Search This Blog(Over 800 companies covered in the blog).

Loading...

Saturday, January 19, 2013

Two gems worth betting on

Two low priced counters worth betting for the medium to long term horizon.

What went wrong-Whats happening right:-

1)Scripscan:JHS svengaard lab ltd
Traded in:Nse-bse
Cmp:29

Business:Starting with manufacturing of only Toothbrushes the company widened its scope to Toothpastes, Mouthwash and Denture Tablets and today is an oral care product manufacturer and exporter. Apart from working on its own brands the company also offers Contract Manufacturing Partnership to brands in the domestic and the international market. One of the most prominent brands manufactured under the company’s name is Dr. Gold which was launched in April 2009 with economy, mid economy and premium toothbrush categories.Some of the prominent brands partnered with in the domestic market are P&G, Amway India Enterprises Pvt. Ltd., Dabur India Limited, Elder Health Care Limited, J. L. Morison’s India Limited and in the international market are - Dr Fresh , Peanuts , Lavoris, Hello Kitty , Walgreens  and Walmart.

Special mention:Promoters allotted themselves lakhs of shares at 98rs.Tano mauritius,the private equity firm which got a great success ratio, bought shares worth 25crs at 98rs.

What went wrong:-Company took many small clients for volume growth resulting in sticky receivables.Few large clients halved their off-take.Numbers nosedived and company posted losses.Input prices went through the roof but because of fixed price contracts company couldn't pass it to the clients.The company had one of the worst financial years.

Whats happening right:It sacrificed the smaller clients and concentrating on fulfilling the requirements of the large reputed ones.Changed its business model in an unique manner where the clients would pass on to everything and JHS would only concentrate on global product quality and timely delivery.In this way it would avoid the prolonged receivable cycle and any volatile input prices.Merged its group companies for better synergies.Started exporting again after a long time.A stock worth betting on at present prices.

What else:I bought it because its a perfect fmcg proxy.The largest toothbrush manufacturer from India(300 million tooth brushes).It caters to the need of 1 trillion Proctor and gamble in our country.The company has got number of amazing tax and excise benefits.Replacement cost of its assets would be 300-400crs.Present marketcap is only 60crs.




2)Scripscan:Jai balaji industries ltd
Traded in:Nse-bse
Cmp:34

Business:Jai Balaji is one of the largest manufacturers of steel in the private sector in Eastern India. It has integrated facilities for producing steel in eight manufacturing units spread across the states of West Bengal, Chhattisgarh, Orissa and Jharkhand.The company has a chain of value-added products which include DRI, Pig Iron, Ferro Alloys, Alloy and Mild Steel Billets, Reinforcement Steel TMT Bars, Wire Rods, Ductile Iron Pipes and Alloy and Mild Steel Heavy Rounds.With vibrant and dedicated people forming the core, the company has grown from strength to strength under the dynamic leadership of its promoters and directors.Its combined experience has propelled the Group into the league of formidable steel players in Eastern India, which has not only diversified into power generation in West Bengal and Chhattisgarh but has progressed work in allied industries like cement as well.

Special mention:Promoters have bought shares worth 12crs at 180rs,worth 2crs at around 40rs and took shares 50crs worth of warrants convertible into shares at 50rs.

q)What went wrong?

ans)The coal scam hit it badly.Numbers went pathetic because of higher input costs and lower product prices.High interest costs took the toll out of it.

q)Whats happening right?

ans)Did a recent debt restructuring successfully resulting in lot of interest costs savings.Coal scam has presumably ended and none of its coal blocks have been deallocated.Company backwardly integrated by putting a .35mtpa coke oven which would save 100crs input costs from present fiscal.Interest rate further would see a cut, saving more finance costs for the company.Raw materials prices have started softening and product prices have jumped a bit,albeit in a very tiny manner.A counter to watch out for with very limited downsides and huge upsides.

What else:I bought it because the replacement cost of its assets are 4000crs.Debts are 2200crs.So we get the Net asset value at 1800crs(4000crs-2200crs).Further it has 700mt of high grade coal resources which should get valued into thousands of crs in near future.At present Jai balaji is only valued at 200crs which is a pure bankrupt valuation.

164 comments:

jay said...

what about concurrent (india)infrastructure aka shriniwas power (531261)?

PJain said...

Can u pls let me know your viewpoints on JHS svengaard lab ltd
. The results are very bad. The stock has gone down by 50%. Is it right to still believe that this company is in the right direction?Arun, Your advice pls

Arun.K.Mukherjee(9804589299) said...

Jay an update about conc is coming soon.Keep reading the blog.

Arun.K.Mukherjee(9804589299) said...

@Mr jain....jhs is laying a good foundation.Results should be good in coming quarter.Promoters and private equity feels the NAV of this company to be around 100 per share.I am holding and hav plans to add more

PJain said...

FIIs have also been paring holdings in companies such as integrated textiles firm Alok Industries, battery maker Eveready Industries and toothbrush maker JHS Svendgaard, in the face of a challenging business environment.

Arun,

Why are you posting shares like JHS, when they are doing very bad. You are just giving wrong information to small investors

Arun.K.Mukherjee(9804589299) said...

Jain sahab FII's havent sold a single shares in jhs.ET is too delinquent to check the right details.I just post my opinion,its upto investors to decide what to buy and what not to.

PJain said...

