We are publishing this Analysis based on the Query from our Paid Subscriber. The company have good Trailing results & seems to lure lot of investors.
Let us analyze in Warren Buffet way on the Financials.
Kanchi Karpooram Limited (KKL), a Public Limited Company, manufactures Camphor, its derivatives, Gum rosin, Value Added Resins and Fortified Rosin. Over the last 25 years, it has a proven track record for quality, competitive price and timely supply to a variety of customer across industries. The main product Camphor has been well accepted by customers. Besides Camphor and its derivatives, KKL’s products such as Gum rosin and Rosin Derivatives, also enjoy an enviable share in the market, including some of the most trusted brands across the world.
Warren Buffet, Value & Growth Checklist
Following are the 25 Checklist parameters:
|History of Consistently Increasing Sales, Earnings & Cash Flow||Yes.|
|Durable Competitive Advantage||Moderate.|
|Future Growth Drivers / Sector Growth||Moderate.|
|Conservative Debt (long term debt < 3 Net Profit)||Yes|
|Debt Equity Ratio, Current Ratio||Both are Good|
|Return on Equity must be Above Average||55% (Excellent)|
|Low CAPEX required to maintain current operations||Moderate|
|Inventory Turnover Ratio, Debtor Days, ROCE||Increasing. Moderate|
|Management is holding / buying the stock||Yes|
|Market Price < Intrinsic Value||Yes.|
|Stock Price is consolidating (now)||Yes|
|Stock Price is growing in past years along with EPS growth||Yes|
|Consolidated PE, PB Ratio, PEG Ratio||PE 4, PB is 2X, PEG 0.2|
|Cash Flow Positive, Net Profit % greater than 8%||Cash Flow: NegativeNet Profit: Yes|
|Paying Dividends, Tax||Yes|
|EPS Growth Rate||30% above|
|Jump in Trailing Result EPS||Yes|
|Jump in Quarterly Result EPS||Yes. But recent 2 q-o-q not increasing in profits|
|Expected Gain in 5 Years||200-300%
(If smallcap/midcap market restores)
|Price Movement Graph, 52 Week High & Low||Okay|
|Power of Brand||Moderate|
|Corporate Governance, Reputation of Leaders||Very small company. Cannot measure this.|
|Fraud reported||Not in current search.|
Based on the above analysis we can see Kanchi Karpooram have Multibagger Stock properties. Company aligns with Warren Buffet principles of Value & Growth Investing. It can be considered as Low Risk Moderate Returns investment. However, investor has to do more due diligence on the stock before investing.
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