We have discussed Avanti Feeds several times on our blog in past. The company has performed superbly over the last five years. The revenues have grown at a CAGR of 45%, and the net profits have grown to 30 crore in 2013 from a loss of 1 crore in 2010.
To get a better understanding about the company, a very detailed and in-depth management interview is available on valuepickr.com. The interview provides an insight about the industry, company and the prospects going forward. I would strongly recommend everyone to take out some time and read the whole interview (requires free login).
Some of the key highlights are: Continue reading Avanti Feeds: Management Q&A
“management’s indifference and shareholder negligence both worked on Warren’s behalf, for the fewer folks came to the show, the more valuable would be whatever knowledge he could wrest from the company.” – from The Snowball where WB talks on the importance of attending AGMs
There is a lot of fear in the markets and several stocks in the mid and small cap space are having a free fall. These are the great times to focus and research more on the companies to find undervalued gems.
Last month, we toured South India to attend a few AGMs. We visited Avanti Feeds, Shilpa Medicare and Swelect Energy. The meetings were good and the companies seem well placed. It is often concerning to watch a few shareholders holding nominal quantities and coming over for free gifts and snacks. Despite good arrangements and the good work by the management, these shareholders often sabotage the proceedings. We need to fix this, otherwise the promoters will never treat the minorities properly. Probably having a video conferencing of AGMs may help.
Brief updates from above meetings:
Avanti Feeds: We have discussed the company many times in past and the stock has performed well too. The industry continues to see high growth rates of 30%+ since the adoption of the new shrimp specie – Vannamei. The company is superbly placed in its sector (due to the support of TUF) and ranks among the top. The management seemed quite honest, hard working and conservative. They were one of the first to understand the potential of the Vannamei specie in India and took various steps to get it introduced. The company has grown from a turnover of just 100 Cr in 2009 to 650 Cr in 2013. Avanti seems well placed as the industry is expected to remain on a good growth path for the next few years. Continue reading Updates from quarterly results and AGMs
Markets have undergone a lot of correction (more visible if one considers the mid/small cap space), and though the economic indicators are not good and there is lot of uncertainty, but these are the times to plant the good ideas and make a strong portfolio for upcoming years.
For the last couple of years, most of the companies are grappling with the rising costs due to power, labour and inflation, and most of them are witnessing a slower growth and contraction in margins. Perhaps the fall in rupee is a way by which several export oriented companies will get some relief and would be able to regain the lost margins. But we should also remember that not all companies will be benefited. Due to a competition, much of the benefits would be taken away by the customers and hence we need to focus on high quality companies which have a pricing power and have done well in past. Most of the companies in our portfolio have been export oriented (and low on debt). We feel that the following may do quite well – Avanti Feeds, Oriental Carbon, Poly Medicure, MPS Ltd, Acceleya Solutions, GRP, Orbit Exports etc.
We discussed a couple of new ideas in our last post; here are more thoughts on them: Continue reading NMDC and other updates
“Market rewards you as per your perception about the market. If you treat it as a gambling den, it will prove a gamble for you” – Vijay Kedia
The results season is here and we are again busy tracking them. For those who still don’t use the alert feature in the Screener, we would highly recommend you to set an email alert for the Bulls Cartel Screen and the Growth Stocks screen (select alerts for the “new results”) to keep an easy tap of the results (that is what we do along with adding stocks to the watchlists to also get the updates about them).
On the performance side, most of the results look good and here is a brief review on the stocks we have discussed so far:
Avanti Feeds – The company has posted a fantastic Q4 result. This is the fourth year since the industry has changed and started doing well, and Avanti is delivering a super growth. Here is a snapshot: Continue reading Updates on latest quarterly results [Q4FY13]
Can Fin Homes (BSE: 511196, NSE: CANFINHOME) is a housing finance company promoted by Canara Bank (having 42% stake). Housing Finance has been a very rewarding sector in past (look at HDFC, LIC Housing and GRUH Finance). Thus the discussion on Can Fin caught our immediate attention.
Can Fin focuses on affordable individual home loans and is concentrated in the southern India. Until 2011, the company had been growing at a marginal pace of around 7%. The Silver Jubilee year and the change in management seems to have brought about a new enthusiasm though. Since then the business has been growing at a rapid pace of about 30% p.a.
|| 23.47 crore
|Gross NPA %
Looking at the support by the government towards cheaper financing for affordable housing, there seems to be good growth opportunity ahead. Continue reading Can Fin Homes & other updates
BSE: 523323 | NSE: KOVAI
CMP: Rs.165 | Market Cap: 175 Cr | PE ratio: 9.50 | BV: 71
Screener link | Company Website
Kovai Medical Centre and Hospital (KMCH) is a 691 bed multi-disciplinary super speciality hospital located in Coimbatore. The company has two satellite centres at Ramnagar, Coimbatore (10 beds) and Erode (65 beds). In addition the company through its subsidiary “Idhayam Hospital” operates another speciality hospital (58 beds) in Erode. Coimbatore has emerged as one of the major medical centre in South and is attracting a lot of medical tourism.
