About The Company
The company has been in limelight for quite some time. It has been fairly fancied among the investor as a portfolio stock in the capital markets.
About The Results
Prism Cement having changed its accounting year to end with March ending instead of June had posted good results for quarter as well as period ended 31st March,09. This is the first audited results of FY 09 having posted by any company, even ahead of Infosys. Due to improved performance in Q3 , the company has declared a final dividend of 5%, which along with 10% interim having already paid, make it 15% for the period or 20% annualised, against 10% having paid last year.
The company posted a total income of Rs.245 crores in Q3 against Rs.218 crores of Q2 and Rs. 167 crores of Q1 while total for the period is at Rs.630 crores. PAT for Q3 stood at Rs. 50 cr. Against Rs. 31 cr. Of Q2 and Rs. 15 cr. of Q1. A rising trend on topline and bottomline. It is also heartening to note that on an EPS of Rs. 3.23 a dividend of Re.1.50 is being paid. Thanks to debt free status of the company. This is inspite of the fact that tax liability of the company for FY 09 has been at 40% against 26% of FY 08.
About the Stock
Share ruling at 27 has fully factored in the working for FY10 and would see its full value coming in at Rs.30.
We must wait for the fair value to arrive to make any fresh positions.
Showing posts with label Penny stock tips. Show all posts
Showing posts with label Penny stock tips. Show all posts
Wednesday, April 15, 2009
Firstsource Solutions - Multibagger
The present market capitalization of the company is at Rs 725 crore while the enterprise value is close to Rs 2,000 crore. With the repurchase of FCCB, the company would get vastly re-rated. Share now ruling around Rs 19 is witnessing huge volume, on expectations of stake sale. If that happens, it is likely to rise to Rs 30 per share, which is expected to be atleast the stake sale price.
Firstsource Solutions (FSL)Firstsource Solutions (FSL) is a global BPO company, providing services across the banking and financial services sector, telecom, media and healthcare industries. It provides services throughout the customer lifecycle, including customer acquisition, customer care, billing and collections, transaction processing and business research and analytics.
FSL has global clients with over 20 Fortune Global 500, Fortune 500 and FTSE 100 companies and includes over 800 leading hospitals in US, 3 of top 5 global healthcare insurance companies, 2 leading Indian mobile service providers, 2 of the world’s top 10 telecom companies and one of the largest Indian bank.
FSL acquired MedAssist Inc, the largest provider of revenue cycle management services to hospitals in USA. For acquiring this, FSL issued FCCB of US$ 275 million, which are due for redemption in Dec 2012 or convert at Rs 92.29 per share. As share price is ruling at Rs 17, conversion seems unlikely.
Due to the FCCB concern, share price has taken a beating and had its 52-week high/low of Rs 51/Rs 9.50. The share is now ruling at Rs 19.10.
The company has started buying back FCCB in March 2009 and had repurchased FCCB of US$ 49.70 million till date, which is commendable, as after this, the outstanding FCCB is just at US$ 225 million.
FSL, for the year ended 31/03/08 had a total income of Rs 1,334 crore with a PBT of Rs 143 crore and PAT of Rs 132 crore.
The present equity of the company is at Rs 428 crore, with face value of Rs 10 each. Of this, ICICI Bank, being the promoters, hold 26.74% while 50.77% is held by 4 OCBs and 7.04% by FIIs and Foreign Venture Capital Investors. This is thus leaving low float of about 15% with the public.
In the past, Warburg Pincus wanted to acquire the company and even ICICI Bank is keen to divest its stake and exit from the company at a proper price.
The company does not have much debt except the FCCB. As at 31/03/08, it had a total debt of Rs 1,225 crore with FCCB being at Rs 1,103 crore. However, the company has intangible assets of Rs 1,888 crore being Goodwill on various acquisitions but no write offs will be required as there is no impairment.
The present market capitalization of the company is at Rs 725 crore while the enterprise value is close to Rs 2,000 crore. With the repurchase of FCCB, the company would get vastly re-rated.
