Madulsima Plantations PLC

[stocks hunterTop contributor]

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MADU will produce good results for the SEP Q as well.Hence we can expect the share to reach new high levels in comming weeks. Recently it traded high of Rs16.50 and cooled off around Rs14.80 levels and once again started to go up. This is one of very few shares that went against the general mkt trend last friday and ended up at Rs15.0 up by Rs0.50 cents on thin margins.

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Keep a closer look at MADU.

[Jana1Top contributor]

Hello buddy,

Don't jump to conclusion by looking just price appreciation when mkt is bear. See only 1615 shares was traded yesterday. Then hw can u expect it will back?

And have u ever invested in Madu befr? I have traded several times. This time I thought not to touch as plantation had difficulties. Do u know hpow they make profit? Dont trust their NAV. That is bullshit from biological asset reval. See in ur report over 50 mn from revaluation which never give them return. They just set off when audited account comes.

[smallvilleTop contributor]

Anyways, plantations are not considered as per their NAV, its again PE basis valuation with a good 25-35% discount to sector only value a plantation for its worth. Why we discount is for unforeseeable risk with rains and wage hike like scenarios.

[KDDNDTop contributor]

As per my observations...
plantation shares mostly in discount rate / price..
but thats this sector's habit or nature....

I am not quite sure whether it is signal to buy...
but for me... its not that much good reason to select it as a BUY!

GL!

[Jana1Top contributor]

Why we discount is for unforeseeable risk with rains and wage hike like scenarios.

I never heard plantation should be valued based on the earnings- not to consider NAV. I thought wage hike is foreseeable. It is generally each 2 years they expect increment. The two years term will end by start of April 2015. So u couldn't foresee? Once wage is increase by 20% again, tea plantation will be in hell for another 6-12 months. But discounting for rain is useless..

[stocks hunterTop contributor]

UDPL is going to be a killer here. Keep an eye on MADU since it is in the same boat as well.

[smallvilleTop contributor]

Why we discount is for unforeseeable risk with rains and wage hike like scenarios.

I never heard plantation should be valued based on the earnings- not to consider NAV. I thought wage hike is foreseeable. It is generally each 2 years they expect increment. The two years term will end by start of April 2015. So u couldn't foresee? Once wage is increase by 20% again, tea plantation will be in hell for another 6-12 months. But discounting for rain is useless..

As far as my memory serves, everyone (including me) analysed plantations on PE based with a discount to sector PE. Greedy or Cse.cee had done such in 2011 before the KGAL run too

Yes the wage hike is at least foreseeable.. But naturally plantations follow a trend of few years of profits followed by losses..

Would you not consider the affect to rubber tapping due to rain?

Rains are plus for Hydro though..

[shane101Top contributor]

Seems like plantation rally on the way , recently many plantation shares start moving upward.

[stocks hunterTop contributor]

MADU is a share not to miss in a plantation rally.Still its a shame why people do not like plantations. Every business has its own risks. It is not limited to plantations only.

[harieshaTop contributor]

My feeling is plantations will be in RED or in minor profits in September quarter.

There are two factors to consider in Tea profitability. Crop and Price. Last three months was not good for Tea. Less crop with lessor prices prevailed.

Normally winter buying is starting in the month of September. This year it didn't happened either. Only in October we saw some good prices with improved buying. But in last two auctions low grown prices came down by considerable margins, mostly because lessor demand in Mid East. Next quarter will be a more difficult one. In addition to mid east crisis, Russian currency is falling. Continually shrinking oil prices will erode buying power of Mid-East and Russians.

Early 2014 I published an earnings forecast on RPCs with oil palm, probably in the other forum. ELPL, WATA, NAMU and AGAL. AGAL exposure to palm oil is negligible. I think these plantations outperformed the rest during last six months.

Rubber sector, no point of discussing now as no signs of recovery yet.