Thanks a lot Arun for the same. I am just against people who want to make small investors as their scape goat. I also try going through the annual reports of various companies and try giving tips to my own circle. Hence, I want to make sure small investors never lose a penny(Overall as not all stocks may give profits). I admire you for your great work and response to each of the comments.I admire you that at this age,you are doing a great research. Thanks a lot. Keep it up with your great job.

arun said...

You are welcome jain ji.keep posting your valuable feedback and comments.

Anonymous said...

Dear Arunji,

You have recomended JHS svengaard lab ltd as a good scrip but the scrip has come down more than 60% from your recomended price. I have hold 350 shares can i hold or sell it out and book the loss pls advice.

Thanks

Amudhan

Anonymous said...

Dear Arunji

Everyday Jai balaji has come down even the market is up also JHS has come down from 30 plus to 7 will these two stocks have any future or it will be a junk stock because P&G cancel the detergent power (Tide) contract to JHS and the company sales also come down every quarter. pls advice.

Thanks

Ramesh

Arun Mukherjee said...

Both would become 10-15-20 times in the next 3-4 years.Stay invested.

Anonymous said...

Arun bhai,
I have read your blog and have a lot of respect for you. But I am struggling to understand how JHS can bounce back. Did you forget P&G are not renewing its contract with JHS and the latter is going for lawsuit?

Arun Mukherjee said...

I have not forgotten anything.See in our country there ain't a company with advantages of jhs.From excise to tax benefits added up with very low cost.They have changed the model to conversion too which will help them to survive from any raw material vagaries.P&G contract cancellation is only for its tide brand,the oral b and another product of proctor is still manufactured by jhs.One may argue about the soring relationship but even cancelling out proctor theres a world for jhs.Export potential is immense too,like last fiscal they exported worth 20crs.The whole story would get changed ones they are able to add a big fmcg client.At some point of a time that would happen for sure.

Anonymous said...

Even tha market has moved more than 1500 points in the last 20 days but JHS & Jai balaji still in downward trend only.

Anonymous said...

Dear Arun ji,
What is your target for JHS 1 YR/2 YR forward.Have you got a chance to talk to management since you are also invested.Per share loan amount is around 25 Rupees.If you add up with 6 .Actual share value 31..does it worth 31 at this point.Since you have valued company's replacement cost would be arpund 300-400 crores .Considering 300 crores per share value becomes 140 .so if we deduct of 25 rupees loan intrinsic value becomes 115.But share is available at 6 plus now..What price you think downside could be and at what price you would like to add more...

Anonymous said...

Today JHS has locked at lower circuit @5.95 & Jai balaji has come down . In a month both will become penny stocks.

Arun Mukherjee said...

The problem is stock market can be very cruel sometimes.Very often it makes analysis look pooh-poohing coz of the fear emotion.At present there's no trigger for the company.Its in a complete mess.But the capacity its having or say the tax benefit it posses,no one else got that among its peers.I wont hazard a price target here but at some point of a time it would move on to much higher levels which it richly deserves.

Anonymous said...

Arun ji,
What is your holding size and average price??Do you think more downside possible when can we average?

Arun Mukherjee said...

25 bucks, but would make it less than 10rs in the days to come through averaging.I dont allocate more than 10% in anything.Jhs has got 5% weightage so far in my portfolio.

Anonymous said...

Arun Ji ,
Thanks a lot for sharing your holding.I am currently holding 30000 shares at 16 level.Will add more in future based on share price downfall.

If you see shareholding pattern it shows Jude Magima and Clara Maria Magima are combinedly holding more than 1.6 Lakh shares.

Tano is US based and purchased shares around 97 level.But one thing not clarified on what corporate action Tano's Equity base increased to 35 lakh from initial shares of 25 Lakh..Can you please throw some light???

Arun Mukherjee said...

Tano is a private equity firm and it was decided they would invest 35crs for a tad below 15% stake.Now jhs equity got increased thanx to its merger with group firms.So as per the arrangement tano upped its stake from 25 lakh shares to 35 lakh shares.Their stake thus remains the same.

Anonymous said...

Arunji,
Tano bought 25L shares of JHS excluding the group company.But later Nikhil Nanda merged his group entity being simal business in JHS so extra shares should be alloted to Nikhil Nanda only.How tano received extra shares ?DId they purchase additional shares post merger to make it 15% stake.

Dinesh Shirvaikar said...

I think the legal issues it is involved in with P&G will do it more harm than good. Not only has it affected JHS in the short term, but things don't look to be improving either.
Mind u, it is never easy to take on the might of an MNC.
Firstly, in India, they have umpteen choices to select a vendor and many would fall over themselves to associate with the P&G name.
Secondly and more worrying is the impression this will create in other MNCs who may have been thinking of associating with JHS. Now everything will go to Hold state till the dispute is resolved. And in this there will be only 1 loser - JHS. If P&G wins the case, it is curtains for JHS. If P&G loses, they will fulfill their commitment, but it will be good-bye for any further business from them or from any other MNC for that matter.
And thirdly, contract manufacturing of low-end items like tooth-pastes and brushes is a very low margin/commodity business with too many unorganized players. So whichever way this goes, I think JHS story is over, at least for the time being or at least till such time that they restore their credibility as a reliable vendor.

Anonymous said...

I guess you started investing long back..I understand your pain.I stared investing when P&G terminated its contract....which is in a way good to get a great company cheaper...This company is small but highly transparent ..This phase is worst for them..legal issues in way not a big issue..P&G want to start their own manufacturing facility ..so they cancelled contract on tide..All these are known issue...once management decides to focus on adding long term client ..which is not tough since this company has huge facility and long experiance than unorganized player...Happy Investing

Arun Mukherjee said...

