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15
May

Jiya Eco-Products – Multibagger Analysis

Jiya Eco-Products Ltd.

NSE Code JIYAECO.NS
BSE Code 539225
URL https://www.jiyaeco.com/
CMP 55
Free Report Yes
Publish Date May-15-2019

In this post we would like to Explore the Multibagger Potential of the company. This is based on a blog reader request.

jiya

Jiya Eco is into a unique business of manufacturing of Pellets and Briquettes. The company operates in Bhavnagar, Gujarat.  The offered products are manufactured from agriculture and forest waste, which are the cost effective, high yielding and sustainable bio fuel alternative. Modern algae processing techniques are implementing the production of our products. Further, Pellets manufactured from agriculture and forest waste have a huge demand in the marketplace owing to their zero smoke & fly ash emission, easy handling, uniform in diameter, high fuel efficiency, and more.

The product Briquettes is a substitute of solid fuels like coal, charcoal, firewood etc. It is used in Pharmaceuticals, Textiles units etc.  The product Pellets are used as Fuels for Electric Power Plant Homes and a Substitute of Fuels like Diesel, Kerosene, LPG etc.

In short, the company provides Alternative Bio-Fuel to the Customers which are Cost Efficient & Eco-friendly.  This is a unique business with lot of opportunity in the sector.

Positive Factors

Company is showing almost 100% growth in Sales & Profits compared with previous year.  The EPS growth is clocking around 200%.

jiya-perf

Solid Expansion Plans. The new Pellet manufacturing unit in Gandhidham will be commissioned in next 2 years which will be be Doubling the current capacity.   Company is undergoing Greenfield & Brownfield Expansions.  Company has multi-year Lease of Land providing easy access to raw material & lower transit cost.  The company is currently expanding outside of Gujarat to Rajasthan and Madhya Pradesh.

Forward Integration of Burner Manufacturing business ensures growing demand for current Pellet business.

Company have boost from NTPC, Government Initiatives to support Bio-fuels etc.  Since this is a Unique model of business, Jiya Eco is the only company in this sector.

Company has good Revenue & Net Profit Growth.

jiya-pandl

Other positive factors are:

  • High ROE.
  • High ROCE.
  • Managed D/E at 0.4.
  • Increasing Net Worth & Reserves.
  • Trailing Numbers are good.

Concern Factors

Reduction in Promoter Holdings of 30% in last 3 years.  Huge Promoter Holding Sale in last 1 year. link.  There is an Allegation that Warrants are converted to Shares too.

No Dividend Payouts.  Although the company may be reinvesting the profits in the business which is considered good.  Tax advantages of 5 years seems to be maxed out.

Sales are mostly into Credit.  Debtor Days increased 100% in past 1 year.  This may induce Working Capital problems.  Cash Flow is flat/negative.

Low Liquidity Stocks can become a Manipulation Instrument.  Hence allocate 50% less money if investing, then increase progressively for next 6 months.

Debt is moderately high. Increasing Borrowings.

SME category risk of price crashes during bear times.

Warren Buffet, Value & Growth Checklist

Following are the Checklist parameters:

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. green
Durable Competitive Advantage Yes. (no visible competitors) green
Future Growth Drivers / Sectoral Growth Yes.  (unique sector) green
Conservative Debt (long term debt < 3 Net Profit) Moderate. Cash Flow issues are there. yellow
Debt Equity Ratio, Current Ratio Moderate. Increasing Borrowings a Concern. yellow
Return on Equity must be Above Average Yes. green
Low CAPEX required to maintain current operations Not. yellow
Inventory Turnover Ratio, Debtor Days, ROCE Increasing. Concern. red
Management is holding / buying the stock No. Promoters have High Selling in past 3 years. red
Price is Under Valued (< intrinsic value) Considering the EPS Growth it is Super Under Valued green
Stock Price is consolidating (now) No. It had a fall & now spiked back. yellow
Stock Price is growing in past years along with EPS growth Yes. green
Consolidated PE, PB Ratio, PEG Ratio PE 7 (moderate)

PB 4 (high)

