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Saturday, January 19, 2013

PANAMA PETROCHEM LTD - BUY




Panama Petrochem is an Ankleshwar based manufacturer of specialty oil products promoted by Rayani family.Company having five manufacturing units in India located at Ankleshwar, Daman, Dahej,Marol and Taloja .Its total capacity is 105000 MTPA  for more than 80 products together.Recently company started a subsidiary in UAE - Panol Industries RMC FZE. Petroleum Jelly,Liquid Paraffins,Rubber Processing oil,Transformer oil,Cable Jelly,Knitting oil ..etc are companies major products.These products are widely used in industries like Cosmetics,Pharmaceuticals,Electrical,Cable Manufacturing,Textiles..etc.  Company selling various branded products for these industries.Panama Petrochem tied up with Germany based Lubcon Lubricant Consultants for developing new oil based products.Crude derivatives are the main raw materials for the company and the current  stability in crude price will help the company to protect its margins.Even at the time of higher crude prices,company successfully hiked its product prices to protect its margins to a certain extent.Now, many countries are exploring  opportunities to start/increase shale gas/oil production.This efforts may act as a check for sharp spike in crude prices going forward.

                                                      For the FY 2012 company reported a Sales of Rs.583 Cr and a net profit of Rs.31 Cr .On a small equity of Rs.8 Cr FY 12 EPS was Rs.39/- . Company is very liberal in dividend distribution too which paid 50 % each in past three years. It is almost a debt free company with a book value around Rs.260 .After hitting a 52 week high of Rs.250, now this stock is trading around at  its  52 week low price. Considering promoters’ experience in this industry ,expansion plans ,stability in raw material prices ..etc  recommending a  BUY @ CMP Rs.135/-

Link to company website HERE

Link to latest Annual Report  HERE

87 comments :

  1. Hi VP

    thanks a lot for expressing a positive opinion on a manufacturing stock after a long time..
    Robin

    ReplyDelete
  2. Hello VP Sir,

    I have been investing in MNC's like Ingersoll Rand, Yuken India, Alstom Projects. What risks you think investing in MNC's like these have?

    ReplyDelete
    Replies
    1. Two special risks are, possibility of floating direct subsidiaries of parent company and doing futuristic business through that subsidiary and another point is a possibility for higher royalty payment for using technology ,brand name ..etc.These are main risk not specific to the mentioned companies but applicable to all MNC's .

      Delete
  3. Thanks for review. What is your opinion on Andhra Petrochemicals?

    ReplyDelete
  4. Sir, wat are your thoughts on
    supreme industries ltd. is good to invest at current level.....

    ReplyDelete
    Replies
    1. Company is not bad ,but not suggesting an entry at current price.Wait for dip ..

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    2. Thank you Sir :)

      Delete
  5. I have jyothi labs.how abt its feature?

    ReplyDelete
    Replies
    1. Reasonably good , should control its debts

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  6. HI Valuepick,

    What is your thoughts on Selan Oil?
    On the fundamental side they may just get approvals for Drilling from DGH at any time and Dolly Khanna is increasing her stake in selan every quater on quarter.

    Regards,
    Vikas Karunakaran

    ReplyDelete
  7. What's your view on sintex Sir.

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  8. could you please suggest some consumption stock,can i buy vadilal at cpm.please answer both ques.
    thanking you
    astha

    ReplyDelete
    Replies
    1. Vadilal Recommended around Rs.105 ( see the below link) which is currently trading around Rs.224 .At CMP it is a HOLD for me.

      http://value-picks.blogspot.in/2012/06/vadilal-industries-ltd-buy.html

      Delete
  9. Dear sir,

    Entering into mangalam cement, vatech wabag, & granules at current cmp, your advice please sir..

    ReplyDelete
    Replies
    1. I don't think anything serious negatives happened to these companies post recommendation.

      Delete
  10. Thanks sir for a good pic again :)
    What is ur view on Goa carbon now?? should we re-enter?

    Regards,
    Kinshuk

    ReplyDelete
    Replies
    1. Many good companies are available at attractive valuation mainly because of recessionary situation of that particular industry and not because of any specific issue to that particular company.In such a case investors should show enough patience till that sector came out of woods .Considering the challenging business environment prevailing in India ,we can't assume this will happen in short period like 3 or 6 months.What I mean is ,even a particular company is good we may get appreciation only when that sector gets a re rating.

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    2. ok , got it sir. Time horizon should be real long (5 years+) Thanks again

      Delete
  11. Sir,

    Do you track technocraft industries? What's your view on this. Can this be considered to buy at CMP?

    Regards,
    Nadim

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  12. Hi Sir, also can you tell about this new IPO - Esteem Bio Organic Food processing Ltd...is it worthy enough for participation?

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  13. This same promoters came out with another IPO last month for Eco Friendly Food processing park Ltd which is also in the same business .When there is some improvement in market sentiment ,they are trying to collect money .I don't know why there is two companies for similar purpose and two IPO within two months.I don't like these type promoters.

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  14. Dear Sir,
    Want to know your view on Dish TV and IRB infra for long term.
    Thanks.

    ReplyDelete
  15. Sir,
    I am in dilemma regarding investment between MF and stocks. Earlier I used to invest in MF in SIPs, but now that I have started in stocks myself, I am not sure what should I invest in MFs. Earlier I used to do sip of 14k p.m. and rest in FD etc, but now I have started investing stocks and money seems less to me when investing in stocks, what should I do ? Should I stop some of my SIPs and invest that money in stocks? I have already reduced my FD amount.

