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Sri Lanka Equity Forum » Stock Market Talk » Royal Ceramics Lanka - Diversified Tiger turned traditional manufacturing company

Royal Ceramics Lanka - Diversified Tiger turned traditional manufacturing company

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EquityChamp

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Moderator
Principle Business Activities
The main businesses were manufacturing wall tile, floor tile and bath ware reflecting the traditional line of business. But the much beautiful pace and colour has been added through aluminium extrusions,  plantations,  packaging,  paints and financial services  businesses.

Operational Performances
The group has experienced a remarkable compounded annual revenue growth of 40% for the last five years especially after the acquisition of Dhammika Perera and later on adopted unrelated diversification strategy. This strategy has helped the company to nullify the impact of declining profits in the manufacturing and selling of tile products but to introduce a robust growth channel on a sustainable basis.

The company now gradually expanding its business demographics beyond the shores and penetrating oversees markets including Australia. The overseas sales has grown from a 4% of total sales in 2014 to 6% of total sales in 2015 and the company hopes to make this ratio to 10% by 2016.

The company generates a significant ROE of 22.5% for 9months ending 31st December 2015 while the ROME @ CMP 22.2%. Given the significant revenue and profit growth the same-like ROE & ROME reveals the fact that RCL stock @ current price levels not reflecting its true profitability.



Valuation Multiples

RCL is currently trading at a PE multiple of 4x based on the forecasted FY PAT attributable to equity holders of Rs3,335mn for 2015/16 FY. The stock was trading at an average PE of 6.8x during the period 2013/14 and 2014/15. If the stock valued at a PE of 6.8x the stock should trade @ 204.7. Therefore I am of the opinion that RCL carries a significant upside potential in medium-term @ the current price of 119.90.



Thanks

chamil1


Manager - Equity Analytics
Manager - Equity Analytics
Super Share . Expect massive profits for the FY ended recently

Harry82

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Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
target price Rs 150.00

EquityChamp

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Moderator
RCL has achieved what I was expecting. They have achieved more than my expectation had they not booked extraordinary tax provisions in Q4 of 2015/16. Though the PAT was reduced by one-off provisions the revenue target is well within my expectations. Cheers for the future conglomerate. Basketball

Brinthan

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Attractive profit from their last quarter....Forigners buy this share continuesly....Is there any news ?

Subdivsion or a good dividend expectation...?

Harry82

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Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Subdivision possible

Brinthan

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Harry82 wrote:Subdivision possible
If its happen the targat price will be 150...

Harry82

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Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
foreigners started to buy.
sort term target Rs 150.00

Harry82

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Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
This week also foreigner target RCL at this low price level

Teller

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Moderator
This is an international company now ,i m so proud to be a share holder of RCL.
RCL goodwill spreads whole over the world and it's billion dollar company now.

EquityChamp

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Moderator
RCL still not moved. It dosne't get the attention of the traders yet. I advice the fundamental investors to capitalise on the opportunity. A stock with strong fundamentals.

Thanks

Brinthan

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Lot of sell orders around Rs.124/- mark thats why it is not moving upto now..

EquityChamp

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Moderator
RCL had witnessed good collection by foreigners for some time now. Yet price stagnates. Therefore still chances are high that we can expect a quick price appreciation.

Brinthan

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Welcome back EC Sir,After long time.....nice to see you......... i also away in this forum and i active in another forum now....Because this forum is  now conrol by useless people.....

EC Sir if u have time please write the article regarding REXP....I think this is the future GEM....

EquityChamp

avatar
Moderator
Hi Brinthan,

What was that forum. Who were the members there.

I will write a separate analysis on REXP shortly. it is now trading at a PE of 5.4x and a PBV of 2.4. But there are some more good stocks whose PE and PBV are much attractive than this. Example TAFL, GRAN.

I also went around during the last few months to explore new territories.

Brinthan

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
EC Sir ,this is the forum...and it is conroll by professionals.....

http://Deleted/viewforum.php?f=11


I invite u to join this forum....

Brinthan

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Lankaequityforum

I cant share web address...u can google it and find

EquityChamp

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Moderator
Ok Brinthan,

Noted. Who are the prominent members there. I mean the good contributors. There must be good members for you to get motivated to join there.

Brinthan

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
There are lot of quality members sir ,
In that forum No room for promoters and manipulaters

Shark is the key person

Bluewhale,Pathfinder,topcat,Pat,Shadowwalker,NC+,
future123,investerfrom1985,value and manymore........

EquityChamp

avatar
Moderator
@Brinthan wrote:There are lot of quality members sir ,
In that forum No room for promoters and manipulaters

Shark is the key person

Bluewhale,Pathfinder,topcat,Pat,Shadowwalker,NC+,
future123,investerfrom1985,value and manymore........
Hi,
In any forum you can't prevent the presence of those two categories. That is normal. What we have to do is taking informed decisions after considering a wide range of factors.

Shark is solely a tech guy. Pathfinder and NC+ also the same. In these market sentiments we need fundamental analysis more than technical because we know foe a fact that market is still not in a bull run so any investment must be targeting future, mid-term or long-term. So technical won't work much as trading is bit difficult.

Not sure about Bluewhale, topcat, Pat etc. Shadow and future are in this forum as well ne. Very Happy

EquityChamp

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Moderator
RCL has reported a fantastic result once again. But the stock price is relatively unmoved. Are we looking anything else other than good performance from a company like this?

nirowat


Manager - Equity Analytics
Manager - Equity Analytics
It will run when the time comes
In the meantime be happy that you can collect as funds allow at rock bottom

EquityChamp

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Moderator
Stock price is in a depressed state for long time now. Who knows why the investors have forget this one for so long.

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