PEG 0.05 (very low)

yellow
Cash Flow Positive, Net Profit % greater than 8% Cash Flow: Negative

(expansion plans induced cash crunch)

Net Profit: Okay

yellow
Paying Dividends, Tax No. red
EPS Growth Rate 100% above green
Jump in Trailing Result EPS Yes green
Jump in Quarterly Result EPS Yes green
Expected Gain in 5 Years 500-1000%+

(If promoter concerns are resolved & more investors are attracted including MFs)

green
Price Movement Graph, 52 Week High & Low High: 78

Low: 32

green
Volume Analysis 2 Lakh yellow
Power of Brand Moderate yellow
Corporate Governance, Reputation of Leaders No frauds reported. But few concerns on Warrants issues at Peak price exists. yellow
Fraud reported Same as above. yellow

Summary

Based on the above analysis I would like to say that the Jiya Eco possess Multibagger properties & considering the concerns it is categorized as High Risk High Returns stock.  If invested do tight monitoring on the company news & events.

image

Disclaimer Futurecaps is an independent equity research team. Use of the information herein is at Investor’s own risk. This is not an offer to sell or solicitation to buy any securities and Futurecaps will not be liable for any losses incurred for the investment based on the advice.  The Investor is advised to do due diligence in the scrip mentioned.  None of Futurecaps Advisors hold 1% above Holdings of this company.

Premium Services

This stock analysis is part of our Free Services where Tracking & Updates will not be provided.  We encourage Serious Investors to Buy our Premium Service where our Adviser Team is investing along with Tracking & Updates.

 

 

23
Apr

How Multibaggers are Created?

If you are a new investor, we recommend you go through this table below.  This will help you understand the Multibagger Creation Journey.

Year Description Returns

Starting Year

Here you Identified a Multibagger based on Past Performance & Growth aspects.

For example, The capitalization is 300 Crore & PE is just 5.

Imagine you Invested 1 Lakh Rupees on it.

0% on 1 Lakh
After Year 1 The company performed well as expected and displayed 20% EPS Growth.

Now PE is 4.

But all EPS growth will not be reflected in Price, especially in the beginning years.  Hence you will get +/- 20% returns.

+/- 20%
After Year 2 Now the company performed well again with another 20% EPS Growth.

This time the price will have to start reflecting as more & more analysts, people, funds will be looking into the stock.

Let us say the price gained 50%.

The PE is 5 again.

+ 20% | 1.5 Lakh
After Year 3 Your company is performing well with another 20% EPS growth.

This time the market visibility is high & hence the price jumped another 100%

Now the PE is around 8 with Capitalization 600 Crore.

+ 100% | 3 Lakh
After Year 5 Now you are on Year 5.  The compounded EPS growth of 20% lead to 100% EPS growth in 5 years.

Since the Capitalization is above 1000 Crore, Mutual Funds will start Investing. Big Money & Increased Visibility leading to Higher PE.

Now the PE is 20 with Capitalization 1200 Crore.

+100% | 5 Lakh

5X Gain in 5 Years

Now onward 20% EPS growth leads to 30% price growth.

Also, you will earn 100% return on original capital.  i.e 1 Lakh gain every year.

After Year 10 Now the company is growing again at 20% CAGR.

Now the PE is 30.

+500% | 30 Lakh

At this point you will start getting Dividend Yield 1% as 30 Thousand rs. per year.

30X Gain in 10 Years

Wealth Creation!

After Year 20 If you are lucky to have a Superbagger with 20% CAGR. Eg: Infosys, Wipro, Page Industries etc.

Now the PE is 40 and you have a 100X returns on original capital.

All these are possible as, Infosys gave 300X returns in 20 years!

+3000% | 10 Crores

Now the Dividend Yield will be 1 Lakh rs. per month equal to your Original Capital investment.

100X Gain in 5 Years

Cash Flow Generation!

This is how Stock Market creates wealth & cash flow.  It takes really long time for the compounding to work.  No shortcuts!

So here are the problems of amateur investors:

  • They add more stocks than above learning & tracking capacity
  • They exit stocks every other year breaking the power of compounding positioning

SO I recommend each & every investor to understand this process & continue holding stocks long term discarding noises, as long as their fundamentals & growth factors are intact. Be like Pro!

