Poddar Developers – Multibagger Analysis

The Poddar Group one of India’s oldest business houses, that dates back to the year 1690 and boasts a legacy of 10 generations. Historically, the family has been industrialists and bankers, hailing from Ramgarh, in the Shekhavati region of Rajasthan.

The promoters in  our Group have over 40 year of experience in construction activities, which were done on a SPV basis – individual projects were done in individual SPV’s. The decision to do all construction activities in Poddar Developers Ltd., was taken in 2008. Previous developments comprising of residential and industrial, have been done in Mumbai, Pune, Kolkata and Bangalore.

image

Company URL: http://www.poddardevelopers.com/

Screener URL: http://www.screener.in/company/?q=523628

CMP: 330

Fundamental: LINK 1

Warning: The high debts of the company coupled with recession probability in 2-year warns us to be cautious about this stock.  Although the stock can move up to 5 times in next 2 years, it can go go down 10 times after that (in worst case). Be judgmental & allocate flip strategies on this stock.

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow

Yes. image

Durable Competitive Advantage

Moderate. image

Future Growth Drivers

For next 2-3 years the infrastructure boom should provide good value to this company. image

Conservative Debt (long term debt < 3 Net Profit)

Not. image

Debt Equity Ratio

Only 0.2 image

Return on Equity must be Above Average

13% (but near to our minimum of 15%) image

Low CAPEX required to maintain current operations

Moderate. image

Management is holding / buying the stock

75% promoter holding.  image

Price is Under Valued (< intrinsic value)

With current growth rate. Yes.  image

Stock Price is consolidating (now)

Not. 4 times peaked in past year.  image

Stock Price is growing in past years along with EPS growth

Yes. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio

PE 11; PB 2 (both moderate) image

Cash Flow Positive, Net Profit % greater than 8%

Yes. image

Paying Dividends, Tax

Yes. image

EPS Growth Rate

40% as 3 year average image

Jump in Trailing Results

Yes. 100% Yearly EPS jump image

Quarterly Results Growing

Yes. 300% in current quarter. (Watch for massive seasonal-sales) image

Expected Gain in 10 Years

Growth not steady So taking 30% as standard growth rate, 8-10 times in 10 years. image

Price Movement Graph, 52 Week High & Low

Okay. image

Volume Analysis

2710 (very low & good for price-fire) image

Power of Brand

Moderate. image

Corporate Governance, Reputation of Leaders

Good. image

Fraud reported

Few complaints exists  image

Declaration

Considering the growth rate, the company possess multibagger properties. 

Following are our action items on the stock:

  • Ensure upcoming quarter EPS growth
  • Ensure encashing projects for next 2 years

image_thumb1

Allocation

2-3% of current 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.

2 Responses to “Poddar Developers – Multibagger Analysis”

  1. vy3r Says:

    Hey guys, have you looked at Ujaas Energy?

  2. Bhavin Mehta Says:

    FC, I appreciate ur analysis. Company seems really good and making 52wk high daily.
    Still, how do you ascertain to invest in Real Estate while other sectors are offering better opportunities.
    Also, please suggest some NBFC from housing finance. How do u rate can-fin homes?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


%d bloggers like this: