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Emerging companies - Mid caps that can become large cap
 The Equity Desk Forum :Investment Ideas - Creating winning portfolios! :Emerging companies - Mid caps that can become large cap
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smartcat
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Quote smartcat Replybullet Topic: Think Tanks, Think Sintex
    Posted: 15/Feb/2008 at 5:00pm

Emkay has initiated coverage on Sintex Industries (CMP: Rs. 452, Market Cap Rs. 5,000 Crores)

FY07 Results:
 
Net Revenues: Rs. 1,165 Crores
EBIDTA: Rs. 222 Crores
Net Profits: Rs. 133 Crores 
EPS: Rs. 12
RoE: 24.7%
P/E(x): 37
 
FY10 Earnings Estimates:

Net Revenues: Rs. 4,355 crores
EBIDTA: Rs. 892 Crores
Net Profits: Rs. 603 crores
EPS: Rs. 40
RoE: 18.7%
P/E(x): 12
 
Excerpts from the report:

Sintex Industries Ltd. (SIL) is a Gujarat based company having businesses in:

(a) Plastics which contributes about 70% of the total revenues, and
(b) Textiles contributing 30% of the total revenues.
 
The company manufactures a range of plastic products and industrial custom moulding products. Having pioneered the concept of plastic water tanks (60% of market share) in India, SIL has moved to providing innovative products with emphasis on technology catering to infrastructure development like prefab, monolithic structures for housing and custom moldings for automobiles & power sectors.

In the textile segment, the company is primarily engaged in the manufacture of fabric for premium retail garmenting and industrial fabric, positioned as value-added products compared to volume driven products. Its product mix in textiles comprise yarn-dyed structured fabrics & design based ready made garments.
 
I just wish the other 30% revenues came from anything other than textiles.


Edited by smartcat - 15/Feb/2008 at 5:58pm
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nitin_jagtap
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Quote nitin_jagtap Replybullet Posted: 15/Feb/2008 at 5:04pm
Cat this is another solid company just like their tanks ...equitymaster has been covering this stock for more than 18 months. Management was earlier not very focussed now they have come back with new vigour.

PS : I hold this stock
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smartcat
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Quote smartcat Replybullet Posted: 15/Feb/2008 at 5:14pm

Equitymaster Estimates:

FY10E Revenues: Rs. 2,500 crores
FY10E Net Profits: Rs. 360 crores
 
But Equitymaster research reports should only be read for the content - not for earnings estimates. Their estimates are extremely conservative.
 
Regarding Sintex, along with usual concerns like textile business, competition from small scale industries, rise in input costs (petroleum based) etc, I am concerned about the poor quality of Sintex's website design. People should not be allowed to run a business if they can't design a proper website Geek
 
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nitin_jagtap
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Quote nitin_jagtap Replybullet Posted: 15/Feb/2008 at 5:21pm
True eqm is quite conservative in estimates , on one hand thats the way an analyst should work when writing a report , you cant take everything on face value in a conf call with the management.Its better to discount some parts of it.

Yes website design is something I also pay lot of importance to and also mentioned this in another thread (cant remember which one) but if the management isnt tech savy I am afraid we have to live with it.
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basant
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Quote basant Replybullet Posted: 15/Feb/2008 at 5:38pm
We will keep this under the Emerging companies section. SmartCat can you edit that first post and include parameters like CMP, Mkt Cap, growth rates etc -> in TED format!
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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kulman
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Quote kulman Replybullet Posted: 15/Feb/2008 at 6:52pm
Interesting. The issue with Sintex is their main products aren't consumable type.
 
See SmartCat... when I referred you as HNI it also meant Having Numerous stock Ideas.
 
 
 
 


Edited by kulman - 15/Feb/2008 at 6:56pm
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tigershark
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Quote tigershark Replybullet Posted: 15/Feb/2008 at 8:49pm
do high rise apts built by dlf and brigade grp for ex put sintex tanks on top? and what would be the churn ratefor onre tank 10-20 yrs? is this business similair to suitcase business?
understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things
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Quote kulman Replybullet Posted: 15/Feb/2008 at 9:22pm
Originally posted by tigershark

is this business similair to suitcase business?
 
Which suitcase? The one carried by the Late Narsimha Rao to Mr. Phatak or the one used by VIPs? Both look like scams...but it's not proven yet.
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