13
Apr

Atul Auto – Multibagger Analysis

Atul Auto Ltd.

NSE Code ATULAUTO.NS
BSE Code 531795
URL http://www.atulauto.co.in/
CMP 335.00
Free Report Yes
Publish Date Apr-13-2019

In this post I would like to Explore the Multibagger Potential of the company. This is based on a blog reader request.

Introduction

The company based in Gujarat founded in 1980s is into the business of Vehicle Manufacturing primarily in the 3-wheeler targeting Cargo & Passenger segments. Company maintains No.1 position in the Diesel 3-wheeler segment in Gujarat.

Earlier in 1970s, the company started with invention of ‘Chakkada’ which was a big success. The current CEO inherited the business from his father & currently have PAN India presence with 330+ primary & secondary networks of distribution centers across India.

The company also have Petrol/CNG variants with Overseas presence. The company has 850+ employees and 60000 production capacity.

image

CEO

The company CEO is Mr. Jayantibhai J Chandra. He performed previously as Managing Director of Khushbu Auto Finance Ltd. another subsidiary.

Positive Factors

Following are the Positive Factors identified:

Company has a Good Research Team. The company produces 3-wheeler in all Fuel range Petrol, Diesel, CNG, LPG and Electric. Electric Vehicles R&D on Card to accommodate Future trends.

Good Array of Products visible while ATUL Shakti is the new in array covering Passenger & Delivery segments.

image

FY18 had Sales Growth of 24% and Export growth of 40%. India three-wheeler market is projected to exhibit a CAGR of more than 15% by 20235.

Company does not have any Debt problems as it maintains Debt as Zero & Current Ratio above 1.8. CRISIL has reaffirmed rating as CRISIL “A” with stable outlook. HDFC Small cap & ADITYA BIRLA Mutual Funds are Invested.

Company has invested into the Green Vehicles Variant to curb the Vehicle Pollution issues. It owns a Subsidiary Atul Green Automotive to accommodate this Green Variants.

New plant in Bavla near Ahmedabad which supports Future Expansion aspirations.

Urbanization, India Growth Story, Green & Electrical Vehicle usage will be Boost to the company in coming years.

Concern Factors

Following are the Concern Factors identified:

Demonetization & GST has impacted the Sales of the company. Any such reforms in the future will Negatively affect the company.

The past FY 2015 seems to have the higher number of sales. The direct Competitor Bajaj Auto although seems to have higher sales in FY2018 too.

Cash Flow seems to be not steady. FY2017 seems to have provided the highest cash flow. Current year Net Cash Flow is negative due to Capex expenditure.

Few misalignments with Industry Growth also visible. In few years the company growth was lower than the industry growth. (In high growth companies this will be the opposite)

image

Crude Oil Price increase can adversely affect the company sales.

Management seems to be Immune to Debts. This affects the Leveraged growth & expansion of the company. The sluggish growth rate of 10% may be due to these factors.

Major competitor is Bajaj Auto which dominates the 3-wheeler industry. Other Competitors are Piaggio & Mahindra. The Penetration & Network of Atul Auto needs to be multifold increased for growing above these niches.

Sales & Profit Growth

Sales & Profit Growth is visible for the current year.

image

Warren Buffet, Value & Growth Checklist

Following are the Checklist parameters:

