PSP Projects Multibagger Analysis (Warren Buffet Way)

Update: The current Corona impact could have changed the Future Outlook of this company sector.  You should take updated Inference on Investing this multibagger. 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.  We follow Value Investing principles of Warren Buffett in India.  Hence  we are analyzing PSP Projects based on Warren Buffet methodology.

PSP Projects is a multidisciplinary construction company offering a diversified range of services.  The services include construction and allied services across industrial, institutional, government, government residential and residential projects in India. They provide our services across the construction value chain, ranging from planning and design to construction and post-construction activities to private and public sector enterprises.

Warren Buffet, Value & Growth Checklist

Following are the Checklist parameters:

Capitalization	2000 Crore
History of Consistently Increasing Sales, Earnings & Cash Flow	Yes.
Durable Competitive Advantage	Yes.
Future Growth Drivers / Sector Growth	Yes.
Conservative Debt (long term debt < 3 Net Profit)	No, company have slightly higher debt
Debt Equity Ratio, Current Ratio	Debt Equity Ratio is 0.17 Current Ratio is 1.5
Return on Equity must be Above Average	27% (Good)
Low CAPEX required to maintain current operations	Moderate (because of construction intensive)
Inventory Turnover Ratio, Debtor Days, ROCE	Moderate (because construction intensive)
Management is holding / buying the stock	Yes
Market Price < Intrinsic Value	Yes. Intrinsic Value at Rs. 1128 Intrinsic Value Calculator
Stock Price is consolidating (now)	No.  Price is at Peak levels due to QR Jumps which Indicate a 100% Returns on Bull Market. However a slash in earnings will cut 50% of Price too as we are currently in Bear Market
Stock Price is growing in past years along with EPS growth	Yes (as you can see from QR results)
Consolidated PE, PB Ratio, PEG Ratio	PE Good, PB is 5X,  PEG is good
Cash Flow Positive, Net Profit % greater than 8%	Cash Flow: Negative Net Profit: Yes
Paying Dividends, Tax	Yes
EPS Growth Rate	20% above
Jump in Trailing Result EPS	Yes
Jump in Quarterly Result EPS	Yes
Expected Gain in 5 Years	300-500% (as you can see from past growth)
Price Movement Graph, 52 Week High & Low	Okay
Volume Analysis	13000
Power of Brand	Yes, Company has good Brand & Promoters
Corporate Governance, Reputation of Leaders	Yes
Fraud reported	No.

Summary

As per the above analysis, we can see PSP Projects have Multibagger Stock properties because of Greens. One can Invest during 2019 year.  Company aligns with Warren Buffet principles of Value & Growth Investing.  It  can be considered as Low Risk Moderate Returns investment.

Update Due to Corona Impact more & more companies are loosing businesses – but few are gaining more .  Hence you should consider reviewing the next QR results before making any investment decisions on PSP Projects.

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