Saturday, November 3, 2012

RAPICUT CARBIDES LTD - SMALL,BUT STEADY GROWTH


















During  1970’s and 80’s Indian Cutting tools industry was dominated by two multinational big daddies – Sandvik Asia and Widia India .In 1977 few technocrats resigned from Sandvik Asia and started this company . Rapicut’s manufacturing facility is located at Ankleshwar,Gujarat.Later company took over  Gujarat Drillwell Private Limited and merged the same with Rapicut in 1993.Company producing  various types of Tungsten Carbide products like . T.C. Buttons, Rings, Tips, Inserts, Flats, Bushes, Jute Eyelets, Solid Carbide Cutters,Tungsten Metal powder ..etc which finds applications in Mining,Metal Cutting and Engineering Industries. Company’s client list includes Neyveli Lignite Corporation,Mineral Exploration Corporation Limited , Steel Authority of India Limited ,Tata Iron & Steel Co. Limited ,BHEL ..etc .This small company showing steady growth over past many years .In latest quarter company reported good numbers .This time it is more important to note that this performance came at a time there is severe slow down in its user industries.I believe company now started to eat the market share of some biggies too.Rapicut is now expanding its manufacturing capacities and ready to  move to the next growth orbit . For the past few months  promoters are purchasing shares from open market  which is another point to note.Company is managed by a decent management which  showing their willingness to share the success with minority share holders. This small company raised their dividend payout ratio from 10 % to 30 %  during last four years.For the last FY,company reported a sale of Rs.30 Cr , net profit of Rs.3 Cr and an EPS of Rs.14/-. In the first six months of this FY itself Rapicut posted a turnover of  about Rs.20 Cr and a net profit of 2.15 Cr .Half year EPS is Rs.10/-. Company is expected to perform even better going forward  with some revival in demand from user industries and stability in raw material price.Due to purchases by promoters and good performance in second quarter ,its share price appreciated recently and trading around Rs.86/- .This company having a tiny equity base of just Rs.2.15 Cr  hence liquidity is low.Those with high risk appetite can add small lots at CMP and buy more if there is any dip below  Rs.75/-. Steady growth ,good management,resilience during tough business environment ,decent dividend yield ,possible capacity expansion and increasing promoter confidence ..etc makes it an attractive micro cap stock, but only for brave hearts due to low liquidity.CMP is Rs.86/-

Link to Company website HERE 

Link to latest Annual Report HERE

Discl: I am holding shares of Rapicut Carbides. 

90 comments :

  1. Hello Sir,

    What is you view on following share.please let me know should i hold these or sell.

    Shree ganesh jewellers bought @115 and Current cmp@120.
    Fairfiled Atlas purchased @170
    Tulip telecom bought @ 45
    Oriental bell bought @85

    ReplyDelete
  2. Hold Fairfield and Orient Bell,not tracking the rest.

    ReplyDelete
    Replies
    1. Dear what is your view on india glycols.

      Delete
  3. are you tracking ador fontech?

    ReplyDelete
  4. Dear VP

    On Aug 15 2012 We discussed abt NEULAND LAB @116 ..u said Hold and my understanding of rising Promoter stake Q on Q hinted that something was on the cards ... now stock is at 180 ...... Also Promoters r still buying

    Please put ur latest view .... If reports 10Rs EPS ...Stock shall rock .....

    ReplyDelete
  5. Dear Sir,

    Thanks for another good pick!
    What do you think about IL&FS Investment Managers at the current price? What are the potential risks (realistically) that you foresee in investing in this company?

    ReplyDelete
  6. Hello VP Sir,

    I hope you're enjoying the bull run!
    I wanted to ask about Aarti Drugs. Is it a buy/hold/sell at this price? Why the company is not fancied as other pharma stocks despite being a consistent performer on business front?

    Thank-you

    ReplyDelete
    Replies
    1. Difficult to give a specific reason,but it is a fact that market is assigning only lower valuation for Aarti Group companies for past many years.

