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August 18, 2014

2

Kovai Medical Center and Hospital Ltd

by Futurecaps Advisor

Kovai Medical Center and Hospital (KMCH) is a 750- bedded Multi-Disciplinary Advanced Super Specialty Hospital nestled in a serene atmosphere of over 20 acre piece of land. The location enables the patients to enjoy the rule of quietude, away from the hustle and bustle of city life.

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CMP: 313

Website: http://www.kmchhospitals.com/

Analysis URL: http://www.screener.in/company/?q=523323

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. image
Durable Competitive Advantage

Cannot judge this parameter. 

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Future Growth Drivers Yes.  Indian specialty hospitals are in up trend. New and new players like Manapuram too entering into this segment.  Company is expanding. image
Conservative Debt (long term debt < 3 Net Profit) Yes. image
Return on Equity must be Above Average Yes. It is 30% and our average requirement is 15%. image
Low CAPEX required to maintain current operations Yes.  Investing Cash flow required, but it is low compared with Operating Cash flow. image
Management is holding / buying the stock Yes.  50% is current holdings. image
Price is Under Valued (< intrinsic value) Average. Price is quoting around 3 times of book value, which  is not too good, but still adaptable. image
Stock Price is consolidating (now) Yes. image
Stock Price is growing in past years along with EPS growth Yes. image

Additional Futurecaps Checklist

PE, PB Ratio PE 13; PB 3; Moderate. image
Cash Flow Positive, Net Profit % greater than 8% Yes. image
Paying Dividends, Tax Yes. image
EPS Growth Rate 30%.  We are happy to see 50% growth. image
Jump in Trailing Results Yes. But only 30%. image
Quarterly Results Growing Q-Q 20% growth in sales & 100% growth in profits. image
Expected Gain in 10 Years 10X in 5 years through EPS growth & PE resizing on limelight.  In 10 years it could cross 40X. image
Volume Analysis Low volume.  Good for price fire. image
Power of Brand Hospital Reputation good.  It can attract patients & students. image
Corporate Governance, Reputation of Leaders Yes. image
Fraud reported Not in current search. image

 Declaration

Here by we declare that the stock has multibagger properties.

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Allocation

3% to 4% of your portfolio.

Disclaimer

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.

Read more from Multibaggers
2 Comments Post a comment
  1. Aug 19 2014

    It was on my radar too. Your analysis reconfirmed my study. Today bought at 330Rs.

    Can you please check Igarashi Motors, Kalyani Steels, Hindustan Media Ventures? These all are 500Cr-1200Cr. Companies with strong fundamentals.

    Reply
  2. Aug 19 2014

    Good Bhavin! Make sure you are properly diversified & watch the 2 quarterly results for hold/sell decisions. 🙂

    Reply

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