Is Kanchi Karpooram a Multibagger?

We are publishing this Analysis based on the Query from our Paid Subscriber.  The company have good Trailing results & seems to lure lot of investors.

Let us analyze in Warren Buffet way on the Financials.

NSE Code KANCHI.NS
BSE Code 538896
URL https://www.kanchikarpooram.com/
CMP 270
Free Report Yes
Publish Date Nov-15-2019

Kanchi Karpooram Limited (KKL), a Public Limited Company, manufactures Camphor, its derivatives, Gum rosin, Value Added Resins and Fortified Rosin. Over the last 25 years, it has a proven track record for quality, competitive price and timely supply to a variety of customer across industries. The main product Camphor has been well accepted by customers. Besides Camphor and its derivatives, KKL’s products such as Gum rosin and Rosin Derivatives, also enjoy an enviable share in the market, including some of the most trusted brands across the world.

Warren Buffet, Value & Growth Checklist

Following are the 25 Checklist parameters:

Capitalization 115 Crore green
History of Consistently Increasing Sales, Earnings & Cash Flow Yes. green
Durable Competitive Advantage Moderate. yellow
Future Growth Drivers / Sector Growth Moderate. yellow
Conservative Debt (long term debt < 3 Net Profit) Yes green
Debt Equity Ratio, Current Ratio Both are Good green
Return on Equity must be Above Average 55% (Excellent) green
Low CAPEX required to maintain current operations Moderate yellow
Inventory Turnover Ratio, Debtor Days, ROCE Increasing. Moderate yellow
Management is holding / buying the stock Yes green
Market Price < Intrinsic Value Yes. green
Stock Price is consolidating (now) Yes yellow
Stock Price is growing in past years along with EPS growth Yes green
Consolidated PE, PB Ratio, PEG Ratio PE 4, PB is 2X,  PEG 0.2 green
Cash Flow Positive, Net Profit % greater than 8% Cash Flow: NegativeNet Profit: Yes yellow
Paying Dividends, Tax Yes green
EPS Growth Rate 30% above green
Jump in Trailing Result EPS Yes green
Jump in Quarterly Result EPS Yes.  But recent 2 q-o-q not increasing in profits yellow
Expected Gain in 5 Years 200-300%

(If smallcap/midcap market restores)

yellow
Price Movement Graph, 52 Week High & Low Okay green
Volume Analysis 2000 yellow
Power of Brand Moderate yellow
Corporate Governance, Reputation of Leaders Very small company.  Cannot measure this. yellow
Fraud reported Not in current search. green

Summary

Based on the above analysis we can see Kanchi Karpooram have Multibagger Stock properties.  Company aligns with Warren Buffet principles of Value & Growth Investing.  It  can be considered as Low Risk Moderate Returns investment.  However, investor has to do more due diligence on the stock before investing.

Note: We only do 100 Point checklist on Paid Multibaggers which the Advisor Team also will be Investing.  Do not waste time with free multibaggers where you will not get tracking updates.  Visit Subscribe to know more.

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.

image

Premium Services

This stock analysis is part of our Free Services where Tracking & Updates will Not be provided.  If you are a Serious Investor, we encourage to Buy our Premium Service where our Adviser Team is investing along with Tracking & Updates.

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.

 

Is Bella Casa a Multibagger Stock based on Warren Buffet Analysis?

Bella Casa Fashion & Retail Ltd

NSE Code BELLACASA.NS
BSE Code 539399
URL http://www.bellacasa.in/
CMP 122
Free Report Yes
Publish Date Sep-30-2019

In this post we would like to Explore the Multibagger Stock Potential of Bella Casa.

bella casa

Bella Casa Fashion & Retail Ltd is operating in fast growing fashion market of India. Bella Casa is catering to 2 lakh cr market. The market size of home furnishings, women ethnic wear and men’s ethnic wear is more than Rs 2 lacs cr.

Positive Factors

Company have consistent 15% Revenue & Profit growth in past 3 years.

bella-income-statement

Company is quoting at Low PE of 15 due to current market sentiments

Company is trading at 40% discount from 52 week high due to market sentiments, GST troubles etc.

