My friends who have very good understanding of stock market and Chennai companies advised me not to enter the counter, when I wanted to buy sales impressed by their product portolio. Please do more due diligence.
Posts in category Value Pickr
Profit lies where noone is watching: some turnaround plays (18-10-2015)
HELLO, TODAY I WANT TO DISCUSS SOME STOCKS THAT ARE COMPLETELY AVOIDED BY ALL BUT THEY ARE GOOD TURNAROUND PLAYS.
POWER SECTOR
WE ALL KNOW ABOUT THE PROBLEMS BUT THERE ARE SOME HIDDEN GEMS.
RATTANINDIA POWER
BY DEC,15 WILL HAVE 2700 Mw CAPACITY. PUTTING HUGE LOSSES SINCE LAST FEW QUARTERS BECAUSE AMRAVATI PLANT COMMISIONING IN Q4FY15 BUT RECIEVED COAL BY TRAIN IN LAST DAYS OF PREVIOUS QUATERS.
HAVE GOOD PPA WITH MAHGENCO AND FSA WITH CIL. IT ALSO GOT RS 1.55 AS COMPENSATORY TRAFFIF FOR IMPORTED COAL.
LIKELY TO BE PROFITABLE IN 1-2 QUARTERS.
XPANSION IS NOT A ISSUE BECAUSE IT HAS LAND AND CLEARANCES TO DOUBLE THE CAPACITY TO 5400Mw.
KSK ENERGY VENTURES
KSK HAS THE INDUSTRY MOST ENVIABLE PPAs OF MORE THAN Rs 5 WITH MOST GENCOs FOR ITS MAHANADI PLANT. WILL BE PROFITABLE IN 1 YEAR. ALSO ITS WARDHA POWER PLANT OPEN ACCESS ISSUE IS LIKELY TO BE SOLVED BY 2016E
IT WILL BE ONE OF THE LARGEST POWER PRODUCERS IN THE COUNTRY.
RPOWER: SENSIBLE PRODUCER
MOST OF THE CAPEX IS OVER.
HAS THREE MAJOR PLANTS. ROSA(1200 Mw) AND BUTIBORI(600 Mw) HAVE COST PLUS PPA AND SASAN IS A INTEGRATED PLANT. CONTINUOUSLY PROFITABLE. ALSO LEFT 2 UMPP DUE TO LOW PROFITABILITY.
SAMALKOT PLANT IS THE BIGGEST DRAG AS 8000Cr EQUIPMENTS ARE LYING IDEAL AND THAT IS ALL QUITY. NOW THESE EQUIPMENTS WILL B SHIFTED O BNGLADESH FOR A NEW POWER PLANTS.
GOOD PLAY FOR 1-2 YEARS AS TURNAROUND IS NEAR.
REALTY SECTOR
ANANT RAJ INDUSTRIES- MINI DLF
DELHI/NCR FOCUSED PLAYER HAS ONE OF THE LOWEST GEARING OF 0.2. ALSO HAVE THE RENT GENERATING PROPERTIES THAT CURRENTLY GNERATE Rs 100 Cr RENT BUT AT PEAK OCCUPANCY WILL LIKELY TO GENERATE Rs 275 Cr RENT.
ALSO MANESAR SEZ HAS A OCCUPANCY OF JUST 40% THAT IS SEENG RAPID DEVELOPEMENT CONSIDERING THAT GURGAON HAS TURNED EXPENSIVE.
HAS Rs1000 CR DEBT BUT HAS 500 Acre PRIME LAND IN DELHI THIS INCLUDE A 2 ACRE PLOT ON BHAGWN DAS ROAD WORTH 1000 crore AND 2 Acre IN HAUZ KHAS WORTH 800 Cr.ALSO A 131 Acre PROJECT IN GURGAON IS CURRENTLY UNDERWAY.
DB REALTY: MINI OBERIO REALTY
IN NEWS DUE TO 2G CASE.
