Vinyl Chemicals – Multibagger Analysis
Update: This stock really is Not a Multibagger. Since the Valuation change it is No Longer a Multibagger in our view. You can check other stocks from our latest Multibaggers pack.
https://futurecaps.com/tag/multibagger/
Futurecaps is a SEBI Registered Research Analyst providing Multibagger service to Indian Stock Market.
Vinyl Chemicals India Ltd , A Parekh Group company is in the business of selling various specialty chemicals mainly to textile, paints and adhesive sectors since 1991.
Website: http://www.vinylchemicals.com/
CMP: 38
Warren Buffett Checklist
| History of Consistently Increasing Sales, Earnings & Cash Flow | Yes. |  |
| Durable Competitive Advantage | Yes. Company mainly sell product to Pidilite Industries. | |
| Future Growth Drivers | Increasing market share of Pidilite should improve Vinyl Chemicals as well. | |
| Conservative Debt (long term debt < 3 Net Profit) | Not. The short term liabilities is very high for the company. It is around 50 and the past year Net Profit comes only around 5 crore. |  |
| Debt Equity Ratio | Good. | |
| Return on Equity must be Above Average | Impressive. 33%. | |
| Low CAPEX required to maintain current operations | High CAPEX required. | |
| Management is holding / buying the stock | 50% is management holding. They are holding flat for past 3 years. | |
| Price is Under Valued (< intrinsic value) | Yes. Considering past 3 years earnings-growth. | |
| Stock Price is consolidating (now) | Yes. | |
| Stock Price is growing in past years along with EPS growth | Yes. Price grown 4 times in past 1-2 years. | |
Additional Futurecaps Checklist
| PE, PB Ratio | PE 4.2 which is good; PB 2.5 little higher in this capitalization range. | |
| Cash Flow Positive, Net Profit % greater than 8% | Not. Comes around 4% |  |
| Paying Dividends, Tax | Yes. | |
| EPS Growth Rate | 20% to 50% | |
| Jump in Trailing Results | Yes. 100% jump in trailing year. | |
| Quarterly Results Growing | Latest quarter shows growth. Past quarter shows de-growth but. | |
| Expected Gain in 10 Years | Maximum 3-5 times in next 5 years. | |
| Volume Analysis | Apt volume. | |
| Power of Brand | Company mainly work with Pidilite, hence brand does not matter in backward-integrations. | |
| Corporate Governance, Reputation of Leaders | Flat. | |
| Fraud reported | Flat. | |
Declaration
We cannot really sure about declaring it as a Multibagger. It could provide decent returns, but as we have other strong multibaggers, let us skip this.
Allocation
0%
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.
