Bhartiya International Ltd:-Hidden gem

Many of you repeatedly in my mail have asked for paid calls and what they will be and all.Now as an amateur and being a social guy I would always safeguard the vested interest of investors than something else.Anyways here"s an example of a paid member call and the type which I provided just a month back

Market outlook and stock tip:-Bhartiya International Ltd.(Sunday, April 7,2013)


Momentum based Stock idea:-

Scripscan:Bhartiya International Ltd.
Traded in:Nse-bse
Average Buy price:185
Target:260rs
Return percentage:40%
Duration:4-6 months

Business:Bhartiya International Ltd., together with its subsidiaries, engages in the research, development, manufacture, and export of leather and textile apparels, leather bags and accessories, and fur garments in India. The company also plans, develops, and builds real estate properties, including residential apartment complexes. In addition, it operates as a private investment firm, specializing in infrastructure assets in India.Bhartiya is India's largest manufacturing export house of leather garments and amongst the top 25 leather apparel manufacturers in the world.

My real interest:I would really cut it short.My interest in the company is because of its 30% stake in its group company called BUILDCO.BUILDCO announced the launch of the Bhartiya City, a 125 acre (17.2 sq ft built-up area - 8.2mn sq ft residential and 9mn sq ft retail) integrated township in Nov 2012.The new integrated township across 125-acres has eight districts which bring together homes in different formats, work spaces including a large IT SEZ and financial district, shopping district and a high street, hotels, a hospital, a school with great attention to public realm covering many parks and streets which are pedestrian and cyclist friendly to give a unique experience of a township rightly labeled as ‘City of Joy’.It has priced the residential complex in the range of Rs 29 lakh to Rs 1.5 crore based on the available facility. Bhartiya City has signed up with Leela Hotels to operate the first hotel which will also include the largest conference centre in Bangalore.The initial 800 apartments got sold in a record time of just 18 days.It launched release II (two towers) of its residential project on 23rd January, 2013 and received encouraging response(over 1 lakh people witnessed the same).The number of apartments offered in release II were ~450 units, out of which majority got sold out.The company is in discussion with an EPC contractor for the residential phase and is likely to finalize it any day now. For its IT SEZ project, EPC contract work has already started.The whole project is a time consuming one and requires billions to have the full completion in the next few years.The recommendation is based on the euphoria that its project has generated and will generate further.Bhartiya is a pretty unknown scrip and is only worth 200 odd crs.

Conclusion:During the year fy11-12, the Company achieved a turnover of Rs. 207crs as against Rs. 167 crs in the previous year,registering an increase of 23.92%.Gross profit after interest but before depreciation and tax increased to Rs. 13crs as compared to around 10crs in the previous year. Net profit after Tax saw an increase to Rs. 7.36 crs from Rs. 5.5crs in the previous year,showing an increase of 32.96 %.The management has guided me a overall revenue growth of 33% and 30% in fy13 and fy14 respectively.I am recommending bhartiya just because of its interest in BUILDCO(core business growth can further re-rate the counter).Its hard to fathom a revenue or a profit figure from the real estate venture as that would bring huge windfall gains to the company in the longer term.Its a momentum news based stock idea hence core investors may exercise caution.Short term guys have a gala time folks by accumulating it in the mentioned buy range and exiting in the target price.

Todays update:Its been just a month and the company is running ahead to meet its target.Enjoy the ride members.

btw:People looking for midcap/smallcap positional call professional service may rush a mail at my mail id
arunsharemarket@gmail.com to know more about it.

Wim Plast Ltd:-Go and own this Cello furniture

Stock idea:-

Scripscan:Wim Plast Ltd
BSE Code:526586
Buy range:340
Target:450
Duration:4-6 months

Quote:Wimplast was recommended at 200 odd levels during late 2012 with targets of 350 bucks.Not only did it achieved that but it went all the way to hit a level of 427rs.Owing to the present market volatility it has made a little southward journey with its stock price hovering now around 320-340rs mark.The reason to recommend the counter at this juncture is its recent commencement of its Naihati unit at West bengal.The same is set to boost its turnover and profits in the coming quarters.Also even on a valuation basis its quoting pretty cheap.With consumption play themes running wild,wimplast may well move to a different orbit in the coming few months.Make this a part of your core portfolio."Wimplast" has been and remains "one of my high conviction bets".

Story:To start with I love no brainers.It means where you don't even need to apply your brain to get your perfect scrip.Take the case of this week's recommendation-Wim plast.In the year 1994 the company setup manufacturing unit of plastic moulded furniture at Daman in which company got grand success in the business. In the process of diversification in 2005 company has setup plants at Baddi, Himachal Pradesh for processing of bubbleguard extrusion sheets and also moulded furniture which remains a new innovation in India in the field of extrusion technology.Even couple of years back the company's presence was limited to western and northern regions with units in Daman and Baddi.But fy11-12 changed the whole dynamics of the company.Wimplast started new manufacturing units in Chennai and Haridwar with an investment of 28 crore through internal accruals. The company’s new manufacturing unit in Kolkata has very recently commenced production(from march 15th). It also have Depots in Gujrat, Rajasthan, Andhra Pradesh, Haryana and Punjab and have strong consumer base through out the country.Wim Plast manufactures, sells, and exports plastic furniture.Its products include molded chairs, stools, tables, and related parts, as well as bubbled guard sheet.It owns the cello brand which is a household name in our country and got a vast distribution network.While the company faces stiff competition from Supreme Industries and Nilkamal when it comes to moulded furniture, Wim Plast however has the distinction of being a monopoly player manufacturing wall panels (Cello bubble guard board).This wall and false ceiling panels are manufactured by Wim Plast and marketed by Vista Plastech across the country(false ceilings,Cello bubble guard ceilings).The panels are made from 100 per cent virgin poly propylene and are ideal for use in offices, hospitals, hotels, warehouses, malls, homes and industries. Cello bubble guard wall panels have various advantages over other materials like gypsum board as these are water-proof, termite-proof, fire resistant, economical, maintenance-free and easy to install.The plastic products are still under-penetrated in India providing immense scope and vast opportunities in terms of plastic consumer goods.

Visionary diligent promoters with good repute in the market gives much confidence and conviction too.Forget recession and other slowdown issues as its a play on our country's consumption.Cancel your high interest rate fears as it has no debt on its books.Have a quick smile as it has grown over 30% for the last 4-5 years and the trend is only expected to better going forward.The company couple of years back has acquired a plant at Chennai which has helped them to cover the southern region and they have "recently commenced production in Kolkata" which now will cover the whole eastern region.The company managed its balance sheet well during the down years.In addition, the company has an above average ROE of 20%+, has been able to keep inventory and debtor levels low and improve the net margin during the last five year time period.Now lets have a quick glance through the last fiscal results.For the Audited full year,net profit rose 24.66% to Rs 22.75 crore in the year ended March 2012 as against Rs 18.25 crore during the previous year ended March 2011. Sales rose 26.10% to Rs 210.92 crore in the year ended March 2012 as against Rs 167.27 crore during the previous year ended March 2011.It also paid a dividend of 6 bucks. During the year the Company has added new 25 range of products with multiple applications.These prospects the outfit of geographical areas throughout the Country and the Company will meet mass consumers with the number of range of premium products.Wim plast should comfortably grow its topline(280-300crs) and bottomline(29-31crs) by 35-40% this fiscal fy12-13.Fy13-14 on a most conservative estimate, it would grow 22-25%.PE expansion would gradually take place and with its brand backing it would eventually move into a different orbit in the coming months and years.Promoters well aware of the future posses the maximum permissible shareholding limit of 75%.I feel domestic consumption stories would get much attention from investors fraternity in coming days.Valuation wise too, wimplast deserves a massive re-rating.The company has a very tiny equity of 6crs.It would deliver an EPS of 65 for fy13-14.Assigning a mere PE multiple of 7 times gives me a figure of 450 bucks.Keep it for ages to make huge money or else can also follow my assigned target.At present prices its a steal.

btw:People looking for midcap/smallcap positional call professional service may rush a mail at my mail id arunsharemarket@gmail.com  to know more about it.

Caplin Point Laboratories Ltd:-The "Chill Pill" for your core portfolio

Stock idea:-

Scripscan:Caplin Point Laboratories Ltd
Bse code:524742
CMP:60
Target:50% CAGR for coming few years.

