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Caselet 2_A pioneer in making ready to use steel for construction purposes

Caselet 2_A pioneer in making ready to use steel for construction purposes

  1. 1. Caselet: A pioneer in making ready to use steel for construction purposes (Only for case study purpose as a part of Workshop, no recommendation) Caselet 2 A pioneer in making ready to use steel for construction purposes Case: The share price of the company peaked on 05 Jan 2018 at Rs 136.65. The IPO came in Jun 2011 at a price of INR 108 per share. The 2017 Annual report with balance sheet, cash flow and P&L was available by this time (05 Jan 2018 when peak was formed). Could we identify the trouble in the company based on the available data and what are the top conclusions that we can draw from this data? Draw at least 5 conclusions why it should be considered or declined to invest based on 2014 data and information provided? Profile: The company is engaged in the business of making ready to use steel for construction purposes. History: The company was incorporated in Mumbai, in 2006. Over the years, through a series of acquisitions, it has evolved into a high-quality service provider in foundation engineering across the construction and infrastructure sectors - both in India and Southeast Asia. The Company is the second-largest foundation engineering company in Singapore with a track record of successful execution of over 250 projects.
  2. 2. Caselet: A pioneer in making ready to use steel for construction purposes (Only for case study purpose as a part of Workshop, no recommendation) Share price Extracts of Cashflow Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Cash from Operating Activity 53 24 24 11 66 Cash from Investing Activity -151 -91 -1 -2 -50 Cash from Financing Activity 105 72 -21 -6 -10 Net Cash Flow 7 5 2 4 5 Extracts of Balancesheet Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Share Capital 12 12 14 15 15 Reserves 63 114 139 162 278 Borrowings 113 133 174 196 237 Other Liabilities 139 277 215 166 325 Fixed Assets 126 214 216 207 381 CWIP 2 0 0 0 0 Investments 2 0 5 5 4 Other Assets 197 322 321 327 469 Trade receivables 45.75 63.33 74.16 77.03 217.79 Loans n Advances 122.46 153.07 135.59 153.11 150.77
  3. 3. Caselet: A pioneer in making ready to use steel for construction purposes (Only for case study purpose as a part of Workshop, no recommendation) Extracts of P&L Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Sales 469 680 652 489 688 Expenses 416 606 584 423 584 Operating Profit 54 74 67 66 105 OPM % 11% 11% 10% 13% 15% Other Income 11 8 9 7 122 Interest 8 10 12 12 18 Depreciation 15 21 28 33 39 Profit before tax 41 51 37 28 170 Tax % 10% 11% 12% 20% 0% Net Profit 37 45 32 22 170 EPS in Rs 5.85 6.5 4.29 2.73 13.28 Dividend Payout % 0% 0% 5% 0% 2% Shareholding pattern (as of Sep 2014)  Promoter o 60.17%. 22.43% of promoter holding pledged  In public/institution category some key holdings: o ALPANA MUNDRA 1.21% o ASHISH INDUSTRIAL AND COMM ENTERPRISES PVT LTD 3.75% o HRISHITA INVESTMENTS ADVISORY PVT LTD 1.7% o MUSTRAY IMPEX AND SERVICES PRIVATE LIMITED 4.05% o SATPAL KHATTAR 1.35%
  4. 4. Caselet: A pioneer in making ready to use steel for construction purposes (Only for case study purpose as a part of Workshop, no recommendation) Your notes 1) ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ 2) ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ 3) ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ 4) ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ 5) ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________

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