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Poddar Developers – Multibagger Analysis

Poddar Developers – Multibagger Analysis

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

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 FlowYes.image
Durable Competitive Advantage Moderate.image
Future Growth DriversFor 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 RatioOnly 0.2image
Return on Equity must be Above Average13% (but near to our minimum of 15%)image
Low CAPEX required to maintain current operationsModerate.image
Management is holding / buying the stock75% 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 growthYes.image

Additional Futurecaps Checklist

Consolidated PE, PB RatioPE 11; PB 2 (both moderate)image
Cash Flow Positive, Net Profit % greater than 8%Yes.image
Paying Dividends, TaxYes.image
EPS Growth Rate40% as 3 year averageimage
Jump in Trailing ResultsYes. 100% Yearly EPS jumpimage
Quarterly Results GrowingYes. 300% in current quarter. (Watch for massive seasonal-sales)image
Expected Gain in 10 YearsGrowth not steady So taking 30% as standard growth rate, 8-10 times in 10 years.image
Price Movement Graph, 52 Week High & LowOkay.image
Volume Analysis2710 (very low & good for price-fire)image
Power of BrandModerate.image
Corporate Governance, Reputation of LeadersGood.image
Fraud reportedFew 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.

About Futurecaps

Futurecaps is a 12+ year experienced Indian Stock Market Advisory with SEBI Registration.

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2 Replies to “Poddar Developers – Multibagger Analysis”

  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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