Story:The genesis of Caplin Point took place in the year 1990 as a Private Limited company mainly to manufacture a wide range of Ointments, Creams and other External applications in addition to the regular segments of pharmaceutical formulations. In 1994, Caplin Point was converted into a Public Limited company and the public issue was successfully oversubscribed by 117 times which is a record in the Pharmaceutical industry in India. The entire proceeds of the public issue were deployed in the manufacturing facility and then translated into a state of the art factory at Pondicherry spanning 51,000 sq. ft.With the merger of May (India) laboratories P Ltd, Chennai in 2006 and Malind Laboratories P Ltd, Baddi in 2009, Caplin Point had substantially increased its production capacity to cope up with the growing demands of the markets.Its also one of the early entrants in India in the area of Biotechnology. Caplin Point has already started constructing its latest and largest project, a facility that would be in compliance with US FDA, UK MHRA, and other regulatory bodies for multiple dosage forms such as liquid injectables, ophthalmic drugs and lyophilized bio-tech products.Caplin Point is focusing on expanding into South America, increase its presence in brand marketing in West Africa and also exploring the possibility of starting up operations in CIS and Eastern European markets.The company is having a large capex of 75crs to be mostly funded by cash flows.The facility to manufacture sterile speciality products would go on stream in 3 phases – Phase -1 during Q4 of the current fiscal, Phase -2 during Q2 next fiscal and Phase -3 during FY’14-15.The result of this would be an additional 300-400crs turnover in the coming 3-4 years. Upon completion of the new plant,Caplin Point will be starting up operations in the fully regulated markets of Europe, USA, Mexico and Brazil.The so far success of Caplin Point is primarily attributed to its unique business model.Caplin Point decided at an early stage that the conventional style of exports would mean diminishing margins and reduced opportunities for expansion, and had taken the unique step of setting up sale points at strategic locations in Central/South America and various parts of Africa. This way, Caplin Point is not only the manufacturer and exporter, but also the importer and distributor of its products by its collaborators. One of the main reasons for the success can be attributed to the wide range of products offered. Caplin Point has over 1500 products registered in various countries and further registrations are on the way.It also envisage creating a retail chain and reach the end users with an innovative product basket that would include Caplin Point’s own products and other consumables by direct marketing. With this, the whole spectrum of business involving the Manufacturing, export, import, distribution and retain sales will be covered.

Its unique in a number of ways.A quick glance through its website would reveal a nomenclature of shareholder names lying in the "unpaid dividend account" category.I in living memory is yet to find even a single listed entity which cares so much for the minority shareholders.There's little or even no attrition problem in the company as the chairman himself has recruited talented employees and placed them in countries where it has got a foothold.Was interacting with its chairman the other day and it was some experience.Mr paarthipan is all about his company.He fears debt as had past debt issues which forced him to go in some other remote countries.Learned lesson the hard way,came back and now is committed to be a force to reckon with in the coming years.On asking questions like whether the stunning price rise in his counter is about operators interest received answers like who are operators?Enquiring about creeping acquisition, was absurd to him.He answered by questioning whether its ethical,legal and to the best of investor's interest or not?He is totally ignorant about stock markets but be rest assured the man surely knows how to grow,and grow really big.Caplin is kinda a mix of my earlier bets,say relaxo and thangamayil,both been multibaggers in their own right.Caplin too posses all the ingredients to find its name amidst this two in the coming few quarters.Like relaxo its debtors day stands at a mere week or even less than it.Its comparable to thangamayil as its concentrating on select regions where the larger entities shy away from because of small market sizes(2000-3000crs).Caplin's balance sheet shows capital work in progress of 13crs(expansion work value going on at the end of fiscal in simple words)and advances from clients at around 34crs.I mean give it a thought folks-This is a 100crs turnover company and it has already received more than 1/3rd as an advance from its clients.The company gets 90% of its present revenues from non regulated overseas markets where there's not much competition to talk about(the chairman himself understand the places very well).I put additional efforts on "Intangible property or say on an entrepreneur's brain".Its equivalent to 5rs extra earning per share for me.This same strategy has been very successful over the past few years.Betting on Havells coz of Mr Anil Gupta,Axis IT&T coz of Mr Chandrasekhar, all have been huge multibaggers previously.Caplin is an unique company with a sound visionary experienced leader in place.His aversion towards taking much debt and expansion through internal accruals would always make sure its in the reckoning of much investors interest.Caplin's turnover stood at 108crs and profit of 8crs in 2011-12(it follows a june year ending).Company's bottomline is expected to grow 50% CAGR for the coming couple of years.This fiscal NP should be around 15crs resulting an EPS of 10rs.Next year fy13-14 a 50% growth would see it clocking 15rs EPS(22.5crs PAT).For a growing company with healthy ratios(ROE of nearly 25% and ROCE of over 28%),high cash flow generation ability,negligible debt and sound business strategy,it looks to be a sound buy.It paid a cool dividend of 2 bucks last fiscal.With higher profits the dividend too should see a decent spike resulting in hefty yields.

btw:People looking for midcap/smallcap positional call professional service may rush a mail at my mail id arunsharemarket@gmail.com  to know more about it.

Singer India Ltd:-Can it rewrite the success of TTK Prestige?

A sample paid call to enrich your portfolio blog readers.

Stock idea:-

Scripscan:Singer India Ltd
Cmp:75
Target:150
Return percentage:100%
Duration:9-12 months
Traded in:Bse

Singer's history:Company started as a distribution company in 80's.In the 90s, started a facility in Sahibabad.It expanded by establishing a new plant in Jammu after that.It then entered into the consumer durable sector.Immense competition and other issues slowly killed the company. The company reported loss of 16crs in 2004.Jammu factory owing to labour problems closed down.Operational losses skyrocketed to over 50crs in late 2000.Networth got fully eroded with over 70crs accumulated loss.BIFR declared it a sick company.In the year 2008,a restructuring plan got unveiled for the revival of Singer India.Steps like adjusting accumulated losses against share capital,infusion of fund by hiking stake of its parent,a one-time settlement with banks,settlement with unsecured creditors and waiving off borrowings from its parent helped singer's to pare down its debt and accumulated losses at a much respectable level .Company then focussed on its core business of sewing machines,changed its strategy from distributor based model to dealer based model which has helped it be a networth positive company.

Story:Just few days back I penned the follow up of La opala which has seen a spectacular rise since my recommendation,moving from 100 to 437 in just a matter of 9 months.La opala was recommended by me not once but twice coz of my high conviction in the business model and prospects of the company.Today's pick is pretty similar to La opala-From domestic consumption to huge market potential of its products.Another interesting point to note would be the fact that just like la opala's product,Singer India too has a place in my home in form of its sewing machine.I was told by my late granny its there for the last 30 years and yet it works as fine as it used to during the initial days.Singer India is all about "Sewing machines".Singer India sells Singer and Merritt brand consumer sewing machines and other sewing related products to distributors and dealers throughout India, through its own small retail network of 25 "Singer" shops in highly attractive locations in India, and through BTI to certain government agencies and to military canteens.I did a lot of research about sewing machines and the company for the past few months.From checking the heavily transacted online shopping sites like Naaptol,ebay India,Homeshop18 to asking my lady mate fraternities who have been recent buyers of Singer's sewing machine to satisfying myself by calling up its dealers,I did it all.The feedback received can be termed fabulous with all vouching for its quality.I made up my mind to recommend it once its out of the "BIFR" sick company zone.It went all the way to 134 in Nov12 but the announcement never came out.This week earlier the announcement finally hit the street which paved the way for me to finally recommend it to you guys.

Present plans:Singer India historically was a retailer of consumer durables, with consumer credit, and an emphasis on sewing machines. Continuing a business started in 1870, Singer India is only one of two multi-nationals with a right to retail, including through company stores, nationwide in India.Singer India's strategy is to continue to grow revenue and profit by increasing market share in the domestic sewing market and by growing the small appliance business, a market segment which Singer India reentered in late 2010(fy11-12 sales contribution 3crs).The Company's product range in this category includes mixer, toaster, electric kettle, chopper, etc.Following its recent exit from BIFR, Singer India may now seek to pursue a new retail initiative with multi-brand, retail stores, offering durables for the home as well as credit and other financial services to Indian consumers.Singer in India has about a 30% share of the organized sewing market in India. The new small appliance line is being sold by Singer India through a separate network of distributors and dealers, as well as through the Singer shops. Sales of sewing products represent almost all of Singer India's sales.Singer India manufactures, through contract arrangements, some of the sewing machines that it sells; sewing machines are also purchased from outside suppliers in India and from SVP.Due to labour problems,the manufacturing facility at Jammu is shut since last eight years.It outsources its entire manufacturing to vendors from Haryana and China.It has nationwide network of 520 dealers with a strong presence in Southtern part of the country..Singer India plans to reopen its own direct manufacturing operation with the goal to satisfy a portion of its own requirements and to export sewing machines to other Singer Asia(its parent) locations and to SVP.Further its very hopeful of commencing production of the jammu unit in the near future.If its able to do that successfully the company would find its stock price totally getting re-rated as that would help it to manufacture self, thereby enhancing margins..

Market size and potential:Even an article in economic times last December caught my attention.It stated,'There is a new addition to the list of proud possessions that young people like to flaunt':"sewing machines".Says Singer India's managing director Rajeev Bajaj: "With technologically advanced machines and tutorials on YouTube, sewing is becoming fun with today's generation".Younger consumers are buying sewing machines to enhance look and value of their garments by adding fashion at home.Social media sites have further helped the younger generation to take interest in these machines where they get live demonstrations.Quintessence about the market size and the potential further enticed me.The age of sewing machine consumers has fallen from 40-60 years to 18 to 35 years now and most of them are urban dwellers.The overall demand for sewing machines currently stands at around 32 lac units.The organized sector is dominated by usha and singer.The organised players are currently seeing nearly double digit volume growth.Interestingly, the sales of home sewing machines have risen from 20,000 units per annum to 1.2 lakh units over the past four years, growing at 40% per annum.On a population of 122crs+ with majority being youth the potential for Singer India is just too huge.There's just no other company to play with as its the lone listed entity.At 80crs of marketcap we get a market leader with 30% market share,a debt free company with a solid brand backing it up and a company which shall grow 22%-25% for the next couple of years.It also generated more than decent positive cash flows for fy11-12.

