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Wednesday, August 24, 2011

Dunlop India Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target price and analysis,view and outlook,multibagger

Scripscan:Dunlop India Ltdd

Story:There is an interesting story in Dunlop. The Ruias, who are already running the Falcon Tyres, have acquired this company a year back. We all know that the company has been lying closed for quite some time, maybe for the last eight-ten years. So, it was a Herculean task. But the company is bagged by rich assets, manufacturing plant, good land value, good brand recall etc. So, recently, maybe in the last one year, the promoters have infused about Rs 250 crore into the company as an inter-corporate loan, which can be termed as quasi equity and the company can be called debt free.He further added, "Even if I take this as a debt, the networth of the company presently is Rs 125 crore. They have two plants one at Sahaganj in West Bengal and Ambattur in Tamil Nadu. In Ambattur, it’s a very prime land and they have huge surplus land lying there. The promoters as a company plan to sell part of land or monetise part of the land at Tamil Nadu. They are expecting to realise about Rs 700-750 crore by either developing that property of their own or selling it off. But I am going more by the core business of the company and Falcon Tyres, which the promoters have acquired six-eight years back, they have really turned around, they have a good presence and the manufacturing capacity of the company is also quite good at 32 lakh tyres per annum. This is the only company which has been making the Aero Tyres.Going by their financial performance, though they have a very low turnover at present of about Rs 175 crore and they are not utilising the capacity even to the extent of 10%. I think that maybe in next 12-18 months they should be able to take their plant capacity to about 60-70% utilisation, they should be able to monetise about Rs 300-400 crore or maybe Rs 500 crore in this period.Taking all this into consideration, at least in this market I see very limited downside for the stock, maybe it cannot fall more than below Rs 65. But once you have the recovery in the market and once the market stabilizes, share can bounce back to about Rs 85-90 levels in the short-term.

Quote:The above article is the recommendation of a reputed analyst who is daily in several media channels.Dunlop is again owned by the Pawan Ruia group which makes me wary.I belong from the actual place where dunlop has its sahaganj factory.Am aware of the condition and trust me folks its not even near to good shape(dont feel the condition would change ever).The recent fall has been a result of pledged stuff where the lenders liquidated the shares blindly in open market.Am really not enthused by this company and suggest investors to exit out at rallies.

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