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hit2710
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Quote hit2710 Replybullet Topic: Aditya Birla chemicals(ABCIL)
    Posted: 29/Oct/2009 at 9:58am
Originally posted by Vivek Sukhani

Market capitalisation/(PAT+Depreciation)


For Aditya Birla chemicals(ABCIL)
as you say, PAT + Dep for last three years was
For 07 49 crores
For 08 66 crores
For 09 64 crores

If you average all three, it comes to around 60 and current market cap is around 183 crores.

So the ratio we talk about comes to about 3.

How would that qualify as an investment? Dividend is not up to the mark at 1.5 Rs per share.

Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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Vivek Sukhani
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Quote Vivek Sukhani Replybullet Posted: 30/Oct/2009 at 2:54pm
Bihar Caustic has always been cheap and has remained that ways. For that matter, you may take any alco/chloro chemical company like a Kanoria Chem or a Jayshree Chem. Dividend yield however is much higher for a Kanoria chem or a Jayshree chem.
 
The thing is, these companies are way too dependent upon aluminium producers.
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rapidriser
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Quote rapidriser Replybullet Posted: 30/Oct/2009 at 6:50pm
Originally posted by Vivek Sukhani

Bihar Caustic has always been cheap and has remained that ways. For that matter, you may take any alco/chloro chemical company like a Kanoria Chem or a Jayshree Chem. Dividend yield however is much higher for a Kanoria chem or a Jayshree chem.
 
The thing is, these companies are way too dependent upon aluminium producers.
 
The chlor-alkali business has some major disadvantages -
 
1. Both chlorine and caustic soda are absolute commodities, and as with all commodities, the timing of entry and exit is critical.
2. Chlorine and Hydrochloric Acid are extremely hazardous chemicals, which can not be stored for more than a few days. So even if demand for caustic soda is high but if there is no outlet for sale of chlorine /Hydrochloric Acid, then the manufacturer has to close down his plant until he finds a safe outlet for chlorine.
3. The largest input cost is electric power. Many producers have put up captive generation plants, but shortage of power persists mainly in summer months when there is shortage of water.
 
Overall, this is one sector where even patient long term investors have been forced to give up hopes after years of disappointment.
 
 
 
  
 
 
When all else is lost, the future still remains. - Christian Nestell Bovée
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Quote basant Replybullet Posted: 30/Oct/2009 at 6:56pm
I think that when the price of one goes up the price of other falls!

'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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hit2710
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Quote hit2710 Replybullet Posted: 30/Oct/2009 at 7:54pm
I was looking at their balance sheet and their results for the past few years.

Since last three years they have reduced their debt from 111 crores to 45 crores in FY 09.

        March05        06          07        08       09
SALES    107           111       143      174    204

NP        26               26          33       49     46
Equity capital has been 23.39 crores.
EPS for FY 09 was 19.
For HY 10, net profit is 28.84 crores giving half yearly eps of around 12.3.

Looking at these earnings, I feel company is doing right things to improve earnings. All the concerns expressed about the company's business exist, but that seems to be built into the price.

Reduction in interest burden itself will improve earnings.

And with expected eps of 25, the stock is available at pe of around 3. Once the debt is totally cleared off, I expect the dividend to be hiked.


Edited by hit2710 - 30/Oct/2009 at 8:00pm
Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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Vivek Sukhani
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Quote Vivek Sukhani Replybullet Posted: 30/Oct/2009 at 8:31pm
Originally posted by hit2710

I was looking at their balance sheet and their results for the past few years.

Since last three years they have reduced their debt from 111 crores to 45 crores in FY 09.

        March05        06          07        08       09
SALES    107           111       143      174    204

NP        26               26          33       49     46
Equity capital has been 23.39 crores.
EPS for FY 09 was 19.
For HY 10, net profit is 28.84 crores giving half yearly eps of around 12.3.

Looking at these earnings, I feel company is doing right things to improve earnings. All the concerns expressed about the company's business exist, but that seems to be built into the price.

Reduction in interest burden itself will improve earnings.

And with expected eps of 25, the stock is available at pe of around 3. Once the debt is totally cleared off, I expect the dividend to be hiked.
You are right.....the stock's wonderfully cheap.
 
if it were not for the management, this stock should have definitely been accumulated by me.


Edited by Vivek Sukhani - 30/Oct/2009 at 8:31pm
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amol.karale
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Quote amol.karale Replybullet Posted: 30/Oct/2009 at 2:36am
This is sustainable business. Growth is not that gr8 but a good stock to get into. One will not be at loosing position if he decide to accumulate the stock at this level. Company's chemicals find application across a wide range of industries like food, textiles, electrical and electronics, composites, leather, plastics and automobiles. No dilution of equities in last 4-5 years. But Management seems to be habitual of taking debt every year. However, in FY09 they managed to bring the debt level down to 80 Crores.
Company
Name
P/E Current
Price
Net
Sale
Net
Profit
Current
Mkt Cap 
Sale/
Cur Mkt
Profit/
Cur Mkt
Total
Assets
Total
Networth
Total
Liabilities
Net
Cur Asset
Debt/
Equity
Aditya Birla Chemicals 3.33 78.5 210.42 46.08 184 115% 25% 286 240 46 15.57 0.19


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hkumar
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Quote hkumar Replybullet Posted: 04/Nov/2009 at 7:29pm
Historically the stock is market performer. In last 3 years gave a return of 53% where as NSE is 52%. During the peak time in 2007 it went to only Rs. 107....may be due to the industry nature.
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