Crompton Greaves Consumer Electricals Ltd. ANNUAL REPORT REVIEW FY17-18

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Crompton Greaves Consumer Electricals Ltd. manufactures and markets a wide spectrum of consumer products ranging from fans, light sources and luminaires, pumps and household appliances, such as geysers, mixer grinders, toasters, and irons. Crompton has been the market leader in fans, domestic pumps, and street lighting for over 20 years. It has manufacturing locations in Goa, Vadodara, Ahmednagar, and Baddi. Crompton products are available in nearly 150,000 retail points across the country.

Annual Report Review FY17-18

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

 

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SNOWMAN LOGISTICS LTD. ANNUAL REPORT REVIEW FY2017-18, FY2016-17, FY2015-16, FY2014-15

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The company is the leading integrated temperature-controlled logistics service provider operating on the pan-India basis. Temperature controlled warehouses are set up adjacent to cities with a large potential for sourcing and/or consumption of temperature sensitive products.

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Annual Report Review FY17-18FY16-17FY15-16FY14-15

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

CCL PRODUCTS LTD. ANNUAL REPORT REVIEW FY17-18

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CCL Products (India) Limited, was founded in the year 1994 with the vision of creating only the finest and the richest instant coffee in the world. CCL Products is engaged in the manufacture of Soluble Instant Spray Dried Coffee Powder, Spray Dried Agglomerated / Granulated Coffee, Freeze Dried Coffee, Roasted Coffee, Roast & Ground Coffee, as well as Freeze Concentrated Liquid Coffee. Soluble instant coffee is prepared from carefully chosen Arabica and Robusta coffee beans, roasted and processed to perfection, for an aroma and flavor. In addition to this, CCL has the ability to supply flavored coffee, decaffeinated coffee, organic coffee, Rainforest coffee, Fair Trade coffee, Dual and Triple certified coffee as well as Chicory-coffee mix as per the required specifications of the customer.

Annual Report Review FY17-18

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

 

Bajaj Corp Ltd. ANNUAL REPORT REVIEW FY17-18

Bajaj Corporation

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.

WB 1985 01

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

WB 1985 02

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.

WB 1985 03

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

WB 1985 04

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

WB 1985 05

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.

WB 1986 01

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 –

WB 1986 02

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

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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 FY17-18FY16-17

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.

WB 1983 01

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.

WB 1983 02

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

WB 1983 03

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.

WB 1983 04

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

WB 1983 05

L&T

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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.

MarutiS

HeroM

AsianP

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 1983 06

WB Letter 1984

Mr.Buffett has mentioned benefits of repurchase of shares.

WB 1984 01

WB 1984 02

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.

 

WARREN BUFFETT’S LETTER – 1982

WB Letter 1982

Mr.Buffett has mentioned characteristics of cyclical industries-

WB 1982 01

The product which can be differentiated and sell it by the branding of it then the company can able to earn extra from it. But the product where no chance to differentiate product then profitability is the major factor of market forces.

WB 1982 02

WB 1982 03

We cannot predict that when the cycle will going to turn, we cannot predict that when demand will overtake supply and prices of the commodity will start improving or supply increases much compared to demand and prices starts falling.

We should focus when any company is engaged in the corporate acquisition. If any company is issuing shares for the acquiring a company which having lesser intrinsic value then we should keep cautious. Such decision of the management provides us a clue regarding the perspective of the management and weather company is intended to create the wealth of the owners or not.

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While management makes an acquisition at the expensive valuation by issuing their shares than some of the rationale given by management which we should check by putting highest cautions.

WB 1982 04

Mr.Buffett had provided a solution by which management can avoid value destruction for the existing owners of the company.

WB 1982 05

Many a time, management only focuses on the increasing future Earning Per Share (EPS) by sacrificing the strength of the balance sheet. But they forget that if the balance sheet does not remain strong for a longer period of time then business is going to have a tough time into the future.

TATA Steel 01

TATA Steel 02

The criterion which Mr.Buffett focuses while making an investment decision –

WB 1982 06

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.

WARREN BUFFETT’S LETTER – 1980 – 1981

I am really grateful to Riddhi for helping me with editing work.

WB Letter 1980

Mr.Buffett gave his opinion about the repurchase of outstanding shares of the company.

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He had discussed the effect of inflation to his shareholders in a very well manner.

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Buffett focuses on businesses that can enhance the Return on Equity with the rising inflation and without the need of additional capital requirement.

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When there is a temporary trouble to the business; and if the managers have an ability to cure that temporary problem and the business itself can generate good cash; then

wb_1980_04

Buffett mentions that we should focus on strong business so that it does not depend on the good management.

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WB Letter 1981

Mr.Buffett has given his view on maximizing economic benefits rather than accounting appearance. And also stated some of the mistakes which the management is making.

wb_1981_01

Rather than buying companies which have the management with above-mentioned characteristics, he suggests buying a company which has the following characteristics.

wb_1981_02

Few companies are able to enhance their margins though their sales which are not growing at a very high rate and are still sustaining their market share.

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In India, there is an air cooler manufacturing company which grew well without major additional capital.

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In the above table; we can see that Sales and Net profit has grown by 30% and 48% CAGR respectively. And if we see cumulative capital expenditure made by the company; then it is just 10% of the cumulative net profit. The company has grown its sales and profitability without the requirement of major additional capital.

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Mr.Buffett gives a good logical perspective that when the company can earn higher Return on equity; then they should invest their earnings into the business itself. And if the company is unable to earn higher Return on equity; then they should distribute earnings to the owners so that the owners can deploy capital in a better way. But we should be aware of companies that are raising capital for the dividend payout.

wb_1981_03

Warren Buffett’s Letters 1957 – 2012