Poddar Developers – Multibagger Analysis

Update: This stock really is Not a Multibagger up to date.  Since the Valuation change it is No Longer a Multibagger in our view.  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.

The Poddar Group one of India’s oldest business houses, that dates back to the year 1690 and boasts a legacy of 10 generations. Historically, the family has been industrialists and bankers, hailing from Ramgarh, in the Shekhavati region of Rajasthan.

The promoters in  our Group have over 40 year of experience in construction activities, which were done on a SPV basis – individual projects were done in individual SPV’s. The decision to do all construction activities in Poddar Developers Ltd., was taken in 2008. Previous developments comprising of residential and industrial, have been done in Mumbai, Pune, Kolkata and Bangalore.

Screener URL: http://www.screener.in/company/523628

CMP: 330

Fundamental: LINK 1

Warning: The high debts of the company coupled with recession probability in 2-year warns us to be cautious about this stock.  Although the stock can move up to 5 times in next 2 years, it can go go down 10 times after that (in worst case). Be judgmental & allocate flip strategies on this stock.

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow	Yes.
Durable Competitive Advantage	Moderate.
Future Growth Drivers	For next 2-3 years the infrastructure boom should provide good value to this company.
Conservative Debt (long term debt < 3 Net Profit)	Not.
Debt Equity Ratio	Only 0.2
Return on Equity must be Above Average	13% (but near to our minimum of 15%)
Low CAPEX required to maintain current operations	Moderate.
Management is holding / buying the stock	75% promoter holding.
Price is Under Valued (< intrinsic value)	With current growth rate. Yes.
Stock Price is consolidating (now)	Not. 4 times peaked in past year.
Stock Price is growing in past years along with EPS growth	Yes.

Additional Futurecaps Checklist

Consolidated PE, PB Ratio	PE 11; PB 2 (both moderate)
Cash Flow Positive, Net Profit % greater than 8%	Yes.
Paying Dividends, Tax	Yes.
EPS Growth Rate	40% as 3 year average
Jump in Trailing Results	Yes. 100% Yearly EPS jump
Quarterly Results Growing	Yes. 300% in current quarter. (Watch for massive seasonal-sales)
Expected Gain in 10 Years	Growth not steady So taking 30% as standard growth rate, 8-10 times in 10 years.
Price Movement Graph, 52 Week High & Low	Okay.
Volume Analysis	2710 (very low & good for price-fire)
Power of Brand	Moderate.
Corporate Governance, Reputation of Leaders	Good.
Fraud reported	Few complaints exists

Declaration

Considering the growth rate, the company possess multibagger properties.

Following are our action items on the stock:

• Ensure upcoming quarter EPS growth
• Ensure encashing projects for next 2 years

Allocation

2-3% of current 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.