Is Kanchi Karpooram a Multibagger?

Update: The current Corona impact could have changed the Future Outlook of this company sector.  You should take updated Inference on Investing this multibagger. You can check other stocks from our latest Multibaggers pack.

https://futurecaps.com/tag/multibagger/

Futurecaps is a SEBI Registered Research Analyst providing Multibagger service to Indian Stock Market.

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.

NSE Code KANCHI.NS
BSE Code 538896
URL https://www.kanchikarpooram.com/
CMP 270
Free Report Yes
Publish Date Nov-15-2019

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:

Capitalization 115 Crore bce05 green e1587451073732
History of Consistently Increasing Sales, Earnings & Cash Flow Yes. bce05 green e1587451073732
Durable Competitive Advantage Moderate.
Future Growth Drivers / Sector Growth Moderate.
Conservative Debt (long term debt < 3 Net Profit) Yes bce05 green e1587451073732
Debt Equity Ratio, Current Ratio Both are Good bce05 green e1587451073732
Return on Equity must be Above Average 55% (Excellent) bce05 green e1587451073732
Low CAPEX required to maintain current operations Moderate
Inventory Turnover Ratio, Debtor Days, ROCE Increasing. Moderate
Management is holding / buying the stock Yes bce05 green e1587451073732
Market Price < Intrinsic Value Yes. bce05 green e1587451073732
Stock Price is consolidating (now) Yes bce05 green e1587451073732
Stock Price is growing in past years along with EPS growth Yes bce05 green e1587451073732
Consolidated PE, PB Ratio, PEG Ratio PE 4, PB is 2X,  PEG 0.2 bce05 green e1587451073732
Cash Flow Positive, Net Profit % greater than 8% Cash Flow: NegativeNet Profit: Yes
Paying Dividends, Tax Yes bce05 green e1587451073732
EPS Growth Rate 30% above bce05 green e1587451073732
Jump in Trailing Result EPS Yes bce05 green e1587451073732
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 bce05 green e1587451073732
Volume Analysis 2000
Power of Brand Moderate
Corporate Governance, Reputation of Leaders Very small company.  Cannot measure this.
Fraud reported Not in current search. bce05 green e1587451073732

Summary

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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