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Wednesday 19 August 2015

LATEST UPDATE ON CIPLA Ltd: Hereunder given report of HSBC on CIPLA:

"HSBC CIPLA GEMs Super 15 – portfolio change Adding Cipla, removing SIPCHEM Adding Cipla (CIPLA IN, Buy, TP: INR795.0, CMP: INR703.2): New product launches in emerging markets along with certain product approvals in the UK and the US should drive earnings in the near term. We expect margins to improve on a y-o-y basis.

Respiratory franchise to double in next 4-5 years with higher growth in the US followed by EU and then EMs  Near-term gNexium traction will moderate but will be supported by few exclusive launches in FY17 Gseretide MDI inhaler approval in UK is a near-term catalyst. 

We have a Buy rating and fair value target price of INR795"
Stock Performance of Jindal PolyFilms Ltd and Rain Industries Ltd:

1. Jindal PolyFilms Ltd: When we planning to recommend this stock @ Rs 345, some of our friends in LEADING brokerage houses were advising us against it. Their rationale was that stock has already more than doubled in just 4 months from its recent low of Rs 169 in March 2015 and stock is also substantially up from 1 month low of Rs 273. However, we were convinced about further upside and future potential of the co. Hence, we decided to recommend. And result of our conviction is that JPFL has yesterday touched at new high of Rs 394.

2. Rain Industries Ltd: Stock had risen immediately upon our recommendation on the result day. However, yesterday stock came down below our recommended level. It has been mainly due to some institutional selling (sometimes DII/FIIs do not have patience, want to move out of slow-moving investments and convert to some hot ideas) and also bad market conditions. Here, we have strong conviction that stock will outperform the markets by a big big margin and should provide blow-out appreciation. Investors will liquidity may continue to add more

Tuesday 18 August 2015

Cipla Ltd: Technical view from a friend whose success ratio is amazingly high:

The trend is definitely up for Cipla though, in the short term, the share is undergoing a time-wise correction, with the price reversing from an important resistance level @ Rs.750. It is a common phenomena of price correcting after good results & vice-a-versa. I expect the share to trade in the price range of Rs.670-700 for about a week before it resumes/gains upward momentum. A close above Rs.750 will be the blow-out phase for the share and it can then zoom to Rs.850-900. Can't rule out 4 figure for the scrip by the time of Q2 results are out. A good medium term investment
(say,6-8 weeks).


Our take on CIPLA Ltd Rs 704/

Looking at huge volumes within few minutes of market opening, it appears that it was pre planned strategy of some bear cartel.  However, yesterday evening, MD of CIPLA in a TV interview told that Cipla sales should grow 20% in current year and margin should also improve 150 Bps. Co is also setting up new factory in Goa and open to acquistions in USA. Although contribution to profits from Nexium in coming quarters will be lower, yet Cipla is likely to post 71% growth in bottom line for FY16 with estimates Eps of Rs 25-27.

According to Kotak Securities, Cipla is their top pharma pick.

Jefferies has given price target of Rs 850 as Jefferies estimate Cipla earnings to grow 35% CAGR over next 3 years

Monday 17 August 2015

Updates on RAIN, CIPLA and Noble Explochem

1.RAIN INDUSTRIES LTD Rs 47/

                         
           

RIL has declared same results for Q2 as estimated by us.  Q1 PAT has jumped QoQ 71.70%.  H1 PAT stands higher by 32%. RIL has also announced interim dividend of Re 1 i.e. 50%. Co likely to declare similar dividend by year end.


For CY15, RIL can report Eps of Rs 14-16. Stock is trading at just 3.15 x CY15 Eeps. Amongst large-sized midcap stocks, RIL is the most undervalued stock. There are 3 big big triggers in the waiting. RAIN IS OUR TOP PICK in segment of midcap stocks. In midcap  segment, Rain should deliver highest appreciation in CY16. We recommend to invest large sums in Rain as your wealth should more than triple in next 12-18 months.


