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Financial Review:
Profitability Ratios
Gross Profit Ratio: 248,753/754,827=33%
Net profit margin: 107,255/754,827=14%
Forecasted minimum EPS for the year 2010/2011=Rs. 5.76
Note.
The above forecasted EPS is based on the quarterly accounts published by the CLPL for the December quarter, which includes only the results of the core activities of the company (sale of leather products. In June 2010 the company acquired the controlling interest in South Asia Textile Industries Limited (SATL). This investment was shown under other investment in December accounts. I believe the consolidated accounts will be published in the year end.
South Asia Textiles Industries Lanka (Pvt) Ltd. (SATL), a leading fabric manufacturer in Sri Lanka and has generated positive results from the inception. Inclusion of the results of SATL in the 31st March accounts should further enhance the quality of the earnings of the CLPL group, I believe the consolidated EPS for the March accounts should at least be Rs. 7.00. (Resulting a PE of just 12.5 at current prices)
More on SATL: http://www.yarnsandfibers.com/news/index_fullstory.php3?id=22797#
Liquidity review:
Further to the 2010 warrant conversion the company has one of the strongest balance sheet in the ERIL group.
Current Ratio: 768,772/230,269=3.34 times
Loan coverage: 144,054/(144,557+37,493)=80% (80% of loan can be repaid with an annual profit)
Price to Book Value =88/75.78=1.1 times
Other considerations
CLPL warrant is due to be converted in August this year with a right a price of Rs.102. presently the warrant is trading in the range of Rs.20 resulting a total cost of 130/=. All the investors in CSE know the aggressive nature of ERIL (even last year before the warrant conversion the share went to 230 levels) so I believe within a short period they will hike the price of CLPL in order to make the warrant attractive.
CLPL is strong fundamentally as well as its one of the important hot stocks in CSE.
Friends open for comments and suggestions.
Regards
Profitability Ratios
Gross Profit Ratio: 248,753/754,827=33%
Net profit margin: 107,255/754,827=14%
Forecasted minimum EPS for the year 2010/2011=Rs. 5.76
Note.
The above forecasted EPS is based on the quarterly accounts published by the CLPL for the December quarter, which includes only the results of the core activities of the company (sale of leather products. In June 2010 the company acquired the controlling interest in South Asia Textile Industries Limited (SATL). This investment was shown under other investment in December accounts. I believe the consolidated accounts will be published in the year end.
South Asia Textiles Industries Lanka (Pvt) Ltd. (SATL), a leading fabric manufacturer in Sri Lanka and has generated positive results from the inception. Inclusion of the results of SATL in the 31st March accounts should further enhance the quality of the earnings of the CLPL group, I believe the consolidated EPS for the March accounts should at least be Rs. 7.00. (Resulting a PE of just 12.5 at current prices)
More on SATL: http://www.yarnsandfibers.com/news/index_fullstory.php3?id=22797#
Liquidity review:
Further to the 2010 warrant conversion the company has one of the strongest balance sheet in the ERIL group.
Current Ratio: 768,772/230,269=3.34 times
Loan coverage: 144,054/(144,557+37,493)=80% (80% of loan can be repaid with an annual profit)
Price to Book Value =88/75.78=1.1 times
Other considerations
CLPL warrant is due to be converted in August this year with a right a price of Rs.102. presently the warrant is trading in the range of Rs.20 resulting a total cost of 130/=. All the investors in CSE know the aggressive nature of ERIL (even last year before the warrant conversion the share went to 230 levels) so I believe within a short period they will hike the price of CLPL in order to make the warrant attractive.
CLPL is strong fundamentally as well as its one of the important hot stocks in CSE.
Friends open for comments and suggestions.
Regards
Last edited by lion on Wed Apr 27, 2011 9:40 pm; edited 1 time in total