To add me few cents,let me present 8 points which has compelled me to stay put on it.

1)The guy Nikhil nanda is someone who has a lot of fire in belly.The company kinda faced the same issue in 2008,the recession vagaries,jhs fell to 15,yet it turnarounded smartly to hit an all time high.You cant keep a good man down for long.He is young,dynamic and committed to make wealth for the minority shareholders.

2)Not to forget the private equity Tano.Check out his history of brewing rich returns.Google up and one will find tano has further intention of hiking the stake.They can as the open offer limit has been hiked to 26% I believe.Its pretty hard to get a private equity in these days.They bought at 98,Nanda too converted the warrants at same price.Both provide confidence.

3)I wont read much on the proctor case.No one can ignore India as the manufacturing hub.Cant rule another major fmcg coming in and ordering bulk to jhs.

4)It would also be prudent to note that jhs is now a conversion player.Its insulated from the input vagaries.

5)There's a huge untapped export potential too.

6)Another thing is it has got huge capacities in its fold.Dont need any more expansions.Just need to bag few orders.

7)Check out replacement cost of assets.Atlst 10 times superior even after adding the debt up.

8)Not to forget its tax benefits,excise benefits till 2020.Any new player would have a cruel time matching jhs's prices.

I may be wrong but got lot of conviction on it.Let c how things pan out.

Anonymous said...

And Price fall to 6 is because ADVENT ADVISORY SERVICES PVT LTD sold huge stake .In a way it is good that we can get another 10000 shares by putting 50000.I will add min 10000 in few months..since many people like few of old investor might want to sell.I do have conviction due to Tano and Nikhil Nanda himself is there.

Arun Mukherjee said...

To me its a great value buy.Lets sleep with it.

Anonymous said...

What is your view on Opto circuits and Core education these two fall sharply from their 52 weeks high is it right time to enter the stock for long term horizon (1-2 years). pls advice.

Arun Mukherjee said...

You can have a small position in both of them at present prices.Opto is slightly better placed though.

Anonymous said...

Betting Big on JHS ..added 3374 quantity to make it to 26000.Going to add further on 5 or in between 5 & 6 .Those who are investing from higher level like 35 or so .This is the best time to add all news are worst hence you are getting cheap.Buy low and hold tight.

Tano's involvement is big plus also it could be a potential takeover by colgate in worst case scenario.

Anonymous said...

Dear Arunji

will it be correct will colgate takeover JHS

Anonymous said...

If it gets taken over by very big player who need large facility that they can own and crate asset base are colgate/HUL/P&G/any pharma company like dabur etc.

These companies business segment matches seamlessly with these companies to takeover.But take over is the worst case scenario.

Why Nikhil Nanda and Tano will sell its stake such cheap after putting such effort for so long.They will try to improve business scenario and or product base offerrings to capture future FMCG growth.

No doubt it is tough time for JHS but India cannot be ignored as world manufacturing base after china.So considering its investment and its facility and asset it is a value buy before and now as well.



Arun Mukherjee said...

Takeover by colgate?I seem to be way beneath as far market rumuors are concerned this days.See in my 11 years career I have had a lot of hits and misses.Jhs is a classic play on the intrinsic value.Its quoting a not even 5% of its breakup value.Nanda is a sound guy with good business brain.At 5-6rs its worth buying.

Anonymous said...

Why it is down from 100 Plus to 5.7 Rupees??

What all could be the reason why people are selling to such a low level..is this really going to take very long time for revival???

Arun Mukherjee said...

It will take some time but things often change very quickly in the financial jungle.

Anonymous said...

Thanks Arunji,
Based on your past experiance what do you think price cann fall to 3-4 ruppees??

Arun Mukherjee said...

Anything is possible in stock markets.But based on my experience I have also seen some stocks moving up 100 times from crap levels.One example which comes to my mind is KEC int.I was hardly 14-15 then,bought it at 14 it fell to 8,I panicked and sold.3 years later it went to 800.Am not saying jhs or anything else will skyrocket like that but stock market is a real crazy place.

Anonymous said...

Yes Arunji,
The only reason I am asking for 3-4 is that .If you see the supply over demand at 6 rupees.Supply is more than demand.

Similar situation I observed when at 11 I placed order for 5000 quantity later supply came out 25000 quantity later I came to know that it is advent adisory selling it stake in huge quantity.so at this point another big holder if of holds can go much down.

For a retail investor we buy each level .but what do you think on this regard how much lows possible to buy more??

Arun Mukherjee said...

See if we are looking for 50-60rs gains,we can definitely miss out on 1-2 bucks.

Anonymous said...

Dear Arunji,

Can i average Jai balaji industries now the stock has traded @ rs.16.90. Will the coal scam hit jai balaji what is your long term target (2-3 years)

Arun Mukherjee said...

I am accumulating balaji is what I can say.

Anonymous said...

Arun Ji,
because of small market cap large fund houses never purchase small cap company only retail purchases and that too mostly away from market.Hence these smallcap when will be market favor ..how long is your holding time(jai balaji,JHS)??

Arun Mukherjee said...

Very very valid point but here the case is very different.Coz both the companies are fan of creeping acquisition.Both of them often buy their own shares and once their liquidity problem eases am sure they will swallow their shares.I am not someone who is fond of exiting.My holding period is till I see value and growth.Could be as high as lifetime.

