Wednesday, March 30, 2011

ANDHRA PRADESH PAPER MILLS LTD - Moving into the big league

The L. N. Bangur Group controlled AP Paper mill sold the entire promoter stake to
 I P Holding Asia Singapore Pte Ltd, a subsidiary of International Paper Company, USA .It is expected to improve both the share price and financials under the new professional management CMP is Rs.197/-


Sunday, March 27, 2011

BAMBINO AGRO INDUSTRIES LTD - If There Is A Will There Is A Way



Company                  : BAMBINO AGRO INDUSTRIES LTD
BSE Code                  : 519295
Group/Index           :T
CMP                          : Rs.35/-
FV                              : 10
Recommendation    : BUY






BAMBINO  is a household name in most parts of India  for the past many years. But the company owns this brand could not generate anything to its shareholders so far .Bambino agro came out with a public issue in the first part of 90's at a premium of Rs.30/- .After touching a high of Rs.84 in 1994 its share price is still hovering below the IPO price.Bambino manufacturing Vermicelli, Pasta, Instant Foods, Sweets/Namkeens  macaroni ..etc with the brand name BAMBINO from its manufacturing units located at  Hyderabad, Gurgaon and  Nagpur .Bambino's turnover shows reasonable growth in last ten years from   just Rs.38 Cr in 2001 to Rs.200 Cr in 2010.But till 2009 there was nothing to comment about the bottom line which was limited to few lakhs.Non professional promoters are the biggest negative of this company. But the recent  efforts of the management again giving some hopes about this company after a long tperiod.Recently company entered into an agreement with Domino's pizza chain for supplying  wheat pasta.As part of strengthening its marketing efforts company recently appointed additional C&F agents and super stockists across India to tap the growing market of  ready to cook/eat food.Bambino is also launching  new products like 3 minute instant pasta with sauce,Macaroni Crocodelite,multi cereal pasta ..etc . It also planning to launch some varieties of dietary functional foods in near future .All these efforts are showing some positive signs from the management side to tap the large opportunities available in this industry.After a long period company has  shown some improvement in its margins in last FY where its bottom line grows from few lakhs to 1.63 Cr .In the current FY,for the three month period Sep - Dec Company  posted a net profit of Rs 0.55 v/s 0.48 lac.
All together, there is a great brand in the hands of this company in a growing industry with huge potential in a country like India.If promoters are able to perform some smart moves ,BAMBINO AGRO INDUSTRY may turn as a multibagger from current level in future. Company  is currently trading at Rs.35/- with a market cap of just 28 Cr against  an annual turnover above Rs.200 Cr.

Wednesday, March 23, 2011

BASF INDIA - BUY






BASF INDIA is a 71 % subsidiary of the German chemical Giant BASF AG. Company producing polystyrene and wide variety of chemicals for Industries like leather,Agrochemicals, plastics,Paper ,automobile,Textile…etc. Last year ,company integrated its operations in chemical sector by merging another listed entity Ciba India with itself .  German parent company is now paying much attention to develop business in Asian region including India and China.As part of this strategy ,recently company merged its subsidiaries  BASF Coatings (India) Private Limited, BASF Construction Chemicals (India) Private Limited and BASF Polyurethanes India Limited into the listed entity.  In the agrochemical sector company dropped some low margin products and now moving to the the value chain. Considering the growth of White goods Polystyrene business of the company having a bright future . BASF India’s construction chemicals division producing liquid admixtures, powder and resin products. At a time of improving prospects of end user industries ,promoters are consolidating its business under the listed entity and also paying much attention to the R & D efforts. Long term investors may consider a Buy at CMP of Rs.510/-

Saturday, March 19, 2011

ABG INFRALOGISTICS - BUY

Company                  : ABG INFRALOGISTICS
BSE Code                  : 520155
Group/Index           : B
CMP                          : Rs.172/-
FV                              : 10
Recommendation    : BUY







                                                                 
ABG Infralogistics is promoted by Agarwal family and  started operations in 1984 as a crane rental company .Thereafter as a forward integration ,company ventured into the erections of machineries for various type projects.After successfully completed projects for large clients like IPCL,Essar oil,Bharat oman refinaries..etc ,ABG started to pay much attention for port operations. Currently,company operating container terminals in ports like Kandla,Kolkata,Paradip,Vizag,Haldia and Mangalore.Recently ,company awarded the
development right for the North Cargo Berth-II of the Tuticorin port trust.Another similar order is to develop the Western Quay-6 (WQ-6) berth of Visakhapatnam port and operate it for 30 years.Some of the mentioned projects are implemented through subsidiaries having majority interest.Company is now known  as an undisputed leader in planning  developing and operating container handling berths.Like crane lending operations ,profitability of port operations are linked to the volume handled by various berths in ports.Export from India is expected to rise many fold due to the revival in  world economies and the purchasing power of Indian middle class is expected to boost imports as well. Recently ,ABG came out with an open offer @ Rs.224 ,where current market price is @ Rs.172/- .Company also declared an interim  dividend of 50 % . Close to 65 % of the total equity is held by the promoters and 23 % with mutual funds and FII's. Considering the leadership position in port operations and the possibility of increase in trade activities of India with various countries,ABG infra logistics have a great future .One may consider an inclusion of ABG Infra logistics in their portfolio at CMP of Rs.172/-
                                                                                                                                       

