Saturday, December 8, 2012

TIL Ltd - BUY



  
   
I know ,many of you may raise eyebrows for recommending a loss making company this time.As a contrarian bet I am taking  one such company -TIL Ltd – for genuine investors.I believe if the poor performance of any company is only due to a temporary demand slackness in that particular industry ,such situations should be used to enter in quality companies from such  sectors. Proper time of entry and depth of patience will help to make robust return in such cases. As you are aware ,overall engineering industry in India is going through a rough patch due to lower capex for the  past few years.Delay in various approvals by government authorities for larger projects ,higher interest rate ..etc are the main reason for this scenario.I feel ,we are almost at the bottom of a poor capex cycle and it is the time to acquire quality companies from this sector and wait with patience to reap the benefits in medium to long term.TIL is a Kolkata based company manufacturing and distributing engineering equipments for sectors like material handling ,mining,construction,earth moving ..etc. TIL along with its subsidiaries  operating in four divisions –

1)    Material Handling ( Mobile Cranes,Tower Cranes,Container Handler,Forklift..etc)
2)    Equipment and Project Solution (Hot Mix Plants,HD Drills, Crushing and Screening Solutions ..etc
3)    Construction and Mining Equipments  (Excavators,Off-highway trucks,Loaders..etc
4)    Power System Solutions ( Diesel Generators with various capacities)


The above product profile clearly indicating company’s presence in each and every important segments of infrastructure development.


Company is also serving as the dealer for Caterpillar products for  north and east India and Bhutan through its  subsidiary Tractors India Private Ltd.During the past few quarters company came through serious challenges mainly due to poor  demand in  power systems and construction divisions on account of  delay in various infrastructure projects in roads, power and mining space. For FY 2010-11 company reported a top line of Rs.1380 Cr ,  net profit of Rs.60 Cr and an EPS of Rs.60 /- .In FY 2011-12 profit declined substantially to Rs.15 Cr and again in subsequent quarters of FY 13 TIL reported losses .  As a reflection of this bad financials its share price nosedives from a high of Rs.750 level to current level of sub Rs.200. I believe ,government will now  initiate some steps to improve the momentum of the economy including aggressive capex plans by PSU companies.Since there is not much distance  to the next parliament election ,chances are there for a speedy approval of projects which delayed in past many months or years.Altogether I strongly feel this is the time to buy quality companies from sectors which may directly benefited  by an improved  capex cycle.TIL is one such company operating in many of these  verticals and recommending it  for investors with enough patience which is now trading even below its book value of Rs.270/-.This stock is listed both in NSE and BSE and trading at CMP of Rs. 205 /- 


Link to Company Website HERE

Link to latest Annual Report HERE



94 comments :

  1. Sir,
    One request from your reader, you also mention "I feels" but its not that but its "I feel" .

    Also I feel TIL is is in bad shape and needs to reduce their debt.

    Youc pick Aditya Birla is not running. Any reasons you can point at will be be helpful.

    Thanks
    John P

    ReplyDelete
    Replies
    1. Dear Mr John

      Thanks for pointing my mistake of an extra 's' somewhere .I am not a master in English and only very limited knowledge in this language.So there my be many spelling and grammar mistakes.But I think you got the point what I mean by that sentence.So please bear with for the rest.

      On the second point ,I can express only my opinion and each and every reader have freedom to agree or disagree with the mentioned points .Invest if and only if you have conviction - money is yours,profit/loss is only for you.About its debt ,I don't think company's debt is high compared with the size of company and feel all these negatives are reflecting in its current share price .


      Aditya Birla chem not completed even just 2 months after recommendation.I don't think there is any meaning in expecting a price rise in this short period .

      Delete
    2. I wasn't aware of being grammatically correct on expressing financial intelligence :)

      Delete
    3. @ John P,Some of your mistakes
      1. You also mention -> You have written or you have mentioned.
      2. TIL is is -> TIL is.
      3. Youc pick -> Your pick.
      4. Will be be -> Will be.

      Delete
  2. Dear VP,

    Came across the EIMCO ELECON whhich is under the same categroy. Do you think this company also needs a mention.

    Regards

    Neil

    ReplyDelete
  3. Sir,

    What do you think about Gujarat Apollo Equipments and it's management?

    ReplyDelete
  4. Do you track west life development. hardcastle restaurant the indain franchisees of mc Donadl's will merge into West life Development.

    This stock seems to have a grest bull from Rs 10 to 86 CMP

    ReplyDelete
    Replies
    1. What to say about a company with trading volume of just 5 shares max on everyday where there is no bulk deal.Scrip may move on this news ,but waste of time

      Delete
  5. Hi Sir,
    What do you think about SNL bearing? Would you advise to buy it at current rate?
    regards,
    saj

    ReplyDelete
  6. sir what is ur view for ur old post kilpest, can you post any further view, as i want to invest in the same

    ReplyDelete
    Replies
    1. Company's new ventures delayed a bit .Better to wait few more months before taking a final call.

      Delete
  7. Thanks for your valuable picks sir...

    ReplyDelete
  8. Sir,
    May I know ur views about prozone.the fdi , may help this stock .

