RICHA INDUSTRIES LTD - RESULT UPDATE

Richa Industries recommended on 22nd January 2015 @ 33.

::LINK TO RECOMMENDATION::

Today company has announced December 2014 quarter numbers as follows.

 As seen above: Results are in line with expectations; Sales have declined while net profits have increased significantly due to exceptional loss in Dec-13 quarter.

I got to speak with the management (Jt. Md - Dr Sandeep Gupta) about earnings and the future guidance for the company. 

Please note that the below excerpt of the conversation includes forward looking statement from the management.

Next Quarter Numbers: I asked Dr Gupta on what should be the expected top-line for this full-year and he said the sales for full year will be more than 300 crores, To confirm the same i remarked that it would require next quarter to have a topline exceeding 118 crores for full year revenue to be above 300 crores, He confirmed and said he is pretty sure to achieve that.

FY16 Guidance: I asked Dr Gupta on what should be the expected top-line for FY-16 and he said the sales for full year FY16 will be more than 450 crores (+50% from Proj. 300 crore FY-15 Sales) on back of strong orders which company is already in process to get and have started planning for the same.

Debt: Dr Gupta said that by FY-16 end there will be significant reduction in debt.

Order: Richa Industries as discussed with Dr Gupta has bagged some projects in South-India too which is a new zone for the company since it largely has been limited to North-India.

Going forward, Richa Industries is surely going to make the most of measures such as make-in-india and shortage of warehouses in the country which might help in exceeding the projections above.

 

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 The numbers are in line with expectations and Richa Industries remains a compelling multbagger at this throw-away valuation, Investors should continue to hold this stock and fresh entry too can be taken.