Monday, August 4, 2014

BUY NILKAMAL STOCK AT 310 FOR TARGET PRICE 400

BUY NILKAMAL STOCK AT 310 FOR TARGET PRICE 400



Material handling segment has the potential to report healthy growth/margin.Nilkamal is the market leader in moulded plastic products and plastic crates. The products offered by its largest division, material handling, are sold (on B2B basis) directly by its more than 350 sales personnel to engineering, automobile, pharmaceutical industries etc.

NL enjoys a market share of 60% in this segment, with the second-largest player being Supreme Industries (SIL). Fast growth in the material handling business, which incidentally is also NL’s most profitable segment, is being driven by a multitude of sectors like agriculture, hospitality, logistics, industry, waste management, automobiles, dairy and horticulture products. Because of the diversified customer base, there has not been much impact of the recent slowdown in IIP growth. The Management expects this business to continue to grow at 20% CAGR, with sustainable EBITDA margins of around 14%.

Also another attractive point for NL is that EPS growth over the next three years between FY14 to FY16 is expected to average 18-20% plus YoY but valuation multilpes look quite low between 8x on FY15 and 7x on FY16E. Also NL’s cash earnings have grown robustly in last 3 years with CPS being Rs 67 in FY14 as compared to Rs 51. in FY13 which will further increase to Rs 78. in FY15 and Rs 91 in FY16. Hence it would be prudent to value NL on cash earnings rather then net earnings alone.
To add the current market cap of NL at Rs 527. crs, the NL stock trades a market cap to sales multiple of just 0.27x on FY15E whereas the potential revenue over the next 2 years is over Rs 2200 crs.
Hence I believe that the NL stock should be purchased at the current price for a price target of around Rs 310.

It is best to consider that, i have vested interest in this stock as i have invested !!!


Friday, July 25, 2014

JULY EXPIRY SPECIAL - BUY TATA MOTORS IN FUTURE AND CASH AT 461/463 WITH TGT 485/490 SL 453


JULY EXPIRY SPECIAL - BUY TATA MOTORS IN FUTURE AND CASH AT 461/463
WITH TGT 485/490 SL 453



Thursday, July 24, 2014

BUY GHCL STOCK AT 59 TGT 75 SL 52 - VERY SHORT TERM


BUY GHCL STOCK AT 59 TGT 75 SL 52 - VERY SHORT TERM


GHCL India is one of the largest manufacturers of Soda Ash in India, with an installed production capacity of 8.50 lakh MTPA, equally divided for producing Light (used in detergent industry) and Dense (used in Glass industry) Soda Ash. GHCL's Soda Ash is also widely used in the manufacture of sodium salts widely used in food products, textiles, paper, metallurgical industries and desalination plants.

Some of GHCL’s major soda ash consumers include clients like Hindustan Unilever Limited.

Attractive point for GHCL is that EPS growth over the next three years between FY14 to FY16 is expected to average 20% plus YoY but valuation multilpes look quite low between 5x on FY15 and 4x on FY16E. More noteworthy is that GHCL is one of those stocks which has seen almost 90% erosion in prices from its peak in Dec 2007. At the current price GHCL enjoys a market cap of Rs 578 crs as compared to a balance sheet size of Rs 3014 crs as on Mar 2014 and a Net worth of Rs 587 crs.

It is best to consider that, i have vested interest in this stock as i have invested !!!

Sunday, July 13, 2014

Innoventive Industries Limited Buy @ Rs. 20 with Target Price: Rs 120)



Innoventive Industries Limited Buy @ Rs. 20 with Target Price: Rs 120)





Winners do not do anything different but they do things differently. This is a well diversified engineering product company. It manufactures precision tubes, panel strips, auto components and various other engineering products such as machined tubings, couplings and pup joints. These products are used in various industries such as general engineering, transportation, power and oil & gas. Interestingly, manufacturing of these products does not require very high end technology. In fact there are umpteen number of companies which supplies these products. 

The company, earlier known as Arihant Domestic Appliances Private Limited, was acquired by Mr. Chandu Chavan and the other first generation promoters in 2002. It commenced its business with supplying Electric Resistance Welded (ERW) tubes to the automobile industry. Today, it caters to the diverse engineering requirements of clients from various industries, mentioned above. Specialization in processing various types of steels, faster development cycles, flexible production systems and effective supply chain management has made Innoventive one of the industry leaders. Despite offering quality products, the company does not charge any premium for its products. This makes the company less vulnerable to stiff competition in the industry.


Thus, in view of its strong growth prospects, wide range of products, process innovation and management focus towards enhancing profitability, the stock is well placed to double your money over the next 4-5 years. At the current price of Rs 20 per share, the stock of the company is currently trading at just 8.4 times its trailing 12-months earnings.  recommend you to buy the stock of the company at current levels or lower. 

Disclaimer : It's better to deem as I have vested interest in this company