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This is the concluding part of a two-part segment offering a salaam to all those companies that stopped me during my morning vigil of trawling through corporate numbers for the second half of 2014-15.
Oriental Carbon and Chemicals
This sleepy Kolkata chemicals company has arisen. Consider: A post-tax profit of Rs 7.8 crore in the second quarter of 2013-14 on an equity capital of Rs 10.3 crore (face value Rs 10) moved up to Rs 9.9 crore in the first quarter of the current financial year and Rs 13.1 crore during the second quarter. What I like: Finance cost has declined across the two quarters this year; other income is higher than interest outflow; interest cover is a hefty 10x-plus. Appears to be a pretty story building here.
Freshtrop Fruits
The Ahmedabad company is engaged in a seasonal business (fruit processing). The numbers: Profit before tax (PBT) of Rs 6.40 crore in the first half of 2013-14 rose to Rs 10.95 crore in the first half of 2014-15 on an equity of Rs 12.14 crore (face value Rs 10); a higher depreciation indicates capacity building; an interest cover in an excess of 12 indicates makings of a hugely profitable business (when the company is only just acquiring scale). What excites me is this could be a sustainable export play in one of the most abundant fruit producing countries suffering from extensive processing under-penetration.
Kaveri Seeds
The story of a fictional corporate reporting, the kind of numbers delivered by this Hyderabad company, would have attracted disdain. But this is precisely what Kaveri Seeds has been reporting: Company with an equity capital of less than Rs 14 crore (Rs 10 face value) reporting a half-yearly profit before depreciation, interest and tax (PBDIT) of Rs 268 crore (previous corresponding half Rs 174 crore). Consider some other talking points: An interest outflow of Rs 6 lakh in the first half, other income of Rs 8.20 crore and a tax expense of Rs 4.50 crore. Three words describe this company: Swimming in cash.
CARE Ratings
There is an assumption that credit rating companies mirror the economy: Weak profits in a slowdown, rebound in a strong economy. Which is why the numbers of CARE Ratings merit attention: PBDIT more than doubled from Rs 33.52 crore in the first quarter of 2014-15 to Rs 72.76 crore in the second quarter; profit after tax strengthened from Rs 59 crore in the first half of 2013-14 to Rs 79 crore in the first half of the current year. Interest outflow is Rs 19 lakh. Other Income: Rs 37.52 crore (you can read that again). The government must love this company; it paid Rs 50 crore in corporate tax in 2013-14 on a total income of Rs 229 crore. How many private companies can claim to be run for shareholders, employees and the government?
Vakrangee Limited
One number caught my attention in its second quarter results. Revenues increased Rs 18 crore over the first quarter, PBIT increased Rs 25 crore even as interest outflow declined by around Rs 8 lakh. An interest cover of 9x. There has been a profit increase for the past 12 of 13 quarters. In a rapidly digitising climate, the story at Vakrangee could well be beginning.
The author is a stock market writer, tracking corporate earnings and investor psychology to gauge where markets are not headed