In case ICICI Bank, opts to sell, which is most likely, open offer for 20% would be made, resulting in 100% acceptance, as 4 OCBs holding 51% may not participate. In that case, share price will rise to stake sale price.
Share now ruling around Rs 19 is witnessing huge volume, on expectations of stake sale. If that happens, it is likely to rise to Rs 30 per share, which is expected to be atleast the stake sale price.
Considering all these factors, share qualifies as a risk free bet at Rs 19.10, which is likely to give close to 50% return in next six months.
Firstsource Solutions (FSL)Firstsource Solutions (FSL) is a global BPO company, providing services across the banking and financial services sector, telecom, media and healthcare industries. It provides services throughout the customer lifecycle, including customer acquisition, customer care, billing and collections, transaction processing and business research and analytics.
FSL has global clients with over 20 Fortune Global 500, Fortune 500 and FTSE 100 companies and includes over 800 leading hospitals in US, 3 of top 5 global healthcare insurance companies, 2 leading Indian mobile service providers, 2 of the world’s top 10 telecom companies and one of the largest Indian bank.
FSL acquired MedAssist Inc, the largest provider of revenue cycle management services to hospitals in USA. For acquiring this, FSL issued FCCB of US$ 275 million, which are due for redemption in Dec 2012 or convert at Rs 92.29 per share. As share price is ruling at Rs 17, conversion seems unlikely.
Due to the FCCB concern, share price has taken a beating and had its 52-week high/low of Rs 51/Rs 9.50. The share is now ruling at Rs 19.10.
The company has started buying back FCCB in March 2009 and had repurchased FCCB of US$ 49.70 million till date, which is commendable, as after this, the outstanding FCCB is just at US$ 225 million.
FSL, for the year ended 31/03/08 had a total income of Rs 1,334 crore with a PBT of Rs 143 crore and PAT of Rs 132 crore.
The present equity of the company is at Rs 428 crore, with face value of Rs 10 each. Of this, ICICI Bank, being the promoters, hold 26.74% while 50.77% is held by 4 OCBs and 7.04% by FIIs and Foreign Venture Capital Investors. This is thus leaving low float of about 15% with the public.
In the past, Warburg Pincus wanted to acquire the company and even ICICI Bank is keen to divest its stake and exit from the company at a proper price.
The company does not have much debt except the FCCB. As at 31/03/08, it had a total debt of Rs 1,225 crore with FCCB being at Rs 1,103 crore. However, the company has intangible assets of Rs 1,888 crore being Goodwill on various acquisitions but no write offs will be required as there is no impairment.
The present market capitalization of the company is at Rs 725 crore while the enterprise value is close to Rs 2,000 crore. With the repurchase of FCCB, the company would get vastly re-rated.
In case ICICI Bank, opts to sell, which is most likely, open offer for 20% would be made, resulting in 100% acceptance, as 4 OCBs holding 51% may not participate. In that case, share price will rise to stake sale price.
Share now ruling around Rs 19 is witnessing huge volume, on expectations of stake sale. If that happens, it is likely to rise to Rs 30 per share, which is expected to be atleast the stake sale price.
Considering all these factors, share qualifies as a risk free bet at Rs 19.10, which is likely to give close to 50% return in next six months.
JVL Agro Industries - Multibagger
With a massive scale up through expansion projects & acquisitions, and growth visibility in coming years, JVL Agro with revenues of Rs.1155 crores, expected EPS of Rs.50 for FY 09 and a market cap of Rs.58 crores looks undervalued, in an industry unlikely to go out of fashion.
JVL Agro Industries Ltd.JVL Agro Industries Ltd. was incorporated in 1989 under the name of Jhunjhunwala Vanaspati Limited. The company set up its unit at Jaunpur, close to Varanasi in the year 1990 with the production capacity of 25 tpd. From a 25 tdp capacity in 1990, the company has grown substantially and now claims to be India’s largest unit for manufacture of vanaspati with a capacity of 72,000 tpa at Jaunpur. The company besides Vanaspati now produces various Refined Oils and Mustard Oil and has recently diversified its business activities into fertilizers and other agro based products.
