Ceramic Sector Valuation Guide - Based on EPS and PBV methods

hariesha Mon Oct 15, 2012 11:31 pm

* Out of the five companies RCL do have exposure to Finance and Retailing through LB Finance and Delmage.
LWL and CERA (through LWL) do have exposure to Plantation sector mainly Tea and Rubber.

* Some thing common to all the companies is huge difference between trailing PE and forward PE. I think we
must follow the forward PE ratio as it gives economic hardships faced by the sector.

* Out of five companies three have reported losses in the June quarter. Can we expect some thing better in
the September? I think problems they faced in the June quarter continued into the September also.
Sluggish economic conditions affecting sales, high energy costs, above average short term borrowings in a
high interest rate regime, all may have affected the earnings.

* There wasn't much demand for this sector , except for RCL during last rally. Probably investors may have
thought, prevailing economic conditions are not favorable to the sector.

* When considering Book Values, CERA, LWL and PARQ are much bellow their book values.

* Other than RCL and PARQ, other shares are bit illiquid and collecting a sizeable quantity within a short
period of time is bit difficult.

* I think we shouldn't hurry into this sector.

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