Categories

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).

Please note

Note: The artciles are not research reports but assimilation of information available on public domain and it should not be treated as a research report.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure: It is safe to assume that I might have the dkiscussed companies in my portfolio and hence my point of view can be biased.Readers should consult registered consultants before making any investments
.

Archives : Old artciles

Wednesday, October 7, 2009

Nirlon Ltd:Future growth prospects/target price/realty play/recomendation/analysis

Scripscan: Nirlon Ltd
cmp:66
Code:500307

Story:The management of the company “Nirlon Ltd.” does not readily share information on their reality business plans. Thus, we have analyzed the company based on publicly available data, personal visit to the place & the latest Annual Report 2008-09. Our report is based on various assumptions.

Prime Location In Mumbai:Nirlon Knowledge Park is conveniently located on Mumbai's Western Express Highway. The location is easy to commute from the western & eastern suburbs of Mumbai.

New Construction To Add To Lease Rentals Revenue:Nirlon is developing 2 msf of commercial property near Goregaon in 4 phases, partly by demolishing old structures, partly by developing the existing free area. Of the 4 phases, 1st phase of 0.8 msf will get operational in H2FY10E & 2nd phase of 0.34 msf will get operational in the beginning of FY11E. Both these phases are expected to generate a annual lease rental income of ~ Rs.109 Cr. The balance 2 phases of 0.33 msf & 0.31 msf are expected to get operational in FY13E & FY16E respectively generating lease rental revenue of Rs.40 Cr & Rs.39 Cr p.a. respectively.

Old Constructions Continue To Generate Decent Cash Flows:Nirlon has in total 3 properties namely Goregaon, Worli & Tarapur totaling to 0.72 msf. Of the three properties, the company is in the process of re-developing Goregaon property into a commercial property. The company will continue generating revenue from its other properties namely Nirlon House – Worli & Tarapur. The company will continue to have the cash flow Rs.10 Cr to Rs.11 Cr annually from both these properties.

Company To Become Debt Free Within Four Years Starting From FY10:The company has got a securitize loan of Rs.400 Cr sanctioned from HDFC for its Phase 1 & 2 of which ~ Rs.370 Cr has been withdrawn. We expect the company to repay this loan from the security deposit of ~ ~Rs.130 Cr – Rs.140 Cr & balance through internal accruals with in 4 years beginning from FY10E.

VALUATION – “Beyond The Vagaries Of Real Estate Biz”:Nirlon, traditionally being in the Nylon production business came under BIFR in 1988 due to changing fortune of Nylon yarn business. However, the company had valuable land & property in Mumbai City which is paying well to the company’s dark fortune. Thus, with company’s struggle & efforts to rehabilitate, it decided to make fruitful use of this valuable property by redeveloping its existing property & go in for commercial lease rental business. Nirlon Knowledge Park is thus expected to generate a continuous inflow of Rs.120 Cr to Rs.130 Cr annually by FY11E, by the way of lease rentals, there by mitigating vagaries of real estate business. Thus we expect the company to become debt free by FY13E & also go for further CAPEX which would be financed fully through internal accruals.

Conclusion:Nirlon, with turning around of its financials & huge growth story kicking in; is expected to generate huge free cash flow. Thus, based on DCF we have arrived at 12-18 months price target of Rs.126. The stock has recently witnessed a sharp run up giving an excellent return of 312 % in 6 months. The stock has outperformed BSE 500 & Small Cap Index by 223 % & 175% respectively. We believe that the stock has the potential to give multi-fold returns in the next 2-5 years & hence a good bet for long term investors.

Source:asset alliance sec

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: arunsharemarket@gmail.com 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.
 
x

Subscription to Arunthestocksguru

Enter your email address:

Delivered by FeedBurner