Ramesh Damani is a conservative investor and adviser. Owing to an ambiguity in SEBI Rules on whether investment recommendations could be given in public, Ramesh Damani preferred to keep a low profile rather than get on the wrong side of the law.
However, the increasing clamour from his vast legion of devoted fans meant that Ramesh Damani had to break his silence sooner or later.
He has now come out into the open with not one, but four top-quality stock recommendations that he assures will enrich investors. Let’s take a quick look at them:
(1) National Building Construction Corporation (NBCC):
It is easy to see why Ramesh Damani is bullish about NBCC. It is the construction arm of the government and gets priority for constructing every project that the government launches. It will be the biggest beneficiary of NAMO’s 100-cities plan.
NBCC has shown healthy growth in the recent past. The revenue grew by 12.24% YoY and 45.9% QoQ to Rs.14452.4mn in Q4FY14 while EBITDA went up by 5.47% YoY and 126.6% sequentially to Rs. 1033.4mn.
NBCC’s EBITDA margin are also on the uptick with 7.05% as against 7.59% in Q4FY14 and 4.59% in Q3FY14. The net profit in Q4FY14 went up by 11.42% YoY and 91.42% QoQ to Rs. 1069.3mn.
The other thing that would have appealed to Ramesh Damani is NBCC’s strong balance sheet with a debt free status and a cash balance of over Rs 15000 million. The order book is also healthy at Rs. 130bn as on March 2013.
(2) TV Today Network:
This is a company close to Ramesh Damani’s heart because he happens to be one of the largest shareholders with a massive chunk of 8,19,686 shares. Radhakishan Damani, the other great stock wizard, holds 8,96,000 shares, through his company Damani Estate & Finance Pvt. Ltd.
Ramesh Damani points out that Digitization is a huge game changer for the entire media industry because it means more subscription revenue, less carriage cost and high margins.
TV Today reported stellar Q1FY15 results with a two-fold increase in standalone net profit at Rs 32.79 crore as against a standalone net profit of Rs 11.98 crore during the April-June quarter of FY14. The total income increased 54.10%o Rs 137 crore as against Rs 88.90 crore of the same period a year ago.
So, it does look like Ramesh Damani’s hypothesis about TV Today is coming true.
(3) Ricoh India:
I covered this in my recent piece Why Are Stock Wizards Ramesh Damani & Kenneth Andrade Bullish About Ricoh India? This is a no-brainer stock given its MNC pedigree, strong brands, proven track record, ambitious growth plans and cheap valuations.
(4) Balmer Lawrie & Co:
Ramesh Damani loves PSU stocks when they are quoting at cheap valuations and give consistent dividends. Ramesh explains that 50 per cent of Balmer Lawrie’s profits come from the logistics business. The logistics business is almost a “foolproof business” for Balmer, Ramesh says, because the company owns container depots and land and is like a monopoly transit for other PSUs. It is only a question of time before the company gets re-rated, Ramesh Damani says, with a wink.