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Monday, April 21, 2014

Orient paper Ltd:-The cheapest bet with massive potential in the consumer appliances segment

Another paid call given just couple of months ago.Already up 20% from the suggested level.Now open readers act on it for further 40% movement in the short term.

Stock Idea:-

Scripscan:Orient paper Ltd
Traded in:Nse-bse
CMP:14
Target:23
Return percentage:65%
Duration:4-6 months
Point to note:Please don't make any haste.Its a volatile counter with good volumes and would always offer chances to pick up during correction periods.

Quote:A lot of action is expected to happen in the recommended counter.The note is of Skp aligned with my views.Its not meant for long term members.Folks who fancies short term stuff can act accordingly.

Company Background:Orient Paper & Industries Ltd (OPIL) is a part of CK Birla Group. It is engaged in the business of manufacture of Paper (tissue papers, writing and printing papers, photocopy papers etc) and Consumer Electrical goods (fans, lightings and household electrical appliances). OPIL has five manufacturing units located at Amlai (M.P.), Brajrajnagar (Orissa),
Kolkata (W.B.), Faridabad (Haryana) and Noida (U.P.)

Investment Rationale:OPIL Paper business in recent years have been facing stiff challenges, since Indian Paper Industry has been passing through a very difficult phase due to huge cost increases and depressed market conditions. In addition, the OPIL had problems in functioning of its aging captive power plant, which led to losses during the year FY13. OPIL has already taken several initiatives to improve the performance of paper business:

a)A 55 MW power plant was commissioned in December -2012 at Amlai, M.P. This will not only overcome the bottleneck of steam and power unavailability but will also result in savings of ~INR 300 million annually.

b)New 250 million gallon water reservoirs are now fully operational,which is helping OPIL to avoid any water shortage related shutdown.

c)OPIL has taken ~12% increase in the prices of paper which has helped in reducing losses.Apart from the above Rupee depreciation had increased the cost of imports thereby, giving some respite to the industry.

Diversification into the small electrical appliances to propel growth:OPIL has launched a wide range of Electrical/Household Electrical Appliances (achieved turnover of ~INR 500 million in the first year of launch). Initially the company will trade in the aforesaid new products and will leverage its Orient brand coupled with its robust distribution network comprising of ~5,000 dealers.

Surplus land to add value:OPIL Paper plant at Brajrajnagar is non-operational since 1999. The company has applied for coal linkage for an IPP project and is awaiting an approval. Though, we believe that relevant available land can be optimally used for other purposes going forward.

Valuation:We rate a BUY rating on OPIL with a price target of INR 23.7/share. Our target price is based on SOTP valuation methodology, discounting Electrical and Paper business at 0.2x and 1x FY15EEV/Sales.

Btw:The past data of OPIL is not comparable since the Cement division has been demerged with effect from 1St April 2012. Post the demerger, the OPIL business reflects the value of the Paper, Consumer Durable business and Investments.

My view:Orient paper after the demerger has rejuvenated itself with its initiatives.The company is all set to make a sparkling turnaround in the coming quarters.Its a class company coming from a quality stable.Interest is very high in the counter because of the intrinsic value.A lot of MF's are already behind it and with the expected profits,it should attract a premium valuation.My target is 23 bucks which should get achieved over the next 4-6 months.


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.

Thursday, April 10, 2014

Tv Today network Ltd:-The next big wealth creator in making

Below penned are the couple of paid calls which were given to members a few months back.Both doing amazingly well.Also put is a fresh stock idea for my beloved readers.

1)Scripscan:Fluidomat ltd
Traded in:Bse
Cmp:68
Target:120
Return:75%
Duration:9-12 months

Strategy:The company is the only listed fluid coupling play in the bourses.A fluid coupling in a company is what an underwear(read page industries),lunch plates(Read La opala),pressure cookers,(read ttk and hawkins) is to us in our daily life.Company got a ROE of 30% with nearly a monopoly business.Management is sound and paid a sound dividend of 2.5rs this fiscal.Company has been very consistent on its numbers over the last several years.Fluidomat trades at a low single digit PE.Company is about to bag huge orders from Petronas which would take the company in the top global league.One of the very few companies which got a tremendous pricing power.Promoters stake have gone from 30% to nearly 53% in the last five years.Accumulate slowly for a 70-80% yearly return.Its kinda a safe compounder too.Company got all the potential to be a massive multibagger.At 30 crs marketcap its an amazing bargain.Personally I do own a heavy position in the stock.At some point of a time expect a research note on the counter.

2)Scripscan:Eicher motors ltd
Traded in:Nse-Bse
Cmp:4900
Target:6200
Return:25%
Duration:4-7 months

Strategy:The Royal Enfield maker is doing wonders in the bourses.A lot of HNI activity is slated to happen in the counter.Scrip is in very strong momentum.Though the price is bit high but stock market is a place where quality counters are often treated with abnormal valuations.I ain't bothered about its long term potential.But for someone looking to rake in cool moolah in a large cap masterpiece can consider it at present levels.




A high conviction bet for my beloved readers:-

Scripscan:Tv Today network Ltd
Traded in:Nse-bse
CMP:119
Target:10% in short term,20% in medium term and 40-60% in a year's time
Long term target:30-40% CAGR for coming 5 years

Note:AS you all are aware,through my VC vehicle I own the MOSL(Motilal oswal)franchise but never in my services have resorted to use their stock tips.The logic been simple-my unique way fits into the tiny micro cap category whereas MOSL only pens on known mid or large caps with yearly target return of 20-25% .Now for the first time a couple of things gonna happen.I am going to recommend a media stock assimilating mosl's research logic.Digitisation is certainly a windfall gains for broadcasters and hence don't want to miss the inevitable run in the scrips related to the sector.TV today at present prices is one heck of a medium bet.At 7x fy15 earnings,the company deserves a place in your portfolio.

About the company:TV Today Network Ltd is a company engaged in news broadcasting operations.The company is a part of India Today group and operates a network of TV news channels,namely Aaj Tak, Headlines Today,Tez and Dilli Aaj Tak.They are first Indian broadcaster to uplink from India, a 24 hour Hindu news channel.The company also has also made strategic investment worth Rs 45 Crore during FY12 in Mail Today Newspaper (Private) Limited, which publishes a news paper called Mail Today.The company has one subsidiary, namely TV Today Network (Business) Ltd.

Digitisation,a windfall gains for broadcasters:Broadcasters are likely to enjoy windfall gains as digital cable opens up the under declared pay-TV revenues. Digitisation will also ensure increase in cable capacity, which will lead to reduction in carriage cost paid by broadcasters to erstwhile analog cable oparators. The power of bargaining will shift from distribution networks to content. In such a scenario, we believe broadcasting networks will grow their profit at CAGR of 35-40% during FY13-FY17 just because of increase in subscription revenue, which will flow entirely to bottom line.

News Content's double whammy: News channels suffer double whammy as they need to pay high carriage fee on top of low subscription income as compared to General Entertainment Channels (GECs) to get their channels carried on analog networks. Carriage fee is the single largest cost item in P&L of news channels at ~30-35% of revenues. This has lead to financial bleeding of almost all news channels.Two of the three listed players are barely profitable and one is loss making for a long period of time. Digitisation will reduce the carriage fee, which will ensure better financial performance from news broadcasters.

TV Today Network, a turnaround:Surge in revenues with not much increase in associated cost will ensure a huge turnaround in operational performance of the company.The company will likely report life high profit at the end of FY14, which will also ensure RoE of ~20%.We expect revenues to grow at CAGR of 23% during FY13-15E vs 10% growth during FY06-13. This will lead to disproportionate growth in PAT at CAGR of 171% during FY13-15E vs PAT CAGR of -11% during FY06-13.

Numbers:Company reported 313crs of revenues in fy13 with PAT of 12crs.The same is set to inch up to 415crs and 69crs respectively in fy14.In fy15,company to post revenues of around 480crs on an expected PAT of 88-90crs.At around 12 times fy15,you get your target price.Company only commands a marketcap of 700 odd crs at present prices.

Valuations and View:TV Today is play on turnaround of news broadcasting business as well as general theme of digitization in media space. The stock offers attractive risk reward at ~9x FY14E EPS with ~4% dividend yield in FY14E. Historically , the company has traded at median PE of 21x and lowest PE of 9x since listing in FY04.Therefore, we believe there is a decent upside to stock in 1 year time frame even if we take 30% discount to median valuations.

My personal take:The company came with its IPO 11 years back at 95rs.Even the Sensex was at 3000 levels then.Sensex moved over 7 times,many companies became 100 baggers but TV today remained a laggard.As India  transitions to become the worlds fifth largest consumer market by 2025, its middle class will swell  by over ten times its current size of 50 million to 583  million people.We have the leading Hindi news channel in our hand which will benefit massively from that.Digitization would do wonders for the company.Not to forget the expected 4-5% dividend yield.Even on historical valuations its quoting at its lowest over a period of 10 years.Tv today as we all know owns channels like Aj Tak and headlines today.AJ tak brand is even superior to that of biggies like ICICI bank and HDFC bank.Company is terribly under owned inspite of all the multibagger ingredients.Present price offers a great chance to opt for the only recommended pure media play.Buy it for any term members.

Conclusion:High ROE+High Dividend Yield+Brand play+Hindi news market leader+Digitization+Nearly zero debt+Ethical visionary management+Under owned stock from a boring sector+A laggard for the last 11 years with no capital appreciation+Content Owner+High entry barriers+Amazingly cheap valuation+I own it too.Lolz ignore the last+.TV today over the next 8-10 years will create massive wealth for the shareholders.Go for it.


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.