Conclusion:The stock price is pretty volatile and dances rampantly to the tune of the market.Midcaps are amidst carnage for some unknown reasons.It may not rewrite the scripture of la opala but certainly there's more than a chance of it making a huge northward move once market realizes its potential.If one sees the past recommendation of mine whatever domestic consumption stories got discussed,every single one moved.La opala was a 4 bagger,V-guard and cera became 3 baggers,Wimplast and WPIL more than doubled etc etc.Singer too should provide investors decent capital appreciation in the coming days.Singer posted sales of 156crs and PAT of 10crs(EPS 9.5) in fy11-12.Its just out of BIFR so needs bit of time to chart its growth.Thus, I aint considering the fy13 financials part.I expect it to deliver 15rs earnings for fy14(16crs PAT and 250crs sales).Hard to assign a PE to it in absence of any listed peers.In light of the domestic consumption play hay-days,I value it 10 times on the expected fy14 forward earnings of 15rs to arrive a price target of 150rs.

btw:People looking for midcap/smallcap positional call professional service may rush a mail at my mail id arunsharemarket@gmail.com  to know more about it.

Wipro ltd:-How 1000rs investment translated to 50crs

Stock markets are in a depressing mood with quality counters getting hammered for some unknown reasons.I have never seen such retail aversion towards stocks over the last decade or so.Here' something which will surely brighten up faces and lighten up your mood.

1000 invested in "Wipro ltd" during 1980's turns up to 50crs now.Nay, that wasn't a crumbling PJ.

Wipro came out with its IP0 at 100 bucks in the year 1980.Your cohorts/associates/relatives/in laws/acquaintances may have delinquently applied for it and received 10 shares in allotment.Check how it changed their lives.

In 1981 company declared 1:1 bonus = 10 shares turn 20 shares
In 1985 company declared 1:1 bonus = 20 shares to 40 shares
In 1986 company split FV from 100 to 10 = 40 transformed to 400 shares
In 1987 company declared 1:1 bonus = 400 to 800 shares
In 1989 company declared 1:1 bonus = 800 to 1600 shares
In 1992 company declared 1:1 bonus = 1600 doubles to 3200 shares
In 1995 company declared 1:1 bonus = 3200 to 6400 shares
In 1997 company declared 1:2 bonus = 6400 triples to 19200 shares
In 1999 company split FV from 10 to 2 = Shares increased 5 times to 96000 shares
In 2004 company declared 1:2 bonus = It increases to 288000 shares
In 2005 company declared 1:1 bonus =Doubles to 576000 shares
In 2010 company declared 3:2 bonus = Shares increases to 960000 shares

So whoever invested 1000 bucks in Wipro in the 1980's would have 9.6 lakhs shares now.Wipro on today quotes around 440rs.So 440*9.6 lakh shares would come to a value of 42crs 25 lakhs.Adding up dividends would escalate the figure to around 50crs.

So its not only the Jhunjhunwalas or the Buffets who can make millions and billions.By harnessing the power of your logic and combining it with a bit of the business study, you can make enormous wealth too in stock markets.All you have to do is create enough discipline and have the required conviction in your mind.Worst times would always provide the chances of making best of returns in the better period.So relax and have everything into alignment to win big from the stock markets.Happy investing folks.


Btw:Sorry for not able to reply to the ones who wished me on my 25th birthday.1700 odd mails with incessant sms made me real helpless.Thanx a great deal folks.You guys mean a lot to me.Be in touch and have a lively and rocking Holi.

Westlife Development Ltd:-A sureshot 5 bagger

Stock idea:-

Scripscan:Westlife Development Ltd(Hardcastle Restaurants)
Bse code:505533
Marketcap:870crs
Cmp:472
Target:2000
Duration:9-12 months

"Warren Buffett Quote":Buy companies with strong histories of profitability and with a dominant business franchise.

Story:McDonald's operations in western and southern India has got consolidated.Hardcastle Restaurants Pvt Ltd (HRPL), the privately-held franchisee of McDonald's Restaurants is getting merged with its parent Westlife Development Ltd. Hardcastle Restaurants Private Limited (HRPL), the Master Franchisee for McDonald’s west & south operations has been the pioneer in introducing global QSR practices to India and has established a leadership position in the rapidly growing QSR industry in the country.Hardcastle Restaurants Pvt. Ltd. (HRPL) leads the restaurant footprint in India with over 148 restaurants across the states of Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra and Tamil Nadu.Westlife has been moving up nonstop over the last few months after its announcement of reverse merger with Hardcastle.There's only jubilant food to play with in the similar category but that's available at a marketcap of 8500crs.Westlife at present price of 470 bucks attracts 1/10th of jubilant foods marketcap,i.e,870crs.QSR market is pegged USD 15 bn and is expected to grow by 15-18% pa over 2013-2020.This represents a huge opportunity for a company like hardcastle which with mcdonalds has been in the market for over 15 years.The company plans to increase the store count to 250 in next 3 years.Westlife reported sales of Rs 547.4 crore, including Hardcastle, in 2011-12, which was more than half of Jubilant's sales at Rs 1,017 crore.Thus if jubilant trades at 8500crs mcap,Westlife or hardcastle gets a fair value at 4200-4500crs or 2100-2300rs per share.With zero external debts and decent cash reserves,the conviction increases multifold.Also if hardcastle can extend its reach to Mcdonanld's other brand such as Mccafe, the story would only get stronger.The company has no further plans of diluting equity which as seen previously has always worked for the interest of minority shareholders,enriching the value in most cases.Promoters owns 75% stake in the company which will only help it to sustain even much higher valuation as people are starved of interesting businesses.The company may well grow 25-30% CAGR for the coming 10 years.Its a cash cow business which will always drive large handsome cash flows.Its hard to get the shares as it suffers from low liquidity but if you can, be rest assured of minting huge money in the coming few months and years.

La Opala RG Ltd:-Paid call to members(from 100 to 420 in 9 months))

Many of you repeatedly in my mail have asked for paid calls and what they will be and all.Now as an amateur and being a social guy I would always safeguard the vested interest of investors than something else.Anyways here"s an example of a paid member call and the type which I provided just 9 months back.

Market outlook and stock tip:-La Opala RG Ltd(Saturday, June 23, 2012)


Scripscan:La Opala RG Ltd
Traded in:Nse-bse
Cmp:105
Target:420rs(raised from 356)
Return:400%
Duration:6-9 months

Story:La Opala RG Ltd promoted by Mr. Sushil Jhunjhunwala and Mr. Ajit Jhunjhunwala, is in the business of manufacturing of Opalware and Crystalware products. La Opala started manufacturing Crystalware in the year 1996, sourcing the exclusive right to use the technical know-how, information, data for the manufacture and sale of Crystalware in India and abroad from Doosan Glass of South Korea, a leading manufacturer of Crystalware globally.La Opala has manufacturing units in Madhupur (Jharkand) and Sitarganj (Uttarakhand).La Opala is at present the largest domestic manufacturer of opal glassware, with the company commanding a 40% share of the opal segment.The company’s opal ware products primarily comprise dinner sets, cup saucer sets, coffee mugs, coffee cups, tea sets, soup sets,pudding and desert sets; and crystal ware products consist of barware, vases, bowls, and ashtrays.It would be prudent to note that even Rashtrapati Bhavan uses La Opala crockery.For a country like India the company’s main business is into Opalware and Glassware where organized market share is just Rs 500 crore.Its pretty certain international players like Luminarc from France and Corelle from the US eyeing a pie in India would definitely target companies like La Opala.The company has a wide range of opalware and crystalware products selling under established brands. The company also exports its products to more than 30 countries. It has products spread across the value chain. Diva and Crystal - its high-end brands contribute more than half of the total revenues. The La Opala brand caters to the mass market. The company's 100-strong distributor network for La Opala covers all major towns of the country. It also channelises its products through modern retail stores.There are 10,000 retail touch points through which the products of La Opala are sold.The company's revenue have doubled over the past five years.Its operating profit margin has been growing steadily since the past four quarters. Exports contribute around one-fourth of the company's total turnover.La Opala RG net profit rose 28.11% to Rs 3.19 crore in the quarter ended March 2012 as against Rs 2.49 crore during the previous quarter ended March 2011. Sales rose 22.04% to Rs 29.84 crore in the quarter ended March 2012 as against Rs 24.45 crore during the previous quarter ended March 2011.For the Audited full year,net profit rose 35.19% to Rs 12.60 crore in the year ended March 2012 as against Rs 9.32 crore during the previous year ended March 2011. Sales rose 19.62% to Rs 112.62 crore in the year ended March 2012 as against Rs 94.15 crore during the previous year ended March 2011.The company has recently increased its manufacturing capacity to 12,580 metric tonnes. The same will boost the company's sales further in the present fiscal.La opala should comfortably cross 150-155crs sales in the current year.PAT should come in the range of 17.5-19crs.The stock is trading at around 6 times its expected fy13 earnings of 17.3-18 rs.Given its track record and sound financials, the company should attract higher PE multiples in the next couple of quarters.Putting a modest PE multiple of 12 helps me in getting a target of 216rs.Further Fy14 earnings could be around 33-35rs.So a PE multiple of 12 gives a target of over 400rs.The promoters own 67% stake in the company and may well hike it going forward.Sushil Jhunjhunwala(Managing director) is a pretty cool visionary man who seems to be committed to make much shareholders wealth in the coming years.La Opala RG is into a very niche segment which has tremendous potential.The brands of the company would do wonders as its a household name in the country(Even it has find its place in my house).At 100 odd crs marketcap, I do get a lot of comfort in the counter.There's no equity dilution in near future which convinces me of the inevitable re-rating which can take place at any point of time.With comfortable debt-equity and other healthy ratios added up with the niche business model,its ought to catch investor fancy sooner or later.It also pays a dividend of couple of bucks.Altogether an unique bet which can mint money for you folks.Go for this "Indian consumption" story.

