Bajaj Corp Ltd. ANNUAL REPORT REVIEW FY17-18

Bajaj Corp Ltd. is one of the leading player in Hair oil category with brands like Bajaj Almond Drops Hair oil, Bajaj Brahmi Amla Hair Oil, Bajaj Amla Hair oil and Bajaj Jasmine Hair oil. Company’s flagship Brand Bajaj Almond Drops Hair oil is the No. 1* hair oil in Indian market with Premium positioning and commands one of the highest per-unit price in the industry.

The company had acquired the Nomarks Brand, With this acquisition, the company has also ventured into the 9000 cr Skin Care Category.

Annual Report Review FY17-18

Disclaimer: This is not a recommendation to Buy-Sell-Hold. And I am not a SEBI registered analyst.

WARREN BUFFETT’S LETTER – 1985 – 86

WB Letter 1985

Mr.Buffett indicate that Berkshire Hathway has a capability to earn superior return generally earn by corporate America.

We need to focus on the mistakes which we have made and try to learn from our mistakes.

Berkshire liquidates its textile business in the year 1985. Cyclical nature of the business and huge competition makes them helpless which resulted in the shutdown of the textile business.

If management having good managerial skills then company able to produce the good economic return.

Commodity business only able to produce profit while prices of the product are fixed or capacity is shorted. And managers can enhance capacity with the availability of capital when things look good in future.

Acquisition of Scott & Fetzer

CEO of the Scott & Fetzer – Ralph Schey is capable enough. When he took charge of the company, at that Time, Company had 31 businesses. Ralph had disposed of many of the businesses which have limited profitability and result of that company left with 17 businesses. Capital allocation decision of the Ralph is good enough which Mr.Buffett admired.

After the purchase by Berkshire, Schey spent two years revising World Book segment by selling off the Japanese division and trimming domestic operations in much the same way as he had tightened Scott Fetzer.

WB Letter 1986

Mr.Buffett mentioned that he and Mr.Charlie only having a major two job to perform – one is to retain and attract a good manager to manage a business and other is to allocate capital of Berkshire Hathway in a way which helps to earn more money than average.

Acquisition of the Fechheimer Bros. Co.

Mr.Buffett mentioned that he only acquire a company when economic characteristics of the business are favorable, and connected with the right people who can handle position with integrity.

Mr.Buffett on Accounting numbers –

Warren Buffett’s Letters 1957 – 2012

 

SUPREME PETROCHEM LTD (SPL) ANNUAL REPORT REVIEW FY17-18

 

Supreme Petrochem Ltd (SPL) is a joint venture between The Supreme Industries Limited and the Rajan Raheja Group.

SUPREME PETROCHEM LTD (SPL) owns and operates state-of-the art production facilities from two locations in India the first at Amdoshi – Wangani Village near Nagothane in District Raigad Maharashtra and the Second in New Manali Town near Chennai in Tamil Nadu.

The Styrenics facility at Amdoshi – Wangani has the following Plants
— Polystyrene (PS)
— Expandable Polystyrene (EPS)
— Specialty Polymers and Compounds (SPC)
— Extruded Polystyrene Foam Boards (XPS)

Annual Report Review FY17-18

Disclaimer: This is not a recommendation to Buy-Sell-Hold. And I am not a SEBI registered analyst.

BALKRISHNA INDUSTRIES LIMITED (BKT) ANNUAL REPORT REVIEW FY17-18

Balkrishna Industries Limited (BKT) is a leading manufacturer in the Off-Highway tire market which was incorporated in the year 1987. The company has successfully focused on specialist segments such as agricultural, construction and industrial vehicles as well as earth moving, port and mining, ATV, and gardening applications and as a result, company comes out as a global player in the Off-Highway tire industry with a 6% market share.

Annual Report Review FY17-18, FY16-17

Disclaimer: This is not a recommendation to Buy-Sell-Hold. And I am not a SEBI registered analyst.

WARREN BUFFETT’S LETTER – 1983 – 84

WB Letter 1983

Berkshire Hathway made an acquisition of majority stake into Nebraska Furniture Mart. Mrs.Blumkin leave Russia for America when she was the age of 23. She had no formal education, no knowledge of English.

Many retailers had pressurized to the furniture and carpet manufacturers to not to sell products to Mrs.B but Mrs.B has managed to run her business and also able to cut prices. She has to face many cases but she won all and received huge publicity.

Mr.Buffett has explained the concept of intrinsic value in a very well manner.

Mr.Buffett has explained how to look at the economic Goodwill with the example of the See’s Candy. He has an emphasis more on economic Goodwill rather than accounting Goodwill. Company’s ability to produce a higher return on assets compared to market then that excess return is economic Goodwill.

Also mentioned that assets heavy businesses require additional capital for the further growth.

Great business creates a fortune during an inflationary year where the company requires less tangible assets. And also companies having availability of the fund for acquisition of the new business. They do not have to depend on the bringing additional fund by either debt or issuing new share capital.

I have quoted example of 2 two companies into the automobile business and one company is in the paint business.

Example 1 – 3 which are asset heavy businesses, where we can see that borrowing is compounding, non-availability of free cash flow and wealth of shareholders does not created or get erode, whereas in example 4 – 6 which are asset light or least asset businesses, we can see that borrowing reduced or increased at a lower rate and investments into the books has compound well, availability of free cash flow which resulted into the wealth creation for the shareholders.

But the management who is not disciplined then they will do a silly things such as –

WB Letter 1984

Mr.Buffett has mentioned benefits of repurchase of shares.

Warren Buffett’s Letters 1957 – 2012

Disclaimer: Businesses discuss in this article is not a recommendation to Buy-Sell-Hold. And I am not a SEBI registered research analyst.