Company is poised for long term growth advantages due to Structural Tax changes & India growth story.

Company has more than 4000 retail outlets in india & expanding through branding, innovation, e-commerce & deep penetration.

India is 2nd largest exporter of home textiles & hold 7% global share. The India home decor consumption is growing at CAGR 8% due to real estate trends, millenial disposable income etc. which will support the company growth in future too.

Company had Expanded Capacity activation in current financial year.

Concern Factors

Current Quarter EPS growth is low due to GST & Tax Impacts.  This is measured to be recovering in upcoming years.

Global Recession can impact the Sales in near future.  But long term seems to be okay.

FDI Participation, Increased Competition from Global Brands, Government policies are Other Threats in the path of the company

Warren Buffet, Value & Growth Checklist

Following are the Checklist parameters:

Capitalization 140 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 higher debt red
Debt Equity Ratio, Current Ratio Debt Equity Ratio is 1 (this is bad for growth)

Current Ratio is 4 ( no liquidity crunch)

red
Return on Equity must be Above Average 21% (Good) green
Low CAPEX required to maintain current operations No yellow
Inventory Turnover Ratio, Debtor Days, ROCE Moderate, High Debtor Days yellow
Management is holding / buying the stock Management sold 5% red
Market Price < Intrinsic Value Yes. Intrinsic Value at Rs. 250 Intrinsic Value Calculator green
Stock Price is consolidating (now) Yes green
Stock Price is growing in past years along with EPS growth Yes. green
Consolidated PE, PB Ratio, PEG Ratio Okay yellow
Cash Flow Positive, Net Profit % greater than 8% Cash Flow: Negative

Net Profit: No

yellow
Paying Dividends, Tax Yes green
EPS Growth Rate 15% 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 82 (good for existing investors, bad for new investors) yellow
Power of Brand Yes, Company has good Brand & Ambassador Jacqueline Fernandez green
Corporate Governance, Reputation of Leaders Yes green
Fraud reported No.  But high remuneration ration & increments for core promoters green

Summary

Based on the above analysis I would like to declare that the Bella Casa possess Multibagger Stock in Indian Stock Market & 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.

image

Premium Services

This stock analysis is part of our Free Services where Tracking & Updates will Not be provided.  If you are a Serious Investor, we encourage to Buy our Premium Service where our Adviser Team is investing along with Tracking & Updates.

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.

 

Learn how Multibagger Stocks are Created through Value Investing

If you are a new investor, we recommend you go through this table below.  This will help you understand the Multibagger Creation Journey.

Year Description Returns

Starting Year

Here you Identified a Multibagger based on Past Performance & Growth aspects.

For example, The capitalization is 300 Crore & PE is just 5.

Imagine you Invested 1 Lakh Rupees on it.

0% on 1 Lakh
After Year 1 The company performed well as expected and displayed 20% EPS Growth.

Now PE is 4.

But all EPS growth will not be reflected in Price, especially in the beginning years.  Hence you will get +/- 20% returns.

+/- 20%
After Year 2 Now the company performed well again with another 20% EPS Growth.

This time the price will have to start reflecting as more & more analysts, people, funds will be looking into the stock.

Let us say the price gained 50%.

The PE is 5 again.

+ 20% | 1.5 Lakh
After Year 3 Your company is performing well with another 20% EPS growth.

This time the market visibility is high & hence the price jumped another 100%

Now the PE is around 8 with Capitalization 600 Crore.

+ 100% | 3 Lakh
After Year 5 Now you are on Year 5.  The compounded EPS growth of 20% lead to 100% EPS growth in 5 years.

Since the Capitalization is above 1000 Crore, Mutual Funds will start Investing. Big Money & Increased Visibility leading to Higher PE.

Now the PE is 20 with Capitalization 1200 Crore.

+100% | 5 Lakh

5X Gain in 5 Years

Now onward 20% EPS growth leads to 30% price growth.

Also, you will earn 100% return on original capital.  i.e 1 Lakh gain every year.

After Year 10 Now the company is growing again at 20% CAGR.

Now the PE is 30.

