Saturday, September 25, 2010

DE - NORA (INDIA) LTD - WILL IT BE A MULTIBAGGER ?




 
 
MNC’s always enjoying premium valuations in Indian
Stock market ,especially companies operating from niche
space.De Nora India (DNI) is a niche company commanding a
market share of about 75% where it is operating , but
overlooked by the investor fraternity- may be because of  the
complex nature of business in which it involved .
This company is a 51.25% Subsidiary of Gruppo De Nora
of Italy ,the world leader in design,erection and
commissioning of electrochemical plants. DNI’s main business
includes coating of anode and Cathode using in Chlor Alkali
plants and corrosion systems used for preventing corrosion
in SAW pipes ..etc. Along with this ,company is also supplying
electro-chlorination equipments for purifying water  for
drinking and Industrial purpose. The erstwhile Mercury Cell
technology used in our country is now gradually converting
into Membrane Cell technology, which is opening huge
chance for company’s product. Even if the new cells need
not require coating in the initial few years of operation it
should be coated periodically thereafter which is a big
opportunity for the company. In last  year DNIL introduced
Platinized  Titanium Anodes  for  surface  finish application
in India .Company’s factory located at Goa is equipped with
most modern facilities and it is getting full support of its
parent company. Lying of large network of pipelines in oil
and gas sector,building of new bridges ,different type of
concrete protection requirements ..etc are expected to
bring good business for company’s Cathodic protection
division.On the negative side ,company’s business
have some cyclical nature,and is related with the fortunes
of Chlor Alkali industry which is now  started showing revival.
Secondly there was an order against the company  by the
Directorate General of Supplies and  Disposals, Ministry of
Commerce and Industry which restricts the company from
business with certain  government departments for a
period of five  years  .But, DNI  challenged this order and
in last month got an order stating that the time period
reduced to just one year starting from 22.02.2010.
Even if it may slightly affect the
performance in very near future,there is good scope
for its business in private sector and also in export front.  
FINANCIALS
 
DNI’ financial year ending is in the month of December.
Last financial year witnessed one of the worst performance
in recent past where company posted a turnover of Rs.13.45
Cr and a net loss of Rs.33 Lac(excluding other income).
But ,for the qtr ended June 2010 alone company posted a
sales of Rs.4.74 Cr v/s Rs.2.29 Cr and a net profit of
Rs 1.20 Cr v/s .58 Cr. Half year EPS is Rs.2.14 v/s Rs.1/- .
Company is very liberal in dividend payment which paid 50%
in 2004 ,70% in 2005 ,69% in 2006,58% in 2007,25% in 2008.In
2009, due to loss company skipped the dividend and it is
expected to give higher yield in this year due to better
prospects. Considering the support from the parent
company which is the world leader, revival in the user
industries ,chances of a turnaround performance ..etc
company may turn as a multibagger going forward.
CMP is Rs.79/-(Trading in both NSE and BSE)

12 comments :

  1. Dear ValuePick ,
    Wow , 2days back I have pickedup this stock b'coz of its result available on its site and not on BSE site.Secondly ,I like to post to you but , that would have been ,student teaching to teacher ??? SO , I did not write , but as you have now written,let me ask one thing , where did you got the message that govt has banned this company for 1 or 10 years , I could not locate , but as you have told , then it must have been TRUE.

    KUDOS FOR YOUR RESEARCH !!!!!
    with due regards and respect
    Vakharia

    ReplyDelete
  2. This comment has been removed by the author.

    ReplyDelete
  3. Dear Mahesh
    Ban is only for one year and almost seven months already over.For details ,your mail id pls.

    ReplyDelete
  4. WOW, the latest UI is more pleasant to see and read. I have entered De Nora today at 79 levels.Hope it rocks like Vimal oil.
    Thanks Value Pick.

    ReplyDelete
  5. Sirji,

    You had given a BUY call for TIMEX at decline. Now it is trading around 41-42. Is it right time to enter or Should I wait further?

    ReplyDelete
  6. Dear Sir,

    What is your view on K S Oils Ltd? Shall we enter now?

    Regards
    Manjunath
    Bangalore

    ReplyDelete
  7. Dear ValuePick

    Can EPC be bought now and is it a multibagger in long term(2-3 years)

    ReplyDelete
  8. De nora declared a divided of Rs 5/.
    You have recommented this at Rs 79/- now quoting 92/- Is it a buy.

    Vishnu R nair

    ReplyDelete
  9. Dear Value Pick,
    I had entered De Nora on your recommendation at 79. Currently it is around 109. Please let me know if profits can be booked.
    Thanks for your service and recommendations for small investors.
    Regards
    Rams

    ReplyDelete

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