Lml

yasirsait · #1 23rd July 2007, 01:12 AM

The sales of LML has been falling in excess of 40% for the past 4 years.
This has translated into net loss which has been mounting steadily.

It is quite alarming to note that from a net loss of around 40 crores in 2001, the company has declared a net loss of almost 250 crores in 2006.

The book value is a negative 21.54 per share.
This means that even after the company sells off all its assets including plant, building, machinery and called in all their loans, even then they would not have enough money to pay off their creditors let alone have anything left for the equity share holders.

I have not been able to find the results for the latest quarter ended June 2007. I don't think they have been declared yet.

The 18 month period ending 2007 are thus:
Total Income - 24 crores.
Net loss - 203.32 crores.

This appears to be somewhat positive as the loss has reduced by about 50 crores between 2006 and 2007 but if you look at the income, it also has reduced from 40 crores to 24 crores. They are selling even less bikes than they had the previous year.

Basically I think this is a lost cause at least for the time being.
Unless the company can re-invent itself or pull off some stunning turnaround, it doenst make sense holding the shares of LML.

Technically,
After a fall from 16.25 to 11, the stock could bounce back to 12 - 12.5 but this seems short lived.
The current support level of 11 is a precarious one and once broken, the stock could fall to below 9.

I would recommend that if you are holding, cut your losses and get out.

On the other hand, if you are looking at entering this stock, I wouldn't recommend it in the light of the facts as we currently know them.

Peace,
Yasir

swagat86 · #2 23rd July 2007, 10:33 AM

Gud info.

thanks

aroymkp · #3 23rd July 2007, 10:35 AM

Company has been declared Sick under BIFR - Does this give any benefit?

yasirsait · #4 23rd July 2007, 11:09 AM

Quote:

Originally Posted by aroymkp

Company has been declared Sick under BIFR - Does this give any benefit?

When a company is declared sick, it needs to submit a revival plan to the authorities based on which there are chances of the debt being written off, parts of the company being sold, etc.

In short, it shows that there is someone taking interest in making the company healthy again but we cannot say for sure what is going to happen.

Look for news about the company. See what updates you can get.
If possible, call the company secretary or the investors relations and check with them what plans they have for the future of the company.

Please share with us.

Peace,
Yasir