Usually most of our discussed stocks are mid-caps whose merits are generally unknown to the masses. Whenever there is coverage of these stocks by Media…they get due attention and often do well. Some of our stocks got wide coverage in last few days:
1. Asian Hotels:
Will Asian Hotels’ shareholders gain after its demerger into three separate companies? Recently, the company split into three different entities — Asian Hotels (North), Asian Hotels (West) and the Asian Hotels (East). Right now, only Asian Hotels (North) is being traded on stock exchanges, and going by its current market capitalisation, the gains to shareholders look uncertain. The other companies are awaiting regulatory approvals to list next month
http://economictimes.indiatimes.com/articleshow/5829815.cms?frm=mailtofriend
We had covered the demerger story at our blog here and covered the demerger impact here. One of the demerged company – Asian Hotels (N) has already got listed and given better than expected returns.
Our View: The above economic times article is very well highlighting the reasons why this demerger is creating value. We do expect the other to companies to list well and provide better gains than the calculations done at our blog earlier.
2. Shilpa Medicare:
The bulls have taken fancy to the Shilpa Medicare — a small-sized pharma company. Its price made a record intra-day high of Rs 362.50 on Tuesday after rising by more than eight times over the past one year. News of financial institutions buying a small stake in the company along with a dilution by the promoters has fuelled the recent rally in the stock.
We have covered Shilpa Medicare several times at our blog. Initially it was covered at Rs 80 here.
Our View: As the article points out – the stock is not cheap, yes we agree but we also believe that good stocks don’t trade cheap 🙂 It would be tough to find a company having leadership position in Oncology segment, having operating margins of 30%+, growing at 45% CAGR available at less than 20 times PE. Infact if one takes a close look at last two quarterly nos of the company, the stock is trading at just 15-16 times annualised earnings.
Also if one increases the outlook to more than 1-2 years, the company has a good future. They are putting up new capacities and plan to double their turnover in 2 years.
3. Jaihind Projects:
We had first covered this company at our blog at about Rs 90 here. The stock has done exceeding well and has created a new all time high of 265 today. The company has been getting coverage on various business channels and people our discovering the underlying story.
4. Balkrishna Industries (Update):
Balkrishna Industries Limited (BKT) specialises in the production of tyres for off-road applications, including agriculture, industry & construction, earthmoving equipment, ATV and lawn & garden vehicles. http://www.tyrepress.com/News/77/19257.html
Our View: This is one company which has a fantastic track record and aims to be a 1 billion dollar company by 2015, which is quite possible looking at the business model of this company. In long run, the stock can give superb returns if they continue to grow as per their plans.
We believe that for better wealth creation investors should keep looking for undervalued and growth oriented stocks and invest in them at an early stage. This is the place where maximum wealth is created. We have been continuously working on this area. Would request the readers to keep exchanging ideas and keep spreading the logics to other investors.
Sir,
I want to invest Rs. 5000/- . Which one will be the best bet among the stocks discussed by you?
Please guide.
Sir,
I want to invest Rs. 5000/- . Which one will be the best bet among the stocks discussed by you?
Please guide.
Dear Madhu,
I’m providing the logics and analysis here. You need to do your homework yourself.
Regards,
Dear Madhu,
I’m providing the logics and analysis here. You need to do your homework yourself.
Regards,
Hi Ayush,
Wonderful picks and nice to know that you are sitting on hefty profits. I am very impressed by Balakrishna and hold it and plan to buy more on dips. I have a question on Asian hotels – Do we still have a chance to get in and take part in this demerger?? Has Asian Hotels delisted??
Hi Ayush,
Wonderful picks and nice to know that you are sitting on hefty profits. I am very impressed by Balakrishna and hold it and plan to buy more on dips. I have a question on Asian hotels – Do we still have a chance to get in and take part in this demerger?? Has Asian Hotels delisted??
Dear Siddharth,
Yup, Balkrishna is an excellent company with a bright future.
The demerger opportunity is over.
Regards,
Dear Siddharth,
Yup, Balkrishna is an excellent company with a bright future.
The demerger opportunity is over.
Regards,
Hey guys currently u can buy PSL …Its really d best stock at current valuation …Can touch 300 within six months..
Hey guys currently u can buy PSL …Its really d best stock at current valuation …Can touch 300 within six months..
Dear Vaibhav,
We have created a platform to share fundamental views. Will appreciate if logics are given along with recommendations.
Regards,
Dear Vaibhav,
We have created a platform to share fundamental views. Will appreciate if logics are given along with recommendations.
Regards,
I am glad you brought it up. PSL is undervalued. eps of around Rs 20 and ceps around Rs 33 for 2008-09. 2009-10 is expected to be more or less similar.
CMP – 150 i.e. P/E of around 5.
the company had an excellent 2008-09 and 2009-10 will show a marginally lower performance.
It is in a hot sector. (Warren Buffet would advise you to stay away – if it was not so undervalued) oil and gas investment s are picking up and there is lot of demand for pipelines.
GAIl and Reliance Gas Transportation Limited are laying 9 new cross country pipelines. Petroleum and Natural Gas Regulatory Board has invited bids for three more pipelines, with another expected soon.
PNGRB estimates that Rs 60,000 crores will be invested in major pipelines in the next 3 years (1,000 km of pipelines will cost about 5000-6000 crore). and Few companies are in a position to benefit from this.