So those who wants to be in plantations I recommend RPCs with exposure to Oil Palm, but better avoiding plantations.

A plantation rally - For a rally no need of fundamentals. When some body push one others will follow. But don't expect rally's with good results.

[slstockVeteran]

As there is interest in plantation now, I thought I will tell my opinion for what its worth. Don't get in big time or have huge hopes on a massive overall plantation run as of yet ( ofcourse if each company pushed there can be an artifical one). When I went though reports , other than a handful of companies ( mainly ones with Oil palm or selected Tea) reported earning were higher due to revaluation of assets.

WATA , UDPL has gone up 100% from low this year.
IF I have time will write more on other plantation companies later.

[Karan]

MADU NAVPS 55.77 last 3 month EPS 2.09

[stocks hunterTop contributor]

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When tea time comes plantation companies with 100% tea has a very good time. When it is low liquidity it gives good aroma taste. When other ingrediants added - like of NAV+EPS etc..etc.. It gives us a great taste nothing can match it.

[harieshaTop contributor]

* As there are some interest in Plantations I am publishing following valuations.

* These valuations are for trading purposes only. Lot more things to consider for investing in Plantations.

* Rubber plantations are excluded

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Foward EPS assuming last quarter earnings will continue.

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[Jana1Top contributor]

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When tea time comes plantation companies with 100% tea has a very good time. When it is low liquidity it gives good aroma taste. When other ingrediants added - like of NAV+EPS etc..etc.. It gives us a great taste nothing can match it.

According ur chart, if u read its pattern carefully, there is chance it to touch 19-20. Wait and c.

[stocks hunterTop contributor]

hariesha,

Yes MADU is a good company at present and attractive as you mentioned.When it comes to UDPL and WATA they have increased more than 100% during this run and MADU deserve to trade over Rs20in every angles.

Low liquidity is the biggest asset MADU is having at the moment like UDPL. Can take it to new price levels since it is well backed by fundamentals as well.

[smallvilleTop contributor]

Breaking 17 barrier is vital for MADU

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On the other hand, looking at Hareisha's illustrated figures, I find BALA to be undervalued based on PBV & PE both.

[Jana1Top contributor]

In my view Madu is purely speculative counter. There is no cash reserve and they rarely make cashflow. Those who don't understand the basic will pay off. No1 can fall in love with speculative. As I said MADU touched 19 and returning back. I thought that is the exit time for the time being if u r a trader.

Yes BALA could be good pick. I haven't check nw days..

[pri67ket]

MADU seems to be speculative sale.It's running in loss in 2012(219M) & 2013(66M).Even in 1st quarter in 2014 13M loss.

It's major income tea.It doesn't have palm oil which is major income in plantations in recent times.

I don't think it will show profit in this quarter(end of Sep 2014)

[BackstageTop contributor]

MADU seems to be speculative sale.It's running in loss in 2012(219M) & 2013(66M).Even in 1st quarter in 2014  13M loss.

It's major income tea.It doesn't have palm oil which is major income in plantations in recent times.

I don't think it will show profit in this quarter(end of Sep 2014)

Welcome to the forum pri, nice to have new members joining in the discussions.

[pri67ket]

MADU seems to be speculative sale.It's running in loss in 2012(219M) & 2013(66M).Even in 1st quarter in 2014  13M loss.

It's major income tea.It doesn't have palm oil which is major income in plantations in recent times.

I don't think it will show profit in this quarter(end of Sep 2014)

Welcome to the forum pri, nice to have new members joining in the discussions.

Thanks Buddy.

[stocks hunterTop contributor]

Even fundamentals are strong plantations have their own risks. Hence better be careful as mentioned by the forum members. If you are not comfortable don't touch it.

Now just look at CFVF. They have declared very good results and still price of the share is comming down.

[DocStockTop contributor]

I would like to revisit these calculations, please.
Mightily interested in ELPL, BOPL, TPL
@Hariesha up for it?

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