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

Saturday, September 19, 2009

Blue Bird (India) Ltd:Is it a buy/hold or sell?

Scripscan:Blue Bird (India) Ltd

Story:Blue Bird (India) (BBIL) is a leading manufacturer of paper based notebooks and stationery under its Blue Bird brand. The company's products i.e notebooks and stationery, are designed for educational use, office use and for home and personal use. The Company derives more than 80% of the revenue from the notebook category. Besides this, the company undertakes commercial printing services in a wide variety of areas like product brochures, catalogues & instruction materials, diaries & calendars, magazines & other publications, business forms, and annual reports. The "Blue Bird" brand has a strong presence in western and southern India. BBIL's products principally cater to Western India, including the State of Maharashtra. BBIL is also present in Southern India and is expanding its presence there. AC Nielsen ORG-MARG has estimated that Blue Bird enjoys the highest market share of 48% in the organized notebook market. In November 2006, BBIL came with an IPO of 87.8 lakh shares at Rs 105 per share to finance its two major expansions: one in south and the other in west India.The fortune of the notebook industry is closely tied with the evolving and growing national economy and population. This holds true for BBIL products, since most of the end-users are students, as the Company derives more than 80% of the revenue from the notebook category. With literacy level on the rise, the 7-24 age group (the education pursuing population), which currently has a literate population of 257 million, is estimated to grow to 342 million by 2011, as per the AC Nielsen report. As a result, the notebook market is set to grow from the current Rs 5,100 cr. to Rs 8,208 cr. by 2011.In an industry dominated by the unorganized sector, the company has been able to post consistent growth in the past. Net profit of BBIL rose 42.40% to Rs 7.12 cr. in the Q1 ended June 2009 whereas Sales rose 77.03% to Rs 210.47 cr. in the quarter. For the year ended March 2009, the company had posted net sales of Rs 502.47 cr. and net profit of Rs 15.16 cr. On equity of 35 cr. (Promoters' stake- 52.6%) the EPS stood at Rs 4.33. At Rs 27, the stock is available at a P/E of about 4.5 times expected FY10 earnings (Rs 6). The mkt. cap of the company stands at just 94 cr. against expected sales of Rs 600 cr. for FY10.Going forward, the key to company's success is the growth in student population. With literacy level on the rise, the notebook market is set to grow from the current Rs 5,100 cr. to Rs 8,208 cr. by 2011. This bodes well for companies like blue bird. The blue bird stock at current levels looks undervalued, given its leadership status and also as an education play. Blue Bird India appears a pure value pick, trading at close to one fifth its FY09 sales with a marketcapitalization (m-cap) of Rs 94 cr. and sales of Rs 500 cr. The company is among the largest manufacturers of notebook and printing stationery. It is currently available at a P/E of 4.5x. Further growth could come from the fresh capacities being put up, which is expected to see bottom line contribution starting H2FY10 onwards. Investors can accumulate the Blue Bird stock at this level and add more on declines for good returns over the medium-long term.

No comments:

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