Monday, January 31, 2011

Q3 Dec 2010 Results - HSIL,Cera,Hi Tech Gears,Sukhjit Starch,Riddhi Siddhi,Cheviot,Ludlow Jute,Vivimed labs,Sree Rayalaseema Hi Stength Hypo,Khaitan Chemicals,GSFC

This is a post tracking results on stocks that are either on my watchlist, among my top 10 picks or new candidates.
Key Highlights
  • Most firms have posted decline in margins that is not good. This could impact any existing ratings in Top 10 picks. The firms have posted seq Q-on-Q decline is margins are 
    • Cheviot - cmp 315.50% in decline in OPM% ( related to Top 10 pick -Ludlow Jute whose results are not yet out.Ludlow is at cmp 62 and PE of 2x ). . Cheviot results here
    • Sree Rayalaseema Hi Strength Hypo - cmp 56. 40% decline in OPM%. 3x PE. Results here
    • Khaitan Chemicals and Fertilizers  - SSP pack - cmp 115. 40% decline in margins . PE 3x. Results here
    • But somehow GSFC continues to post good results. cmp 340. Results here 
    • Riddhi Siddhi - though results were great but restructuring issue of hiving off manufacturing units into a separate Private co. causing doubts into investors minds.
  • But issue with cheap valuations and negative results such as above reduces the stock upward momentum.I.e  cheap could continue to remain cheap unless it gets a big ..results driven trigger.
  • Few that stand out and posted good results with stable or increase in margin are - 
    • Hi Tech Gears ( the gears supplier to Hero Honda) - cmp 106. One of my best auto anci. pick. 6x PE. Results here
    • HSIL ( Cera Sanitaryware - among my top pick)  - cmp 125. 11x PE but Cera scores slightly  better on more cheaper -8x PE and lesser debt (debt free on Net basis). Some high profile FII`s have recently participated for the 150 cr QIP of HSIL. Should be good for sector.
    • Vivimed Labs - cmp 282. Slight decline in margins but at at 9x PE. Good niche play but some selling by promoter. Results here
    • Sukhjit Starch - cmp 268. Results were decent but seq QoQ was flat. 5x PE. results here
  • Impact on existing ratings of Top 10 stocks. ( Long Only)
    • Ludlow Jute - monitor it as Cheviot `s results was not good. So slight potential in downgrade as valuations at 2x PE and debt free still makes it quite attractive.
    • Sree Rayalaseema Hi Strength Hypo -  downgrade from top 6 to below top 10. Even though its cheap but it margins improve then  buy rating could be improved.
    • Hi tech Gears- moves to top 6 along with Cera 
    • Sukhjit Starch - maintains rank among top 6.
    • Vivimed Labs - might deserve entry into top 10.

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