Saturday, December 29, 2012

GILLANDERS ARBUTHNOT & CO.LTD. - BUY







Even  this company operating in India for the past 77 years ,this may be a strange name for many of you.This company originally promoted by  Mr. F. M. Gillanders and Mr. G. C. Arbuthnot and later taken over by Kolkata  based Kothari Group.Albert David Ltd is another listed company from this business group  .GAL is a diversified company with operations mainly in sectors like Tea,Engineering,Textiles,Chemicals,Property and Trading.Company owns 10 Tea estates with approximate area of 6000 hectares mainly in Assam.In addition to selling  bulk tea , company selling tea in retail packets under two brands – Mayur and KPI. GAL’s engineering division- Modern India Construction Company ‘MICCO’ executing turnkey contracts for designing and execution of  Building & Technological Structures, Tankages, Piping, Blast Furnace, Re-Heating Furnace, Industrial Furnaces, Cold Rolling Mills, Continuous Casting Machine, Gas holders, Coke Oven Battery projects, Raw Material Handling etc. Company is a preferred contractor of big steel companies like Tata Steel,Bhushan,SAILl..etc.Even in this tough times, recently GAL 's engineering division received orders worth Rs.133 Cr from Tata Steel and Bhushan. Textile division manufacturing cotton and synthetic yarn from two of its factories located at Kolkata and Ludhiyana.Total operating  1200000 Spindles in both these units together and selling the products both in local and export market. Company also operating a 6.5MW biomass based Power Plant in Punjab .
Chemical division of GAL manufacturing Lead oxide and it is one of the  largest manufacturers of Lead Oxides and Stabilizers for PVC Industry in India with a capacity of 17,655 Metric Tons.Company’s trading division importing and distributing various type of industrial products  includes Paints,Construction chemicals,Abrasives ,Painting equipments..etc. After a bad performance in last year company back to robust growth in first half of this FY .GAL reported a net  profit of Rs.21 Cr in the first half itself v/s a small profit of just Rs.1.5 Cr in same period last year.HY EPS is Rs.10/- .Due to softening cotton prices and increasing tea prices company is expected to benefit further .Management is liberal in profit distribution and distributed 50 % each in 2009 and 2010 .45% in 2011 and 5 % in last year even there is a loss.In 2010 company declared a bonus too.Recommending a BUY on GILLANDERS ARBUTHNOT & CO.LTD @ CMP of Rs.76 /- .Stock is listed both in NSE and BSE

40 comments :

  1. Sir, how is the management of this company?

    ReplyDelete
    Replies
    1. Not much aggressive , I don't think that is negative.

      Delete
  2. Sir,
    your view required on JK agri im holding at 550 shall i hold and wait for relisting or book loss.

    Thanks
    Ramesh

    ReplyDelete
  3. Whats your view on A. K. Capital?

    A leading debt market player available at very cheap valuation. There is hardly any issue in which it is not involved in the debt market.

    The management is a issue and there is cash flow issue in the balance sheet. But still it is available at a dirt cheap valuation.

    Request you to share your view about this stock.

    ReplyDelete
    Replies
    1. Hi Admin,

      Why do you say management is an issue for AK Capital? I'm an investor in the company and worried after hearing your comment.

      Delete
  4. Hi Sir,
    What is your opinion on Thangamayil Jwellery at CMP ? ..Thanks for all your advice..

    ReplyDelete
  5. Value Pick Ji,

    Thanks a lot for your valuable insights on various stocks.

    Just have a query,Why is the book value of Eon Electric is above 200 but the stock is trading below 35.

    Thanks
    Arun

    ReplyDelete
  6. Hi Sir,

    What do you think about Ador Welding and its management?

    ReplyDelete
  7. Dear Valuepick
    Dhampur Sugar has fallen from 75 to 51. Is it due to the amalgamation with jk sugar. how much downside can we expect.
    Regards
    debasish deb

    ReplyDelete
    Replies
    1. Recently UP Government increased State Advised Price (SAP) for sugarcane procurement by more than 15% .Many other states are expected to follow the similar trend .This is the only negative happened in recent times.Hope the price of sugar stocks will recover after December qtr result.

      Delete
  8. sir thanks for good picks..i want ur view on anil ltd..its customers is very reputed like itc lupin daber arvind mill..anil ltd profit increase 7 crores to 48 crores 2008 to 2012. anualy as well its eps is 48 anually..your view plz at currrent price

    Regards
    Shailesh

    ReplyDelete
  9. Dear Shailesh

    Good company from the starch and related sector.One small issue is the sharp price rise of its raw material in recent past due to delayed monsoon .Let us hope the same situation will not repeat next year .

    ReplyDelete
  10. Wouldnt the Market Value of GAl surpass greatly the present Market Cap + Debt which is just 162Cr + 200Cr = 362 Cr. I believe all the assets mentioned by you are worth much more higher... esp if they were acquired atleast 10years before... what is your say?

    ReplyDelete
  11. Hi,

    Dont worry. I am also a investor in A.K. Capital.

    The auditor has resigned few years back and no reason was provided till date. There is cash flow issues. The stock had gone only in one direction in 1yrs ie. down.

    About the management, it is the attitude which I was referring to. I had called them few months back and they were rude. They never replies to emails.

    Then also, I feel it is now dirt cheap and warrants an investment. Rate cut in Jan will be a good trigger. One top public shareholder in the company is RKD.

    ReplyDelete
  12. VP Sir,
    Do you see value in buying Heritage Foods at current levels?

    Also I have question for you on Market & Granules:
    Sir, I bought Granules at 150 levels and after that it moved to 231. After reading your messages and asking investors to buy business and NOT the stock in the market, I refrain from booking profit as I still think it has capacity to move forward once the issue mentioned by you gets resolved.

