Saturday, January 12, 2013

AARVEE DENIMS & EXPORTS LTD - BUY




 



 









With a market share of 12 % ,Ahmedabad based Aarvee Denim is the second largest manufacturer of denim fabrics in India. Company having three manufacturing units in and around Ahmedabad. Company increased its production capacity by 40 % in last financial year, thus the current capacity stands @ 80 million meters per annuam.Denim prices are currently going through a consolidation phase after some sharp spike in past few quarters. On the other side cotton prices showing weakness which is expected to increase the margins of denim exporting companies. Weakness of rupee is an added advantage. Due to the reduction of Chinese export to International market ,large Indian denim exporters increased their market share in recent times. Other than export ,company selling branded products under three brands - De Extase,Fashion Wrapper and Aden. Size of branded retail operations are limited currently but company planning to open more stores in future. In the financial front too Aarvee Denim exhibiting good performance. For the last September quarter company reported a net profit of Rs.17 Cr v/s Rs.4 Cr .In last FY ,company bought back half of the issued FCCB’s .The current trend in denim and cotton price is expected to continue for some more time ,hence recommending a BUY on this stock  for medium term .Keep an eye on the price of raw material in local market and price of end product  in International market .Currently stock is trading in both NSE and BSE around Rs.76/-


Link to Company Website HERE

Link to Branded Retail HERE

97 comments :

  1. Sir, thanks for the pic. But i dont got when you say price of cotton and denim...so you mean if price of cotton(raw material) rises, we should exit ??

    ReplyDelete
    Replies
    1. If the company can pass on the rise of raw material to customers ,it is not an issue otherwise ...

      Delete
  2. Hello Sir,

    I have my investment in SKumar nationwide. Because of their good brand i invested huge money.Suddenly share crashed and presently trading at 13-14 rs. Feeling trapped. Should i book loss if there is no possibility of revival.

    ReplyDelete
    Replies
    1. I don't like the management of SKumar's group.

      Delete
  3. Sir,

    Your old recomm. Interlink Petroleum has recently signed a sale and purchase agreement for the supply of 5000 standard cubic metre per day of Natural Gas from its Baola field for an initial period of 5 years. Kindly give your views,if it is right time to enter the stock.

    ReplyDelete
    Replies
    1. I don't know why the owners of the company changing frequently ?

      Delete
  4. Hi sir, First of all, you have posted this recommendation at 4.53am. hats off to u sir.
    secondly, i have query in my mind. Some say do not buy the company which has high debt like gvk power, gmr infra, reality stocks. where as some companies even with high debt do well. How to evaluate this while analysing the companies?
    Sanjay

    ReplyDelete
    Replies
    1. WE can't say a company is bad only because of debt in its balance sheet.In my opinion Whether the company having enough cash flow to service the debt is more important.If there is sufficient opportunities for growth in future with good cash flow ,debt is not an issue,otherwise it is painful

      Delete
  5. Dear sir,

    your views on acrysil, denora, & wpil entering at cmp?

    ReplyDelete
  6. Sir,

    What do you think about Empee Distilleries? What is your view on the company's management?

    ReplyDelete
  7. Dear Sir,
    Can I buy Mangalam Cement @cmp for atleast one yr?
    Thanks & regards

    ReplyDelete
  8. sir i had buy accelya kale solution at 260 and now its around 350 ?
    what u think its target can be ?

    ReplyDelete
    Replies
    1. Recommended @ Rs.125 and already requested to book profit.Neutral on it at CMP .Company recently bagged new contracts ..

      Delete
  9. VP sir, Promoters of Granules are reducing thier stake, which is not a good sign as you already mentioned. What should we do being a small investor?? Not sure whether selling happening thru ESOP or not? Should we exit partially and keep close an eye for next actions?
    Pls. reply sir. Your single opinion matters a lot us

    ReplyDelete
    Replies
    1. Dear mayur

      On the first look ,since the promoter percentage reduced from 44.51 % to 44.43 % ,we may feel promoters sold some shares during December quarter compared with September quarter.But in reality promoters added more shares during this period and reduction in percentage terms is only because of fresh issue of shares to non promoter category.It is a fact that the CEO sold few shares recently ,but he not belongs to promoter group.It is very difficult to ascertain the correct reason for that and a bad performance ahead may or many not be the single reason.Even some personal requirements may be a reason.Frankly speaking, difficult to say an YES or NO at this point and those willing to take risk can hold it for the time being and make a final call after next two quarterly results.