+500% | 30 Lakh

At this point you will start getting Dividend Yield 1% as 30 Thousand rs. per year.

30X Gain in 10 Years

Wealth Creation!

After Year 20 If you are lucky to have a Superbagger with 20% CAGR. Eg: Infosys, Wipro, Page Industries etc.

Now the PE is 40 and you have a 100X returns on original capital.

All these are possible as, Infosys gave 300X returns in 20 years!

+3000% | 10 Crores

Now the Dividend Yield will be 1 Lakh rs. per month equal to your Original Capital investment.

100X Gain in 5 Years

Cash Flow Generation!

This is how Stock Market creates wealth & cash flow.  It takes really long time for the compounding to work.  No shortcuts!

So here are the problems of amateur investors:

  • They add more stocks than above learning & tracking capacity
  • They exit stocks every other year breaking the power of compounding positioning

SO I recommend each & every investor to understand this process & continue holding stocks long term discarding noises, as long as their fundamentals & growth factors are intact. Be like Pro!

Atul Auto – Multibagger Analysis

Atul Auto Ltd.

NSE Code

ATULAUTO.NS

BSE Code

531795

URL

http://www.atulauto.co.in/

CMP

335.00

Free Report

Yes

Publish Date

Apr-13-2019

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

Introduction

The company based in Gujarat founded in 1980s is into the business of Vehicle Manufacturing primarily in the 3-wheeler targeting Cargo & Passenger segments. Company maintains No.1 position in the Diesel 3-wheeler segment in Gujarat.

Earlier in 1970s, the company started with invention of ‘Chakkada’ which was a big success. The current CEO inherited the business from his father & currently have PAN India presence with 330+ primary & secondary networks of distribution centers across India.

The company also have Petrol/CNG variants with Overseas presence. The company has 850+ employees and 60000 production capacity.

image

CEO

The company CEO is Mr. Jayantibhai J Chandra. He performed previously as Managing Director of Khushbu Auto Finance Ltd. another subsidiary.

Positive Factors

Following are the Positive Factors identified:

Company has a Good Research Team. The company produces 3-wheeler in all Fuel range Petrol, Diesel, CNG, LPG and Electric. Electric Vehicles R&D on Card to accommodate Future trends.

Good Array of Products visible while ATUL Shakti is the new in array covering Passenger & Delivery segments.

image

FY18 had Sales Growth of 24% and Export growth of 40%. India three-wheeler market is projected to exhibit a CAGR of more than 15% by 20235.

Company does not have any Debt problems as it maintains Debt as Zero & Current Ratio above 1.8. CRISIL has reaffirmed rating as CRISIL “A” with stable outlook. HDFC Small cap & ADITYA BIRLA Mutual Funds are Invested.

Company has invested into the Green Vehicles Variant to curb the Vehicle Pollution issues. It owns a Subsidiary Atul Green Automotive to accommodate this Green Variants.

New plant in Bavla near Ahmedabad which supports Future Expansion aspirations.

Urbanization, India Growth Story, Green & Electrical Vehicle usage will be Boost to the company in coming years.

Concern Factors

Following are the Concern Factors identified:

Demonetization & GST has impacted the Sales of the company. Any such reforms in the future will Negatively affect the company.

The past FY 2015 seems to have the higher number of sales. The direct Competitor Bajaj Auto although seems to have higher sales in FY2018 too.

Cash Flow seems to be not steady. FY2017 seems to have provided the highest cash flow. Current year Net Cash Flow is negative due to Capex expenditure.

Few misalignments with Industry Growth also visible. In few years the company growth was lower than the industry growth. (In high growth companies this will be the opposite)

image

Crude Oil Price increase can adversely affect the company sales.

Management seems to be Immune to Debts. This affects the Leveraged growth & expansion of the company. The sluggish growth rate of 10% may be due to these factors.

Major competitor is Bajaj Auto which dominates the 3-wheeler industry. Other Competitors are Piaggio & Mahindra. The Penetration & Network of Atul Auto needs to be multifold increased for growing above these niches.