Sunday, March 30, 2014

V-mart Retail ltd:-The best bet in the retail sector with multibagger potential

 Very recently recommended to the paid members at 250 odd bucks.Hardly has moved 20rs from the suggested level.Its more of a Gift to my loyal readers to make some cool bucks now.

Stock tip:-

Scripscan:V-mart Retail ltd
Traded in:Nse-Bse
Buy range:250
Target:325
Duration:4-7 months
Return percentage:30%
Long term target:Should continue to provide 30% CAGR for coming 5 years.

Business:V-Mart is a complete family fashion store that provides its customers true value for their money.V-Mart offers fashion garments at down-to-earth prices and over a period of time has emerged as the destination of choice for bargain hunters and the fashionable alike.It primarily operate in tier II & tier III cities with the chain of “Value Retail” departmental stores.The stores cater to the needs of the entire family altogether by offering apparels, general merchandise and kirana goods.“Price Less Fashion” is the Main Motto through which the company believes in providing the latest trends to the upwardly mobile Indians at the best possible price.

Stores:V-mart operates 88 stores across 76 cities in 12 states and union territories(with a total area of 7.1 lakhs sq ft,so round about 8000 sqft per store).The stores are located in prime cities such as Bihar, Chandigarh, Gujarat, Haryana, Jammu and Kashmir, Madhya Pradesh, New Delhi, Punjab, Rajasthan, Uttarakhand and Uttar Pradesh.New stores are set to be opened in smaller towns and cities in regions such as West Bengal, Assam and Uttarakhand etc.The company is among the pioneers in setting up modern ambiance stores or large retail malls across various small towns and cities like including Sultanpur, Ujjain, Motihari and more.

Why I am bullish:-

1)The average sales per sq ft has increased from Rs.507 in 2011 to around 710rs now.The management is confident of increasing the same to even higher rates(ideal sales rate just over 800 bucks according to the management) by meeting the aspirations of people by proving quality fashion at affordable prices.The inventory days has improved from 104 in FY12 to 92 in FY13.Present breakup of product mix is 86:14 in apparel:kirana stores. The company plans to take it to 90:10 in about 2 years which will provide higher margins.

3)What is like the most about the company is its concentration towards the Tier-3 cities,huge growth potential with not much competition(Likes of Trent,Shoppers stops or even Big bazaar would probably never come there in the next 5 years).The store guidance given by them stands at 94 by march 2014.The company plans to add up atleast 25 stores for the coming few years.Its a simple calculation.So 50 stores would come up in next 2 years.It takes about 2500 bucks to set up per sq ft(1300rs store and 1200 bucks inventory).So on a capex of 100crs(again no debt or equity dilution but to be funded by Ipo money and from internal accruals),calculate the sales folks.

4)The company has been an amazing performer over the last several years.Both sales and profits have grown at over 35% CAGR respectively for the last 5 years.The company ended fy12-13 with revenues of 383crs accompanied by a PAT of 18crs.In the 9 months of the present fiscal,it has already done revenues of 395crs and a PAT of 24crs.The company is expected to end the fiscal with revenues of 500 crs and a profit of 29crs(last quarter isnt the strongest quarter and contributes around 17% on an overall basis).Further for fy15,the company is expected to grow by 40%(700crs of revenues and  around 42crs of PAT).

4)A lot of retail companies like Vishal killed themselves by opting for massive debts.Retail as a sector always remained an area of interest but due to high leveraging and exorbitant valuations,(industry PE at around 40 as per estimates of Moneycontrol)I gave them a miss.But with V-mart,say debt equity of .2 and quoting at less than 12 times fy15 earnings with management guidance of 30% CAGR growth for the coming decade, gives me the impression of having a massive probable multibagger.A mere multiple of 15 on fy15 earnings, helps me to arrive at the target price of 325 bucks.

Conclusion:The company bunches store locations of about 150-200 km from each other, allowing economies in sourcing and distribution.Working-capital cycle has remained steady over the years, and is on a par with its retail peers. The company enjoys superior margins in comparison to its counterparts on account of lower rentals and meagre employee cost.V-Mart is now concentrating on high margin apparel and non apparel segment where the gross margins are around 35%,much higher than kirana stores which sees around 13% margin.Company should comfortably generate around 20% ROE in the coming many years.This is a very simple yet an attractive business which has got massive growth potential.The FII's and MF's have bought huge amount of shares from the open market in the last few months.Promoters are neat,visionary and seem committed towards making money for themselves and for the minority shareholders.A scrip which has got all the potential to write a scripture for itself.


 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.

Monday, March 17, 2014

Ratnamani Metals and Tubes Ltd:-My birthday gift to the paid members(Turning 26 years on 20th of march).Enjoy the metal multibagger

Quote: Ratnamani was recommended to paid members just hardly a couple of weeks ago.

Guys it has been a great blogging journey for me since the last 7 years.The blog has got tremendous response and accolades from all over the world.It has been visited over 1.7 million times since its inception.I am quite determined of doing the same work of guiding you people till eternity.Anyways being my well wishers and admirers, I feel great to let you folks know that I am turning 26 years of age on day after tomorrow,i.e,20th of march.You can send all your blessings and wishes by either mailing me or texting me on my number.Please put your name folks so that I can figure you out.


 Stock tip:-

A high conviction bet:-

Scripscan:Ratnamani Metals and Tubes Ltd
Traded in:Nse-bse
Buy range:150-162rs
Target:10% in short term,20% in medium term and 40-50% in a year's time
Long term target:25-30% CAGR for coming 5 years

Business:Ratnamani Metals and Tubes Ltd produces carbon steel welded pipes and stainless steel welded/seamless tubes and pipes.It got a stainless steel capacity of 27,000 metric tonne (20,000 for welded pipes and 7,000 for seamless pipes) and 350,000 tonne of carbon steel.Ratnamani provides high frequency welded pipes, electric resistance welded pipes, saw pipes, seamless tubes and pipes, welded tubes etc. The company serves various industries including power plants, refineries, water distribution, petrochemicals, fertilisers, irrigation, process industries and oil and gas sector.Ratnamani has an impressive clientele comprising major public, private and joint sector Companies in the country who are leaders in their respective segments.The company exports its products to around 16 countries.Over the years company has expanded its capacities to handle more critical grades and specialty tubes for the stainless steel division along with increasing capacity of carbon steel pipes on the other. Ratnamani's manufacturing facilities are located at Chhatral and Indrad on Ahmedabad – Mehsana Highway and at Bhimasar, Kutch, on Bachau – Anjar Road.

Fiscal 12-13:Despite the challenging scenario,the Company continued to be successful and has performed well.The major factors attributable to this include strong business initiatives strengthened with the sound domain knowledge, consistent product quality aligned to customer expectations, product mix, captive skills partnered with cost consciousness and persistent focus on efficiencies.During the year 2012-13, revenues from operations were Rs. 1200crs though reduced marginally but PBT increased by 44.80% from Rs. 139 crs to Rs 201 crs and profit after tax surged 44.15% from Rs. 94 crs to Rs. 136 crs.EPS went up by 21.92% from Rs. 23.90 to Rs. 29.14,strengthening shareholder''s value.Company basically capitalized on the interest front as its debt came down from 275crs in fy12 to just 120crs in fy13.

What I like the most:Ratnamani with over 50% market share is the leader in production of stainless steel pipes.It also got the distinction of India's only company to be approved by Nuclear Power Corp to supply pipes for heat exchanges in nuclear reactors and instrumentation tubes.Its diversified clientele insulates it from the vagaries of any sectoral slowdown.On words of the management,"We have consciously turned conservative, concentrating on only those segments where we see good potential for growth. We are now focusing on the stainless segment and high-value products to ensure that returns stay healthy".The company enjoys one of the best operating margins in the industry,thanks to its initiative of buying inputs on bulk only when the orders are ready to be executed.There's not much inventory to talk about either.Sales have grown at an amazing speed of 29% in the last 10 years,from 118crs to 1200crs in fy13.Profits too have galloped at a superior pace of 48% CAGR,4crs to 136crs.Company has managed the slowdown perfectly and has been able to grow its profits year after years.It will continue to grow 15-20% for the coming few years,ones the cycle picks up Ratnamani may even grow at say 40-50% CAGR.

Conclusion:Net profit of Ratnamani Metals & Tubes rose 13.59% to Rs 35.94 crore in the quarter ended December 2013 as against Rs 31.64 crore during the previous quarter ended December 2012. Sales rose 28.09% to Rs 334.41 crore in the quarter ended December 2013 as against Rs 261.08 crore during the previous quarter ended December 2012.The business model is one of its kind.With manageable debts and signs of a revival in the cycle-Ratnamani looks all set to perform extravagantly again.The company will end the fiscal with revenues of around 1320crs and a PAT of 145crs.Its trading at just 5 times its fy14 earnings(fy13-14 EPS expected to be 33 bucks).So how to value a company which has grown by leaps and bounds,survived the down cycle and managed its profits well,got ROE and ROCE of over 20% backed by a visionary pedigree and investors like Nalanda and IDFC?Buy it for any term folks.As soon as the market realizes the potential and the story,scrip would get heavily rerated in the bourses.The company has never skipped a dividend in the last ten years.Ratnamani over the last 12 years has seen its stock price moving over 100 times.With its business model and sound strategies in place,it looks to be another 10 bagger in the coming 7-8 years.Huge upsides and limited downsides to make the quintessence.


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.
 
 Regards,
ARUN 

9804589299

Sunday, March 9, 2014

Omnitex Industries ltd:-Can Strata India be the next big multibagger?

Note:This isn't your multibagger or my paid call or even a recommendation to clarify beforehand folks.Its a tiny cap with a mere 5crs market cap.I am penning the details or the quintessence which caught my eye.I invite a general discussion on the counter.You people try to dig more about the company,anything and everything helps in markets as you know.

