KRBL Ltd. – Multibagger Analysis
KRBL is the company famous for Basmati Rice brand India Gate.With a 120 year heritage and an existence since 1889, KRBL Ltd. is India’s first integrated rice company with a comprehensive product chain.
Company web site: http://www.krblrice.com/
Analysis link: http://www.screener.in/company/?q=530813&con=1
Warren Buffett Checklist
|History of Consistently Increasing Sales, Earnings & Cash Flow||Yes.|
|Durable Competitive Advantage||
Yes. Through power of brand.
|Future Growth Drivers||Export Boost through new governance laws. Plus, company focusing on seed-research, tie up with retail chain market in India and abroad should boost future income.|
|Conservative Debt (long term debt < 3 Net Profit)||Debt stands around 344 crore & Latest Net Profit at 255 crore. Sure to cover enough by 3x.|
|Return on Equity must be Above Average||17% is the ROE which is above 15% average|
|Low CAPEX required to maintain current operations||Moderate capex cash flow visible|
|Management is holding / buying the stock||Promoter Holding is impressive at 58% & No buying or selling visible.|
|Price is Under Valued (< intrinsic value)||Yes.|
|Stock Price is consolidating (now)||Yes.|
|Stock Price is growing in past years along with EPS growth||Yes. But not too impressive|
Additional Futurecaps Checklist
|PE, PB Ratio||PE at 8 and PB at 2 which are very good in current boost market.|
|Cash Flow Positive, Net Profit % greater than 8%||Yes.|
|Paying Dividends, Tax||Yes.|
|EPS Growth Rate||Latest growth 100%; Average growth 30%.|
|Expected Gain in 10 Years||4-5 times.|
|Power of Brand||Branding attracts more sales, more profit margins!|
|Corporate Governance, Reputation of Leaders||Pass|
Here by we declare that KRBL is a potential multibagger positioned at right price.
2-3% of total portfolio.
Futurecaps recommends 20 to 25 multibaggers per year, we recommend a 25% to 50% allocation of your savings in equity. The stocks recommended here are gone through Analysts of several years experience in stock market. Although they were successful in predicting future multibaggers, the overall stock market is a risky game. So we recommend the reader to put his/her own thoughts & invest wisely.