Saturday, June 21, 2014

EXCEL INDUSTRIES - STRONG PRESENT ,BRIGHT FUTURE



     
Excel  Industries is a group company of Excel Cropcare Ltd . Selecting this stocks at this point of time mainly on three reasons- improving business prospects of its existing specialty chemical segment,foray into Pharma Intermediates and the vast potential of its non core Enviro-Biotech Division. Company own three production facilities one each at Roha ,Lote  Parshuram( Ratnagiri Dt Maharastra) and Ahmedabad.
                                                                          Under the specialty chemicals division ,company manufacturing Phosphorous Derivatives,Agro Chemical Intermediaries, Mining Chemicals..etc. Under the pharma intermediates division  ,till now company was mainly in Veterinary API’s but recently set up a new facility for human API’s at its existing Lote site .Products from this new facility is high margin products and expected to drive company’s NPM from current level once the commercial production reaches full swing. The most exciting part is its Enviro Biotech Division .

Enviro Biotech Division -  A High Potential Business

  

  
This division  may be termed as ‘an idea before its time ‘ .But I believe ,its time is just coming and the potential is very vast.Under the Enviro Biotechh division ,EIL is manufacturing  Centralised waste management plants and Organic Waste Converters .Excel is one of the two top waste treatment plant manufactures in India .Actually managing waste is the biggest challenge of any city administration.Many Indian cities are far behind in cleanliness and effective treatment of wastes compared with foreign cities .This creating lot of health related issues on one side and act as a reason for preventing development of various sectors including tourism ..etc on the other side. We all are aware about the importance and seriousness of this issue and hence I am not writing too much on this.



EIL manufacturing  different types of organic waste converters suitable to treat different volume. Size and model of machine is varied based on the volume to be treated .These machines are suitable for Housing societies, markets, Food processing companies, Slaughter houses,Hospitals,Malls..etc.Using this converter, organic wastes like  kitchen waste, garden waste, food processing waste etc are converted into compost. With the help of strong R&D ,company introduced its most modern fully automated waste converter ‘Bioneer’ in Indian market.This machine is capable to convert waste into compost in just 24 hours. Company already recorded more than 1000 successful installations of its WC’s at various locations.Bioneer is suitable to handle 100 Kg to 400 kg waste per day.If these machines are targeted individual of group customers ,the larger version of this system is the Centralized Waste treatments plants suitable for treating Municipal Solid Wastes upto 500 tons per day.More than 10 such plants already installed in India and Excel supplied one such plant to Solid Waste Recycling Ltd  a company formed to handle waste recycling in Mauritius.Compost manufactured in this facility is distributed by Mauritius Co-operative Agricultural Federation (MCAF) and Roger Fayd’herbe Ltd, all over the Mauritius .In India , Excel’s prestigious CWM Plant established in Ahmadabad and working on a PPP model .( Details HERE  and HERE ) This is considered as one of the most successful waste treatment arrangement established anywhere in India .Bio fertilizer manufactured from this facility is marketed under ‘CELRICH’ brand through its group company Excel Cropcare Ltd. 
                
  
Link to Enviro Biotech Division HERE
   
Financials

For the financial year 2013-14 ,company reported a top line of Rs.417 Cr , net profit of Rs.18 Cr and an EPS of Rs.16.50. Company also declared a dividend of 75 % on FV Rs.5 shares.

Conclusion
Even though I emphasized on the non core – Waste Converter business – above ,please don’t misread Excel as a Waste Converter company. Its core business is chemical related itself .Only close to  5 % of total income came from WC Machine  business in last FY but it reported a growth of  about 50 % compared with previous year. Waste Converter business is at nascent stage and this concept itself is just gaining momentum in India .New government’s initiatives especially Prime Minister’s  personal interest in clean city concept is expected to give a new lease of life for this industry . Government already announced its intention to develop 100 smart cities and waste management will be a crucial and inevitable part of this cities . Being a company successfully handling such a system in PM’s own state ( Centralised waste treatment plant at Ahmedabad) he will be well aware about its possibilities and it will give an extra bias to Excel. Arranging waste treatment facilities at own cost may be a compulsory pre condition for permission for building flats,housing colonies ..etc in all cities in future. This will be an eventuality and there is no other options .Such a situation will create better opportunities for Excel’s non core business and the potential is immense.
                                                            If we look into its core chemical business,the chemical cycle is started to looking up and prices are improving. Company is a prominent player in Mining chemicals and any steps to avoid the uncertainty in mining sector by the new government will naturally increase the demand for Excel’s products.In pharma related space,company recently set up a new API facility and gain from this unit will also start to flow in near future . Company is an established player in  agrochemical and water treatment chemical business and potential of the same is also robust. Company possessing a strong R&D wing for both divisions . As per available information, company’s  R&D division for waste related business is actively working on ' Energy from Plastic waste'  and  'Fuel from Plastic waste' concepts and gained substantial improvement .

