Maruti suzuki
I have written about maruti suzuki earlier here and here. Maruti recently announced great results, atleast on the face of it.

The results are good, though not spectacular. The company has shown an 18% year on year growth in volume and 25% growth in profit. The QoQ growth is -4% , mainly due to the seasonality of the sales. The company has been able to manage the costs well on yoy basis and reduce them from the previous quarter. The main reduction has been on material costs and elimination of the exchange variation losses.

So I should be doing handsprings and cartwheels ..right ? not exactly. I have written  earlier on anchoring and my failure to build a full position in maruti suzuki. So a 200%+ price increase is a simultenaous reason for me to smile and beat myself 🙂

Bharat electronics
I have writen about BEL earlier here . BEL recently announced Q1 results and reported 180%+ growth in net profits and a 10 fold increase in profits.

I am happy about the results, but not for the reasons you would expect. Let me explain – My key concern with BEL has been that the company has been booking majority of its sales in Q4 and a result was making almost 60-70% of its profit in the same quarter.

Now the company operates in a project kind of business and hence could be booking revenue based on percentage of completion method during Q4. As a result of the skew, the company had built up high recievables and hence higher working capital.

The company seems to be moving away from the above (need to confirm from the annual report) skew which is good as it would help in improving the cash flow and reduce work capital requirements. So the results are good, not due to the growth, but due to the reduction in the skew in the quarter by quarter revenue.

On an overall basis, the core business of the company is fairly immune from the recession and the company should continue to do well.

I have written about CRISIL earlier here. CRISIL reported its quartely results and reported a 17% increase in topline and 12% increase in the bottom line. The offshore research business continued to show growth inspite of the chaos in the international markets.

I am pretty happy with the results in view of the macro conditions in which these results were achieved. In addition the company reported a dividend of 25Rs/ share which amounts to a 50% payout. The company management is not hoarding the capital, which is a good thing.

CRISIL is one of the few companies with enormous competitive advantages. I have always wanted to buy this company, but was put off by the steep valuations. During the downturn, I was reading an article on buffett and was struck by a comment – buffett tends to read about companies even if he has no plans to buy the stock. If he likes the company, he mentally files it and waits for the right time when the price is right.

The above comment got me thinking and on going through my notes found my analysis of maruti and CRISIL. After a  quick analysis, I decided to pull the trigger.

Moral of the story 🙂 (for me) – be prepared in advance. You never know when opportunity strikes !

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