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Saturday, November 14, 2009

Nagarjuna Agrichem Ltd:paid call to members(future growth outlook and prospects,buy/sell/hold,analysis and recomendation

Many of you repeatedly in my mail have asked for paid calls and what they will be and all.Now as an amateur and being a social guy I would always safeguard the vested interest of investors than something else.The open blog is a place for me to give guidance..paid blog is for the one who needs those calls and my bigtime guidance desperately.Anyways here"s an example of a paid member call and the type which I provided just few months back.

Saturday, August 15, 2009
Coming week outlook,stock tip-Nagarjuna Agrichem Ltd

ScripscanScripscan:Nagarjuna Agrichem Ltd
Duration:3.5-6 months

Story:Established in 1994, NACL started by producing Monochrotophos Technical. Thereafter, Company expanded to produce comprehensive range of pesticides technicals, formulations and custom manufactured fine chemicals. Company is exporting its products to 24 countries. It has Custom Synthesis and Toll Manufacturing Division which caters to overseas requirements. Broadly, its product range is as under:

1) Insecticides: It includes Prolenophos, Acephate and Dichlorovos.

2) Herbicides: Protilachlor.

3) Fungicides: Propicanzole, Tricyclazole and Myclobutanil.

Company formulates its formulations in a modern Plant situated in East Godavari District. This unit is one of the few to have in a single location, integrated multiline facilities capable of producing a variety of pesticide formulations such as liquids, powders and granules simultaneously.

Financial Performance:

2 0 0 8 - 2 0 0 9 2 0 0 7 - 2 0 0 8
cr. cr.

Net Sales 605.36 412.10

PBT 80.40 39.76

Income-tax 31.14 14.01

PAT 49.26 25.75

Equity 14.90 14.90

EPS (Rs.) 33.06 17.28

Dividend 50%

Reserves: (crs.) 137.00

Company has reported extremely good results for 08-09 wherein, its topline has gone up by almost 50%. PBT has doubled to 80 crs. Despite more than 100% rise in income-tax, PAT has zoomed by 90% with EPS of Rs. 33.06. Stock is trading at 4.15 x FY09 EPS.

Future Prospects:

09 - 10E

Net Sales 675.00

PAT 58.00

Equity 14.90

EPS (Rs.) 39.00

P.E. Ratio 3.53

For Q1, its PAT has gone up by 35% to Rs. 11.58 crs.

Company is setting up a new project for manufacturing Technicals at a capex of Rs. 140 crs. Recently, land for the same has already been acquired. Company has also completed de-bottlenecking at existing Plant. Project will become operational in early 2010. Impact of same will be felt in 2010-11. It may emerge as the fastest growing agro-chemical company in India.

Valuations: Promoters hold 78% stake. Dividend yield works out to 4%. BV is Rs. 100/-.Stock is available at:

1) 4.1 x FY09 EPS.

2) 3.5 x FY10E EPS.

In peer group, Rallis has P.E. Ratio of 12/-. Nagarjuna Agrichem is grossly underpriced considering that Rallis sales are 800 crs. as against NACL 600 cr. sales.

Even if NACL has modest P.E. Ratio of 6, its share price should be more than Rs. 200/-. Buying strongly recommended as share price can go up by 30% in short term and by 60-80% in 1 year.A great buy

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