Scripscan:Omnitex Industries ltd(Strata India)
Bse code:514324
Cmp:14
Marketcap:5crs

Note:In 2009 or probably 2010,similar company called Subuthi Finance(now Indus finance)was suggested at 8 bucks as the company was holding truckload of Indowind energy.Subuthi from 8 in a matter of few quarters moved all the way to 339 bucks.

Quote:I have called Omnitex guys a few times and every time I was asked to mail them up which eventually was done but till date no reply has arrived from their desk.On calling the Omnitex given phone number in Bse,one is greeted by the message of "Welcome to Strata India".Plan to meet them up in due course.You folks try to grill them up too.

About Omnitex:Omnitex is a company with no core business.So before you start to sense irrational stuff,pay heed to the details.It owns around 30% in its JV company called Strata Geosystems and there lies my interest.Company's paltry income is of basically licence fees received for premises and amenities from Strata Geosystems.Google up to know more about Strata or even a close eye on the care ratings will do a world of good too.

Care ratings:Ratings are mostly unbiased stuff which provides mostly everything about a company.Here's the link(http://tinyurl.com/nyvbw9h).Am pasting the CARE rating's nutshell.

Background:Strata Geosystems is a JV promoted by Omnitex and Strata Systems Inc.SGIPL is engaged in manufacturing of Geogrids along with providing end-to-end solutions from designing to execution of constructing retaining wall for approach to fly-overs.The manufacturing facility of SGIPL is located at Daman & as of March 31, 2013 had the capacity to produce 4.50 million sq.mtr of Pet Geo Grid per annum.In FY13,company was also engaged in trading of Geo cell and in FY14, the company is setting up a plant to manufacture the same at an estimated cost of Rs.3.33 crore.Furthermore the company is an exclusive distributor of BEBO arch system in India.

Increase in scale of operation coupled with healthy order position:During FY13, the total income of SGIPL’s grew by 21%, mainly due to increase in orders received for both manufacturing of geo grids coupled with receiving orders for providing end-to-end solutions.However, overall scale of operations remains modest with operating income of Rs.63.32 crore and PAT of Rs.2.42 crore.On H1FY14,it reported total income of Rs.27.00 crore.SGIPL has order book of Rs.138 crore as on October 01, 2013,out of which approximately 50.00 crore will be executed by March 2014.

Improvement in overall gearing:Overall gearing improved 0.52x as on March 31, 2013 from 0.74x as on March 31, 2012 primarily on account of repayment of term loans and accretion ofprofits.Moreover, SGIPL has comfortable liquidity position in the form of un-utilized working capital borrowings (as the average monthly working capital utilization was around 49% for the past twelve months ending September 2013.

Decline in operating profitability leading to marginally deterioration in debt coverage indicators:The operating margins of SGIPL declined by 670 bps during FY13 vis-à-vis FY12 primarily on the account of comparatively lower realizations coupled with write off bad debt amounting to Rs.1.90 crore. However the operating margins continues to moderate.

Introduction of new products & services resulting in moderate capex:As discussed above, during FY13, SGIPL has ventured into trading of Geocells and has plans to set up a manufacturing unit for the same.Furthermore, the promoters has also planned new vertical for design, supply and construction of bridges using precast archbridge technology. The company will source technology from Swiss based BEBO Arch International AG.The company is developing moulds for bridge arch with a total cost outlay of Rs.1.00 crore.Thus going forward, ability of the company to successfully diversify its revenue stream and complete the aforementioned project,without any time and cost over-run, shall be critical from credit perspective.

Prospects:SGIPL’s prospects will largely depends on its ability to increase the scale of operations via continuous flows of orders from infrastructure sector in the scenario of slowdown. While increasing awareness towards the technical textiles would be crucial for its future prospects in India.
(Source:Care Ratings)

Positives:-

1)1)Strata geosystems growing at a rapid speed(Company has grown over 50% CAGR since inception).Even its counterpart Maccaferri India aims to be a 1000cr turnover company in next 5 years with growth of 50% CAGR(http://www.business-standard.com/article/companies/maccaferri-eyes-robust-growth-targets-rs-1-000-cr-turnover-111032900215_1.html)

3)Robust clientele,comfortable debt equity ratio,great pedigree team(mostly IIT folks,Checkout in linkedin).Just read more about the background of guys who are the promoters of Omnitex or say who owns a lot of shares in Omnitex.The likes of "Ashok Bhawnani,Narendra Dalmia-People of great repute and incredible entrepreneurial skills with extravagant successful past track records.

4)Industry is new and growing at 30% per annum.Maccaferri and Strata have got lot to gain.Their business is confined to just 5-10% of the entire construction spending. However, the amount of quality and savings they ensure for the developers are phenomenon. Hence, the growth is certain.Strata recruiting daily,can find jobs in google with good million yearly package.

5)Promoter owns 20% of strata in their name and 30% through Omnitex,if they put the remaining 20% in Omnitex in lieu of warrants,story will change and stock will get massively re-rated.Also since Omnitex has given a corporate guarantee of 21crs,it obvious the minimum value of Omnitex assets are worth atleast 21cr,so the present marketcap of 5crs is not even 25% of its asset value.


Concerns:-

1)In fy09 shares were issued at 60 when PAT was mere 16 lakhs.In fy12 again shares were issued at 60,valuing the co. at only around 4xFY11 earnings.Omnitex applied for only 8718 shares during FY12 & its stake got diluted from 33.88% to 29.5%.Omnitex invested only 5.23 lakhs for 8718 shares, even though it found money to give 17 lakhs inter corporate deposits.

3)The corporate guarantee given by Omnitex to Strata increased from 10Cr. to 21Cr.For this, Omnitex is not receiving any guarantee commission which is generally ~ 2% of the guarantee amount or 42 lakhs p.a.Though on the reverse,strata is saving that amount which is helping some cost reduction.

3)Strata would continue to grow but if they allots more shares and Omnitex stake gets diluted(Provided omnitex refrains from subscribing),shareholders of Omnitex would never benefit or any re-rating may never occur.Also its a call auction category scrip with 2week average trading volumes of just 800 odd shares.

 

Valuation:Holding companies typically trade at 50% or a bit less than the their intrinsic holding value.Since there's no direct listed player in the segment and also considering Strata's amazing management team and with robust growth prospects,I prefer to value it on 1 time marketcap/sales.Strata as per the order book position would end fy13-14 with 77cr sales.So applying my valuation metric,77cr is the valuation for Strata Geosystems.Now the listed Omnitex India owns around 30% in Strata geo(30% of 77crs comes at 24crs).After putting a 50% holding discount,we arrive at a value of 12crs.Also as pointed out,Omnitex properties are atleast worth 21crs.So on adding up the values,we get much superior valuation for omnitex.It would also be prudent to note that Strata is expected to perform amazingly once the infra cycle picks up.Say even 50% CAGR is not a big deal as it has already proven its execution skills(albeit on a small scale),the low base effect will also help.I mean considering the prevailing tough environment,its still a cash positive profit making company with comfortable interest cover.So if Strata even grows at 40% cagr,the stock price of Omnitex should follow suit too.Provided there's no malpractices and 40% Strata geo growth(from 77crs in fy14 to 295crs in fy17).So again if Strata makes it 290crs revenues in next 4 years,Omnitex with 30% stake and 50% discount value,will have a value of 45crs or 108rs per share.Present market cap is just 5crs folks.

Disclosure:Bought 280 shares on last week.Intent to buy a few more.


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.

Tuesday, February 25, 2014

DHP India Ltd:-The hidden gem which is set to become the next 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 related 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.


Quote:Dhp India was suggested few quarters back(http://tinyurl.com/nfx5ogp) to my readers as the microcap of just 10crs marketcap was looking very interesting.The company is buzzing as it has bagged few major orders.I have been able to gather a lot more information on the company which will be updated shortly.Coming quarter numbers should be spectacularly good.All in all a tiny cap to watch out for.

Recent numbers:Net profit of DHP India rose 408.70% to Rs 2.34 crore in the quarter ended December 2013 as against Rs 0.46 crore during the previous quarter ended December 2012. Sales rose 89.70% to Rs 11.23 crore in the quarter ended December 2013 as against Rs 5.92 crore during the previous quarter ended December 201.

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.

Sunday, February 2, 2014

Selan Explorations Technology Ltd:-The company which made more money than Warren Buffett in the last 10 years

Paid members have enjoyed a 25% rise in Selan since its call a couple of months ago.Its time for blog readers to enjoy this amazing multibagger.

Stock Idea:-

Scripscan:Selan Explorations Technology Ltd
Traded in:Nse-bse
CMP:300
Target:450
Return percentage:50%
Duration:9-12 months
Long term Returns expected:30% CAGR for next 5 years.

Note:Trying to pen in most simple words.Please read it meticulously and understand why you need to buy the stock.

Story:Selan Exploration is into exploration & production of oil & gas.It currently operates 5 small fields in Cambay onshore-Lohar, Bakrol, Indrora, Ognaj and Karjisan.These oil fields were awarded to the company in 1995-2000 under a Production Sharing Contract (PSC) with 100% participating interest by the Government of India.Selan was subsequently awarded two more fields in Gujarat namely Ognaj Oilfield and Karjisan Gas field.In-place resource stands at 73 mmbbl(million barrels)& 7 mmbbl in Bakrol & Lohar respectively.Production level is currently at ~660 bpd(barrels per day).The company sells its crude output to Indian oil at a discount of 5% to Brent.Five points to qualify Selan exploration as a great medium to long term buy.