Sales & Profit Growth

Sales & Profit Growth is visible for the current year.

image

Warren Buffet, Value & Growth Checklist

Following are the Checklist parameters:

History of Consistently Increasing Sales, Earnings & Cash Flow

Yes. However the Rate of Growth is Not too Impressive.

image

Durable Competitive Advantage

Moderate. (compared with competitors)

image

Future Growth Drivers / Sectoral Growth

Yes. 15% CAGR Sector Growth forecasted for next 5 years.

image

Conservative Debt (long term debt < 3 Net Profit)

Debt is 0.

image

Debt Equity Ratio, Current Ratio

DER is 0. CR is 1.8. Both are Very Good.

image

Return on Equity must be Above Average

22%

image

Low CAPEX required to maintain current operations

Not.

image

Inventory Turnover Ratio, Debtor Days, ROCE

All 3 are decreasing for current 2 years but within range.

image

Management is holding / buying the stock

No changes.

image

Price is Under Valued (< intrinsic value), PEG Ratio

PEG is high.

image

Stock Price is consolidating (now)

Yes.

image

Stock Price is growing in past years along with EPS growth

Yes.

image

Consolidated PE, PB Ratio

2015 holds the highest price value.

image

Cash Flow Positive, Net Profit % greater than 8%

Yes.

image

Paying Dividends, Tax

Yes.

image

EPS Growth Rate

Yes.

image

Jump in Trailing Result EPS

Yes.

image

Jump in Quarterly Result EPS

Yes. 50%

image

Expected Gain in 5 Years

300%. (Not impressive expectation)

image

Price Movement Graph, 52 Week High & Low

Okay.

image

Volume Analysis

Low Volume. Good if Growth manifests.

image

Power of Brand

Moderate Brand compared with Big Peers.

image

Corporate Governance, Reputation of Leaders

Yes.

image

Fraud reported

Not in current search.

image

Summary

Based on the above analysis I would like to say that the company possess Multibagger properties but not in a Great Order. Hence be cautious about Investing in it.

image

Source

http://www.futurecaps.com

Value

Research. Affordable.

SEBI Registration

INH200006956

Disclosure

Adviser do not hold above stock

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.

image

Is Atul Auto a Multibagger Stock based on Warren Buffet Analysis?

Atul Auto Ltd.

NSE Code ATULAUTO.NS
BSE Code 531795
URL http://www.atulauto.co.in/
CMP 335.00
Free Report Yes
Publish Date Apr-13-2019

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

Introduction

The company based in Gujarat founded in 1980s is into the business of Vehicle Manufacturing primarily in the 3-wheeler targeting Cargo & Passenger segments. Company maintains No.1 position in the Diesel 3-wheeler segment in Gujarat.

Earlier in 1970s, the company started with invention of ‘Chakkada’ which was a big success. The current CEO inherited the business from his father & currently have PAN India presence with 330+ primary & secondary networks of distribution centers across India.

The company also have Petrol/CNG variants with Overseas presence. The company has 850+ employees and 60000 production capacity.

atul-auto-multibagger
Atul Auto Multibagger Stock

CEO

The company CEO is Mr. Jayantibhai J Chandra. He performed previously as Managing Director of Khushbu Auto Finance Ltd. another subsidiary.

Positive Factors

Following are the Positive Factors identified:

Company has a Good Research Team. The company produces 3-wheeler in all Fuel range Petrol, Diesel, CNG, LPG and Electric. Electric Vehicles R&D on Card to accommodate Future trends.

Good Array of Products visible while ATUL Shakti is the new in array covering Passenger & Delivery segments.

atul-auto-multibagger-autos.png

FY18 had Sales Growth of 24% and Export growth of 40%. India three-wheeler market is projected to exhibit a CAGR of more than 15% by 20235.

Company does not have any Debt problems as it maintains Debt as Zero & Current Ratio above 1.8. CRISIL has reaffirmed rating as CRISIL “A” with stable outlook. HDFC Small cap & ADITYA BIRLA Mutual Funds are Invested.

Company has invested into the Green Vehicles Variant to curb the Vehicle Pollution issues. It owns a Subsidiary Atul Green Automotive to accommodate this Green Variants.

