Saturday, May 24, 2014

NILKAMAL LTD - REPEAT



  

Nilkamal and Wimplast are two companies I recommended earlier on same day.( Old Link HERE ) Recommended price was Rs.202 for Wimplast and Rs.264 for Nilkamal.But now ,Wimplast turned as a 4 bagger which is currently trading above Rs.800 where Nilkamal is still around the recommended price. This week let us look into the reasons for this under performance by Nilkamal which is almost 10 times bigger than Wimplast by turnover.

                                                                             The brand ‘ Nilkamal’ is familiar to everyone and it is the world’s largest  moulded furniture maker and Asia's largest plastic processor.Company operating through five different divisions viz – Moulded Furniture,Material Handling,Mattress,@home, and Home ideas.Its manufacturing facilities are strategically located at each zones of our country .Company own seven factories in India and one in Sri Lanka. Under the moulded furniture division ,company manufacturing plastic moulded chairs , sofas ,ready to assemble furniture ..etc .Its material handling division selling crates, pallets, Pallet Trucks ,Stackers, Forklifts ..etc. Company is the market leader in each of these products.
    


    

 What  went against managements expectation was the performance of @home division.This division comprises 19 large format retail stores with an average size of 16,000 sq.ft. per store.Even after spending close to Rs.100 Cr for this division ,performance of this division was not up to the mark for a long time.Performance of this division affected company’s over all profitability and its share price.Now management took a decision to control spending for this division and concentrate in other core businesses.It is planning to spend Rs.50 Cr to start two manufacturing facilities for mattresses in next three years.At present company owns two  mattress manufacturing facilities located at Bangalore and Kolkatta . Management is confident to achieve over Rs.100 Cr turnover from this division alone in this financial year (2014-14) itself. Mattress division is comparatively high margin one for the company .After a long wait , company’s @home division also came to profitability in previous financial year (2013-14) .In all other divisions company having enough capacity and hence not expecting substantial spending for capacity addition in near future . This situation will help the company to improve its cash flow and debt reduction going forward. Nilkamal Bito Storage Systems  ( Link HERE) , the joint venture company with BITO Langertechnic of Germany also reported profit in latest FY .Combro Nilkamal Pvt Ltd is another joint venture with US based Cambro Manufacturing Company ( Company Profile HERE)  .This joint venture company is operating in the field of commercial food service & hospitality segment which also reported good performance in FY 2013-14 

 

All together ,this is the changing time in Nilkamal with management’s prudent decisions.Promoters holding about 63 % stake in this company and not a single share pledged..Company reported substantial improvement in its profitability in latest March quarter. For the full year ,Company reported a consolidated top line of Rs.1752 Cr and a net profit of Rs 48 Cr . EPS for the year is Rs.32 .Company also declared a dividend of Rs.4 per share . Company’s book value is close to Rs.300 and currently trading even below this @ Rs.288. Considering the steps taken by the management in recent times to improve its performance ,recommending this stock again as a BUY for long term investors.Stock is suitable to include even in the core mid cap portfolio . Stock listed in both exchanges.



Link to Company Website HERE 

 

Disc: It is safe to assume that I have vested interest in Nilkamal

102 comments :

  1. Sir, can I enter acrycil @280 and indag rubber?thanks.due to this blog I am sitting on huge profit.

    ReplyDelete
    Replies
    1. Both these stock recommended at lower level. One can HOLD it

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  2. Excellent analysis Sir!! Keep up the great work .

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  3. Thanks for your long term recommendation. I request to recommend stock between 5 to25 like marksons pharma

    ReplyDelete
    Replies
    1. The stock price should not the primary factor in deciding the stock purchase. If you prefer technical analysis than look at PE, PEG, un pledged promoter holdings , market cap to sales , debt etc etc .......

      Delete
  4. Sir please your view upon jyoyhy lab and anant raj Ind. Your view is need full for me thanks

    ReplyDelete
  5. Good call Sir!!! I was in a fix a month back between Supreme and Nilkamal and should have referred to your recommendation!!! Now on I have decided to check your blog whenever I am in a fix!

    ReplyDelete
  6. Sir,

    I am regular visitor of your blog - believe me , your comments and suggestion made me quite knowledgeable on the subject.

    I express my sincere thanks to you..

    I have recently bought Delta Corp @ Rs 100.68, should I hold? Appreciate - if you can give some insight of Delta Corp.

    Also , Finolex Cables Q4 PAT jumps 79% at Rs 69.31 cr. Would, Finolex be good option to buy?

    Thanks Arup

    ReplyDelete
    Replies
    1. Not tracking both stocks hence not in a position to comment on.