1)As of now, the company is producing oil from only 2 fields,Bakrol & Lohar.Management has also indicated that Indrora Oilfield contain far larger quantities of recoverable oil than Bakrol.Let us conservatively assume 100 Million Barrels of Oil Reserves under Selan.Selan's reserve would get valued at many a thousand crores.Selan recently has completed drilling of 2 wells, commercial production is expected to happen any day now.Further drilling is also going on.Company has a marketcap of only 500crs.It delivered a revenue of 97crs and PAT of 45crs respectively for the last fiscal 2012-13.

2)Previously, the technology recovery rate of exploration activities was ranging from 10-20% from the total potential reserves in Gujarat.But with the latest technology implementation of 3D contour mapping this recovery rate has gone up to as high as 50-60% for the similar fields.Contour mapping is just like a magnetic resonance imaging(MRI) scan of a human body.Stunning management quality and they are committed to make huge amount of shareholders wealth in the coming years.It buybacks(7 buybacks in the last 10 years),it allots warrants,it generates huge amount of cash,it has got a wonderful under leveraged balance sheet.Selan is one sure shot winner for the longer run.

3)Numbers has been flattish so far over the last few years as it was consolidating its resources and investing a lot in its proven fields.Over the next few quarters the company would actually be in a position to ramp up production massively and deliver an EPS of 60(2014-15).Value it as per the sector and the valuation would be in 4 digits.Even if at the present juncture we see the valuation of selan;EV/reserves of less than 1,marketcap to sales of around 5 with high double digit return ratios,its the cheapest oil exploration company in the bourses.

4)Selan's production cost is $11 per barrel, which is reasonably low.Company pays $5 per barrel as Royalty to the government.The stock has delivered an annualized return of over 41% from 2003 to till date,much superior to the broader market(Selan was at 10rs 10 years ago).Hell,its even higher than what "Warren Buffet Sahab"s berkshire hathaway delivered in the same period.In my view creating and delivering shareholder value has been well handled by Selan. Selan is now all set to start the process of returning value to shareholders while they continue the value creation process.

5)Crude oil demand is projected to increase to about 1600-1800 mn barrels per year. Rising global crude oil prices have triggered increased domestic exploration and production activity.All this factors makes Selan a big beneficiary and helps one to have a lot of conviction on the stock.Selan posses robust fundamentals,amazing pedigree quality,mind boggling prospects,low business risk.Over the next few quarters it can have a production level of about four to five lakh barrels per year, which can lead to a cash flow of over Rs 150 crore.Have put a 8 times forward earnings to arrive at the target price.Selan is a stock which can be kept for lifetime.Make it a part of your core portfolio folks.


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.  

Thursday, January 23, 2014

PTC India Financial Services (PFS):-The next big multibagger with incredible potential

Quote:Another recent paid call which is up 30% but got a very long way to go.Readers enjoy the multibagger idea.


Multibagger Stock Idea:-

Scripscan:PTC India Financial Services (PFS)
Traded in:Nse-bse
Cmp:11
Target:44
Percentage return:400%
Duration:3 years

Business:PTC India Financial Services Ltd (PFS) is promoted by PTC India Ltd (PTC) as a special purpose investment vehicle to provide total financial services to the entities in energy value chain, which inter-alia includes investing in equity and/or extending debt to power projects in generation, transmission, distribution; fuel sources, fuel related infrastructure like gas pipelines, LNG terminals, ports, equipment manufacturers and EPC contractors etc.PFS also provides non-fund based financial services adding value to green field and brown field projects at various stages of growth and development.

Note:I attended the conference call of the company held recently.The conference transcript/points itself is more than enough to suggest the counter to you folks.

1)Loan disbursement during Sep'13 quarter stood at Rs 549 crore, growth of 66% y.o.y.Management strongly believes the company is set for an exponential growth in terms of revenues and profits in next couple of years.

2)During the next couple of years, as per the management, the idea is to cash in the equity investments of about Rs 435 crore( invested in 5 projects as equity, of which 2 investments are based on buy back mode, and need not have to worry for projects to commission) that the company has made so far and also to venture in financing new infrastructure space apart from power, i.e. into roads; coal mines developments, railway works and T&D projects.

3)Management also expects that the reform initiative taken by government will accelerate further in the coming months and more clarity will emerge on coal blocks and health of discoms.

4)Yield on assets was lower to 13.57% for Sep'13 quarter as compared to 14.19% for Sep'12 quarter largely due to shift from short term disbursements to more long term disbursements.Yields from short term disbursements for loans like for bridge funding etc are better than yields on long term disbursements. Interest spreads stood at 4.88% during Sep'13 quarter and management expects the spread to remain around these levels for next few quarters.

5)Of the total loan asset of Rs 3125 crore as on Sep'13, nearly 40% constitute renewable energy and rest are thermal based assets. Renewable, especially wind generally takes about a year's time for capacity to go on stream as against thermal, which on an average takes about 3 years. Hence the share of renewable is going up, due to faster addition of capacities.

6)Renewable loan book stands at around Rs 1200 crore, of which Rs 1036 crore belongs to wind energy, Rs 221 to solar and rest are biomass energy book.

7)Company has total loan book of about Rs 2400 crore, of which Rs 900 crore are Long term loans, Rs 700 crore are short term, Rs 470 crore ECB, Rs 120 crore debentures and rest are bonds.

8)GNPA was unmoved at slightly less than Rs 5 crore. Management continues to be positive on the health of assets and does not anticipate any further increase in NPA's.Other income is higher as it constitutes fee based income from loan syndication and lead institution activities.

Quintessence:PFS reported Nil Net NPAs.Debt sanctioned at Rs 10132 crore, as on Sep'13.Total outstanding loan assets stood at Rs 3125 crore as on Sep'13.Capital Adequacy Ratio as on Sep'13 stood at 32.31%.Promoter's shareholding as on Sep'13 stood at 60% and none of the shares are pledged.

Performance for the year ended Mar'13:For the year ending Mar'13, Interest income stood at Rs 251.32 crore, up by 89% y.o.y.Interest expense stood at Rs 101.17 crore, down by 47% resulting in 133% increase in NII at Rs 150.15 crore. The other income was down by 25% to Rs 35.21 crore resulting total income of Rs 185.36 crore, up by 66%. Other income for FY'12 includes income from sale of certified emission units of Rs 4.63 crore as compared to Nil for FY'13.Operating expense was down by 19% to Rs 30.07 crore. PBT before profit on sale of equity investments was up by 109% to Rs 155.9 crore. There was a profit of Rs 127.24 crore for Mar'12 year, being profits from divesting equity stake in 2 companies namely Ind-Barath Power generation and Indian Energy exchange, as compared to Nil for Mar'13 year.PBT after profits on sale of equity investments and emission units, stood at Rs 155.29 crore, down by 23%. After providing total tax of Rs 51.13 crore, up by 7% y.o.y, the PAT stood at Rs 104.16 crore, down by 32% y.o.y.

Performance for the half year ended Sep'13:For H1 FY'14, PFS reported net sales of Rs 195.66 crore, up by 47% y.o.y. Interest expense was up by 99% to Rs 85.70 crore, as NIM was down by 192 bps to 6.93% resulting a NII of Rs 109.96 crore, up by 22% y.o.y. For H1 FY'14, the other income stood at Rs 1 lakh as compared to Rs 21 lakh for H1 FY'13, resulting total income of Rs 109.97 crore, up by 22% y.o.y.Operating expense was up by 120% to Rs 23.32 crore.Operating expense include MTM forex loss of Rs 9.34 crore as compared to forex loss of Rs 1.88 crore for H1 FY'13. Provision for H1 FY'14 stood at Rs 4.14 crore as compared to Rs 3.28 crore for H1 FY'13. Thus PBT was up by only 8% to Rs 82.51 crore. Total tax was up by 13% to Rs 28.06 crore and PAT for H1 Sep'14 stood at Rs 54.45 crore,up by 5% y.o.y.

Future numbers:As per my calculations assimilated with the management guidance,this is what the company will deliver.Present fiscal loan book should be over 4200crs.Fy15 loan book of 8000crs,fy16 will be around 12000crs.It would be prudent to note that the company needs no funds till 25000crs loan book,so no dilution or destruction of wealth in the offing.So even I consider 10000crs loan book and a 4% NIM,the pbt figure comes at 400crs for fy16.Equity investments will further chip in with 150crs of PBT.So 550crs of PBT for fy16 or say around 400crs PAT.Its presently quoting at trailing earnings of a tad low than 7 times.If the number vindicates,turn to fy16 or start counting fy17 numbers,give it a 7 trailing PE and you get the target price of 44 bucks.As its dividend policy if it pays 20% of its PAT(400crs),you get 80crs as dividend or over 1.5rs dividend per share,resulting in a forward yield of 14% at present prices.

Conclusion:Its a terrific unnoticed company backed up with a robust pedigree team,say  kinda an all-rounder in its own regard.At 11 bucks you get to satiate your penny priced multibagger desires.You get the taste of private equity investment play.You get a zero NPA company which is set to deliver very high CAGR growth at least for the next 3 years.You get a high dividend play as it pays more than 20% of its PAT as dividends,last year being 40 paise per share.With higher profits in the coming years,higher will be the dividends.At 11rs there's no downsides either.Over a period of 3 years,the company is a probable multibagger.A 400% return or a 4 bagger awaits the folks who can stay put for only 3 years.


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. 

Thursday, January 9, 2014

BDH Industries Ltd:The penny priced pharma multibagger stock with intrinsic value of 250 bucks

Quote:Another paid call to members which has moved up over 50% in the last 4 months.Can move up further from here too.

Hidden Gem:-

Scripscan:BDH Industries Ltd
Bse Code:524828
Cmp:16
Target:30
Duration:9-12 months
Target return percentage:85%+6.5%:91%

Div yield:6.5%
Special mention:1 re dividend,X date 20th august.

