Panasonic Home Slips into Loss

Latest results

(in Cr.)
Jun-11
Mar-11
FY10-11
Revenue
32.75
43.27
186.79
Net Profit
-2.9
0.07
1.79
EPS
-3.38
0.08
2.09
Cash EPS
-2.54
0.94
5.3
OPM %
-4.7
3.17
4.06
NPM %
-8.85
0.16
0.96
 
 
 
 

share price movement

 
 
 
Weekly H/L
104.5
98.15
Monthly H/L
111.65
96
52 Weeks H/L
244
83
 
( 16 Nov 10 )
( 22 Aug 11 )
Delivery / Var+ELM %
64.36
31.95
Ex Date
 
 
 
 
 

Investors, vote please

Will you invest in Panasonic Home Appliances at the current market price of Rs.102?

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Share price movement


Q2 not good

Panasonic Home Appliances has not performed well in the quarter ended 30.06.11 as compared to the quarter ended 31.03.11. Revenue dropped from Rs.43.27 crore to Rs.32.75 crore. Revenue for the full year 2010-11 was at Rs.186.79 crore. Net profit turned into a net loss of 2.90 crore during the quarter. For the year 2010-11 the company reported a net profit of 1.79 crore. Operating profit of 3.17% turned into an operating loss of 4.70%. Net profit margin of 0.16% turned into a net loss of 8.85%. The company is manufacturing home appliances like mixers and grinders. It is expanding into making coffee machines and some other appliances. It also exports its products.

Avoid investing

The shares of the company are being traded in the stock markets at Rs.102 now. The highest price recorded by the company’s shares in the last one year is at Rs.244 (on 16.11.10) and the lowest price was at Rs.83 (on 22.08.11). In other words, the company’s shares are traded at close to its lowest price in the last one year. One is tempted to invest in the company’s shares at this low price. But one should desist from this temptation and avoid investing in the company now because of the following reasons:

  • The company’s turnover is very low
  • It has slipped into loss
  • Its share price rose 45% in two days because of manipulation in the stock market. For some peculiar reason, SEBI is not probing the reason for this.

There is one plus point in the company. Panasonic, the Japanese company has a 51% stake in this company. But this alone cannot justify investment in the company. In fact, only because of this plus point, the company’s shares are traded at above Rs.100 inspite of the fact that it is a loss making company. But my view is that if you are served with poison in a golden vessel, you should not consume it. Just because it is served in a golden vessel, the poison will not become manna. A poison is a poison whether it is served in a gold vessel or not. Similarly if a company is not doing well, one should not persist with it even though it may be associated with a big name like a multinational company or a transnational company or a triple A rated company. Avoid substandard companies. Invest in only profit making dividend paying company with good management track record.

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