HAS LOWEST DEBT OF 362 Cr. PROJECTS AT MAHALAKSHMI, MARINA AND BKC AR CURRENTLY UNDERWAY. MAHALAKSHMI PROJECT IS ALONE WORTH 7000CR AT 50% DISCOUNT TO CURRENT PRICE. IT ALSO HAVE 1000cr BOOKING AMOUNT WITH IT. CAN GIVE HANDSOME RETURNS AS THE MARKET TURN AROUND. IT HAS ALSO RECIEVED ALL THE NECESSARY CLEARANCES AND A FCA INCREASE.
REFINING AND PETROCHEMICALS
MRPL: MINI RIL
MRPL IS 71% OWNED BY ONGC. LATEST EXPANSION IS COMPLETE INCREASING ITS CAPACITY TO 3lbpd OR 15 Mtpa. THSI INCREASE COMPLETITY OF REFINERY TO 9.8 ALSO A PROPLYLENE UNIT IS ADDED.
RECENTLY ONGC APPROVED MERGER OF OMPL UNIT WITH IT THAT IS A PETROCHEMICAL UNIT THUS MAKING IT A INTEGRATED REFINER.
FUTURE LOOKS GOOD AND IT IS AVAILABLE FOR A CHEAP PRICES. ALSO KOCHI MANGALORE PIPELINE IS UNDERWAY THAT WILL REDUCE RAW MATERIAL COSTS.
GNFC
ONE OF THE MOST PROFITABLE AND CONSISTENT CHMICAL PRODUCER. commisioned a tdi plant in q2 fy14. but in december 14 there a major fire. THEN DUE TO THIS THE DAHEJ PLANT POST LOSSES OF MORE THAN 800Cr INCLUDING 330Cr WRITEOFF. BUT KNOW IT IS BOUGHT BACK ONSTREAM IN JANUARY 2015. AND ITS PERFORMANCE IS ALSO INCREASED.
CAN BE A MULTIBEGGR.
VEIWS ARE INVITED
Cafe Coffee Day – Will you Date? (17-10-2015)
Nope. Political connections are useful in getting loans, getting loans written off, getting tenders, cutting red tape, buying land for expansion, the list is endless.
Cafe Coffee Day – Will you Date? (17-10-2015)
You are wrong here. Political connections are red flags one should be cautious about. One needs to be sure about how they have created value in the past and what is the gameplan for the future. Some point of time they WILL face adverse political situation and work against value creation. Tell me one politically connected enterprise among consumer businesses which has consistently created value?
Oriental Carbon and Chemicals Ltd (17-10-2015)
Observations
Every year in annual report company have mentioned the total amount MT's of insoluble sulphur sold, however I find it very surprising in FY15 annual report this figure was not mentioned. Since revenue from insoluble sulphur for FY15 being very near to FY14, the quantity(MT sold) will be nearby FY14 quantity sold which was 19224MT.
Assuming 11000MT new capacity being fully operational by FY 2019 we get new capacity of approx 30000MT which is 11-12% CAGR growth. And also not to forget they will have some debt by that time too. The ROA for last 3 years have been around 12% so the returns on incremental capacity seems decent but not great. At this point of time (11 PE). I see less margin of safety for new allocation. Will add if price goes below 430. Positives I see are company is able to generate good cash flows and management seems to be doing what they talk from Mundra Plant capacity addition experience.
Disc : Invested. Will add if there is correction from CMP of 515
INDIGO ready for takeoff :airplane: (17-10-2015)
Hi @BALASAHEB: Thanks for starting the thread. Based on the little info I have read:
Indigo gave out a hefty interim dividend. Is it to strip the money off the company before going IPO? Management integrity in question (there will soon be minority shareholders).
It is doing way better on most metrics. But load factor of the other airlines being higher might be a tell-tale sign that the others might take a hit on profitability to garner market share (a la Flipkart). And we know such measures hit businesses where the competition is fierce.
A negative net worth compounded by #1 might not be very palatable to the value investor.
The offer price has been raised from Rs 400 to Rs 700. Don't know when the Rs 400 was decided on but have the business fundamentals improved so drastically to warrant a doubling of offer price?