Business and product range:BDH Industries engages in the manufacture and sale of therapeutic formulations covering a range of pharmaceuticals worldwide.Its products include antifungal, antibiotics, anticancer, antidiabetics, antidepressant,antiulcerant,anti-emetics, corticosteroids, diuretics, vitamins and minerals etc and skin protective products in the form of tablets, capsules, injections, oral suspensions, creams, syrups, ointments, and topical powders.The company also provides specialty formulations in therapeutic applications comprising electrolyte replinishers, narcotic analgesic, and non-steroidal anti-inflamatory. In addition, it offers various bulk drugs, such as azithromycin dihydrate, erythromycin stearate, erythromycin estolate, erythromycin base, and erythromycin ethyl succinate. Further, the company manufactures SOULFIL,an oral pill for the treatment of erectile dysfunction in men.Thanks to a dedicated R&D team, BDH is poised to conquer new heights, having only recently joined the sparse ranks of companies manufacturing anti-cancer formulations in India.BDH's state-of-the-art manufacturing facility won GMP Certification from WHO way back in 1982. Today, it has accreditation for more than 170 products and represents a perfect balance between the five M's - Man, Machine, Materials, Methods and Measurements.

Exports and Accolades:BDH today exports a wide range of finished pharmaceutical formulations and bulk drugs to leading organizations in several countries including Australia, Bolivia, Denmark, Dominican Republic, Germany, Ghana, Japan, Kenya, Madagascar, Malaysia, Mozambique, Netherlands, Niger, Nigeria, Papua New Guinea, Yemen, Singapore, Sri Lanka, Sudan, West Indies, Zambia, Zimbabwe etc.The Government of the India has accorded "Star Export House" status to BDH and also accredited with WHO-GMP Certification since 1982 and ISO 9001:2008 by SGS (UK) Limited."Federation of Indian Export Organisations (FIEO) Export Award "NIRYAT SHREE" 2001-2002 & 2008-2009."Good Corporate Citizen” Award by Bombay Chamber of Commerce & Industry 2010"."State Pharmaceutical Corporation (SPC) Sri Lanka Merit Award 2010"“STAR Export House” status by Govt. of India."WHO-GMP Certificatation since 1982, renewed WHO-GMP in 2010"."WHO-GMP Certificatation for over 170 products"."ISO 9001:2008 Certification from SGS UK Chemexcil TOP Export Award"."Chemexcil Trishul Award for Consistent Export Performance"."Government of Maharashtra Export Award"."Ministry of Commerce's Award from the President of India".

Future Prospects:The implementation of modern technology in the production processes shall yield better results.Consistent efforts are made by the company to introduce technology upgradation and comply with guidelines relating to GoodManufacturing Practices.It has been registering products with various countries.Also there are visits by various MOH (Ministry of Health) of various Governments as well as customers.Pharma business has detailed procedure for registration and it takes nearly 6 months to 24 months for completing the registration and begining of business.The gestation period is high due to various stages of operation by every country in their own way.The medicines of the company are marketed at the lowest prices in the world at the same time high standard is maintained.Being in pharma sector,inspite of some limitations, decent future growth in business is expected in Domestic as well as Export markets.The company is also on a hiring spree suggesting higher demand for its products,one can find several of its jobs in the leading job portals.Penning an analysis on a 9crs company is incredibly tough where there's hardly any information to work upon.Hunch backed up by making out of hints in no time leads to success in stock picking.From hiring to awards all are a testimony to the fact that this penny stock posses the needed ingredients to be a bigger one in the coming period.

Realty story:BDH stands out for Bombay Drug House. Company's plant is located on 2.7 lac sq ft at Kandivali east adjoining to Big Bazaar in the prime location of Kandivali.The FSI there is 2 which give saleable area of 5.4 lac sq ft on which 30% loading is permissible and feasible. Thus total saleable area works out to 7 lac sq ft and the existing market rate is Rs 5000 per sq ft. BDH has a manufacturing are spread over 42,500 square feet though the entire space is 270,000 sq ft.Co owns land and development cost is estimated at Rs 2000 per sq ft which leaves post tax profit ( 30% assumed) of Rs 2100 per sq ft.The clear tax free profit could be Rs 147 Crore on equity of Rs 6 Crores offering earnings of Rs 240 per share.Shifting cost is not in excess of Rs 15 Crore which hardly matters.Rumuors are that one of the leading Mumbai Builders has approached the co with a outright sell of the said land for Rs 125 Crore which was refused by the co.Since the property is adjacent to Big Bazzar, chances of Pantaloon or RIL stepping in is not ruled out.So if it vindicates all these then BDH is all set to make history in the bourses.Again the same has been there for eternity now and yet nothing has happened.It may so happen that nothing happens in the next decade too.

Conclusion:Its a small cap pharma counter with just a marketcap of 9crs having an equity of around 6crs.The company has guided a CAGR topline as well as bottomline growth of 35-40% for the coming couple of years(Profits should grow higher than the guidance,say 45-50%,thanks to the USD rates).For fiscal 2012-13 it delivered revenues of 40crs with a profit after tax of 1.67crs.The company has been very consistent too with its number over the last five years.The recent June quarter result further entails more confidence.Net profit of BDH Industries rose 123.81% to Rs 0.47 crore in the quarter ended June 2013 as against Rs 0.21 crore during the previous quarter ended June 2012. Sales rose 32.73% to Rs 9.57 crore in the quarter ended June 2013 as against Rs 7.21 crore during the previous quarter ended June 2012.It has a great payout ratio and pays more than 30% of its profits through dividends.The company has declared a dividend of 1 re and its going XD on 20th of august.So whoever will purchase the shares till 20th of this month will avail the dividend yield of nearly 6.5%.On a valuation parameter it quotes at less than 3 times its expected fy15 earnings of 6rs.The promoters own 55% stake in the company.Considering its small scale, I put a modest multiple of 5 to arrive at a cool price target of 30 bucks.Any news on the realty part can take the stock price to levels which I cant fathom at this juncture.Downsides are very limited from the present prices.

BTW:Its a call auction based scrip and thus trades with low volumes.Please don't make any haste to pocket the counter.One will get enough time and opportunity to avail the shares.Keep aside your impulsion to win big from stock markets.
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.

Tuesday, December 24, 2013

Paushak ltd:-The undiscovered hidden gem with multibagger potential

Recent paid call recommendation to members which is already doing wonders.

Medium term news based stock idea:-

Scripscan:Paushak ltd
Bse code:532742
Buy range:130-142rs
Target: 175rs.
Duration:4-6 months
Return percentage:25%+

Quote:Its a news based play so a long note is unwarranted.Am just penning the quintessence.

Business:Paushak is part of the Alembic group of companies situated in Gujarat.Alembic Ltd is the oldest pharmaceutical company in India founded in 1907 and has celebrated a "hundred years of excellence". Over the years Paushak has established a multi-product capability in Phosgene & its derivatives manufacturing.Paushak's vision is to be a leader in strategic supplies of phosgene intermediates and development compounds to pharma, agro & speciality chemical companies worldwide, using novel technologies in a safe and clean environment.

Point to note:Paushak is one company which am tracking for the last few years.I have always thought of suggesting it to members at levels like 55,98 and 124, yet every single time it moved up only to consolidate at superior levels.I feel with the bonus rumuor coupled with robust expected quaterly numbers,scrip offers an interesting opportunity for folks who can stay put for a period of 4-6 months.

News:Company has a very tiny equity of 3 odd crs.Its hard to get the scrip in good quantity.Interested fraternity including myself always conveyed the message of a liberal bonus but its been of no avail so far.But now with 34crs of reserves and virtually negligible debt,company is expected to announce a bonus issue.Company reported turnover of 50crs accompanied by a PAT of 7.7crs for fy12-13.This fiscal the same will inch upto 65-70crs with an expected PAT of between 12-13.5crs.

Track record&Ratios:Paushak has been a very impressive performer over the last several years.Over the last ten years,sales and profits have grown at a very healthy CAGR of 26% and 60% respectively.Even on a return on equity metric it qualifies on good merit(overall double digit with last fiscal being over 22%).The company has a high book value of around 140 bucks.Debt has been consistently reduced over the last few years.At present it just got a debt of around 1cr,company should be a debt-free entity within the next fiscal.

Valuation:Company quotes at a very attractive forward valuation of just 4 times.I expect the bonus news to follow with the annual numbers.Even if it doesn't vindicate,scrip should still hog the limelight because of the robust numbers.A mere 5 PE too gives you the target price.An unnoticed gem overall.


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.

Monday, December 9, 2013

My Hidden gems/Multibagger recommendations for all of you

Just around a month back penned the below note for the paid members.Some prices may have changed a bit.Hope it will help the readers too in making cool bucks.


Request granted:-

Members often come with different request as far the calls are concerned.To summarize them and answer all of them in once, here's what I came up with.You can buy the counters at present market levels.

1)I want a scrip which will protect downsides but will continue to provide me solid dividend yield of 5-6% for coming several years?

Ans)Jenburkt pharma ltd(cmp 70)



2)I want a midcap bet which has all the ingredients to be a large cap.It should be able to generate huge amount of cashflows,a market leader and a counter which must posses amazing return on equity?

Ans)Symphony ltd(cmp 375)

 

3)Name a penny priced stock,probably a turnaround candidate with a good business model and decent pedigree in place.It should have the possibility to be a 10-20 bagger in the coming 3-5 years?

Ans)JHS Svendgaard lab(cmp 5)

 

4)I have made good money in demerger cases,examples are numerous from reliance to Indiabulls.Name a counter which is a demerger candidate and which will provide huge gains in the years to come?