Wednesday, March 16, 2011

Value Investing and Growth Investing



Value Investing
Value investing includes buying an undervalued stock and then selling it when the market at last recognizes the company's potential. In simple terms, value investing can be considered as investing in something that the market presently values less than what it is actually worth. The concept of "value" might be different for different investors. While some of the investors consider only the present assets of a company for determining the intrinsic value of its share, others estimate it based entirely on the company's growth prospects.
How is Value Investing Done?
Value investing usually involves the buying of under-priced shares. Now, whether the share is under priced or not is established or known by some forms of fundamental analysis. Examples of such under priced securities include stocks that have -
  • High dividend yields.
  • Low price-to-earnings multiples.
  • Low price-to-book ratios.
Also, stocks that are trading at a discount to their book value may be considered value investments. Other strategies comprise opting for stocks with low price-to-cash-flow ratios. There are several ways of evaluating the success of value investing. One could indulge in value investing simply by observing the strategies of well known investors.
Benefits and Dangers of Value Investing
The ability to judge and select a company with strong fundamentals can give significant earnings in the long run. It has been empirically noticed that value stocks outperform growth stocks. By compounding through dividends, value stocks can be among the most profitable investment options in one's portfolio. However, owing to the huge number of companies that float their shares in the market, it becomes very difficult to find a stock of a promising company which is undervalued by the market.
Besides, over dependence on the model of value investing can minimize one's earnings potential. It is important that investors take their sentiments into account, as this plays a vital role in the movement of stock prices in the market.
Growth Investing
Growth investing is a strategy which involves investing in stocks which have above-average growth potential. Such investments are carried out even in situations where the price of such shares appears high in terms of the price-to-book or price-to-earnings ratios. An investor who adopts the growth investing strategy is known as a growth investor.
How does Growth Investing Work?
Growth investing strategy is executed in several ways. These include investing in blue chips, emerging markets, recovery shares, smaller companies, Internet and information technology stocks, special situations and second-hand life policies.
The appreciation in the value of growth stocks is fairly fast and high. For about 5 years preceding the 2000-2001 dot com bubble burst, the growth stocks performed better than value stocks.
After the end of dot com era, value stocks have been performing much better than growth stocks. This is why a 50:50 investment strategy (i.e. half the portfolio is created by applying the growth investing strategy and the remaining comprises of value stocks) has been widely advised by financial analysts.
Growth Investing Strategy: Benefits and Risks
Growth investing is many a times used by investors for maximizing their capital gains. Hence it is also known as 'capital growth strategy'. However, the application of the growth investing strategy can adversely affect one's aim to diversify their investment portfolio. It would be dicey to attach a high price to a security in hope of benefiting from its growth. The security price may crash down if the growth rate fails to live up to expectations.
Growth investing can be considered as a converse to value investing because in case of growth investing the investments are made only when shares are cheap.
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Courtesy :Tax4india

Saturday, March 12, 2011

CAMLIN FINE CHEMICALS - AN UNKNOWN GEM

Company                  : CAMLIN FINE CHEMICALS
BSE Code                  : 532834
Group/Index           : B
CMP                          : Rs.56/-
FV                              : 10
Recommendation    : ACCUMULATE



Camlin fine chemicals is an unnoticed company operating in a sector with huge potential.Company is the demerged arm of Camlin ltd,and a manufacturer of some niche fine chemicals used mainly in food processing and pharma sector.It has two divisions - Food processing Chemicals and Industrial products. In the food processing chemicals segment company manufacturing  antioxidants which are used mainly in edible oil and other food items to increase shelf life.Its anti oxidants TBHQ and BHA commanding a 30% market share in the global market and it is  the market leader in this category.Company having strong tie - up with Kemin Lab of USA for R&D and marketing  for the products in food segment.Recently company introduced a new product in the form of a natural spray for giving natural freshness for  vegetables and fruits and  increasing the shelf life of these items  without any harm to the consumers health.This products is filed for patent and it is expected to become a blockbuster product of the company.Another recently launched niche product is Ascorbyl Palmitate for cosmetic and baby food industry.Now company is strengthening its marketing wing throughout Europe and USA. As part of its backward integration programme ,company recently acquired a subsidiary of Borregaard which manufacturing Hydroquinone .There are only five companies in the world manufacturing Hydroquinone which is the main raw material of Camlin Fine Chem's product. Due to short supply of Hydroquinone ,company faced interruptions and low margin situation in the past .This acquisition will ensure the easy availability of raw material and help to improve its margin .Company steadily increasing its sales  market share in previous years and its turnover improved from Rs.47 Cr in 2006-2007 to Rs.125 Cr in 2009-2010. Bottom line improved from a loss of Rs.2 cr to a profit of Rs.4.3 Cr in this period .In FY 2011-12 company is guiding a turnover of Rs.200-250 Cr with an improvement in margins.In short , it is a company with good management with clear vision, working in a  sector with huge potential . Currently ,this FV 10 company is trading with a P/E multiple of  9 .The parent Camlin ltd with FV Rs.1 is trading with a  P/E multiple of 24 .Considering all the positive factors including the global market leader position in certain products, increasing popularity of ready to eat and ready to serve food items in India  ,  initiatives of management to introduce new products and their history - it is a stock to accumulate at current price of Rs.56/-





Wednesday, March 9, 2011

ALBRIGHT & WILSON CHEMICALS INDIA LTD - Turnaround Time ?




