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Is Bella Casa a Multibagger Stock based on Warren Buffet Analysis?

Is Bella Casa a Multibagger Stock based on Warren Buffet Analysis?

Bella Casa Fashion & Retail Ltd

NSE CodeBELLACASA.NS
BSE Code539399
URLhttp://www.bellacasa.in/
CMP122
Free ReportYes
Publish DateSep-30-2019

In this post we would like to Explore the Multibagger Stock Potential of Bella Casa.

bella casa

Bella Casa Fashion & Retail Ltd is operating in fast growing fashion market of India. Bella Casa is catering to 2 lakh cr market. The market size of home furnishings, women ethnic wear and men’s ethnic wear is more than Rs 2 lacs cr.

Positive Factors

Company have consistent 15% Revenue & Profit growth in past 3 years.

bella-income-statement

Company is quoting at Low PE of 15 due to current market sentiments

Company is trading at 40% discount from 52 week high due to market sentiments, GST troubles etc.

Company is poised for long term growth advantages due to Structural Tax changes & India growth story.

Company has more than 4000 retail outlets in india & expanding through branding, innovation, e-commerce & deep penetration.

India is 2nd largest exporter of home textiles & hold 7% global share. The India home decor consumption is growing at CAGR 8% due to real estate trends, millenial disposable income etc. which will support the company growth in future too.

Company had Expanded Capacity activation in current financial year.

Concern Factors

Current Quarter EPS growth is low due to GST & Tax Impacts.  This is measured to be recovering in upcoming years.

Global Recession can impact the Sales in near future.  But long term seems to be okay.

FDI Participation, Increased Competition from Global Brands, Government policies are Other Threats in the path of the company

Warren Buffet, Value & Growth Checklist

Following are the Checklist parameters:

Capitalization140 Croregreen
History of Consistently Increasing Sales, Earnings & Cash FlowYes.green
Durable Competitive AdvantageYes.green
Future Growth Drivers / Sector GrowthYes.green
Conservative Debt (long term debt < 3 Net Profit)No, company have higher debtred
Debt Equity Ratio, Current RatioDebt Equity Ratio is 1 (this is bad for growth)

Current Ratio is 4 ( no liquidity crunch)

red
Return on Equity must be Above Average21% (Good)green
Low CAPEX required to maintain current operationsNoyellow
Inventory Turnover Ratio, Debtor Days, ROCEModerate, High Debtor Daysyellow
Management is holding / buying the stockManagement sold 5%red
Market Price < Intrinsic ValueYes. Intrinsic Value at Rs. 250 Intrinsic Value Calculatorgreen
Stock Price is consolidating (now)Yesgreen
Stock Price is growing in past years along with EPS growthYes.green
Consolidated PE, PB Ratio, PEG RatioOkayyellow
Cash Flow Positive, Net Profit % greater than 8%Cash Flow: Negative

Net Profit: No

yellow
Paying Dividends, TaxYesgreen
EPS Growth Rate15% abovegreen
Jump in Trailing Result EPSYesgreen
Jump in Quarterly Result EPSYesgreen
Expected Gain in 5 Years300-500%green
Price Movement Graph, 52 Week High & LowOkaygreen
Volume Analysis82 (good for existing investors, bad for new investors)yellow
Power of BrandYes, Company has good Brand & Ambassador Jacqueline Fernandezgreen
Corporate Governance, Reputation of LeadersYesgreen
Fraud reportedNo.  But high remuneration ration & increments for core promotersgreen

Summary

Based on the above analysis I would like to declare that the Bella Casa possess Multibagger Stock in Indian Stock Market & 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.

 

About Futurecaps

Futurecaps is a 12+ year experienced Indian Stock Market Advisory with SEBI Registration.

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