      Delete
  7. http://www.newindianexpress.com/business/news/Poor-Demand-Hits-Nilkamals-Expansion-Plan/2014/05/23/article2239505.ece

    ReplyDelete
    Replies
    1. Same thing can be interpreted in different ways .See the below links too

      http://www.moneycontrol.com/news/business/nilkamals-mattress-dept-to-cross-rs-100cr-rev-this-fiscal_1090550.html


      http://www.mydigitalfc.com/news/nilkamal-eyes-15-cent-revenue-growth-year-546

      Delete
  8. Star investor Dolly Khanna is heavyly invested in this stock. Check in public share holding .Its a high conviction stock like Cera. La Opla etc

    ReplyDelete
  9. sir plese share ur view on nitco.

    ReplyDelete
    Replies
    1. No change in my previous views on Nitco . These type potential turnaround stories may mint money ,but patience to wait for long term is the key for success in such stories.99 % investors are looking on share price movement from the next day of purchasing such stocks and start to ask ' why it is not moving even when many other stocks are moving ?'. These type cases are not suitable for such investors.

      Delete
  10. My comments are not getting visible.. Can any1 share views on Dhanlaxmi bank..

    ReplyDelete
    Replies
    1. Tracking only very few banking stocks like Yes Bank,ING and DCB

      Delete
    2. Sir, I remember you saying last time tracking only Yes and ING banks. Since now you are tracking DCB, are you very much positive on it?
      ASH

      Delete
  11. sir ur views on care ratings, subex and suzlon

    ReplyDelete
    Replies
    1. Positive on CARE Rating , not tracking Subex, Suzlon is an already recommended stock.

      Delete
  12. Dear Sir,

    Still holding the share of sunshield you recommend at Rs 67.Yesterday the result is very bad.Please advice what to do.

    ReplyDelete
    Replies
    1. Please check whether the same question answered in recent times before posting messages. Practically it is very difficult to answer again and again for same question due to time constraint and waste of effort.This same question answered below the previous posting today morning itself.

      Delete
  13. Dear VP sir, would it not be difficult for NILKAMAL to compete if IKEA enters Indian markets?.. your views on this ..And if u can throw light on a company called Alok industries,, PLEASE ANSWER MY QUESTION SIR, tried several times to get my query answered., thank u

    ReplyDelete
    Replies
    1. Competition is part of any business. I don't think Nilkamal is a small company to sink easily

      Delete
  14. Sir please share your views on spicejet..As this was your recommodation in 2010 @ 86 and then after time time you also book the loss also..but now what do you think about this script and sector..Since now the new government is also formed and also have a good vision of development is seen in this government ...so could you please share your view in this share and also tell me is this script is good at this price for long term...thanks in advance

    ReplyDelete
    Replies
    1. Prefer to take a call only after getting some idea of new govt's aviation policy.

      Delete
  15. Vp sir,what are your views on Dcb Bank?is it a buy for long term ?or any other bank which you feel would be a good bet in the long term. Waiting for your valuable feedback

    ReplyDelete
  16. You have recommended Adani Power on Tuesday, March 23, 2010 when it was at 114. I had invested at that time based on your recommendation as a long term basis. I have been holding this stock even it was down by more than half of your recommended price. In this changed political environment, what is your advice on this script? Thank you.

    ReplyDelete
    Replies
    1. There is no meaning in sticking on any stocks if the situations which decide its fundamentals are changing.After recommending Adani power few years back the coal price scenario changed drastically and hence I requested to avoid the same . Now a new govt in place and everyone expecting some positive changes in favor of power sector .But if there is no formula to fix tariff based on production cost power generation companies may not gain as expected . So, better to wait and watch what changes the new government is going to implement.

      Delete
  17. Sir, can u pls comment on Southern Ispat ?

    ReplyDelete
  18. Dear Sir,
    The most of stock recommanded by you in last two months open with upper circuit so we fear to buy on higher rates so in the case of nilkamal if stock open with the same fashion we can go for buy with six months retain view.kindly reply please.
    Regards
    Jitendra

    ReplyDelete
    Replies
    1. Dear Jitendra

      My stock recommendations are not based on volume /price movement but mainly depends on the expected business growth and current worth. So please don't misunderstand them as "TIPS" which are mainly for making quick bucks ( whether making money in such tips is another question) with the support of punters or operators .If I believe the long term prospects of a stock is limited within few circuits ,I never recommend such stocks , but I can't insist only long term investors should buy the stocks I am recommending.This is market and investors are different kind ,if investors with short term view entered in that stock, they may sell after holding it only for few days and a correction set in . But I believe wealth creation will happen only by sticking on quality stocks for long term.

