Intrinsic Value of 20 Indian Stocks – HDFC Bank, SBI, Reliance Industries, Adani Ports, Tata Motors, Ashok Leyland, Infosys, TCS, Sun Pharma, Dr. Reddy, Meghmani Organics, Jiya Eco, Wonderla Holidays, PSP Projects, Associated Alcohol, SRG Housing, CanFin Housing, Maithan Alloys, Bhageria Industries, Caplin Point, Veto Switchgears, KEI Industries, Gulf Lubricants, Acrysil, BCL Industries, Hester Bioscience, Aster DM & More

One should not take decision based on Price.  It should be based on Price & Growth aspects.  That is the reason Big Investors like Warren Buffet relies on Intrinsic Value & Fair Value.

Intrinsic Value is the present value of the company after applying the past growth rate for the future next 10 years.

Fair Value is discount of 30% on Intrinsic Value.

Rule of Thumb

  • If the CMP is less than Fair Value then BUY.
  • If the CMP is greater than Fair Value & less than Intrinsic Value then HOLD.
  • If the CMP is greater than Intrinsic Value then SELL

Intrinsic Value & Fair Value of Largecaps

Company CMP Intrinsic Value Fair Value Recommendation
HDFC Bank 1289 971 680 Sell
SBI 332 187 131 Sell
Reliance Industries 1546 1747 1223 Hold
Adani Ports 368 681 477 Buy
Tata Motors 175 Loss Loss Sell
Ashok Leyland 80 60 42 Sell
Infosys 733 490 343 Sell
TCS 2216 1865 1306 Sell
Sun Pharmaceuticals 430 678 475 Buy
Dr. Reddy’s Laboratories 2896 8844 6191 Buy

Intrinsic Value & Fair Value of Smallcaps & Midcaps


Company CMP Intrinsic Value Fair Value Recommendation
Meghmani Organics 56.65 539.32 377.53 Buy
Assoc.Alcohols 185.6 781.22 546.86 Buy
PSP Projects 495.55 1682 1177.4 Buy
KEI Inds. 474.95 1375.16 962.61 Buy
Gulf Oil Lubricants 812.1 1197.69 838.38 Buy
Tata Elxsi 827.85 277.79 194.46 Sell
Automotive Axles 819.6 1304.42 913.09 Buy
Acrysil 95.2 334.84 234.39 Buy
BCL Industries 74.45 1231.71 862.2 Buy
Bharat Parenterals 168 4183.17 2928.22 Buy
Sandhar Tech 250.1 372.92 261.05 Buy
Aster DM Health 162.7 131.47 92.03 Sell
Hester Bios 1452.1 3100.36 2170.25 Buy
Bella Casa 119.75 357.1 249.97 Buy
Bhageria Indust. 116.85 605.03 423.52 Buy
SRG Housing 83.1 1128.7 790.09 Buy
Can Fin Homes 395.35 354.21 247.95 Sell
Jiya Eco-Product 26.65 730.91 511.64 Buy
Veto Switchgears 36.55 -266.29 -186.4 Hold
Caplin Point Lab 294.6 938.35 656.85 Buy
Maithan Alloys 464.85 -1193.73 -835.61 Hold
Wonderla Holiday 246.9 595.92 417.15 Buy

Is Jiya Eco Products a Multibagger Stock based on Warren Buffet Analysis?

Jiya Eco-Products Ltd.

NSE Code JIYAECO.NS
BSE Code 539225
URL https://www.jiyaeco.com/
CMP 55
Free Report Yes
Publish Date May-15-2019

In this post we would like to Explore the Multibagger Potential of the company. This is based on a blog reader request.

Jiya Eco Products  Multibagger Stock

Jiya Eco is into a unique business of manufacturing of Pellets and Briquettes. The company operates in Bhavnagar, Gujarat.  The offered products are manufactured from agriculture and forest waste, which are the cost effective, high yielding and sustainable bio fuel alternative. Modern algae processing techniques are implementing the production of our products. Further, Pellets manufactured from agriculture and forest waste have a huge demand in the marketplace owing to their zero smoke & fly ash emission, easy handling, uniform in diameter, high fuel efficiency, and more.

The product Briquettes is a substitute of solid fuels like coal, charcoal, firewood etc. It is used in Pharmaceuticals, Textiles units etc.  The product Pellets are used as Fuels for Electric Power Plant Homes and a Substitute of Fuels like Diesel, Kerosene, LPG etc.

