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aloksahi1971
Senior Member
Joined: 20/Aug/2007
Location: India
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Posts: 390
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   Topic: Mcnally Bharat ---- good company wrong promoters
Posted: 19/Nov/2009 at 4:33pm |
McNally Bharat Engineering Co Ltd reported a sales growth of 81%, 92% and 161%, respectively, in the past three quarters. It is an engineering company that executes material-handling projects for power, steel, mineral and mining industries. The order book stood at Rs2,415 crore as on 31 March 2009. The company is also bidding for projects worth Rs4,075 crore. Despite the slowdown in steel and non-ferrous industries, operating profit growth is robust – 117%, 116% and 175%, respectively, in the past three quarters over the corresponding period last year. There are two major drawbacks of this stock. One, operating profit margin is a low 9% which means it has very little cushion; and two, the company is controlled by the BM Khaitan group (GP Birla group has a 24% stake) and neither of these two groups has a great record of creating shareholder value. That is probably why, despite its scorching growth, the stock is remarkably cheap. Its market-cap is 15 times its sales and 1.77 times its operating profit. McNally Bharat has signed an MoU with KHD Humboldt Wedag International GMBH and its subsidiaries in Germany, India and Hong Kong to acquire their engineering workshop in Cologne, Germany and their coal and mineral technology (CMT) business based in Germany, India, South Africa, Russia and China. Buy the stock at around Rs50.
This is moneylifes take on this company
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Born To Golf forced to work.
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aloksahi1971
Senior Member
Joined: 20/Aug/2007
Location: India
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Posts: 390
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Posted: 19/Nov/2009 at 4:44pm |
It has a low market cap. Huge order books. Cost of raw material will go down (if the theory of excess Iron production in China is true!)
It can grow @ 30 to 35% in the next 24 months and the present PE is 19
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Born To Golf forced to work.
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PKB2000
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Joined: 11/Aug/2006
Location: India
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Posts: 1453
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Posted: 19/Nov/2009 at 5:02pm |
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DISCLOSURE: I use to track this stock!!!
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I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso
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FutureBull
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Joined: 06/Feb/2009
Location: India
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Posts: 1868
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Posted: 19/Nov/2009 at 5:06pm |
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another disclosure: RJ is in the stock and many good FIs. it has got right fundamentals.. according to one report India will see >$50 Bn investment in metal and mining in times to come. this company would be direct beneficiary of that
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‘The market always does what it’s supposed to — BUT NEVER WHEN’.
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deveshkayal
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Joined: 04/Sep/2006
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Posts: 3903
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Posted: 23/Nov/2009 at 9:33am |
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I hate companies raising capital through rights issue simply bcoz dilution happens at lower price.
Article in today's DNA says McNally targets 7000crs revenues by 2015. Such long term ambitions are hardly achieved by any company.
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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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praveen
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Joined: 09/May/2008
Location: India
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Posts: 543
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Posted: 23/Nov/2009 at 11:03am |
It competes with TRF & Elecon Engineering in the material-handling space
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The quest for knowledge is a never ending Journey
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basant
Admin Group
Joined: 01/Jan/2006
Location: India
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Posts: 18403
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Posted: 23/Nov/2009 at 11:17am |
Originally posted by deveshkayal
I hate companies raising capital through rights issue simply bcoz dilution happens at lower price.
Article in today's DNA says McNally targets 7000crs revenues by 2015. Such long term ambitions are hardly achieved by any company. |
Rights issue is the best way to dolute equity. Existing shareholders get chance to participate and for the ones who do not they can always sell their Rights forms. I'd skip a company that makes a QIP to buy a company that makes a rights issue. That is because the price at which the rights are coming is irrelevant for an equity shareholder (from the holistic point of view). Higher the price good for the company but it is coming from the stockholder's pocket and lower the price bad for the company but then the stockholder is not been creamed and unlike those QIP fellows the Rights subscribers are in no hurry to flip or rather buy and dump! One company that has almost always made a rights issue and up several hundred fold is Karur Vysya Bank!
Edited by basant - 23/Nov/2009 at 11:18am
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'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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Hitesh Shah
Senior Member
Joined: 12/Oct/2008
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Posts: 3656
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Posted: 23/Nov/2009 at 11:26am |
Originally posted by basant
.....
One company that has almost always made a rights issue and up several hundred fold is Karur Vysya Bank!
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But Basantji, they thought of it: 28-07-2009
Karur
Vysya Bank Ltd has informed the Exchange that the Annual General
Meeting of the Bank was held on July 27, 2009 and all the resolutions
listed in the Agenda of the meeting were approved except the following:
1) Item No. 3 - Ordinary Business: Re-appointment Mr. M. K. Venkatesan
who retires by rotation and seeking re-election. As the said Director
has since expressed his unwillingness to get re-appointed. Board
accepted the same dropped the said resolution. 2) Item No. 10 - Special
Business: Proposal to issue shares through the mechanism of QIP in
terms of SEBI guidelines to the extent of Rs. 500 Crores. Board has
taken decision to defer the issue for now and hence the same was
dropped from the listed agenda item.
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