P.S:As you all know I had a recent spine surgery which resulted in couple of titanium screws implantation in my neck.Interestingly in the hospital the plates I got served foods was of "La opala".So though had a horror time but La opala made sure I got something to smile about.

Todays update:Within the mentioned duration,the company has hit the 400% return target of 420rs(recently it hit a high of 437rs) and looks good for even more.Enjoy the ride members.btw:People looking for midcap/smallcap positional call professional service may rush a mail at my mail id
arunsharemarket@gmail.com to know more about it.

Jai balaji industries:-A King size Multibagger in making

Stock idea:-

Scripscan:Jai balaji industries
Traded in:Nse-bse
cmp:27
Marketcap:170crs

"Warren Buffett Quote":Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.

Story:Just five points which will speak the real value of this company:-

1)Company 1.1mtpa steel manufacturing company with diversified product range including pig iron, sponge iron, TMT bars, ferro alloys, alloy bars etc.Replacement cost of assets over 4000crs.Debt of 2000 odd crs.(NAV of the company 4000crs-2200crs=1800crs)

2)The company holds varying stakes in four coal blocks-Dumri and Rohne in Jharkhand and Andal and Jagannathpur in West Bengal.It posses 700mt of high graded coal.Coal valuation is all over the place(USD 3 per tonne to USD 25 per tonne).Taking most conservative value of 3USD per tonne,value comes at over 10500crs.

3)Recently it backwardly integrated by putting up a .35mtpa coke oven.Will help in saving 75-100crs input,enhancing margins.Did a CDR which further will help saving 25-40crs.Raw materials prices have started softening and product prices have jumped a bit,albeit in a very tiny manner.

4)Promoter bought over 6 lakhs shares from open market in the last few months and further allotting 1cr warrants at 50 bucks,promoter stake to move from 52% to 58% post warrants conversion.

5)Reduced pledged shares from 92% to 68% recently,should be below 60% with warrants conversion.Company may have further plans to release more pledged shares in due course.

Conclusion:So you are getting India's 8th largest backwardly integrated 3000crs revenue company with 12300crs of assets(10500crs of coal+1800crs of assets after deducting debt) at just 170crs.Sanity is not in vogue but probably will be someday.


Btw:People looking for midcap/small cap positional call professional service may rush a mail at my mail id arunsharemarket@gmail.com to know more about it.

Ravindra Trading & Agencies Ltd:Present price 12rs target price 500

Scripscan:Ravindra Trading & Agencies Ltd.(Renuka energy)
Bse code:504341
Cmp:12 rs
Target:"500 rs"

"Warren Buffett Quote":I am not looking at quarterly earnings projections,am not looking at next year’s earnings, am not thinking about what day of the week it is, I don’t care what investment research from any place says, am not interested in price momentum, volume or anything. I am simply asking: What is the business worth?

Story:How lucky you are?The question has its merit as the above counter is terribly illiquid with no activity for the last few months.Probably it traded for a few trading sessions in the last 6 months or so.But provided you are able to bag a few of it,gala days are ahead(the counter is not suspended, trading is on but there's just no sellers available).Immediate disclosure would be-I too am in the queue with my orders in it,hoping against hope,to avail myself a few of it.Forget business model and leave aside chartbusters ROE,if you can show me a company with an extravagant impeccable visionary leader in place, am ready to own it with multiple x.Ravindra trading or a would be Renuka energy, belongs to the rags to riches guy "Narendra Murkumbi",the owner of Shree renuka sugars(I feel blessed to have interacted with this pure self made billionaire genius guy of only 43 yrs, who cares a great deal for his minority shareholders).Mr Murkumbi owns around 74% stake in the company which made a profit of 1crs on a turnover of 33crs for the last fiscal.The company also paid a dividend of 1 re which at present price yields more than fixed deposit interest of over 8%.So what finds my interest on this particular company which boasts of a marketcap of less than 1cr?Obviously the presence of the great guy who finds his rank in the forbes richest Indian list.The company is in process of merging Shree Renuka Urja Pvt Ltd (under incorporation) and Shree Renuka Energy Limited with itself.Shree Renuka Energy headed by J Suresh Kumar (former CFO of Lanco Infratech)is a subsidiary of Renuka Sugars.Its setting up a 3×350 MW Coal Based thermal power plant in Karnataka.I am in no mood to pen about the scheduled time of the power station or even its revenue generation ability.It would be too premature to comment on that as it takes quite a time to gather all the needed approvals.There's also a long gestation period with much executional risks attached to it.Overall its again an amazing move as renuka energy finds a way to get listed which will help it to garner funds from investors.The merger fineprints are not in my hand yet but the present entity itself is worth 500rs per share to me.Mr Murukambi created amazing wealth for his shareholders in shree renuka sugars over the last 10 years.I feel, he would make much  more for himself and his shareholders again in Ravindra trading(renuka energy). This above counter thus is a possible future 10-20-30-40 bagger.

btw:Google up Narendra murkumbi business world to know everything about him.

CORE Education & Technologies Ltd:-Buy/sell/growth prospect and recommendation,news and results,target and analysis,view and outlook,multibagger

Scripscan:CORE Education & Technologies Ltd
Traded in:Nse-bse
Cmp:235

"Warren Buffett Quote":Derivatives are weapons of mass financial destruction.

Story:The quote gets vindicated to the present mayhem in the above mentioned counter.Core projects is presently quoting at 235 bucks,down 60rs from its previous close.There's rumour of pledged shares getting liquidated and margin call accentuation which possibly can further erode more marketcap of this particular company.I myself had similar experience in core education few years ago.The stock then collapsed to 34rs from 150 in a matter of few trading sessions.Since derivatives are not abided by circuit filters it can really dance rampantly.Retail investors please be careful and exercise caution here.Though years back it moved from 150 to 34 to 325 but there's more than a chance it may not happen always.Already lot of margin call and pledge issues have taken a heavy toll on quality companies throwing them in jeopardy.The need of the hour is management clarification which can provide some confidence to the already horror stricken investors.Ideally,stock market is supposed to be efficient,well regulated and highly competitive,where no group or party can influence stock prices.Though Indian stock exchanges are said to be one of the best regulated exchanges and often we hear about Sebi"s whips and blacklistings to dubious and unscrupulous parties but still in reality the stock market in India suffers from imperfections and inadequacies that allows operators and few parties to play certain games that can be detrimental to the unwary and unguarded;though,of course,one can profit from them provided they being early entrants.As an investor,beware of operators games and traps.Operators vested interest too can be a cause of this downfall and they can further make you dance on their tunes,provided you are stuck in with broker's margin.Lastly, investor planning to buy it shouldn't buy till the fall of this reason is known and stock has stabilized for a good number of days.Even if it moves up and you miss it,don't repent,stock market always would provide you innumerable chances to make merry.

Elcid investments ltd:-10000rs investment turns 4crs in less than 18 months

Scripscan:Elcid investments ltd
Bse code:503681
LTP:2.73
Delisting proposal price:11455 rs

"Warren Buffett Quote":I never attempt to make money on the stock market.I buy on the assumption that they could close the market the next day and not reopen it for five years.

Story:The above quote finds much resemblance to the story of an unknown counter called Elcid investments.If you have invested 10000rs in elcid investments much less than couple of years ago it would have vaulted to over 4crs now(4crs 20 lakhs to be precise).The company which last traded at 2.73 rs on September 19,2011 recently announced a voluntary delisting offer at 11,455rs per share.The floor price was arrived at as per the valuation report dated February 20 of SSPA & Co, Chartered Accountants.For the financial year ended March 2012, the company reported a net profit of Rs 10.26 crore on a revenue of Rs 10.64 crore. Earnings per share for FY12 stood at Rs 512.80.Promoters presently own around 80% of the equity cap.The company boasts of  229 retail shareholders who by now are having extravagant grand celebrations.So stock market isnt that bad a place as overscrupulous brag about.Its hard to find an elcid investment but provided you are right about few basic stuff,you ought to smile big in the longer horizon. When companies are making losses,be it an existing company or a new company,investors shy away from the stock and wrongly extrapolate the current condition well into the future.So much so,that asset prices go significantly below the replacements costs.Problem is that people understand price and hardly bother about the "value" in the market.Elcid too on the first glance gets immediately dismissed but once you dig about its holding and intrinsic value,your eyes would lit up.So you see even if a company is not making profits it can well be the next success story.But thing is that you would need to have patience in clinging on to them.They can very well disappoint you bigtime with their underperformance in a good period but over the long run they would make you a hell lot wealthier.