2. CIPLA Ltd:   Again we have proved right with our estimates for Q1 bang on target.

                               Q1/FY16

Sales                       3776

PAT                          651

Eps Rs                      8.10

Q1 PAT has risen 150%  QoQ basis, risen 120% YoY basis and higher by 42% even on Bloomberg estimates.  Such blow-out quarter was helped by a combination of Nexium (where profit margins reportedly in excess of

65%) and strong growth in base(25% yoy) which drove EBITDA margins upwards to 27% despite continued increase in R&D and staff costs. 


Pulmicort Respules will help sustain the growth momentum in 2HFY16. Investors will see seveeral levers for growth from FY17.


Looking at valuations of other pharma stocks  like Sun Pharma (Re 1 face value), Shasun (Eps Rs 7, cmp Rs 394, again Re 1 face value), Dr Reddy ( PE Ratio of 43) and even Cadilla/Lupin getting PERatio of 32-40, CIPLA appears underpriced.



We feel that CIPLA (unless there is huge institutional selling pressure) should cross 800 mark by August expiry. Stock appears good for long term perspective also



3. NOBLE EXPLOCHEM LTD  Many investors have expressed their doubts about various triggers mentioned by us ( VRS, preferential offer to be made to a Bse listed entity, coming hike in Promoter stake etc), We reiterate that we have not made any false statements and no exaggeration. We have made mention of certain triggers which are based upon DOCUMENTARY EVIDENCE. Investors will not find these info anywhere ( annual report or Management Discussion or in the results). Hence, these doubts should not prevent investors from buying Noble. Stock has come down due to large scale profit booking (Q1 results have nothing new but we had anticipated these type of results only bcoz co is yet to resume production). It provides a very good opportunity to accumulate Noble.

Friday 14 August 2015

DoW.Exclusive:  CIPLA Ltd ;

Cipla is set to announce BEST EVER quarterly performance today for Q1.

1. Cipla had reported PAT of Rs 260 crores for quarter ended March 2015

2. Co had reported PAT of Rs 294 crores for quarter ended June 2014

3. Bloomberg consensus for Q1 ended June 2015 is PAT of Rs 458 crores

As against these, Cipla today should report PAT of Rs 650 crores,beating all market estimates by big wide margin.

It means that Q1 profit rising 150% QoQ basis,  rising 120% QoQ basis and HIGHER by 42% over Bloomberg consensus.

With such excellent nos, Cipla scrip should rise significantly. If our estimates come accurate (how we proved correct in J Poly), stock of Cipla can be anywhere between Rs 810 to 840 by August expiry (provided markets do not slide during the period and remain stable). This derivative stock should provide HUGE appreciation to our followers
DoW.Exclusive:  RAIN INDUSTRIES LTD Rs 46/

Rain Industries Ltd, apart form 3 mn ton cement plant in India , is largest producer of CPC in the world and leader in CTP with plants spreads across S America, Europe and USA. Rain should announce best ever quarterly results today. We estimate Q2 PAT (co follows Dec as year ending for its financial) to rise WHOPPING 65% QoQ basis. Eps for Q2 alone should be Rs 4 (Rs 2 FV). Eps for CY15 should be Rs 14-15.

Co should also declare handsome Interiam dividend.  Within 2-3 weeks of Q2 results, scrip can rise 20-30%. However, we advise investors to
hold Rain for 6-18 months. Our price target Rs 150-170 in 15 months. 

There will be some big corporate action in coming months which should lead to rerating of the stock.

Thursday 13 August 2015

RESULT UPDATE ON JINDAL POLY FILMS LTD:



Jindal Poly Films Ltd has lived upto our expectations and has reported much better results even that our estimates.

Although sales have increased by 8% (volume increase must have been higher due to lower price/kg) but profit margins have literally zoomed. PAT has shot up by WHOPPING 118% to 107.28 crores. In fact Q1 PAT IS EQUIVALENT TO 70% PAT OF ENTIRE FY15. 

Q1 Eps is Rs 25.47. It gives annualised Eps of Rs 100.  However, to be on conservative side, JPFL has potential to deliver Standalone Eps of Rs 90 for FY16. Thus a large sized midcap stock and LEADER IN PACKAGING INDUSTRY is trading @ 4xFY16Eeps.

