Happy Deepawali: Samvat 2070

Muhurat Trading Session

We wish all our readers a very Happy & Prosperous Deepawali. May Goddess Laxmi shower her blessings, and Lord Ganesha shower happiness on all of us.

Samvat 2069 ended on a wonderful note as the Sensex hit an all time high.

We recommend our readers to take part in the Muhurat Trading session on this auspicious day. Few ideas for long term perspective are:

1. Alembic Pharma

2. GRP

3. Oriental Carbon

4. P I Ind

5. Shilpa Medicare

Over last couple of years, we have got some superb companies to participate in, such as Astral Poly Technik, Ajanta Pharma, Atul Auto, Avanti Feeds, Poly Medicure, Mayur Uniquoters etc and all of these have given some superb returns. The Q2FY14 results have been very good for most of the companies we have been tracking and hence existing ideas give more comfort and promise rather than something new and unknown.

The best stock to buy could be the one you already own – Peter Lynch

We would like to thank our readers for your support and collaboration in doing the in-depth research and groundwork. We are pretty optimistic about the year ahead and wish you Happy Investing!!!

  • vishal kejriwal

    Happy Deepwali to dalal-street team!!

  • sidhartha sinha

    Ayush – Wish a very happy Diwali to the entire team at Dalal-street.

    Quick question whats the rationale for putting in shilpa medicare (ahead of Divi’s lab and Biocon) as a pick?

    regards
    Sid

  • Anoop

    Wishing a very happy deepawali to Dalal-streat team and family..
    Regards
    Anoop

  • Roberto el S

    Hi Ayush,

    I wish you and your family a very happy diwali!

    Regards,
    Roberto el S

  • Vivek Gautam

    Happy Diwali to You n everyone .

  • DeepakkumarPrasad

    Hi Ayush & Pratyush ..

    Happy Diwali to you and your family. All my best wishes are there for you guys.

    Wish due respect to all your recommendation I have following comments for these small caps–

    Shilpa Medicare trading at
    – 2.35 times its book value
    – way above its intrinsic value

    – Piotroski & G factor both on the lower side
    – market cap Twice the sales

    same with Alembic pharma with a negative cash flow … PI industries trading way above its book value.

    Don’t you think small caps trading at such high valuation is a risky bet.

    • Ayush

      Hi Deepak,

      Value investing is not only about investing in stock with attributes like low PE, Price to Book etc. If you look at the above 3 cos, all of them are having good and unique business models and experiencing high growth rates of about 25-30%. Infact in recent times the growth in profits of alembic and PI has been at about 50%….hence these cos have been getting better valuations by the markets.

      Also, the M Cap of Alemic and PI is already more than 2500 Cr and they attract institutional investors too and hence getting them at low PE etc may not be possible until the earnings take a hit.

      Ayush

      • Salil

        Hi Ayush,

        Just to confirm that Alebmic and Shilpa are good buys even after current run ups?

        • Ayush

          Hi Salil,

          Please take your own call after going through the details and doing your homework. Buying and selling should be dependent on own understanding of stock story and investment horizon.

      • DeepakkumarPrasad

        Thanks Ayush

  • Kushal Dalal

    Wish you and your family very happy diwali….

  • dinesh jain

    Happy New Year…wat u say about Insecticid instead of Kaveri seed?

    • Ayush

      We don’t track Insecticide.

      • dinesh jain

        ok… thanks for ur reply…

  • Hardtoget

    happy & prosperous investing Diwali & year to you & family

  • bingo

    Hi Ayush, the screener gave me a warning while lookup up for “Sadbhav Engineering Limited” that “Company might be capitalizing the interest cost I tried to understand the impact of capitalizing interest cost but couldn’t understand the impact of the warning fully. Does it act as a warning to check if a promoter influenced the lender to agree to capitalize the interest repeatedly to cover up the inability to generate profits? Couldn’t this be found if the debt equity proportion over a long period gets out of balance? For companies in the BOT kind of projects, what would be a good ratio to look at? debt vs revenue over a long period?

    • Ayush

      It a indicator to check the borrowing cost being charged to the PL on the outstanding loans. At times, cos capitalize the interest cost to inflate nos….while at times its due to genuine reason – like the new expansion is under progress and the operations haven’t started…so one needs to check into the reason for lower cost and use his judgement.

      I haven’t tracked much BOT project cos, hence can’t comment.

      Ayush

  • roughlyright

    Why Alembic Pharma at 200/210 and not earlier ? From current price of 200/210, can it comfortably double in three years ? Thanks.

    • Ayush

      Hi RR,

      I have been in-frequent in doing blogpost as I have quite busy over last few months….otherwise, might had recommended earlier as we had initially bought in 130-140 range.

      Given the super Q2 results, 180-190 is also a good range to buy. I think the co may do 20-25% compounding for next 2-3 years.

      Ayush

      • roughlyright

        Thanks, Ayush. I expect 30% + growth in EPS for the next 3 years. I might be biased though as I am heavily invested.

  • roughlyright

    Why Alembic Pharma now at 200/210 & not earlier ? From CMP, can it comfortably double in three years ? Thanks.

  • Sreekanth

    Hi Ayush

    Do you track suven lifesciences?

    Also would like your views on Jet airways post the etihad deal..Do you forsee a leaner balance sheet and similarity to the United Spirits-Diageo deal?

    • Ayush

      Hi Sreekanth,

      Sorry, we are not tracking both the cos.

  • mallikarjun

    Hi Ayush
    Have put up some data about Virat Industries and AksharChem on valuepickr.. Can you please go through it and caution me about possible red flags.. They seem to be undervalued a lot..

    Regards
    mallikarjun

    • Ayush

      Hi,

      We had a look and though they look cheap but for longer term investing we need more clarity on long term growth and stability of current margins and earnings. We couldn’t get more insights on these cos.

      • mallikarjun

        thanku Ayush..

        Regards
        mallikarjun

  • DeepakkumarPrasad

    Hi Ayush,

    Do you track Borosil Glass works. http://www.screener.in/company/?q=502219
    It has got a good brand name and is familiar in upper middle class families who strives for quality . The financials also looks attractive.

    – Deepak

  • Ayush

    We don’t track the co but had a quick look but the earnings include other income hence may not be repeatable. So plz take care of that.

    • DeepakkumarPrasad

      thanks Ayush.

      One more question – Do you suggest accumulation of Alembic pharma. I had 2 choice either Shilpa or Alembic at 210+ I bought alembic and Shilpa strated touching new highs. 🙂

      – Deepak

  • Sid Jadon

    What about first leasing company of lndia ltd stock

    any views. is it intresting bet

    • Ayush

      Be careful on the same…as per recent reports some fraud seems to have happened in the co.

  • vivek turaga

    Hi Ayush, thanks for the Analysis of GRP…Would be Grateful if u can mail me AR’s from 2005-2009…mail id: [email protected]..If u have them…not able to find them anywhere.

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