New plant in Bavla near Ahmedabad which supports Future Expansion aspirations.

Urbanization, India Growth Story, Green & Electrical Vehicle usage will be Boost to the company in coming years.

Concern Factors

Following are the Concern Factors identified:

Demonetization & GST has impacted the Sales of the company. Any such reforms in the future will Negatively affect the company.

The past FY 2015 seems to have the higher number of sales. The direct Competitor Bajaj Auto although seems to have higher sales in FY2018 too.

Cash Flow seems to be not steady. FY2017 seems to have provided the highest cash flow. Current year Net Cash Flow is negative due to Capex expenditure.

Few misalignments with Industry Growth also visible. In few years the company growth was lower than the industry growth. (In high growth companies this will be the opposite)

image

Crude Oil Price increase can adversely affect the company sales.

Management seems to be Immune to Debts. This affects the Leveraged growth & expansion of the company. The sluggish growth rate of 10% may be due to these factors.

Major competitor is Bajaj Auto which dominates the 3-wheeler industry. Other Competitors are Piaggio & Mahindra. The Penetration & Network of Atul Auto needs to be multifold increased for growing above these niches.

Sales & Profit Growth

Sales & Profit Growth is visible for the current year.

image

Warren Buffet, Value & Growth Checklist

Following are the Checklist parameters:

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. However the Rate of Growth is Not too Impressive. image
Durable Competitive Advantage Moderate. (compared with competitors) image
Future Growth Drivers / Sectoral Growth Yes. 15% CAGR Sector Growth forecasted for next 5 years. image
Conservative Debt (long term debt < 3 Net Profit) Debt is 0. image
Debt Equity Ratio, Current Ratio DER is 0. CR is 1.8. Both are Very Good. image
Return on Equity must be Above Average 22% image
Low CAPEX required to maintain current operations Not. image
Inventory Turnover Ratio, Debtor Days, ROCE All 3 are decreasing for current 2 years but within range. image
Management is holding / buying the stock No changes. image
Price is Under Valued (< intrinsic value), PEG Ratio PEG is high. image
Stock Price is consolidating (now) Yes. image
Stock Price is growing in past years along with EPS growth Yes. image
Consolidated PE, PB Ratio 2015 holds the highest price value. image
Cash Flow Positive, Net Profit % greater than 8% Yes. image
Paying Dividends, Tax Yes. image
EPS Growth Rate Yes. image
Jump in Trailing Result EPS Yes. image
Jump in Quarterly Result EPS Yes. 50% image
Expected Gain in 5 Years 300%. (Not impressive expectation) image
Price Movement Graph, 52 Week High & Low Okay. image
Volume Analysis Low Volume. Good if Growth manifests. image
Power of Brand Moderate Brand compared with Big Peers. image
Corporate Governance, Reputation of Leaders Yes. image
Fraud reported Not in current search. image

Summary

Based on the above analysis I would like to say that the company possess Multibagger properties but not in a Great Order. Hence be cautious about Investing in it.

image

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.

More Free Multibaggers

You can find More Free Multibaggers here.

https://atomic-temporary-50748686.wpcomstaging.com/free-multibaggers-2019/

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.

 

Is Meghmani Organics a Multibagger Stock based on Warren Buffet?

In this post I would like to provide Multibagger Analysis on Meghmani Organics Ltd (BSE 532865, NSE MEGH.NS).

Note This is part of our Free-multibagger Analysis which will not have any tracking & updates.  I would recommend you buying our serious list of Paid-multibaggers subscription plan here.

Meghmani Organics

Founded in 1986, Meghmani Organics is a leading manufacturer of pigments, agrochemicals and basic chemicals.  The company has show tremendous record of growth & expansion.

Mr. Ankit Patel is the current Chief Executive Officer.

Website: http://www.meghmani.com/

CMP: 60.00

Meghmani Organics Multibagger Stock

During 2017-18 Meghmani Organics has clocked year-onyear growth of 27% in Revenue, 49% in EBITDA and 95% in PAT. Better monsoon, focus on high margin product mix, better capacity utilization has led to fuel for continued growth. The company has 3 high growth businesses in one company.  i.e. Pigments, Agrochemicals and Basic Chemicals

Company is witnessing aggressive expansion in scale across each business, accompanied with backward integration, large client base with significant repeat business, strong product bouquet and wide global presence.

