Tuesday, December 31, 2013

LIBERTY SHOES - UPDATE

LIBERTY SHOES  recommended @ Rs.112 on 21/12/2013 ( Link HERE ) .Stock currently trading @ Rs.155 ,an appreciation of about 50 % in 6 trading sessions .Even if it appreciated substantially in short period of time , I believe there is still room for further appreciation in this stock.Companies  backed by good brands will  always command higher P/E multiples and as per available information ,Liberty is doing well in business in recent times .Requesting to still HOLD this stock in your portfolio for long term.


Disc: I have vested interest in LSL

Saturday, December 28, 2013

SUPERHOUSE LTD - REPEAT


  

How long investor fraternity can ignore a company which is showing continuous growth in past ten years with uninterrupted dividend paying history and led by decent management ? .Answers may vary ,but one thing is sure – if history is any indication , once investors will find it out which will result in sharp re-rating of stock price.The company in question is Superhouse Ltd which I recommended earlier @ Rs.62 few years back and even after  reporting  robust performance in business thereafter, it is still trading at cheap valuation.



                                                                   Rs.600 crore Superhouse is the second largest exporter of Leather footwear and other leather products from India .Its products are exporting to countries like France, UK, Germany, USA, Canada, Spain, Scandinavia, Netherlands ..etc  under its own brand “ Allen Cooper” and supplying to various companies like Topman,Barrats,Next,Ikon,Bata, Hush Puppies ,Pierre Cardin,C&A,Eram,Andre, Dorothy Perkins, Nilson Group, Acebo’s..etc.In the safety shoe segment company exporting products under own  brand “Double Duty” to Gulf countries and European countries.More than 80% of company’s turnover is presently from export and only now company seriously  exploring the opportunities in domestic market with their “Allen Cooper “ brand.  (Product offering in India can access HERE)  Superhouse group having 15 manufacturing facilities in India and marketing offices in UK, U.S.A., U.A.E. Canada,and Romania..etc .With the vast experience of promoters in this field ,Superhouse  showing excellent growth in past many years.

                                                                       On Valuation basis Superhouse is one of the cheapest quality stock available .Company reported a top line of Rs.592 cr and a net profit of Rs.23 Cr in last financial year. Company reported sharp improvement in its performance in the first half of current FY where it reported a sales of Rs.325 Cr and a  net profit of Rs.15.5 Cr .Company reported an EPS of Rs.14 in the first half itself v/s Rs.9 reported same period in last year. Export oriented sectors are expected to perform well in coming years due to improvements of economies of Western countries. Since, company earning lion share of its income from overseas market ,any improvement in US and EU countries  will help Superhouse to perform exceedingly well going forward .I expect superhouse can report an EPS close to Rs.30 in this full year.At current market price of Rs.100 ,it is trading even way below  its consolidated book value of Rs.162 !!.Even if  investors ignored this stock so far ,promoters are confident about their company and hiked their own stake in the company sharply  ( from 45% to 55%) during last 5 years.I believe ,this is the perfect time to look into this stock due to a special reason too. As per the relaxed Periodic Call Auction guidelines Superhouse is eligible to come out of PCA .This is expected to happen within next 10 trading sessions.

                                                                   Considering promoters experience,continuous growth in business,very cheap valuation,brightening export opportunities – recommending Superhouse again at CMP of Rs.100 .After the announcement of relaxation in PCA, like many other such stocks, Superhouse also recovered in past few days .But considering its  one year forward P/E  of less than   4 even at CMP ,I believe there is very good chance of further upside even from current level.

Stock listed only in BSE with trade code 523283

# Since this stock is currently trading in PCA ,order entry is permitted only from 9.30 AM.

Link to old posting HERE

Link to Company website HERE

Link to latest Annual Report HERE 

Disc: I have vested interest in Superhouse.

Thursday, December 26, 2013

INDAG RUBBER - UPDATE

INDAG RUBBER  recommended @ Rs.95  in July  2011,which hits its 52 week high today @ Rs.304 ,an appreciation of more than 200 % in two years  .Still recommending to HOLD this stock for long term.

Link to old posting HERE

Wednesday, December 25, 2013

BLUE STAR INFOTECH LTD - UPDATE

Blue Star Infotech recommended @ Rs.72 in August 2013,which hits its 52 week high and closed in upper circuit @ Rs.110.An appreciation of more than 50 % in less than 5 months .Still recommending to HOLD this stock.

