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September 14, 2014

6

Madhav Marbles – Multibagger Analysis

by Futurecaps Advisor

Incorporated in the year 1989 as a 100% Export Oriented Unit, Madhav Marble & Granite Ltd. is a leading processor and exporter of premium quality granite and marble.

The company operates its Granite Division from South India(Salem, Tamil Nadu). The Region known for its rich reserves of metamorphosed granite. In conformity with its commitment to excellence, the company has installed the most sophisticated and environment-friendly granite processing machinery imported from Italy

image.

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

Screener URL:  http://www.screener.in/company/?q=515093

CMP: 40.00

Warning:

Madhav Marbles & Aro Granite have similar valuations.  Past 3 years shows Peak-Low-Peak trend.  We expect these sector companies to show high growth in next 2 years.  Once after that the stock should be exited.  Not long term multibagger.

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. image
Durable Competitive Advantage Moderate.  Other better players exists. image
Future Growth Drivers Infrastructure growth of India should benefit this company. image
Conservative Debt (long term debt < 3 Net Profit) Yes. image
Debt Equity Ratio It is 0. image
Return on Equity must be Above Average ROE is around 6.  Very low. image
Low CAPEX required to maintain current operations Yes. image
Management is holding / buying the stock Promoter holding is 40%.  There is a slight decrease in holdings from past 3 years. image
Price is Under Valued (< intrinsic value) Yes. image
Stock Price is consolidating (now) Not. image
Stock Price is growing in past years along with EPS growth Yes. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio PE 5, PB 0.25 (Very Good) image
Cash Flow Positive, Net Profit % greater than 8% Yes. Yes. image
Paying Dividends, Tax Yes. Dividend Yield is 3% image
EPS Growth Rate 50% on average. image
Jump in Trailing Results Yes. 15%. image
Quarterly Results Growing Yes. 50%. image
Expected Gain in 5Years Considering the growth of 30% and PE resizing to 10 it can provide 5-8 times returns in 5 years image
Price Movement Graph, 52 Week High & Low 40, 13 image
Volume Analysis Less than 10 thousand. Good. image
Power of Brand Yes. image
Corporate Governance, Reputation of Leaders Not.  Some shadows exists. image
Fraud reported Some fraud traces exists LINK 1 LINK 2 image

Declaration

Here by we declare that Madhav Marbales have Multibagger qualities.  But considering few bad reports, it is a High Risky Multibagger.  Need thorough analysis before investing.

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Allocation

1-2% of 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
6 Comments Post a comment
  1. pp
    Sep 14 2014

    Why have you deleted datamatics?

    Reply
    • Sep 14 2014

      We are waiting for our internal team to work on fundamental aspects. Once that is done it will be released again.

      Reply
    • pp
      Sep 15 2014

      I actually bought in 1 week before you guys but once you guys posted stock jumped. Just wondering should i sell?

      Reply
  2. Sep 15 2014

    Please consider taking a look at Swaraj Engines…

    Reply
  3. Bhavin Mehta
    Sep 15 2014

    FC, will you look at Mold-Tek Technologies?
    Quite attractive financials, decent growth and good promoters.

    Reply
  4. Sep 17 2014

    Madhav Marbles & Aro Granite have similar valuations. Past 3 years shows Peak-Low-Peak trend. We expect these sector companies to show high growth in next 2 years. Once after that the stock should be exited. Not long term multibagger.

    Reply

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