

Category 3: 20% of issue  200Cr (over subscription: 700Cr)

Category 4: 40% of issue 400Cr (over subscription: 1400Cr)

Individual investors are Category 4: i.e. Individual investors can invest upto 1400Cr worth

Since REC is going to retain oversubscription .. oversubscription upto 3.5 is acceptable.

Latest update on subscription (as of Sept 3,2013 5:00pm)

Category 1: over subscription: 1.15 (200 x 1.15 = 230Cr)

Category 2: over subscription: 3.55 (200 x 3.55 = 710Cr)

Category 3: over subscription: 3.55 (200 x 3.55 = 710Cr

Category 4: over subscription: 2.51 (400 x 2.51 = 1004Cr)

Total Over Subscription: 2.65 (1000 x 2.65 = 2650 Cr)

PN: Category 2 and Category 3 who have completely oversubscribed and are Corporate's and HNI respectively .. (So they know its good and we should also understand that its good and invest)

Conclusion: there is still about 3500 - 2650 = 850Cr worth of investment that can be done by individual investors.. So go ahead and buy.. we should see a premium listing.. of the bonds and you can make a packet (10-25%) even in the short term .. Money refunded will be paid back with interest at the rate of: 5% .. the buffer days between date of allotment and actual issue of bonds will be paid interest at the rate of issue .. so if you applied for 8.71% you will get interest at the rate of 8.71% along with the bonds..

Link to BSE website for bond status (Latest)

Invest in REC Tax Free Bonds for short term 20% upside!!

REC (Rural Electrification Corporation) has come out with TAX Free Bonds with following coupon rates for individual investors (Category IV - upto 10 lakhs)

10 yrs bond: Coupon Rate: 8.26% (Tax Free)

15 yrs bond: Coupon Rate: 8.71% (Tax Free)

20 yrs bond: Coupon Rate: 8.62% (Tax Free)

Assuming an individual investor in tax bracket of 33%

8.26% Tax Free = 12.32% (With Tax @ 33%)

8.71% Tax Free = 13% (With Tax @ 33%)

8.62% Tax Free = 12.86% (With Tax @ 33%)

=====================

REC bonds are virtually Risk free hence comparing with Bank FD's..

Bank FD rates are close to 9% and Senior citizen rates are close to 9.5% 

keeping a buffer lets assume that bank FD give us 10% return (Before Tax)

=====================

Rs 1000 invested in 8.26% REC Tax Free Bonds is equal to 12.32% taxable bonds.

So Rs1000 invested in REC Bonds will give 123.20 in interest income (before Tax)

Rs1000 invested in BankFD with 10% interest rates will give 100 as interest income..

So the question is how much capital do we need to invest in bank FD to get 123.20?

The answer is 1232/= rupees  invested in 10% bank FD gives you 123.20 in interest income.

=====================

REC bonds of Rs 1000/=  face value are going to be listed in BSE 

and "Most Likely" will quote at 1232/= 

=====================

8.26% Tax Free = 12.32% (with Tax); Quote at: 1232/= (23.20% gain)

8.71% Tax Free = 13% (With Tax); Quote at: 1300/= (30.00% gain)

8.62% Tax Free = 12.86% (With Tax); Quote at 1286/= (28.60% gain)

=====================

So there is a good chance to make a short term 20% profit by subscribing to these REC bonds and selling on listing.. that's a 1 month 20% return.. almost guaranteed..

PN: These are based on an assumption that we are equating REC bonds to 10% FD by banks.. there are finance companies bonds which payout 11% and even 12% (but at lower credit rating)  we have kept a buffer of 0.50% as real bank FD are around 9.5% (Senior citizen)

Personally I think this is a risk free 20% but please do your own deep dive before investing!! I did speak to ICICI Direct folks and they said already around 160Cr is sold on 30th August (1st day) 

This is first come first served basis.. 

This is a 1000Cr issue with over subsription level of 2500Cr 40% reserved for individual investors.!!

