Madhav Marbles – Multibagger Analysis

Incorporated in the year 1989 as a 100% Export Oriented Unit, Madhav Marble & Granite Ltd. is a leading processor and exporter of premium quality granite and marble.

The company operates its Granite Division from South India(Salem, Tamil Nadu). The Region known for its rich reserves of metamorphosed granite. In conformity with its commitment to excellence, the company has installed the most sophisticated and environment-friendly granite processing machinery imported from Italy

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Company URL: http://www.madhavmarbles.com/

Screener URL:  http://www.screener.in/company/?q=515093

CMP: 40.00

Warning:

Madhav Marbles & Aro Granite have similar valuations.  Past 3 years shows Peak-Low-Peak trend.  We expect these sector companies to show high growth in next 2 years.  Once after that the stock should be exited.  Not long term multibagger.

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow	Yes.
Durable Competitive Advantage	Moderate.  Other better players exists.
Future Growth Drivers	Infrastructure growth of India should benefit this company.
Conservative Debt (long term debt < 3 Net Profit)	Yes.
Debt Equity Ratio	It is 0.
Return on Equity must be Above Average	ROE is around 6.  Very low.
Low CAPEX required to maintain current operations	Yes.
Management is holding / buying the stock	Promoter holding is 40%.  There is a slight decrease in holdings from past 3 years.
Price is Under Valued (< intrinsic value)	Yes.
Stock Price is consolidating (now)	Not.
Stock Price is growing in past years along with EPS growth	Yes.

Additional Futurecaps Checklist

Consolidated PE, PB Ratio	PE 5, PB 0.25 (Very Good)
Cash Flow Positive, Net Profit % greater than 8%	Yes. Yes.
Paying Dividends, Tax	Yes. Dividend Yield is 3%
EPS Growth Rate	50% on average.
Jump in Trailing Results	Yes. 15%.
Quarterly Results Growing	Yes. 50%.
Expected Gain in 5Years	Considering the growth of 30% and PE resizing to 10 it can provide 5-8 times returns in 5 years
Price Movement Graph, 52 Week High & Low	40, 13
Volume Analysis	Less than 10 thousand. Good.
Power of Brand	Yes.
Corporate Governance, Reputation of Leaders	Not.  Some shadows exists.
Fraud reported	Some fraud traces exists LINK 1 LINK 2

Declaration

Here by we declare that Madhav Marbales have Multibagger qualities.  But considering few bad reports, it is a High Risky Multibagger.  Need thorough analysis before investing.

Allocation

1-2% of portfolio.

Disclaimer

Futurecaps recommends 20 to 25 multibaggers per year, we recommend a 25% to 50% allocation of your savings in equity.  The stocks recommended here are gone through Analysts of several years experience in stock market.  Although they were successful in predicting future multibaggers, the overall stock market is a risky game.  So we recommend the reader to put his/her own thoughts & invest wisely.