    Sachin

    ReplyDelete
    Replies
    1. Theoretically positive but company should prove.

      Delete
  9. Sirji u give a lot of suggestions. Thanks for that.
    One suggestion from my side: Buy UPL and forget for three years!!! I bought it at 110!
    What's your opinion.

    ReplyDelete
    Replies
    1. Already recommended at Rs.111 /- see the below link

      http://value-picks.blogspot.in/2012/06/united-phosphorus-ltd-buy.html

      Delete
  10. How to you view Indiabulls Wholesale services after the approval FDI in retail in LS & RS

    ReplyDelete
    Replies
    1. Price may or may not move but I am not interested to recommend any stocks from Indiabulls group .

      Delete
  11. Any major update in tata chemicals . It seems to have rallied form 300 - 350 in no time

    ReplyDelete
    Replies
    1. For the past few days there was some rumor about Tata Chem,not interested to speculate on that .Positive only on long term.

      Delete
  12. What's your opinion on HCL infosystems and sterlite technologies?

    ReplyDelete
  13. Sir,
    Holding centum since your recommendation I am still positive, but would love to know your view.

    Sagar

    ReplyDelete
  14. Dear VP,
    What is your view on escorts ltd?

    Thanks,
    Tom.

    ReplyDelete
    Replies
    1. Company having potential but not interested to recommend only because of management's attitude towards its minority share holders .Just Neutral.

      Delete
  15. sir what is ur view for technofab

    ReplyDelete
  16. Sir,
    How is VA Tech Wabag?

    ReplyDelete
    Replies
    1. Good one for genuine long term investors.

      Delete
  17. Dear Sir, this site should be tagged as "What works on D-Street" :) What are views on Asian Hotel (East): Asset rich with 5* hotels, land for further development, able promoters, decent dividend yield and negative EV. Return on hotels seems to be very poor though.

    Thanks

    Ritesh

    ReplyDelete
    Replies
    1. On the basis of assets owned many hotel companies are trading at attractive valuation .But when a re rating is possible is the main question.

      Delete
  18. hello sir, I would like to know buying KAVERI SEEDS COMPANY still makes sense since it has gone up to 1350.. One more question sir, since PE of this scrip is 16 is it relatively cheap?... Kindly guide me sir..
    THANK YOU...

    ReplyDelete
    Replies
    1. I have recommended this stock around Rs.270

      http://value-picks.blogspot.in/2010/07/kaveri-seed-company-future-perfect.html

      which now gained multi fold in last two years .Recently they started the commercial production from their olericulture project named as KEXVEG (Kaveri Exotic Vegetables). Company is now developing many new paddy varieties too.For a high risk taker I CAN'T say a strict 'NO' even at current price.

      Delete
  19. Hello Sir,
    Whats your view on VIKAS WSP?? Promoters and FII's are increasing their stake since last 3 quarters aggressively. Isn't it a good sign for a stock to move upwards?? Waiting for your valuable views... Thanks in advance

    ReplyDelete
    Replies
    1. Even the product has potential I have no confidence to recommend it due to below average promoter quality .

      Delete
  20. Hello Sir,
    What do you think about Diamond Power?

    ReplyDelete
    Replies
    1. Go through the below link ,how we can trust such promoters ?.

      http://www.indianexpress.com/news/it-raids-on-firm-find-massive-tax-evasion/925244

      Delete
  21. Thank you sir for the pic, actually I was about to write a comment regarding any good pic in infra/construction sector, given that most of the companies are bad. Thanks for posting this good company :)

    ReplyDelete
  22. Thank you for good recommendations for small investors. can your give me your opinion to buy for long term on vulcan engineers, rossell india and umang dairies. Thanks for your help.

    ReplyDelete
    Replies
    1. Vulcan and Rossell is fir for investors with long term view and not suitable for those looking at the trading screen day by day .Not tracking Umang Dairies.

      Delete
  23. Hi Value pick jee,
    The pick, Rossell India is exiting considering the businesses it is in and the nescent stage it is at. We are also hearing nice developments regularly. My only doubt, that count not get clarified with the available information is the strategic investment in Nigeria having interests in YUMS brands in Nigeria. The YUMS brands license for Nigeria IS HELD BY Devyani International Ltd. How Rossell India Ltd is comming into picture is not crear. The AR 2012 does not give any details in the Management Analysis, no details of such company in Investments of Rossell India. However the website claims strategic investments. I am missing something,can you please through some light on this aspect.
    Thank u very much

    ReplyDelete
    Replies
    1. Even if I am not tracking this stock in recent times as far as my understanding company divested its minority stake both in Yum brand Franchise ( Nigeria) and Lemon Tree Hotels in India and decided to concentrate in developing Kebab Xpress business in India.

      Delete
  24. Dear Vp,
    Is it ok to enter heritage at current levels ? I know long term is gr8 for the compny , bt since it has appreciated 100% in 3 months shd i wait for a short term correction ? Pls suggest.

    ReplyDelete
  25. Dear vp sir...I have RIL shares. Do you suggest them to hold? What is the best book value for this.