Private placement of bonds has already been oversubscribed

Links:

REC Tax Free Bonds FY-2013-14 Issue Highlights

REC Tax Free Bond HomePage

Personally I would recommend all investors to invest and then .. short term players can sell on listing (my plan also) there is value also in holding for long term.. only other tax free plan which comes close is PPF and the rates change every year depending on change in GOI Bond rates.(interest rate on PPF is falling..) . and there is a max limit of just 1 lakh 

PN: this is based on publicly available information and my personal opinion.. please do your own deep dive before investing

BASEL-III: Fall of the banking pack. and rise of the IT pack (One man's poison is another man's cure)

We have seen that the banking pack has lead the recent market tumble.. and surprisingly the IT (Information Technology) end of the market is going strong in-spite of all odds..(is it just the Rupee arbitrage??)

what is the underlying principle for the rise of IT and the Fall of the Banks..

Surprisingly the answer to both the IT and Banking industries "Boom and doom" is the same: BASEL III

One man's poison is another man's cure : 

BASEL III is the poison that is going to crush banking and
BASEL III is the cure which will increase demand for IT programmers just like the Y2K (Year 2000) Bug years..

BASEL III agreements were set into motion to provide a "Global" regulatory framework for more resilient banks and banking systems
BASEL III sets international framework for liquidity risk measurement, standards and monitoring.
BASEL III objective is to improve banking sector's ability to absorb shocks.
BASEL III objective is to reduce risk spillover to the real economy.
BASEL III sets micro level prudential regulation at individual bank levels
BASEL III sets macro level prudential regulations at system wide basis..

All this "prudential regulations" at the micro and macro level means a lot of custom code for the banks. Since BASEL III is Global regulations you can expect Indian IT foot soldiers "on the move" implementing BASEL III worldwide..

Welcome back to the "golden age" for IT again..

Banking's Poison

BASEL III rules and regulations are going to squeeze the banking industry from both ends.
- lending restriction by enforcing "Risk Weighted Assets"
- Increase in Capital requirements.

There is an understanding that Indian Banking system is not so leveraged and will be able to sail through.. but that's not true..

Capital Adequacy Ratio" which is an indicator of strong financial status ..
It seems a bank with capital adequacy ratio of 11.1% in old system .. under the new BASEL III will have capital adequacy of 5.7% due to new definition and subsequent adjustment of capital due to increase in risk coverage due to "Risk Weighted Assets".

The BASEL III rules are going to be implemented in phases and starts from 2013..for next 10yrs (now we know why the banks are falling like nine pins .. and will continue to remain suppressed)

CET1(Common Equity Tier-1) is going to see "deductions" starting 2014 and hence we can expect more equity capital raising by banks to meet the increasing deductions. Equity capital requirements for Indian banks according to estimates is close to 1Trillion Rupees (1 lakh crore)

"Disclosure's start Jan 1,2015" i.e all reporting will have to be based on BASEL III  .. you can expect reports about drop in banks financial strength and lower earnings.

BASEL III will result in sluggish growth, high unemployment for the economy and increase in "resolution cases" and low returns on investment for the banking industry.

Increase Equity capital or reduced loan books.. we might see both these steps based on banks ability to raise equity or not.. higher capital requirements will force reduction in dividend payout to investors..

It will be easier to use the Non Banking Finance Company (NBFC) to fund risk assets as banking rules donot apply to NBFC. Expect NBFC to outperform banks and NIFTY

Expect higher interest rates, higher down payment for housing loans... this could result in lower demand which will result in falling/stagnant real estate values/prices.

RBI Document for BASEL III (Link)
Institute of International Finance (Measuring the cumulative impact of BASEL III Sept 2011)
Basel III in International and Indian context (10 questions we should know the answers for) Dr D Subbarao
BASEL-III PWC:Navigating changes in banking capital

Jayant Agro: Factor of 3!! Under Reporting Profits at standalone levels

I was just trying to read through the latest Annual Report year 2012-13 of Jayant Agro Organics 

you can get a copy of the Annual Report from Company website here (Link)

=============================

Looking at the stand alone Income Statement for Jayant Agro Organics

Year Ending March 2013

Total Revenue: 1228.21Cr

Cost of Material Consumed: 504.03Cr

Value Add Margin: (1228.21-504.03) = 724.18Cr

Value Add Margin as percentage of sales: 724.18/1228.21 = 58.96%

Net Profit Reported: 27.73Cr

Net Profit Margin as percentage of sales: 27.73/1228.21 = 2.25%

Jayant Agro has a Value Add Margin as percentage of sales of: 58.96% 

while Jayant Agro  reports a net Profit Margin as a percentage of 2.25%

=============================

=============================

Looking at another of my Best Buy Recommendations GAEL Annual Report (Link)

