simple screener like
Sales growth >15 AND
Profit growth > 15 AND
Return on equity > 20 AND
Market Capitalization > 1000 AND
Debt to equity < .50
but this will give mostly stable companies for others we need to change parameters and track many companies, sometimes we get companies from competitors and analysis of some other businesses.
Stock name: Tilaknagar industries
Sector: Alcohol and beverages
Thesis:
Andhra Pradesh and Tamilnadu expected to reduce excise duty and create more conducive policy for alcohol sector. This could boost volumes by 20+%.
More focus on premiumization, resulting in increased margin
Company has reduced debt drastically and will be debt free by Q2FY25. All profits will become cash flow and help company expand distribution network, marketing reach with the cash in hand.
Technically about to break ATH with long 18 month consolidation.
My recent learnings in identifying structural stories.
Stocks that have a structural story seem to move in parallel channels on weekly and/or daily charts ever since they turnaround or breakout from a base.
Attaching a few charts here that have moved in parallel channels in the past; currently still in parallel channels ( the likes of Polycab, Godawari power, Ncc, Precot, Time Technoplast, Stride Pharma, Shaily, Kilburn Engineering and 20 microns)
In this chart you can see even during the IT raid news the stock didnt breach the lower channel, rather reversed from it. Technical analysis can help us overcome such grey “” situations in investing where we do not know the impact of the development. The stock has been in the channel ever since it broke out from the base at 1162.
Stock again has been in a channel since double bottom breakout at 300. Current overhang of falling iron ore prices, government retrospective royalties and subdued demand from china have compelled the stock to retest the lower channel. A lot of times clarity comes in news after the stock has plummeted 15-20%, so we can use such technicals to exit a stock totally or partially or even enter as the stoploss would be very small if we have conviction in the business. Its a make or break level for the stock as its a previous gap up area as well.
This has been a huge winner; almost 10x; and still in the channel. Promoters target 500cr revenue in FY25 and have issued warrants recently but valuations are quite stretched.
It has run up more than 3x and the valuations are still cheap in this market with the company growing at 18-20%.
Order book is still growing after such a good runup.
and some that have started to move that can potentially be good winners (the likes of Wockhardt, Patanjali (on daily charts) and Oriental aromatics ltd).
This one seems to have turned around with very good q1FY25 results. Management is guiding for good follow on quarters. Concalls are interesting.
Patanjali is in a very early stage and yet to be determined wether it stays in the channel. Broke out from a double bottom base and Vcp on weekly charts as well ever since it topped out in June 2020.
Again moving in a channel since breakout at 240-250 levels. It has recently formed a smaller channel on daily charts as well.
Trying to find patterns to identify structural stories early by charts.
These patterns could last much longer even after a few names already up 2-3x. The idea is to identify low risk entry near the lower channel in stocks where we couldn’t enter earlier and still find enough future runway OR exit at the upper channel if we want to book some profit/exit entirely which again is an individual call according to one’s understanding of the business.
A break of the channel on either side; on upper side of channel could give a frothy move while on the lower side of channel could be a potential breakdown, should be monitored.
Bajaj Finserv – weekly chart.
Stock formed a good VCP pattern for last 3 years. It has had a good break out recently along with making a 52 week high. Volumes have been strong.
Underlying business is still growing at > 25%. P/B compressed from 8 to 4 in period of last 3 years. Time correction seems to be over and the next move might resume from here.
Disc: trading position.
Asian Markets Securities Initiates Coverage on Senco Gold with potential 22% UPSIDE
If payables are high then so is receivables 686 Cr.
A few questions sent to management on their investor relations email. Pls comment if anyone here knows more about these.
Investment in Portavadie Distillery: As per your annual report, investment in Portavadie Distillery (100% subsidiary) is carried at a cost of INR 17.8 crores. However, as per this article, Piccadily has invested GBP 15 million in Portavadie (eq. to ~INR 150 crore). What is this discrepancy? Please provide information as to the acquisition cost of Portavadie and clarify this. Link: New plans submitted for Portavadie Distillery – The Spirits Business
Sale of land during 2023-24: As per AR, land was sold at a profit of ~29 crore. Pls provide information on which land was sold and for what consideration? How was the proceeds of sale used by the company? Pls provide detailed information.
Related Party Transaction: As per AR, the company has Balances Outstanding from Piccadily Sugar worth INR 37 crores (page 122 of AR). What is the nature of these receivables? When will they be settled? Pls provide the details.
Just to add few more parameters in comparison as per current price
thanks the interview was instructive.
Although, I am invested, I had few questions/issues re: the company. The sub MAS Rural Housing Fin is not a wholly owned sub, but 60% owned sub. Balance 40% is owned by promoters in their individual capacity. So I am not sure if the promoters invested @ the same valuation as the listed co or was their 40% a result of financial engineering?
@Shubham_Dixit
I initially invest in company based on fundamentals. Then, I continue to monitor its progress. If I discover positive developments or growth opportunities, I may consider increasing my investment.