Further, THESE ARE STANDALONE nos.  JPFL derives around 4700 crores (twice as much as from domestic sales) from its European business. Thus, CONSOLIDATED Eps for FY16 should be more than Rs 140.

If Indian equity markets remain stable and do not crash, Jindal Poly Films Ltd has potential to be Rs 700 in 2-3 months. We feel that if industry prospects remain stable, then JPFL will be in 4 DIGITS in 2016

Genuine investors can buy more. Traders may succeed in selling JPFL next week @ Rs 420-460. Advise not to book profit on Friday 14th August as looking at these nos, JPFL should catch attention of big players of financial services and WILL BE RERATED



Recommended Before Results:

INSTANT BUY: Jindal Polyfilms Ltd Rs 345/:

With reference to our blog previous night, here we are unfolding our 1st stock idea which should provide fantastic appreciation in short term  but even at current levels, should provide multibagger
appreciation in 12-18 months.



JPFL is a leading producer of Polyester and BOPP films mainly used for the flexible packaging industry. Its manufacturing facility at Nasik is the world's single largest location factory for producing these plastic films. In Ocotber 2013, JPFL acquired BOPP films division of ExxonMobil and has emerged as the LARGEST producer of BOPP films in the world with a combined capacity of 4,45,000 TPA. Now, JPFL has give manufacturing locations-two in USA and three in Europe

For FY15 JPFL reported Eps of Rs 36,45 on standalone sales of 2504 crores. However, Consolidated sales stood at 7284 crores. PAT was 187 crores. In consolidated nos, JPFL had providede one-off for Rs 117 crores. But for same, Consolidated PAT would have been much higher  (around 260-270 crores)

Now JPFL is being recommended for investment as industry is doing well due to lower crude prices and JPFL is set report BEST EVER quarterly nos today and also FY16 will be best ever in its history.

As per our estimates (info), Standalone results could be as under:

   

Thus, JPFL's Q1 PAT should be HIGHER by around 170% QoQ basis and BEST EVER quarterly performance in co's history. With estimated Eps of 71.50 for FY16, stock is available at PE Ratio of just 4.80.  Being industry leader, stock deserves much much higher valuations.  Moreover, we are unable to estimate Consolidated nos (which co publishes only for full year,not on quarterly basis) but Consolidated PAT could be 400 Crore+  and Consolidated Eps could be Rs 95-100.

Downside from current levels may be very very low. But once Q1 results are announced and if same are as per our estimates, stock could race ahead to Rs 420-450 in few days.  Investors should not be surprised if stock is in 4 digits in 2016.

Full research report (considering proposed merger of Jindal Photo and Europe operations) may be released next week. However, this brief snapshot is being released in view expected bumper results for Q1

Wednesday 12 August 2015


Very Important for our valued followers/investors:

We shall be  doing 3 Breaking News . 

One Breaking News is expected around 11.00-12.00 hours on 13th August 2015 (co having Topline of around 2500 crores) and another 2 Breaking News (one frontline stock in derivatives and other in Cash group but with topline of aroundbillions dollars) around MidNight of 13th August or latest by 10.30am on 14th August. Hence, we advise all to stay tuned. 

All 3 stocks likely to provide OUTSTANDING wealth appreciation in few days (not even weeks)

Friday 7 August 2015

Breaking News/More Updates on Noble Explochem Ltd


1. Under BIFR scheme, promoters are infusing funds for allotment of Equity shares. Post infusion of funds/BIFR scheme implementation, promoter's stake will rise to 74.41%  from existng 16%. It indicates that promoters find deep value in the company (1200 acre land bank, plant to produce Explosives and plant to produce Petrochemical
product). 74.41% stake means enhanced confidence of investors in co's future. At present, some investors may be shying away from buying due to current low promoter stake.

2. NEL has already finalised VRS for its 15 year old entire workforce of 220 workers. When NEL is ready to resume production, it will make fresh recruitment of only 90 workers to run the plant. It will bring down wages cost by more than 60%. Firstly, work force will stand reduced to around 40%. Secondly, monthly wages of fresh recruits
should be lower than those employed for 15 years. Such a move will help NEL to expand its profit margins
Result Update on Associated Stone

Recommended @ Rs 80, stock had risen to Rs 126, providing more than 50% appreciation in less than 3 weeks. A Stone has reported much better financials for Q1/FY16:



Sales have increased by 45% to 42 crores. Despite big rise in interest cost (borrowings for financial Dubai acquisition), PAT has jumped by 140%.  Impact of Dubai mines will start accruing from Q2 onwards.