Income Statement for Gujarat Ambuja Exports:

Year End March 2013

Total Revenue: 3014.07Cr

Cost of Material Consumed: 2069.10Cr

Value Add Margin: (3014.07-2069.10)= 944.97Cr

Value Add Margin as percentage of sales: 944.97/3014.07 = 31.35%

Net Profit Reported: 113.35Cr

Net Profit Margin as percentage of sales: 113.35/3014.07 =  3.76%

Gujarat Ambuja Exports(GAEL) has a Value Add Margin as a percentage of sales of: 31.35% 

while GAEL reports a Net Profit Margin as percentage of sales of: 3.76%

=============================

GAEL margin reporting looks true.. while Jayant Agro margin reporting looks suspect.. 

Well the answer is just a step below..

-------------------

Jayant Agro 2013:

Cost of Material Consumed: 504.03Cr

Purchase of Stock in Trade: 502.43Cr

Stock in Trade as % of Cost of Material Consumed: 502.43/504.03 = 99.68%

Jayant is carrying as "Stock in Trade" inventory equal to 99.68% of its full year's cost of material consumed.

Next year's Cost of Good Sold = Zero (as its already included in this year's expense)

-------------------

-------------------

GAEL 2013:

Cost of Material Consumed: 2069.10Cr

Purchase of Stock in Trade: 411.34Cr

Stock in Trade as % of Cost of Material Consumed: 411.34/2069.10 = 19.88%

GAEL is carrying as "Stock in Trade" inventory equal to 19.88% of its full year's  cost of material consumed. 

-------------------

Lets get this clear.. 

Jayant has sales of 1228.21Cr and the cost of material for this sale of 1228.21Cr is 504.03Cr .. and in the expense section is purchase of stock in Trade worth 502.43Cr which is very very close to the cost of material consumed for the whole year..

surely this is a lot of inventory.. that is being carried forward.. infact in the year ending March 2012

Jayant "Cost of Goods Sold" was 678.71Cr while inventory was 775.19Cr .. 114.21% of last year's full year's "Cost of Goods Sold"..

------------------

Assuming "Inventory at a level of 20% (similar to GAEL) 

Cost of Material Consumed: 504.03Cr

Suggested Purchase of Stock in Trade: 20% of 504.03 = 100.80Cr

Difference in "Purchase of Stock in Trade" = 502.43-100.80 = 401.63Cr

Assuming everything else is the same in the income statement of Jayant Agro.. 

Net Profit should have been: 401.63+ 27.73 = 429.36Cr

Surely a net profit of 429.36Cr is way way out compared to reported profit of 27.73Cr

Lets take GAEL again into the picture: 

GAEL had Value Add Margin as percentage of sales at 31.35% and Net Profit as a percentage of sales at 3.76% (11.99%)

we know that Jayant has a Value Add Margin as percentage of sales at 58.96% let us assume that Jayant will have a Net Profit as a percentage of sales at 7.01% (11.99% of Value Add margin)

Ideal Net Profit for Jayant Agro Organics (standalone): 86.17Cr which translates to EPS of 57.44 per share

Conclusion: Jayant is under reporting profits by a huge number by increasing costs.. Though a company is allowed this level of flexibility .. we as investors can see the under reporting done and get a stock at an unbelievable discount to its real value..

Jayant has a Market Cap of just: 108.53Cr and only 5235 shareholders.. Right now looking at the level of under reporting I can say Jayant is an easy 10 bagger!!

 

We as investors can also approach the management to report real numbers and help in value unlocking .. hence benefitting all investors..

PN: These are my personal views about publicly available information.. Please do your own deep dive before investing!!

Jayant Agro Organics AR-2012-2013: Where have the dividends gone?

I just received the annual report for Jayant Agro for year ending March 2013. (Year 2012-13)

It is also available in the company website link is here

as the title suggests we are looking at the dividends .. and looks like we are getting less dividends.. the question is how and why?

Lets look at the consolidated results.. proposed dividends (Page 64).