Management quality of Company is top most and they are very investor friendly . Since company's chemical business is established and very strong  there is no question of uncertainty even if the WC business needs time to pick up.In nut shell – Excel Industries is a company with good core business ,high potential non core business led by highly professional and ethical management . This stock having many ingredients to become a multi bagger in future .Stock listed in NSE and BSE ( Scrip Code -500650 ) and trading around Rs.127

Link to Company Website HERE 




Disc: It is safe to assume that I have vested interest in Excel Ind.

69 comments :

  1. Sir.. Thank you so much...for excellent pick of today...Excel Ind. On previous reco. I Benefited with Alpha geo a lot.. Sold few and covered d capital based on the last update & now the stock is quoted around 250 mark. Thank you so much sir, live long! small investors like me are gaining good.Sir,can I still add more to my holding since stock is traded available now? I have great hope to get reply and publish my query.

    ReplyDelete
    Replies
    1. If you mean Alphageo.I still positive on that stock.

      Delete
  2. It is very good to share knowledge, expertise and analytically skill for stock researched that you have done.

    In fact i personally track the suggested scrip, it goes there on with upper circuit. Your suggestion goes towards accumulation but practically price ringing is getting placed

    ReplyDelete
  3. Dear sir,


    Your view on Rei Agro


    Thanks & Regards,
    Rajeev

    ReplyDelete
  4. VP sir, Thank you for your recommendation. I really admire your work and contribution to the fellow investors. I have been following your blog for the past few months it is a real good experience. I am very much new to stock markets. Lost bit of money in stocks following stock tips and speculating on my own. Now I am really determined to learn good fundamental analysis and start a new phase by betting myself on fundamentally good stocks. Could you please suggest some good study materials(books) to understand fundamental analysis for indian stocks.
    Thanks in advance...
    Regards,
    Sri

    ReplyDelete
  5. Dear VP Sir,

    Please guide me on Astra Microwave as i am holding a big quantity in it and also sitting on Handsome Profits thanks to your recommendation. Please let me know what will be a good Valuation to sell it.

    ReplyDelete
    Replies
    1. Recommended Astra Micro just one year back @ Rs.35

      http://value-picks.blogspot.in/2013/06/astra-microwave-products-ltd-niche.html

      At current price of Rs.135 ,it already gave 250 % return.Still recommending to Hold it.

      Delete
  6. Hello VP,

    Any good pick in housing finance market at CMP? I looked at the results of GRUH, LIC, IB, Dewan and GIC and liked GIC. Your suggestion please.

    Thanks,
    Tushar

    ReplyDelete
    Replies
    1. 3 stocks .Canfin.GIC,Dewan already recommended at lower level.

      Delete
  7. sir i want to know why you always post on saturdays and not on any working day . bcoz it leads to circuit opening on monday and for whole next consecutive week , therefore we are unable to buy any shares . I request you to please post on any weekday instead of weekend . so that we can also buy these shares .

    ReplyDelete
    Replies
    1. How will it help you on weekday, I don't get it. Circuit will be there on weekdays as well.

      Delete
    2. Before criticizing on this matter one should check my old postings till 2011 . It was always on weekdays . At that time many readers mentioned ,they are not getting a chance to study the company before buying it and forced to jump into it and later realised the mentioned stock was not suitable for their risk profile .At that time they repeatedly suggested to stop posting on weekdays and post only on weekends .I also believe that is the right method and changed it from 2012 .

      I believe ,you are not loosing anything due to non purchase of a stock but your loss is only notional .At the same time If you purchase a stock which is not suitable to your risk profile and expectation that may result in real loss .