The company has its manufacturing facilities at Jaunpur, close to Varanasi and at Alwar, Rajasthan. The company has a capacity to produce 72,000 tpa of Vanaspati, 1,14,000 tpa Refined Oils and 81,000 tpa Mustard Oil.
The company sells its products under ‘Jhoola’ brand which commands a market share of 35% of the Uttar Pradesh vanaspati market, 23% share of Bihar, 5% of Jharkhand, 9% of Maharashtra, 6% of Madhya Pradesh and 8% of Gujarat. (Source : Company’s Annual Report March 08)
Expansion and Diversification Projects:
The company has undertaken various expansion and diversification projects which will add substantially to its scale of operations leading to higher revenues and profitability.
• Greenfield Project in Bihar - The Company has acquired around 10 acres at Dahri-on-sone in Bihar to set up a 750-tpd capacity refinery/vanaspati unit. The project is in the final stages of implementation and the first phase for 500 tpd is expected to go on stream in May 2009.
• Expansion at Varanasi Plant - The company has set up a new refinery at Varanasi with a capacity of 400 tpd which has gone on stream in December 2008. This has doubled the production capacity at its Varanasi plant. (from 72,000 tpa before the expansion.)
• Greenfield Project at Haldia - The Company has acquired around 8.5 acres at Haldia to set up a 1000-tpd capacity refinery. The project is under implementation and is expected to go on stream in 2010-11.
• Expansion Project at Alwar - The Company is setting up an edible oil refinery of 100 tpd at Alwar, Rajasthan, to manufacture refined and soybean oil.
• Acquisition of Fertilizer PSU - The Company acquired the assets and properties of 318-acres factory unit of M/s Pyrites Phosphates & Chemicals Limited (a PSU in liquidation) at Amjhore, Bihar, through auction to venture into fertilizers. The unit besides land of 318 acres also has captive pyrite mines, which is the main raw material for manufacture of sulphuric acid used for manufacture of Single Super Phosphate (SSP). The unit has over 250 acres of surplus land which can be utilised for expansion of the unit in future.
• Multi Services SEZ – The group had acquired a stake in Hari Fertilizers Ltd. located in Varanasi and plans to develop a 333 Acre SEZ on the land of Hari Fertilizers Ltd., for which the company has received State and Central Government approvals.
Investment Rationale:
JVL Agro is one of the most attractive proxies of India’s cooking media sector. The company possesses a product basket extending from vanaspati to various refined oils. With a market share of 35% in Uttar Pradesh and 23% in Bihar in Vanaspati, the company commands leadership position across two of India’s most densely populated states. The company has established a strong foothold in these markets, without spending much on advertising. The company has a brand that is visible, attractive and available; has a scale that is imposing and economical and enjoys a reach that is extensive and penetrated.
The various expansion projects undertaken by the company will add substantially to the topline and bottomline of the company in the years to come. The group has plans for Real Estate development on 333 acres in Varanasi in which it proposes to develop a Multi-services SEZ for which approvals from Central and State Government has been obtained.
The market cap of the company at the current price is Rs 58 crores. The entire debt of Rs 70 crores (Term Loans of Rs 7.16 crores and the balance as Working Capital) is against Cash Credit Limit (against Rs 85 crores which the company holds as Fixed Deposits). For the first 9 months of FY 08-09, the company has reported PAT of Rs 28 crores. For full year, it is expected to be around Rs 36-38 crores, resulting in an EPS close to Rs 50. The stock thus trades at a PE of just 1.5 at its CMP. Moreover, out of the total turnover of Rs 1155 crores in FY 08, the revenue from Trading is just Rs 281 crores, majority of revenues coming from refining/ manufacturing activity.
With a few expansion projects having gone on stream and the others expected to be on stream soon, we expect a significant scale up of its operations in the coming years with significant growth in Sales and Profitability.
