Market outlook and stock tip:-Bhartiya International Ltd.(Sunday, April 7,2013)
Momentum based Stock idea:-
Scripscan:Bhartiya International Ltd.
Average Buy price:185
Business:Bhartiya International Ltd., together with its subsidiaries, engages in the research, development, manufacture, and export of leather and textile apparels, leather bags and accessories, and fur garments in India. The company also plans, develops, and builds real estate properties, including residential apartment complexes. In addition, it operates as a private investment firm, specializing in infrastructure assets in India.Bhartiya is India's largest manufacturing export house of leather garments and amongst the top 25 leather apparel manufacturers in the world.
My real interest:I would really cut it short.My interest in the company is because of its 30% stake in its group company called BUILDCO.BUILDCO announced the launch of the Bhartiya City, a 125 acre (17.2 sq ft built-up area - 8.2mn sq ft residential and 9mn sq ft retail) integrated township in Nov 2012.The new integrated township across 125-acres has eight districts which bring together homes in different formats, work spaces including a large IT SEZ and financial district, shopping district and a high street, hotels, a hospital, a school with great attention to public realm covering many parks and streets which are pedestrian and cyclist friendly to give a unique experience of a township rightly labeled as ‘City of Joy’.It has priced the residential complex in the range of Rs 29 lakh to Rs 1.5 crore based on the available facility. Bhartiya City has signed up with Leela Hotels to operate the first hotel which will also include the largest conference centre in Bangalore.The initial 800 apartments got sold in a record time of just 18 days.It launched release II (two towers) of its residential project on 23rd January, 2013 and received encouraging response(over 1 lakh people witnessed the same).The number of apartments offered in release II were ~450 units, out of which majority got sold out.The company is in discussion with an EPC contractor for the residential phase and is likely to finalize it any day now. For its IT SEZ project, EPC contract work has already started.The whole project is a time consuming one and requires billions to have the full completion in the next few years.The recommendation is based on the euphoria that its project has generated and will generate further.Bhartiya is a pretty unknown scrip and is only worth 200 odd crs.
Conclusion:During the year fy11-12, the Company achieved a turnover of Rs. 207crs as against Rs. 167 crs in the previous year,registering an increase of 23.92%.Gross profit after interest but before depreciation and tax increased to Rs. 13crs as compared to around 10crs in the previous year. Net profit after Tax saw an increase to Rs. 7.36 crs from Rs. 5.5crs in the previous year,showing an increase of 32.96 %.The management has guided me a overall revenue growth of 33% and 30% in fy13 and fy14 respectively.I am recommending bhartiya just because of its interest in BUILDCO(core business growth can further re-rate the counter).Its hard to fathom a revenue or a profit figure from the real estate venture as that would bring huge windfall gains to the company in the longer term.Its a momentum news based stock idea hence core investors may exercise caution.Short term guys have a gala time folks by accumulating it in the mentioned buy range and exiting in the target price.
Todays update:Its been just a month and the company is running ahead to meet its target.Enjoy the ride members.
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