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. However the Rate of Growth is Not too Impressive. image
Durable Competitive Advantage Moderate. (compared with competitors) image
Future Growth Drivers / Sectoral Growth Yes. 15% CAGR Sector Growth forecasted for next 5 years. image
Conservative Debt (long term debt < 3 Net Profit) Debt is 0. image
Debt Equity Ratio, Current Ratio DER is 0. CR is 1.8. Both are Very Good. image
Return on Equity must be Above Average 22% image
Low CAPEX required to maintain current operations Not. image
Inventory Turnover Ratio, Debtor Days, ROCE All 3 are decreasing for current 2 years but within range. image
Management is holding / buying the stock No changes. image
Price is Under Valued (< intrinsic value), PEG Ratio PEG is high. image
Stock Price is consolidating (now) Yes. image
Stock Price is growing in past years along with EPS growth Yes. image
Consolidated PE, PB Ratio 2015 holds the highest price value. image
Cash Flow Positive, Net Profit % greater than 8% Yes. image
Paying Dividends, Tax Yes. image
EPS Growth Rate Yes. image
Jump in Trailing Result EPS Yes. image
Jump in Quarterly Result EPS Yes. 50% image
Expected Gain in 5 Years 300%. (Not impressive expectation) image
Price Movement Graph, 52 Week High & Low Okay. image
Volume Analysis Low Volume. Good if Growth manifests. image
Power of Brand Moderate Brand compared with Big Peers. image
Corporate Governance, Reputation of Leaders Yes. image
Fraud reported Not in current search. image

Summary

Based on the above analysis I would like to say that the company possess Multibagger properties but not in a Great Order. Hence be cautious about Investing in it.

image

Source www.futurecaps.com
Value Research. Affordable.
SEBI Registration INH200006956
Disclosure Adviser do not hold above stock
Disclaimer Futurecaps is an independent equity research team. Use of the information herein is at Investor’s own risk. This is not an offer to sell or solicitation to buy any securities and Futurecaps will not be liable for any losses incurred for the investment based on the advice.  The Investor is advised to do due diligence in the scrip mentioned.  None of Futurecaps Advisors hold 1% above Holdings of this company.

Premium Services

This stock analysis is part of our Free Services where Tracking & Updates will not be provided.

We encourage Serious Investors to Buy our Premium Service where our Adviser Team is investing along with Tracking & Updates.

4
Apr

Right Way of Buying Stocks!

Take my words, A Stock Investor will not Succeed unless he/she develops the Right Discipline!

10 years back I used to be a Newbie in Stocks. I was reading Warren Buffet books & researching with my own Value Research website. During the time I was relying on my friends & TV channels for advices.

The problem I had was, Every month I wanted to buy a new stock.  I spend time on researching, shortlisting my adviser stocks, listening to market channels, buying every other scrip they recommend.

One Day: My ICICI friend will come & say there is a New Natural Resources fund, so Reliance Naturals will become 100-bagger. Bhum!

Chalo Invest kiya Reliance Naturals pe!!

Another Day: On TV Channel, Porinju is sitting & recommending XYZ stock, claiming having a Strong Balance sheet! I didn’t know how to check the balance sheet.. But I bought that stock too!

After 1 year: I have around 60 stocks in my account.  During the time I met with a Senior Investor while I visited my broker Geojit.

Seeing my portfolio he shouted!!  Are you mad?? Did you know anything about these companies?  How you are going to track them?

He said, I will be never a good investor if holding big bunch of stocks!!

Realization

It took another 2 years for me to realize the matter.  My portfolio went red during a Bear Market zone.  NOW, I wanted to cleanup my portfolio. 

The problem is, I don’t know why I bought certain stocks, nor I know the adviser to contact.  Clearly big mess!

Solution

Years after, I started with a Concentrated Plan. Yearly, I will buy only 5 new stocks with thorough study of annual reports, collaborated decision making, QR tracking and for long-term holding.

The advantages were many:

  • Easier to Manage since the stock count was small
  • Installment Based Investing was possible as I can buy the same stock every month at different prices.
  • More Time to Life Since the number of stocks were low, there were more time to my life, I found that stock investing is Passive!
  • Same Portfolio Returns you will get the same portfolio returns for the properly selected stocks, even if it is 50 or 5.

I am providing the same my own invested stocks through the Paid Subscription Plan. This will be having tracking & updates. I encourage serious investors to purchase this plan.

Same Trouble I can See Today Too!

When people contact me over the Phone Consultation, I am seeing the same problem is haunting them too.  There was one investor with 3 brokerage accounts and 120 stocks!! Who is going to read the annual reports, track the QR performance of 120 stocks per year? 

