In this post we can analyze PSP Projects based on Warren Buffet methodology.
PSP Projects is a multidisciplinary construction company offering a diversified range of construction and allied services across industrial, institutional, government, government residential and residential projects in India. They provide our services across the construction value chain, ranging from planning and design to construction and post-construction activities to private and public sector enterprises.
Warren Buffet, Value & Growth Checklist
Following are the Checklist parameters:
|History of Consistently Increasing Sales, Earnings & Cash Flow||Yes.|
|Durable Competitive Advantage||Yes.|
|Future Growth Drivers / Sector Growth||Yes.|
|Conservative Debt (long term debt < 3 Net Profit)||No, company have slightly higher debt|
|Debt Equity Ratio, Current Ratio||Debt Equity Ratio is 0.17
Current Ratio is 1.5
|Return on Equity must be Above Average||27% (Good)|
|Low CAPEX required to maintain current operations||Moderate|
|Inventory Turnover Ratio, Debtor Days, ROCE||Moderate|
|Management is holding / buying the stock||Yes|
|Market Price < Intrinsic Value||Yes. Intrinsic Value at Rs. 1128 Intrinsic Value Calculator|
|Stock Price is consolidating (now)||No. Price is at Peak levels due to QR Jumps which Indicate a 100% Returns on Bull Market. However a slash in earnings will cut 50% of Price too as we are currently in Bear Market|
|Stock Price is growing in past years along with EPS growth||Yes.|
|Consolidated PE, PB Ratio, PEG Ratio||PE Good, PB is 5X, PEG is good|
|Cash Flow Positive, Net Profit % greater than 8%||Cash Flow: Negative
Net Profit: Yes
|Paying Dividends, Tax||Yes|
|EPS Growth Rate||20% above|
|Jump in Trailing Result EPS||Yes|
|Jump in Quarterly Result EPS||Yes|
|Expected Gain in 5 Years||300-500%|
|Price Movement Graph, 52 Week High & Low||Okay|
|Power of Brand||Yes, Company has good Brand & Promoters|
|Corporate Governance, Reputation of Leaders||Yes|
Based on the above analysis we can see PSP Projects have Multibagger Stock properties & One can Invest during 2019 year. Company aligns with Warren Buffet principles of Value & Growth Investing. It can be considered as Low Risk Moderate Returns investment.
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|Disclaimer Futurecaps is an independent equity research team. Use of the information herein is at Investor’s own risk. This is not an offer to sell or solicitation to buy any securities and Futurecaps will not be liable for any losses incurred for the investment based on the advice. The Investor is advised to do due diligence in the scrip mentioned. None of Futurecaps Advisors hold 1% above Holdings of this company.|