Consider this :-
• The company has a Book Value of Rs 105 (expected to increase to over Rs 150 in Mar 09),
• Generates healthy ROCE of 29%
• The company has a receivable cycle of just 10 days, which talks of prudent financial management & controls
• The impact of expansion projects and acquisitions on the company’s Sales and Profitability will show in the coming years.
• The revenue and profit potential of its 333 acres SEZ in Varanasi as and when the active implementation takes place,
With the roadmap of growth chalked out by the management by way of various expansion projects and acquisitions, the capacities of the company in various segments will go up significantly than the current capacities.
The stock trading at Rs 77 with a PE of 1.5 and a market cap of Rs 58 crores looks grossly undervalued. The growth in the company is clearly visible which we believe could be atleast 25-30% each year for the next few years.
The extent of undervaluation of the company becomes even more evident when compared with the peer group.
Investors can choose to accumulate the stock at the current price and on declines.
JVL Agro Industries Ltd.JVL Agro Industries Ltd. was incorporated in 1989 under the name of Jhunjhunwala Vanaspati Limited. The company set up its unit at Jaunpur, close to Varanasi in the year 1990 with the production capacity of 25 tpd. From a 25 tdp capacity in 1990, the company has grown substantially and now claims to be India’s largest unit for manufacture of vanaspati with a capacity of 72,000 tpa at Jaunpur. The company besides Vanaspati now produces various Refined Oils and Mustard Oil and has recently diversified its business activities into fertilizers and other agro based products.
The company has its manufacturing facilities at Jaunpur, close to Varanasi and at Alwar, Rajasthan. The company has a capacity to produce 72,000 tpa of Vanaspati, 1,14,000 tpa Refined Oils and 81,000 tpa Mustard Oil.
The company sells its products under ‘Jhoola’ brand which commands a market share of 35% of the Uttar Pradesh vanaspati market, 23% share of Bihar, 5% of Jharkhand, 9% of Maharashtra, 6% of Madhya Pradesh and 8% of Gujarat. (Source : Company’s Annual Report March 08)
Expansion and Diversification Projects:
The company has undertaken various expansion and diversification projects which will add substantially to its scale of operations leading to higher revenues and profitability.
• Greenfield Project in Bihar - The Company has acquired around 10 acres at Dahri-on-sone in Bihar to set up a 750-tpd capacity refinery/vanaspati unit. The project is in the final stages of implementation and the first phase for 500 tpd is expected to go on stream in May 2009.
• Expansion at Varanasi Plant - The company has set up a new refinery at Varanasi with a capacity of 400 tpd which has gone on stream in December 2008. This has doubled the production capacity at its Varanasi plant. (from 72,000 tpa before the expansion.)
• Greenfield Project at Haldia - The Company has acquired around 8.5 acres at Haldia to set up a 1000-tpd capacity refinery. The project is under implementation and is expected to go on stream in 2010-11.
• Expansion Project at Alwar - The Company is setting up an edible oil refinery of 100 tpd at Alwar, Rajasthan, to manufacture refined and soybean oil.
• Acquisition of Fertilizer PSU - The Company acquired the assets and properties of 318-acres factory unit of M/s Pyrites Phosphates & Chemicals Limited (a PSU in liquidation) at Amjhore, Bihar, through auction to venture into fertilizers. The unit besides land of 318 acres also has captive pyrite mines, which is the main raw material for manufacture of sulphuric acid used for manufacture of Single Super Phosphate (SSP). The unit has over 250 acres of surplus land which can be utilised for expansion of the unit in future.
• Multi Services SEZ – The group had acquired a stake in Hari Fertilizers Ltd. located in Varanasi and plans to develop a 333 Acre SEZ on the land of Hari Fertilizers Ltd., for which the company has received State and Central Government approvals.
