April 2019 - Stocksbaazigar
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Month: April 2019

Jet Airways Crisis worsens

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Stocksbaazigar discussed Jet Airways Crisis in detail in November 2018 in the post Jet Airways Crisis explained. It was predicted then that deal with Tata Group won’t materialize as the Founder Naresh Goyal wasn’t ready to cease his control over the aviation company which he started in 1993. Jet Airways has the second largest Market share in India after Indigo in the Aviation sector. Naresh Goyal is a pioneer of Private Aviation industry in India. In 1992 when the Government of India accepted the Liberalization, Privatization and Globalization reforms under P. V. Narasimha Rao Government, he was the first to take a leap of faith with the incorporation of Jet Airways in 1993 which became fully functional airlines in 1995. Jet Airways served 26 years to Indian and Foreign Customers before all its flights getting grounded recently. We have already discussed all the reasons for this Financial crisis in the above-mentioned post. Now, let’s analyze the current situation of Jet Airways. Naresh Goyal and his wife stepped down Founder Naresh Goyal has 51% stake in Jet Airways which he founded in 1993. He and his wife Anita Goyal agreed to step down from the board of Jet Airways after their board meeting on 25th March. Etihad Airways which owns a 24% stake in the company also decided to step down. Employees of Jet Airways and all the experts in the Aviation industry blamed Naresh Goyal for not taking timely actions and made him cease the Chairmanship of the company. Jet Airways grounded all its flights The Interim Management set up to monitor the situation decided to halt its all operations and grounded all its flights after unpleasant situations like Strike by Pilots, Protests by Employees, etc. after intervention by Government. It is clear that Government has a soft-corner for Jet Airways which is saddled with more than $ 1 bn debt and may face the fate of Kingfisher Airlines very soon. But they won’t take any action now thanks to the Loksabha Elections 2019. Supreme Court questioning the forceful control of Jet Airways by lenders to find new Buyers for it as per the Revival Plan has also created the panic in the market. Jet Airways Shareholders are worried Kingfisher Airlines has a similar script like Jet Airways. KFA acquired Air Deccan and its problems started. Jet Airways took over Air Sahara and its problem started. The debts started increasing thanks to increasing ATF. This lead to erosion of the valuation of Jet Airways significantly. We saw stock price touching 158 last weak which is a big concern for all the 1,58,000 Retail shareholders who are stuck in it. Only five Mutual Funds has some exposure in Jet Airways but they were smart enough to reduce their exposure significantly over the quarters. Indigo and SpiceJet were preferred over Jet Airways by them which saved them. Vijay Mallya took a dig at Government Kingfisher Airlines Ltd and Jet Airways Ltd both served premium clients and had healthy rivalry before former Airline went bankrupt and willful defaulter Vijay Mallya ran away from India. When the ‘Revival plan’ of Jet Airways came out, Mallya couldn’t stop himself from showing his anger on Government. In a series of tweets, he targeted both Government and Jet Airways. He claimed that he could have saved KingFisher Airlines easily if Government had bailed out it the way they are planning to bail out Jet Airways. He may be right about the partiality Government is doing in this case but people are aware that Vijay Mallya is ‘Bhagoda’ while Naresh Goyal did not run away from the situation. Goyal neither diluted his stake in JetAirways nor stopped his attempts to find a Buyer who can save Jet Airways. He was ready to reduce his stake from 51% to 15% in the possibility of Win-Win deal with potential buyers. Customers react to JetAirways Crisis Frequent travelers of Jet Airways are really upset to see the ongoing development in Jet Airways Ltd. They showed solidarity to the employees of Jet Airways who served them for so many years. They are really optimistic about the survival of Jet Airways. Not all customers are that loyal. Many customers of Jet Airways faced inconvenience when flights were canceled on last minutes and they didn’t get refunds of the same. They showed their anger on Social Media. Travelers who pre-booked seats in Jet Airways for their summer vacation went to Andheri office for their refunds but they were requested to cancel the tickets through the platform they booked the tickets. It is said that those who booked tickets directly using Website and App of JetAirways will get a refund within 7 days. But those who booked tickets through agents have to wait for an indefinite time. Jet Airways stopped its operations on 17th April 2019 which created a great vacuum in the sector. The airfare tickets are skyrocketing by almost twice the price. Low fare No-frills airlines are getting benefited by Jet Airways Crisis. Unfortunately, premium clients who travel by Jet Airways rather than low-cost airlines only for the good experience of traveling are missing Jet Airways the most. Jet Airways Employees seek President’s intervention for salary dues. Jet Airways Pilots didn’t receive their salary for 3 months. Other staff didn’t get a salary for last month while Executive level employees have not got any salary from last 7 months. Aviation Minister Suresh Prabhu and DGCA Chief both raised their hands by saying that Jet Airways Ltd being Private Airlines, they must seek clarification from the Interim Management of Jet Airways about their Salaries. Govt itself facing problem to run Air India which has more debts than Jet Airways and 76% disinvestment plan in it has been postponed due to some unavoidable reasons. Jet Airways Employees have decided to approach Prime Minister Narendra Modi and President Ram Nath Kovind to seek their intervention for their salary dues. They are desperate now as they don’t have any guarantee of their jobs nor money to … Read more