    Thanks for your suggestions.....

    ReplyDelete
  26. Hi Sir,

    Considering infrastructure sector stock you have suggested , what is your view on NBCC ?

    SK

    ReplyDelete
    Replies
    1. CMP of NBCC is Rs.163 which earlier recommended @ Rs.95 /- See the below link


      http://value-picks.blogspot.in/2012/04/national-buildings-construction.html

      Neutral at CMP

      Delete
  27. Dear Sir,

    What is your views about Tree house education ?

    Tx
    Kavya

    ReplyDelete
    Replies
    1. One of the better companies from this sector.Stock run up recently ,consider after a consolidation.

      Delete
    2. Thank you VP sir.

      Hope to see this scrip in your blog soon.

      Tx
      Kavya

      Delete
  28. Hi VP Sir,
    Do you track Plastiblends ?? Your comments please if you
    track ?
    Thanks ...

    ReplyDelete
  29. Sir,

    what is your views on Tilaknagar industries.

    thanks in advance.

    ReplyDelete
  30. Hi Sir,

    Can you pls let me know your views on hi-tech gears?

    Praveen

    ReplyDelete
  31. Sir, is it make sense to re-enter into Avanti Feeds around 160 levels? what's your latest opinion on this. I'm ready to hold for long terms if there is ample scope.
    Thanks again.

    ReplyDelete
  32. Sir,
    I have bought tayo rolls at around rs 88,should i hold them or dispose them off as the stock is falling continuosly

    ReplyDelete
    Replies
    1. After reached Rs.110 Tayo is currently quoting around Rs.70.If you have no plan to hold it for long term better to book loss.

      Delete
  33. Dear Valupickji,
    Whats your opinion on Bilcare , I saw your openion on Nov 2 any changes after Debt restructure?
    thank you
    Praveen

    ReplyDelete
  34. truly a good pick .

    Robin

    ReplyDelete
  35. Sir,
    I have bought premier explosives at rs 72 long time ago,it fell after that and reached that price now. should i hold it or sell them now with minute loss?

    ReplyDelete
  36. Dear sir, looks like IPO season is back. Would you like to recommend any of them - Bharti Infratel or CARE ?
    Awating your reply.

    ReplyDelete
  37. VPji, why it always happens that stock moves 10% up next day after your recommedation. We dont get chance to buy at the price you recommeded. See the latest example, TIL Ltd - recommeded @205 and cmp is 230.
    Is this because of involvement of Big institutions / broker firms?

    -Mayur

    ReplyDelete
  38. Any update on view on Vijay Shanti builders considering reduction in promoter holding?

    ReplyDelete
    Replies
    1. Reduction in promoter stake is negative but I feel many negatives are already discounted in CMP.

      Delete
  39. Sir,
    I am holding ABM Knowledgeware?

    Kindly through some light?

    Regards,

    ReplyDelete
    Replies
    1. Already recommended partial profit booking .nothing new to update .

      Delete
  40. westlife development is having mcdonald business .please give your view.

    ReplyDelete
  41. hello sir, what is your take on RELAXO FOOTWEAR.. Its trading at a discount to its competitor BATA.. Would you suggest relaxo can be bought at around 750-800? Or should i wait for some correction.. kindly help sir...
    THANK YOU,
    AJAY

    ReplyDelete
  42. Dear VP,

    What is your view on JB Chemicals and Pharmaceuticals. Are they heading towards a turnaround?

    Thanks and Best Regards,

    Roshan

    ReplyDelete
  43. Hi,

    Please update your view on Claris after recent developments.

    Thanks,
    Jagan

    ReplyDelete
    Replies
    1. Don't think it is good for minority share holders.

      Delete
  44. Please suggest any pick from aerospace and defence sector

    ReplyDelete
    Replies
    1. Listed companies in this space is limited,already mentioned Centum and Sika Intrplant

      Delete
  45. Sir, Can you pls put your opinion on the below stock at present level

    1. ALok Industries
    2. Cox & Kings
    3. Educomp

    ReplyDelete
  46. Dear VP sir,

    This might be the weird comment you end up reading, but it's worth a crore for me....
    I want to know what factors (parameters in company's results) do you consider in picking a stock.

    I am interested in this, because i am constructing an excel extracting all the values from companies result sheets.

    Naming the parameters would really help me out in putting them into my query and extracting data out of it.

    It would be great if you can just let me know the parameters and conditions at first go.... (i hope this dicussion goes on in future tooo).

    For eg. If i feel only Book Value should be considered to pick a stock and the condition is

    Book Value > Current Price...

    If you can just brief me out the parameters you check and the conditions i would be really really thankful to you sir.

    Thanks a lot in advance,

    Sunil.

    ReplyDelete
    Replies
    1. Dear Sunil

      If you need a one sentence answer ,It is the future growth of company which will decide our gain in stock market .Our Success depends on how accurately we can foresee it now.Past or present data can be used to analyse and take a decision how much risk is involved in an entry at current price level but in my opinion it can't be used as a short cut to calculate what gain we can make in the future.

      Delete

Followers

Tweet TopOfBlogs