During the past year, the production crossed 2 Lakh MT while utilization levels increased to 84%. Our consolidated net Sales were ₹17,747 mn compared to ₹13,963 mn in FY17 buoyed by strong performance in exports as well as in the Domestic market. Exports saw 29% growth while Domestic market increased by 25%. Company strategy of expanding our diversified product portfolio,with focus on higher-value products, spurred EBITDA for the period by 49% to ₹4,312 mn resulting in 360 bps expansion in EBITDA Margin to 24.3%. On the back of vertically integrated business model, we effectively managed fluctuating raw material costs in the market and boosted our profitability. PAT for the year almost doubled to reach ₹1,713 mn as compared to ₹877 mn last year with PAT Margin reaching 9.7%. Interest cost declined by 22% on account of repayment of debt by ₹751 mn during the year.

Positive Factors

Company enjoys 14% share of Copper Phthalocyanine market.  Being an Exporter it enjoyed Revenue Increase through the US Dollar – Indian Rupee Depreciation.

Accelerated by Chemical regulation in China.

Company have 5 subsidiaries.

image

Global Pigments market to be growtn 4.1% CAGR and reach $27 billion by 2023. This will give immense potential to the commpany coupled with the large capex plan initiated last year.

Sales Growth

image

Profit Growth

image

Last year, Meghmani Organics initiated a landmark capex plan involving investment of ₹6.4 bn. The capex involves three projects starting with the Chlormthane (CMS) Project, already at the construction level, is expected to be commissioned by December’18. For the Second and Third project, involving expansion of Caustic Soda and Hydrogen Peroxide, we have finalized the technology and signed the agreement for the Power Plant. Both are expected to be commissioned by June’19.

ROCE of the company increased to 32% from previous year 21%

Concern Factors

Due to the low awareness in indian farmers the usage of Meghmani products is decelerated. 

Increasing  global competition, forex variations, global standards variation are other threats the company faces.

There are few corporate governance issues due to promoters faced by Meghmani Organics.

China coming back with pulling De-regulations on Chemicals can impact the Profitability of the company

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash FlowYes.

 

 

Recent Year, Revenue Growth 49%, PAT Growth 95%

New Plant commissioning on the way.

image
Durable Competitive Advantage Moderate.image
Future Growth DriversModerate.

 

 

Sector outlook is Good due to Chinese De-regulations.

image
Conservative Debt (long term debt < 3 Net Profit)Not.image
Debt Equity Ratio, Current Ratio0.44, 2.31image
Return on Equity must be Above Average21%image
Low CAPEX required to maintain current operationsModerateimage
Management is holding / buying the stock48%. Increasing.image
Price is Under Valued (< intrinsic value)

Yes.

As per the Intrinsic Value Calculator taking moderate growth of 50%, the company is at discount of 80%.

image
Stock Price is consolidating (now)

Yes.

(due to bear market in smallcap & micaps)

image
Stock Price is growing in past years along with EPS growthYes.image

Additional Futurecaps Checklist

Consolidated PE, PB, PEG Ratio

PE 6, PB 2, PEG 0.11

(PE is very low)

image
Cash Flow Positive, Net Profit % greater than 8%Yes. Yes.image
Paying Dividends, TaxDividends: No, Tax: Yesimage
EPS Growth Rate50%. Very Aggressiveimage
Jump in Trailing Result EPSYes.image
Jump in Quarterly Result EPSYes.image
Expected Gain in 5 Years5-10 Timesimage
Price Movement Graph, 52 Week High & Low30/6image
Volume Analysis6 lakh (High)image
Power of BrandModerate.image
Corporate Governance, Reputation of LeadersFew issues on MFL promoter stake sale exists.image
Fraud reportedYes. Duty Evasion Arrest. linkimage
Celebrity InvestorsYesimage

Declaration

Definitely the company possess Multibagger properties at the current price.  But, be cautious about the Management alerts.

image

Note

This is part of Free Multibaggers plan which do not include Tracking & Updates.  I would encourage serious investors to buy our Paid Subscription plan.

futurecaps-subscription

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.

