The Q4 show-stoppers

Pathreya lists some of the absolute gambles that can bring some excitement into dreary lives

This bag of remarkable performances, mispricing opportunities and absolute gambles could bring some excitement into dreary lives. If you make a packet, send me a ‘thank you’ WhatsApp.
 
UPL: The global agri-chemical sector de-grows; UPL grows revenues nearly 17 per cent. The global agri-chemicals sector struggles with losses; UPL reports more than 50 per cent increase in profit after tax (PAT) for 2016-17. The consolidated last quarter performance is the stuff people could write case studies about: Rs 729 crore of net profit after exceptional items accounting for 42 per cent of the PAT for the full year (previous corresponding quarter Rs 312 crore). How do these people do it?

 
C&C Constructions: One could have dismissed this company’s third quarter rebound on the grounds that it could have been a one-off thing, but consider the consolidated follow-up in the fourth quarter when compared with the third: earnings before interest, depreciation, tax and amortisation (Ebitda) of Rs 126 crore compared with Rs 163 crore coupled with a decline in interest to Rs 44 crore from Rs 78 crore. The annualised Ebitda continues to be higher than the market cap. How one would love to read this company’s annual report!
 

Kiri Industries: What do you say when a company reports a near 25-fold increase in standalone PAT in a single year? PAT (before exceptional items) increased from Rs 4 crore in 2015-16 to Rs 95 crore in 2016-17.  Consolidated return on equity was 46 per cent. What I appreciate more than the results (possibly inspired by a commodity price swing) is the management’s explanation of its responsiveness: product mix improvement, prospective capacity expansion, tighter working capital management and aggressive debt repayment. If only the stock had been cheaper.

 
Subex: Reported a significant jump in profit before exceptional items from Rs 15 crore in 2015-16 to Rs 75 crore in 2016-17, remarkable for a company a number of analysts had given up for dead, following a change in its management. Loved the decline in interest from Rs 46 crore to Rs 20 crore. The only small bone I have to pick is that printing of the third quarter results would have enhanced comparison convenience.
 
Vivimed Labs: This company has under-performed the markets for long. First, they said the company had built up large debt; the company divested a business and right-sized its balance sheet. Then, they asked if the company could evolve beyond a balance sheet-correction play. The company has reported stunning consolidated fourth results in response — net profit increased from Rs 12 crore in the fourth quarter of 2015-16 to Rs  70 crore in the third quarter of 2016-17 to Rs  158 crore in the fourth quarter of 2016-17. Market cap of Rs 921 crore. Crazy.

 
Indo Solar: The company has reported a turnaround in the fourth quarter — a net profit of Rs 32 crore on a market cap of Rs 300 crore for the last quarter. Absolutely compelling in view of the price and the sector’s prospects though the devil’s advocate insists that first a read of the annual report may be recommended.
 
The author is a stock market writer, tracking corporate earnings and investor psychology to gauge where markets are not headed