Thursday, October 24, 2013

Godfrey Phillips India Ltd



Had done a  note on Godfrey Phillips earlier
Some developments have taken place since then:
1)      Rabale , Navi Mumbai plant is  now completely operational. The plant is built on a 44,000 sq metres ( approx 11 acre ) plot with a 21,500 sq metre factory buildingThe plant has been built on a high technology platform with maximum automation. The Technology tripod  incorporates three major new technologies. These correspond to the three main areas of production: the primary manufacturing which prepares the cured tobacco leaf for production, the secondary manufacturing which involves cigarette making and packing, and the warehouse and despatch area. The plant won’t require more than 100 workers.
2)      236 unionized staff and workmen attached to its plant at Andheri, Mumbai, opted for the VRS  announced by the company. The financial outlay on this account amounted to Rs. 35 crores approx and has been accounted for in the June 2013 P&L. Further, the production facilities at its plant at Andheri, Mumbai have been largely re-located to the new plant at Rabale.
3)      Registered office has been shifted from Andheri to Lalbaug, Mumbai
4)      The company has been accounting for exchange loss on its Forex loan on a consistent basis and we may see some more of that in the current quarter too.
5)      June quarter saw a good scale up in revenue though profitability was affected due to VRS & forex loss provision
Management pedigree is mediocre at best . Notwithstanding the same, going ahead the benefits from geographical expansion  and right sizing should be substantial.  EV is about 2800 cr @ cmp of Rs.2700.

At the time of writing this report, the author /his family have an investment interest in the stock mentioned above. Under no circumstance does the information in this report represent a recommendation to buy or sell the above-mentioned stock.  This report has been prepared and issued on the basis of publicly available information, internally developed data & other sources believed to be reliable. This is just a suggestion solely for information purposes and does not constitute a solicitation to any person to buy or sell a security. While the information contained therein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Readers using the information contained herein are solely responsible for their actions and are advised to satisfy themselves before making any investments. 

15 comments:

  1. Another excellent pick!...great going...:)

    Appreciate your diligent efforts in cherry-picking such amazing scripts...

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  2. recently vst industries came out with very good result ......sir anything new to add on godfrey and can you comment about its Twenty Four Seven Convenience Stores

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  3. The non - tobacco bizs are v small currently and not profitable. Recently both , Godfrey & ITC increased prices by about Rs.10 / pack of 10 in the premium categories.

    I feel the key watch-out point is the tobacco biz.performance.

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