View point:Derailing of stock prices

"Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ.Once you have ordinary intelligence,what you need is the temperament to control the urges that get other people into trouble in investing"-Warren Buffet.

Quoting the billionaire investor,It should serve as the mantra for those aiming to be successful in stock markets.The world"s most successful investor believes that emotions(greed and fear) acts as a major role in influencing investors into making grave errors which gets compounded by taking further rash actions.This creates the kind of stock market environment that we are now witnessing.You buy a quality stock and the other day it moves down by a few percentage point.Such pathetic is the mood of the street this days.General market though hails high near 20k levels but somberness prevail as small and midcaps are amidst big carnage for simply no reasons.Its hard to fathom any cause which can hammer them so badly.Retail investors would always shy away from investing at lowest bargain prices,no matter how much you speak.They are going against the behemoth FII flows,selling inspite of positive signals from the management fronts.Interest rate has recently seen a cut and should further soften going forward therefore helping in margins.Data shows a 1% cut in interest rate boosts 15% profit of small and mid cap companies.History suggests whenever FII's bought in big,the markets rallied huge within few quarters(Be it in 2003 or 2009 or now).Its understandable  bearing severe notional losses sometime could be very hard but fortune favors the brave folks.Investors with calm mind backed up by pure confidence and conviction would smile all the way in the longer run.Portfolios would rise multi-fold,stocks would turn 10-20-30 baggers.So if selling at low and buying at high is not your cup of tea,stay put guys.The best of return would always follow after pathetic horrendous days.Being an optimist,I would always speak about the positives and when facts and logic are there to embrace,get it.Technical analysts,papers are there to make you more nervous with their "change with the trend" attitude and rule but if you follow the basics and get your logic right, its bound to be your catalyst for an exciting journey of making money in our very own stock markets.Good days are knocking at the door folks.Its just a matter of time before quality counter moves where they richly belong.Happy investing folks.

DHP India Ltd:-Buy/sell/growth prospect and recommendation,news and results,target and analysis,view and outlook,multibagger

Scripscan:DHP India Ltd
Bse code:531306
Cmp:33

Story:DHP India Limited engages in the manufacture and sale of low pressure regulators for liquefied petroleum gas (LPG) cylinders, and related accessories and parts in India. Its products include propane regulators, butane regulators, LPG regulators, hose assemblies, and brass fittings. The company also exports its products.The Registered Office of the Company is situated in Kolkata & its Factory is situated in Howrah District, West Bengal.

This is an interesting microcap with good potential.The company has been pretty consistent in its numbers over the last several quarters.Its a mere 10crs mcap company having an equity base of just 3crs.It hails from our part of the world and once am out of this present bedridden restrictions,a management meet seems very on.Promoter owns 75% stake resulting in negligible volumes in the bourses.Its a herculean task to pen analysis about this unknown unheard counters.There's just no detail to work over.Even after meeting the managements if details are put on which are not in public domain,controversies may arise.It has happened in past and chances remain loads of getting it repeated once again.Anyways would still try to dig in details.

DHP has increased its sales from 12crs to 25crs in the last five years.Net profit in the same period vaulted five times to 3.5crs from just 70 lakhs.This can be attributed to its decision of manufacturing its products from trading previously.Presently it boasts of a superb net margin of 14% compared to 5-6% what its used to enjoy earlier.The Company presently has shifted the main focus of its manufacturing business from domestic market to the export markets and is pretty confident of obtaining satisfactory orders in the coming years.

I had the opportunity to interact with a few client of this company.Feedback received can be defined remarkable,they vouched for its world class product quality at much affordable prices.Can the company scale up remains the million$ question.Balance sheet is squeaky clean.Networth stands tall at 16crs with debts of less than 2crs, allowing it to go for fresh debts,in case it plans to expand big.Industry is fragmented though, with the company facing stiff competitions from superior vendors.Its too premature to suggest it a buy as lot of questions are in mind.On a prime facie it looks in better shape than a lot of other inferior microcaps.Volumes are too less,so any bulk buying or selling can make it move either ways bigtime.Growing consumption of low pressure regulators & gas realted products coupled with immense potential for LPG  appliances makes the stock worth a look.I am not assigning any fat targets but downside seems very minimal from the present prices.

Two gems worth betting on

Two low priced counters worth betting for the medium to long term horizon.

What went wrong-Whats happening right:-

1)Scripscan:JHS svengaard lab ltd
Traded in:Nse-bse
Cmp:29

Business:Starting with manufacturing of only Toothbrushes the company widened its scope to Toothpastes, Mouthwash and Denture Tablets and today is an oral care product manufacturer and exporter. Apart from working on its own brands the company also offers Contract Manufacturing Partnership to brands in the domestic and the international market. One of the most prominent brands manufactured under the company’s name is Dr. Gold which was launched in April 2009 with economy, mid economy and premium toothbrush categories.Some of the prominent brands partnered with in the domestic market are P&G, Amway India Enterprises Pvt. Ltd., Dabur India Limited, Elder Health Care Limited, J. L. Morison’s India Limited and in the international market are - Dr Fresh , Peanuts , Lavoris, Hello Kitty , Walgreens  and Walmart.

Special mention:Promoters allotted themselves lakhs of shares at 98rs.Tano mauritius,the private equity firm which got a great success ratio, bought shares worth 25crs at 98rs.

What went wrong:-Company took many small clients for volume growth resulting in sticky receivables.Few large clients halved their off-take.Numbers nosedived and company posted losses.Input prices went through the roof but because of fixed price contracts company couldn't pass it to the clients.The company had one of the worst financial years.

Whats happening right:It sacrificed the smaller clients and concentrating on fulfilling the requirements of the large reputed ones.Changed its business model in an unique manner where the clients would pass on to everything and JHS would only concentrate on global product quality and timely delivery.In this way it would avoid the prolonged receivable cycle and any volatile input prices.Merged its group companies for better synergies.Started exporting again after a long time.A stock worth betting on at present prices.

What else:I bought it because its a perfect fmcg proxy.The largest toothbrush manufacturer from India(300 million tooth brushes).It caters to the need of 1 trillion Proctor and gamble in our country.The company has got number of amazing tax and excise benefits.Replacement cost of its assets would be 300-400crs.Present marketcap is only 60crs.




2)Scripscan:Jai balaji industries ltd
Traded in:Nse-bse
Cmp:34

Business:Jai Balaji is one of the largest manufacturers of steel in the private sector in Eastern India. It has integrated facilities for producing steel in eight manufacturing units spread across the states of West Bengal, Chhattisgarh, Orissa and Jharkhand.The company has a chain of value-added products which include DRI, Pig Iron, Ferro Alloys, Alloy and Mild Steel Billets, Reinforcement Steel TMT Bars, Wire Rods, Ductile Iron Pipes and Alloy and Mild Steel Heavy Rounds.With vibrant and dedicated people forming the core, the company has grown from strength to strength under the dynamic leadership of its promoters and directors.Its combined experience has propelled the Group into the league of formidable steel players in Eastern India, which has not only diversified into power generation in West Bengal and Chhattisgarh but has progressed work in allied industries like cement as well.

Special mention:Promoters have bought shares worth 12crs at 180rs,worth 2crs at around 40rs and took shares 50crs worth of warrants convertible into shares at 50rs.

q)What went wrong?

ans)The coal scam hit it badly.Numbers went pathetic because of higher input costs and lower product prices.High interest costs took the toll out of it.

q)Whats happening right?

ans)Did a recent debt restructuring successfully resulting in lot of interest costs savings.Coal scam has presumably ended and none of its coal blocks have been deallocated.Company backwardly integrated by putting a .35mtpa coke oven which would save 100crs input costs from present fiscal.Interest rate further would see a cut, saving more finance costs for the company.Raw materials prices have started softening and product prices have jumped a bit,albeit in a very tiny manner.A counter to watch out for with very limited downsides and huge upsides.

What else:I bought it because the replacement cost of its assets are 4000crs.Debts are 2200crs.So we get the Net asset value at 1800crs(4000crs-2200crs).Further it has 700mt of high grade coal resources which should get valued into thousands of crs in near future.At present Jai balaji is only valued at 200crs which is a pure bankrupt valuation.

Atul Auto Ltd:-Paid call to members(Target achieved)

Stock idea:-(December 12,2012)

Scripscan:Atul Auto Ltd

Bse code:531795

Cmp:169

Target:204

Percentage return:20%

Duration:3-4 months

3-5yr CAGR return:30-40%

Quote:Atul auto was recommended at 111rs couple of months back for a target of 160 odd rs(http://www.arunthestocksguru.com/2012/11/akcapital-services-ltdthangamayil.html).Not only it achieved its target within much time to spare but also attracted lot of HNI' attention from all corners.I feel there's still lot of action left in the counter and members who may have previously missed out can opt for it, hoping for a cool 20% return in the next 3-4 months.Also on a longer term basis this stock is a must in one's core portfolio.I haven't change my estimates for the counter much but it looks like the company would beat my estimates pretty easily which could result in further price upgrades.

The hunch of finding a potential multibagger gives a special feeling folks.The feeling of satisfaction,the thought of owning something which would steadily multiply with time.If its a midcap, I kinda murmur not bad but you can do it better fella.A smallcap or say a probable "bud of the oak tree" really really turns me on.Atul auto just falls under that smallcap fraternity which stands tall to qualify as a big future winner.A true extremely undervalued,overlooked masterpiece..Why?Read on.