      Delete
  7. VP Sir,

    You are an inspiration to all of your followers. Every week coming up with ideas is rare. Your humbleness and desire to help others is unmatched.

    If you don't mind me asking, what keeps you putting so much efforts and time in maintaining this blog and sharing information without any expectation? I am sure that you're very well educated but wondering did you receive any formal training in stock investing? (if not then again an inspiration on how a common person be a good investor)

    Best wishes for your health and prosperity.
    Krishna

    ReplyDelete
    Replies
    1. Dear Mr Krishna

      I clearly mentioned the reason and my stand on this subject as a comment to one Mr Rao ,behind the posting of Aditya Birla Chemicals.

      Delete
  8. Dear Valuepickji
    Can you please give your opinion on Jb chemicals sept results.
    Regards
    Arpita

    ReplyDelete
  9. Dear Sir
    Pidilite industries Sept results not as promising as its previous quarter. Can you please give your updates on it.
    Thanks
    Niraj Pathak

    ReplyDelete
  10. Valuepickji
    Holding Multibase for two years. Still available at the same rate. Is there any change in fundamentals or any new developments going forward.

    Niladri

    ReplyDelete
  11. dear sir
    i am planning to buy indorama syenthis at CMP 26 what is view on this company shares..

    regards
    Thiyagu.

    ReplyDelete
  12. Hi Sir, what's your views on Ashiana Housing & Ybrant Digital, if you're tracking? Pls advise.

    Also, would u like to recommend any stock from Media/digital cable sector since digitization came in place in 4 metro cities so far.

    ReplyDelete
    Replies
    1. Dear Mayur

      I am not sure about the much talking impact of digitalisation on these cos.Hence so special opinion.One stock recommended earlier from Media Sector,Sri Adhikari Brothers @ Rs.27/- on the below link

      http://value-picks.blogspot.in/2010/02/sri-adhikari-brothers-television.html

      Delete
  13. Sir,
    Is it must for a every company to send it's annual report to every share holder.
    Asking for an academic interest.

    Mr. Sayyad

    ReplyDelete
  14. Dear Sir,

    Thanks for the new scrip.
    Excel crop care is booming up in a short span from 120 to 225 . Sir what is happening here ? Is it a company to watch?

    Boby K P
    Bangalore.

    ReplyDelete
    Replies
    1. Already commented about this

      Delete
    2. What is the outlook for basant agro after its quarterly results.

      rakesh gupta

      Delete
    3. No change in previous stand .Seed business posted a growth over 25% in latest quarter.

      Delete
  15. Schneider Electric Infrastructure has declared its second quarter results. The comapny's Q2 net loss was at Rs 20 crore versus profit of Rs 7 crore, YoY.
    The comapny's net sales were down at Rs 260.8 crore versus Rs 302.8 crore, YoY.
    Should we hold the stock or exit?????
    Pl suggest.

    ReplyDelete
    Replies
    1. Difficult times of power related sectors reflecting in it .Time is not enough to judge the new management and their strategies.Those having interest to take some risk and a long term view can still hold,otherwise exit.We can't rule out some developments other than mere numbers which may take it higher.

      Delete
  16. What's your view about coral lab.

    ReplyDelete
  17. A good Co. but very illiquid Stock. Both way difficulty i.e while buying and selling. Avoid!

    ReplyDelete
    Replies
    1. Clearly mentioned it is for High risk High profit type investors.

      Delete
  18. Hello Sir,

    Please provide your views on Fresenius Kabi. Is it good to enter at CMP 96?

    Thanks,
    Sunil

    ReplyDelete
    Replies
    1. Dear Sunil

      Recently commented on this stock,Use the search option above and help to avoid repetition to save time and effort.

      Delete
  19. VP Sir.. I am holding Themis at 108.. how has the company performed in last quarter? I'll hold my shares for long term.. but just curious to know its quarterly performance..

