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.

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

Additional Futurecaps Checklist

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

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

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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.

Categories: Uncategorized

2 replies

  1. FC, I appreciate ur analysis. Company seems really good and making 52wk high daily.
    Still, how do you ascertain to invest in Real Estate while other sectors are offering better opportunities.
    Also, please suggest some NBFC from housing finance. How do u rate can-fin homes?

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