Saturday, January 11, 2014

APAR INDUSTRIES - REPEAT





  
Companies showing resilience during tough business environment always deserving attention.Last few years were very bad for many industries mainly due to global recession and policy paralysis here. This week let us look into a company which not only shows good resilience during this tough period but shows decent growth .Apar Industries is the company and it is one of my old recommendation too. Now I feel ,with improvement in the economies of overseas countries and the formation of new government in the months to come in India ,this is the perfect time to look into it again.

                                                                                          Apar is a diversified company ,mainly operating in four segments – Automotive and industrial Lubricants,Specialty Oils,Aluminium Conductors and Cables. Aluminium alloy rod and conductors were developed first in India by this 58 year old company  through its own R&D initiatives and now Apar is one of the largest and low cost producer of Aluminium Conductors in the world .Apar having strong technical collaboration with Alcan (Canada) and Properzi (Italy) .Company selling its products under’POWERLINE’ brand in India and exporting the same to more than 80 countries  including US, EU, Africa, CIS Countries etc..  . Company also producing different new  variants of alloy conductors  like High Conductivity Alloy Conductors, High Temperature Thermal Resistant Alloy conductors , High Temperature Low Sag conductors ..etc as per the requirements of customers.
                                                            In the specialty oil segment ,company producing Transformer oil,Rubber Process oil..etc.Apar’s POWEROIL brand commanding leadership position in Transformer oil segment. Company is the largest manufacturer in India and fourth largest in the word .Its strong presence in overseas market helping the company to report better performance amid tight business conditions in India.
     

                                                                   In the automotive lubricant segment ,AGIP brand is manufactured by the subsidiary of Apar named APAR CHEMATEK LUBRICANTS LTD .It is a joint venture between ENI of Italy and Apar .Recently company increased its stake in this subsidiary from 50% to 97.5%.



In cable segment ,company producing Electrical & Telecommunication cables and supplying products to industries like Power Utilities, Petrochemicals, Steel, Cement, Nuclear Power, Defence, Telecommunication, Metros, and Shipbuilding etc.This division added to the company by the take over of Uniflex cables in 2008 . After five years under Apar Management its turnover improved from a mere Rs.31 Cr to Rs.408 Cr. 


Why this stock is interesting :


·         Apar is leader in many segments in which it is operating in India and one among the five in the world.


·         Well diversified Geographical presence – exporting products to more than 80 countries which is minimising risk of concentration in any region and thus the possibility of recession. Apar reported sharp  spurt in export ,which increased more than 45 % in last year.

·         Showing strong growth even tough times.Company’s total turnover increased from Rs.3453 Cr to Rs.4532 Cr (31%) in last FY  . ( Transformer and Specialty oil segment 6% growth,Conductor Segment 63% ,Cable segment 18 % ,Auto Lubricant 30% growth)


·         Stock is available at cheap valuation .Company reported a net profit of Rs.110 Cr and an EPS of Rs.28.50 in last year on a consolidated basis .At CMP of Rs.145 ,stock is available at a P/E of just 5 and also below its book value of Rs.163


·         Company following a liberal dividend policy ,which paid 52 % dividend in last FY 


·         Promoters very aggressively purchasing shares from open market which indicating their confidence . ( Check the details HERE) . Now their stake reached close to 60 %  and not a single share is pledged .Also ,Templeton Asset management company hiked their stake by subscribing shares on a preferential basis at a price of Rs.220 per share.


Conclusion:


As I mentioned above ,revival in foreign countries and the emergence of a new government in India few months down the line are expected to result in a positive demand scenario in the industries in which company is operating . Raw material prices of company is also showing a steady trend .Company already proved their competency and efficiency in tough times .Stock is a value buy @ CMP Rs.145 for long term investors .Listed in NSE and BSE   


Link to Company Website HERE

59 comments :

  1. Dear VP
    pls share your view on FLUIDOMAT Limited,one of high quality stock as per my research. Pls reply

    ReplyDelete
    Replies
    1. Fluidomat recommended at Rs.29 ,stock now appreciated more than 100 %

      see the below link

      http://value-picks.blogspot.in/search?q=fluidomat

      Delete
  2. Sir what is your view upon India Nippon electrical

    ReplyDelete
    Replies
    1. Good company for investors with enough patience.

      Delete
  3. I wish you answer this -

    Why did strides gave dividend of Rs 500/- per share. ...

    ReplyDelete
    Replies
    1. Company sold major portion of its business and sharing the amount received from that sale with its share holders.

      Delete
  4. These days why are recommending stocks only when they reach or are at 52week high.... Is this intentional .. ...You must be a billionar man!

    Dare to post this

    ReplyDelete
    Replies
    1. 52 week high or low is not my consideration while recommending shares but whether the stock is worth at current price or not.

      Better to keep much attention on your financial position than that of me .I will take care mine.

      Delete
    2. Sir,

      Pls don't respond to non sense comments.

      Delete
    3. I have faith in your intention because of varied reasons.Dont get upset with baseless negative comments.