Anonymous said...

JHS @ 5.15 rupees ,really strange who is offloading at such low rate.Good for us will accumulate more going forward.

Arunji,
What do you think about paramount communication ,Are you invested in this ?

Arun Mukherjee said...

Not invested in paramount.No idea who is selling jhs.

Anonymous said...

Arunji,
is there anything that we dont know ,something very big.Who is continuously selling such huge volume daily @4.9.



Arun Mukherjee said...

Well in stock market a stock can remain oversold or overbot for a very long time.Maybe the sellers know more than us and they feel it deserves a lower price.Thrs no lack of buyers too who are picking up in anticipation of multibagger gains.But surely it would take some quarters to get back on track.

Anonymous said...

Dear Arunji,

I have lot of respect with you and your views on the stock market. For the last 10 days i am accumulating JHS 5000 shares @Rs.5-5.50 and Jai balaji 1000 shares @ Rs.15.8 - 16.5. Hope will get good returns in the coming years.

Arun Mukherjee said...

I have a lot of respect for their business models and management and have bot the counters at much higher levels.Hopefully their bad times will soon be over and investors will get to see much much higher levels.

Unknown said...

Hi Arun, I have recently started following your website. Its really commendable. Thanks again. W.r.t. JHS, just wanted to know what is the management's plan incase P&G business to JHS doesn't grow. Has there been any significant development/growth on that front in last couple of quarters (any major contract that they have got)? Sorry to bother you, but thot of asking if incase u had checked on these with the management.

Arun Mukherjee said...

They have added two clients in the last few months,Dabur and Patanjali ayurved.Jhs has a lot to gain as some of the largest FMCG companies like Church & Dwight (owners of brand Pepsodent, AIM and Close Up in the U.S. market) are yet to come into India.GlaxoSmithKline and Johnson & Johnson are yet to bring their entire product portfolio into the country. There will be a lot of action in future in the Indian market with international brands increasing their presence in the country.With the kind of capacity and tax excise benefits jhs is on it would be hard for any other company to match jhs's price.Not to forget they have the advantages till 2020,so ones a robust foundation gets created this company will run like anything.

The gross block of 176crs,at present value would be way up to more than 300crs.Compared to that debt at 76crs provides huge comfort.The bankruptcy value comes at around 35-40 bucks minimum.It just needs to survive in the coming few quarters, if it can,will be a massive bagger in the years to come

Anonymous said...

Agree in toto.But can anyone tell me..who is selling in such low price..it really need too much guts to sell such low..Are we missing something??

Arun Mukherjee said...

In stock market the most fascinating thing is u will always find a buyer and a seller.Both wud feel thyself the smarter and the other one to be the fool.

Anonymous said...

Dear Arunji,

One stock broking agency recomended "Tril Ltd - BSE code - 532928" for a target of Rs.500/- from the present market price of Rs.95/-. will it be worthable to buy at present levels. your advice pls.

Anonymous said...

JHS has one more worst quarter the company loss has widened every quarter and this quarter loss is more than their income. and very soon it will become junk stock like Ks oil, Raj Oil,Ankur drugs, Koutoons retail. Arunji still you are having hope in this scrip???????????

Arun Mukherjee said...

I have no idea about TRIL.

Arun Mukherjee said...

Yup hopeful about jhs.The present price fully reflects the pathetic results it came with.Company is having a severe horror time.Let c where jhs goes in the days to come.

Anonymous said...

So you are also slowly loosing the confidence with JHS. is it correct.

Anonymous said...

Arunji,

Shree Ganesh jewellery has posted good results for the last few quarters but the share has come down to a all time low. Your view on this scrip is it advisible to invest now.

Arun Mukherjee said...

Forget about loosing confidence.Added 2300 more today.

Arun Mukherjee said...

I dont track shree ganesh actually.So cant say a thing

Anonymous said...

Great Arunji...well timing...I am purchasing from 16 and purchased in all price point last at 4.90 ...my total holding 38000....even in todays macassare it did not go much low... Will look this quarter holding pattern to take up further decision...will add 25000 more quantity if it touches 4...

Arun Mukherjee said...

The business is beyond time.Currently nearly 97% of the population in developed countries uses at least one variety of toothpaste and 87% of this population, brushes twice daily.This gives marketers virtually no space to expand the market with new users in this region. In stark contrast, only 55% of the Indian population uses toothpaste and less than 15 percent of the Indian toothpaste users brush twice a day, only indicating that ther's huge potential for Jhs.

Anonymous said...

You are saying the company has holding coal blocks then why they are buying loan from outside they can sell one of thiere coal block to others and raise money to close the loans to save the interest cost and it will help us to imporve the balance sheet good. your views please still you are advice to buy this scrip because it has touch new low every day and today it has touch Rs14.60/-.

Unknown said...

JHS is in good business segment with low cost capacities but it will have to tide over its immediate cashflow issues. It has scheduled loan repayment of about Rs.26 crore in FY 2014. The company will face problem in its servicing esp. due to it poor operating performance. They will find it difficult to refinance existing loan as bankers (ICICI Bank, etc) have classified the a/c as NPA.

Unknown said...

Hi Arun, does it make sense to buy relaxo footwear now? at ~Rs.850?

Arun Mukherjee said...

Coal blocks as per the terms are given for captive purposes,so no question of selling out.

Yup jhs would have more problems ahead.I foresee a CDR for the company.Jhs is following a german contract manufacturer model which is visiting many countries with its client.I know Nanda quite a bit and feel he would emerge victorious again.