 

 

Meghmani Organics–Multibagger Analysis

In this post I would like to provide Multibagger Analysis on Meghmani Organics Ltd (BSE 532865, NSE MEGH.NS).

Note This is part of our Free-multibagger Analysis which will not have any tracking & updates.  I would recommend you buying our serious list of Paid-multibaggers subscription plan here.

Meghmani Organics

Founded in 1986, Meghmani Organics is a leading manufacturer of pigments, agrochemicals and basic chemicals.  The company has show tremendous record of growth & expansion.

Mr. Ankit Patel is the current Chief Executive Officer.

Website: http://www.meghmani.com/

CMP: 60.00

Growth Aspects

Company enjoys 14% share of Copper Phthalocyanine market.  Being an Exporter it enjoyed Revenue Increase through the US Dollar – Indian Rupee Depreciation. 

Accelerated by Chemical regulation in China.

Company have 5 subsidiaries.

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Global Pigments market to be growtn 4.1% CAGR and reach $27 billion by 2023. This will give immense potential to the commpany coupled with the large capex plan initiated last year.

Sales Growth

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Profit Growth

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Risks low awareness in indian farmers, global competition, forex variations, global standards variation, corporate governance, chines de-regulation on chemicals.

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow

Yes.

Recent Year, Revenue Growth 49%, PAT Growth 95%

New Plant commissioning on the way.

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Durable Competitive Advantage

Moderate. image

Future Growth Drivers

Moderate.

Sector outlook is Good.

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Conservative Debt (long term debt < 3 Net Profit)

Not. image

Debt Equity Ratio, Current Ratio

0.44, 2.31 image 

Return on Equity must be Above Average

21% image

Low CAPEX required to maintain current operations

Moderate image

Management is holding / buying the stock

48%. Increasing. image

Price is Under Valued (< intrinsic value)

Yes. image

Stock Price is consolidating (now)

Yes. image

Stock Price is growing in past years along with EPS growth

Yes. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio

PE 6, PB 2 image

Cash Flow Positive, Net Profit % greater than 8%

Yes. Yes. image

Paying Dividends, Tax

Dividends: No, Tax: Yes image

EPS Growth Rate

50%. Very Aggressive image

Jump in Trailing Result EPS

Yes. image

Jump in Quarterly Result EPS

Yes. image

Expected Gain in 5 Years

5-10 Times image

Price Movement Graph, 52 Week High & Low

30/6 image

Volume Analysis

6 lakh (High) image

Power of Brand

Moderate. image

Corporate Governance, Reputation of Leaders

Few issues on MFL promoter stake sale exists. image

Fraud reported

Yes. Duty Evasion Arrest. link image

Annual Report

Expansion Plans on Card. link image

Declaration

Definitely the company possess Multibagger properties at the current price.  But, be cautious about the Management alerts. 

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Note

This is part of Free Multibaggers plan which do not include Tracking & Updates.  I would encourage serious investors to buy our Paid Subscription plan.

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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.

Is Caplin Point Laboratories a Multibagger Stock based on Warren Buffet Analysis?

NSE Code: CAPPL.NS

BSE Code: 524742

URL: http://www.caplinpoint.net/

Caplin Point Multibagger Stock

About Company

Caplin Point was established in 1990 to manufacture a range of ointments, creams and other external applications.

The Company was listed in 1994 following its IPO which was oversubscribed 117 times, the proceeds of which were deployed in setting up a manufacturing facility at Pondicherry. Thereafter, the Company expanded its product range and increased its production capacity.

The Company focused on the emerging markets of Latin America, Caribbean, Francophone and Southern Africa and is today one of the leading suppliers of Pharmaceuticals in these regions, with over 2000 product licenses across the globe.

The Company is entering into the Regulated Markets for Injectables through its state of the art manufacturing plant, capable of handling Liquid Injectables in Vials,Ampoules, Lyophilized Vials and Ophthalmic dosages. The facility is approved by US FDA, EU-GMP, ANVISA-Brazil and INVIMA-Colombia.

