Wednesday, November 12, 2014

Western India Shipyard Ltd: Q3FY14 Result Analysis
Western India Shipyard Ltd came out with good set of numbers for the September, 2014 quarter speaking sequentially. The total income of the company jumped to Rs.11.18 Cr in Q2FY14 as against Rs.5.66 Cr in the June, 2014 quarter. The net loss came down from 9.27 Cr in the June, 2014 quarter to Rs.4.51 Cr in the September, 2014 quarter, which showed marked improvement in performance, speaking sequentially. Also, the Finance Cost in the September, 2014 quarter has come down to Rs.1.90 Cr as against Rs.1.95 Cr.

This implies that the company is slowly strengthening its fundamentals and by FY16, it is expected to turn to black. Moreover, commencement of full scale mining in Goa, will help the company immensely. Also, the effect of new orders will start to show up from Q3FY15. 

However, there is a selling of the shares in the market, because most of the market participants has probably compared the result on Y-o-Y basis, which is not the right approach, for turnaround companies. Besides, the CDR money from its parent company, ABG Shipyard Ltd is likely to provide cushion against the working capital requirements. Chartically speaking, the scrip could find support at around Rs.2.20, where accumulation can be done, by long term investors. 
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