Yesterday, Porinju Veliyath bought a chunk of an ultra micro-cap real estate company called Ansal Buildwell Ltd.
Porinju’s latest stock pick is a Pharma company called BDH Industries. Today, he bought 45,942 shares at Rs. 42.84 each, making an investment of Rs. 19.68 lakhs.
BDH Ltd is also an ultra micro-cap with a market capitalisation of only Rs. 24 crore. It is engaged in the manufacture and sale of therapeutical applications.
During FY 2013-14, BDH reported robust results with export sales of Rs. 3051.74 lakhs as compared to Rs. 2205.17 lakhs in FY 2012-13. The domestic sales stood at Rs. 1202.11 lakhs as compared to Rs. 1924.77 lakhs in FY 2012-13. The profit after tax in FY 2013-14 improved to Rs. 229.78 lakhs as compared to Rs. 167.27 lakhs in FY 2012-13.
This robust performance continued in the September 2014 quarter with the net profit surging 55.32% to Rs 0.73 crore as against Rs 0.47 crore during the previous quarter ended September 2013. Sales surged 30.06% to Rs 12.07 crore in the quarter ended September 2014 as against Rs 9.28 crore during the previous quarter ended September 2013.
However, the results for the December 2014 quarter were disappointing. The net profit declined 21.67% to Rs 0.47 crore in the quarter ended December 2014 as against Rs 0.60 crore during the previous quarter ended December 2013. Sales declined 25.21% to Rs 8.16 crore in the quarter ended December 2014 as against Rs 10.91 crore during the previous quarter ended December 2013.
Porinju’s calculation appears to be that BDH Industries will get back to the growth trajectory in the March 2015 quarter and that there will be bumper gains to be made.
Whether this micro-cap will live up to the lofty expectations of Porinju Veliyath requires to be watched closely.
Next financial year…I will buy some micro-caps …not this year
People don’t know that the value of land held by BDH industries is abour 400 Crore.
Realty story of BDH:BDH stands out for Bombay Drug House. Company’s plant is located on 2.7 lac sq ft at Kandivali east adjoining to Big Bazaar in the prime location of Kandivali.The FSI there is 2 which give saleable area of 5.4 lac sq ft on which 30% loading is permissible and feasible. Thus total saleable area works out to 7 lac sq ft and the existing market rate is Rs 5000 per sq ft. BDH has a manufacturing are spread over 42,500 square feet though the entire space is 270,000 sq ft.Co owns land and development cost is estimated at Rs 2000 per sq ft which leaves post tax profit ( 30% assumed) of Rs 2100 per sq ft.The clear tax free profit could be Rs 147 Crore on equity of Rs 6 Crores offering earnings of Rs 240 per share.Shifting cost is not in excess of Rs 15 Crore which hardly matters.Rumuors are that one of the leading Mumbai Builders has approached the co with a outright sell of the said land for Rs 125 Crore which was refused by the co.Since the property is adjacent to Big Bazzar, chances of Pantaloon or RIL stepping in is not ruled out.So if it vindicates all these then BDH is all set to make history in the bourses.Again the same has been there for eternity now and yet nothing has happened.It may so happen that nothing happens in the next decade too.
@manish
well said and well signed off
gud write up
god bless u
jacob mathew
Read somewhere the land is actually owned by a trust..