Co has announced stock split 5:1.

Investors may continue to hold. We estimate that under normal market conditions, stock can rise to Rs 175-225 in next 12-15 months.

In fact, A Stone will stand to benefit immensely if govt succeeds in implementing its initiatives of affordable housing and smart cities

Wednesday 5 August 2015

Special Preview/Bonus/Curtain-raiser for early/current investor-visitor of our newly set-up Blog:

SITASHREE FOOD PRODUCTS Ltd (Bse,Nse): SFPL  is new rising star in Indian FMCG segment. Current market cap of this profit making co (Cash Profit for FY15 Rs 12 crores) is just 5%xFY16Esales. Stock has potential to rise by 300% in 12-15 months. SFPL is marketing its products to majority of Indian/MNC FMCGs. Investors may buy big quantity. 

Full report next week. Advantage for early/regular bloggers

Stock performance Till 5th August

1. Noble Explochem Ltd : Subsequent to our recommendation @ 9.27, Stock at 17.23 has already appreciated by 85% and monthly gain at 230% is highest gainer at Bse. Stock is poised for much higher levels.Investors may buy more.

2. Kamadgiri Fashions Ltd : Subsequent to our recommendation @ 78,stock has gone up 40% in just 3 trading sessions. Stock has potential to touch 130-140 in coming week.

3. Associated Stone: Recommended @ 82, stock touch high of Rs 127 recording appreciation of 54%.

4. Gujarat Ambuja Exports Ltd: Recommended @ 47, stock was facing resistance to cross Rs 50. Stock today cross Rs 54 and closed @ 52. Scrip may cross Rs 60 next week and 4 month target Rs 90

5. Pressman Advertising Ltd  Recommended @ 40, stock is up 20%. Hold for long term for multibagger appreciation. Only listed co in advertising segment.

Saturday 1 August 2015

Kamadgiri Fashion Ltd Rs 78: Poised for Surge

RATIONALE FOR RECOMMENDATION;

KFL, engaged in production of textile and garments, is supplier to all major brands in India. Current market cap is less than 40 crores which is just 15% of its FY15 sales. Finally, Mr Kishore Biyani who is known for his business acumen to pick equity stakes in various firms at early stage and then exit in few years with multibagger appreciation holds 27.84% equity stake in KFL through one of his unlisted privately held companies. This equity tie-up has led to better business opportunities with Future Group as KFL supplies large quantity of garments to
CENTRAL, FBB  and PANTALOON.

Promoted by Goenka family, KFL is engaged in production of textile fabrics and garments. KFL has 3 plants in Umergaon and Tarapur. KFL's business can be divided mainly in 4 segments:

1. WEAVING: At its Umergaon plant, KFL has most modern weaving machines including Sulzer, Somet, Tsudocama from Switzerland and Japan. Company has its own advanced version of warping machines. KFL is producing Poly/Cotton, 100% Cotton, Linen, Poly/Viscose fabrics. KFL supplies grey fabric to leading brands of India including Raymond KFL produces around 95 lac mtr fabric per annum

2. OTC Brands:  KFL has been selling fabric under its own brands namely  TRUE VALUE AND TRUE LINEN.  True Value is amongst leading brands in Poly/Viscose segment. Introduced recently, True Linen is Linen fabric range which is capturing market share rapidly. Margins in OTC Brands are quite high

3. Apparels:  Spread over 2 lac s f at 5 plants in Tarapur, KFL has capacity to produce approx 4.60 million pieces of garments which includes 2.40 million shirts, 1.20 million trousers and 1 million denim pieces.  Company has CAD CAM technology imported from Gerber Germany and machines imported from global firms like Beisler, Strobel, Brother, Juki etc.  KFL has been supplying garments to various major brands which include:

