Delivered to Equity Pune gather...why Opto Circuits & Arshiya International should burst & they did...

1. 1Blog: http://dharmawat.blogspot.com/
Why
Opto Circuits
&
Arshiya International
should burst
You can’t hide the truth for long…
A presentation by: Niteen S Dharmawat
at Equity Pune gathering…

2. Key factors
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 Obvious signs for a burst…
 Consistent mismatch between CFO v/s NP
 Dangerous level of Share Holding Pattern ‘SHP’
 Fancy business models
 Acquisition led ‘growth’ to hide poor performance
 High level of growth compared to CFO/NP
Blog: http://dharmawat.blogspot.com/

3. Opto Circuit
3
 Celebrity Analysts recommending from
the rooftop
 Acquisition led growth
 Significant increase in debt + Preferential
allotment: Cash guzzlers
CFO 126 130 178 115 40
Signal (Red)
Parameter Mar 2012 Mar 2011 Mar 2010 Mar 2009 Mar 2008
Net profit 573 368 260 209 131
In INR Crores. All are consolidated numbers.
~140 in Aug ’12
when thought
to stay away
CMP: 60.
 Mismatch between Net profit and CFO over last
several years (remember Enron)
Blog: http://dharmawat.blogspot.com/

4. Arshiya International
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 Celebrity Analysts getting swayed (e.g.: Samir
Arora of Helios Capital, IIM alumni, operating
from Singapore)
 Fancy business plans and stories
 NP-OCF combination with poor shareholding
pattern – a disaster in making
OCF 119.48 -28.05 -9.38 13.83 -10.19 -15.50
Signal
Parameter Mar 2012 Mar 2011 Mar 2010 Mar 2009 Mar 2008 Mar 2007
Net profit 47.51 24.93 15.40 18.49 12.36 3.98
SHP Pledged 32.13 23.87 25.36 17.97 17.47 11.01
Signal
Parameter Sep 2012 Jun 2012 Mar 2012 Dec 2011 Sep 2011 Jun 2011
SHP Unpledged 12.46 19.36 17.87 25.26 25.73 32.19
In INR Crores.
Analyzed in Sep’12 and
concluded a possible
burst. CMP: 26.
 Mismatch between Net profit and CFO over last
several years, poor SHP (remember Enron, Satyam?)
Blog: http://dharmawat.blogspot.com/

5. 5Blog: http://dharmawat.blogspot.com/
About the presenter:
Niteen is an MBA and cleared CFA Level 2, CFA Institute USA.
A firm believer in long-term financial planning, and a 20
years veteran of the stock market, he likes to analyse the
economy, and individual stocks. He also conducts investor
education sessions.
He likes reading books/magazines/news papers on the
topics as diverse as general management, technology,
investment, fiction, marketing and the Gita.
He is a person who believes in "Everything else can stop but
learning".

6. 6
IMPORTANT DISCLAIMER: Investment in equity shares has
its own risks. Sincere efforts have been made to present the
right investment perspective. The information contained
herein is based on analysis and up on sources that I consider
reliable. I, however, do not vouch for the accuracy or the
completeness thereof. This material is for personal
information and I am not responsible for any loss incurred
based upon it & take no responsibility whatsoever for any
financial profits or loss which may arise from the
recommendations above. I sincerely request you to do your
homework before you take any position whatsoever. I, my
relatives or friends may have/have positions in the stocks
discussed here.

7. Thank you
Email: niteen.dharmawat@gmail.com
Mobile: 9850571857
Blog: http://dharmawat.blogspot.com/
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