Relaxo is a cash cow.If you check this blog you will find calls at 300 odd,ya still a buy.

Anonymous said...

Jai balaji & JHS is still a buy for your view. pls comment.

Arun Mukherjee said...

Yup, a buy for me.Bought more jhs and balaji recently at around 5 and 15.50

Anonymous said...

Presently i am having 6000 shares of JHS and 2500 shares of Jai Balaji which is 15% of my protfolio still can i accumulate both for a holding period of 2-3 years. your advice pls.

Arun Mukherjee said...

be slow on your accumulation,both wd take time to perform.

Anonymous said...

ok thanks for your advice will it perform surely because i already lost huge amount in markets

Anonymous said...

What is your view on allied digital services the company scrip has come to all time of Rs.7/- two months back. Now they got order worth 240 crores from Pune Police commissioner for installing CCTV cameras and they sold their subsidary company. Is it advisible to invest at this point of time for a 2-3 years.

Arun Mukherjee said...

Nothing is sure in stock markets.Secret to win in stock market is by constructing a disciplined diversified long term portfolio portfolio.

I Dont track allied digital.

Anonymous said...

Arunji,

Is it worthable to buy shilpi cable technoloties at present price 18.45. The company earning per share (consolidated) Rs.5.26 it is more than the share value then why the scrip is not moving from the listing date. pls advice.

Arun Mukherjee said...

I dont track shilpi that closely but ya its quoting at very attractive valuations.

Anonymous said...

Is Alphageo (india) Ltd is worthable at the present price and is there any future for this company. Next year 2014 govt is going to auction some Gas & oil exploration. pls advice

Arun Mukherjee said...

Alphageo was one of my favorite bets once upon a time.I have seen the counter moving from 60 to over 1000 bucks.It then moved to a low of 21.Its too inconsistent.I suggest selan in place of it.Though if alphageo can come out with few good quarter performances,returns can be huge

Anonymous said...

Hi arunji,can i buy these 2 stocks now.i will wait for 2-3 years.any target price.ur suggestion?

Arun Mukherjee said...

ya can buy them..no targets as of now..but big multibaggers in their own ways

Anonymous said...

Arunji,

your views on Basant Agrotech the company posted decent results every quarter and EPS @1.2 per annum but the scrip is not moving. Can enter the scrip at present levels.

Arun Mukherjee said...

I liked this company a lot until it did the blunder of splitting its shares.It needs to reverse split to get some attention.Until that happens no prudent investor would even care to look at it.Arvind remedies is a classic case of the same.

Anonymous said...

Any idea about sterling biotech the stock has moved more than 50% for the last 3 trading sessions. Yesterday the outcome of bond holder meeting has came. "The Bond Holders have also agreed and approved (1) that the conversion price of the Bonds due 2018 shall be Rs. 60 (Rupees Sixty Only) per share, subject to Reserve Bank of India, Foreign Investment Promotion Board and such other regulatory approvals, if any, as may be required; (2) to suspend all litigations in India and UK till January 2014 and (3) to withdraw the litigations in India and UK on completion of the exchange and substitution of the Existing Bonds with and for the Zero Coupon Convertible Bonds due 2018. Is it wise to invest at the present price.
pls suggest

Arun Mukherjee said...

I dont track it so no idea

Anonymous said...

one interesting fact noticed when compared JHS share holding pattern for sep vs jun found none of the top public share holder offloaded the share(checked in JHS website investor menu).also for some 100 days total NSE BSE sold quality is more than 15 Lakh.

SO when such a huge selling top investor of JHS has such a huge confidence which says a lot about its capability.

Now we should wait for its turnaround Vis a Vis adding more if it gets off loaded again below 4 or at 4.

Till then Happy Investing!!

Anonymous said...

Arun, what is your opinion on JSW holdings and steel sector(since jsw holdings holds a large percentage of JSW steel). I hold at an average price of 900rs. Do you think, it will reach that price or should i exit and invest elsewhere?

Arun Mukherjee said...

I aint a fan of the steel sector or for say any commodities.The only company I bought or own remains jai balaji ind,that too coz of the coal assets.Jsw holdings would be a hold at the moment,Nothing spectacular.

Anonymous said...

Your views on india bulls securities the company is declaring dividend of Rs.1/- every quarter for the last 5 quarters and at the present market price the dividend yield will comes to 24%. Is it worthable to invest in this scrip. pls advice.

Arun Mukherjee said...

Though I dont like the sector but am a huge fan of the Indiabulls group.They have been massive wealth creators in the last decade or so.Indiabulls sec would do well ones the equity markets start to rise.You can buy a few,not much downsides.

Anonymous said...

Source:The Hindu BusinessLine - In a blow to Nikhil Nanda-owned JHS Svendgaard Laboratories, Competition Commission of India has rejected allegations of anti-competitive practices by FMCG major Procter and Gamble. BSE-listed JHS, a third-party manufacturer, had alleged that the FMCG chain did not honour its commitment after its c

What is the future. Still you are having hope this company will come back from the hurdles. pls advice.

Arun Mukherjee said...

Bechara jhs.See just like in human life,companies too face a lot of bad times.Some diminishes in the ashes and some make great turnaround stories(symphony,singer etc).Jhs at present is having the horror of its life.I sleep with scrips and will ly with it for coming many years.You don't need to hope on my hope to be in a counter.If you feel it provides you the conviction and confidence then only be with it.

Anonymous said...

