Thursday, March 5, 2009

Aditya Birla Chemicals ( Bihar Caustic) - Q3 results

Sensex - 8197
Price - 31.15

I had originally posted on Aditya Birla Chem here followed by updates on the Q1 and Q2 results.

The company’s Q3 results are back on track post slight downturn in Q2 because of the boiler blast which affected production. Sales has grown sequentially from Rs 46 crores in Q2 to Rs 49.8 crores in Q3. More importantly Net profit has grown from Rs 6.4 crores to Rs 12 crores where the Q2 profitability was affected due to one time expense on repair and maintenance. Quarterly EPS moved up from 2.78 to 5.14.

Cumulative EPS for first nine months 13.6 and annualise EPS works out to be Rs 18.33. The stock currently is trading at nearly 1/3rd its book value and a P/E ratio of 1.71 times.

The company also got rechristened to Aditya Birla Chemicals from Bihar Caustic. I continue to hold the stock and add at opportunities

6 comments:

Anonymous said...

HI
DID YOU CHECK Gujarat Fluorochemicals Ltd ?

Ninad Kunder said...

Hi Anon

I havent checked it. Might do it in the near future.

Cheers

Ninad

Pankaj Pandekar said...

There is a contigent liability on the company. Can you comment on how this can change the valuations of the company.

Ninad Kunder said...

Hi Pankaj

I cannot recollect any large contigent liabilities on the company's balance sheet. Can u point out the specific contigent liability that u r referring to.

Cheers

Ninad

Pankaj Pandekar said...

As per its balance sheet march-2009 in moneycontrol there is a contigent liability of 72cr.

Ninad Kunder said...

Hi Pankaj

I have checked with the company and its a case running with the JSEB from 1984 onwards regarding annual minimum guarantee charges. The company has provided the maximum amount including interest as a contigent.

However the compnay has won the case in the Electricity Forum against which the SEB has filed in the High court where the case is pending.

Honestly the fact that the case has been running for 25 years and the fact that the company won the first round reduces my concern. Even if they lose in the high court, I am sure they will take it to supreme court so I dont see this playing as a liability in the near future.

Cheers

Ninad