Medium term news based stock idea:-
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.
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