    Looking at market it seems the market may start correcting in next 6 months. With that impact do you think the Granules OR Heritage or in that matter most of the mid-caps will perform?

    Pls do give your views on both the points and thank you sincerely for your guidance.

    Chhers,

    ReplyDelete
    Replies
    1. Dear Amit

      We should understand one thing ,in the history of stock market no stock moved vertically to great heights if such a rise is driven by fundamentals and because of the purchase of genuine investors .There may be exceptions in case of operator driven low volume ( 1 or 2 share per day )cases and I have nothing to say about that.In genuine cases there will be correction,profit booking ,consolidation ..etc in between.If people like to chase only the momentum and interested only in market more than stocks or companies one should book profit when that momentum ends.For a genuine investor each and every corrections (without any fundamental negatives)offering better opportunities.

      What I mean is ,before purchasing a share we must have a plan whether we like to stick with the quality of company and grow with its business growth or we are planning to just chase the momentum and encash it, and act accordingly.A trading bet never convert into an investment and vice versa .As you are aware the basic of stock market is – share price will move up or down corresponding to the growth of company in long term.If a company’s business growing it will surely reward and if it fails to grow share price will come down accordingly. This is the only truth in stock market which is permanent .It is a long process and not happening in one ,three or six months.You just go through the last ten years financials of today’s big companies like Infosys,Dr Reddy’s ,TTK Prestige,Nestle ..etc etc and compare with the growth happened in their stock prices . Then do one more thing – just take the companies like Penta Media ,Silverline ..etc etc and compare what is their financial now and ten year before. 9 out of 10 considering stock market as a place to multiply money in few days and it is like a gambling .But in fact it is driven by strong reasoning when we take it in the long term.Short term fluctuation always depends on participants sentiments where long term movements always depends on business growth of companies.
      So first ,before buying a stock decide what we are planning to do and do it accordingly.

      Delete
  13. Hi sir,

    what do you think about Thomas Cook?

    ReplyDelete
  14. Sir,
    What Do you think about Atul auto at CMP 170.

    ReplyDelete
    Replies
    1. I have recommended this stock in 2010 @ Rs.71 ( see the below link)

      http://value-picks.blogspot.in/2010/06/atul-auto-shining-in-crowd.html

      Thereafter it declares 1:2 bonus and a rights issue at 1:4 @ Rs.30 .Still it is trading around Rs.170/-
      It already multiplied many times from the initially recommended price .At CMP it is a HOLD for me.

      Delete
  15. Hello Sir,

    I bought EON electric at 37 I see a downward trend, what could be the reason and do you recommend that I average it?

    Thanks,

    Sandeep

    ReplyDelete
  16. Hi VP,

    Thanks for your valuable picks,

    Can you pls let me know your views on FortisMalar hospitals.

    Regards,
    Praveen

    ReplyDelete
    Replies
    1. Dear Praveen

      Tracking only its parent company not this one.

      Delete
  17. Dear Sir,
    your view on surya roshni..its product is atractive and sector having growth potential..

    ReplyDelete
    Replies
    1. Company having reasonable prospects.But the promoters lapsed their warrants to be converted @ Rs.110/-. They believe its share not worth Rs.110 ??

      Delete
  18. Hello VP Sir,
    Can i consider to buy tata chemicals at around 350 (CMP), your one of the old recommendations. Is the value still intact and can be good investment?
    Thanks and Regards,
    Nadim

    ReplyDelete
    Replies
    1. A good company for long term but this year their margins may be at the lower end.

      Delete
  19. Sir,
    Biocon promoters have sold some stock from their welfare fund.

    Do you see that as negative or their could be some other reasons like raising cash?

    ReplyDelete
  20. Dear VP Sir,

    I am middle class person working in Co-op Bnak . I am planning yo Invest an amount of Rs2.00lacs by breaking an FD in Gillanders @78. So what do you suggest should be my horizon period to get atleast the price of 150. or should i invest in Mangalam cement.

    Pls give you valuable input .

    ReplyDelete
  21. Whether a particular stock is suitable for one should be decided by oneself.It depends on many factors including your risk taking capacity,holding period ..etc.I have a personal advice to everyone - never invest in stock market with your savings and you should distinguish between savings and investment.Invest only surplus funds what is available over and above savings. .Otherwise we will be forced to take many wrong decisions emotionally when there is an volatility in prices and such decisions (in most of the cases) ends in huge losses.So never divert any amount ,which we have saved for any other purpose ,to stock market to generate some income in between.If you are doing so only invest in bluechip stocks where risk is less.

    ReplyDelete
  22. Dear Valuepick,

    The replies made by you to the comments of members are commendable, particularly on Short Term Investments, Momentum and Savings Vs. Investments.

    Thank you very much for your sharing of Insight and Matured replies, keep it up, may god bless you. Happy New Year 2013.

    Arun Kumar
    Hyderabad

    ReplyDelete
  23. Dear Sir,
    Thank you for delivering us sheer joy of knowledge of value stock picking in easy way...... may god bless you.
    plz sir can you express your views on OPTO CIRCUITS LTD.i bought this stock ar rs.105 .
    Can stock again move to lvs of rs.250 in 2 years period?.... need ur suggestion.....
    regards,
    rahul

    ReplyDelete
  24. Hello VP,

    Thanking again for your great service for investors. Wish you a Very Happy New Year.

    Regards,
    Vasanth

    ReplyDelete
  25. Sir,
    Thank you for the detailed reply you have to my earlier query. Appreciate it.

    ReplyDelete

Followers

Tweet TopOfBlogs