Stock research on global mid-cap companies

Evaluate Research

Evaluate Research provides institutional quality stock research on small-cap and  mid-cap companies on a global basis, thus helping connect investors with the company.

At Evaluate Research, we provide free of cost to all investors a 20-25 page Initiation Report which evaluates in great detail all aspects of the company:  growth opportunities, catalysts, business description, competitive positioning, SWOT analysis, risks, etc.  In addition, we determine specific price targets for the company based on detailed 5-year complete forecasts of financial statements including IS, BS, CF, ratios, etc.  Finally, whereas many sell-side brokers offer sketchy and irregular ongoing maintenance research of companies, if not outright dropped or termination of coverage, at Evaluate Research we systematically monitor and regularly publish Update Notes covering quarterly earnings, major corporate events, etc.

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Stock research on global mid-cap companies, Evaluate Research

Equity Bottom-Up

Rajesh Exports’ margins continued their upward surge as a result of the company’s continued efforts towards growing its higher margin businesses including export of premium jewelry, higher quality refined products and retail. For 3Q2018 ended December, the company reported operating margin of 1.0% vs. 0.72% in 3Q2017. Overall, for the first three quarters of the year, the operating profit margin was 0.91% vs. 0.66% during the corresponding period last year. During our call with management, they sounded extremely optimistic about the growth of their high margin businesses and mentioned that they expect margins to double over the next 3 years. A sustained increase in margins will be a strong catalyst for the stock price in the coming years.
Revenue for the quarter came in at Rs.413.0 bn, down 36% over the 3Q2017 revenue of Rs.644.9 bn. The decline in revenue was mainly due to the implementation of 5% VAT in Saudi Arabia and UAE which became effective from 1st January, 2018. There was also a slight impact of the GST implementation in India last year. We believe that there will still be some decline in revenue in 4Q but it should start picking up from the first quarter of FY2019. The sustained increase in oil prices and recovering luxury goods sales in the US and other developed countries also provide some strong tailwinds for the company. Gold price has also been strong over the last couple of months despite rising bond yields and after falling to about $1,250 per ounce in December last year, gold is now trading at about $1,350 per ounce.
Analyst: Ajeya Patil

Rajesh Exports’ margins continued their upward surge as a result of the company’s continued efforts towards growing its higher margin businesses including export of premium jewelry, higher quality refined products and retail. For 3Q2018 ended December, the company reported operating margin of 1.0% vs. 0.72% in 3Q2017. Overall, for the first three quarters of the year, the operating profit margin was 0.91% vs. 0.66% during the corresponding period last year. During our call with management, they sounded extremely optimistic about the growth of their high margin businesses and mentioned that they expect margins to double over the next 3 years. A sustained increase in margins will be a strong catalyst for the stock price in the coming years.
Revenue for the quarter came in at Rs.413.0 bn, down 36% over the 3Q2017 revenue of Rs.644.9 bn. The decline in revenue was mainly due to the implementation of 5% VAT in Saudi Arabia and UAE which became effective from 1st January, 2018. There was also a slight impact of the GST implementation in India last year. We believe that there will still be some decline in revenue in 4Q but it should start picking up from the first quarter of FY2019. The sustained increase in oil prices and recovering luxury goods sales in the US and other developed countries also provide some strong tailwinds for the company. Gold price has also been strong over the last couple of months despite rising bond yields and after falling to about $1,250 per ounce in December last year, gold is now trading at about $1,350 per ounce.
Analyst: Ajeya Patil

Q3FY2018 [ended December]: Sustained Improvement in Margins