Madhav Marbles – Multibagger Analysis
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
Company URL: http://www.madhavmarbles.com/
Screener URL: http://www.screener.in/company/?q=515093
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.|
|Durable Competitive Advantage||Moderate. Other better players exists.|
|Future Growth Drivers||Infrastructure growth of India should benefit this company.|
|Conservative Debt (long term debt < 3 Net Profit)||Yes.|
|Debt Equity Ratio||It is 0.|
|Return on Equity must be Above Average||ROE is around 6. Very low.|
|Low CAPEX required to maintain current operations||Yes.|
|Management is holding / buying the stock||Promoter holding is 40%. There is a slight decrease in holdings from past 3 years.|
|Price is Under Valued (< intrinsic value)||Yes.|
|Stock Price is consolidating (now)||Not.|
|Stock Price is growing in past years along with EPS growth||Yes.|
Additional Futurecaps Checklist
|Consolidated PE, PB Ratio||PE 5, PB 0.25 (Very Good)|
|Cash Flow Positive, Net Profit % greater than 8%||Yes. Yes.|
|Paying Dividends, Tax||Yes. Dividend Yield is 3%|
|EPS Growth Rate||50% on average.|
|Jump in Trailing Results||Yes. 15%.|
|Quarterly Results Growing||Yes. 50%.|
|Expected Gain in 5Years||Considering the growth of 30% and PE resizing to 10 it can provide 5-8 times returns in 5 years|
|Price Movement Graph, 52 Week High & Low||40, 13|
|Volume Analysis||Less than 10 thousand. Good.|
|Power of Brand||Yes.|
|Corporate Governance, Reputation of Leaders||Not. Some shadows exists.|
|Fraud reported||Some fraud traces exists LINK 1 LINK 2|
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.
1-2% of 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.