Correct.When a share can come from 100 Plus level to less than its face value there is many thing wrong that is given.Risk of turnaround is high so you are getting it cheap.How many years/months/days turnaround will take we don't know .How long will it make lows and how long will stay there no one knows.Are you confident in its story...If yes then only stay with JHS and keep on investing based on your extra money for investment .But if you want to make short term investor it might not give you return in very short term..Stay cool and keep on investing in 52 weeks lows bro....Happy Investing!!

Anonymous said...

Arun ji,
What is your view on career point and education sector.I am planning to invest some in career point .What is your view and price target.

Arun Mukherjee said...

I dont like the education sector.Career point has a good biz though.

Anonymous said...

What is Your View on Schneider Elec.for longterm?Reply please.

Anonymous said...

Sorry Mean Schneider Electric.

Arun Mukherjee said...

A quality company but am not too comfortable with its massive equity size

Anonymous said...

Sir,

Where u see JHS and JAI BALAJI IND.from 5 years from now?(Mean return wise)

reply sure

Arun Mukherjee said...

5 years sound meaningless now.Both of them are having immensely toughest time.If they can survive for the next 2-3 quarters,both will be massive multibaggers.

Anonymous said...


Article in the economic times given below will it comes Jai balaji will benefit for this. pls advice.

NEW DELHI: India may allow captive coal miners to sell surplus coal to steel, cement and power producers in a move that could challenge the monopoly of public sector Coal IndiaBSE 0.15 % and increase domestic supplies and serve to rein in imports.

A panel headed by Planning Commission member BK Chaturvedi recommended last week that surplus coal be sold at Coal India prices to companies from these sectors.

The proposal will go to the Cabinet Committee on Investment soon.

Arun Mukherjee said...

It would never sell any inputs even if its allowed.For 1tonne of steel approx 3 tonne of raw materials are required.Balaji has 1mtpa steel plant,it needs 1.6mtpa of iron ore,1mt of non coking coal and .35mt of coking coal.One of its non coking coal mine in ardhagram has already gone operational from feb 13.Ones dumri(non coking coal) and rohne(coking coal) starts production which will probably happen within the next 3-4 quarters,the whole story would get changed.It would become a profit making company and also a very efficient inegrated one.

Anonymous said...

Gulshan polyols is in advance talks with paper mills to setup onsite plants in their factory premises for manufacturing percipated calcium carbonate,dry and wet ground calcium carbonate for their consumption. in the q2 also the company is having cash and cash equivalent of Rs.19crores but the scrip is not moving for a long time. your view pls on this. i am holding 810 shares @130/- as per your recomendation more than a year back.

Arun Mukherjee said...

My call was at 70 bucks.In anycase its lacking nothing,from good management to grt business.Hopefully would get noticed soon.

Anonymous said...

Sir,

Your best Stocks for longterm disciplained Investment,please name them?And How u think JHS and JAI BALAJI qualify for longterm Investment?

Arun Mukherjee said...

Check the blog for tips and check the above comments for your answer.

MovieBug said...

Is this a good time to enter Jai Balaji Industries.. at CMP of around 13, if yes..what would b its target price

Arun Mukherjee said...

I have been bullish on it since quite a while and all the while it has made fresh new lows.It needs to survive 6-8 months,if it can,will move to much much higher levels.Else will underperform markets.

Anonymous said...

What is your present view on Rama Petrochemicals. Long back (2007) you have given your view on this company. Sep 13 company posted good results an EPS of Rs.2.12 more than the present share price. Can we buy at this levels and the company has any future.

Arun Mukherjee said...

Company on track,am studying it.Plan to either meet the management or have an interaction with them.Would keep u posted..

Anonymous said...

ok thanksji, expecting your further update soon

Anonymous said...

Sir,as Today movment in script(JAI BALAJI)u think it's bottom out & go for towards forward journey.What u think sir?

Arun Mukherjee said...

Ya some good accumulation today.Hope it moves up in the days to come.

Anonymous said...

What's your view on Mukesh Babu fin.? Is it worth to buy now ? May be b'coz of land bank ?

Arun Mukherjee said...

Its a very interesting counter.Looks very cheap compared to its intrinsic value

Anonymous said...

Good news JHS has touched UC in BSE & NSE now @Rs.5.64. Arunji, any recent updation will the rally continue. pls advice.

Arun Mukherjee said...

I have no news on it except it got a gross block of nearly 200crs with debt 80crs and got a mcap of just 12-13crs.Intrinsic value is still many a times more than the cmp.

Anonymous said...

Sir You said for JHS Intrinsic value is still many a times more than the cmp,Sir what u think value for Both JHS and Jai Balaji from current price(mean upside from current price)?

Regards

Anonymous said...

As ponited out in previous posts..it is a value buy....but purchase need to be done based on turnaround /profitability of business/revenue etc...though at that time this share will not abe available such low price...already share prices are jumping ....with news it will jump much faster...here till 11 rupees it is always better to atleast ourchase some at different price point based on sentiments..if you are really interested in this counter..

Arun Mukherjee said...

You read about the previous comments and will get your answer.

Anonymous said...

Any news for JHS & Gulshan both these scrips are locked upper script. pls comment

Anonymous said...

Sir.. wht about concurrent india? Its been painful last 3 years holding it.. Please say when it will list back and touch 100 your old target?

Anonymous said...

