Sanjoy Bhattacharyya, the doyen amongst value investors, was one of the first to give Mayur Uniquoters a vote of confidence. In October 2013, Sanjoy created a Model Portfolio for his fans in which he gave Mayur Uniquoters pride of place. The price of the stock then was Rs. 134 (adjusted for bonus). Today, about a year later, the stock is at Rs. 414, giving a return of 200%+.
Sanjoy Bhattacharyya’s green signal to a stock means a great deal because he does not touch a stock if the fundamentals and valuations are not in place.
Westbridge Capital aka Jwalamukhi Holdings was the next to buy a truckload of Mayur Uniquoters’ stock. In May 2014, Westbridge pumped in Rs. 110 crore into Mayur to grab 11% of its equity at Rs. 235 per share (adjusted for bonus). Westbridge is a super-savvy investor and its expertise in finding winning stocks needs no elaboration. Their latest stock pick is La Opala RG.
It is also no coincidence that stock wizard Saurabh Mukherjea of Ambit Capital made a special mention of Mayur Uniquoters when talking about “good and clean” companies that investors could buy truckloads of. Saurabh suggested that Mayur is the classic ‘Peter Lynch Buy-What-You-See” sort of stock because its products (artificial leather) is used in car furnishings (Tata Motors, Honda, M&M etc) and footwear (Bata, Relaxo). Saurabh also pointed out that Mayur’s capital allocation is “impeccable” and that as the promoters own a large chunk of the equity, they would take good care of the company.
Saurabh Mukherjea made a very interesting point that if investors buy good companies which are in their youth stage or early years, the first 15-20 years can compound 30-35 percent and make investors a huge fortune. He hinted that investors can buy a “reasonably generous size” of Mayur Uniquoters.
The latest big-ticket investor to grab a big chunk of Mayur Uniquoters is DSP Blackrock Mutual Fund. Yesterday, DSP bought 12.77 lakhs shares at Rs. 400 per share.
(Incidentally, one of DSP Blackrock’s recent purchases is 8K Miles which it bought on 9th August 2014 at about Rs. 198. Today, about 3 weeks later, the stock is at Rs. 468, giving a gain of 135%).
To come to terms with Mayur Uniquoters’ business model, financials etc, we have to turn to the “Initiating coverage” report by Edelweiss. Edelweiss says the Company is on a “strong foundation” and has recommended a buy on the basis that Mayur is making capacity addition in high margin export business, has strong clientele, superior return ratios etc. Edelweiss emphasizes that if Mayur does manage to get export orders from marquee clients like BMW, Mercedes and GM, it would be a “game changer” and put Mayur into another orbit.
Finally, we have to listen in carefully to Suresh Kumar Poddar, Mayur’s CEO & CMD, explain the prospects of the company in the foreseeable future. Poddar said that the Company could be expected to report a growth between 15% and 20%. He hinted that these estimates are “modest” and “conservative” and that the actual figures could be much more.
So, there you have it. Now, you have to carefully ponder over the data and decide whether to give Mayur Uniquoters pride of place in your long-term portfolio.