I am also learning the fine art of value investing, so I await what my smarter friends have to say.
INDIGO ready for takeoff :airplane: (17-10-2015)
India’s domestic pax up 19% to 6.8m in Aug-2015
CAPA > Aviation News > India’s domestic pax up 19% to 6.8m in Aug-2015
23-Sep-2015 11:25 AM
inShare
© CAPA
India’s Directorate General Civil Aviation (DGCA) reports (Sep-2015) the following Indian domestic traffic highlights in Aug-2015:
Passenger numbers: 6.8 million, +18.7% year-on-year;
Load factor:
Air India: 79.3%;
Jet Airways: 80.8%;
Jetlite: 78.7%;
SpiceJet: 92.1%;
GoAir: 75.6%;
IndiGo: 76.8%;
Air Costa: 77.3%;
Airasia India: 72.1%;
Vistara: 62.9%;
Air Pegasus: 77.1%;
Trujet: 83.7%;
Market Share:
Air India: 16.6%;
Jet Airways: 19.8%;
Jetlite: 3.0%;
SpiceJet: 12.3%;
GoAir: 8.1%;
IndiGo: 35.3%;
Air Costa: 0.9%;
Airasia India: 2.0%;
Vistara: 1.5%
Air Pegasus: 0.2%;
Trujet: 0.3%. [more - original PR]
Wockhardt – A story with twist and turn (17-10-2015)
I think this company is due for rerating based on following observations
- US FDA issue is now 2.5 years old (started in May 2013) . Average time taken to resolve US FDA issues with other pharma companies is around 2 years. Wockhardt has data integrity issues so they are taking longer.
- Management started receiving US FDA approvals for individual drugs after gap of almost 2 years. In June 2015, it received approval of analgesic drug Oxycodone Hydrochloride. In Sept 2015, it received approval for Memantine Hydrocholride (for alzheimers'). This shows positive bias of US FDA towards the company
- Management continues to spend one of the highest spend on R&D in the industry. % of R&D Spend to Sales for Q1 FY 16 was 13.3% vs 11.5% for FY 15, 9.3% FY 14.
- Promoters stake is around 75% and they did not reduce it in last 2 years, although interest shown by companies like Lupin. This shows their confidence about their future.
Disc - Invested from lower levels.
Talwalkars Better value Fitness Ltd – Good fundamentals (17-10-2015)
In last 6 months, promotors reducing their stake in the company, QIP of 107 Crores (at price of 305 per share) thereby expanding equity by 13.5% brought stock down from Rs 400 to current price of Rs. 250.Their 50:50 JV with David Lloyd Leisure Ltd UK in club business would be a drag for short term.
But I think health club business is a lifestyle play which is long term trend in developing country like India. % of penetrations of health clubs is poor as compared to developed world. With Market cap of 736 Crores, trailing PE value of 17 and 5 years compounded sales growth of 25% and profit growth of 40%, I think this stock is attractively priced.
Please see recent new item in money control
http://www.moneycontrol.com/news/recommendations/buy-talwalkars-targetrs-319-cd-equisearch_3634741.html
Disclosure : invested from lower levels. No new investment in last 90 days.
Top 5 Picks – optimistically, for the next 50 years (17-10-2015)
@srnarayan Hi Sreekanth,
That is true. Maybe consistent bad performers over 1-2 years should be replaced with new ones.
Reg NMDC, your right with the prices / margins. But, i feel 120 seems a fair price.
Reg Igarashi, I googled, but I'm not sure whats up with the de-listing you mentioned. Could you share some links reg the same?
I bought it @250->350 after seeing it on value-picks.blogspot. It had increasing ROCE the last 3 years, other ratio-numbers were also okay. And the Japanese partner who initially sold his full stake, later bought it back.
Growth scope seemed to be there, as these small motors keep on increasing in cars. And their stuff must hopefully have quality, because their clients are international car makers. If some small dc motor goes kaput while driving in the US, they will sue in big $$$. Though i hope it doesnt supply VW 