India is a major pipe manufacturing hub in the world.
Besides US and Japan. There is also huge demand expected from abroad especially US and Russia where many oil and gas and water pipelines are old and replacement is overdue.
Gujarat Welspun Stal Rohren, PSL, Man industries are likely to be the major beneficiaries and PSL is the most undervalued.
whether the global increase in demand materializes or not the Indian investments in pipelines is happening. Therefore ur pick Jai hind projects was a good one – (sorry i missed it – dint find enough time to research). GAIL and Reliance are implementing their projects and funds is not a problem. Besides for the first time in the country there is a situation of surplus gas.
Reliance can produce 80 mmscmd of gas from KG basin but it is only producing 63 mmscmd. becuase it cannot sell gas until more customers are connected via new pipelines.
Pretty much every section of the industry related to gas is in waiting mode. City gas distribution, new power plants, fertliser plants, other industries all benefit from more pipelines. GAIL and Reliance have the financial incentive to lay more pipelines. And all this is only about gas pipelines
PSL has been a major supplier to GAIL..
a major concern is that the most important input is steel. A change in steel prices has a major impact on the overall cost. dont know how much of the cost it can pass on etc..(the demand for pipelines will still remain even if the price of pipes increases, because the pipeline operators will be allowed to charge higher transmission tariff through the pipelines)
Requesting comments
Thanks
I am glad you brought it up. PSL is undervalued. eps of around Rs 20 and ceps around Rs 33 for 2008-09. 2009-10 is expected to be more or less similar.
CMP – 150 i.e. P/E of around 5.
the company had an excellent 2008-09 and 2009-10 will show a marginally lower performance.
It is in a hot sector. (Warren Buffet would advise you to stay away – if it was not so undervalued) oil and gas investment s are picking up and there is lot of demand for pipelines.
GAIl and Reliance Gas Transportation Limited are laying 9 new cross country pipelines. Petroleum and Natural Gas Regulatory Board has invited bids for three more pipelines, with another expected soon.
PNGRB estimates that Rs 60,000 crores will be invested in major pipelines in the next 3 years (1,000 km of pipelines will cost about 5000-6000 crore). and Few companies are in a position to benefit from this.
India is a major pipe manufacturing hub in the world.
Besides US and Japan. There is also huge demand expected from abroad especially US and Russia where many oil and gas and water pipelines are old and replacement is overdue.
Gujarat Welspun Stal Rohren, PSL, Man industries are likely to be the major beneficiaries and PSL is the most undervalued.
whether the global increase in demand materializes or not the Indian investments in pipelines is happening. Therefore ur pick Jai hind projects was a good one – (sorry i missed it – dint find enough time to research). GAIL and Reliance are implementing their projects and funds is not a problem. Besides for the first time in the country there is a situation of surplus gas.
Reliance can produce 80 mmscmd of gas from KG basin but it is only producing 63 mmscmd. becuase it cannot sell gas until more customers are connected via new pipelines.
Pretty much every section of the industry related to gas is in waiting mode. City gas distribution, new power plants, fertliser plants, other industries all benefit from more pipelines. GAIL and Reliance have the financial incentive to lay more pipelines. And all this is only about gas pipelines
PSL has been a major supplier to GAIL..
a major concern is that the most important input is steel. A change in steel prices has a major impact on the overall cost. dont know how much of the cost it can pass on etc..(the demand for pipelines will still remain even if the price of pipes increases, because the pipeline operators will be allowed to charge higher transmission tariff through the pipelines)
Requesting comments
Thanks
Hi
Another stock that deserves your attention is ICSA India..which is high on my list.
Hi
Another stock that deserves your attention is ICSA India..which is high on my list.
Hi,
ICSA India has been on my radar for long (when in was Rs. 18 with FV 10). The below are the few concerns today:
1. Debt
2. Promoters holding, Equity dilution and Pledged shares
3. Shrinking Margins due to increase in revenues from infra segment
4. Pace of growth in Embedded space has slowed down drastically. This is a high margin business.
5. Charts look extremely weak.
Regards,
MM
Hi,
ICSA India has been on my radar for long (when in was Rs. 18 with FV 10). The below are the few concerns today:
1. Debt
2. Promoters holding, Equity dilution and Pledged shares
3. Shrinking Margins due to increase in revenues from infra segment
4. Pace of growth in Embedded space has slowed down drastically. This is a high margin business.
5. Charts look extremely weak.
Regards,
MM
I agree that there is a huge opportunity for this sector.
I preferred to go for Jaihind as compared to PSL caus:
1. There are various players in pipe manufacturing
2. All of them have been expanding capacities aggressively
3. It quite a commodity sector.
Still I will try to go through PSL again and revert if needed.
Regards,
I think we need to look beyond just numbers. Look at the quality of earnings. I have been following ICSA for long (had when it was in double digits 🙂 ) but I feel the quality of earning is not good.
Regards,
I completely agree. Also the debt is increasing despite regular dilutions, cash flows are negative etc.
Regards,
Hi
Im a little confused here.. are Ayush and ayushmit two different people two different people..
Jaihind projects is definitely a better catch.. but it has run up quite a bit and PSL is undervalued based on present performance and future performance wont be any worse even if it doesnt get much better. Though in all likely hood pipe manufacturers are set to do better.
Hi,
We have revamped the comments system at our blog and hence I have created a new id – ayushmit to post comments.
Regards,
Ayush