At a consolidated levels.. Jayant Agro has reported for the year ending March 2013 Dividend payouts of:

Interim Dividend: 1.595Cr

Proposed Dividend: 6.75Cr

Total dividend payout for year ending March 2013: 8.34Cr

Last year total dividend payout for year ending March 2012: 4.375Cr

Dividend tax payout has also increased to 83.23lakhs(Last year: 48.67 lakhs)

My concern is this:

Jayant Agro has declared (on a standalone basis) dividend payout for year ending March 2013:

Proposed Dividend payout: 3.37Cr 

Question is: when Jayant Agro at consolidated levels is reporting 8.34Cr as dividend payout .. why shareholders are getting only 3.37Cr .. this is all the more important because Jayant Agro and its subsidiaries are paying dividend tax to the Govt of India .. distributing the dividends to the shareholders (where majority shares are held by Jayant Agro Promoters) would make the best sense as you donot need to pay dividend tax again to Govt. as subsidiaries have already paid taxes.. 

--------------------------------------

(for the sake of argument let us assume) It is quite possible that maybe there are subsidiaries where Jayant has less than 100% shareholding and this consolidated dividends are getting distributed through these "not 100% subsidiaries" and hence not available to Jayant Agro for distribution.

Jayant Agro has 3 subsidiaries:

1. Ihsedu AgroChem Pvt Limited  -- Shareholding: 100%

2. Ihsedu CoreAgri Services Pvt Ltd --Shareholding: 100%

3. Ihsedu Itoh Green Chemicals Marketing Pvt Ltd. -- Shareholding: 60%

Most likely place for the dividend payout to slip out from Jayant consolidated  is "Ihsedu ITOH Green Chemicals Marketing Pvt. Ltd." 

well Ihsedu ITOH reported revenues of: 16.32 lakhs and profit after tax of: 5.72 lakhs for year ending March 2013 .. surely the dividend payout could not have leaked from here..

--------------------------------------

There is a possibility that Ihsedu Specialities Chemicals Private Limited: which was amalgamated in 2012 could have been the source of leakage of dividends.. but I was reading annual report of year 2011-12 when Ihsedu Specialities Chemicals Pvt Limited was bought in as a 100% subsidiary and then amalgamated into Jayant Agro. 

"Ihsedu Speciality Chemicals Pvt. Limited (ISCPL)

The Hon’ble High Court of Bombay vide its order dated July 6, 2012 sanctioned the “Scheme of Amalgamation”of ISCPL, a wholly owned subsidiary of the Company with the Company. The “Appointed Date” is October 1, 2011. Thus, from this date ISCPL stands amalgamated with the Company and the legal entity of ISCPL stands dissolved without winding up. Further, the entire business undertaking of ISCPL gets transferred to and vested in the Company"

--------------------------------------

Even though the verdict was passed in July 6,2012 (technically it falls in the year 2012-13) the verdict clearly states that as of Oct 1,2011 ISCPL is dissolved into Jayant Agro.. so start of the year 2012-13 ie 1st April 2012 ISCPL was already amalgamated into Jayant Agro so dividend slippage through ISCPL is also out of question.

Conclusion: 

Jayant Agro at consolidated level has reported Dividend payout of: 8.34Cr .. there is no way that the dividends could have been distributed to minority shareholders of subsidiaries .. because as of April 1,2012 Jayant agro subsidiaries are 100% owned by Jayant and only subsidiary where there is less than 100% had no significant earnings for dividend distribution..

8.34Cr in dividends on an equity base of just 7.5Cr works out to a dividend payout of: Rs 5.56 per share (Rs 5 face value) actual proposed dividend payout is just Rs 2.25 per share which is just 40.4% of Rs 5.56

This year's AGM to be held on Sept 26,2013 11:00am M. C. Ghia Hall, Bhogilal Hargovindas Bldg.,

4th Floor, 18/20, K. Dubhash Marg, Mumbai- 400 001.

This question needs to be raised.. why dividend distribution is less to shareholders of Jayant when subsidiaries are reporting higher dividend payouts to jayant. there is zero dividend tax if the dividends are distributed to shareholders .. and everyone stands to benefit.

FII Activity In August 2013 - Still buying Indian Equities: Go Long!!

Contrary to what is being reported that the market is falling due to FII selling in the Indian Equity markets.. data reported by SEBI says otherwise..