      Delete
  5. Dear VP,

    As an avid reader of your blog, I would request you to kindly refrain from calling a stock the NEXT Ajanta Pharma or the NEXT Big thing, because it has a tendency to trap small investors who fall prey to sudden upward gyrations in the stock price, because speculators jack up the share price after your recommendation.
    Having said that, I read your article on Caplin Point and even though I once owned the stock, I was not convinced about the managment's ability to follow their current business model of earning revenue through advances, especially since they are now planning to expand in far more regulated global markets like the US. Management's credibility with regards to scaling up remains a doubt at my end.
    I know you would be aware, that your blog is not a secret anymore and is talked about on valuepickr.com, moneycontrol and also on twitter. A lot of people follow your advice, so would request you to keep long term investors concerns at heart.
    One request would be to provide your recommendations during the week, maybe Wednesday so that people can first digest what you recommend and then take a suitable call depending on their research.

    Regards,
    Pratul

    ReplyDelete
    Replies
    1. Dear Pratul
      By that heading I tried to indicate that the company may succeed with the same product Ajanta is manufacturing. Anyway , taking what you said in good sense and will keep more vigil going forward.

      In case of 'Advances' ,even if the company not able to continue this business model ,Completing a new plant using the advances available till now and internal accruals and without much debt which is with a potential to generate Rs.300-400 Cr income is not a small thing

      About the ability of promoters to scale up the business- As you are aware ,this same promoter once escaped to an African Country due to his mounting debt issues .I don't think ,at that time even his friends expect he will come back and re start the business .So I am not under estimating them.

      As far as my understanding , they know how to do the business but their problem is ,they are not able to present facts in a convincing and a polished manner to investor/analyst fraternity. I too feel the same in a real life experience recently.But I believe ,it can be addressed by appointing a professional PR agency and appointing some professionals in the company itself ,when the company grow..


      Regarding the day of posting - It was earlier posted on week days .At that time many readers complained that they are not getting enough time to study the company before acting on it and also requested to change the day of posting in order to get two holidays(enough time) .

      Delete
    2. Sir,
      with all due respect
      what Mr. pratul said is right .....
      whether its caplin point or apar industries liberty shoes they are low volume shares and when readers like me who follow your blog jump in suddenly to buy the shres...and share price suddenly goes up...... i think the returns you mentioned in any stock expected during year gets fulfilled in few days.....
      ...unfortunately your value investing is turning into speculative investing... :(
      Regards
      Rahul

      Delete
    3. Dear Rahul

      I can't control everything.A section of readers will criticize if stock is moving slowly and the other section will criticize if stocks moving sharply .Investors should do some home work and buy the stock upto which rate one is comfortable.

      Delete
    4. Dear VP

      You are guiding us based on your knowledge. It is hardly your liability to see to it how all of us take it or use it.
      No need for you to carry the baggage of that use or misuse.
      There will always be some speculators who would gain by immediate profiting, where as some other would ALSO earn in the long term.If some one is wary of speculations, they can always take the call later on.Further if you think a stock is AJANTA jolly well call it AJANTA- it gives us idea about what to expect form it. Your method of giving recommendation on Saturday is comfortable enough for all, as it gives time for analysis as well as fund management.

      regards

      ajit

      Delete
    5. I could not agree more. I have been an avid reader of Valuepick as a boarder of MMB (Moneycontrol message board) along with some other excellent boarders before valuepickji opened this blog (as far as I remember). I find it very funny, ungrateful and graceless that on one hand members are getting free advice of excellent quality and then they are demanding tailor made / customized solutions for individual need. Most of the members are unable to give any meaningful contribution in form of sharing further information on the scrips recommended. I would request Valuepick not to get disturbed and disheartened and continue in his own way as there are thousands and millions of his followers who are benefiting and do not know how to thank him for his absolute great service to small investors like me / us.---------Follower.

      Delete
  6. Dear Sir this is second time i m posting regarding Lactose India kindly give your view should i hold on or exit from it ?

    ReplyDelete
    Replies
    1. Nothing has happened since last update

      Delete
  7. hello VP jii..............sir, Thanks for your excellent stock research and recommendations ............... I would like to ask your views over this MID cap IT/BPO company "First Source solutions Ltd". This sector is doing well as Global countries (US, EU) economies is reviving also This Company First source Solutions Ltd is showing excellent Q to Q results with excellent Profit & Revenue growth. sir Pls give your Valuable view over this company I Hope you will reply My Query sir. Thanks in advance. God bless....

    ReplyDelete
    Replies
    1. Not tracking this stock,so not in a position to comment

      Delete
  8. not worried abt apar ind's 900 crores debt?

    ReplyDelete
    Replies
    1. Company exploring various options to pare debt including divesting part of one business and not much capex planned in near future.Cash flow is also improving .I believe, they can service the debt

      Delete
  9. Pls. give reco. On shirpur gold. I am holding this share.

    ReplyDelete
    Replies
    1. Govt's current gold and gold ore import policy is not positive for the company.Situation may change once CAD shows a declining trend.

      Delete
  10. Sir, great fan of yours- Need your views on Atul Auto..as I want to invest in this company with a view of 5 years and also Jayshree tea future prospects! Thx in anticipation!

