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Thursday 30 July 2015

LATEST UPDATE/Breaking News on Noble Explochem Ltd

Apart from Installed capacity of 25,000 toness, NEL also has a Petrochemical plant for producing 10,000 tonnes of a petrochem product named "2EHN" which is also known as Cetane improver and is used in diesel production for improving fuel quality. IndianOil Corpn, Essar Oil, RIL, HPCL, BPCL are customers for 2EHN.

Wednesday 29 July 2015

GUJARAT AMBUJA EXPORTS LIMITED Rs 47

This Ahmedabad based co with diversified product portfolio  of MAIZE STARCH/DERIVATIVES, SOYA PROCESSING, COTTON YARN, WIND POWER has reported Q1 results:


                             Q1/FY16     Q4/FY15       Q1/FY15     FY15

Net Sales                  608            614             582           2524

Profit Before Tax       37.47         10.66          40.76           97.76

Profit After Tax         24.85          20.05          29.75          84.17

EPS Rs 2 FV            1.80             1.45          2.15             6.08

YoY basis, GAEL has reported small decline in its Eps from Rs 2.15 to Rs 1.80., However, co's performance on QoQ basis has witnessed huge improvement. In Q4/FY15, its PBT was 10.66 crores and PAT had increased to 20.05 crores due to MAT credit. Thus, at PBT level, co's profit increased by whoppping 265%. 

Now Breaking News: Due to recent fall in corn prices, company is expecting sharp flare up in its profit margins in Maize Starch business in coming quarters. Co derives nearly 1000 crore worth sales from Maize Starch division. On a rough estimate, due to large expansion in profit margins in Maize Starch division , Q2 PAT should be in the range of 45 crores which means approx 80% jump QoQ basis. In fact, H2 may also witness margins similar to Q2. Thus, GAEL might report PAT of 150 to 160 crores for FY16.Stock price can double in 2016 in stable market conditions

Tuesday 28 July 2015

Underpriced Mining Scrip: Associated Stone

ASSOCIATED STONE INDUSTRIES (KOTAH) LIMITED ( CMP 82 )

Rajasthan Based Associated Stone Industries (ASI) is the large producer of Kotah Stones in India. ASI has its own mines equipped with the most modern mining equipments, diamond cuttig tools etc producing widest variety of Natural Stones. ASI is producing 2 types of Kota Stones i.e. Blue Kota Stones and Brown Kota Stones.  Apart from Kota stones, ASI is also producing 4 varieities of Sand Stones i.e Kandla Sandstone, Buff Sandstone, Rajgreen Sandstone and White Sand Stones.

ASI in fact owns THE LARGEST QUARRY IN THE WORLD WHICH IS SPREAD OVER 10 square kilometres and produces annually around 15 crores s f of Kota stones

Scrip is recommended for investment as market cap of ASI is just 115 crores, trading at 6.25xFY15 EPS. Book Value is Rs 78/

FINANCIAL PERFORMANCE:

                              Q U A R T E R  E N D E D    Y/ENDED
                              31.03.2015         31.12.2014      31.03.2015
                              Rs/Cr                 Rs/Cr             Rs/Cr

Sales                      73.45                 39.16                209

Depreciation             1.57                    1.96                6.43

Finance Cost             3.26                    1.12              8.22

Profit before Tax        19.18                 12.10             31.43

Profit After Tax          10.96                 8.34               18.41

Equity                       6.63                    6.63              6.63

EPS Rs                    8.27                   6.29              13.90


Promoter                                                                70.40%

Now Associated Stone is poised for huge growth as company has acquired a mine in UAE with total investment of Rs 110 crores. This mine has start production in June 2015. When fully operational, UAE operations can add Rs 300-350 cr per annum to its topline and more than proportionate rise in profit margins


FUTURE OUTLOOK:

                                   2015-16
                                     Rs/Cr

Sales                            270

Profit after Tax                 24

Equity                            6.63

Eps Rs                            18



In current market scenario, ASI seems highly underpriced considering that:

1. ASI mines/quarries are spread over 10 square kilometres. These are the largest quarries in the world.

2.Scrip is trading at 6.25xFY15 Eps

3. Scrip is available at 4.90xFY16E Eps



Promoter stake is quite high at 70.40%

Even if ASI gets modest PE Ratio of 8, its share price should be Rs 144 based upon expected Eps for FY16. 

Monday 27 July 2015

PRESSMAN ADVERTISING LTD: Only for Long Term Investors with patience

Listed at Bse, Nse, Pressman is the only advertising co listed at stock exchanges. And this is amongst very very few ad companies which have not sold out to Global ad giants. Promoted by Suchanti family, Pressman is amongst the oldest Indian ad companies .

Pressman has been reporting consistent profits with excellent profit margins. Decent dividend payout. Moreover co is in biz where big capex is not required to ramp up the business. AND, profit margins increase on increased biz. Company already has excellent ROE, ROCE etc. 

There is no immediate trigger for share price to shoot up. But every investor should hold this scrip in his portfolio. It is a CONCEPT stock, available at very small market cap. 

once it catches attention of some big HNIs, or comes on radar of brokerage houses, share price can be on fire. Scrip in normal course can double in 9-12 months. If scrip develops fancy amongst investors and brokers, scrip can even triple/quadruple in 24-30 months

A GREAT VALUE buy for GENUINE INVESTORS

Saturday 25 July 2015

NOBLE EXPLOCHEM Ltd: Low Risk High Reward proposition


Nagpur based Noble Explochem Ltd is in business of explosives. However, at present, production not going on. Production is shut since last 4 years. Co had fallen into losses. Co has submitted to BIFR rehabilitation package seeking some debt relief/restructuring. 

Current market cap of co is 18 crores. At present, explosive industry enjoys huge valuations in equity market (see price of Solar Industries, Premier Explosives etc). Once, rehabilitation package of Noble is approved, co can resume production and it is estimates that co will start making profit from day one.

Although scrip has already risen sharply in recent days (just come out of call auction system), still investors can buy at current price.

If its rehabilitation package is not approved (although it is very very unlikely as co already declared sick by BIFR) and production starts, stock can give MULTIPLE returns. Depends on how fast co ramps/increases production which , in turn, will depend on availability of working capital. If Noble can operate at 100% capacity, its share price can be Rs 200 in 3 years.
Worst scenario: Co fails to start production, share price can dip by
20-30% from current levels. Its debt is not high. Despite stoppage of
production, current losses are quite reasonable and not huge.