Fundamental Analysis of JK Paper

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Company Profile Company Name: J K Paper Ltd Industry: Paper and Paper Products House Name: Singhania (HS) Group Year of Incorporation: 1960 Regd Office: Songadh, Gujrat Website: https://www.jkpaper.com BSE Code: 532162 NSE Code: JKPAPER Market Cap: Rs. 2736.04 Cr Category: Small Cap company About JK Paper Ltd: JK Paper Ltd is one of the leading Paper and Paper Products manufacturing company in India. It is a part of J.K Organization and comes under the Harsh Pati Singhania (HS) Group. It has two large integrated paper manufacturing units in India. The first unit JK Paper Mills was commissioned in 1962 in Rayagada Odisha. JK Paper Ltd. took over Central Pulp Mills of Songadh Gujarat in 1992-1993. Central Pulp Mills, an Integrated Paper and Pulp established in 1966. JK Paper Ltd has recently taken over The Sirpur Paper Mills, an ailing paper mill, located at KagazhNagar of Telangana district by acquiring 76.37% of stake. Sirpur Paper Mills was incorporated in 1938 with a capacity of 1,38,000 tonnes per annum capacity. The combined capacity of JKPM and CPM is around 4,55,000 TPA. The Sirpur Paper Mills will add more capacity to JK Paper when it gets functional after renovation. With the upgradation plans, JK Paper can reach more than 7,00,000 TPA production within the next 2 yrs. Product Portfolio of JK Paper Ltd JK Paper Ltd is one of the leading players in the Indian Paper Industry. It has a large distribution network of 188 wholesalers, 10 depots, 4 regional marketing offices, and more than 4000 dealers through which it sells its products. Office papers- JK Cedar , JK Copier, JK Easy Copier, JK Sparkle ,JK Copier Plus and JK Excel Bond. New brands ‘JK CMax’ and JK Max. Printing & Writing Papers- JK Cote , JK Ledger, JK SHB, JK Evervite, JK Finesse ,JK Elektra, JK Lumina, JK Ultraprint, JK Esay Draw Packaging boards- JK TuffCote, JK Ultima ,JK TuffPac , JK IV Board Speciality Papers- MICR Cheque paper, Parchment , Cedar digital JK Paper Ltd is a leading exporter of branded copier paper in India which exports its copier papers to 35 countries. It is also in top two players in coated Paper and High-End Packaging Boards. Segment wise market share of JK Paper Ltd. JK paper ltd enjoys a 28% market share of the paper Industry in India. It is eyeing for 37% market share in Branded Copier paper segment. Currently, in this segment, they have a 24% market share. In the coated paper they are the second largest manufacturer of India with 12% market share. In the packaging paper segment they are market leader with 11% market share. Paper Industry in India Paper Industry in India is a growing Industry. The digitalization hasn’t affected its growth at all. The demand for paper is currently about 15 million tonnes. The overall paper consumption is estimated to reach 24 million tonnes in 2024-25. This industry consumes about 3% of the wood from