    ReplyDelete
    Replies
    1. Result will be published only on 10 Nov.

      Delete
  20. Dear VP sir
    Please share your view on Claris lifesciences, Arvind industries and Subex? What are the targets?

    At which price heritage foods may be under correction?

    ReplyDelete
    Replies
    1. Dear Kiran

      You can use the search option to find posting or comment on a specific company if it is already mentioned.Claris and subex already there .As far as my understanding there is no company listed in the name of Arvind Industries either in NSE or BSE.

      Regarding Heritage - who can give the correct answer ?

      If you are referring about some technical terms, I have no idea about that and not believing in it .I am interested to know ,at what price a stock is worth for a buy.This may vary from person to person based on their risk profile and other parameters .In case of Heritage even at this price I AM positive.

      Delete
    2. Bravo ... convinced with your explanation.

      Delete
  21. Dear vp sir,

    Is it right to enter manali petrochemicals at current cmp?
    Kindly explain in brief what is the exact meaning of rights issue?

    ReplyDelete
    Replies
    1. Not tracking Manali

      Fresh Shares offered to the existing share holders only

      Delete
  22. Dear sir,

    Kidly give your views on your old postings: epc industries, psl technologies, milton, & suzlon to enter in current cmp?

    ReplyDelete
    Replies
    1. EPC is good one for long term investment.No need to hurry in others.

      Delete
  23. Sir
    Please comment on the results of gpil sept quarter.

    Pranab

    ReplyDelete
    Replies
    1. Not very bad in tough conditions like this.

      Delete
  24. VPsir,
    Namaste from Kailash.

    first time writer on your blog.

    Sir you mentioned you are positive on Heritage at this price at Rs.420 after a it has more than double.
    On similar lines are you positive on GRANULES India at CMP?

    Not sure why stock has corrected after excellent results.

    Pls do share if you positive at current price.

    Thank you sir and glad to visit your blog as we hardly find investment blogs which is a boon for small investors.

    Most of the others are trading and speculative.

    pls do mention and thank you.

    Namaste.

    ReplyDelete
    Replies
    1. I will not change my stand only due to price fluctuations if there is no negative news specifically affecting company fundamental.

      Delete
    2. Thanks sir,
      But at current price can one enter?

      Kailash.

      Delete
  25. VP sir,kindly give prospects of Grauer and weils?

    ReplyDelete
  26. Dear VP Sir,

    Why share price increase after giving bonus shares. Technically there is no value addition. How share holders benefit.?

    ReplyDelete
    Replies
    1. My previous answer was a foolish one due to my overlooking and ignorance .Read below the opinion of an expert in this matter.

      Delete

    2. Dear Mr.Value Pick,

      Issue of bonus shares does not amount to fresh inflow of funds. The amounts under Reserves get transferred to capital account. Therefore, the question of utilising the funds again does not arise. Since the return of capital on the expanded capital base has to be maintained ( EPS, dividend), generally, it can be taken as a positive indication from the management and better growth projections. Normally, after issue of bonus, the share price falls due to fresh supply.

      Delete
  27. dear value pick any company in education sector you rcommend

    ReplyDelete
  28. Dear VP,

    With reference to your recomendation on July 22 2010, Chaman Lal Setia Exports , Is now available at 32. From last 2 year the financial results are quite good with 15% growth in topline and 11% in bottom line, 1st half of FY 2012-2013 is also impressive. Company is paying divident regularly. Can you express your views on this after 2 year?

    Satya

    ReplyDelete
    Replies
    1. Not now ,let us see the impact of late monsoon in rice production.

      Delete
  29. Sir..

    SIMRAN Farms Dividend not yet credited. Did they disburse it to any. Do i need to contact Company Secretary?

    ReplyDelete
  30. Dear sir
    If possible it is great for us if you maintain all companies by alphabet. Mean if i want any specific company by just clicking the starting letter i will get the information. Search option not looking good some companies are not coming in search even though those placed in the blog.