      Delete
  19. hello sir,
    do you think international travel house is a value buy?

    ReplyDelete
    Replies
    1. Already recommended @ Rs.165

      http://value-picks.blogspot.in/2010/04/international-travel-house-ltd-from.html

      Delete
  20. Hi,

    I am a beginner in trading. These days power sector stocks are moving up(Orient green, Suzlon, jiaprakash). When I looked into their balance sheet all of them are in big loss and they are continuously losing money, have high debt but still they are moving up. There is a sentiment in the market that new government will do something in power and infra but still I am not able to convince myself.Please share your knowledge which will be helpful for me.

    Also you had written that you are tracking Yes bank what would be your suggestion for this now coz its already at 563.

    Regards
    Rohan

    ReplyDelete
    Replies
    1. Dear Rohan

      I am not an expert to advice anything about trading.My stock recommendations are only for investment purpose .I believe strength of balance sheet is not a big concern if your purpose is trading only.

      Delete
    2. Respected Sir,

      Apology for picking wrong word. I mean investment purpose only. I am not able to understand why this is happening that is why I am not putting even a single rupee.Again apology for not conveying my real intention.

      Regards
      Rohan

      Delete
  21. Hi Sir,

    I am posting comments for such a long time but they never gets published. Please publish this one.
    Please share your views on anus laboratories and visesh infotechnics.

    ReplyDelete
    Replies
    1. Fundamentally nothing to comment about both stocks. In a bull market , share price of even closed down companies may pumped by operators ,nobody can predict such movements after analysing fundamentals .

      Delete
  22. Hi sir,
    Whats you view on jp associates and HDIL for long term.

    ReplyDelete
  23. Hi VP sir,
    May i know your veiw about firstsouce solution ltd for 8 to 12 months

    ReplyDelete
    Replies
    1. Not positive on any time bounded investment in stock market and not tracking the mentioned stock.

      Delete
  24. dear sir,
    pls share your view on opto circuits india ltd.

    thanks

    ReplyDelete
    Replies
    1. Company desperately need funds at this point ,if some one came to pump money ,its fortune will change.

      Delete
  25. Hi VP Sir,

    Can you please suggest some solid waste management companies. I believe this sector has huge potential ...if taken care my new govt.

    Hoping to see this message published.

    ReplyDelete
    Replies
    1. Already recommended VA Tech Wabag and ION Exchange

      Delete
  26. Hello sir,I am a regular viewer of your website, its very informative you put a lot of hard work in researching and finding out companies which are going to perform well in future, I had invested in some of your recommended companies, and they are doing well thank guiding us, can you please advise how long this bull rally going to last, just wanted your views on this, is it possible that the markets will keep on rising for next 5 years or this will be just a 1 year rally and this will be the end of bull run, please do reply. Thanks

    ReplyDelete
    Replies
    1. I don't think anybody in the world can give a specific answer for your query. I would prefer to concentrate on individual companies rather than index movement.

      Delete
    2. Thanks for your reply sir, will do the same, god bless you

      Delete
  27. Sir, I believe sanitation will be one of top most priority if next govt. I am confused choosing between Cera/HSIL/Somany . Please provide your inputs . I believe this sector has huge opportunity in India in many years to come. I have plans to hold any of the above stock for atleast 5 years to get handsome profit.

    ReplyDelete
    Replies
    1. All these cos good for long term .Since these appreciated sharply in recent times ,one should show patience for further gains.

      Delete
  28. Sir .. Is it safe to buy
    Marksun pharma at dis point ... As u always say for long term ... As u have recomded dis stock at 4 rs nw it is currently trading at 25 so it is safe to buy just for investment purpose ...

    ReplyDelete
  29. Marksans now reached a market cap of over Rs.1000 Cr. There may be some momentum and gain due to this ,but purely on fundamental basis not recommending a buy at current price. Even granules is still available at a market cap of less than Rs.750 Cr

    ReplyDelete
  30. Sir,

    Kerala Ayurveda result published. Still it is same as two years back. Is it advisable to continue holding it?

    ReplyDelete
    Replies
    1. Even the opportunity is very big ,management is not showing any efforts to utilise it . Better to shift from this for the time being and reconsider if they are showing any meaningful efforts to revive the company.

      Delete
  31. hello Sir,

    I am impressed by your value picking. A great saluate to ur hard work and research.

    What is the scope for oil and energy industries in future.

    Can I hold ONGC for long term . Please advice

    ReplyDelete
    Replies
    1. Positive on this sector , not tracking ONGC

      Delete
  32. Sir, can't thank you enough for your recommendations and assistance.

    Should one plan to book some profit in superhouse at around 140 levels, and lumax auto technologies at around 170 levels?

