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Tuesday, December 24, 2013

Paushak ltd:-The undiscovered hidden gem with multibagger potential

Recent paid call recommendation to members which is already doing wonders.

Medium term news based stock idea:-

Scripscan:Paushak ltd
Bse code:532742
Buy range:130-142rs
Target: 175rs.
Duration:4-6 months
Return percentage:25%+

Quote:Its a news based play so a long note is unwarranted.Am just penning the quintessence.

Business:Paushak is part of the Alembic group of companies situated in Gujarat.Alembic Ltd is the oldest pharmaceutical company in India founded in 1907 and has celebrated a "hundred years of excellence". Over the years Paushak has established a multi-product capability in Phosgene & its derivatives manufacturing.Paushak's vision is to be a leader in strategic supplies of phosgene intermediates and development compounds to pharma, agro & speciality chemical companies worldwide, using novel technologies in a safe and clean environment.

Point to note:Paushak is one company which am tracking for the last few years.I have always thought of suggesting it to members at levels like 55,98 and 124, yet every single time it moved up only to consolidate at superior levels.I feel with the bonus rumuor coupled with robust expected quaterly numbers,scrip offers an interesting opportunity for folks who can stay put for a period of 4-6 months.

News:Company has a very tiny equity of 3 odd crs.Its hard to get the scrip in good quantity.Interested fraternity including myself always conveyed the message of a liberal bonus but its been of no avail so far.But now with 34crs of reserves and virtually negligible debt,company is expected to announce a bonus issue.Company reported turnover of 50crs accompanied by a PAT of 7.7crs for fy12-13.This fiscal the same will inch upto 65-70crs with an expected PAT of between 12-13.5crs.

Track record&Ratios:Paushak has been a very impressive performer over the last several years.Over the last ten years,sales and profits have grown at a very healthy CAGR of 26% and 60% respectively.Even on a return on equity metric it qualifies on good merit(overall double digit with last fiscal being over 22%).The company has a high book value of around 140 bucks.Debt has been consistently reduced over the last few years.At present it just got a debt of around 1cr,company should be a debt-free entity within the next fiscal.

Valuation:Company quotes at a very attractive forward valuation of just 4 times.I expect the bonus news to follow with the annual numbers.Even if it doesn't vindicate,scrip should still hog the limelight because of the robust numbers.A mere 5 PE too gives you the target price.An unnoticed gem overall.


btw:People looking for midcap/smallcap positional call professional service may rush a mail at my mail id arunsharemarket@gmail.com to know more about it.

24 comments:

mangalore said...

Nahi milega..upper circuit

vishu said...

Its in upper circuit

Anonymous said...

Hi Arun,

Any picks from the agriculture related space? Some tractor stocks and agro-chem stocks have done really well. Because of good monsoon stocks such as VST Tillers, Dhanuka Agritech, Rallis have appreciated more than 50%! Any favorites in this space?

Thanks

PJain said...

Hi Arun,

What do you think on the current sensex and stock prices? Is it not overheated?Is it not worth waiting and buying good stocks.Pls advice

Arun Mukherjee said...

I have always liked and recommended dhanuka to my folks..Remains a safe compounder.

Rallis and vst too should do well.

Arun Mukherjee said...

Jain ji,

I never bother about markets as there will always be selective opportunities.Out of 4000 listed bse stocks,will always find some cool outperforming ones.

Vishal said...

Arun why have you stopped updating your blog?
Few fans like me , who are very small scale investors who can just invest 3-4k/month into stocks depend on blogs like yours.
Paid service for ppl like me doesn't make sense.

I was expecting you will provide 3-5 stock idea on new year , but never the less I'm very disappointed.

Wish you consider free users bit more seriously

Thanks
Vishal

Arun Mukherjee said...

Vishal,

If you can find out 12-15 counters from my blog in a year.That makes a good ordeal for you.

Anonymous said...

Hi Arun,

Any views on Sabero Organics? Operating in the same space as Dhanuka and managed by Murugapa Group? Also, your opinion about EPC Irrigation?

Thanks.

Arun Mukherjee said...

Sabero I used to track but since the takeover by coromondal am lacking ideas in it.Would give a relook.

Commodity Trading Tips said...

The price difference between the spot and futures markets changes regularly. This difference between spot and futures is known as 'basis', and the risk arising from the difference is known as 'basis risk'.

Anonymous said...

Arun look at your chill pill.

Arun Mukherjee said...

Wow,caplin point from 60 to 122...

Mujahid Khan said...

how is this possible when the indian economy is in wheel chair. If would prefer to check this company's fundamental before judging your perspective

Anonymous said...

this cillpill definitely touch 1000rs mark 1.5yrs.

Anonymous said...

Dear Arun,
Whts ur views on Venus Remedies, Persistent system and Waterbase Limited fundamental wise and long term perspective. Even Dhanuka too. Can I buy at CMP or should wait for correction in short term. Reply is highly appreciated.
Thanks
Nirav S. Karia

Arun Mukherjee said...

Waterbase I have no idea.Bullish on venus and persistent.

anup said...

Which shares is the best for six months.

Anonymous said...

Arun,
Paushak is in lower circuit, what levels will it consolidate at? Your advice for long term?

Arun Mukherjee said...

Its a company with very tiny equity and thus comes with low volumes.It hails from the stable of class promoters(though they need to open up a bit more to analysts and investors).Business is good with entry barriers,would provide decent long term returns.

Anonymous said...

thanks arun, dont you think paushak is commanding a very low p/e of 5-6 inspite of belonging to alembic group. alembic holds 19% holding in paushak and chairman Mr chirayu Amin manages both of these.Any news on Bonus..

Arun Mukherjee said...

Paushak may command a low multiple but we need to remember its been a 4 bagger in less than 3 years.Results been a shocker,but probably better number awaits them.At some point of a time it would catch good HNI fancy.

MANAV said...

Hi Arun

Can u please tell me what all major clients this company is doing business with. And where's the major segment of the Revenue coming from? What's their business model.

Thanks & Regards
Manav

Aditi Jain said...

Nice Blog, Thank you for sharing this nice information about nice topic on your blog, it is very informatics info thank for this blog
Big Height

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