      More than that ,if I post it on a particular time on a trading day the same effect may happen and if I post it on different times each week my readers will forced to check the blog each and every minute.

      I started this blog mainly to help the retail investors to take an informed decision before purchasing any stock .If you are planning to jump into a stock on the very next moment of seeing the name , there is no meaning for all my efforts and continuing writing this blog.

      Delete
    3. great thought process sir....hats-off to ur sincere efforts.
      God bless u!

      Delete
  8. Sir, can we still hold IFGL? Thanks again for super recommendation. Indeed a true valuepick.

    ReplyDelete
    Replies
    1. Closely watch the possibilities for a revival in steel Industry and movement of rupee value

      Delete
  9. VPji,

    The president of india holds a 17 % stake in IDFC. Pls tell me what does it mean ? Coz there are no promoters in it. So what role does the president play in it ? Is the stake divestable ? Pls guide me.

    Thanks

    HK

    ReplyDelete
    Replies
    1. Central Govt holdings are always in the name of President

      Delete
  10. hi ,
    VP, I agree with you !
    Posting on weekends provide me my own bit of time to investigate the recommendation rather than plunging into it without much background. Since my bread & butter is not from it I can never compete with ppl running their show on this LOB. So this definitely allow me to take a more informed decision than doing it blindfolded.
    Also The recommendation you provide are long term so a circuit of 4-5 days where the stock price may increase by 20-25 % don't bother me, in fact it makes me more confident. One more thing which come out of this is there are not only retail investors keeping an eagle eye on VP recommendations but institutional investors as well (making a stock to circuit is definitely not a retail investors piece of cake)

    Thanks ..

    ReplyDelete
  11. sir,

    i have invested in excel cropcare,how do you rate it,like kaveri seeds one of your old recommendations and jk agritech and basanth agro in seeds but crop care you have not selected may i know the reason.

    Thanking you
    Regards
    Ram hyderabad

    ReplyDelete
    Replies
    1. Stocks like Sabero Organics ,Bharat Rasayan ,United Phosphorous ..etc recommended from this space earlier.SEarch the blog.

      Delete
  12. Sir I read your old recommendation on Speciality restaurants which is about 2 yrs old.. I saw that stock price is around same level.. Is it still a buy? Kindly guide. I am new investor

    ReplyDelete
    Replies
    1. Food inflation ruling at higher level may be one reason for investors apathy

      Delete
  13. Respected Sir,
    Please let me know whether I can buy Dewan Housing fiance @CMP.I know u had recommended this earlier but still would like to know ur view at CMP.I want to buy this stock given the potential of this sector in future....Plz do reply


    ReplyDelete
    Replies
    1. I always prefer to buy a stock when it is available at lower valuation . Not a buyer based on technical analysis

      Delete
  14. Respected Sir,
    Plese i need your view on the optical fiber industry.Which stock can be bought out of Aksh Optifibre,Birla Ericsson Optical Ltd and sterlite Technologies...This sector has gt a huge potential in future....I would really appreciate if u can guide me in selecting the stock from this sector...

    Will wait for ur reply....Plz do reply

    ReplyDelete
    Replies
    1. http://value-picks.blogspot.in/2014/02/optical-fibre-cable-sector-to-re-rate.html

      Delete
  15. VP sir,
    your take on Chembond Chem as I am holding it and hoping to see revival due to infra.

    Any view on Sharon Bio Medicine if one can buy for long term at current price?

    ReplyDelete
    Replies
    1. Hope revival along with improvement in Construction sector

      Not tracking Sharon Bio

      Delete
  16. Kindly your view upon rain industries and man industries reply is very important to me thanks

    ReplyDelete
  17. Sir need your view on apcotex industries

    ReplyDelete
    Replies
    1. Stock recommended @ Rs.112 when its FV was Rs.10 ,now it splitted into 5 and still quoting around Rs.170 .Even after 3 times gain still I am positive for long term

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

      Delete
  18. Sir need your view on apcotex industries

    ReplyDelete
  19. Sir I want to invest in DCB Bank. Is it a good stock for long term investment?

    ReplyDelete
    Replies
    1. Suitable for long term passive investors

      Delete
  20. Sir looking at current monsoon situation is it advisable to buy Nath Bio for long term? Or is it too expensive now? i am a long term investor

    ReplyDelete
    Replies
    1. I don't think company will end in this year and El Nino will repeat in every year. I would like to take it as an opportunity.