So my recommendations are below:

  • Be Disciplined.  Reduce the number of stocks. Invest every month on same stocks until your portfolio limit reached.
  • Know your stocks. Read about them. Find the scope of  the sector.
  • Wealth Creation. Stock Market is for wealth creation. Give time for the companies to grow.  Let the Magic of Power of Compounding happen.

NOW you tell me, Should I create Youtube Videos to make people understand this??

Comment below.

image5

2
Apr

Meghmani Organics – Multibagger Analysis

In this post I would like to provide Multibagger Analysis on Meghmani Organics Ltd (BSE 532865, NSE MEGH.NS).

Note This is part of our Free-multibagger Analysis which will not have any tracking & updates.  I would recommend you buying our serious list of Paid-multibaggers subscription plan here.

Meghmani Organics

Founded in 1986, Meghmani Organics is a leading manufacturer of pigments, agrochemicals and basic chemicals.  The company has show tremendous record of growth & expansion.

Mr. Ankit Patel is the current Chief Executive Officer.

Website: http://www.meghmani.com/

CMP: 60.00

Growth Aspects

Company enjoys 14% share of Copper Phthalocyanine market.  Being an Exporter it enjoyed Revenue Increase through the US Dollar – Indian Rupee Depreciation.

Accelerated by Chemical regulation in China.

Company have 5 subsidiaries.

image

Global Pigments market to be growtn 4.1% CAGR and reach $27 billion by 2023. This will give immense potential to the commpany coupled with the large capex plan initiated last year.

Sales Growth

image

Profit Growth

image

Risks low awareness in indian farmers, global competition, forex variations, global standards variation, corporate governance, chines de-regulation on chemicals.

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Yes.

 

 

Recent Year, Revenue Growth 49%, PAT Growth 95%

New Plant commissioning on the way.

image
Durable Competitive Advantage Moderate. image
Future Growth Drivers Moderate.

 

 

Sector outlook is Good.

image
Conservative Debt (long term debt < 3 Net Profit) Not. image
Debt Equity Ratio, Current Ratio 0.44, 2.31 image
Return on Equity must be Above Average 21% image
Low CAPEX required to maintain current operations Moderate image
Management is holding / buying the stock 48%. Increasing. image
Price is Under Valued (< intrinsic value) Yes. image
Stock Price is consolidating (now) Yes. image
Stock Price is growing in past years along with EPS growth Yes. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio PE 6, PB 2 image
Cash Flow Positive, Net Profit % greater than 8% Yes. Yes. image
Paying Dividends, Tax Dividends: No, Tax: Yes image
EPS Growth Rate 50%. Very Aggressive image
Jump in Trailing Result EPS Yes. image
Jump in Quarterly Result EPS Yes. image
Expected Gain in 5 Years 5-10 Times image
Price Movement Graph, 52 Week High & Low 30/6 image
Volume Analysis 6 lakh (High) image
Power of Brand Moderate. image
Corporate Governance, Reputation of Leaders Few issues on MFL promoter stake sale exists. image
Fraud reported Yes. Duty Evasion Arrest. link image
Celebrity Investors Yes image

Declaration

Definitely the company possess Multibagger properties at the current price.  But, be cautious about the Management alerts.

image

Note

This is part of Free Multibaggers plan which do not include Tracking & Updates.  I would encourage serious investors to buy our Paid Subscription plan.

image

Disclaimer Futurecaps is an independent equity research team. Use of the information herein is at Investor’s own risk. This is not an offer to sell or solicitation to buy any securities and Futurecaps will not be liable for any losses incurred for the investment based on the advice.  The Investor is advised to do due diligence in the scrip mentioned.  None of Futurecaps Advisors hold 1% above Holdings of this company.

28
Mar

Wonderla Holidays – Multibagger Analysis

In this post I would like to provide Analysis on Wonderla Holidays.  The company was listed almost 5 years back & still trading at approximated price after Inflation.

Wonderla Holidays

CMP: 300.00

Website: https://www.wonderla.com/

Wonderla Holidays Limited operates three largest amusement parks in Kochi, Bangalore and Hyderabad; and the Wonderla resort in Bangalore under the brand name Wonderla.