 Auto Limited engages in the manufacture and sale of three wheeler auto rickshaw vehicles (passenger/loading) and spare parts.The company offers a range of three wheeler diesel auto rickshaws, CNG auto rickshaws, and PNG auto rickshaws, such as pickup and delivery vans; passenger carriers; and chicken carriers, tippers, water tank carriers, soft drink carriers, mobile shop vehicles, hopper vehicles, bio hazard vehicles, and vegetable vending vehicles. It produces auto rickshaw vehicles under Atul Shakti and Atul Gem brand names. The company exports its products to Nigeria, Kenya, Egypt, and Tanzania, as well as other African countries. It is also involved in the generation of electricity with wind turbine generators at village Soda Mada, Rajasthan and village Gandhavi, Gujarat.Atul auto differentiates itself with customised product offerings, low maintenance, and strong after-sales service to buyers in form of service warranties of two years which other larger players like Bajaj Auto and Piaggio do not provide.The company has been able to grow 25% and 20% respectively as far its sales and profits growth are concerned over the past five years(08-12).So the consistency stuff which we all crave for is here folks that too it showcased when we had the vagaries of recession,the uncertain inflationary environment.The industry itself had a de-growth where it operates in.Surprise surprise an auto play with cash equivalent(11crs) superior to its net debt(4crs).Thus, I present to you a de-leveraged bet with consistency and ethics where minority shareholders are well treated too(company has issued bonus twice in the last decade).The company has been a leader in its existing territory – Gujarat (approx. 45% market share) & Rajasthan (approx. 30% market share), the company is now trying to go Pan India by entering new territories(Kerala & Assam are its next big markets).The company has grown its domestic market share in the goods carrier segment from 5% in FY09 to 12% in FY12 while growing at a CAGR of 44%. In FY13 till date its market share was 15% in this segment.Atul Auto’s share in the domestic carrier space has increased  three-fold from 2% in FY09 to 6% in FY13.EBITDA margins have remained well above 9% in a challenging environment for the past three years.I happened to have a sound chat with with Mr. J V Adhia, Vice President, Finance – Atul Auto.In his words,"Current dealer network is about 120 dealers. A year back we had 100 dealers but only 30-40% were active! Now more than 80% are active. Plan to have 250 dealers in 2 years.As of now the company is seeing a very strong demand and there is a waiting period of about 10 days. As per policy the company is taking orders on advance basis only. Hence the high advances on Balance Sheet.We are in process of doubling our capacity from 24,000 to 48,000 vehicles p.a. This expansion is being done at our existing plant and we have sufficient space.We are expanding capacities by ongoing de-bottlenecking exercises. We are already at 20-25% higher production and the rest of the de-bottlenecking increases should happen over next 3-6 months.  We have options of introducing a double shift, as and when deemed necessary.We do envision to be 1000 Cr company by 2015-16". (Co did 298 Cr turnover in 2012 and around 400 Cr is expected for FY 13).On the exports front, as expansion comes in full by December 2012, the company is working on restarting exports in the South East Asian/Saarc markets like Bangladesh and Sri Lanka in the immediate term along with newer African markets.The NPM too(5 % odd) is expected to remain on the rise considering lower input costs and a better operational performance.It ended fy12 with a PAT of 15crs which should comfortably cross 22-23crs in the current fiscal.On an equity base of 11crs that translates into an EPS of 20rs.At present market price of 169rs the same gets discounted by a PE multiple of a tad less than 8.5.PE expansion gradually would take place and at some point of a time it would quote at a forward PE of around 10,which gives you your target price of 204rs(20rs*10.2).For a growing company with consistency,ROE and ROCE of over 25%,dividend yield of nearly 4%,ethical and visionary management,huge exports potential coupled with the most sought after tag of "domestic consumption play"-I mean whats missing here?Nothing at all.A great buy.

Quote:People looking for positional call professional service may rush a mail at my mail id
arunsharemarket@gmail.com to know more about it.

btw:After thorough meticulous research only the paid calls are been provided to the members.The open site(http://www.arunthestocksguru.com/) is meant to provide outlook and not recommendations.Paid site is meant for recommendations with target/duration/complete story and updates.Scrips where am most bullish would be posted on the paid site.

Regards,
ARUN

APM Industries Ltd:Buy/sell/growth prospect and recommendation,news and results,target and analysis,view and outlook,multibagger

Stock idea:-

Scripscan: APM Industries Ltd(FV-2)

Bse code:523537

Cmp:18

Target:26

Percentage return:45%

Duration:6-9 months

Quote:This days am not able to concentrate much on my research,thanks to the prolonged bed rest,as suggested by the doctors.But the good thing is my research analyst fraternity have been very generous to share lot of stock ideas.The discussion in the cell goes on for hours.Hemant bhai,the veteran who has been a mentor figure for long now came up with a stock idea which immediately qualified as a decent small cap bet.

Story:Belonging to Rajgarhia group, APM Industries is engaged in production and marketing of Poly/Viscose and Polyester-blended Yarns Having its plant in Bhiwadi, APM has installed capacity of 50,000 spindles. Yarns manufacturer by APM are used for making suiting fabric, shirting fabric and knitted fabrics. APM has been supplying its yarn to leading brands like Siyaram, S Kumars, Raymond, Digjam, Donear etc. Yarn manufacturers are doing extremely well and APM is available at extremely attractive valuations and trading at substantial discount to its Book Value, hence the recommendation to buy.

                               2011-12             2010-11
                              Rs/Cr                 Rs/Cr

Sales                      259.82               243.62

PBDT                       24.13                 26.66

Depreciation                4.62                  4.71

PBT                          19.51                 21.95

PAT                           12.60                13.82

Equity                         4.32                  4.32

Eps Rs                       5.83                  6.39

Promoter                    62.81%

For FY12, APM ind had reported 6.65% rise in its sales. But Pat declined by 9% due to erosion in  profit margins in H2 due to sudden fall in realisation. APM had declared 30% dividend for the year.

FUTURE OUTLOOK:

                            Q U A R T E R  E N D ED        H A L F  Y E A R  E N D E D
                            30.9.2012        30.9.2011           30.9.2012         30.9.2011

Sales                     89.21             84.48                  149.63            146.19

PBT                         9.20               6.37                   14.14              12.50

PAT                         6.18               4.08                     9.41                8.29

Eps Rs                   2.86                1.89                     4.36                3.83

APM Industries has reported fabulous results for quarter ended Sept 2012 wherein Pat has risen by 50% to 6.18 crores. Eps for Q2 ALONE is 2.86.  Eps for H1 is Rs 4.36 as against 3.83 in corresponding half of previous year. APM has declared Interim dividend of 30% i.e 60 Paise.  

In FY12, profit margin of APM had declined in H2 due to unexpected slowdown. However, as per industry sources, now there are no signs of slow down. Rather , fibre prices (raw material for producing yarn) have declined recently. and hence, APM should continue maintain its profit margins in H2. 

For FY13, APM Industries is likely to achieve Sales of 280 cr and PAT can be Rs 19 crores. Thus, Eps for FY13 should be Rs 8.80.  Its Book Value as on 31st march 2012 was Rs 31.40 and should be Rs 38-39 as on 31st march 2013. 

Stock is trading at just 2xFY13E Eps and 0.45xFY13E Book Value. APM will definitely declare handsome final dividend also and may also cheer with first-ever Bonus issue. Management is extremely reliable, efficient with low overheads. Few years back when majority of yarn companies reported losses, even at that time, APM continued to report profit which proves investor-friendly attitude of management. Its such a counter which offers a superb dividend yield of over 7% at present prices.A mere forward 3 PE multiple helps me to arrive at a target price of 26rs.Members can expect appreciation of 40-45% in 6-9 months.

Antique`s top 11 bets for 2013

Antique`s top 11 bets for 2013:-

The Indian markets have outperformed most of its peers in CY12, after significantly underperforming in CY11. According to Antique Stock Broking, CY13 will surely lay foundation for strong outperformance in CY14. Glance through the 12 stocks that are likely to give you wonderful returns in future.

1)Scripscan:Cromptom Greaves
cmp:122
Target Price:156

Story:Crompton Greaves' FY13 profitability is likely to be under pressure due to higher than expected restructuring cost on overseas operations.Though restructuring is expected to be complete by 4QFY13, slippage to 1QFY14 cannot be ruled out.Antique expects overseas business to report loss of ~INR3.11bn in FY13e and return back to profits of INR15m in FY14e.

2)Scripscan:Maruti Suzuki India Limited
cmp:1574
Target Price:R1,830

Story:An improving macro normally leads to an improvement in consumer sentiment and a consequent uptick in high discretionary spends. Antique sees indication of rates easing-off, re-rates multiples for the rate sensitives (cars) and sees Maruti benefiting from all of the above. Also, given its fat import bill (net imports at USD1.7bn), it also benefits from any INR appreciation. Antique believes the only argument for the bear (competitive pressures) is also fading.

