PTC Financial Services – Multibagger Analysis

PTC Financial Services – Multibagger Analysis

PTC India Financial Services Ltd (PFS) is promoted by PTC India Ltd (PTC) as a special purpose investment vehicle to provide total financial services to the entities in energy value chain, which inter-alia includes investing in equity and/or extending debt to power projects in generation, transmission, distribution; fuel sources, fuel related infrastructure like gas pipelines, LNG terminals, ports, equipment manufacturers and EPC contractors etc.

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

Screener URL:http://www.screener.in/company/?q=533344

Moneyworks4me URL:

CMP: 40

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. image
Durable Competitive Advantage

Neutral.

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Future Growth Drivers Forecast 2 year Economic growth should enable the company to sustain & grow in profits. image
Conservative Debt (long term debt < 3 Net Profit) Current Liabilities stands around 140 crore & Net Profit at 240 crores; So Current Liabilities is less than 3X of Net Profit. image
Debt Equity Ratio 1.25; Moderate for financial companies. image
Return on Equity must be Above Average 8.69% which is below average of 15%. image
Low CAPEX required to maintain current operations Low CAPEX company. image
Management is holding / buying the stock Management is holding 60% of the share. image
Price is Under Valued (< intrinsic value) Yes. image
Stock Price is consolidating (now) Company is neat at 52 week high with 400% returns 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 10 – good; PB 1.5 – good image
Cash Flow Positive, Net Profit % greater than 8% Cash flow is negative; NP% is 40% which is good. image
Paying Dividends, Tax Yes. image
EPS Growth Rate 30% to 50% is the average.  image
Latest Quarter EPS Growth 50% growth q-o-q  image
Expected Gain in 10 Years 20-30 Times in 5 years considering 30% to 50% growth rate.  image
Price Movement Graph, 52 Week High & Low 52 wh is 400% than 52wl; So be cautious.  image
Volume Analysis Volume is high  image
Power of Brand Yes. image
Corporate Governance, Reputation of Leaders Yes. image
Fraud reported Not any in current search. image

 Declaration

Considering current EPS growth in annual & quarterly results, PTC Financial Services is a multibagger.  As it has already appreciated 400%,  I recommend entering in lower levels or installments.

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As the company have negative cash flow issues, please be watchful during economic down turns.

Allocation

2-3% of your 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.

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