Investment Rationale:
JVL Agro is one of the most attractive proxies of India’s cooking media sector. The company possesses a product basket extending from vanaspati to various refined oils. With a market share of 35% in Uttar Pradesh and 23% in Bihar in Vanaspati, the company commands leadership position across two of India’s most densely populated states. The company has established a strong foothold in these markets, without spending much on advertising. The company has a brand that is visible, attractive and available; has a scale that is imposing and economical and enjoys a reach that is extensive and penetrated.
The various expansion projects undertaken by the company will add substantially to the topline and bottomline of the company in the years to come. The group has plans for Real Estate development on 333 acres in Varanasi in which it proposes to develop a Multi-services SEZ for which approvals from Central and State Government has been obtained.
The market cap of the company at the current price is Rs 58 crores. The entire debt of Rs 70 crores (Term Loans of Rs 7.16 crores and the balance as Working Capital) is against Cash Credit Limit (against Rs 85 crores which the company holds as Fixed Deposits). For the first 9 months of FY 08-09, the company has reported PAT of Rs 28 crores. For full year, it is expected to be around Rs 36-38 crores, resulting in an EPS close to Rs 50. The stock thus trades at a PE of just 1.5 at its CMP. Moreover, out of the total turnover of Rs 1155 crores in FY 08, the revenue from Trading is just Rs 281 crores, majority of revenues coming from refining/ manufacturing activity.
With a few expansion projects having gone on stream and the others expected to be on stream soon, we expect a significant scale up of its operations in the coming years with significant growth in Sales and Profitability.
Consider this :-
• The company has a Book Value of Rs 105 (expected to increase to over Rs 150 in Mar 09),
• Generates healthy ROCE of 29%
• The company has a receivable cycle of just 10 days, which talks of prudent financial management & controls
• The impact of expansion projects and acquisitions on the company’s Sales and Profitability will show in the coming years.
• The revenue and profit potential of its 333 acres SEZ in Varanasi as and when the active implementation takes place,
With the roadmap of growth chalked out by the management by way of various expansion projects and acquisitions, the capacities of the company in various segments will go up significantly than the current capacities.
The stock trading at Rs 77 with a PE of 1.5 and a market cap of Rs 58 crores looks grossly undervalued. The growth in the company is clearly visible which we believe could be atleast 25-30% each year for the next few years.
The extent of undervaluation of the company becomes even more evident when compared with the peer group.
Investors can choose to accumulate the stock at the current price and on declines.
Wednesday, March 25, 2009
Multibaggers - Kamanwala Housing Construction Ltd (KHCL)
Kamanwala Housing Construction Ltd (KHCL) was originally incorporated in 1984 as Kamanwala Housing Development Finance Company mainly to cater middle class buyers by constructing low cost housing and financing it at nominal rates.
Kamanwala Housing Construction (KHCL) is a reputed small sized player in the housing construction segment. KHCL has a slew of projects lined up which would enable it to register aggressive growth in its revenues and earnings over the next two-three years.
KHCL has several projects lined up in prime localities of Mumbai due for completion in the next two years. KHCL’s revenue and earnings will see strong growth trajectory due to the execution of these projects and also enable the company to enhance its image in segment and get into contracts of higher value going ahead.
Derisking business by expanding to new geographies
To de-risk the business model further, KHCL has undertaken geographical diversification as well and entered into a joint venture agreement having 20% share with M/s. Prajay Engineers & others for the development of a land admeasuring 35 acres at Patancheru, Hyderabad. It has also purchased additional 2 acre land in Hyderabad for 1.60 cr to construct commercial / residential buildings.
Diversification into commercial space
KHCL has entered into commercial segment as well and has drawn up ambitious expansion plan on a much larger scale. In the last couple of years, it has acquired good land bank in Mumbai for future projects.
Good track record
Having a track record of more than two decades, KHCL has completed the execution of 18 projects in Mumbai, with saleable area totaling more than one million square feet.