FUTURE GROUP (RIG, UMM, Lee Cooper, Bare Denim, John Miller etc)
Raymond
Park Avenue
Blackberry
Spykar
Parx
Monte Carlo
Killer
John Players
Indigo Nation etc

In international market, KFL is supplying garments to brands like Next, Debenhams, Burton, River Island etc

4. UNIFORM;  Here, KFL is catering to uniform requirements of corporates and has prestigious clients like Future Group, Lilavati Hospital, Mexus Education, BCCI etc

FINANCIAL PERFORMANCE:

                              2013-14       2014-15
                              Rs/Cr           Rs/Cr

Sales                     253                260

Depreciation             3.43              3.49

PBT                         4.38             3.56

PAT                          2.92             2.17

Equity                       5.06            5.06

Reserves                                     21

EPS Rs                     5.78           4.30
--

KFL had performed extremely well for FY14 wherein its sales had grown by 25% to 253 crores and despite significantly higher provision for income tax, PAT  jumped 217% to 2.92 crores. EPS stood at Rs 5.78.
However, KFL suffered mild setback for FY15 wherein is PAT slipped to Rs 2.17 cores and Eps came down to Rs 4.29. However, KFL maintained dividend at Rs 1.50 per share and current market price is Cum-Dividend

Reason for lower nos in FY15 was bad Q3:

                        Q4/FY15         Q3/FY15

Sales                  75.38            51.10

Depreciation          0.82             0.86

PBT                    2.87            -2.03

PAT/Loss             1.95            -1.32

In Q3, KFL had done some inventory write-off (One time) which led to Loss of 2.03 crores. However, KFL reported very good nos in Q4 with PBT of 2.87 crores (turnaround of 4.90 crores at PBT level). Eps for Q4 alone stood at Rs 4. In fact PAT of Q4 ALONE IS JUST 10% LESS THAN PAT OF ENTIRE YEAR.

.

FUTURE OUTLOOK:

                                   2016-17         2015-16
                                   Rs/Cr             Rs/Cr

Sales                            330               290

Profit after Tax                7.50             6.50

Equity                           5.06               5.06

EPS Rs                        15                     13

KFL is strongly recommended for buying as:

1. Scrip is cum-dividend Rs 1.50.
2. Scrip is trading at 6xFY16E Eps
3. Scrip is available at 5.20xFY17E Eps
4. Finally, a very little known fact that Mr Kishor Biyani (promoter of Future Group) holds 27.84% stake in KFL through one of his unlisted firms. His brother is also on the Board of KFL. Although listed as non-promoter, but actually/for all practical purpose, Mr Kishor Biyani as good as co-promoter of KFL. It is highly highly unlikely that Mr Biyani will sell his stake of KFL. Mr Kishor Biyani is known for his business acumen to pick equity stakes in various companies at an early stage and take exit in few years with multibagger appreciation (e.g. BIBA).

Current market cap of KFL is less than 40 crores. Daily trading volumes are very low due to low price. Floating stock is not large as persons in textile industry know future potential of KFL and continue to hold the scrip.

In current market scenario where companies without any track-record and/or with negative Book Value/no dividend/even loss making are quoting at ridiculously high prices and even companies with average track-record are quoting at multiples of 20-50, KFL is still available
at:

A)  6xFY16Eeps
B)  5.20XFY17Eeps

Even if KFL gets reasonable PE Ratio of 12, its share price should DOUBLE based upon FY16 estimates.

Stock Performance of Associated Stone

Subsequent to our recommendation, Stock has risen from Rs 82 to Rs 115 in one week only i.e. rise of 40%. Investors may hold as good consolidation appears going on. Will not be surprised if stock surpasses our estimated price target and that too in much shorter span of time.

Stock Performance of Noble Explochem Ltd ( suggested at 9.27 )

Noble Explochem Ltd initially suggested at 9.27 levels few days back only. NEL continues upper circuit journey. In fact, NEL has been the best performer (if we exclude  operator-promoter nexus/operated closely held Penny stocks) for July at Bse. Stock has appreciated 176% in July 2015. We expect NEL to surge further in coming week. Delivery ratio ranging from 80% to 100% which indicates that stock is being accumulated by genuine investors.