3)Scripscan:Dish TV India Limited
cmp:77
Target Price:95

Story:Antique expects DTH penetration in India to be ~49% over the next four years. Also,Dish TV India Ltd. (Dish TV) is the leader in the six player market with ~28% market share. bAntique believes the company is expected to benefit from the Phase II and III of digitisation due to its strong presence in tier II and II cities. Expect subscriber additions to improve from 3Q onwards led by; onset of festive season and some shift from cable to DTH in Phase I locations.

4)Scripscan:Oil & Natural Gas Corporation Limited
cmp:285
Target Price:316

Story:Antique recommends ONGC as a top buy as the development of 37 marginal fields will entail almost 10% Year-on-Year (YoY) growth in FY14/15e. Also ONGC's subsidy burden is expected to decline going forward as lower under-recoveries owing to potential diesel price hikes, LPG cap and decline in kerosene consumption would induce the Govt. to overhaul the current subsidy sharing mechanism of fixed discount.

5)Scripscan:Larsen & Toubro Limited
cmp:1566
Target Price:1908

Story:Despite adverse macro-environment, Larsen & Toubro, has reported strong order-inflows in FY13 so far. The company, believes Antique will stand to gain from any pick up in infrastructure investment activity, as peers continue to struggle due to stretched balance sheets. The company is well on track to meet its order-intake guidance and margins are likely to remain healthy and execution strong, which will ensure strong earnings growth during FY12- 14e. L&T remains a preferred large-cap capital goods stock.

6)Scripscan:ICICI Bank
cmp:1174
Target Price:1320

Story:Despite adverse macro-environment, Larsen & Toubro, has reported strong order-inflows in FY13 so far. The company, believes Antique will stand to gain from any pick up in infrastructure investment activity, as peers continue to struggle due to stretched balance sheets. The company is well on track to meet its order-intake guidance and margins are likely to remain healthy and execution strong, which will ensure strong earnings growth during FY12- 14e. L&T remains a preferred large-cap capital goods stock.

7)Scripscan:Coal India Limited
cmp:359
Target Price:407

Story: Antique believes CIL is in a sweet spot due to structural deficit of coal and monopolistic presence. Coal India Limited has  a coal reserve of ~20bnt and resource of ~60bnt stands to be a natural beneficiary of the prevailing demand/supply gap of coal.Also, CIL's non-executive wage costs (~50% of operating cost) are revised every five years. The last wage revision was effective from July 1, 2011 and has been provided in FY12. Hence, for the next five years, wage cost will grow in line with general inflation levels.

8)Scripscan:Dr. Reddy's Laboratories Limited
cmp:1900
Target Price:2100

Story: Antique believes Dr. Reddy's Laboratories (DRL) has one of the best generic product pipelines in the US. The breadth of DRL's pipeline insulates it from potential revenue shocks arising out of specific approval delays. Antique expects DRL to demonstrate strong earnings growth of 17% over 2011-2014e driven by; a series of product launches in the US; momentum in the domestic market; accelerating growth in the Russian market and margin improvement on the back of rationalisation of costs and an improving business mix.

9)Scripscan:Jaiprakash Associates Limited
cmp:97
Target Price:109

Story:Antique is bullish on the company’s high quality assets in the portfolio.On a consolidated basis, the company's asset portfolio consists of 33.3mmt of consolidated cement capacity (35.9mmt by 4QFY13e) supported by 672MW of CPP, 165km of six lane access controlled expressway, 1,700MW of power capacity and real estate land bank. Antique believes they have the potential to generate robust cash flows on a steady state basis, which can be utilised for deleveraging/expanding the future asset base.

10)Scripscan:Shriram Transport Finance Company Limited
cmp:750
Target Price:850

Story:Shriram Transport Finance Corporation Ltd. (STFC) has been the biggest fallout from recent regulatory changes on securitisation through the assignment route. However, the lender appears to have tided over the liquidity crunch by moving smoothly on to the PTC route while consolidating its retail funding base. Antique expects RoAs to clock 3.3% level for FY14e after building in 30-40bps of spread compression and keeping LLPs at a conservative 190bps.

11)Scripscan:ITC Limited
cmp:280
Target Price:322

Story: After the Government of India increased the prices of non-filter cigarettes in FY 09. there was a shift towards filter cigarettes. The shift in turn led to ITC's market share in the cigarette industry growing from 74% in volume terms to approximately 84-85% currently.A similar scenario is set to emerge after increasing number of states are putting a ban on chewing tobacco products, thereby providing a huge base for the cigarette industry to exploit.

Hyderabad Industries Ltd:-The next big mutlibagger

Multibagger Stock idea:-

Scripscan:Hyderabad Industries Ltd
Traded in:Nse-bse
Cmp:490
Target:635rs
Return:30%
Duration:6-9 months
Long term target:35-40% CAGR for the next 5 years

Story:Here's a company which has excited me a great deal and gives me the hunch of digging out a huge infinite bagger in the coming years.I was looking for a counter which would be nearly debt free(high inflationary environment,double digit interest rate you see),should have a great brand,better if its a household name,market leader and domestic consumption(recall our jockey company,page ind?-how about hawkins or a ttk prestige?ah all 10-15-20 baggers re,attractive valuations(to get that great midnight comfort and sleep),good dividend yield(so that if it doesn't perform the dividend cheque may come to the rescue)and a business model which would be simple to understand coupled with stunning prospects and potential.Hyderabad Industries Ltd just fits in everything so perfectly.

Hyderabad Industries (HIL) is a flagship company of C K Birla Group.HIL's product range include Fibre Cement roofing sheets (Charminar), Autoclaved Aerated Concrete Blocks and Panels (Aerocon) and Calcium Silicate insulation product (HYSIL) and Jointing material for gaskets.HIL’s most modern manufacturing plants are located at 12 locations in 8 states of Andhra Pradesh, Gujarat, Haryana, Jharkhand, Kerala, Maharashtra, Orissa and Uttar Pradesh. HIL being a market leader over several years has a strong & extensive distribution network with nearly 8000 sales points spread across the country which is serviced by its 45 depots.Company is the market leader in the asbestos-based roofing industry, with an estimated market share of 21% and its famous brand "Charminar" established over six decades and enjoys a premium of 6-8% over others in the market.From a mere roof manufacturing company,this company has evolved into a multi product, green building products organization.The demand for these building products is likely to stay firm led by growth in rural housing and price advantage of asbestos sheets over galvanized iron sheets.It has gradually diversified from a one-product into other areas such as autoclaved aerated concrete (AAC) blocks, thermal insulation products and other products like prefabricated building panels, Hysil powder, spares and accessories etc.The expansion of ind. capacities and the overall buoyant economic scenario are boosting demand from this segment.Over half of our population still lives under thatched roofs (Kuccha roofing) and clay tiles. Thatched roof is not waterproof, and poses a fire hazard besides needing regular replacement. Tiled roof needs recurring maintenance and is also not safe. Hence security concern coupled with rising income level, the desire to shift from kuccha house to pucca house is increasing.Asbestos Cement Sheet(acs)are good insulators of heat and sound as compared to thatched, tiled or galvanized metal roofs. Additionally, ACSs are water resistant and fire resistant. ACSs are also relatively cheaper than galvanized metal roofs. ACSs require minimal maintenance and infrequent replacement unlike thatched and tiled roofs. Hence, whenever disposable income increases, switching to ACS roofs is the most obvious choice.The ACS industry de-grew by ~5% in FY10, grew by ~3.5% in FY11 and grew further by ~7% in FY12. The industry is estimated to grow at 6-9% for the next few years on account of increased income in rural areas coupled with various initiatives by the Government for affordable housing such as Indira Awas Yojna, Golden Jubilee Rural Housing Finance Scheme and Pradhan Mantri Adarsh Gram Yojana. Additionally, other schemes such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) guarantee employment to low-income individuals, which also helps generate demand for the roofing industry.This Government sponsored initiatives in providing homes and schools for the masses in general and the poor in particular will increase the demand of Hyderabad ind products many a times.The company has delivered a topline of 860crs in fy-12(730crs in fy10-11) and targets the topline to cross 2000crs by 2016.Profits jumped to 60crs from 50crs in the same period.It paid a dividend of 18.5rs,translating to an yield of around 4%.The company should at-least grow by 25-30% this fiscal.The company is expected to deliver an EPS of 105rs for fy13.A mere PE multiple of 6x helps me to arrive at the target.This company is nearly a zero debt one having reserves(335crs) of nearly 50 times its equity cap(a liberal bonus which could be another trigger to rally always remains in the offing).At present prices it quotes at just 4 odd times which is incredibly cheap for a quality company having a neat visionary management.In a single line I presume I can just pen the whole stuff,"In a country of 122crs where 75% remains below poverty-Hyderabad industries caters to exactly those ones".ROE and ROCE too should comfortably be above 20% respectively in the coming years which provides the required conviction to own a quality business.A pizza franchise with 100crs profit attracts a mcap of 8000crs,a company which provides you the required shelter trades at just around 300crs mcap having a profit of as high as 60crs.Rationality may not be in vogue but would be someday for sure.With time as it grows,rather at some point of a time there would be a complete PE re-rating which can take it to miles away from the present price.Also, its Hyderabad factory is situated on 70 acres land in a very prime area of Sanatnagar which is like Heart of the city. Govt policy is to shift all factories from Sanatnagar so that residential and office buildings can come up.Currently, some inds. in this area, specially polluting pharma industries have already shifted.It is not very far fetched that management of HIL plans to shift this factory in next 1-2 years itself.As and when it happens, it will bring huge value for the stake holders.Altogether,A lovely bet to make your rich over the long haul.