Indian forests. Rest it relies on an agroforestry initiative for pulp production. Around 1,25,000 Hectares of land in India is under pulpwood plantations. Paper Industry is a very capital intensive technology. Indian Paper Industry has invested over $ 5 Bn in the capacity increase, technology up-gradation, and acquisitions, etc. Anti-dumping duty on Uncoated copier paper It was observed in the last 2 years that uncoated copier papers from Indonesia, Thailand, and Singapore were imported in India at very low prices than which it was sold globally. On the demand of the domestic Paper Industry, Government fixed an Anti-dumping duty on the uncoated copier papers recently. The recommended import price of this paper is decided at $855 per MT. If the import is done below this price, custom will collect the difference as an anti-dumping duty. Paper Prices Trend in India In the last few months, Pulp prices came down by almost $120 per MT which also affect paper prices. Paper prices were down by $100 per MT in the Global Market. In India as per the ASEAN policy, the duty on paper is Zero. Therefore the prices are benchmarked with the landing prices of the paper. JK Paper used 71% of its Pulp from its own Plantations produced in the vicinity of the Paper Mills and imports very small amount of Paper-Pulp. This gives the company a good pricing power over its competitors. Apart from pulp prices, the fluctuations of the dollar also affect the pricing power of India. When China decided to ban the import of mixed waste, they started buying shooting pulp prices. On the other hand, globally mixed waste prices decreased it helped Indian Paper Industries which used cheap mixed waste for production. This helped the industry in the realization of profits. J K Paper Ltd share price details Closing Price on NSE on 11th April 2019 is 153.30 52 Week Low/High of JK Paper Ltd share price is 97.30/194.20 Face Value is Rs. 10 Book Value of JK Paper Ltd share is 92.49 Company P/E is 6.86 vs Industry P/E 11.90 EPS-TTM 22.36 Returns: 1 yr (6.7%), 3 yrs (225.58%) and 5 yrs (363.99%) Shareholding pattern Financials of JK Paper Ltd. Views of Stocksbaazigar on the JK Paper Ltd. stock JK Paper has given tremendous returns to Investors in last 5 yrs thanks to the growing demand of Paper in India. The globally decreased Pulp Prices may not reach the highs at which they were in the next 3-5 years. So clearly, the Indian Paper Industry will show good performance in the upcoming quarters too. The major advantage of JK Paper is it doesn’t depend much on the import of raw materials. They are integrated Paper Pulp production and Paper Manufacturer. It helps them raise the prices of different paper segments by 1,2,3% thanks to the margin they enjoy. JK Paper Ltd is increasing its capacity and utilizing up to 103% of its capacity. They have a target to increase it up to 110% soon. The effect of GST reduced demand for FMCG products in 2017 which … Read more