Old recommendation link HERE

Monday, December 23, 2013

NITCO LTD - UPDATE

Nitco Ltd - is one of my poorly performed recommendations so far. This stock initially recommended @ Rs.60 and later @ Rs.15 ,which is currently trading @ Rs.14.Delay happened   in the  implementation of  CDR ( Corporate Debt Restructuring ) package  was beyond my expectations.After  long waiting ,now there is signs of positive developments in the company.Recently promoters subscribed 22099206 equity shares on a preferential basis @ Rs.25.20 against the current market price of Rs.14 . This will bring an additional funding of Rs.55 Cr to the company by the promoters.( Announcement Link HERE) .Still I have faith  in this company and I believe they can come back to the old good times sooner or later.

Link to new  website HERE

Saturday, December 21, 2013

LIBERTY SHOES - REPEAT




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 This stock once recommended @ Rs.95 .( Old report HERE) .Recommending it again @ CMP of Rs.112 due to company's recent initiatives and improving financial performance.When I recommended this stock last time it was in 'T' group but now it excluded from 'T' group and trading normally.I expect Liberty Shoes  will be a stock to watch out in 2014 and will turn out  as an  out performer from the mid/small cap space in the coming year.
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In last few years ,even in India ,we have seen few fantastic turnarounds from the verge of collapse to great success.Eicher Motors and Bata India are best examples for  such a  rise as phoenix from the ashes.From a low of Rs.63 reported in 2003 ,share price of Eicher Motors galloped to Rs.5000 in just 10 years.In case of Bata India ,  stock moved from Rs.26 to Rs.1085 during this same period.If we dig deep ,there is some common factors in many of such companies which turned around dramatically .’ Brand ‘  is one important factor in many such cases. Strategic marketing and technical collaborations , sincere efforts of management with hard work and dedication are the other key points present in such cases.Considering many of such factors , Liberty Shoes is currently at a situation where Bata was 5 or 6  years ago.Incidentally both these companies are in the same line of business too.Liberty is one among the largest 5 producers of leather shoes in the world with a production capacity of 50000 pairs per day.Company selling its products through a  marketing network comprising of 150 distributors, 400 exclusive showrooms and more than 6000 multi brand stores. In addition to this ,company having strong presence in all major  online stores.Liberty’s major brands includes Force-10 ,Fortune,Gliders,Coolers,Senorita,TipTop..etc.

                                                                                            What is interesting at this point is – Promoters are again looking the business seriously and taking every efforts to bring the company into the right track.Company decided to appoint external agencies for in- depth study of the existing operations of the Company .Recently company introduce a host of new attractive models and expanding presence into new geographies.In an effort to increase margins company planning to rationalise its sourcing of raw materials. Presence of some private companies under the same management may be a reason for conflict of Interest .Recently management hinted their plan to consolidate the business under the listed entity in an efforts for value creation.Recently they decided to merge  retail arm Liberty Retail Revolution  with the company which is planning to add 100 new stores every year .At present RRL running more than 400 show rooms .It seems all the efforts of management started to show positive results.In the latest September quarter ,company reported a 50 % growth in sales and sharp increase in net profits from just Rs 8 lakhs to  Rs.3 Cr .

                                                               Entry of some well known private investors like Dolly Khanna (who spotted multibaggers like Hawkinks,Cera Sanitary,Amara Raja Battery,Relaxo Foot ware ..etc at attractive price levels) in Libery Shoes is another point to note along with the positive changes happening in the company.Dolly Khanna entered in the more than 1 % share holder’s list in latest September quarter.I believe -with a very good brand ,large marketing and manufacturing facilities and changing attitude of promoters with aggressive growth plans – this branded play will turn as a wealth creator in the years to come.Stock listed in BSE and NSE.Reiterating  strong BUY @ CMP Rs.112

Link to Company's recently renovated website HERE

Link to latest Interview with MD. HERE

Disc: I  have vested interest in LSL


Friday, December 20, 2013

PERIODIC CALL AUCTION - UPDATE

After creating lot of confusion and frustration among retail investors who are investing in small and mid caps , SEBI now proposed to change the criteria for selecting stocks to be included in Periodic Call Auction .Read the circular link HERE . I think, it is really a relief  up to a certain extent even their new circular is also a confusing one especially in the case of scrips included in 'T' group. I hope at least 75 % of the scrips currently included in PCA will come out of it in the next revision .

Happy Investing....

