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Wednesday, September 9, 2009

Jagatjit Industries Ltd and Taneja Aerospace & Aviation Ltd:Future growth outlook and potential

1)scripscan:Jagatjit Industries Ltd

Story:Jagatjit Industries is a 60 year old liquor company famous for Aristocrat brand Whisky. They also had brands like Maltova, etc. which they sold to SmithKline a couple of years back. This company was dragged in problems between the promoters of the group and a wide order in the month of March by CLB, that problem has not been resolved. CLB ordered the company to buy back the shares of other promoter group and they have already brought back the shares which led to reduction in equity from about Rs 52 to about Rs 44 crore. If you look at the valuations of the company, at the current price the market cap of the company is just about Rs 200 crore, the gross of the company is Rs 540 crore and this being a 60 year old company and the market cap just being 50% of gross the real value of the assets must be much more.This company has done sales of about Rs 800 crore on the last year, so even if you compare this company with the drop on the basis of sales and brand equity this looks grossly undervalued compared to the peer group.At 60rs it looks to be a great buy.

2)scripscan:Taneja Aerospace & Aviation Ltd

Story:If we see the price pattern of this stock, this stock has been primarily rangebound between Rs 30–40 for a long period of time. Promoters picked-up about 5% of the stake in the company they increased the stake by about 5% in the month of November at about Rs 28 and the stock has been primarily rangebound mainly because of the negatives which surround the sector and also the company. Last year there were rumours of a Delhi based infrastructure company wanting to take a stake in their air strip project and the valuations being talked about are very high, and at that time the stock touched a high of about Rs 250–270.The company has a 250-acre land where they have made an airstrip which is largely unutilized and I see that as an opportunity, the reason that we are getting the stock at a market cap of just about Rs 100 crore is primarily because of the reasons which are mentioned. When things look rosy and everything starts looking good. When they are fresh with orders for aircraft and the value unlocking which people are expecting that airstrip will have that happens and you won’t get the stock for Rs 35-40. The reason you are getting the stocks at current valuations is only because of the negatives which are surrounding and the good thing is that the promoters themselves have increased their stake at about Rs 28 in the month of November. At that time there was pessimism all around and the stock has also been range bound for a very long period of time and that’s a reason you are getting this stock for Rs 35, when there were rumours of someone big buying that airstrip business and fancy valuations being talked about at that time the stock was not available for Rs 35 and it was available for Rs 250–270. So this is the one for the patient investors who can just sit on the stock and wait for company to unlock the value for the shareholders.A great buy

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