fundamental analysis shows ipl now weaker, page-7

youve got a good point

the PE is low thats for sure, but can anyone come up with a realistic, a best case and a worst case EPS scenario (including all the added new shares) ??

The returns on Equity and Capital n Assets were just unbelievable on this company up till recently. Thats what im concerned about. Theyve all gone down markedly and are on the fringe for traditional fundamentalists

As long as theyre kept at these levels and dont go lower, im happy.

But if NPAT goes lower, these ratios wont be considered 'good' anymore

The management just shouldnt have taken on so much debt. It was waaay too much

That acquisition and massive debt dented the fundamentals in my opinion

Long term tho, you can go wrong , as long as management can build on the current fundamentals. As profit gets better , all the key fundamentals will keep getting better

They cant really make addittional acquisitions from now UNLESS these additional acquisitions now or in the future can give them at least 15% returns.

The ROE has been driven down to its limit with this cap raising

Any future acquisition or growth driver will have to be very very closely analysed and scrutinized and give a 15% or better return on equity

They cant use debt either

Pre dyno their Return on Equity was over 30%

So they had room to drive down the ROE if need be and take on acquisitions that returned lower than 30% but better than 12%

Now with all the dilutions, ROE n ROIC n ROA have been driven down as far as they can go!

So i dont think therell be any added acquistions in the near term which is good

They need to focus on increasing earnings at a good rate and get all the fundamentals back up to scratch.

Long , long term youre right - at PE 5, you cant go wrong. Short term i dont know though. Who can really predict earnings in this kind of environment??!