Arunji,

You have recommended Marg ltd multiple times in this blog about the potential and future prospects.I beleive the latest your recommendation was when the price was around 94. Currently it is down to 14. What to do you think about it's potential?Is there anything fishy about the promoters?I have invested heavily in this stock and my avg is around 70.Will I ever get my price back?Please provide a reply.

Arun Mukherjee said...

Concurrent will take some time to relist again.

Marg was too good a bet until promoters played spoil sport and killed the reputation of the company.It can only move if promoters show some commitment towards the minority shareholders.

Anonymous said...

Arunji,
Please let us know your best bet based on valuation and balancesheet in following sector anticipating turnaround in 2014

one real estate stock
one infra play

Arun Mukherjee said...

I have always liked Ashiana housing in the realty arena.Mahindra lifespace is a good one too.

Lanco maybe in infra

Anonymous said...

Arunji,
Last we interacted you purchased at 5 rupees to average....I also averaged out at that price....now people are interested to purchase at comparetively better price..nothing has changed about the company than indian macro...Do you want to do further averaging..if yes at what price and on what business trigger...

Arun Mukherjee said...

I dont put more than a certain percentage in a stock.As I always put a good monthly fund in stocks,a buffer to allocate more always remain.Jhs needs to survive,if it can,will script a new scripture.

Anonymous said...

Dear Arunji,

What is your view on Gayathri projects and Provogue is it worth to buy for CMP. pls advice.

Arun Mukherjee said...

Dont track them that closely but FDI in retail will help provogue.Gayatri will do well once the infra sector gets back in the reckoning.

Kashish Agarwal said...

KG Denim is a cheap valued stock of textile sector..
EPS , P/E ratio r excellent..
even the turnover is increasing evry qtr..
why is n't it moving north..?
what is wrong with this script..
plz giv ur valued commnts..

Arun Mukherjee said...

As you said it looks to be worth a bet but am not sure why its not performing.

Anonymous said...

Arunji,

Soon Jai Balaji will become junk sotck as the scrip value comes in single digit (rs.9.30/-) post result it will trade in paisa (penny stock). Still u are recomend this stock.

Arun Mukherjee said...

Jai balaji's numbers would be pathetic.Its in an entire mess and thus the price.The saving grace can be its couple of coal blocks.If rohne and dumri stays,it will move up,if not the mess will continue.But again book value is around 70 bucks,so again intrinsic value is way too high.It needs to survive coming few months,needs to have those two blocks desperately.Else a gone case as far the shorter term prospects are concerned.

Anonymous said...

i agree your point the book value is around 70 bucks if they posted continues loss the book value will become negative like sterling biotech, ksoils etc. i am holding 2000 shares @20 bucks (avg) now can i average the scrip or leave it your valuable suggestion pls.

Arun Mukherjee said...

Sterling was a fraud case and so was ks oils.Corporate governance wasnt at vogue.Its all about surviving for balaji now,all depends upon the coal blocks.Keep holding till clarity emerges

Anonymous said...

Arun Ji,
Any good news for JHS ??This counter is showing strong demand off late with 5% up Ckt each day for last few days.Are you aware of any recent development..what is your average price in this counter?

Arun Mukherjee said...

Its moving on a takeover buzz.What I got to know is-Promoters are demanding 60 bucks but the interested company wants to pay 25-30 bucks to acquire jhs.Negotiations are on and thus the buying from insider circle.All rumuors again so one shouldn't read too much.

Anonymous said...

Good for us those who are invested in sub 10 in either case be it 25-30 or be it 60..Dabur Colgate HUL can easily eat this like evening snacks to enhance capacity expansion.Colgate is best fit.What I feel though promoter should offload majority shareholder for some better partnership and win win for both.Anyway its intrinsic value is huge even if this this buzz does not go through ...poor return for Promoter and Tano who invested huge sum..60 is very low valuation though in that terms....

Anonymous said...

Arun ji..what is your average buy price in JHS ?

Arun Mukherjee said...

I bought jhs at 75,50,30,12,8 and a good quantity at 4.8.Average would be around 9.I have been a firm believer in averaging quality companies.Say someone put 50k at 50rs for 1000 shares,it comes to 5 and he puts another 50k by buying 10k shares.So total 1 lakh put for 11k shares,average comes at 9 bucks.But it must be remembered you should never put more than say 6-8% in a counter.Its also important to put good money every month to have the balance right.Else averaging wont prove any good for u.

Anonymous said...

Arun Ji,
Thanks for sharing your views on JHS averaging ...I also think the same .if you even allocate 5% to one you cannot have more than 20 stocks..with 6-8% it comes down to 17-18 stocks ..What is your view on Damani s view when you are sure it is a value buy buy in truck load ...which offcourse means more than 30% allocation or even more to get huge profit..do you believe him .I know with 5% approach we have lot of coushon in falling market to average and make our investment a balanced one....

Arun Mukherjee said...

Well am unconventional in my approach.I do believe in valuepicks and buying in bulk,but in a SIP manner.Say I bought jhs first at 75 and balaji at above 100.From top both are down by 90%,but since I feel there's good stories,I kept buying them.Jhs as can be seen if moves another 5% would mean profit for me.Balaji at some point of a time would be same.But again putting monthly sum is very very important.Else I would have been struggling with jhs at 75 and balaji at above 100.

Selan is another example which saved the wealth for 3 years.Bought it at every possible level and time has come for it to reap benefits.

Anonymous said...

Arunji,

What are the future prospects of Marg and Karaikal port?.I'm holding 20K @47 since 2011.First purchase around 120 and averaged on the way down?.How long do you think I have to wait to get my price back?.I'm ready to wait for another 1 year.Please advise..