      Delete
  21. plz share view abt .DQ ent

    ReplyDelete
  22. Sir your views on infra plays like Lanco and GVK for long term investment? Has anythng improved fundamentally?

    ReplyDelete
  23. Sir, If you follow any of JK Tyre, Bharat Forge, Talbros Auto, RSMW, MT Educare, ur view please..!!!

    ReplyDelete
  24. which are your favourites stocks in NBFC or financial sector which can be bought for investment?

    ReplyDelete
    Replies
    1. Looking into one such stock from NBFC sector ,will update in near future if feel promising by all means.

      Delete
  25. Can i buy orchid Chemicals at current levels for keeping in portfolio?

    ReplyDelete
    Replies
    1. Recommended three months back @ 49 ,still positive

      Delete
  26. Nice recommendation. I will surely buy and hold for long term

    ReplyDelete
  27. sirji i m big fan of u. excel is realy multibagar stock see their peer company upl f.v. 1 price 300, pi ind f.v. price 325 monsanto price 2100 thanx sir providin like such stock thanx

    ReplyDelete
  28. Sir can we buy Kerala Ayurveda Ltd at CMP? Its trading at 45. You had given call at 40. Is it still a buy?

    ReplyDelete
    Replies
    1. Not aware about any positive business development in KAL

      Delete
  29. Sir Your views on CRISIL, AMARA RAJA and Bajaj finance pls..

    ReplyDelete
    Replies
    1. All are suitable for Core portfolio.

      Delete
  30. Can you kindly give your take on Nitco Ltd for long term buying?i am trapped at higher levels.. I am a long term investor ready to wait till eternity if there is any hope of revival. If its hopeless then I will get out and switch over to a better stock. kindly give your views Its imp to me. Regards

    Thanks a lot.........

    ReplyDelete
    Replies
    1. Company's CDR package was linked with some asset sales . But due to poor market conditions this process could not complete and company now seeking some changes in this package. As part of CDR ,promoters recently brought more than Rs.55 Cr by way of preferential issue. I still believe it is worth taking risk on Nitco if we have enough patience.

      Delete
  31. sirji what abt vikas wsp. cmp 18 .. promoter bajarangdas baught 1 cr share near 70. sales and profit numbers are growing. can i buy ?

    ReplyDelete
    Replies
    1. Before jumping into Vikas WSP ,better to study the history of promoter especially during the period 2000-2005
      I am skeptical and not interested to recommend this.

      Delete
  32. Dear VP,

    Thanks for your new pick. I have Nahar Capital, Centrum Capital, Intec Capital (All NBFCs) with small profit. Is it worth to continue holding on these companies or better to switch to some other counter? Appreciate your views.

    Thanks,
    Sajan George

    ReplyDelete
    Replies
    1. lol, you want to know the name of the nbfc in VPs mind :), show your three fingers to someone and ask to choose that will be the nbfc pick :D

      Delete
  33. Dear Sir,
    Will highly appreciate your views on Kesar Terminals.

    ReplyDelete
    Replies
    1. Company is not bad .Try to enter in a correction ( If any )

      Delete
  34. hi VP

    Your view on Kolte Patil ?

    ReplyDelete
  35. Hi VP

    Have you tracked Solar Industries and Rasoya Protein ? any view on these stocks?

    ReplyDelete
  36. Dear VP
    your last three replies are at ~5 AM. Take complete sleep. Your health will be our wealth.

    ReplyDelete
  37. Sir, crompton greaves. Watsolo ur opinion. ?? I bought 1100@208.

    ReplyDelete
  38. Hi VP
    Have you tracked responsive industries plz reply.

    ReplyDelete
  39. Sir ,
    I am holding 2500 shares L&T Finance @ 70. Kindly suggest on this.Is it suitable for long term.

    ReplyDelete
  40. dear sir Kindly advise on HOV services , can it has potential to become mutibagger

    ReplyDelete
  41. Hi value investor, first a sincere thanks for your efforts and analysis. In a world where even water bottle costs so much you ate providing valuable analysis for free. So really really commendable. Thanks once again.

    Regarding this particular stock, its hitting lower circuits everyday. You think it's a really worrying signal given its a very small company. And given the situation what would you advice now.

    ReplyDelete

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