Are there any value picks in this market? Yes, I believe there are a few options like – Jocil. Most of us would be hearing this name for the first time 🙂
The company is a subsidiary of Andhra Sugars (55.02% stake) and is listed only on NSE. The company specializes in manufacturing of Stearic Acid Flakes, Fatty Acids, Toilet Soap, Soap Noodles and Refined Glycerine. The company has been doing contract manufacturing of toilet soaps for leading FMCG brands such as – HUL ( Liril, Lifeboy etc), ITC (Vivel, Superia etc), Marico ( Manjal, Jasmine etc), Johnson & Johnson (Savlon) etc.
Very strong financials:
- Jocil has been growing at a CAGR of 51% for last 3 years and a CAGR of 25% for last 5 years, yet it is available at a P/BV ratio of just 1.25, TTM PE of just 6.
- It is a debt free company. Has excess cash of 25 Cr on Balance Sheet (as of 31st March 2009)
- Has limited investment in inventory and debtors. Hence the business is not working capital intensive.
- Has a track record of excellent dividend payout ratio. (Payout ratio has been around 35% for last two years)
So at CMP of 265, we are getting an FMCG related company at a M Cap of about 115 Cr having atleast 25 Cr as cash on Balance Sheet, turnover of approx 300 Cr, Operating profit of approx 35 Cr and a Net Profit of 21 Cr. Isn’t it a value pick?
Other trigger could be – If the company maintains the div payout ratio of even 30%, it means a 150% dividend this year :):)
Company’s website: http://www.jocil.in