Ans)Microsec ltd(cmp 22)

 

5)Tell me a bank bet with high growth potential with a high dividend yield?

Ans)Jammu Kashmir bank(cmp 1280)

 

6)A largecap stock which you feel will double over a period of next 3 years?

Ans)Kajaria ceramics(cmp 230)

 

7)Name a counter which has been a massive flop but may be a huge multibagger like your previous recommended counter like La opala,cera canitariware and wochkhardt.Little bit of risk is affordable?

Ans)Jai balaji industries(cmp 16)

 

8)A bet which has already achieved your target but can even double from present levels?Please name a high growth bet?

Ans)Acrysil ltd(cmp 130)

 

9)A profitable company with a great management which you feel already deserves a very superior price but is undervalued for unknown reasons?

Ans)Tata Elxsi(cmp 228)

 

10)Just for sake of curiosity, name five small cap companies which you are presently researching actively?

Ans)Stone India,Mukesh babu financial,Elegant marbles,Titan biotech,DR Agarwal hospital.



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.

Monday, November 25, 2013

Tata Elxsi ltd:-The Diwali stock idea and also the Multibagger idea

The Diwali stock idea and also the Multibagger idea:-

Scripscan:Tata Elxsi ltd
Traded in:Nse-Bse
Buy range:200-220 rs
Target:280
Duration:6-8 months
Return percentage:27%-40%

Story:Seriously had one heck of a time in choosing the special Diwali pick.I satisfied myself through every means,studied each and every details meticulously,presumed retail gullible investors mindset and zeroed in on the company name penned above.Its not a small cap which you folks would clamour about limited volumes in the bourses or its not the typical large known cap which has presumably got its future return capped at 10-15% CAGR for coming few years.Tata Elxsi is all about the class,the Sunrising business model company with an amazing future ahead.


Quote:'CMC, Tata Elxsi, CRL & Tata Tech are each a TCS in the making in their respective sectors'-S Ramadorai.


Note:Now when that comes from the man who is responsible for TCS's 4 lakh crs marketcap(ya you read that correct 4 lakh crs)you ought to feel the Midas touch already.It would be prudent to note that Mr Ramadorai is the Chairman of my recommendation today.One may question me about why the discrimination among the four companies he named?Why tata elxsi and not the other three?The answer is simple folks.Among the companies he named we only have Cmc and Tata elxsi listed in the bourses.Am not here to piss one off by suggesting the 1300 bucks 4000crs mcap CMC for sure.That leaves me with Tata elxsi which not only provides a healthy 5-7 bucks dividend per share but also is available at a mere marketcap of only 600 odd crs.Now how many company from the respected TATA stable is available at such low valuation?

Business:A part of the USD 100 billion Tata Group, Tata Elxsi provides embedded product design, industrial design, animation & visual effects and systems integration among others.Headquartered in Bangalore, it has offices in Dubai, France, Germany, Japan, Malaysia, Singapore, South Africa, UAE, the UK and the US.As I have mentioned in several of my earlier research notes,Intellectual property/Brain of the guy at helms is one of my major criteria for choosing a company.Mr Ramadorai is the man for me here.And on his words,"It is a company which is specially into- design & development, industrial designing, and animation & special effects. In the first two areas, our capabilities are exceptional.They are total intellectual assets.We have done some cutting-edge work for onboard electronics, design of water filters.Visual computing is slightly different. It touches on aspects like special effects, which plays a part in launches of cars like Tata Motors’ Manza, Tata Motors’ Aria, where the entire special effects were created purely from the engineering data.So there was no actual car used for creating those special effects. The animation business is also making progress with the company setting up a studio in the US".

Fiscal 2012-13:The total consolidated income during the fiscal was Rs. 626.51 crores as against Rs. 542.91 crores in the previous year,registering an overall increase of 15.4%.The Profit after Tax (PAT) was Rs. 21.31 crores, as against Rs. 34.59 crores in the previous year. The decrease in profit is mainly due to retiring of the corporate guarantee given to bank for securing the loan for its JV entity, A2E2 and share of loss in the said JV entity.

Segments:-
Software Development & Services:The businesses constituting this segment are Embedded Product Design,Industrial Design, and Visual Computing Labs. This segment reported a revenue of Rs. 552.95 crores in FY13, registering an increase of 21.7% over the previous year. The segment''s profit was Rs. 62.39 crores.

How they fared:-

a)Embedded Product Design:The Embedded Product Design division provides technology consulting,new product design and development, and testing services for the broadcast consumer electronics, healthcare, telecom, and transportation industries.  It also creates and licenses intellectual property and software components, helping customers create product differentiation, and reduce development costs and time-to-market.

b)Industrial Design:The Industrial Design division helps customers develop winning brands and products by using design as a strategic tool for business success.It provides an end-to-end design and innovation service for new products from consumer research and ideation, to interaction design,prototyping, and manufacturing support.It addresses the FMCG,Automotive, Healthcare, Consumer Electronics, and Retail sectors.It has designed award-winning packaging in the food, beverage,personal, and home care segments, for leading brands in India and overseas.It also executed several projects for interior and exterior styling of vehicles and the design of cutting-edge products for consumer electronics and healthcare.In the interaction design area, its design for an interactive e-sales book for Mahindra and Mahindra won the award for the best User Interface Design at the CII Design Excellence Awards 2012.In the FMCG packaging area, its packaging design for Ocean Herbal, a new Ayurvedic personal care brand, was conferred with the India Design Mark (I Mark). The ''I Mark'' is a prestigious design standard given by the Indian Design Council.This division has been successfully certified for ISO 13485:2003, a management systems standard relating to the design and development of medical devices.

c)Visual Computing Labs:Visual Computing Labs (VCL) offers Animation, Visual Effects (VFX) and 3D stereoscopic content for feature films, episodic television and advertising. It also offers custom content development for visualization and product marketing.VCL won several national and international awards including the Best VFX Shot of the year and Best Animated Feature Film(Theatrical) awards at the prestigious FICCI Frames BAF Awards 2013.It won the Best Special Effects award for ''Ek Tha Tiger'' at the Star Guild Awards 2013 (also known as Apsara Awards). It also won the Best Animated Feature Film (Theatrical) award for ''Arjun - The Warrior Prince'' at the Infocom-Assocham EME Awards 2013.

Systems Integration & Support:During the last fiscal, the segment turnover and profit were Rs.68.72 crores and Rs. 1.70 crores respectively.This business segment integrates, installs and commissions complete systems and solutions for areas such as Computer Aided Design, Analysis and Manufacturing, Virtual Reality, High Performance Computing and Storage for enterprise customers. It provides best-of-breed solutions through partnerships and distribution agreements with leading international software and hardware vendors. It also provides infrastructure management, support and maintenance services.This business will continue to focus on a solutions-centric approach that drives higher composition of software and services in the business mix to improve margins.

1st quarter results:It reported an over three-fold rise in its consolidated net profit at Rs 8.92 crore for the first quarter ended June 30, 2013. The firm had posted a net profit of Rs 2.61 crore in the year-ago period.Its consolidated net sales rose 18 per cent to Rs 173.17 crore in the April-June quarter of 2013-14 fiscal against Rs 146.19 crore in the same quarter of previous fisca

2nd quarter Results:Consolidated operating income rose by 22 per cent to Rs 189.97 crore in the recent september quarter, compared to Rs 155.36 crore in the year ago period.It reported 11-fold jump in consolidated profit at Rs 19.93 crore for the July-September quarter, against Rs 1.81 crore in the same period last year, on the back of currency gains and higher income. The company reported other income, including currency gains, of Rs 6.53 crore during the quarter.The revenue from the software development and services segment rose to Rs 172.40 crore in Q2 FY14, from Rs 136.33 crore in Q2 FY13.Emerging markets focus along with and the under tapped potential at the bottom of the pyramid has been the other demand driver for its services.

Ratio parameters:Debt to equity ratio stands at a healthy .3.ROE and ROCE stands at a robust double digits figures.The company has a book value of 63 bucks as on the last balance sheet figure.Dividend yield is around 2.5%.The company generates decent cash flows from its operating activities.

Conclusion:Its continuing investments in R&D and technology development, as well as the exploration of new and adjacent markets. These will provide the foundation for future business and help de-risk any downturns in specific industries and markets.The company always had the potential but never couldn't move out of the woods.The present time it certainly seems its moving to the rich league which it always belonged.The company is set to report earnings of 14 bucks for the present fiscal(800-850crs sales and a PAT of between 40-46crs for fy13-14 consolidated numbers).Applying a modest PE multiple of 20(average historical PE of last five years has been even higher) helps me to arrive at a target price of 280 bucks.Enjoy the 30% target return over a period of 6-8 months.

btw:Its also a long term multibagger call.I would keep on reviewing it from time to time in future course.
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.

Tuesday, November 19, 2013

Atul auto ltd:-The proven multibagger which is all set to be another multibagger from present levels

Stock tip:-

Scripscan:Atul auto ltd
Traded in:Nse-Bse
Avg Buy price:265rs
Target:350rs
Return percentage:32%
Duration:6-7 months.

Report:Atul auto was recommended to you folks twice in the last four quarters.In the month of October last fiscal a target of 160 was penned on the call of 111rs.The second time on December-call was given at 169 bucks for a target of 204rs.Now much before the stipulated duration,the counter achieved both the targets.I am initiating a fresh buy call on the counter for a target of 350rs,to be achieved in the next six months.

