SUPREME PETROCHEM LTD (SPL) ANNUAL REPORT REVIEW FY17-18

Posted on June 23, 2018 by Jimit Zaveri under Annual Report Review

Supreme Petrochem Ltd (SPL) is a joint venture between The Supreme Industries Limited and the Rajan Raheja Group.

SUPREME PETROCHEM LTD (SPL) owns and operates state-of-the art production facilities from two locations in India the first at Amdoshi – Wangani Village near Nagothane in District Raigad Maharashtra and the Second in New Manali Town near Chennai in Tamil Nadu.

The Styrenics facility at Amdoshi – Wangani has the following Plants
— Polystyrene (PS)
— Expandable Polystyrene (EPS)
— Specialty Polymers and Compounds (SPC)
— Extruded Polystyrene Foam Boards (XPS)

Annual Report Review FY17-18

Disclaimer: This is not a recommendation to Buy-Sell-Hold. And I am not a SEBI registered analyst.

BALKRISHNA INDUSTRIES LIMITED (BKT) ANNUAL REPORT REVIEW FY17-18

Posted on June 22, 2018 by Jimit Zaveri under Annual Report Review

bkt-logo-white-2

Balkrishna Industries Limited (BKT) is a leading manufacturer in the Off-Highway tire market which was incorporated in the year 1987. The company has successfully focused on specialist segments such as agricultural, construction and industrial vehicles as well as earth moving, port and mining, ATV, and gardening applications and as a result, company comes out as a global player in the Off-Highway tire industry with a 6% market share.

Annual Report Review FY17-18, FY16-17

Disclaimer: This is not a recommendation to Buy-Sell-Hold. And I am not a SEBI registered analyst.

WARREN BUFFETT’S LETTER – 1983 – 84

Posted on June 3, 2018 by Jimit Zaveri under Bibliophile

WB Letter 1983

Berkshire Hathway made an acquisition of majority stake into Nebraska Furniture Mart. Mrs.Blumkin leave Russia for America when she was the age of 23. She had no formal education, no knowledge of English.

WB 1983 01

Many retailers had pressurized to the furniture and carpet manufacturers to not to sell products to Mrs.B but Mrs.B has managed to run her business and also able to cut prices. She has to face many cases but she won all and received huge publicity.

WB 1983 02

Mr.Buffett has explained the concept of intrinsic value in a very well manner.

WB 1983 03

Mr.Buffett has explained how to look at the economic Goodwill with the example of the See’s Candy. He has an emphasis more on economic Goodwill rather than accounting Goodwill. Company’s ability to produce a higher return on assets compared to market then that excess return is economic Goodwill.

WB 1983 04

Also mentioned that assets heavy businesses require additional capital for the further growth.

WB 1983 05

PunjL

GodrejP

Great business creates a fortune during an inflationary year where the company requires less tangible assets. And also companies having availability of the fund for acquisition of the new business. They do not have to depend on the bringing additional fund by either debt or issuing new share capital.

I have quoted example of 2 two companies into the automobile business and one company is in the paint business.

MarutiS

HeroM

AsianP

Example 1 – 3 which are asset heavy businesses, where we can see that borrowing is compounding, non-availability of free cash flow and wealth of shareholders does not created or get erode, whereas in example 4 – 6 which are asset light or least asset businesses, we can see that borrowing reduced or increased at a lower rate and investments into the books has compound well, availability of free cash flow which resulted into the wealth creation for the shareholders.

But the management who is not disciplined then they will do a silly things such as –

WB 1983 06

WB Letter 1984

Mr.Buffett has mentioned benefits of repurchase of shares.

WB 1984 01

WB 1984 02

Warren Buffett’s Letters 1957 – 2012

Disclaimer: Businesses discuss in this article is not a recommendation to Buy-Sell-Hold. And I am not a SEBI registered research analyst.

WARREN BUFFETT’S LETTER – 1982

Posted on May 27, 2018 by Jimit Zaveri under Bibliophile

WB Letter 1982

Mr.Buffett has mentioned characteristics of cyclical industries-

The product which can be differentiated and sell it by the branding of it then the company can able to earn extra from it. But the product where no chance to differentiate product then profitability is the major factor of market forces.

We cannot predict that when the cycle will going to turn, we cannot predict that when demand will overtake supply and prices of the commodity will start improving or supply increases much compared to demand and prices starts falling.

We should focus when any company is engaged in the corporate acquisition. If any company is issuing shares for the acquiring a company which having lesser intrinsic value then we should keep cautious. Such decision of the management provides us a clue regarding the perspective of the management and weather company is intended to create the wealth of the owners or not.

While management makes an acquisition at the expensive valuation by issuing their shares than some of the rationale given by management which we should check by putting highest cautions.

Mr.Buffett had provided a solution by which management can avoid value destruction for the existing owners of the company.

Many a time, management only focuses on the increasing future Earning Per Share (EPS) by sacrificing the strength of the balance sheet. But they forget that if the balance sheet does not remain strong for a longer period of time then business is going to have a tough time into the future.