Saturday, January 5, 2013

BANARAS BEADS LTD --- ENDING DISPUTES ,EMERGING OPPORTUNITIES ....







There was sharp appreciation in the price of gold in past few years.This is mainly due to a shift in asset allocation by individuals and countries in favor of gold at a time of financial turbulence around the glob.This unstoppable increase in gold prices forcing lower class and lower middle class people to look into cheap alternatives for the purpose of making ornaments / jewellery .This is not the trend only in our country but in many other places too.This situation improving the potential of another business – Imitation Jewellery. Beads is an important part of this business.This business is dominated by unorganised sector and there is only one listed company from this space – Banaras Beads which is manufacturing in manufacturing and exporting  glass beads, imitation jewellery and other similar products.Banaras beads came out with an IPO in 1995 with a premium of Rs.75 per share. Thereafter there was some serious disputes between the promoter family members which ends in a series of court cases and intervention of company low board ( CLB).Trading of company’s stock suspended from stock exchanges from 2003 to 2011.During this period company’s growth severely affected  and no dividend distributed.Now company almost  settled the  disputed and cancelled the allocation of about 30 lakhs shares issued to a group of family members according to the direction of CLB. From a turnover of Rs.15 Cr in 2007 company grown to a Rs.35 Cr in 2011-12.Now BBL is planning to tap the opportunities aggressively by expanding its design and production facilities ,finding new export channels ,entering into new territories  ..etc.At present company exporting its products to about 60 countries including USA, Africa, Europe and Arabian countries.Company is now adding another 75000 Sq Ft facility ta Varanasi which is expected to complete in another few months.Recently company launched fashion jewellery items under the brand ‘De-Lemon’  and also launched an online shopping portal for Fashion Jewelery & accessories ( Link below).Even this industry is dominated by un organized players ,company’s like BBL having advantage of most modern designing facilities,adoption of contemporary styles,Image of brand ..etc. .FY 2011-12 was company’s first full year post re-listing .In FY 2011-12 ,BBL reported a sales of Rs.34 Cr , net profit of Rs.4.75 Cr and an EPS of Rs.7.10.Another point to note is its dividend pay out .Last year company declared a dividend of 40 % .On the basis of current market price this  provided  a dividend yield of 10% ( tax free) .I believe this was one of the highest dividend yields last year.We can’t guarantee this will repeat in future but there is possibility for the same since company is expected to complete this FY too with similar level of profit. Since company is running near its full capacity ,performance is expected to improve further  with the functioning of new facilities by next year. End of long dispute at management level will help the company to concentrate in business from hereon and demand scenario for imitation jewellery is expected to pick up further.
                                                     Even this company’s stock listed in both stock exchanges it frequently traded only in BSE .Because of this low liquidity ,it is only suitable for those like  high risk high profit kind bets and not for average risk takers.Invest only a very  small portion of your corpus in these kind bets.BBL is trading at a price close to Rs.40 /-

Link to Company's online shopping portal HERE

Link to Company website HERE 

Link to latest Annual Report HERE 


53 comments :

  1. Sir wish u a very happy and prosperous New Year. I wanted to know about SUZLON. Should we buy Suzlon at these levels of 18.50 as the CDR is going to get final approval very soon ??????

    ReplyDelete
    Replies
    1. I think so but must hold at least 2 years.

      Delete
  2. Dear VP,

    Have you done any study on Ricoh India? I am not talking about their delisiting prospects. I want to know what are your thoughts on its fundamentals. It is reporting strong growth in topline (50%) but with losses. As with many successful MNCs, the losses look suspicious in nature. The co management reported that they are targeting a 1000 crore topline by FY14. I must add that it is a pure trading company. They buy printers and copiers from Ricoh Global and sell them through Ricoh India. Will appreciate any thoughts.

    Thanks!

    ReplyDelete
    Replies
    1. Dear Rahul

      This trend is not rare just before open offer in India.We,retail investors are helpless till there is some changes in laws as in the case of US.Many cos independent directors are just rubber stamps.In this case I am not strictly tracking this stock .Since the company importing products from parent , sharp depreciation of rupee value may be a big negative in recent times.

      In India ,majority of promoters treating minority share holder as their enemies after collecting money from them :(

      Delete
  3. VP Ji,
    Please comment on following scrips at cmp for holding 1-2 yeras:-
    1. Jai Corporation
    2. Canfin home finance
    3. Aurobindo pharma

    Regards,
    Manmohan Garg

    ReplyDelete
    Replies
    1. Hold Canfin And Aurobino .Not tracking Jai corp

      Delete
  4. Sir,

    Wish you rocking new year!!
    What is your view on zylong. Looks like because of manipulation this stock lost its 80% market cap. Do you think we can enter in this stock for long term ?

    ReplyDelete
    Replies
    1. I am not interested till its promoters are not interested. :)

      Delete
  5. Sir,

    I track your calls regularly, just wanted to know, from last 2 - 3 calls, the stock which you select are in T to T group, so unable to buy.

    Regards,
    Aajay

    ReplyDelete
    Replies
    1. I don't know why you are unable to buy a 'T' group stock ,if enough fund is available in your trading account !!

      Delete
    2. Me too unable to buy T trade stocks, already i have mentioned here.Brokers told that T trade stocks is banned in their trading terminal.Fortunately I bought Heritage foods when it was not in T trade, that is not a problem when it comes to SELL but again i can't BUY heritage foods if it in T trade.
      Bala

      Delete
  6. Dear vp,
    can u tell me about dishman pharma i m holding at 119/-

    ReplyDelete
  7. What is ur opinion on spicejet at the cmp?

