It is my honest belief that there is a lot of humour all around us if we look at things with a slightly open mind.
As I was browsing through announcements on the BSE site, I came across a interesting announcement made by Gujarat Alkalies and Chemicals ltd regarding their results.
In the Press release Shri Guruprasad Mohapatra, IAS, MD of the company announced that financial ratios have improved significantly at the end of the third quarter as compared to year end March 10
1) Price Earning Ratio - 13.15 times from 5.37 times
2) Current Ratio - 1.68 times to 1.56 times
3) Debt Equity Ratio - 0.13 times to 0.17:1 times
4) Book Value - Rs 193 from Rs 185
Now you would wonder what magic did the management did to improve PE ratio. It is news to me that management’s are now beginning to be judged by how well they can talk to the markets and improve their PE ratios.
Coming down to the magic that the management did to improve this PE ratio. It was a goal that they achieved by reducing the nine months profits of the company from 86 crores to 58 crores. Forget the price just reduce the earnings. I m waiting for the day they bring down the profits to zero and increase the PE ratio to infinity :-).
4 comments:
Dearest mr.Ninad, fine post as usual , shows great clarity of thought and unmatched sense of irony . Hope ppl dont get any ideas....lol. Maybe the recent (NON ) disclosure exemptions ,granted by the ministry of corporate affairs could serve as a new topic for a post. Anyways (EVEN THOUGH I couldnt a response for my last comment, i guess you were busy or i asked a stupid question or sumthing) CONGRATS ON THE SEEKING ALPHA OPPURTUNITY,DATS SO FREAKING AWESUM!!!, Pls accept it. Tc. RAYHAAN
Hi rayhaan
Apologies for not responding to u r earlier mail.
I m not too active in looking at distressed assets/ asset restructuring plays bcos in India neither bankruptcy laws are efficient nor is the legal process time bound.
So though u might have a good transaction, time delays will invariably eat away all the returns.
Cheers
Ninad
HI NINAD,THANKS 4 REPLYING.PLEASE HAVE A LOOK AT EMPIRE INDUSTRIES
anyways i understand nbfcs can be difficult to understand as well as risky .
however i believe there are a few stocks worthy of investigation-
ceejay finance-.44 book value , low p/e and extremely strong balance sheet (i think it has 21 percent tier 1 capital , also i guess patel is on board), gud div yield
sumedha finance-7 percent div,3 p/e,awsum roe and roce. in short gr8 numbers 4 the last 5 yrs. also new promoters have come on board this year. interesting discussion on theequitydesk . com
brescon finance- almost same as above above, low p/e ,b/v, awsum roe and roce
tcfc finance- 8 percent div, cmp-23,b/v-65, trading quite below nav
( alas! couldnt get the time to calcul8 the nav). one caveat though - has positions in the commodity market , which SEEM to be a small part overall
btw, all the co.s mentioned above have promoter stakes above or around 50 percent
EAGER TO HEAR UR THOUGHTS
P.S DID U TAKE UP THE SEEKING ALPHA OFFER
kinda having a joel greenblatt hangover ( just read you can be a stock maket genius too.extremely awsome!, PLEASE PLEASE CHECK IT OUT IF YOU HAVENT) anyways prof greenblatthas pointed out to spinoffs as an area rich with mispricing, with that that in mind just saw the recent bio green industries demerger on the bse rss feed,the co. is persuing a demerger in a ratio of 1:1 between its kraft paper and duplex board division and bio fuels division.(sorry no a/c or a.r available yet) please have a look
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