Joined: 21/Jul/2009
Location: United States
Online Status: Offline
Posts: 536
Topic: JBF Industries - Spinning the story of success Posted: 03/Jan/2010 at 10:01am
JBF’s strength lies in manufacturing, process innovation and in its ability to manage expansions on schedule and in the most cost effective manner. Bringing strategy and a customer centric approach, the choice of location of each plant has enabled JBF to cut costs while providing customers with excellent service. The same approach also saw JBF realize the business potential of an intermediary: polyester chips. Creating space for itself and manufacturing polyester chips as an import substitute has contributed phenomenally to the growth of the company. To further increase bottom line, the company is increasing manufacture of valued added yarns. JBF repeated this successful mix of location, manufacturing process innovation, cost effective & timely project management and customer service in RAK ( Ras Al Khaimah), UAE. JBF RAK LLC, UAE has been commissioned and is operational.
Positives:
==> Major player in polyester chip segment with 51% of the polyester chip market in India.
==> Net sales growth of 33% CAGR and Net Profit of 38% CAGR since last 4 years.
==> JBF Industries holds 67% in JBF Global Pte Ltd which takes care of UAE Unit JBF RAK LLC. Their clients includes all major brand owners like, Nestle, Coca Cola, Pepsi, San Benedetto, Masafi, Al-Ain etc
==> The per capita consumption of polyester in India is 1.6kg as compared to 6.1 kg of China. In China, total production is 17mn tons per annum, while in India it is 3.5mn tons per annum.
==> Generally JBF have Rs2.50bn of exports against Rs8.50bn of imports, so we do have some natural hedge. Hence it will help company as world seems to be bearish on dollars. Generally they hedge this transaction.
==> 9% market share in POY.
==> Promoters have strengthened their stake. On the financial front, last year 14.7mn of FCCBs were bought back at a 40% discount.
==> At marketcap of 630 crores, it's available at marketcap/sales = 0.26 and dividend yield of 5%
==> RoE of last five years are 14.96,14.32,20.82,23.23,12.23. It seems that RoE of FY10 will be 20-25%
==> Consistent great positive operating cash flow. Available at 6 times of cash flow FY09.
Negatives:
=> High debt with d/e ratio of 1.2.
=> Dependency of textile industry
Edited by EquityInv - 03/Jan/2010 at 10:13am
One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do – James Rogers
Joined: 29/Mar/2007
Location: India
Online Status: Offline
Posts: 4243
Posted: 04/Jan/2010 at 4:34pm
Nice find, EquityInv!
Yes, looks like JBF Industries took a bottomline hit in FY09 because of high crude prices.
But Garden Silk Mills - they don't sell too many Garden Vareli sarees anymore - is in a similar business as JBF Industries, and they have managed volatile crude prices well. Their financial performance is quite stable.
Joined: 21/Jul/2009
Location: United States
Online Status: Offline
Posts: 536
Posted: 06/Jan/2010 at 8:32am
Management of Garden Silk seems to be used to very high d/e ratio consistently. However they really managed better growth in bad time. JBF has better margin and RoE than Garden Silk. However future growth really depends on many factor like textile industry, oil, etc..
One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do – James Rogers
Joined: 04/Aug/2011
Location: India
Online Status: Offline
Posts: 865
Posted: 15/Nov/2011 at 8:36pm
Conference Call
JBF industries
Expects 15% growth in topline for FY12
JBF Industries came out with financial results for the quarter ended September 11 and conducted concall on 15 November 11 to discuss financial performance and prospects of the company. Rakesh Gothi, CEO and P N Thakore CFO addressed the call.
Highlights of the call are:
JBF has reported sharp 80% dip in the standalone Net Profit at Rs 8.32 crore over healthy 36% jump in the total income from operations at Rs 1175.33 crore for the quarter ended September 11.
OPM was under pressure on the back of spike in the raw material cost and slipped 280 bps to 9.5%. Further, more than 5 fold rise in forex loss of Rs 61.54 crore has dented the growth in the bottom line.
On the consolidated front, the company has reported 25% dip in the Net Profit at Rs 76.01 crore over 31% increase in the total income from operations at Rs 1854.11 crore in the quarter ended September 11. OPM slipped 490 bps to 11.4% and pulled down operating profit by 8% to Rs 211.74 crore.
The forex losses should end by end of FY13. The forex loss of Rs 63 crore on consolidated front includes Rs 42 crore of derivative losses and Rs 19 crore of MTM losses. The management expects derivative loss of around Rs 70 crore in H2FY12.
Domestic business has reported 36% jump in the revenues at Rs 1177.13 crore while that of segment profit marginally slipped 1% to Rs 92.1 crore in the quarter under review. On the other hand, International (RAK) business reported 14% jump in revenues at Rs 687.89 crore and reported 20% dip in segment profit at Rs 84.31 crore.
On consolidated front, Revenues from chips improved 36% to Rs 1075.38 crore and POY & Specialty yarn jumped up 61% to Rs 593.32 crore and that of films declined 27% to Rs 185.41 crore in the quarter under review.
The capacity of the company at end of September 11 in India was as follows: Chips: 608800 MT and POY& Specialty yarn 258420 MT.
The capacity of chips at RAK has increased from 420000 MT at end of June 11 to 432000 MT at end of September 11. On the other hand, film capacity stood at 66240 MT. Post expansions, the chips capacity in India will stand at 626000 MT and Film Capacity at RAK will increase to 102000 MT.
In Domestic business, Production of Chips has marginally increased 5% to 133275 MT while that of POY & Specialty yarn improved 19% to 64452 MT at end of September 11. On the other hand, sales of Chips declined 9% to 74147 MT while that of POY & Specialty yarn jumped up 21% to 64754 MT.
In RAK operations, production of Chips declined 23% to 60258 MT and that of films declined 10% to 16944 MT in quarter ended September 11. On the other hand, sales volume for chips increased 13% to 64367 MT and that of films slipped 15% to 16461 MT in the quarter under review.
For the quarter under review, Average Chips prices inched up 34% to Rs 79 per kg, POY and Specialty yarn grew 25% to 86 per kg and Films improved 33% to USD 1700 per MT.
The delta of the company products in this quarter is as follows: Indian Operations: Chips Rs 9 per Kg and yarn Rs 22-23 per kg; RAK Operations: Chips USD 280 per MT, Film USD 850 per MT. The delta on film has declined on sequential basis from USD 1000 per MT in quarter ended June 11.
The company sources 90% of PTA requirements from local sources and imports 50% MEG from overseas.
Going forward, the management noted that there is oversupply of chips and POY but is confident to maintain 15% topline growth in FY12 and to hold on 8-9% EBITA.
Capex for H2FY12 would be to the tune of Rs 75 crore.
Every day, self-proclaimed stock market "experts" tell us why the market just went up or down, as if they really knew. So where were they yesterday?
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot delete your posts in this forum You cannot edit your posts in this forum You cannot create polls in this forum You cannot vote in polls in this forum
Active Topics
Memberlist
Calendar
Search
Help
Register
Login
IP Logged