Albright and Wilson Chemicals(AWCIL) is part of  € 5,226 million world chemical giant Rhodia group .
Rhodia UK holding about 73 % stake in its small equity of Rs.3.37 Cr.AWCIL is manufacturing various type of Surfactants used in home and personal care industry.Using the strong network of Rhodia AWCIL is exporting its products to various countries.Company had two units ,one in Ambernath and other in Roha.In 2008 company suspended the manufacturing activities of its Ambernath plant and  in 2010 it increased the capacity of Roha plant.Land  at Ambernath is now up for sale.Last year company posted a loss of Rs.23 Cr mainly on account of retirement compensation for the employees of Ambernath plant (Rs.10 Cr) ,depreciation of Rs.5 Cr and an interest payment of Rs.2 Cr. On sale of Ambernath land company can repay the loans and deploy the balance in the business. Based on the revival in FMCG industry both in India and abroad company started  showing some improvement in its performance.AWCIL's financial year ending is in December .For the FY 2010,company posted a turnover of Rs.164 Cr( Rs.98 Cr) and a net loss of Rs.3.69 ( loss of Rs.21 Cr) . With the strong support of Rhodia,expanded capacity utilisation,possibility of debt free status in near future and a revival in  product demand - AWCIL is expected to turnaround in near future . Possibility of a de listing offer can't be ruled out. Investors with some risk can consider AWCIL which is currently quoting around Rs.185/-

Sunday, March 6, 2011

ROTO PUMPS - BUY

Company                  : ROTO PUMPS
BSE Code                  : 517500
Group/Index           : B
CMP                          : Rs.86/-
FV                              : 10
Recommendation    : BUY
 
 
 
 
Roto Pumps started its operations in 1968 as a producer of
progressive cavity pumps , whose demand met by import
till then.Company  also producing Twin Screw pumps and
Centrifugal pumps in its two most modern facilities located
at Noida.Roto distributing its products around the globe and
it has marketing offices in Australia and UK. Company also
having strong marketing network in India.Progressive
cavity pumps are used to pump liquids with high solid
content and flow needs to be controlled .These type of pumps
are generally used in industries like Beverages,Pharma,
Food processing,dairy, Effluent and sewage treatment
and mining etc.. Other type of pumps made by the
company are used in sectors like irrigation,agriculture..etc.
Half of its sales coming from export and this itself is a testimony
for the quality of Roto’s products. Roto is going through a
capacity expansion programme and the benefits of it will
reflect in the near future.Now company’s customers are
posting good business which
will help the company too.This is one of the cheaply
valued listed player in this sector compared with KSB ,WPIL,
Kirloskar Brothers,Sakthi Pumps ..etc . Roto has a tiny equity
base of 3 crore where promoters are holding almost 70%.
Last year company posted a turnover of Rs.52 crore and a net
profit of Rs.3.3  crore and an EPS of RS.10.7 . On a continuous
basis ,for the past four years company increasing its sales and net
profit. For the Nine month ended December 2010 ,Roto posted an
EPS of Rs.13/-  Roto has an uninterrupted dividend history for
the past five years and paid 20% each in last three years.
Currently it is trading around Rs.85,with a P/E multiple of  just
5 on the expected full  year EPS  of Rs.17 +
 

Wednesday, March 2, 2011

PAUSHAK LTD - FROM THE GROUP OF ALEMBIC.

Company             : PAUSHAK  LTD
BSE Code           : 532742
Group/Index        : B
CMP                   : Rs.74/-
FV                      : 10


Paushak is a specialty chemical company based in Gujarat and belongs to Alembic group .It is one of the known producers of Phosgene and  its derivatives.These products are mainly used in industries like Pesticides,Pharmaceuticals polyurethanes , plastic manufacturing..etc .Phosgene is a highly poisonous gas and it can be converted into liquid by cooling and pressure.Because of the dangerous nature of the product ,it is not very easy to get the lisence for manufacturing this products and environmental clearance is always an issue.Atul ltd is another company in India manufacturing similar type products.Paushak is planning to increase the capacity of Phosgene based products and it already seek goverment permission to expand the capacity.Enviournmental impact Assessment already completed by the ministry  and the the permission is expected soon.In the financial front ,for the nine month ended December Paushak posted a turnover
of Rs.22 Cr and a net profit of Rs.2.96 Cr .On an equity base of Rs.3.21 Cr EPS is Rs.9.2 v/s last full  year EPS of Rs.6.67.  Company declared dividend of 20% each in last two years. This alembic group company deserves a closer look .CMP is Rs. 74/-
                                                                       

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