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Tuesday, September 8, 2009

Kwality Dairy India Ltd:Another one to ruin you(buy/hold or sell?)

Scripscan:Kwality Dairy India Ltd

Story:If am not mistaken these scrip has been a 30 bagger over the last couple of years thanks to blatant rigging by some bombay based operators.Operator activities are still to be seen no matter how bad or good the environment be,Consider Kwality Dairy India Ltd, a company engaged in the dairy product business .Couple of bombay based operators are busy pushing the counter hard bigtime.Now a fall is inevitable and that would suggest that their accumulation has fizzled out and they have become active to exit the company.The sector which the company operates attracts npm to the tune of 1-3% and there are several established players giving stiff competition to these mentioned company.I would suggest investors to exit the counter and move on to better growth oriented comapanies where there are lot of safety and which are runned by great pedigrees.Kwality diary can be a near 600crs company but it makes a meagre 9crs profits.kwality"s equity is pegged at 18crs so a PAT of 9crs gives an EPS figure of just 5rs.At present price of 569 rs its discounts the price by a mind boggling 121times its trailing 09 earnings.A marketcap of over 1000crs is no way justified for these company.Since majority of the shareholding is with the promoters(84%) theres hardly any floating stock avilable making it a perfect pray for the operators.Am seeing some bigtime announcements from the company which can be the way of luring simple investors for sure.Who knows with operators participation it may well hit dizzy heights of 800-900 even 1000 but once stucked be rest assured it would turn out to be one of your biggest nightmares.Avoid buying craps and opt for better growth oriented companies suggested by myself to make a pot of money in the longer run.

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