PSP Projects Multibagger Analysis (Warren Buffet Way)

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

Current Ratio is 1.5

green
Return on Equity must be Above Average 27% (Good) green
Low CAPEX required to maintain current operations Moderate yellow
Inventory Turnover Ratio, Debtor Days, ROCE Moderate yellow
Management is holding / buying the stock Yes green
Market Price < Intrinsic Value Yes. Intrinsic Value at Rs. 1128 Intrinsic Value Calculator green
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 yellow
Stock Price is growing in past years along with EPS growth Yes. green
Consolidated PE, PB Ratio, PEG Ratio PE Good, PB is 5X,  PEG is good yellow
Cash Flow Positive, Net Profit % greater than 8% Cash Flow: Negative

Net Profit: Yes

yellow
Paying Dividends, Tax Yes green
EPS Growth Rate 20% above green
Jump in Trailing Result EPS Yes green
Jump in Quarterly Result EPS Yes green
Expected Gain in 5 Years 300-500% green
Price Movement Graph, 52 Week High & Low Okay green
Volume Analysis 13000 yellow
Power of Brand Yes, Company has good Brand & Promoters green
Corporate Governance, Reputation of Leaders Yes green
Fraud reported No. green

Summary

Based on the above analysis we can see PSP Projects have Multibagger Stock properties & 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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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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