Friday 13 February 2015


Richa Industries recommended on 22nd January 2015 @ 33.
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.

 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.


  1. Dear Ace, three quick queries:
    1. Orders from South India and next year's growth (Rs. 450 cr. sales) coming from Textile division or PEB?
    2. Any update on sale of Textile division?
    3. How does company plan to reduce debt?
    Many thanks.

    1. 1) Sales in total, mainly driven by PEB
      2) No updates on that yet
      3) Company can't reveal to me before putting it to the board, By june end they are expected to put it on the board

  2. Dear ace, you had recommended this stock at around 38 or so as that was the price when your recommendation came out. I suggest you to correct your recommended price.
    Regards. Sriram

    1. Please see intraday chart of Richa Industries for 22nd January 2015 and decide for yourself.