Wednesday, May 16, 2012

Disa India Ltd - AGM Notes

Hello to all. As i write this, the Sensex has ended about 300 points down. Good old days are coming back again! :-) Just kidding!
I attended the AGM of Disa India Ltd on 9th May, 2012 in Bangalore. This is the link to my previous article on the company, which also contains links to some more previous articles on the company!
I would rate the company's management very very highly. The overall body language was positive. The management is always open to answering all reasonable questions, without making any tall claims, etc. No-nonsense and to-the-point. My kinda people!


Some notes about the AGM...

On the demand side, the company is still seeing robust demand. Some slowdown was seen in the quarter ended December 2011, but since January 2012, enquiries and orders have improved substantially.

Wheelabrator now contributes about 25% of the sales. Good visibility being seen in this segment also. 2 new machines are planned to be introduced in the near future. Mr.Carmichael, who was VP of the Wheelabrator business worldwide has been inducted in Disa India's Board.

Latest order book is around Rs.85 cr.

Growth seen on both fronts; new foundries as well as automation of existing manual foundries. On sustainability of demand, the management gave an interesting statistic; out of about 5000 foundries in India, 4000 are fully manual.

On transfer of shares from escrow account, the management clarified that although the case is still going on, the company gave an undertaking to abide by the Supreme Court’s decision, whatever it might be. Hence, the Supreme Court gave them the permission to transfer the shares. The promoters now officially hold 86.5%.

Delisting: no comments since decision has to be taken by promoters, not by the Indian board of directors

Cheers and happy investing


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1) All the posts on this blog, including this one, are for educational and discussion purposes only.
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13 comments:

Samaresh Biswal said...

Sir next time in you are in bangalore let me know want to know about stocks

Neeraj Marathe said...

Sure Samareshji,
Plz send me an email so that i have your contact details in my record.
cheers!
Neeraj

Vinay said...

Hi Neeraj,
Read previously your article on Bharat Bijlee and got very much interested in the company after my own analysis. Would request you share your further views on the company.
Thanks!
Vinay

Neeraj Marathe said...

Hi Vinay,
You have gotten me confused..
1) Is the company you are talking about Bharat Bijlee? Or is it Disa, coz you have commented on the Disa post..
2) If your own analysis got you very much interested with Bharat Bijlee, what further views can i share?
cheers!
Neeraj

Vinay said...

Sorry Neeraj, to get BBL posted in DISA post, but could not find more appropriate place for communication. Must have posted in your BBL post, will be careful in future.
As regards your views, wanted to take advantage of your experience (For me, still much hours left for 10000 hours) and may be I am biased for confirmation.
Thanks!
Vinay

Neeraj Marathe said...

No probs Vinay..
Well, for me, no change in view on BBL..i had started buying in the recent past when the price had dropped..have not built my full position yet..
cheers!
Neeraj

Vinay said...

Thanks Neeraj very much, for lending your kind guidance.
Vinay

Raja said...

Hi Neeraj,
I have the following questions... i should have probably asked you before you attended the AGM... but anyways...
1) Didn't anyone raise the question about rationale behind the large dividend ?
Not that, am complaining, but don't they have any capital expenditure planned for this year ?

2) Last year roughly 40% of their revenue and 50% of their PAT came from a single quarter(Dec). Is there business seasonal ?

Actually the first 3 quarters result made me sit back and not add to my holding when the price was attractive :(

Regards
Raja

Vinay said...

Thanks for your guidance
Vinay

Neeraj Marathe said...

Most welcome Vinay..
cheers!
Neeraj

Neeraj Marathe said...

Hi Raja,
1) Well, i raised the question of dividend. Although the dividend was most welcome, what disturbed me was the randomness and inconsistency of the same. So i requested them to table a proper dividend policy. The request was taken on record. The rationale was that the business had improved substantially, so had the cash position, hence, they were paying some of it out as dividend. ;-)
2) I have stated time and again that the business is lumpy..one cannot and should not look at it on a quarterly basis..
cheers!
Neeraj

JK said...

Hi Neeraj,

Would you recommend a BUY at current price of 2500/-???

Neeraj Marathe said...

Well, tricky question, since I have vested interest. So, I will not recommend anything to others. What I am doing is holding. I have a decent position bought at much lower price.
Perhaps, a bad quarterly result may give a good entry point.
cheers,
Neeraj