    Just an advise

    ReplyDelete
    Replies
    1. I think you had enabled this option before but just for few hours or at max 1-2 days.

      Delete
  31. Sir , thanks for ur valuable information, provided by you for us ,, now I want to now about lords chemical, wr promotor stake is increased from 42% to 70%. with shaare price coming down, companey sales and profit is increasing yr on yrr , pls share your view , so that I can chose good companies for investment , next tme. Thanks again for giveing ur valuable time.

    ReplyDelete
    Replies
    1. Not sure about the quality of promoters.Anyway they didn't uploaded the Annual Report of last two years in BSE

      Delete
  32. Can I buy Kei Ind and PTC Finance @cmp for 2/3 yrs? Pls help.

    ReplyDelete
  33. Just add to the above point,the search option give results only about your posts and does not include the comments and answers.

    ReplyDelete
  34. Dear VP,

    Fundamentally what change has occured in Heritage foods in the last two quarters .. has the retail business come to black?

    Best Regards,
    Shankar.

    ReplyDelete
    Replies
    1. The most important point to note is ,contribution of value added milk products to the total income increased very sharply which will help the company to increase its margins substantially .If it grow like this company can even afford some loss in other sectors till some critical mass reached and report over all good numbers even there is loss in some verticals.

      Delete
    2. looks like we can enter even @cmp for future gains in Heritage food..u seems +ve even at this level, if m not wrong.

      Delete
    3. I live in Hyderabad and the biggest surprise to me was when I visited Heritage retail store yesterday and found they are selling Noodles packet like Maggi under heritage brand. :)

      Though I bought heritage cookie which seems to be average in taste.

      Amit

      Delete
    4. Company is selling atleast 100 products ,including salt , egg,Ice Cream,Mineral Water ..etc under heritage brand.For more details see the below link


      http://www.heritagefoods.co.in/products/

      Delete
  35. Dear valuepick Sequent Scientific has passed resolution on 2nd to allot 21,000,00 warrants to promoters. Why so frequently they are raising there stake and infusing money in company?

    I believe it is a sign of good thing to come :)

    ReplyDelete
  36. Sir,

    Your valuable inputs on LT Foods and Kohinoor Foods at the CMP?

    ReplyDelete
    Replies
    1. Not much positive on rice exporting cos in short to medium term

      Delete
  37. Hello VP,

    What do you think about Kanchan International that you earlier use to follow? There has been decline in share price.

    ReplyDelete
  38. Dear sir,

    Kindly give your views on indian metals & ferro alloys ltd?

    ReplyDelete
  39. VP sir,
    for some reasons my post is not showing up even though I had put message twice.

    If possible, pls give your view on ADF foods?

    Thanks

    ReplyDelete
  40. thank you again :)
    but if i may kindly request you even though i know u are a busy man to avoid holidays for recommending ur fundamental calls and post it on a week day any random time.
    i request so because 1) early on a monday morning operators with big bucks enter and chances are they trap small capital investors
    2) it will be interesting and rewarding for the early bird fan of yours like me

    haz

    ReplyDelete
    Replies
    1. Earlier it was on week days .At that time many of you complaint that you are not getting time to study the stock before acting on it and requested to change the time of posting to any market holiday ?

      Delete
  41. What's your view on ramky infra? Holding it for quiet some time now?

    ReplyDelete
  42. Hi VP,

    I had in one of your previous posts had asked about rapicut (must be a month ago) as i got into the stock at around 57/- after looking at the fundamentals and the dividend yield. Had asked with reference to dividend yield your opnion on rapicut and prima Nice to see that my investment is vindicated

    Nelson

    ReplyDelete
  43. Any views on this stock now ... down significantly ..not sure if it has already adjusted for bonus but still doing badly...

    ReplyDelete
    Replies
    1. Already adjusted for a liberal Bonus

      Delete

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