      Delete
  10. Hello VP SIR,
    I read in many of your comments where you write that you don't like management of that company. Could you please let me know what all things you check and analysis to come to conclusion that whether management of particular company is good or excellent?

    ReplyDelete
    Replies
    1. Dear Sourabh

      Such conclusion are not depends on any numbers or any readily available figures,but mainly based on the smartness they shown in cheating minority share holders and wasting opportunities to create wealth for minority share holders and protecting only the interest of promoters which they expressed in the past through many of their actions.This is purely based on what I hear,read and experienced during last 20 + year in my stock market career.
      So this subject is very difficult to explain more than this ...

      Delete
  11. Hello VP Sir,

    I am new investor and would like to have few suggestions. How do I judge a company's performance as a new investor? Also, if I am looking at long term investments(6 to 9 months), which are the best picks that I can go for? As a new investor, should I be going with a small lot of shares to be bought or in bulk? Well,I agree that it depends on cash in hand but what do you think is the wise approach?

    Thanks in advance.

    Vijay.

    ReplyDelete
    Replies
    1. Dear Vijay

      Didn't get your first question .

      6-9 Months is not long term in Stock Market

      Whether a diversified or concentrated portfolio is good - depends on your conviction on stocks and risk taking capacity.

      Delete
  12. is it possible to have 60 times return in playing with different stocks by capturing the opportunities ???? What ur experience says???

    ReplyDelete
    Replies
    1. I am only an investor and not believing -stock is an instrument to play with .

      Delete
    2. thank you sirji

      Delete
  13. sir your view on compucom software please......
    waiting for your reply sir
    thank u
    pawan

    ReplyDelete
  14. Dear VPji
    I have JK Lakhmi cement..it continous coming dowen, plz comments why it coming down as company is very good..can i add more in dip?


    Regards
    Shailesh

    ReplyDelete
    Replies
    1. Not JK Lakshmi alone all cement stocks corrected in past few days mainly due to a report suggesting that cement demand may show low growth in next few months on account of cold weather condition in North and deficiency of water in South .

      Delete
  15. sir your views on bharat agri ?is it worth buying it at this level

    ReplyDelete
  16. Kindly advise can we purchse omdc on current level
    regards
    kamal

    ReplyDelete
  17. Sir,

    What is ur view for Nahar Capital, IFB ind, Globus Spirit & Hitachi Home

    ReplyDelete
    Replies
    1. Hold IFB and Hitachi not tracking rest.

      Delete
  18. Hi VP.. any views on Reliance Power? - Rahul J.

    ReplyDelete
    Replies
    1. These type high capital intensive - long gestation period type stocks needed enough patience ,especially at a time of delay in govt decisions.

      Delete
  19. sir, please share your view on fedders lloyd

    ReplyDelete
  20. hello sir......................
    share your view on City union bank,jb chemicals and astra microwave..................and sir any big news coming in city union bank in future?

    ReplyDelete
    Replies
    1. JB Chemicals is a BUY and Hold , not tracking the rest

      Delete
  21. Dear VPji,

    Any update on WPIL, its not breaking 350 on down side but also has a resistance at 410, in past 1 year I belife they have 2 - 3 takeovers.but the management is silent. there were rumors that the company is going to be listed in NSE and there might be a private placement at around 550+ levels. can you please advise me on the stock.

    Thanks,
    Aajay

    ReplyDelete
    Replies
    1. User industries are currently going through some tough times ,long term investors can still hold.

      Delete
  22. sir,
    investing on largecap or midcap stocks.. which is better??

    ReplyDelete
  23. Sir,

    What about Themis Medicare ? Is there any bad news ? Stock is going down continuously so shall i book loss ?