MARKSANS PHARMA - UPDATE





Marksans Pharma recommended @ Rs.4 on 23rd March 2013. ( Recommendation link HERE ) .Currently stock is trading above Rs.17   ,an appreciation of whopping 300   % in less than 10 months.Recently  management indicated their confidence to reduce the balance FCCB obligation substantially in next couple of years. Those interested to take some  risk can still HOLD the stock.

Wednesday, December 18, 2013

NEULAND LABORATORIES LTD - BOOK PARTIAL PROFIT

NEULAND LABORATORIES LTD - initially recommended @ Rs.119 ( Old posting HERE) and again repeated @ Rs.126 ( Repeat HERE ) .Today stock hits its 52 week high @ Rs.316.35 . Those who are interested to take only moderate risk can SELL half of your  holding and keep the rest as cost free for long term.

Saturday, December 14, 2013

ACRYSIL INDIA - QUALIFIED FOR AN EXIT FROM PERIODIC CALL AUCTION...


We have discussed a lot about Periodic Call Auction trading system – the system SEBI introduced to suck out the remaining retail investors from equity market. It also proved once again -  theories successful  on paper may not repeat success in practical  life. Why SEBI continuing this system without any modification even after it  proven as an utter flop is the big question  !!!. Introduced for reducing manipulation and increase liquidity , this system actually  reduces  liquidity further and caused for sharp crash in the market capitalization of  even standard companies included in this list. On the other side, it did not contribute anything to control manipulation and manipulators still have their own tools for manipulation. In nut shell ,PCA is the worst and anti retail investor trading mechanism ever introduced by the authorities . To come out from PCA ,SEBI stipulated some criteria which  also included some funny conditions . An average volume  of 10000 shares per day or average 50 trades per day in all days of any quarter are the  two major criteria fixed by SEBI . The anomaly in this system is, it is not considering the equity base or floating stock of any company .I don’t think it is fair to fix same  criteria for companies with 3 cr equity and 25 % floating stock and 300 cr equity and 75 % floating stock .  Another point is -  a low quality stock which is trading @ 0. 5 paise can exit from this system if there is an average turnover of mere Rs.1000 ( 0.10*10000)  per day where a  quality stock  trading @ Rs.2000 can't escape from this system even if there is an average turnover of Rs.1.99 Crore ( 2000*9999 ) .Frankly speaking ,I can't understand the logic behind it .More than this ,automatic cancellation of orders in each hour and need of re-entry in each hour creating lot of trouble both for investors and broking firms . Retail investors apathy towards this mechanism truly reflecting in the falling trading volume and sharp decline of the prices of even goods stocks which included in PCA in the past few  months . The real irony is – this mechanism is introduced by the same SEBI who are spending time and efforts  to promote retail participation in market and also encouraging the listing of small companies . Prevention of manipulation is necessary, but  I don’t think ,killing 99 innocents  to prevent the manipulation by the  remaining 1 is not the proper way to execute this .

                                                                              Let us come to the point .Only very few  quality companies managed to come out of this deadlock once it entered into PCA. Exit and entry revisions are normally happening in the first week of each quarter. Acrysil India will be a surprise exit candidate in the next revision . Total trading days during September – December quarter is 62 days and company already recorded a trading volume of more than 781500 shares which is enough to qualify for an exit ( 62*10000 = 620000  is the required quantity ) .

ACRYSIL INDIA 





Acrysil India is one of the rare companies I recommended earlier  even from the PCA list due to its unique products,robust financial performance ,excellent dividend distribution history ..etc. It is also one of the rare companies recorded its life time high price even after inclusion in Periodic Call Auction. In addition to the exit of PCA ,this Kitchen appliances manufacturer reported very good performance in first half  of current financial year where it reported an EPS of Rs.11.05 against Rs.12.35 reported for the entire full year in 2012-13 . I believe ,company’s positioning as a niche high end producer and its successful efforts to find strong foreign collaborators for financial ,technical and marketing alliances will bring more success going forward. Germany based  Schock and Co GMBH ( leader in Quartz Kitchen Sink’s in various countries ) holding more than 10 % stake in Acrysil and marketing Acrysil’s products in many countries. Recently company started co operating with  Berbel Ablufttechnik ,another German company  for Kitchen Chimneys and appliances. .Management is also investor friendly and  not showing any  hesitation to share their success with minority share holders  .Last year they distributed bonus shares and a dividend @ 33 % .