La Opala RG Ltd:-Paid call to members(Target acheived)

Many of you repeatedly in my mail have asked for paid calls and what they will be and all.Now as an amateur and being a social guy I would always safeguard the vested interest of investors than something else.The open blog is a place for me to give guidance.Paid blog is for the one who needs those calls and my bigtime guidance desperately.Anyways here"s an example of a paid member call and the type which I provided just 6 months back.

Market outlook and stock tip:-La Opala RG Ltd(Saturday, June 3, 2012)


Scripscan:La Opala RG Ltd
Traded in:Nse-bse
Cmp:105
Target:216rs(raised from 176)
Return:105%
Duration:6-9 months

Story:La Opala RG Ltd promoted by Mr. Sushil Jhunjhunwala and Mr. Ajit Jhunjhunwala, is in the business of manufacturing of Opalware and Crystalware products. La Opala started manufacturing Crystalware in the year 1996, sourcing the exclusive right to use the technical know-how, information, data for the manufacture and sale of Crystalware in India and abroad from Doosan Glass of South Korea, a leading manufacturer of Crystalware globally.La Opala has manufacturing units in Madhupur (Jharkand) and Sitarganj (Uttarakhand).La Opala is at present the largest domestic manufacturer of opal glassware, with the company commanding a 40% share of the opal segment.The company’s opal ware products primarily comprise dinner sets, cup saucer sets, coffee mugs, coffee cups, tea sets, soup sets,pudding and desert sets; and crystal ware products consist of barware, vases, bowls, and ashtrays.It would be prudent to note that even Rashtrapati Bhavan uses La Opala crockery.For a country like India the company’s main business is into Opalware and Glassware where organized market share is just Rs 500 crore.Its pretty certain international players like Luminarc from France and Corelle from the US eyeing a pie in India would definitely target companies like La Opala.The company has a wide range of opalware and crystalware products selling under established brands. The company also exports its products to more than 30 countries. It has products spread across the value chain. Diva and Crystal - its high-end brands contribute more than half of the total revenues. The La Opala brand caters to the mass market. The company's 100-strong distributor network for La Opala covers all major towns of the country. It also channelises its products through modern retail stores.There are 10,000 retail touch points through which the products of La Opala are sold.The company's revenue have doubled over the past five years.Its operating profit margin has been growing steadily since the past four quarters. Exports contribute around one-fourth of the company's total turnover.La Opala RG net profit rose 28.11% to Rs 3.19 crore in the quarter ended March 2012 as against Rs 2.49 crore during the previous quarter ended March 2011. Sales rose 22.04% to Rs 29.84 crore in the quarter ended March 2012 as against Rs 24.45 crore during the previous quarter ended March 2011.For the Audited full year,net profit rose 35.19% to Rs 12.60 crore in the year ended March 2012 as against Rs 9.32 crore during the previous year ended March 2011. Sales rose 19.62% to Rs 112.62 crore in the year ended March 2012 as against Rs 94.15 crore during the previous year ended March 2011.The company has recently increased its manufacturing capacity to 12,580 metric tonnes. The same will boost the company's sales further in the present fiscal.La opala should comfortably cross 150-155crs sales in the current year.PAT should come in the range of 17.5-19crs.The stock is trading at around 6 times its expected fy13 earnings of 17.3-18 rs.Given its track record and sound financials, the company should attract higher PE multiples in the next couple of quarters.Putting a modest PE multiple of 12 helps me in getting a target of 216rs.The promoters own 67% stake in the company and may well hike it going forward.Sushil Jhunjhunwala(Managing director) is a pretty cool visionary man who seems to be committed to make much shareholders wealth in the coming years.La Opala RG is into a very niche segment which has tremendous potential.The brands of the company would do wonders as its a household name in the country(Even it has find its place in my house).At 100 odd crs marketcap, I do get a lot of comfort in the counter.There's no equity dilution in near future which convinces me of the inevitable re-rating which can take place at any point of time.With comfortable debt-equity and other healthy ratios added up with the niche business model,its ought to catch investor fancy sooner or later.It also pays a dividend of couple of bucks.Altogether an unique bet which can mint money for you folks.Go for this "Indian consumption" story.

Todays update:Within the mentioned duration,the company has hit the 105% return target of 216rs and looks good for even more.Enjoy the ride members.btw:People looking for midcap/smallcap positional call professional service may rush a mail at my mail id
arunsharemarket@gmail.com to know more about it.

Jyothy Laboratories Ltd:-The largecap Multibagger

Stock idea:-

Story:Scripscan:Jyothy Laboratories Ltd

Traded in:Nse-bse 
Cmp:178
Target:230
Return:30%+ 
Duration:9-12 months

Long term return:30% CAGR for next 5-8 years

Quote:A surprise to start with.In my entire life or to say in my so far stock market career span of over a decade, I have never been votaries of large cap stocks specially the FMCG ones.The stance has recently seen a change where a company with its robust prospects and potential really has made me its newest fan.Its products are a household name atleast in our parts of the eastern world.Ya am talking about the "Ujala" brand of this week's recommendation Jyothy Laboratories.Disclosure immediately would be an entrance which I made in the counter very recently with plans of further accumulating more.A scrip which would compoundly provide a growth of 30%+ every year till next five to eight years.So cancel your FD plans where the money doubles in every eight year and put the same in the counter where it would swell your wealth by over 1000 percentage or 10 times in the same duration.

Story:Jyothy Laboratories Limited engages in the manufacture and marketing of fabric whiteners, soaps, detergents, mosquito repellents, scrubbers, and incense sticks.The company offers liquid fabric whiteners under the Ujala brand name; washing powders under the Ujala Super Washing Powder brand name; fabric enhancers under the Ujala Stiff & Shine brand name; and detergents under the Ujala Techno Bright brand name. It also provides household insecticides, including coils and mosquito repellants under the Maxo A Grade Coils brand name; household kit under the Maxo Aerosol brand name; and liquid vaporizers under the brand name Maxo A Grade Liquid. In addition, the company offers utensil cleaners, such as wash bar and wash liquid under the Exo brand name; incense sticks under the Maya brand name; and beauty soaps under the Jeeva Naturals brand name. Further, the company markets tea and coffee brands; and provides fabric care services, as well as offers laundry services, including dry cleaning and providing linen on rental. Additionally, Jyothy Laboratories Limited, through Henkel India Limited, provides laundry products, home care products, cosmetics, and toiletries.The Henkel buyout has infused a premium brand-width into the hitherto mass-market player Jyothy. Post-Henkel, Jyothy addresses a market opportunity of $5 billion (Rs 26,080 crore) in India, 10 times the size of its stand-alone portfolio a couple of years ago.After acquiring Henkel in June 2011, Jyothy added seven new brands (Pril, Margo, Fa, Henko, Mr White, Neem and Chek) to its kitty and got a strong foothold in urban markets (Jyothy’s rural-urban presence is at 75:25 per cent against 30:70 for Henkel). Thus, strong distribution synergies will not only rationalise Jyothy’s cost structure, but also make it a pan-India player. This will result in strong revenue growth, along with margin gains of about 600-650 basis points, for Jyothy over the next three years.Jyothy’s consolidated revenues and earnings are set to grow at compounded annual rates of 30 per cent and 65 per cent, respectively, over FY12-14. Further, its operating margins are also likely to catch up with industry levels in the next two-three years, driven by increased cost rationalisations and merger synergies . The Jyothy management expects to complete the merger process by March 2013 and expects the combined entity to grow 50 per cent from thereon.Henkel merger is a masterstroke as it makes it a pure FMCG branded player,henkel's loss in book would also limit the merged entity to pay a very tiny tax figure,shareholders too have lot to cheer for as equity dilution would be less  than 3%.Listening to the management meticulously only increases ones conviction."In their words-The firm’s best years lie ahead.Our dream is to grow, over the next 25 years, Jyothy Laboratories into one of India’s largest consumer goods company rivalling multinational firms such as HUL in terms of revenue".The confidence increases when I read the induction of  ex-Reckitt India managing director S Raghunandan as its chief executive officer and whole-time director.He had also held senior positions with companies like Paras Pharmaceuticals (managing director a), Dabur India (executive vice-president, sales), Dabur International (CEO) and Hindustan Unilever (regional sales manager).Raghunandan obtained his degree in Chemical Engineering from Birla Institute of Technology and Science (Pilani) and was an alumnus of IIM-Kolkata.This guy Raghu is considered as one of the pillars in the FMCG sector..The company is going through a transformation following the acquisition of Henkel India and his experience and expertise across the FMCG sector will  be of great value for the company.I dont even care to put ratios and valuation metrics for a FMCG player (FY15 sales would be over 2000crs-FMCG counters trade at 6-7 times their sales whereas present marketcap of jyothy is only 2800crs) which is set to grow by such a massive margin in the coming years.Keep accumulating it only if you have a long term prospective.Short term oriented members you may well get disappointed here though the stake sell of 20%(500crs fund infusion to reduce the debt of the company,stake sell expected anytime) at a decent premium to present market price may offer some rejoice for you guys.