First of all we apologize for not providing the immediate update post Ruchira Papers’ second quarter results.
We continue to believe in the story after reviewing the recent results. September’14 ending quarter results were one of the best in recent times. The company not only reported the all time high quarterly sales of Rs.92 crores but also had one of the lowest quarterly interest expense of Rs.2.69 crores. Both these figures point to the strength of the fundamentals of our investment thesis, which is – Ruchira is a durable growth and continuing deleveraging story. Promoters know this and that’s why they are quietly buying the stock and increased their holding by 0.60% in the second quarter.
The current stock price may be up about 15% since we recommended this stock but again we don’t believe that this is what we are looking for from Ruchira. Our first target is that the stock should at least close the gap between its current price (Rs.25) and the current book value (Rs.43) in next 12 months, which is about 70% return on top of 4.5% dividend yield.
Below is the copy of the results. Feel free to question our thesis and share the knowledge with others. Also, you are welcome to review our other investment idea – Talbros Auto, which we continue to like and recommend to buy.
superinvestors of india 