CEYLON GRAIN ELEVATORS [GRAN: LKR48.3]
Posted on the July 31st, 2012 under Analysts View by Softlogic Equity Research 
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Excerpts of the attached:
Earnings Talk :
GRAN recorded a net profit of LKR396 mn for 1H2012 with normalized earnings remaining in the negative territory. GRAN’s performance for 1H2012 was solely backed by the inflow of LKR447 mn as gain on disposal of its 21.5% associate ‘Ceylon Agro Industries’.
On normalized basis, GRAN has recorded loss of LKR50.5 mn during 1H2012. Performance decline could be defined with high pressurized cost margins triggered by USD appreciation and increased borrowing costs.
Share Talk :
GRAN has been noted on most retailers’ stock watch list. Though the counter trades at a 4Q trailing PER of 7.9X, its normalized 4Q trailing earnings stand at LKR135 mn to trade at 21.5X. Hence, we advise our clients to have your eyes wide open on such dicey picks.
Analyst’s Cautious Note :
Poultry Players are sharing a number of systematic risks…
Raw material costs taking the up climb…
Rupee Devaluation
Fuel & Energy cost hikes
Price ceiling bans passing cost increases to customers