    ReplyDelete
    Replies
    1. Wait for the result before taking a final decision ,if willing to take some risk

      Delete
  24. Sabero Organics has declared excellent results. This quarter they were profitable versus last year corresponding loss.Still, considering the current market, the scrip may go down. It is better to buy, when it goes down further.

    ReplyDelete
    Replies
    1. If company continuously showing business growth ,ultimately it will benefit all investors with patience.

      Delete
  25. VP,
    Your take on Sabero Organics result?

    ReplyDelete
  26. Dear Sir,

    Sabero's Q3 results were due on 16.01.2013. We could not find them in the bourses. Request you to kindly analyse and update us the same. Thank you very much in advance.

    Arun Kumar
    Hyderabad

    ReplyDelete
  27. Sir,

    Could you please suggest whether Suzlon is a good buy? What do you think about Wanbury and Punj Lloyd?

    Regards
    Vijay.

    ReplyDelete
    Replies
    1. Suzlon is a buy for genuine investors with some risk appetite .Not for one looking into the trading screen day by day but for those willing to forget at least two years.

      Delete
  28. sabero profit declined.Sir what is your read on the results?

    ReplyDelete
    Replies
    1. Where it declined ? .Reported a profit of Rs.2 Cr v/s a loss of Rs.11 Cr.Since many businesses associated with agriculture having seasonal effect, it is always prudent to compare these type company's result with the same quarter last year .

      Delete
  29. Sir
    What's your view on Compucom Software ???

    ReplyDelete
  30. sir please comment

    stock to invest-Rolta

    The face value of the stock is Rs.10 and the dividend is Rs.3/ year (as of now).Is it worth an investment from the fundamental point of view too as the stock is quoting decent EPS and a rise in EPS through out the years.The P/E is much less than the industry P/E and the company is getting some multi milion orders this year.

    ReplyDelete
    Replies
    1. I am bit skeptical about the management of Rolta

      Delete
  31. Sir ji, Can you give me ur views on TTK Prestige, Ranbaxy, Zee Entertainment and GMR? Wish you a successful 2013.

    Aaditya Menon

    ReplyDelete
    Replies
    1. Tracking only Ranbaxy which is a HOLD and buy on dip.

      Delete
  32. holding smartlink networks @64 .... it comes to 63 and then again back 55 odd levels ... bought it with a 2-3 years horizon .. please share your views ..

    ReplyDelete
  33. Sir please provide your comments on kernex microsystem and sintex. Thanks prabu

    ReplyDelete
  34. Dear VP sir,
    RAMKY Infra has been corrected sharply in last one year due rumors on political linkage with YSR, AP CM. However, i feel that news is alreedy priced in. I think its good long term bet to enter @cmp 112. As you mentioned earlier it has huge order book pending and debt to equity ratio is also encouraging + book value of 170.

    Please share your thoughts.
    Please reply.

    Thanks
    Mayur

    ReplyDelete
    Replies
    1. Yes Mayur,recently Ramky Pharma City (India) Ltd, a Subsidiary Company of Ramky Infrastructure Ltd received provisional attachment order from Enforcement Directorate.I believe, almost all negatives connected in this matter already discounted.

      Delete
  35. Why man, why you r not replying to my queries. I think you dont like to answer on Ion exchange. Please let me know the reason for the same.

    ReplyDelete
    Replies
    1. Dear Friend

      What to reply on every day about a company without any significant change in its fundamentals or any big change in price range .There is some relevance if you send this message post December quarter result.

      Delete
  36. Dear VP Sir ,

    Can you pls give your thought on Crompton Greaves .

    ReplyDelete
  37. Sir ,

    Can you suggest your view regarding Cox and Kings at present level . I am holding it @146 level .

    ReplyDelete
  38. Sir, what's your take on KSB and Blue star as both of them have considerably come down. Any change in fundamentals?
    Thanks
    MadhuSudhan

    ReplyDelete
    Replies
    1. No change in my views ,both these are quality companies from the respective sectors .But you should wait till there is some revival in these sectors .When it happens ,I believe there will out perform.