Strategy:Over the last eleven years its been a great stock market journey for myself.I am fortunate to have earned quite a sum on a good overall CAGR.The secret has been simple.
1)To put a monthly fund as SIP irrespective of how small or tiny it be.
2)To make assets and continue owning your winners.Say you buy 100 shares of x at 100,it doubles and you sell half the shares to recover your whole cost of acquisition.You keep the remaining as long as the growth story exists.Frankly there's no target for any counter unless its a news based short term play.If you keep on selling full quantity at any given target price,you possibly will never get the taste of massive multibaggers.The risk in those investment free cases are nil too.Even if it moves to zero,you still won't be loosing anything.

Disclosure:I own Atul auto for last several years and got no plans to sell it in the next few years.I bought it when nobody even knew such a counter exist.It used to trade with 10-15 volumes a day with average PE being in very low single digits.The company since then has multiplied the wealth by quite a margin.From allotting bonus to paying rich liberal dividends,it did whatever was possible for them.I foresee the counter soon trading at 15-20 PE its expected earnings,say 2-3 years down the line.

Numbers:The company would do a 35rs minimum earnings for fy15.You put 10 multiple and will see the target price.

Triggers:Mr Ramdeo agarwal,the Motilal oswal mastermind, has recently got into the counter in a big way.He has swallowed a lot at around the present levels.Atul auto is one such counter where still there's not much institutional buzz or FII holding.With consistent performance and amazing numbers backed up by an equally amazing pedigree team,its only a matter of time before those people flock in the counter.


btw:To me every single person related to me should be able to make money.Am in no mood to either disappoint my 9000 email readers or paid members.Open blog would have outlook and paid site would have recommendations.Though open blog may well carry recommendations too, to keep the readers engaged.Even paid recommendations once moving up by 20-25% from the suggested rate would find a place in the open blog.Say on a target of 50% paid folks would make 50% and readers will make 30%.Thus safeguarding the interest of both the fraternities.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.

Monday, November 11, 2013

Suven Life Sciences ltd:-Paid call to members(Target achieved)

Recent paid call given to members just two weeks ago.In a matter of few trading sessions the company has achieved its target and presently quoting at 75 bucks.

Stock tip:-

Scripscan:Suven Life Sciences ltd
Traded in:Nse-Bse
Avg buy price:50
Target price:70
Duration:6-8 months
Return percentage:40%

Business:Suven Life Sciences Limited, a research-based biopharmaceutical company, engages in the design, manufacture, and supply of bulk actives, drug intermediates, and fine chemicals for the life science industry worldwide. The company offers advanced intermediates, intermediates, and active pharmaceutical ingredients. The company also offers contract research and manufacturing services, including development and supply of pharmaceutical and agro chemical intermediates for new chemical entities. In addition, it provides discovery and development of new chemical entities for CNS disorders; research collaborative projects with pharmaceutical companies and drug discovery research services including in-vitro screening and molecular biology, drug metabolism and pharmacokinetics, pharmacology, toxicology and genotoxicity, and bioanalysis, as well as operates a formulation development center.Suven caters to the need of over 20 global pharma majors and has completed nearly 370 projects since its existence.Presently the company is working on 50 odd molecules(26 molecules are undergoing phase I clinical trials, 21 are in phase II and 5 are in phase III).

Real story:Suven has been striving hard for the last nine years to build an innovative, sustainable and sizeable base which consists of exciting innovation pipeline of NCE''s in CNS and growing CRAMS business.Its focus area in CNS is Cognition in Alzheimer''s disease, ADHD & Schizophrenia.Alzheimer''s disease is a debilitating neuro degenerative disease characterized by dementia and memory loss. The threat of Alzheimer''s and other neurological diseases are extraordinary.The statistics are stark: about one in three people over 85, and one in 10 over 65, will develop Alzheimer''s disease.Alzheimer''s disease, a potential  billion market lacking effective medicines or a major contender but littered with high-profile drug failures in the past 2 years.During the last 10 years it has been seen almost 100 compounds that have failed in Phase 3 and only a handful of drugs have been approved for Alzheimer''s and dementia since 1990s.There is clearly a need for more effective therapies that address this and other neuro degenerative diseases; that is where suven is focusing and progressing very well.For the past nine years it has committed significant time and resources to its Drug Discovery & Development program in CNS arena where there is the highest unmet medical need with lowest success rate as well as the longest timelines hence it is taking long time to see any monetary success at Suven even though it has built an exciting innovative research pipeline.On the words of the chairman,"I have been communicating all along that it takes decades to turn new product concept into reality and to find treatments for Alzheimer''s disease but any success would bring huge monetary benefit to Suven and brings relief to the millions of people world over afflicted with Alzheimer''s.But I am happy to inform you that this is the best year ever for CRAMS segment in the history of Suven both in terms of sales and net profit even after spending Rs33 crores on Drug Discovery which was written off on the P&L account.We continue to see exciting growth opportunity in the CRAMS segment and to capture that opportunity we will be expanding our capacities by the addition of a new green field site at Vizag with an outlay of around Rs 100crs which in turn adds to the growth and profitability in the years to come".

Brokerage note:Was reading a big brokerage house note on it which a source of mine forwarded me.In a quintessence,"Suven has grown from being a pure contract research player to become a collaborative research partner. Its integrated business model encompasses all the processes from drug discovery and development services to clinical supplies,manufacturing and packaging. The company earns more than 65% of its revenues from the US and Europe. The company has three promising molecules under clinical trials, holding the potential for out-licensing opportunities in future.Under the collaborative research program (CRP), Suven works with innovator companies to develop drugs up to a certain level, after which the partner would take up the product for further development. During the development phases, it will receive milestones payments at different levels of development. When the partner company takes up the molecule for further investigation, two more revenue streams will open up for Suven. When the partner starts clinical research, Suven will get the CRAMS business and also CRO contracts.On successful commercialization of the molecule, it will get a royalty for marketing the product. Suven is the first Indian company to get into such collaborative research program.Suven’s clinical research division, Asian Clinical Trials (ACT), has entered into a strategic alliance with VPSCRO, a CRO based in Beijing, China to conduct clinical trial services in India and China. CNet revenues have grown at a CAGR of 20% over FY11-13 to Rs.258 cr on the back of higher contribution from new businesses and traction in CRAMS projects. Revenues from DDDSS and clinical research are likely to grow at a faster rate than the CRAMS business going ahead." 

Fiscal 2012-13&1st quarter 2014:The Company's operational performance during the financial year 2012-13 was quite impressive with a sales volume of Rs 258crs as against Rs. 204crs in the previous year, recording a growth of more than 26 percent. The exports turnover increased by 18 percent, from Rs. 193crs in the previous financial year to Rs. 228crs.Profit After Tax (PAT) of the Company increased by 114 percent to Rs. 30crs from Rs. 14crs in the previous financial year.The Earnings Per Share (EPS) of the Company has gone up to Rs.2.64 in fiscal 2012-13 per share from the previous year EPS of Rs. 1.23 in fiscal 2011-12 per share, registering a growth of 115%.It also paid a dividend of 30 paisa per share.Suven Life Sciences Ltd’s net profit more than tripled at Rs 30 crore in the first quarter ended June 30 compared with Rs 7.90 crore in the year-ago period.Turnover of the Hyderabad-based company increased to Rs 111.8 crore which was Rs 71 crore in the 1st quarter of the preceding year.The growth in profit was a result of the commercialisation of two products under contract research and manufacturing services besides increase in sales of two regular products.

Concerns:Suven is an export earner and hence has been a beneficiary of the high USD prices.Suven has got all its manufacturing facilities in Andhra where because of the telengana issue,there has been massive power cuts resulting in lower margins for the company.The management is confident of a better situation by end of the present fiscal.The much debated govt pricing policy may impact it too just like any other pharma company.

Conclusion:I hardly understand the pharma business model.I mean where patents,molecules and litigation are often the norm of the day,you have very little to crave for or boast about.Over the past few weeks and after spending a huge amount of time with pharma industry veterans,I feel I have in parts,understood the business model and future potential of today's recommendation.The company is managed by a very honest and dynamic gentleman named Mr Venkat Jasti, who probably will make a lot of money for its shareholders in the days to come."The promoters too sensing the great future has swallowed over 16 lakhs shares from the open market in the last few quarters".Going by the 1st quarter trend, the company can deliver 120crs of PAT which will absolutely sky rocket its stock price.But based on company's guidance or say putting a more conservative estimate,PAT of 80-84crs looks reasonable.That translates into an EPS of 7 bucks.Pharma companies typically trades at high double digit PE'S.Thus assigning a mere 10 PE multiple helps me to arrive at a target price of 70 bucks, a return of over 40% from the suggested average buy range,to be achieved within the next 6-8 months. 


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.

Wednesday, November 6, 2013

Microsec Financial Services Ltd:-The next big multibagger in making

Management Interaction note:-

Scripscan:Microsec Financial Services Ltd
Traded in:Nse-bse
CMP:20

I recently had an interaction with the MD(BL Mittal) of the company.Here's the quintessence.

About the MD:Mr. Banwari Lal Mittal is the Chairman and Managing Director and is also a Promoter of the Company. He is the founder of Microsec Group. He holds a bachelor’s degree in commerce from Calcutta University. He is a fellow member of the Institute of Chartered Accountants of India, the Institute of Company Secretaries of India and the Institute of Costs and Works Accountants of India.He has more than 17 years of experience in different fields including investment banking, wealth management and corporate advisory. Mr. Mittal has in the past worked with the M.P. Birla Group in a managerial position for about eight years.

Q)Your ipo was concentrated most on the LAS(loan against shares) biz.Whats your outlook for that in the coming years.I do know you don't like funding promoters.And will you be able to maintain the NPA to the least possible level?