Navin Fluorine International Ltd Analysis

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In the summer the demand for coolers, refrigerators and air-conditioners is very high. You will always see smart money investing in stocks like Symphony Ltd, Bluestar, Voltas etc. Very few investors understand the importance of refrigerants gases manufacturers in share market. It is because they fail to connect the link between these chemical companies with summer. It is important to focus on companies like SRF and Navin Fluorine during summer. The reason behind choosing NFIL over SRF is the consistent performance of NFIL in the last 5 years (return of 985% in 5 yrs) and the possible upside in the year 2019. Before starting the Fundamental Analysis of NFIL let’s see some details about the company. Company Profile Company Name: Navin Fluorine International Ltd Company Website: www.nfil.in House Name: P.Mafatlal Group Industry: Chemicals -Others Year of Incorporation: 1998 Regd Off: Vile Parle, Mumbai Market Capital: Rs. 3647.96 Cr Date of Listing: 30th Sept 2003 Sectors: Fine and Speciality Chemicals, Crop Sciences, Refrigerants, and Life Sciences etc. Fundamental Analysis of Navine Fluorine International Ltd. As the name suggests company focusses on Fluorine Chemistry which is an essential part of the Refrigeration industry. Navin Fluorine has a brand called Mafron under which it manufactures refrigeration gases. It also produces inorganic fluorides which are required in pharma and agro sectors. The inorganic fluorides are also used in other industries like Oil and Gas, Glass, Abrasive and electronics too. The third important business of NFIL is large scale manufacturing of Specialty Fluorochemicals required for Agriculture, Pharmaceutical and Petrochemical Industries. It manufactures fluorine-based intermediaries for the speciality chemical industry. The fourth segment of NFIL is CRAMS. Navin Fluorine International Ltd. offers Contract Research and Manufacturing Services for custom chemical synthesis of fluorinated compounds. Navin Fluorine Share Price Current Market Price on NSE on 07/04/2019 is 735.75 52 Week High/Low of NFIL are 579.70/820 Face value: Rs. 2 Number of Outstanding shares: 4,94,46,885 P/E : 23.96 vs Industry P/E : 22.68 EPS-TTM (Rs): 30.71 Book Value/ Share: 199.2 Returns: 1 yr (-8%), 3 yrs( 121%) and 5 yrs (985%) Shareholding pattern of NFIL Promoters: 31.03% General Public: 28.17% NBFC and Mutual Funds: 16.46% Foreign Institutions: 16.08% Others: 7.21% Financial Institutions: 1.06% Key financials of Navin Fluorine Comment: Over the years Navin Fluorine has become highly Cash-rich company with No-debt on it. It has good Assets over liabilities and good cash reserves. Comment: Navin Fluorine is a profitable entity and performing really good. The company has become a Midcap company from a Small Cap company now due to its consistent performance. Comment: NFIL is paying good dividend to its investors. On the completion of its 50 yrs it also announced special dividend. Stocksbaazigar on Navin Fluorine International Ltd. After listening to the Con call of Navin Fluorine on YouTube, I can fairly say that Management of company is confident about the growth from their core business and expecting 30-32% year on year growth. After the laws on Carbon Footprints, organized players like Navin Fluorine International Ltd which was dominant player in Refrigerant gases well-diversified within the Fluoro-chemical businesses which has increased its Product line for better. The acquisition of Manchester Organics Ltd added a portfolio of over 27000 compounds and 3000 IPs to the NFIL. In Dewas, Madhya Pradesh NFIL made strategic investments in cGMP pilot and Multi-purpose plant. As this stock has performed really well in last decade, investors should buy it only on dips and hold them with strict stop losses. Chart of NFIL is really good too. From January to April there is a good delivery-based buying in it. Navin Fluorine International Ltd. company is fundamentally really strong and looks attractive on Technical parameters too. All the 4 BUs of Navin Fluorine will show good growth in the future. A stock of NFIL is a good buy with Stop loss at 698 for the 1-year Target Price of 850. I won’t be surprised to see if the stock over-performs and touches 890 till Dec 2019. Disclaimer: Please note, Stocksbaazigar Mr. Deepak Doddamani is not a SEBI Registered Advisor. He is NSE’s Certified Investment Analysis Professional and NSE’s Certified Marketing Professional Level – 4. Do not consider this post as Recommendation. Stocksbaazigar won’t be responsible for your Profit/Loss. This is an Educational post and should be treated like one. Thank You. Navin Fluorine International Ltd fundamentals explained by Stocksbaazigar

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