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.

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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.

NSE Code PSPPROJECT.NS
BSE Code 540544
URL http://www.pspprojects.com/
CMP 540
Free Report Yes
Publish Date Oct-30-2019

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 bce05 green e1587451073732
History of Consistently Increasing Sales, Earnings & Cash Flow Yes. bce05 green e1587451073732
Durable Competitive Advantage Yes. bce05 green e1587451073732
Future Growth Drivers / Sector Growth Yes. bce05 green e1587451073732
Conservative Debt (long term debt < 3 Net Profit) No, company have slightly higher debt 2d260 red
Debt Equity Ratio, Current Ratio Debt Equity Ratio is 0.17

Current Ratio is 1.5

bce05 green e1587451073732
Return on Equity must be Above Average 27% (Good) bce05 green e1587451073732
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 bce05 green e1587451073732
Market Price < Intrinsic Value Yes. Intrinsic Value at Rs. 1128 Intrinsic Value Calculator bce05 green e1587451073732
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)

bce05 green e1587451073732
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 bce05 green e1587451073732
EPS Growth Rate 20% above bce05 green e1587451073732
Jump in Trailing Result EPS Yes bce05 green e1587451073732
Jump in Quarterly Result EPS Yes bce05 green e1587451073732
Expected Gain in 5 Years 300-500%

(as you can see from past growth)

bce05 green e1587451073732
Price Movement Graph, 52 Week High & Low Okay bce05 green e1587451073732
Volume Analysis 13000
Power of Brand Yes, Company has good Brand & Promoters bce05 green e1587451073732
Corporate Governance, Reputation of Leaders Yes bce05 green e1587451073732
Fraud reported No. bce05 green e1587451073732

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.

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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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Disclaimer Futurecaps is an independent equity research team. Use of the information herein is at Investor’s own risk. This is not an offer to sell or solicitation to buy any securities and Futurecaps will not be liable for any losses incurred for the investment based on the advice.  The Investor is advised to do due diligence in the scrip mentioned.  None of Futurecaps Advisors hold 1% above Holdings of this company.

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