    ReplyDelete
    Replies
    1. Atul Auto recommended @ Rs.71 ,thereafter it declared one rights issue and one bonus issue .Still it is trading @ Rs.300 and already turned as a multi bagger .At current price it is a HOLD for me,

      See the old link below

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

      Delete
  11. Hello Sir- What are ur views on Exide and Wockhardt..I want to buy these twi stocks at current levels but only after taking ur views on the future prospects

    ReplyDelete
    Replies
    1. Not tracking Exide,positive on Wockhardt with a 2 year view.

      Delete
  12. sir, Will please comment on kfa and its future? Can one buy it for long term?

    ReplyDelete
    Replies
    1. I don't think even the promoters of KFA can say something about its future at this point of time.

      Delete
  13. Der VP,

    Please share your views on SPIC

    ReplyDelete
  14. Sir whats u r view on granules...and how will be december quaterly result

    ReplyDelete
  15. Dear sir, any view on fcs software.

    ReplyDelete
    Replies
    1. Read the below two links

      http://value-picks.blogspot.in/2010/07/fcs-software-solutions-ltd.html

      http://value-picks.blogspot.in/2010/07/fcs-software-smart-promoters.html

      Delete
  16. Respected Sirjee,
    What is your view on Vulcan Engineers Ltd?

    ReplyDelete
    Replies
    1. At present most of the companies from this sector is facing very lower level of order intake due to policy paralysis and general slow down .Company having niche technology ,especially in power saving side.Some more time may be required before the business starts looking up.

      Delete
  17. Sir any view on finolex cables and Knox leisuee

    ReplyDelete
    Replies
    1. Not tracking .Do some home work before investing and not take decision only by hearing some parts from somewhere - Name of company is INOX Leisure and not KNOX Leisuee.

      Delete
  18. Dear sir,
    Market really agrees to ur words very seriously. its evident from the price movments of ur recommendations.
    Pls share ur views on TT limited as its coming out of PCA next week.
    However most of the stocks have moved greatly before coming out of PCA. But TT Limited is an exception.
    waiting for ur reply .

    Thanks,
    Raghuram

    ReplyDelete
    Replies
    1. Company's NPM is low and power related issues in TN not sorted out completely .Sought some clarification from management on certain matters .Waiting for their reply..

      Delete
    2. Thanks a lot sir.
      Pls post the management replies under this once they reply :-)
      Thanks again on your work for helping retail investors to make gains from markets.

      Delete
  19. Sir your view on bf utilities for long term

    ReplyDelete
  20. Dear VP Sir,
    I am extremely sorry for the comments that i posted on such wonderful blog of yours i have made money by reading your blog and you are right sir...... we dont do research please dont mis understand me i made a comment from longer term perspective and to maintain the quality of your blog.......... because some lazy investors force you to post comments on HOLIDAY so that they can read and invest....... and because of them share prices goes up really fast and then fear picks them up and those lazy investors (so called) start selling......
    Sir my request is .... again with all due respect........ please post your comment on any day you want......and not on holiday so that your avid followers and readers ONLY will enter in those VALUE PICKS first..
    Thanks and warm regards,
    Rahul

    ReplyDelete
  21. please also share your view on Apcotex Industires one only peer company of Appar Ind. Pls reply

    ReplyDelete
    Replies
    1. Apcotex ia an already recommended stock even before its Face Value Split .See the below link

      http://value-picks.blogspot.in/2010/03/apcotex-industries.html

      Already appreciated more than 100% ,HOLD it

      Delete
  22. Sir ,Heritage food is scaling up its retail stores instead of trimming it down .What are your views on this recent development of the company?

    ReplyDelete
    Replies
    1. Positive developments may happen post election

      Delete
  23. Sir,
    first of all, i have been following your blog since 4 months and i must congratulate you and the investors for sirji;s excellent recommendations. Though i am hearing some criticizing in recent posts, i believe sirji is not obliged to any of the investors. those who wish to follow can and others can very well exit. Sir pls pay no heed to critizing, and follow your own style as you are really good at it. you are already helping many from whom you owe nothing!

    ReplyDelete
  24. Sir I want to invest 1 lakh out of my saving, could you please suggest some stocks..

    ReplyDelete
    Replies
    1. Better never invest using your savings in Stock Market.Use anything available beyond Savings.

      Delete
  25. Sir

    I have 200 shares of Orchid Chemical bought for over a hundred rupees each. Should I sell them and buy a better stock so that my loss can be made up?

    ReplyDelete
    Replies
    1. AS you are aware ,company facing lot of debt issues .It is in the process of reducing debt by selling some assets.But didn't get the final permission for transferring part of an asset to a foreign company .Completion of this deal may bring some relief

      Delete
  26. Dear VP Sir,
    ,Pls comment on Sasken Communication , stock fallen from 210 to 179. ???

    ReplyDelete
    Replies
    1. You are seeing only one side.It moved up sharply from a level of Rs.120 .Correction is part of any healthy up move.

      Delete
  27. Dear Sir,

    please give a recommendation for long term investment.
    also please provide your valuable feed on kokoyu camlin

    ReplyDelete

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