FII Investment in Equities:

1 Aug 2013: FII Net Equities Investment: +ve 177.10 Cr

2 Aug 2013: FII Net Equities Investment: +ve 281.10 Cr

5 Aug 2013: FII Net Equities Investment: +ve 440.30 Cr

6 Aug 2013: FII Net Equities Investment: +ve 150.90 Cr

7 Aug 2013: FII Net Equities Investment: +ve 356.60 Cr

8 Aug 2013: FII Net Equities Investment: -ve 252.90 Cr

12 Aug 2013: FII Net Equities Investment: -ve 338.60 Cr

13 Aug 2013: FII Net Equities Investment: +ve 415.70 Cr

14 Aug 2013: FII Net Equities Investment: +ve 76.30 Cr

16 Aug 2013: FII Net Equities Investment: +ve 294.70 Cr

From 1st Aug 2013 to 16 Aug 2013 FII Equity Investment is: +ve 1601.20Cr 

FII have been selling in the debt market and thus the total FII Activity is -ve in the capital markets but Equity specific activity is Net Positive..

Conclusion: NIFTY on Friday 16 Aug 2013 closed at 5507.85 its advise able to buy at these levels.. instead of shorting

Jayant Agro: Old Annual Reports 2000-2004

Pls find links to Jayant Agro Annual reports

Pls download the document and store in your local system

AR 1999-2000

https://docs.google.com/file/d/0ByssebtSCgTHSlFxbUVyMlE0REE/edit?usp=sharing

AR-2000-2001

https://docs.google.com/file/d/0ByssebtSCgTHNVZoUS10TjU0b3M/edit?usp=sharing

AR-2001-2002

https://docs.google.com/file/d/0ByssebtSCgTHMUZKa19YVG93Sm8/edit?usp=sharing

AR-2002-2003

https://docs.google.com/file/d/0ByssebtSCgTHNHpkdmVWVEpXVmc/edit?usp=sharing

AR-2003-2004

https://docs.google.com/file/d/0ByssebtSCgTHcTNqdWtXYXhjV0k/edit?usp=sharing

Jayant Agro: June 2013 FOB Data

Though I must remind all readers.. that please do your own deep dive before investing and check for facts from your own sources.. This is "As-Is " data with Zero reliability..

For the month of June 2013 total of 221 export shipments were done by Jayant agro and its 100% subsidiary "Ihsedu Agro Chem" .. Total FOB value was: 65.03Cr and Duty Drawbacks and Sales Tax Refund for June 2013 totals upto 81.16 lakhs

Ihsedu has large orders (by Value) which are of low value add.. while Jayant is exporting smaller FOB value shipments but of higher value add (higher margins)

here is a snapshot of export data Ihsedu..

Here is snapshot of Export data : Jayant Part 1:

Here is snapshot of Export data : Jayant Part 2:

I was also looking at old annual reports year 2000-2001

Jayant reported in year ending March 2001

Sales: 102.06cr

Net Profit: 12.10cr (Net Profit Margin: 11.85% Pls note zero taxes..)

even dividend payout was a cool 4.5cr in 2001

for year ending march 2013 Jayant reported 

Sales: 1621cr

Net Profit: 36.24cr (Net Profit Margin: 2.23%)

dividend payout: 3.375cr (less than what was paid in 2001..)

-------------------------

clearly when sales were just 100cr Jayant was reporting over 11% profit margin.. now with 1600cr sales profit margins have dwindled down to 2.23% ..

-------------------------

Conclusion: My personal opinion is Jayant has been under reporting profits.. to grow in size without attracting any serious competition.. 

There is also enough room for a substantial increase in dividend payout.. and increase in stock price as margin improvement is reported.. A real hidden gem..

Looking through the Haze..

After the financial collapse in Oct 2008 .. US FED went on the largest ever monetary expansion mode..

Monetary base of US financial system was expanded from 1,129 Billion to 3,109 Billion .. It was predicted that the Dollar will crash (due to excess FED Printing) and everyone was predicting dollar collapse..

Nothing could be further from the truth..

From Oct 2008 to June 2013 Dollar has strengthened against.

Euro

Strengthened against the British Pound

Strengthened against the Indian Rupee

However the Chinese Yuan and the Japanese Yen have strengthened against the dollar

Chinese Yuan

Japanese Yen

So what we see is that countries who were competitive against US and had positive trade balance with US  (China and Japan) saw their currencies strengthen while countries which had -ve trade balance saw their currencies Fall.

What then happened to the greatest ever monetary expansion by the FED?

1. The FED publishes the monetary base (All the money in the system including money held with the Federal Reserve)

On Oct 2008 the Monetary base was: 1,129 Billion.

