10000 to 4crs in 18 months 1000rs to 50crs 300% returns 75% promoter holdings A 50 bagger A sureshot 5 bagger Analysis Another fraud? Auto ancillaries Bank sector Blind sell Brand plays Broking Bse Nse Buy calls cements Ceramics/tiles Counters I don't like Debt free businesses Delisting candidates demerger bets Disclosure- I own them Domestic consumption plays E-Commerce pick Education Exit at rallies Famous analysts Famous stocks FMCG Footwear future multibaggers Gems andJewellery Hidden gems High conviction ideas High dividend plays High potential small caps High ROE stocks Holding companies Hotel sector How they looted you.. Indian stock market Infrastructure sector Interesting Microcaps IT KPO Landbank plays largecap ideas Less than 5 PE stocks Liquor Logistics Market lessons Market outlook for 2013 and 2014 Market underperformers Meeting with the CEO Metals Monopoly businesses My 5 baggers My Favourite counters My paid stock recommendations My stock picking techniques nse bse tips Oil exploration Operator calls Paints Penny stock outlook penny stock updates Pharma sector Poultry stocks PSU Publicity freaks Real estate Renewable energy plays Safe bets Sell recommendations Share market Live shipping stocks short term call SOTP plays stock tips stock under 10rs Stocks to watch out for Strong bonus candidates Takeover candidates TATA product tea Textiles The 13 bagger The 45 bagger Trading companies Transformers Turnaround bets Tyres Uncertain/Risky business models Unique businesses

Search This Blog(Over 800 companies covered in the blog).

Archives : Old artciles

Sunday, August 2, 2009

Sahyadri Industries Ltd:-Whats the future growth prospects looking like

Scripscan:Sahyadri Industries Ltd

Story:Pune-based Sahyadri Industries makes asbestos cement sheets (ACS) and other building materials sold under the brand name ‘Swastik’ with an installed capacity of 4.37 lakh tonnes. Its fibre cement corrugated roofing sheets are used for industrial sheds, air extractors, roof lights, etc. Its residential products division manufactures kitchen cabinets, doors, sign boards, bed cabinets, etc. It is also backed by a 8.9MW wind power facility, the output of which is sold to Maharashtra State Electricity Board at a pre-determined price. There are four major players in this industry accounting for half the production capacity. To make ACS, asbestos fibre is imported from Lab Crysotile INC of Canada and Sama Fibres of Brazil and mixed with cement.For the year ended March 2009, sales have gone up 11% but net profit has zoomed 200% to Rs19.80 crore. The main reason for this was a strong rural demand for roofing that led to higher product prices. The mere mention of the word ‘asbestos’ turns off many people. Western media label asbestos as pollution-causing. The asbestos that causes problems is sprayed-on asbestos and friable asbestos insulation. These have largely been discontinued. In India, asbestos has never been used as sprayed insulation; only the chrysotile variety is used. The fibres are mixed with cement and are locked into the matrix; there is a low chance of contamination. The probability of sickness due to living or working under an asbestos roof is low. Transportation of drinking water in asbestos pipes is safe and is approved by the World Health Organisation. In India, asbestos sheets have been used by the railways for the past 50 years over platforms through which crores of people pass everyday. Another major consumption of these is in the roofing of godowns of Food Corporation of India where millions of tonnes of food grains are stocked. India uses only 6% of asbestos produced in the world. The US still imports asbestos pipes for water. Canada has reinforced asbestos to make asphalt asbestos compound for re-paving of roads.For the first quarter of this year, Sahyadri may report sales of about Rs110 crore and net profit of about Rs9 crore. This kind of growth, and the prospects for a great full year, make the stock attractive. Net sales for 2010 may hit Rs315 crore and net profit could be over Rs26 crore. This would mean an EPS of Rs28 for 2010. Based on the current price of Rs73, that would mean a P/E of 2.2. The promoters hold 85.10% of the stock. While investors have to be careful about small and unknown promoters, Sahyadri has one thing going for it: sector prospects. ACS manufacturers will have great years ahead of them, thanks to the return of the Congress government and its various rural support schemes such as National Rural Employment Guarantee, loan waivers, etc. The potential for ACS can be gauged from the fact that, even now, 80% of houses in rural areas have thatched roofs.Considering all these points,Sahyadri Industries is a great buy at lower levels.

Important Disclaimer&Privacy policy

This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.

Subscription to Arunthestocksguru

Enter your email address:

Delivered by FeedBurner