JHS Svendgaard:Play on India's oral care
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=3135
Printed Date: 21/Apr/2025 at 1:44am
Topic: JHS Svendgaard:Play on India's oral care
Posted By: prabhakarkudva
Subject: JHS Svendgaard:Play on India's oral care
Date Posted: 01/Jan/2011 at 9:44am
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India’s only integrated provider of oral healthcare products in the outsourced manufacturing domain, offering oral care products -- including toothbrushes, toothpaste and mouthwash -- to leading national and multinational brands. Svendgaard have among the highest installed manufacturing capacities in the toothbrushes segment with about 300 million units per annum.
They are seen as a preferred supplier of oral care products. JHS has already proved itself for its excellence in manufacturing and adherence to the best quality standards. This has ensured the principals who have sourced products from them continue to do so on a long-term basis and also increase the scope of their association with Svendgaard. Businesses: 1.Private Labels in India (Highly customized offering for each client) 2.Export - Private labelling for Asian,African, Middle East, European and American markets. 3.Their own brands - This is interesting.The logic is whatever excess is left over from manufacturing private labels is sold as their own brand. Capacity: A lot of capacity was built during recession which till the last quarter was running at 40-50%.They are now ramping up to manufacture at 80%-90%. ROE: 10-15% due to low asset turnover.Expected to improve to 25-30% over the next year. Market Cap: 153 crores Management: First generation promoter.Survived the recession.Need to dig deeper. Competitors: Need to check. Moat: Need to check. I don't own it,SBI MF does  .Only some Sunday morning work for me.------------- Take your chances and keep them in a box until a quieter time. |
Replies:
Posted By: subu76
Date Posted: 02/Jan/2011 at 12:36pm
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This is a proxy consumer play...
I looked at this one following an article in Outlook Money about a fund manager in HSBC buying a significant stake. At least in the public domain I could not find enough indications of an upcoming sales spike.....No one i asked knew about the brands displayed on their site So i thought i'll check back after the 2011 annual report is out. |
Posted By: prabhakarkudva
Date Posted: 02/Jan/2011 at 12:42pm
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Check this-> http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=501974
I am not sure who the competitors are and what's the moat like in this business. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: srisaurabh2000
Date Posted: 02/Jan/2011 at 2:33pm
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They also are doing detergents for P&G and hand santizers for Invectigard which is a US brand. They have dental spa called T32 in Delhi. The major issue is the promoter pledging which I think last was at ~ 87%. Also the interest payments are quiet high. Subiksha/Spencers with whom they had tie-up have gone down which would have affected them. On the positive side I guess their factory in Delhi was at a good priced real estate and moving their plant to HP would free this plant and good cash if they decide to sell that. However don't know the numbers here. Given the debt and pledging it's difficult to build a long term conviction. It's a good business with very bad numbers. Also haven't seen their FY10 AR which should have been out there by now. |
Posted By: prabhakarkudva
Date Posted: 02/Jan/2011 at 2:40pm
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Read this -> Makes interesting reading of how they survived the recession,the reason for all the above factors.
http://economictimes.indiatimes.com/features/financial-times/JHS-Svendgaard-ties-up-with-pharma-major-weathers-recession-deftly-/articleshow/4058804.cms ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: prabhakarkudva
Date Posted: 02/Jan/2011 at 2:52pm
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Their AR can be found here -> http://www.bseindia.com/bseplus/AnnualReport/532771/5327710310.pdf ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: prabhakarkudva
Date Posted: 02/Jan/2011 at 3:05pm
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Their AR is brilliant.Every aspect is explained in a crystal clear manner. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: joslinjose9
Date Posted: 02/Jan/2011 at 3:13pm
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hi,wallmart and carefour are their clents ------------- fear of lord is the beginning of wisdom |
Posted By: prabhakarkudva
Date Posted: 02/Jan/2011 at 3:25pm
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This is a commodity business and for us to take this business seriously they should grow topline at a very high rate.
We should dig deeper to find out if there is a moat.All they seem to be saying is that they have an integrated facility for toothpaste and toothbrush and they operate from himachal which is has some fiscal benefits. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: subu76
Date Posted: 02/Jan/2011 at 8:07pm
I agree ... the annual report is indeed very well crafted...for a small player this is pretty unexpected.
 They are trying hard to do a good sales job.A few misc points:
On the promoter share pledging the annual report seems to mention that it's pledged as security for the working capital loan. So maybe no issues there Is there any justification for the fall in topline in 2009? After all oral health care business id not go down because of the industrial recession. Also, the 12% margin (2009-10) for such a low value added player seems a bit on the higher side...2009's margin was 5%. Also note: the company seems to have diluted equity recently...They have plans to take over some group companies...