On Jun 2013 the Monetary base is: 3,109 Billion.

I remember once hearing a phrase .. like a bikin, with statistical numbers its not what they reveal but what they hide..

Everyone say's the FED is doing a great job by aggressive monetary expansion .. The truth is something completely different (hidden)

On Oct 2008:

Monetary Base: 1,129 Billion

Reserves of Institutions with FED not borrowed: -ve332 Billion(-ve indicates money borrowed from market and parked with FED)

Money in the System: (Monetary Base - Reserves held with FED) = 1,129 - (-332) = 1,461 Billion

Actual Money in the System in Oct 2008 was: 1,460 Billion USD

On Jun 2013:

Monetary Base: 3,109 Billion

Reserves of Institutions with FED not borrowed: 1,980 Billion

Money in the System:(Monetary Base - Reserves held with FED)= 3,109- 1,980 = 1,129 Billion

Actual Money in the System on June 2013 is:1,129 Billion USD

So the real truth is that "Money in the system in 2013" is still less than the "money in the system in 2008"

which translates to tight money condition and contraction of the economy.. 

What is this Monetary Base 3,109 Billion?

Every month the FED buys 85 Billion dollars worth of Bonds and Mortgage which is a fact.. but the quality of Mortgage and Bonds is suspect..so what the FED is doing is.. its cleaning the books of the FED registered Institutions (big banks) by replacing their suspect mortgage backed securities and Bonds by crisp full value US dollars which have "Zero Risk"

The banks then deposit the newly printed US Dollars back with the FED  as reserves..(resulting in Excess Reserve deposit by the Institutions with the FED)

This ensures there is no massive increase in dollar availability in the financial market which could weaken the dollar

"USD Money in the system in 2013" is less than "USD Money in the system 2008" ensuring the stability of the USD inspite of buying 85 billion dollar/month of bond/mortgage securities buying.. (85 billion bond buying is an eyewash.. its actually cleansing of the books of the large financial institutions and does not help the economy..)

All the FED monetary policies have been directed towards the big banks and nursing them back to health .. rather than the US economy. The US economy and the world economy cannot be encouraged due to the fact that "Peak Oil" is a reality and any economic expansion is going to directly result in more trade and more energy consumption. US energy/oil consumption is at a 15yrs low..

The US Dollar strength will be preserved cause loosing control over the value of the dollar could result in rise of other currencies (chinese Yuan) and loss of financial clout in global markets

Oil prices could rise sharply to bring "Peak oil" front and center of the "Dinner table discussion" 

Future looks more and more driving towards 

"Energy Efficiency/conservation"

"Chaos with population reduction: War/pandemics/natural disasters " 

"Volatility to shake and bake for asset accumulation"

"Further growing divide between rich and poor"

"Drive towards Local economic models"

----------------

With growth prospects diminishing.. we can expect monopolistic companies with very little competition.

Dividend income would be major source of income for investors.. as investors are driven out of the market..

Stick to investing in basic requirements.. Food, Energy, Clothing and shelter (in that order)

Target Energy efficiency, carbon footprint, necessities.

There is going to be a Renaissance period .. where Art,Culture will be given higher priority.. Sports, entertainment would be growth areas.. Growth will take a backstage..

Jayant Agro: Latest FOB Data..

Have been digging around and have collected some more info with regards to Jayant FOB export numbers..

Though must state that the data is incomplete with missing days.. I am also reluctant to post raw data as it could be used as a competitive advantage by other castor oil and castor oil derivatives companies..

1. FOB data for Jayant Agro May 4,2013 to June 7,2013 is: 43.22cr Pls note there is data missing from May 21-May 26,2013

2. FOB Data for Ihsedu Agro , May 14 to June 7,2013 is: 77.18cr.. Pls Note that there is data missing for the period May 21 to May 27,2013

Jayant Agro is mostly exporting value added castor derivatives while Ihsedu is exporting low value high volume castor oil and 1st generation derivatives.

USA it seems still takes the cake as the largest export destination for Jayant Agro's low or high value added castor derivatives..

Jayant had 170 different shipments while Ihsedu had 46 different shipments.. All bulk sales seem to be exported from Kandla Port

Looking at May 2013 numbers I think we can expect 400cr + sales numbers for Q1 2014..

PN: This is based on information from various sources and could have errors.. Pls do your own deep dive before investing

Jayant Agro: Falling Export/Sales number.. Worried?

