Is Bella Casa a Multibagger Stock based on Warren Buffet Analysis?
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Bella Casa Fashion & Retail Ltd
| NSE Code | BELLACASA.NS |
| BSE Code | 539399 |
| URL | http://www.bellacasa.in/ |
| CMP | 122 |
| Free Report | Yes |
| Publish Date | Sep-30-2019 |
In this post we would like to Explore the Multibagger Stock Potential of 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.
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:
| Capitalization | 140 Crore |  |
| 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 higher debt |  |
| Debt Equity Ratio, Current Ratio | Debt Equity Ratio is 1 (this is bad for growth)
Current Ratio is 4 ( no liquidity crunch) |
|
| Return on Equity must be Above Average | 21% (Good) | |
| Low CAPEX required to maintain current operations | No |  |
| Inventory Turnover Ratio, Debtor Days, ROCE | Moderate, High Debtor Days | |
| Management is holding / buying the stock | Management sold 5% | |
| Market Price < Intrinsic Value | Yes. Intrinsic Value at Rs. 250 Intrinsic Value Calculator | |
| Stock Price is consolidating (now) | Yes | |
| Stock Price is growing in past years along with EPS growth | Yes. | |
| Consolidated PE, PB Ratio, PEG Ratio | Okay | |
| Cash Flow Positive, Net Profit % greater than 8% | Cash Flow: Negative
Net Profit: No |
|
| Paying Dividends, Tax | Yes | |
| EPS Growth Rate | 15% 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 | |
| Volume Analysis | 82 (good for existing investors, bad for new investors) | |
| Power of Brand | Yes, Company has good Brand & Ambassador Jacqueline Fernandez | |
| Corporate Governance, Reputation of Leaders | Yes | |
| Fraud reported | No. But high remuneration ration & increments for core promoters | |
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. |
