A close below any previous day’s low will signal a reversal.
The company has delivered on the sales front but saw weak operating profit and benign net profit growth
The net sales of Vinati Organics increased 20% for the quarter ended March 2013 over the same period last year. For the same quarter, operating profit grew 4% y-o-y to Rs37.46, after a particularly dismal third quarter. However, Vinati reported Rs21.46 crore net profit for the quarter ended March 2013 when compared to the Rs20.27 crore for the corresponding period last year.
Vinati Organics has put on a string of consistent showing on the sales front but has disappointed the previous and current quarters when it comes to operating profit. Net sales grew at 20% y-o-y which is inline with the company’s three-quarter y-o-y average growth rate of 22%. The company’s return on networth and return on capital employed are impressive at 24% and 35% respectively. Despite this the market has valued the company cheaply, with market capitalisation quoting at just over three times operating profit.
A closer look into the company’s shareholding pattern reveals that promoters hold 74.99% of the total shares outstanding. Institutions hold 2.37%, while the Indian public holds 22.64%, of the shares outstanding.
The board of directors of the company has recommended a dividend of 125% on the share capital of the Company, or Rs2.50 per equity share of face value of Rs2 each for the year ended 31 March 2013.
Vinati Organics is a specialty chemical company producing organic intermediates, monomers and polymers.
The stock is part of the Kensource Stockletter picks. For more information on Kensource
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In January, the Central Information Commission directed the market regulator to upload from April onwards information about PMS schemes on its website. Despite assurance from SEBI to the CIC, it has not uploaded any data on PMS for which Moneylife has been fighting a long battle
Market regulator Securities Exchange Board of India (SEBI) has refused to share information on portfolio management services (PMS) in the public domain as the deadline to disclose the same by April has passed by. Despite an order from the Central Information Commission (CIC) and subsequent assurance, the market regulator has not yet uploaded any data on PMS on its website. After fighting with SEBI for over a year, the CIC had ruled in favour of Moneylife and directed the market regulator to publish the data related with PMS on its portal.
Our email and SMS to SEBI officials asking about the compliance to the CIC order has remained unanswered till writing this report.
After the order from Chief Information Commissioner (CIC) Satyananda Mishra, issued after a hearing conducted on 17 January 2012, SEBI wrote to Moneylife assuring compliance with the order. In a letter on 18 February 2013, SEBI stated, “The Information Technology Department of SEBI is devising a suitable mechanism/link so that the monthly report received from the portfolio managers for the month of April 2013 and onwards may be transferred to the SEBI website. Accordingly, efforts are being made to make available the monthly report of the portfolio manager on the SEBI website for the month of April 2013 and onwards.”
Moneylife wrote an email to SEBI and requested for the link. Nevertheless, so far there is no response from the market regulator.
Earlier, Moneylife had won a hard fought case, which lasted more than a year, against SEBI to obtain details and performance of all the PMS schemes. In its 2nd RTI appeal hearing held on 17 January 2013, the CIC had ordered SEBI to disclose all the details of PMS schemes and upload the same on the website from April onwards.
This order not only represents a big victory for Indian investors and comes at the end of a long battle by Moneylife to ask the regulator to make PMS schemes more transparent. For the past three years, Moneylife has also helped several investors recover funds, wrongly deducted by PMS. The wrongful losses have extended from a few lakh rupees to as much as Rs1 crore.
The CIC’s order said, “We have carefully considered the facts of the case and the submissions made before us. It is an admitted fact that the desired information is available with SEBI, if not on an annual basis, at least on a monthly basis. Since this information is received electronically, it’s publication through the website would not be a difficult task. By publishing such information about all Portfolio Management Services (PMS) regulated by it, SEBI would serve two objectives. One, help the investing public to access all information at one place and not have to visit 50 different websites and, two, eliminate the need for seeking such information under RTI, from time to time”.
A more detailed report on how Moneylife had won the case can be read over here: Power of RTI: CIC directs SEBI to disclose all information related to PMS.
Last year, SEBI had stonewalled our initial RTI application for disclosure of PMS schemes, when it cited under the pretense of “fiduciary relationship” as the sole reason for not providing information. The story can be read here: SEBI misrepresents public information on PMS as fiduciary; offers mindless response to simple RTI query.
Horror stories of past PMS looting investors prompted us to file an RTI against SEBI to disclose information of such schemes, in order to make it the system more transparent. You can find some alarming cases Moneylife had covered, in detail, over here:
Unless information pertaining to PMS is put up, investors will continue to find it difficult to decide which PMS to invest in and make informed decision. Moreover, without such information, gullible investors will be hardsold such poor PMS schemes, which will lead to capital erosion as evidenced by the stories written above.