I was just trying to understand the Sales figures of Jayant and why they have been dropping in recent quarters..

Consolidated: 

Sept 2012 Sales: 360.67Cr (Sept 2011: 490.06Cr)

Dec 2012 Sales: 323.58Cr (Dec 2011: 403.18Cr)

 

The drop in sales is definitely of concern specially when till March 2012 Jayant had clocked 500% profit growth and 400% sales growth in past 5 yrs

------------------------

Consolidated Sales/NP numbers.

March 2007 Sales 462.49Cr Net Profit: 6.76Cr

March 2008 Sales 605.96Cr Net Profit: 9.51Cr

March 2009 Sales 875.86Cr Net Profit 7.49Cr

March 2010 Sales 904.01Cr Net Profit: 12.47Cr

March 2011 Sales 1,175.26Cr Net Profit: 24.92Cr

March 2012 Sales 1,832.26Cr Net Profit: 31.35Cr

9 months ending Dec 2012 Sales: 1147 Cr Net Profit: 28.6 Cr

Current Market Cap of the company is: 135.15Cr.

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Is the Jayant Agro Story Over??

Did some digging on the internet and ..voila!!

The Director General Of Foreign Trade (DGFT) passed a new resolution with regards eBRC (electronic Bank Realization Certificate)

Story: Exporters used to export stuff and the cash used to be received by Banks. The Exporter was then responsible for getting the Bank Realization Certificate from the Bank and submit it to DGFT to claim export incentives..

According to new rules.. as soon as the banks receive the money.. The bankers are now responsible for sending Bank Realization Certificates to DGFT and exporters then will update the data on DGFT to claim export benefits.. This would make the process paperless as well as improve process flow.. this is known as "eBRC" (my understanding from publicly available information)

From August 2012 it is mandatory that all export BRC should use this process

It is now the responsibility of the bankers instead of exporters to submit eBRC to DGFT.

As with any new idea there were teething problems.. getting the information right..and having the banking foot soldiers upto the task.. 

look at the eBRC data I have collected from DGFT for Jayant.

Used: these are BRC that have been used to claim export incentives

Available: These are BRC that have been uploaded by banks and available for exporter to claim incentives from DGFT

Cancelled: These are BRC that have been cancelled by the banks due to error in data..

PN: this is data as of May 5 2013.

August 2012: 

- only 30 export incentive requests have been submitted by Jayant successfully.

- 135 incentive request are available for which jayant has yet to submit incentive claim with DGFT

- 39 requests were cancelled due to error in eBRC data by banks..

Conclusion: It was a dismal month for Jayant as far as exports and export related incentives.

Sept 2012:

- export incentives successfully submitted by Jayant Agro has doubled as compared to August 2012 but as you can see its still a far cry from other subsequent months data..

- very sharp drop in available BRC .. looks like exports were being shutdown just to clear old backlog..

- 40 request cancelled

Conclusion: Looks like DGFT, bankers and exporters are all fighting to report better metrics.. which means stop new orders.. clear old backlog.. reduce errors/cancellation

Oct 2012: 

- 134 export incentives submitted .. which is 100% increase over Sept numbers

- Available eBRC to claim incentives is very high at 75 which means even exports are trying to clear the backlog and still learning to submit the eBRC for export incentives request.

- 86 cancelled request.. looks like still some more training required..

Conclusion: eBRC are being submitted by bankers to DGFT and exporters are also trying to submit incentives but system still has bottlenecks..

I think you get the picture.. 

fast forward to March 2013 Jayant Agro has successfully submitted 188 requests for export incentives to DGFT

Jayant still has 139 request more that need to be submitted..(maybe due to want of data..)

Other important observation is: For the Quarter Jan-FebMar 2013 there are: 656 (Used + available) eBRC

There are 90 days and that translates to 7.2 BRC per day!! WoW!!

So Jayant has been busy exporting consignments of castor oil and its derivatives on a daily basis.

Conclusion: new regulations specially making it mandatory that all BRC will be submitted electronically as eBRC by the banks was the underlying reason for drop in export numbers.. I am sure this was the reason for sharp fall in export numbers reported by India as a nation..  Jayant as we have seen is doing just fine..

PN: This is my interpretation based on review of publicly available information.. Please do your own deep dive before jumping into any conclusion.