Positive Factors

Consistent 33% Compounded Growth in Sales & Profits, this is really Awesome and it proves the Credibility of their Research & Sales capacity.

Innovative Products clocking around 500 and contributes to New products developments, Developments NSAIDs , Anti-Depressants, Anti-emetic, Anti- Coagulants, etc

Technological Improvements, R&D enhancement, QC support in analytical methods, Proper Adherence to Regulator requirements, Data Mining in Retail should enhance Increased Sales & Profit Efficiency.

Almost Zero Debt company, Less Interest paid, thus More Safer Investment.  Higher Capital Employed usage in 2017 is a remarkable factor.

Increase in Promoter Holdings, Shows good Sign of Confidence in Company & Future. Additionally, the high amount of Promoter Holding supports Increase in Price during good times.

Expansion into New Markets including Latin America, GDP growth in World, 17% Pharmaceuticals Market Growth in China ensures the 33%Growth will be Real in next 5 Years.

High Growth, OP, NP, ROE valuation parameters.

Traded at Discount currently, which is another Boon of Market Crash.  I see the Downside risk is limited.

Caplin Point 2.0
As per the Caplin Point 2.0 Strategy, the company is expanding into US Market, South American Market and Investing in 10X educational academy. Over the years, the Company invested its resources in the CP4 unit dedicated to the manufacture of injectables for the regulated US market. The Company invested ~H350 crore in opex and capex through accruals to enter the US market, which could strengthen the Company’s sectoral respect and Competitiveness. During the last decade, the Company increased its Latin American footprint from two countries to 10 countries.

Key Developments
Caplin Point invested in its business with the objective of strengthening its prospective products pipeline. The Company filed 2 ANDAs in its name. The Company commenced commercial deliveries to the US market through partners. It was required to provide credit to new customers. It made commercial entries into Chile, Paraguay, Panama and Costa Rica. The company launched products in niche segments (soft gels, suppositories and branded/OTC range), strengthening revenues.

Concern Factors

High in Book Value Ratio, which is usually a Curse of the High Growth companies.

Already a Multibagger of Past.

Generic Drug, Technology competition from Peers pose threat on revenue & PAT.

Currency Fluctuation risk.

Geographical Risk due to Excess exposure to Latin America regions.

Financials

P&L shows progress in Income & Profit

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Balance Sheet shows displays Capital Employed increased 59%, Net Worth increased 62%.

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Cash Flow Statement shows free Operating cash flow.

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Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Yes image
Durable Competitive Advantage Yes image
Future Growth Drivers Moderate. image
Conservative Debt (long term debt < 3 Net Profit) Yes image
Debt Equity Ratio, Current Ratio DER is Zero, Current Ratio is High. image
Return on Equity must be Above Average Yes image
Low CAPEX required to maintain current operations Moderate image
Management is holding / buying the stock Yes image
Price is Under Valued (< intrinsic value) Yes

As per the Futurecaps Intrinsic Value Calculator the company is at a discount of 50%.

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Stock Price is consolidating (now) Yes image
Stock Price is growing in past years along with EPS growth Yes image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio PB is high image
Cash Flow Positive, Net Profit % greater than 8% Yes image
Paying Dividends, Tax Yes image
EPS Growth Rate Good image
Jump in Trailing Result EPS Yes image
Jump in Quarterly Result EPS Yes image
Expected Gain in 5 Years 5X image
Price Movement Graph, 52 Week High & Low Yes image
Volume Analysis Good image
Power of Brand Yes.

(the company have heavy brand reputation)

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Corporate Governance, Reputation of Leaders Promoters selling holdings is an Issue in Past. image
Fraud reported Not in current search image
Annual Report Good image

Declaration

Based on the Value & Growth parameters, the company hold Multibagger properties.

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Note Free Multibaggers will not be tracked & Hence no follow-ups will be provided.

Disclaimer

Futurecaps is an independent equity research Company. 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 advise.  The report is purposefully kept concise.  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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