Saturday, April 9, 2011

NITCO LTD - BUY








Company                     : NITCO LTD
BSE Code                   : 532722
Group/Index                  :B
CMP                             : Rs.62/-
FV                                 : 10
Recommendation      : BUY
  
NITCO is a  Mumbai based Tile and Marble manufacturer started its operations way back in 1953. Company's brand ' NITCO' is famous for its superior quality products.Company manufacturing Wall tiles, Floor Tiles and Marble which include Ceramic Tiles,Vitrified Tiles,Natural Marble,Engineered Marble.etc .Company having four manufacturing facilities and the main two  are located at Alibaug and Kanjur Marg both near Mumbai ,where the company having state of the art manufacturing facilities.Company  having a wide marketing network pan India consists of  18 depots, 750 direct dealers and over 5000 sub dealers.About 25% of company's income is coming from exports to various countries includes United States, Canada, Europe, Africa, Oman, and UAE .Nitco also have some presence in real estate development.Close to  50 % of company's income is coming from Vitrified tiles 25 % from ceramic tiles 20 % from Marbles and 5 % from other activities .Company was in  perfect shape till 2009 ,but its operations derailed in 2009 due to two reasons.The first reason was the sluggishness in construction/real estate development  industry which affected the entire companies in this sector.Another important factor was the arrest of its top officials by the Directorate of Revenue Intelligence for alleged customs duty evasion of Rs 1.47 crore.Both these incidents adversely affected the company and it turned to a loss of Rs.9 Cr in 2009 - 2010. Now situation is improving in the industry and particularly for the company. Management is now paying much attention in the business and taking various steps to revive the company.It recently started a 5.5   MW gas based power plant to save power cost which is a major component of total cost of production.It also planning to increase the number of exclusive selling points named 'Le Studio' from 50 to 200 nos.Nitco already developed 2 lakhs Sqft commercial property at thane and also having 7 properties to be developed around Mumbai.Company is planning to develop these properties ( about 15 lakhs sqft salable area) in various steps.For the nine months ended Dec 2010 NITCO posted a turnover of Rs.450 Cr and a net profit of Rs.15 Cr.It is expected to turnaround in this FY and improve its performance in next year onwards. The brand NITCO having a good brand recall in the industry and company can effectively utilize it when there is a revival in the industry. Investors with patience can BUY at current level with  long term view.NITCO is currently trading around Rs.62/-

12 comments :

  1. hi,
    can you tel about tcpl packing company.
    what about this company future,can i average in this rate.
    thanks
    chandrasekar.

    ReplyDelete
  2. Mr VP sir,
    I your follower from last one yr.
    Due to your cont. advice today i am feeling very glad with the script having most of all started showing their potential.

    My kind request to advice me for the averaging from below stocks where i am lagging-technofab,jagatjit,tcpl pack.

    Yours sincerely,
    kmd

    ReplyDelete
  3. Looks very weak on the chart. Has been pretty inconsistent with its PAT in the last 5 years.

    I am very impressed with your stock coverage. Some are real good value picks !

    ReplyDelete
  4. Dear VP,

    How do u see Regency ceramics in the same sector, looks very cheap.Company has high debt,but looking for reliance gas to their manufacturing facility in yanam. what is your view on the regency.

    Thanks,
    Sudhir Raj

    ReplyDelete
  5. dear value pick me and my senior ketan sir both are yours follower and almost buy evry stock recomended by u. We got profit in many scripts however many stocks are at very low level should we average out them as we belive that the stock suggested by u have potentail behind them like tcpl,kilburn chemical,vijaylaxmi,paushak. Please suggest.thanx

    ReplyDelete
  6. Dear Chandru

    Hold TCPL packaging

    ReplyDelete
  7. Dear KMD

    Hold Technofab and TCPL .Regarding Jagatjit Ind, I have recommended it twice first @ Rs.65 and again at 110/- and it moved to Rs.130/-thereafter.As you are aware it is not practical to give the exit call for each and every scrip due to time constraint . I hope ,everyone will do some homework and learn something deep about the mentioned cos before acting on such recommendation.By such a process investors should fix an exit price according to their risk profile.
    Anyway ,there is nothing wrong with Jagatjit and one may average it if it falls close to Rs.65/-

    ReplyDelete
  8. Dear Manikandan

    Thanks for your inputs and comments.

    ReplyDelete
  9. Dear Rajendra

    TCPL is recommended @ Rs.55,after touching Rs.61 it is currently trading around Rs.41 - Hold it.

    Kilburn Chem is recommended @ Rs.55,after touching Rs.66 it is currently trading around Rs.45 - Since this company's performance is below expectation one may book loss after analyzing the result of March qtr if there is no improvement.


    Veejay Lakshmi is recommended @ Rs.76,after touching Rs.87 it is currently trading around Rs.54 - Hold it and average around Rs.50

    Paushak is recommended @ Rs.74 and requested to book profit @ Rs.100 ( see the link - http://value-picks.blogspot.com/2011/03/paushak-book-profit.html)Even thereafter it goes upto Rs.122.-

    ReplyDelete
  10. Dear Sudhir

    Currently not tracking Regency ceramics

    ReplyDelete
  11. After Your recommndation on 09April2011@62, This stock came down to 27.Is there any problem in this script.
    Or BUY at this level. Please advice.
    From Raju P........

    ReplyDelete
    Replies
    1. Already requested to sell

      see the below link

      http://value-picks.blogspot.in/2012/05/nitco-sell.html

      Delete

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