Promoted by Kochouseph Chittilappilly (of V-Guard) link

It is a Sad Truth that the Investors did not got the V-Guard kind of Appreciation from this stock, which they expected a lot.  There can be multiple factors into it like IPO-overpricing, Growth-perspective, Asset-intensive operations, GST-issues etc.

However, due to the Promoter Reputations on High Quality, Corporate Governance, Humanity aspects, the stock has attracted high profile investors like NR Narayana Murthy.

So let us look into the business & value parameters to determine any multibagger potentials.

Business Evaluation

The company generates income from the 3 main parks in kochi, bangalore & hyderabad. Interestingly, the food business constitutes 39% of the revenue.

Positive Factors

Company is expanding to Chennai.  plus, adding more rides, in-house manufacturing & improving efficiencies to existing parks.  All together these will ensure 150-20% revenue growth in coming years.

Company also have advantage of surplus land which ensures further expansion in coming 10 years.  Low Utilization would be a parameter to evaluate.

GST impacted current year Sales, but the latest quarters are improving.

Company has Low Debts which is good in one sense & bad in another view that Leveraged Growth is not there.

Company is adding RFID, No-Queue solutions in the Technical Arena to increase the Footfalls.

No Pledging of shares.

Problem Areas

Considered as Holiday Tiger – Revenue goes double during June quarter there by increasing NPA / Idle resources during other periods.  Scope of Corporate Outing, Official Programmes rendering during Weekdays would increase the ROE.

High PE is one problem with this stock.

High PEG ratio is a derived problem.

Low ROE.

Limited Lows

One advantage I can see is that the Promoters are buying back Wondera stocks due to the bear market so one can expect the lows are limited.

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Yes.

 

 

image
Durable Competitive Advantage Moderate. image
Future Growth Drivers Moderate. image
Conservative Debt (long term debt < 3 Net Profit) Not. image
Debt Equity Ratio, Current Ratio DER is Zero, Current Ratio is Average image
Return on Equity must be Above Average No. image
Low CAPEX required to maintain current operations Moderate image
Management is holding / buying the stock Yes. image
Price is Under Valued (< intrinsic value) No. image
Stock Price is consolidating (now) Yes. image
Stock Price is growing in past years along with EPS growth Yes. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio PE is high, PB is okay  image
Cash Flow Positive, Net Profit % greater than 8% Yes. Yes. image
Paying Dividends, Tax Yes, Yes image
EPS Growth Rate Okay. image
Jump in Trailing Result EPS Yes. But moderate.  
Jump in Quarterly Result EPS Yes. But moderate. image
Expected Gain in 5 Years 2-3X image
Price Movement Graph, 52 Week High & Low Okay image
Volume Analysis Okay. image
Power of Brand Good. image
Corporate Governance, Reputation of Leaders Okay. image
Fraud reported No. image
Celebrity Investors Yes image

Summary

Based on the analysis, I would declare that the Stock definitely has Multibagger properties with expected 2-3X returns in next 5 years.

image_thumb1

Note

Free Multibaggers are those with No Tracking & Updates.

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You are encouraged to use our Paid Subscription here.

31
Dec

Futurecaps Performance

Futurecaps follows Warren Buffet style of Investing principles.  Here is the Past Performance of last 5 years.

Stock Peak Link
Bharat Rasayan 1200% Link
Waterbase  700% Link
Kovai Medical 600% Link
Dynemic Products 300% Link
Duke Offshore 120% Link
Patels Airtemp 50% Link

Prior to that we were running the website valuestocks.in which provided the following recommendations & their peak performance.

image

Proof of Capital Gains

You can see Millions of Profit Proof for one of the recent years:

Break in Service

There was a break in service due to SEBI restrictions.  Right now in 2019 we are back with the required SEBI Certifications.

Testimonials

You can visit our Testimonials page here.

Subscribe

I know the problems of New Investors as they have to go through High Subscription prices like Rs. 10 Thousand, Rs. 25 Thousand, Rs. 50 Thousand etc. where they will get the Same Guidance on Smallcaps & Midcaps.  This is the reason I keep my Prices low so that more & more investors can participate.  

“Don’t sell a Product.. Start a Movement!”

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