Anonymous said...

What is your view on visa steel it is also giving poor performance like jai balaji and high volatility in price also is it advisible to but at this levels

Arun Mukherjee said...

I have already answered marg.

Arun Mukherjee said...

I dont follow visa steel..

Anonymous said...

Arun ji,
Thanks for sharing your views on JHS .For amy mining asset it is very difficult to assess the asset which is under the mother earth.And cost of mining is also on the rise..hence true value of a stock is never known until it is out to measurement ..like coal india has good reserves but whether profit will be in this year or next year no one knows so the share price..more of a speculaion..under buffet intrinsic value calculation model it is diffuclt to put a projected growth..so in stock like jai balaji ..or say selan ..how do you actually put that calculaion..or it is simply projection based...I am more interested of Jai balaji...can you please give your views in that perspective..

1.Coal reserves - can it be sold in open market if not used by jaibalaji..
2.can govt take it out if they dont start mining ...
3.except coal block and minus debt what could be the intrinsic value of jaibalaji could be ..

Arun Mukherjee said...

Selan business is too simple.They have huge proven crude assets.They just need approvals and simultanoesly digging.So one of the safest bets with huge cash flows and zero debt.Value it by cash flow,PE,future growth or whatever way you feel like.

Jai balaji coal assets are meant for captive purposes.Cost of mining is not even 1000-1500 bucks compared to the spiraling coal prices.As of now they only have a 4mt coal mining project which is operational in ardhagram.Govt can do anything and everything.Except coal blocks the NAV is(4000crs invested by balaji,debt of 2200crs=1800crs,carry forward losses are eating the networth though.In any case its worth 1000crs,which gives a value of 105rs per share.

Anonymous said...

Arunji,

Your view on nath bio genes india ltd is it buy at CMP. pl advice

Arun Mukherjee said...

I dont track it.

Anonymous said...

Arun ji ,
Any takeover news confirmation?? recent interest looks good

Anonymous said...

JHS is showing good interest at cmp..which company is taking over it??

Arun Mukherjee said...

Negotiation on,if deal fails,would move down again to 4-5.If deal is on,stock can be a multibagger even in the short term.

Anonymous said...

Alphageo is a buy at cmp @ 105.95 pls advice

Anonymous said...

Long back I posted that jhs could be a takeover candidate...it is good for their business as well.at this point tano could also sale stake completely along with nanda...getting more than 50 would be tough at this market.even at 50 mcp would be more than 130 crore..deal could be on much lower side as well..if the deal happens at even 35-45 range..in shortterm will give good return for new investors..as per negotiation what all companies are interested oalgate/hul/dabur or someone else? on negotiation news confirmation what is your short term target?

Arun Mukherjee said...

Alphageo was good at around 40-45 bucks.In momentum,can move up more too.But a 30-40% correction would make sense to make an entry.


Regarding JHS,not that much is known.But with the kind of facilities it comes with,a lot of FMCG people would be interested to acquire it.No targets for short term.

Anonymous said...

Arunji,
Very true..in their quarterly report they have already mentioned that they are finding an option for settlement of loan ..which implies they are on negotiation.if not today tomorrow they will have to go out..with 8 cr loss and cash crunch is biggest problem with them they took maximum risk without proper backup .Investing such a large sum for p&g was a very bad business decision..Though i dont like debt ridden companies here I am invested looking at its assets on book and gives me comfort.even when share went on low at 5 there was demand to purchase so was at 8.5 it says value investor are accumulating large quantity..lets see how the situation span out

Anonymous said...

for me I have accumulated large amount and if it comes below 5-6 again ready to add more .Many people with large holding are selling at huge loss after waiting for long ..Corporate shareholding came down .two of the entity sold out in open market ...only problem in the negotiation would be pricing before interest cost piles up.so now at what price point it deal would get settle is a question..if it gets sold out to a beter FMCG like dabur/HUL we might get good share in case of merger..else it is better to sell out around 30 if takeover iis around 30-35 bucks...let me know your opinion and exit strategy

Arun Mukherjee said...

Not to forget its tax benefits till 2020.Also TANO being a private equity has invested 35crs at 98rs.Tano would try to squeeze as much as possible,it would pressure the company to sell out as else jhs got a very remote chance to service its debts.Bankers too would want to get their money back and hence they too would urge the company for a sell out.All in all,exciting days are ahead for the company.

Anonymous said...

Ture ArunJi...I completely forgot the tax benefit..but not sure it would get price in during negotiation.of corse it should..lets see..game is on now would wait for the good deal happens here in JHS...

Another one stock is paramount cables they are selling AEI cables stake of 44% of UK business.Now with this debt will comedown in forward profit will look good.now what could be stock price effect..off late it is showing good acumulation..you had long back penned on paramount..what is your fresh view at this price and shortterm price movement...

Arun Mukherjee said...

Everything gets valued as thats a moat or a competitive advantage here.A penny counts in fmcg sector(we get 1 re shampoo pouches,2-3 paise being the margin).Paramount I no longer track as the equity got bloated to 120crs.

Anonymous said...

true Arunji..lets see..how soon the takeover things span out..it is the time to sit tight and add more....

Anonymous said...

Today Jai balaji moved in nse more than 15% any positive news will come.

spc said...

Dear Anuj,

Please confirm on takeover news for JHS svengaard lab ltd.
is it true or just rumours?

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