    ReplyDelete
    Replies
    1. One can book profit in Superhouse at that level.Hold Lumax Auto Tech

      Delete
  33. Please let me know your view on Eicher Motors for long time investment(2+ years). Appreciate your kiind revert.

    ReplyDelete
    Replies
    1. Sorry Kevin ,not tracking it.

      Delete
    2. Sure, Thank you...

      Appreciate all your research and suggestions. I have been tracking several of the recommendations given by you and they are all awesome. I have made some savings and intend to go investment rout slowly. Your posts are defiantly helping thousands of people like me...

      God Bless VP...

      Delete
  34. Sir pls let me know your view on zee tv entertainment

    ReplyDelete
  35. Sir please reply to my query on Mirza international

    ReplyDelete
  36. Please share your views on Ratanami Metels and Tubes?

    ReplyDelete
  37. Dear VP,

    Kindly share your view on Control Print. This stock is beaten for years and showing movement now. Is it good to bet on medium to long term? Thanks!

    Regards
    Ayyappan

    ReplyDelete
    Replies
    1. More than once mentioned that this stock is not in my tracking list and hence not in a position to comment on.

      Delete
  38. Sir, pls share your opinion on Mazda Ltd, if you tack it?
    Thanks for your outstanding efforts.

    ReplyDelete
  39. Sir, i am holding Simran Farms for some time now. You had a recomendation at 30. Do i need to still hold? Whats your view on this?

    ReplyDelete
    Replies
    1. In reply to many messages ,already suggested to exit.

      Delete
  40. Sir, your interpretation on Gujarat borosil results that published now pls. Thanks

    ReplyDelete
    Replies
    1. Stock recommended on the expected future performance and not on the past.

      Delete
  41. Sir what is your view on Gitanjali Gems? it's 52 week high is 618/- & book value is 314/-.Also govt has announced 80:20 scheme. Should one add this share on correction or still stay away?

    ReplyDelete
    Replies
    1. Yes , Company had lot of issues due to changes in govt's policy on gold import .This resulted in serious working capital issues . Now I believe worst is over for Gitanjali.

      Delete
  42. Sir sorry but I want to know when I asked you about nilkamal at rs 150 you had not replied to my question.now you recommending this stock at rs 288.what does it mean.I thing you are accumulating the stock at lwrr level and recommending it at higher level to get maximum benefit.

    ReplyDelete
    Replies
    1. It depends on company's initiatives and improvement is business. A stock which is not a buy @ Rs,10 but the same may be a buy @ Rs.1000 and vice versa .

      Do you really think I can drive a stock like Nilkamal from Rs.150 to Rs.300 + !!!!!!!! :))

      Delete
  43. Dear SIr,
    What is your view on real estate sector?

    ReplyDelete
    Replies
    1. Prefer Infra over real estate.

      Delete
    2. Which infra stocks do you suggest. In one of your comments you described your choice for unity infra...Do you think lanco can be a turnaround story

      Delete
  44. Sir how do you see Wockhardt results? Is it a good time to enter is there is a correction?

    ReplyDelete
  45. Sir what is your opinion on Acrysil results for 4Q FY 2014.

    ReplyDelete
  46. Sir, what is your view on Indo Count Industries please?

    ReplyDelete
  47. Hi VP Sir,

    What is your view on Edible Oil sector after new government formation. I know, you have already recommended two stocks (Vimal, Modi Naturals) in 2010. Is there any change in your view for those two stocks? In the current scenario, do you suggest any other good stock in this sector for long term?
    Best Regards,
    Nawaz

    ReplyDelete
    Replies
    1. Monsoon may be more important than new government for this sector.

      Delete
  48. Dear Sir,

    I hold Aksh & Nilkamal please give your view about result,
    its very imp for me or friends.pl reply
    Thank You,

    Arvind Kumar Patni

    ReplyDelete
    Replies
    1. Hold Aksh

      In case of Nilkamal , recommended buy post result.

      Delete
    2. Dear VP
      Nilkamal- "Buy post-result?" Quarterly result was declared on 14 may. Which result are you talking about?

      Delete
  49. Sir,
    Your view on Indsil Hydro - your old reco?

    The results were good...

    your view for long term?

    ReplyDelete
    Replies
    1. Performance may improve if revival in steel industry due to new govt's expected initiatives in infra sector.

      Delete
  50. sir ur view on orissa mine dev corp(OMDC)

    ReplyDelete
  51. Sir, Please your comments about KSCL.

    ReplyDelete
  52. Sir,
    What happened to Nilkamal today? I had taken 50 shares at 350, could have sold at 390, but avoided now in big loss.

    ReplyDelete

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