Delivering on Q2 expectations
Most of the stocks we have discussed till now have done very well in Q2 nos. In reference to the post on the pre Q2 stock ideas : , both the companies have done well.
Ahlcon Parentals:
http://www.bseindia.com/xml-data/corpfiling/announcement/Ahlcon_Parenterals_India_Ltd_311009_RSt.pdf
The company seems to be back to decent profitability. The expected growth may come up by next qtr. Stock has potential to get better discounting.
Fresenius Kabi:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The company has done much better than the expectations. The margins have exploded and are above 30% now. At this rate and based on the expansion plans of the company, the company may deliver excellent returns in long term.
The company also seems to have attracted the attention of few fund managers (track the mutual fund holding in this company).
Suprajit Engineering
“I am more confident today, than a year ago, that Suprajit is better prepared” - Managing Director , Suprajit Engineering Ltd.
Hi Friends,
Keep a tab on this company. This is a good company in a good sector with very good long term prospects.
The company is known for it’s leadership position in the automotive cable market – The company is now expanding into non-automotive cable market which is 20 times bigger in size than the automotive cable market. As per my reading – the promoters are honest, shareholder friendly and ambitious and after a lot of consolidation in last couple of year, the company seems set to be back on a steady growth path.
The past track record of the company is fantastic. They have grown from just 33 Cr turnover in 2002 to 206 Cr last year.
For this year, I expect the company to do a turnover of 190-200 Cr+ (on standalone basis) and a NP of 14 Cr+, resulting into an EPS of 12+, conservatively. With the new plants coming up, the company may be able to maintain these growth rates for coming years.
Read about the updates of the Company on BseIndia.
Rather than providing the details myself, I would like you all to go through the co’s website, annual report etc to get more details and take informed decision.
Majestic Auto
Hero Honda has once again come out with brilliant performance. I have been missing investing into this company for quite some time.
Another beneficiary of the stock price of Hero Honda is Majestic Auto. Majestic holds 16.25 lac shares of Hero Honda valued at 262 Cr, as of today, while it’s own M Cap is just 69 Cr. It also has other hidden assets like factory, land and other business interests. The company will also benefit by way of higher dividend – which Hero Honda should payout this year.
Excellent Q2 nos from Shilpa Medicare
Shilpa Medicare (reviewed on July 26) has posted fantastic Q2 nos. Few highlights are:
- Approx 54.00% rise in standalone turnover YoY & 24.20% rise QoQ.
- Approx 77.57% rise in standalone OPM YoY & 20.33% rise QoQ.
- NP = 12.62 Cr resulting into an EPS of 5.74.
- OPM very healthy around 31-32%.
- The loss in the subsidiary has narrowed down substantially.
- The interest cost has started reducing despite the company being in expansion mode.
I expect the company to continue posting such healthy nos and should better out in coming quarters. The stock has all the potential to move to the next orbit of Rs 250-300 levels.
Warm up to Q2 results
Quarter two results are are almost there, and we will keep our eyes on the stocks which are undergoing expansion and have come out with good Q1, yet available at cheap valuations. Focus sector is the pharma sector (as it is in the pink of health) and here are two stock ideas:
-
Ahlcon Parentals: The company is back to decent profitability after having some troubles in the slowdown. One must go through their latest annual report and sense the optimism in the company. The company is in the process of scaling up the capacities and they could achieve 50-70% growth in next 1-2 years. Even if they don’t scale up majorly but be back to pre-crash sales levels of roughly 50 Cr, the company could well achieve an EPS of say 8-10. CMP is just 37.
-
Fresenius Kabi: Better known as Dabur Pharma earlier, this company is having ambitious plans for the oncology segment. Oncology sector is witnessing high growth rates and we should continue to bet on serious players in this space. Go through their annual report and one can sense the major expansions and the possible returns one can generate. Their Q1 was excellent and a consistency or improvement over Q1 can zoom the stock price.Share your views
Siemens Healthcare
I came across this very interesting stock idea and I think we all should dig into it more and accumulate on declines.
Background:
The company was earlier known as Bayer Diagnostics. Siemens group took over this company last year.
Positives:
- Tiny Equity capital of just 1.57 Cr hence at CMP of 1100 – Mcap of 165-170 Cr is not much considering it to be part of the huge Siemens group.
- The company is into healthcare sector which is bound to grow rapidly over next few years. Cos like Siemens are market leaders in this sector and can exploit the maximum potential.
- The turnover has already started increasing. Co has reported 75% growth till June 09 (first 9 months) and 92% growth in March Qtr (45.38 Cr vs 23.61 Cr)
- The profitability part is not clear due to several adjustments and may be balance sheet clean up after the takeover. But I expect the OPMs to be easily 20%+ if the Siemens group is bringing it’s expertise in this co. We should get a clearer picture in next qtr nos and annual report.
The opportunity I’m seeing is – For a group like Siemens, current size of operations & Mcap are peanuts. They can definitely scale-up big time here and create multibagger returns for shareholders.
Please dig in more and contribute with your industry knowledge on this company.
Jaihind Projects – Report
Friends,
I had released a formal report on the company today.
Views Invited.
CHI Investments – Update
ETIG has recommended deep discounted holding companies for long term investment in it’s article: http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETM/2009/09/07&PageLabel=19&EntityId=Ar01900&ViewMode=HTML&GZ=T
CHI Investments has topped the list and is still available at approx 84% discount to it’s NAV J. We had recommended CHI Investments at just Rs 25 in our blog post: http://dalaal-street.com/chi-investments-interestingly-mis-priced/
With better discovery by investors, this mispricing should reduce going forward. The gap can reduce to 50% of NAV like in other holding cos. If so, the stock has potential to reach Rs 125-150+ in long term. Another positive factor in this stock is – that it is listed both on NSE & BSE and has decent liquidity unlike other small holding cos (which are illiquid). Also, CHI Investments has investments in cos which are related to power sector and have high growth plans.
With increasing media coverage and shareholders, the risk of unjust merger is also getting reduced.
Shilpa Medicare – Update
We recommended SML in our blog on 26th July, 2009 @ 90. The stock has witnessed a fantastic upmove and has been hitting upper circuits since last few days. The stock was locked up at 161.70 today J
At CMP, we advice small/partial profit booking but at the same time one shouldn’t underestimate the long term story in this stock. The stock still has long term potential for the following reasons:
- The company is all set to emerge as the biggest & dedicated player in the Oncology segment.
- The company has fantastic operating margins of 25-30% and the company is growing @ 30%+.
- For co’s growing at such pace with such high margins, the PE multiples could be in the range of 15-20.
- If so, price target of Rs 200 can be achievedJ.
Other triggers are:
- The company is expected to receive USFDA approval by the end of this year.
Apart from that, we are awaiting the annual report of the company and looking for industry/market updates. Chip in your updates, if any.
Hitler Misses the Bull Market
Hahaha, awesome video, something that’s very true. and missed by many investors.