KMCH had undertaken a major capex of Rs 269 Cr for increasing the number of beds from 320 in 2008 to 691 beds, completed in phases till Aug, 2012. The company has been reporting very good results in recent quarters. Healthcare industry is an evergreen industry and due to health insurance and medical tourism, the sector should see consistent growth. Continue reading Kovai Medical Centre & Hospital and other updates
BSE: 532796 | NSE: LUMAXTECH
It is usually rare to find a good company in the auto-ancillary business. The reason is that they are capital intensive and usually the margins are low and hence they provide low return on capital. However, there are always some companies which do much better than the indutry. Lumax Auto Tech seems to be one such company. The company has had a an excellent growth in past along with good profitability and strong balance sheet. Continue reading Lumax Auto Technologies
The third quarter of the financial year 2013 has generally been very weak. The common problem has been the demand slowdown and the pressure on margins due to inflation and competition. In most of the cases results have been below expectations. On the positive side, these challenging times are the best times to re-structure your portfolio. One gets to accumulate high quality ideas at low valuations, (often) due to temporary problems. The important thing is to maintain liquidity and discipline.
Starting off with the good results:
Ajanta Pharma: The company posted stellar results and the stock witnessed a strong activity and appreciation. We discussed about the company here.
The company has posted a 37% growth in the topline from 164 Cr to 225 Cr and 75% growth in the net profits from 18.50 Cr to 32.57 Cr. The results are remarkable as the growth in profits has persisted despite higher taxation. Usually 4th quarter is the best quarter for the company, hence the company may be able to repeat similar performance in Q4FY13 too. We feel investors can continue to hold and try to buy on sharp declines, if any. Continue reading Update on Quarterly Results
We earlier talked about some developing ideas for 2013. This post is to discuss them in more detail.
Caplin Point (BSE: 524742)
This seems to be a very interesting pharma company at an early growth stage. We have been tracking it for some years but it really caught our interest when we received its FY12 annual report few months back. Few snapshots:
The interesting thing was that the company’s topline had grown by almost 35% in 2012, and yet the efficiency improved. The inventory and debtors remained at very low levels, debt reduced and the cash on balance sheet increased. The company has been getting efficient over the last few years: Continue reading Caplin Point & Poddar Pigments
Hello Friends, we wish you and your family a very Happy & Prosperous New Year!
2012 has been a good year for our financial markets with the sensex gaining over 25% this year and beating all other asset classes. The best thing was that the mid caps (the area we focus on) outperformed the broader markets and the high quality stocks were the major wealth creators. Those feeling that they might have missed the bus and it is late, have a look at this stat – markets are still 4% lower than they were 5 years back. It may be just a start of a long term bull market.
We went through the timeline and compiled the list of the best articles, learning and experiences of 2012. (They are not in any particular order):
New Finance Blogs:
In 2012, we had some very interesting new finance blogs; we would love to congratulate them. We expect to see more new investing blogs in 2013.
- Alpha Ideas – Nitin shares the best of the finance articles, videos and reports – everyday
- Safal Niveshak – Vishal simplifies the teachings of the investing geniuses and makes them understandable in Indian market’s context
- Value Investing by Dhwanil – Discusses value investing stock ideas with a clear thought process
- Safir’s Picks – Safir is an opportunist investor, always with many interesting and winning ideas in his pockets (do follow him on Twitter too)
Best Company Visits:
- Astral Poly Technik – We met with the dealers and plumbers in Ahemdabad to do groundwork and were amazed by their feedback for a strong conviction
- GRP – We were amazed by sincerity and knowledge of the management. Looking forward to attend AGM of 2013 too
- Mayur Uniquoters – The grip and vision of the management on the business helped us in increasing the conviction
Our Best performers during the Year (with percentage change):
- Astral Poly Technik (171%) – The growing brand presence and stock discovery led to high returns
- Atul Auto (142%) – Company went pan-India from its home market of Gujrat
- Liberty Phosphate (134%) – Favorable government policies for SSP sector led to mis-pricing opportunity
- Mayur Uniquoters (130%) – Fantastic financial ratios along with growth led to a good re-rating
- Apcotex (101%) – Earlier part of the Asian Paints group, this company did well on growth and dividends
The close runner-ups were up 100% each: Poly Medicure, Indag and BKT
Market learning of 2012:
Earlier we had a lot of focus on undervaluation while looking at a stock ideas. Now we have also started giving more weightage to the business quality and the scale of opportunity available. The three of the worst performing ideas were: Piccadily Agro, Faccor Alloys & BNK Capital
The common thing among all of them was that though they were good on ratios temporarily, but they had a poor business model or management.
Developing ideas for 2013:
During the year, we experimented with lots of ideas and things. We are highly excited about the developments on Screener and the feedback of users. Our favorite features of Screener are:
- Export to Excel – Screener is the first website in the world to provide such a customization functionality
- Alerts for Screens – We love to set the email alerts for the favorite screens in the Screener to keep an easy track of the latest results
Plans for 2013:
We are expecting the credit rate-cuts in early 2013 and are optimistic about the markets ahead. We plan to create more new tools to make investing happier and easier. We hope to discover more new stocks ideas. And above all, we look forward to your comments and support!
Wish you a very happy and prosperous new year ahead.