Ans)We don't have time to nap.Our balance sheet is clean,have taken the approvals from shareholders to shift the focus.The time has changed completely.Las as a product won't work now.We fund to provide liquidity to our brokerage under tight risk management and our NPA is 0.We are turning.Company on innovation rather than capital,in just two years time the world will see it happening on the land of India.It is worth for shareholders.

q)In the financial services arena a lot of people are apprehensive about your company because of the regional play.You do have the pan India centric strategy as I may recall from your past interviews.What are our plans in that regard?

Ans)We have plans ready to scaleup to Pan India,our club kautilya model will do wonders.Our application for Mutual find is in final stage,but right now the time is difficult ,we will go on fees based model.I am not impressed by the model of India info line or edelweiss.In financial services no body is pan India.They all have more than 75% of business from one region.In India where inflation is 10% the NBFC model is under stress .Say if Roe of NBFC is 10%,it earns nothing because its netwoth is gone down by inflation.For each incremental roe ,you need to leverage the balance sheet by 1 more times,means for 20% roe you need 20 times leveraging.So if 5% nap you are gone for the day.The so called pan India NBfc borrow short term Cps and lend for long term,this cycle will bust anytime.

q)You have started a website called foreseegame.com.Whats all about that?You also plan to open an online pharmacy retail store site called Sastasundar.com?

ans)Foresee is a digital platform that creates engagement between brands and consumers through prediction-based games.Launched this year in March, the platform has 80,000 registered users and it creates games on digital platforms around brands.The game help brands get focused consumer engagement with a high brand recall value and promotes consumer brand loyalty.Besides, it is an end-to-end brand promotion and marketing solution which creates consumer engagement and converts consumer interaction into potential purchase.We expect our users to increase to 1.2 lakh by October and 5 lakh by June next year, helped by the huge opportunities in social media, which is growing on both PCs and mobile platforms.Sastasundar would be a game changer in the Indian medical pharmacy field.

q)To my knowledge you get 10rs per game from the brands right?Or there's some other royalty?Foresee already boast of an Alexa rank of 35k worldwide which is commendable.In future is there any chance that you will also accept advertisement like moneycontrol.com?and sasta sundar will come live only after 26th of October?

ans)Yes the per engagement RS.10 is also very less.It will go to new heights on 26th Oct.Sastasundar.com will be live to cut the medical bills of Indian by 70%.

q)What if someone tries to replicate the Sastasundar business model?Have you got any moat out here?

ans)We have filed patent ,have 20 trademark,5 copy writes,and than also it will take at least a year to make it happen,we have strong Iprs and don't forget completion makes business.See how many companies came after infosis.We need to build competitive strength.Forseegame will give us one lac customer in first month of launch with foreseegame our branding cost at sastasundar is minimal.


Q)What makes you confident on the game of prediction?See the youths or we guys,we lack patience and get bored of stuff very quickly.Anything Microsec is doing in anticipation of that?

Ans) That is what the game of prediction is all about.Take case of Kerala state lottery.Out of 20 lakh customers, 15 lakhs are youth and they buy a ticket per week.We are portal of free lottery for whole India.From the Period of Mahabharat till date people are not bored of prediction and lottery and I do hope no body will be bored of prediction ever.Each day we are introducing new event and making the members engaged with the games.Even if we target 2% of India's add spent at 1000 crores,it would be free ATM.

Q)You expect a 20% growth in month on month as far memberships are concerned in foresee right?I aint gonna ask you about this year or next year but lets talk about 2020. Based on your words,would it be correct to expect 150-200crs of pat by 2020? As of now foresee got 1 lakh members.So if all these 1 lakh members play a single game in forseegame,microsec would make 3crs revenue monthly?Is that a correct estimate?Also About the huge figures you are aiming by 2020,which vertical you feel would contribute the most?And have you thought about any ballpark percentages contribution?Since its digital surely the NPM too would be very high isnt it?Say over 40-50%?.

Ans)Foresee should see a 20% growth for sure.Sastasundar along with it would grow immensely too.Yup we expect those figures on the PAT mark.NPM would be in double digits.You are correct on the monthly revenue estimate.We have detail plan,by 2020 we shall be having business with roe of 50% with growth rate of 20% .The segment result would be financial services 20%,foreseegame 40% and sastasundar 40% .The common thread is digital,going forward all our financial services would be digital.We are in the business of providing knowledge base services on digital platform.Focus is innovation ,knowledge and digital.


q)You did 35crs of consolidated revenues the 1st quarter vs 45crs done in the whole last fiscal(company did 45crs of turnover and around 9crs of profit for the fiscal 2012-13).Can you tell me what led to this massive jump that too under the present turmoil?And is it sustainable going forward?

ans)No ,it is just liquid fund liquidation.We will take about one year before growth starts coming ,real picture would be in the next financial year.

q)You have already sucked in most of the weaker hands through creeping acquisition and its only a matter of time I presume before we see the promoter's stake at the maximum permissable limit of 75%.A lot of market analysts are predicting that a decade later maybe or say earlier the company will pay the dividend of what the present market price is.Whats your say on that?

Ans)Let us not see the Market cap.Our focus is to build world class Business Model which has sustainability and have core competence .We have build the business around that and I am happy that starting from financial planning ,benchmarking of research ( the example of the best performer in research and we don't have single pie due in NSEL neither of our own and nor of our client ,we issued early warning )to consumer engagement by sharing value and making available the best medicine at low cost all our projects have social impact.

Q)Last question-Will you remain debt free for next few years?And can the shareholders expect a dividend from the next fiscal?I am not interested in knowing what you will do in these fiscal or next fiscal,what can you guide me for 2020?What is your message for the 22000 shareholders of Microsec?Immediate disclosure would be even I own your shares too.

ans)By and large we shall remain debt free,we may take some working capital in our sastasundar.com,because it is medicine distribution.That may require huge inventory once we go national.From the year 2014 -15 we shall be having distributable profit,both our new venture are innovative and we expect to close this year adding 50 brands at foreseegame and establishing sastasundar.com.Next year will be year of growth and than cash flow.The model is robust and I can tell you no company has plans on innovation like we have.We have globally scalable model with strong competitive advantage without need of much of capital.If things go as I plan we shall be a billion dollar marketcap company in year 2020.Just calculate the revenue of these project and club it with our financial service business.It looks like magical.I am sure we shall lead,rest is upto god.I will make sure my investors get return.

My take:The MD was very open and frank to all the questions.I am really not sure whether he will scale to 6000crs marketcap in 7 years from a mere paltry 60crs marketcap now.But even if he manages 1/10 of that or say 600crs(if 10 lakh members plays a game daily it would make 20crs yearly PAT,add up a 30 PE)that would make microsec a massive multibagger or a 10 bagger.I see nothing wrong with his dream too,infact its quite a reality.Even 100crs PAT will give microsec over a billion USD valuation as its fully a digitalised business now(no listed peers and comparing Just Dial marketcap of 8000crs for a 80crs PAT figure to make the statement stronger and believable)At 20rs you have hardly anything to loose folks.Reader fraternity don't bother me by asking about its target price as its only meant for guys who can stay put for atleast three long years.


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.

Monday, October 28, 2013

Avanti feeds ltd:-The short term hidden gem positional call which is rocking the markets

Stock tip:-(Target Achieved)

Scripscan:Avanti feeds ltd
Traded in:Nse-bse
Avg buy price:222
Target:265
Duration:2-3 months
Return percentage:20%

Business:Avanti Feeds Limited manufactures and markets shrimp feeds to the farmers of aqua culture. The company operates in three segments: Shrimp Feed, Shrimp Exports, and Wind Mills. It produces prawn, scampi, and fish feeds. The company is also involved in processing and exporting shrimps to the United States, Europe, Japan, Australia, and the Middle East. In addition, the company, through its outlets, offers shrimp ready to eat and ready to cook products under the Prawn King brand name. Further, it engages in the generation and sale of electricity.The company operates 4 windmills with a capacity of 3.2 MW at Chitradurga, Karnataka.


Previous call on it:-As you all know avanti was also recommended at 100 levels few quarters back.

Story:Avanti feeds as can be seen from the above was recommended a number of times and since then the scrip has more than doubled.The present recommendation is for members who fancy short term stuff.I am in no mood to pen a massive note as the call is purely news based.Check the couple of stuff which will dictate its stock price trend in the days to come.

1)The company is set to report absolute blockbuster set of numbers where its expected to double its profits from 11crs to 20crs.Sales too would see a proportionate jump.The result will definitely help it to boost its stock price by 15-20% within the next 2-3 months.

2)My strong sources vouch for a lot of HNI activity in the days to come.One of the most renowned small cap preacher(cant name him as its against rules and calls for violation but to hint with a shah surname)is set to swallow a chunk of the counter.Exciting times await the counter which has got a great short to medium term future as far its stock price trend is concerned in the bourses.

Results:For fy12-13 the company reported revenues of around 650crs with a profit of 30crs.EPS reported was 33rs.For the 1st quarter alone the company has clocked revenues worth 270crs accompanied by a PAT of 14crs.EPS for the quarter alone has been 15.6rs.

Dividend:The company has also paid a dividend of 6.5rs.With much higher profits and a healthy dividend cover,expect to have a dividend of 11-12rs in the present fiscal.

Conclusion:Thai Union Frozen Products (TUF), parent of a leading Thailand-based group of companies engaged in shrimp business, owns 25 per cent shares of Avanti Feeds Ltd.Thai Union Group, a listed entity, is the largest seafood exporter outside Japan with consolidated sales of over $2 billion. It has operations in Thailand, the US, Vietnam, Indonesia and China. The major products include canned tuna, frozen shrimps, cephalopod, shrimp and fish feed.TUF is supporting AFL bigtime in expanding AFL’s processing and export market as TUF has a large wholesale and retail network in the US.Overall,A lot of activity is expected to happen in the counter in the short term.Buy it within the given range to make cool returns.


 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.

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