This is the kind of stocks having almost all ingredients to become a  multi bagger over a period of time  due to many reasons like :

* Low floating stock

* Niche Products with reputed brand "Carysil" targeting ultra premium market segment ( Company is the only producer in India and one among the total four producers in the entire world for first quality Quartz Sinks 

* Investor friendly management 

* Revival in the economies of its major markets 

* Huge untapped market potential in India itself.

* An under invested stock by Mutual funds,Institutions and Big Individual Investors

* Large capacity addition in recent times backed by strong marketing alliances with world leaders .

* Aggressive R & D efforts to develop new models...etc

. I expect more serious investors will look into this stock once it came out of PCA within four weeks  and chances for sharp re-rating .Recommending this stock @ CMP of Rs.150 for investors with some risk appetite .

To get more understanding about this company ,you can refer the following  links.

LINK 1  ,  LINK 2 

Product Demo LINK

Link to Company Website HERE

Link to Latest  Annual Report  HERE

Use the search option to find out my  old recommendations of this stock  in this blog 

Disc: I have vested interest in Acrysil India




Friday, December 13, 2013

KAVERI SEED COMPANY - TAKE SOME PROFIT FROM THIS 6 BAGGER

KAVERI SEED COMPANY initially recommended @ Rs.272,currently trading  @ Rs.1677 .( Old Posting HERE) . This stock already given a whopping  6 fold return to investors with enough patience.Requesting  to SELL 10% of your holdings to recover your cost  and keep the rest as cost free.

Thursday, December 12, 2013

LA-OPALA RG - HOLD THIS 10 BAGGER

LA-OPALA RG  initially recommended @ Rs.66  hits its life time high in this week @ Rs.629.Even if this stock already turned as a 10 bagger during this period ,those with some risk appetite can still HOLD it.

Old posting on La-opala HERE

Tuesday, December 10, 2013

SASKEN COMMUNICATION - UPDATE

SASKEN COMMUNICATIONS LTD  recommended @ Rs.118   hits its 52 week high today @ Rs.175  , an appreciation of more than 50% in  three months period   .Still recommending to HOLD this stock for long term

Link to old posting HERE

Monday, December 9, 2013

CROMPTON GREAVES - UPDATE

Crompton Greaves recommended @ Rs.90  today hits its 52 week high , an appreciation of more than 50% at CMP  .Still recommending to HOLD this stock.

Recommendation Link HERE

Saturday, December 7, 2013

ADOR WELDING LTD - BUY








 
Ador Welding Ltd ( Formerly Advani-Oerlikon) was a sector out performer in the past .During 2005 its share price recorded a high of Rs.520 .But later ,as a true reflection of slowing industrial growth in our country ,its share price came down to lower levels.



This company started operations in 1951 with technical collaboration of Switzerland based Welding Industries Oerlikon-Buhrie Ltd. AWP  is the pioneer and one of the market leading companies in Indian welding consumable sector.Company’s Indian manufacturing facilities are located at Silvassa, Chennai, Raipur and Pune.AWP producing various types of electrodes, wires , fluxes and welding and cutting equipments , CNC Machines,Gas cutting products and accessories..etc.Company supplying its products to many industries which includes Automobiles, Oil and Gas,Power ,Construction ..etc.In order to avail latest technology ,company recently acquired 60 % stake in Israel based Plasma Laser Technologies Ltd.Using modern technology, company Introduced many new products in India in recent past.Even during this tough times company showing resilience and reported better numbers compared with last year.Now ,many stocks from Industrial growth sensitive sectors started to perform on anticipation of bold decisions by the coming government .Based on many parameters Ador Welding is one of the best companies in this sector .
                                                                                       
 In last FY company reported a top line of Rs.364 Cr and a net profit of Rs.19 Cr .AWP is a debt free company with 57 % promoter stake and out of this not a single share is pledged .What is more attractive is its dividend paying record .For the past four years ( actually these period was really a challenging one  for a company like AWP) company maintained a dividend of 60 % .This implies a dividend yield of close to 5 % which is  highest among the listed companies on a continuous basis. I believe,this is a good opportunity to include a clean company in your  portfolio and  there is every chance for out performance once Indian Industrial growth pick up, till then you can still enjoy 5 % or more dividend yield .Recommending a BUY @ CMP Rs.123 ,which is even below its book value .Stock listed both in NSE and BSE


Link to Company website HERE

Latest Annual Report HERE

                                                                    

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