Mirza International – Multibagger Analysis

Mirza International – Multibagger Analysis

In this post we can analyze the possibility of Mirza International  as a potential multibagger.

We are holding a research on this as sources say Top Investor Rakesh Jhunjhunwala is increasing holding in the company.

The Company

Mirza International Limited is a frontrunner in the manufacturing and marketing of leather and leather footwear.  The company exports its products globally & holds reputed brands like Red Tape.

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Website: http://www.mirza.co.in/

Analysis Link: http://www.screener.in/company/?q=526642

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Please refer analysis link. image
Durable Competitive Advantage
  • Yes. Through power of brands, owning manufacturing, designing facilities & cost-optimizations.
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Future Growth Drivers Current growth in Indian retail market & Promotion of export market policies should help the company well. image
Conservative Debt (long term debt < 3 Net Profit) Current Liabilities is around 100 crore & Latest net profit is around 44 crores. So pass. image
Return on Equity must be Above Average ROE is 18+ and above the required 15. image
Low CAPEX required to maintain current operations Not. image
Promoter Holding %, Management is holding / buying the stock Promoter Holding 66%, Promoters is buying back more shares. image
Price is Under Valued (< intrinsic value) Almost on the same bar. image
Stock Price is consolidating (now) Yes. image
Stock Price is growing in past years along with EPS growth Yes, but slow image

Additional Futurecaps Checklist

PE, PB Ratio PE is around 7 and PB is around 1 which are good ratios in current market boom scenario. image 
Cash Flow Positive, Net Profit % greater than 8% Cash Flow from operating activity is positive.  Net Profit is less than 8% as this sector requires high amount of ads & operating expenses. image
Paying Dividends, Tax Yes. image 
EPS Growth Rate 10-20% for the past 3 years, thought the latest year shows flat.  image 
Expected Gain in 10 Years 2X-5X in 5 years; The EPS growth is slow – so do not expect high gains.  image
Power of Brand Branding attracts more sales, more profit margins!  image
Corporate Governance, Reputation of Leaders Good governance history.  image
Fraud reported No fraud reported.  image

Declaration

Here by we declare that Mirza International is a multibagger with possible 2X-5X gain in next 5 years; watch quarterly results carefully for hold/sell decisions.

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It is a potential multibagger like Page Industries with good brands under hold, but watch the quarterly results carefully.

Allocation

1-2% of your 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.

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