    ReplyDelete
  8. Hi VP Sir,

    Jagatjit has slightly similar story. Any update on Jagatjit? Holding for the last 2 years.

    ReplyDelete
    Replies
    1. Please avoid repeating questions on same company in consecutive days .Commented about Jagatjit yesterday below 'Fluidomat - update'

      Pls co-operate :)

      Delete
  9. Dear sir,

    Happy new year, i am following your blog for the past 6 months & acquired lot of knowledge through it, thanks for that first, then you had suggested ing vysya & yes in banking sector, which one you most prefer at current cmp? & your thoughts about banking sector in 2013, since it had a good run last year.

    ReplyDelete
    Replies
    1. Dear Satish

      I like both ,a bit more- Yes Bank :)

      Delete
  10. Sir I hold Rossell India and am planning to add more and more at CMP. I have conviction in this company's business especially the food chain.

    Do you suggest adding more at CMP or wait for below 40 levels.

    Thanks

    ReplyDelete
    Replies
    1. Dear Deepak

      Nothing is bigger than own conviction.Investors will benefit if the promoters de-merge the QSR business reach a critical size and able to stand on its own feet.

      Delete
  11. Hi,i am quite new in stock market wanted to ask in banaras beads there seems to be a difference of 9 points in bse and nse , so what does that mean if i buy in nse will i be able to get in 32 rupees only,,,and wanted your views on dhanlakshmi bank.. if u out some light it will highly appreciated

    ReplyDelete
    Replies
    1. Whether one can buy it from NSE is the question.No frequent trading and volume in NSE.

      Not tracking Dhan.Bank.

      Delete
  12. Dear sir
    your view on aarti industries n rennaisance jwellers..

    ReplyDelete
    Replies
    1. Neutral on Aarti ,not tracking Ren.Jewl.

      Delete
  13. Dear Sir,

    How to select banking stocks. I want to invest in this sector but pretty confused how to analyze banking stocks. Banking business are a lot more complicated than other sector. I will be highly greatful if you can write down one article on it or point us some link for this.

    ReplyDelete
    Replies
    1. I don't think banking is a complicated business to understand but it is really boring ..

      Concentrate in asset quality ,Capital adequacy, quantum of fee based services,treasury operations,ROE.. etc if other things remaining same.

      Delete
  14. Dear Sir

    Your views on INDO WIND & WATERBASE please. Waterbase management seems good with their moderate expansion plans. Indowind has good business but seems to have very poor management.

    Thanks
    Jimmy

    ReplyDelete
  15. Sir thanx for replying my query on Suzlon. My next query is on VENUS REMEDIES. its EPS is nearly 60 and its CMP is just 281. why is it getting such a low valuations . whether there is any problem with management quality etc??? Should i buy it at Rs. 281 levels?????

    ReplyDelete
    Replies
    1. Bit skeptical about the management quality .Even the company showing high EPS ,its cash flow seems under pressure.Neutral on it.

      Delete
  16. Sir,

    Any updates on Kennametal please.

    Regards,
    Aajay

    ReplyDelete
    Replies
    1. Nothing more than provided in the below link :

      http://value-picks.blogspot.in/2012/03/kennametal-india-book-partial-profit.html

      Delete
  17. Dear Sir,

    Please may i know your view on motilal oswal financial services

    ReplyDelete
  18. your comments on claris lifesciences VP?

    ReplyDelete
    Replies
    1. Many times discussed as comments,search

      Delete
  19. sir,
    what is your view on madhucon projects?
    is it properly valued at cmp?

    ReplyDelete
    Replies
    1. Not bad at current price.But one should show patience till sector re-rating happens.

      Delete
  20. How is astral poly, Accelya kale ,Uco bank n aditya birla Nuvo appear to you?

    ReplyDelete
    Replies
    1. Not tracking Uco Bank other two stocks are already discussed,use the search option.

      Delete
  21. How is Havells India n Karnataka bank .i recently entered at 655 n 185 in them .pl give your va
    Unable advice

    ReplyDelete
    Replies
    1. Hold Havells.Karnataka bank depends on many factors other than fundamentals .unable to predict the outcome.

      Delete
  22. Sir,
    You mentioned that value will unlock if QSR business is transferred and run as subsidiary

    My question is will the stock be attractive even though the company doesn't de-merge and retain the business under same umbrella?

    ReplyDelete
    Replies
    1. There may be re-rating when the QSR business reaches a critical mass .But ,if at that time tea prices come down,it may not be a good scenario and the co may not get the valuation which is available to pure QSR plays.

      Delete
    2. Which company share does this relate please

      Delete
  23. Dear VP ,
    I am holding Ganesha Ecosphere from past 1.5yrs.bought it at 65rs in good quatiites.on going through it's growth record..can i hold it or average it or exit..Please help me on the same.

    ReplyDelete
  24. Dear Sir, per BSE/NSE latest anoucement on Granules -
    Dr A Bhaskar Krishna has sold 3168 shares worth Rs 5.17 lacs.
    So my question is why the selling witnessed from promoters? is something cooking behind the scens? We all small investors seeking your views on this.
    Pls advise.

    http://t.in.com/3vp2

    ReplyDelete
    Replies
    1. He is not a promoter or director but the CEO.Selling quantity is very small compared with the buying by the promoters in past few months.Anyway selling by an insider is a point to note and it is a negative factor if it is not for meeting some personal purpose and quantity is big.Wait and watch any further selling is happening.

      Delete
  25. Your views on Caplin point, Eimco Elecon n Vijaya bank please

    ReplyDelete
  26. Your views on SKS Micro please

    ReplyDelete
  27. This comment has been removed by the author.

    ReplyDelete
  28. Dear sir any View on PI Industries,Everon Education

    ReplyDelete

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