      Delete
  39. Hi Sir..
    Last quarter,promotrs of Heritage sold approximately 7%. & FIIs also sold approximately 9%. why this heavy selling? Yet the stock price is nicely placed @527 ..

    ReplyDelete
    Replies
    1. Dear Aman

      Actually promoters not sold 7 % .One persons from promoter category re classified as non promoter ,that is the reason for difference in share holding pattern.FII's not sold but the sold party is Kotak India Focus Fund which is an Indian fund.Those shares are bought by well known Indian Investors itself including Ashish Kacholia and Azim Premji's firms.

      Delete
  40. congrats sir ur sundaram lining, bambino rocking!!!!!will u advise me to enter in kanchan, i can take high risk........?????!!!!

    ReplyDelete
  41. My sincere advice to all boarders. Pls ask questions with respect. I see that few boarders dont have courtesy in asking questions and they are rude. Irrespective of whether VPji may be right or wrong, we need to use proper language. He is only providing his views and it is up to us to take or not.

    ReplyDelete
  42. Hi Sir, sorry to bug you again...but in irrigation space which company should we choose at current valuation - jain irrigation or your recommended - epc and rungta??

    or something else??

    ReplyDelete
    Replies
    1. Jain and EPC are good but should wait at least two quarters.

      Delete
  43. dear sir
    i saw ur post on MANGALAM CEMENT. but that is disappear now. i may be wrong but i want to know about mangalam cement. is it good pick for investment as valueations are cheap?
    shahzad khan

    ReplyDelete
    Replies
    1. Removing any posting because of slide in share price is not my practice .Use the search option provided at the top.

      Delete
    2. Hi,
      it is still there , just go to following link:

      mangalam cement

      Delete
    3. i am sorry sir. i didnt mean that u removed that post. i was searching in lebels right side. there is no name of mangalam cement with other companies.
      thanks Kinshuk Chandra ji now i got it.

      Delete
  44. Hello sir,
    In one of yours comment u have written that you are skeptical about management of rolta? Could you please explain why you are skeptical. .reason why I am asking this is because I am heavily invested in this company. ..
    Regards
    Sourabh

    ReplyDelete
    Replies
    1. Companies accounting practices are questioned more than once by the Tax Authorities on various matters.I would prefer to stay away from such cos or groups .

      Delete
  45. Anything good in Samtex Fashions. Lots of great guns are holding more than 1% of this stock.

    ReplyDelete
    Replies
    1. Many people expecting some value unlocking through some schemes between its subsidiary.But unfortunately promoters are not doing anything in this line for the past 10 years.

      Delete
  46. Hi Sir,

    Shall I enter apollo hospitals @cmp for short term(2 months).

    Thanks,
    Nagesh

    ReplyDelete
  47. Dear VP,

    Firstly, Thanks and appreciate your unselfish motive of sharing good value stock picks with all of us for free when you can easily make money through subscriptions. Kudos to you!!

    Would you be tracking VLS Finance, TCI Finance, careerpoint, Syncom healthcare, JSW Ispat steel ??

    ReplyDelete
  48. Sir
    Whar is ur view on venus power ventures.is it worth buying at cmp?Expecting your valuable reply.

    ReplyDelete
  49. Sir Ji ,

    What happened to this script. ( i.e Aarvee Denims & Exports Ltd ) you recommendated at 76 , Now this is 37 low 31. What's wrong.
    Thanks
    Raju

    ReplyDelete
    Replies
    1. Already recommended to exit @ Rs.74.5

      See the below link

      http://value-picks.blogspot.in/2013/02/aarvee-denim-panacea-biotec-india.html

      Delete
  50. Dear Sir,
    This is for Aarvee Denims & Exports Ltd as you recommended to exit @74.5 in your link
    http://value-picks.blogspot.in/2013/02/aarvee-denim-panacea-biotec-india.html

    But this link is not visible in your blog. as there is only upto 09 Feb 2013. What's the problem.
    Thanks
    Raju

    ReplyDelete

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