lets discuss GIC HF in the next post
Tuesday, April 28, 2015
Usha Martin
I just started reading about Usha Martin, Let me give you a brief background of the company.
I must confess I have no working knowledge of the steel industry. I am mostly focusing on improving company fundamentals. I am also tempted to compare it with the Bhushan steel, JSW, Tata Steel etc of the world. By the end I hope to come to an investment thesis
Brief snapshot of the company: The company manufactures wire rope(39% of revenue), steel(40% of revenue) and specialty products and others(21%). It has a few international subsidiaries which were profitable on a net income basis for FY 14. The company has a integrated steel plant in Jharkand with captive iron ore and coal mines. The specialty steel is used in engg, construction, railways etc
FY 14 gross consolidated revenues - 4166 Crores. International business constitutes 22.2%
Steel exports - 12% of steel revenues- ~4.7% of total revenues
Operating margins: Steel - 20% up YoY despite price realization down 4.5%
wire ropes- 12.4% down YoY despite price realization down 5.9% YoY
Net debt at INR 3630 Cr with 27% in foreign currency is a source of worry. Company maintains adequate hedges.
Consolidated net debt to equity :1.93
Financial performance:
1. PBT down every qtr deep in the red
2. debt to equity: 2 as on sep 2014
3. interest coverage ratio:0.6 as on dec 2014
4. financial stress increasing. company not generating enough cash
5. verdict: company got allocated two coal mines. taking steps to reduce costs such as benefication, coke plant etc. high financial stress. no dividend declared in fy 2014. bv per share=65. current share rice = 20. steep discount to bv. due to financial stress. wait for mar 2015 results. HOLD
I must confess I have no working knowledge of the steel industry. I am mostly focusing on improving company fundamentals. I am also tempted to compare it with the Bhushan steel, JSW, Tata Steel etc of the world. By the end I hope to come to an investment thesis
Brief snapshot of the company: The company manufactures wire rope(39% of revenue), steel(40% of revenue) and specialty products and others(21%). It has a few international subsidiaries which were profitable on a net income basis for FY 14. The company has a integrated steel plant in Jharkand with captive iron ore and coal mines. The specialty steel is used in engg, construction, railways etc
FY 14 gross consolidated revenues - 4166 Crores. International business constitutes 22.2%
Steel exports - 12% of steel revenues- ~4.7% of total revenues
Operating margins: Steel - 20% up YoY despite price realization down 4.5%
wire ropes- 12.4% down YoY despite price realization down 5.9% YoY
Net debt at INR 3630 Cr with 27% in foreign currency is a source of worry. Company maintains adequate hedges.
Consolidated net debt to equity :1.93
Financial performance:
1. PBT down every qtr deep in the red
2. debt to equity: 2 as on sep 2014
3. interest coverage ratio:0.6 as on dec 2014
4. financial stress increasing. company not generating enough cash
5. verdict: company got allocated two coal mines. taking steps to reduce costs such as benefication, coke plant etc. high financial stress. no dividend declared in fy 2014. bv per share=65. current share rice = 20. steep discount to bv. due to financial stress. wait for mar 2015 results. HOLD
Genesis
I am writing this blog to keep a record of companies that I read and track them regularly to measure performance, discuss possible investment thesis and hence make money..yay!!
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