In short, the company provides Alternative Bio-Fuel to the Customers which are Cost Efficient & Eco-friendly.  This is a unique business with lot of opportunity in the sector.

Positive Factors

Company is showing almost 100% growth in Sales & Profits compared with previous year.  The EPS growth is clocking around 200%.

jiya-perf

Solid Expansion Plans. The new Pellet manufacturing unit in Gandhidham will be commissioned in next 2 years which will be be Doubling the current capacity.   Company is undergoing Greenfield & Brownfield Expansions.  Company has multi-year Lease of Land providing easy access to raw material & lower transit cost.  The company is currently expanding outside of Gujarat to Rajasthan and Madhya Pradesh.

Forward Integration of Burner Manufacturing business ensures growing demand for current Pellet business.

Company have boost from NTPC, Government Initiatives to support Bio-fuels etc.  Since this is a Unique model of business, Jiya Eco is the only company in this sector.

Company has good Revenue & Net Profit Growth.

jiya-pandl

Other positive factors are:

  • High ROE.
  • High ROCE.
  • Managed D/E at 0.4.
  • Increasing Net Worth & Reserves.
  • Trailing Numbers are good.

Concern Factors

Reduction in Promoter Holdings of 30% in last 3 years.  Huge Promoter Holding Sale in last 1 year. link.  There is an Allegation that Warrants are converted to Shares too.

No Dividend Payouts.  Although the company may be reinvesting the profits in the business which is considered good.  Tax advantages of 5 years seems to be maxed out.

Sales are mostly into Credit.  Debtor Days increased 100% in past 1 year.  This may induce Working Capital problems.  Cash Flow is flat/negative.

Low Liquidity Stocks can become a Manipulation Instrument.  Hence allocate 50% less money if investing, then increase progressively for next 6 months.

Debt is moderately high. Increasing Borrowings.

SME category risk of price crashes during bear times.

Warren Buffet, Value & Growth Checklist

Following are the Checklist parameters:

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. green
Durable Competitive Advantage Yes. (no visible competitors) green
Future Growth Drivers / Sectoral Growth Yes.  (unique sector) green
Conservative Debt (long term debt < 3 Net Profit) Moderate. Cash Flow issues are there. yellow
Debt Equity Ratio, Current Ratio Moderate. Increasing Borrowings a Concern. yellow
Return on Equity must be Above Average Yes. green
Low CAPEX required to maintain current operations Not. yellow
Inventory Turnover Ratio, Debtor Days, ROCE Increasing. Concern. red
Management is holding / buying the stock No. Promoters have High Selling in past 3 years. red
Price is Under Valued (< intrinsic value) Considering the EPS Growth it is Super Under Valued green
Stock Price is consolidating (now) No. It had a fall & now spiked back. yellow
Stock Price is growing in past years along with EPS growth Yes. green
Consolidated PE, PB Ratio, PEG Ratio PE 7 (moderate)

PB 4 (high)

PEG 0.05 (very low)

yellow
Cash Flow Positive, Net Profit % greater than 8% Cash Flow: Negative

(expansion plans induced cash crunch)

Net Profit: Okay

yellow
Paying Dividends, Tax No. red
EPS Growth Rate 100% above green
Jump in Trailing Result EPS Yes green
Jump in Quarterly Result EPS Yes green
Expected Gain in 5 Years 500-1000%+

(If promoter concerns are resolved & more investors are attracted including MFs)

green
Price Movement Graph, 52 Week High & Low High: 78

Low: 32

green
Volume Analysis 2 Lakh yellow
Power of Brand Moderate yellow
Corporate Governance, Reputation of Leaders No frauds reported. But few concerns on Warrants issues at Peak price exists. yellow
Fraud reported Same as above. yellow

Summary

Based on the above analysis I would like to say that the Jiya Eco possess Multibagger properties & considering the concerns it is categorized as High Risk High Returns stock.  If invested do tight monitoring on the company news & events.

image

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.

Premium Services

This stock analysis is part of our Free Services where Tracking & Updates will not be provided.  We encourage Serious Investors to Buy our Premium Service where our Adviser Team is investing along with Tracking & Updates.

 

Blog at WordPress.com.

Up ↑