My personal gut feel is that the stock will do well over the next 1-2 yrs (both the publicity machine and the profit machine will crank)
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Posted By: prabhakarkudva
Date Posted: 02/Jan/2011 at 8:18pm
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I think they were just starting out then and sold to retails like Subhishka,Spencers etc which were going through a tough time.Now they have entered in to a long term contract with P&G(for Tide or Arial)which seems to have given them some traction.
Margins - Their OPM and GPM has always been in the 15-20% range.Is there a moat?NPM has fluctuated - may be because of higher depreciation on lower profits in 09. Either way,not a business which will let you sleep well. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: srisaurabh2000
Date Posted: 02/Jan/2011 at 8:46pm
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Probably Colgate and Amar Remedies would be a better play. The absense of brand and no intention of pursuing that is a disadvantage for JHS. Dental Spa expansion also may not be an easy franchise. Amar Remedies has a brand and also does mfg for other folks. Though they also carry a baggage with high debt. |
Posted By: learn2earn
Date Posted: 02/Jan/2011 at 9:41pm
I think their business is more of a service to oral sector rather than direct marketing or product company unlike colgate or Amar rem.The branded companies sell their manuf. products in the market as their own brand.As sumone pointed out earlier in the forum its a proxy for FMCG. I read sumwhere they almost have a monopoly in oral products with all big brands as their clients.I will try to find the link again. ------------- INVESTING - EMOTION = SUCCESS |
Posted By: excel_monkey
Date Posted: 02/Jan/2011 at 9:46pm
| Amar Remedies is scam tainted |
Posted By: excel_monkey
Date Posted: 02/Jan/2011 at 5:14am
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prabhakar ji
if you are looking for some upcoming consumer play look at Bajaj Corp at FY12 P/E of 15 with a leading brand exceptionally high ROE as well as it is going to expand its product portfolio it would take JHS Svendgaard exceptional skill, large amount of investment and above all exceptional luck to morph from a contract manufacturer to a brand owner |
Posted By: hit2710
Date Posted: 28/Jan/2011 at 11:25pm
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Promoter Nikhil Nanda has sold more than 2 lac shares in fy 10 (beginning may 2010) whereas sbi mf has bought 4.2 lac shares of jhs.
his holding reduced from 39.84 to 38.13% from may 2010 to dec 2010. ------------- 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. |
Posted By: subu76
Date Posted: 28/Jan/2011 at 12:15pm
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The stock is being "placed" |
Posted By: pkumar
Date Posted: 31/Jan/2011 at 5:18pm
Being placed ???
------------- "The news is always a mix of positive and negative. When markets decline, people point to the negative news; and when it increases, the positive news is emphasized." - Bob Farrell |
Posted By: pkumar
Date Posted: 23/Feb/2011 at 2:41pm
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What happened to it today???
------------- "The news is always a mix of positive and negative. When markets decline, people point to the negative news; and when it increases, the positive news is emphasized." - Bob Farrell |
Posted By: shadows
Date Posted: 23/Feb/2011 at 7:21am
| Hitesh bhai is it now an opportunity to buy fresh or some bad news is coming |
Posted By: mane.ramesh
Date Posted: 24/Feb/2011 at 9:44am
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*deleted*
------------- investment elephant blind |
Posted By: sumit_sultania
Date Posted: 08/Mar/2011 at 11:15am
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Hi, While going through the 2010 annual report I found the following excerpt "In our opinion, the accumulated losses of the Company are not more than fifty percent of its net worth. Further, the Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year." However, they do not show any accumulated losses anywhere. Can someone help me understand why is this statement present in the auditors report. Also, if you see the latest announcement almost 99% shared held by Mr. Nikhil Nanda are pledged. Regards, Sumit |
Posted By: basant
Date Posted: 08/Mar/2011 at 11:39am
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Maybe that has been adjusted with the networth. ------------- '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 |
Posted By: subu76
Date Posted: 09/Mar/2011 at 6:02pm
Hey, is this a recent development.... When i looked at this company i found it to be a nothing company and yet it seemed to be receiving a good press, MF fund managers were buying small sums (80-90 Lackhs) which wouldn't make a difference to their career but yet would lead to more positive press for the company...... The stock seems to have fallen 50% after that |
Posted By: sumit_sultania
Date Posted: 09/Mar/2011 at 8:44am
I thought so first, but the previous years annual reports (07,08) did not have any mention about the accumulated losses. I could not find 09 annual report for this. Can such a statement just be a cautionary statement? |
Posted By: sumit_sultania
Date Posted: 09/Mar/2011 at 8:48am
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Posted By: subu76
Date Posted: 11/Sep/2011 at 6:57pm
I feel the circumstances under which public sector banks invest in such companies should be investigated. Unrelated... Anyway, govt MFs and Institutions (deleting the names since it looks to be in poor taste) should start paying much higher salaries to their fund managers. No self respecting fund manager can survive in their entry level, 2-5 year salaries. Also, not to forget they need to participate in investor conferences where their batch mates from MNCs also attend. |