Recent developments
To de-risk the business model further, KHCL has undertaken geographical diversification as well and entered into a joint venture agreement having 20% share with M/s. Prajay Engineers & others for the development of a land admeasuring 35 acres at Patancheru, Hyderabad. It has also purchased additional 2 acre land in Hyderabad for 1.60 cr to construct commercial / residential buildings. Moreover KHCL has acquired some land in Mahim under SRA scheme. In a 33% joint venture with Aspen Property Pvt. Ltd., it is developing a property at the famous Filmistan Studio, comprising both residential and commercial units. Meanwhile it is negotiating for few projects at 4 bunglow, Andheri Kurla Road.
Amalgamation of Doongursee Diamond Tools
During Q4Fy08 the company has amalgamated its subsidiary called M/s. Doongursee Diamond Tools Ltd with itself. Notably, this subsidiary is holding one lakh FSI for the Malad project.
Bonus Issue
During Q1FY09, KHCL issued bonus shares in the proportion of one equity share of Rs 10 each for every existing equity share held. The company has also recommended a dividend of 25% for FY08.
Valuation
KHCL is expected to register robust growth in revenues and earnings going forward. It is currently quoting at compelling valuations of 0.8x and 0.7x FY10E and FY11E earnings. The stock has succumbed to the market turmoil and its price has declined significantly in the last 3 months. With a strong project pipeline to drive revenue and earnings growth, the stock has potential to deliver handsome returns to the investors over a period of next one year. Investors can enter into the stock at current level , which is very attractive and should enable investors to earn a healthy return on their investment.
Kamanwala Housing Construction (KHCL) is a reputed small sized player in the housing construction segment. KHCL has a slew of projects lined up which would enable it to register aggressive growth in its revenues and earnings over the next two-three years.
KHCL has several projects lined up in prime localities of Mumbai due for completion in the next two years. KHCL’s revenue and earnings will see strong growth trajectory due to the execution of these projects and also enable the company to enhance its image in segment and get into contracts of higher value going ahead.
Derisking business by expanding to new geographies
To de-risk the business model further, KHCL has undertaken geographical diversification as well and entered into a joint venture agreement having 20% share with M/s. Prajay Engineers & others for the development of a land admeasuring 35 acres at Patancheru, Hyderabad. It has also purchased additional 2 acre land in Hyderabad for 1.60 cr to construct commercial / residential buildings.
Diversification into commercial space
KHCL has entered into commercial segment as well and has drawn up ambitious expansion plan on a much larger scale. In the last couple of years, it has acquired good land bank in Mumbai for future projects.
Good track record
Having a track record of more than two decades, KHCL has completed the execution of 18 projects in Mumbai, with saleable area totaling more than one million square feet.
Recent developments
To de-risk the business model further, KHCL has undertaken geographical diversification as well and entered into a joint venture agreement having 20% share with M/s. Prajay Engineers & others for the development of a land admeasuring 35 acres at Patancheru, Hyderabad. It has also purchased additional 2 acre land in Hyderabad for 1.60 cr to construct commercial / residential buildings. Moreover KHCL has acquired some land in Mahim under SRA scheme. In a 33% joint venture with Aspen Property Pvt. Ltd., it is developing a property at the famous Filmistan Studio, comprising both residential and commercial units. Meanwhile it is negotiating for few projects at 4 bunglow, Andheri Kurla Road.
Amalgamation of Doongursee Diamond Tools
During Q4Fy08 the company has amalgamated its subsidiary called M/s. Doongursee Diamond Tools Ltd with itself. Notably, this subsidiary is holding one lakh FSI for the Malad project.
Bonus Issue
During Q1FY09, KHCL issued bonus shares in the proportion of one equity share of Rs 10 each for every existing equity share held. The company has also recommended a dividend of 25% for FY08.
Valuation
KHCL is expected to register robust growth in revenues and earnings going forward. It is currently quoting at compelling valuations of 0.8x and 0.7x FY10E and FY11E earnings. The stock has succumbed to the market turmoil and its price has declined significantly in the last 3 months. With a strong project pipeline to drive revenue and earnings growth, the stock has potential to deliver handsome returns to the investors over a period of next one year. Investors can enter into the stock at current level , which is very attractive and should enable investors to earn a healthy return on their investment.
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