    ReplyDelete
    Replies
    1. SIP in good mutual funds will always win. You have to do the at least 5 years or more

      Delete
  16. Dear Mr Chandra

    It is not an easy question to answer. It depends on your capacity to take risk,time available for collecting information,expected return ..etc.

    I have one small suggestion - never mix savings with investment .Everyone must keep some money for meeting emergencies irrespective of return from it.Whether breaking FD and investing that money in stock market is true or false depends on your over all financial positions and other liabilities which may arise in future.Anyway I will not support an idea to break entire FD and put that money in stocks ,especially at a time market ruling nearly its all time high levels. Opportunities are always in market but one should never driven by market sentiment. Never invest in stock market when we have money ,but invest when we have good opportunities to do that - means when valuations are attractive .Availability of time to learn more and patience are other major factors for success in stock market.

    ReplyDelete
    Replies
    1. Three claps for your most appropriate and realistic reply which has awakened me.-Vihwanath

      Delete
    2. Thank you so much sir :)
      I try to stick to what you say, because it looks right to me as well ... The feeling of left alone in equity forces me to put more money, but what you said is v.correct. Thanks for your valuable advice

      Delete
  17. hello sir
    what is your take on ifb industries at cmp

    ReplyDelete
  18. Hello Sir
    Thanks for your valuable suggestions.
    Please comment on 5 stocks. All 5 are your earlier recommendations which are trading quite below then recommended price.
    Mangalam Cement, KSB Pumps, Godawari Power and Ispat, Career Point (Recommended at IPO at around 300 INR. Today it is trading around 150 INR.)
    Do you think, one should keep adding small amounts on dips.? Career point's valuations are quite attractive. Isnt it sir?

    Another stock which I always ask is Rossell India. I didnt sell it even on 55. Today it is at 45. Still a hold for you sir..?
    Thanks a lot:) Take Care.

    ReplyDelete
  19. Sir
    your view on la opala, i brought at CMP?
    and also view on hanung toys?

    ReplyDelete
  20. sir,
    What do you think about zuari global and capital first?

    ReplyDelete
    Replies
    1. Not tracking Zuari Global , One can consider buying Capital First in small lots.

      Delete
  21. hi vp, any idea about GAEL?

    ReplyDelete
  22. Sir,

    between Britannia and Agrotech Foods, which one would you prefer for a conservative investor and why?

    ReplyDelete
    Replies
    1. For a conservative investor GSK Consumer is better than both of these.

      Delete
  23. Hi VP Sir,

    what do you think about Motor and General Finance at this price?

    ReplyDelete
    Replies
    1. Promoters are buying from market for the past many months.No idea if something is cooking ..

      Delete
  24. Sir,
    your views on Orient Bell at current price?

    ReplyDelete
    Replies
    1. I believe nothing has happened so far to change my views.

      Delete
  25. sir,
    your stocks after recommendations are going down. any reasons?

    ReplyDelete
    Replies
    1. I can only present my stock ideas and not to rigg prices too .If you feel so better to avoid acting on my suggestions.

      Delete
    2. Yes sir,
      Implemented what you mentioned as losses are more than I can take it.

      Booking loss and exiting all the stocks now.

      Delete
    3. That's the best decision one can take when lacks conviction.

      Delete
  26. Sir ur view on Jhs svenguard and Jai balaji at CMP ?

    ReplyDelete
    Replies
    1. Negative on JHS Svenguard and not tracking Jai Balaji

      Delete
  27. Whats your present view on mangalam cement?

    ReplyDelete
  28. sir circuits opend in bambino agro even company having very good business prospects why it is showing lowerr circuits is there any reason behind this?
    thousands of selling orders is it going in oppsit direction

    ReplyDelete
    Replies
    1. Correction is part of stock market.Appreciated more than 100 % in last three months.

      Delete
  29. Sir if one wants to chose between mahindra finance and bajaj finance,then which one should one go for?
    Aditya

    ReplyDelete
  30. dear value

    (1)though i m a long term investor but frightened by crash in mangalam cement price. anything wrong?

    (2)i want to buy Mastek from IT sector. consider ur opinion. plz give.

    Yours Patidar

    ReplyDelete
    Replies
    1. Not aware anything wrong for Mangalam Cement specifically.Whenever a foreign brokerage published a report saying that the Cement demand in near term may slow down due to cold weather condition in north , all cement cos corrected.Instead of running away ,investors stock take these type situations as an opportunity and look beyond few months.

      Delete
  31. dear VP,
    Kindly update on Sabero, post results its been falling?
    Your views on results?

    regards

    ReplyDelete
    Replies
    1. Please avoid repeating this ,already expressed my opinion post result.

      Delete
  32. i think one new investir has asked all anonymous question. Hope god bless him

    ReplyDelete
  33. Sir,
    Is it the right time to enter into blue star ?the company has reported profit in this quarter still it fell.I have saved around 50 thousand and I want to invest in a medium risk counter to take care of my future responsibilties.
    Veer singh

    ReplyDelete
    Replies
    1. If you are not interested to take above average risk better to look into some blue chips on any dip.

      Delete
  34. Hi Sir,
    Can these be bought at current market price and do you think these can give decent return if investment is made for long time
    1. Kalyani forge
    2. Bajaj Hindustan
    3. Shree renuka
    4. Ion exchange

    Regards,
    Nadim

    ReplyDelete
    Replies
    1. As you know, like the case of bank FD ,time period will not ensure higher return in stock market.Keep tracking the growth of Industry and specific company and then take decisions accordingly.If company is growing nothing wrong in holding the same for long term even the market mood is bad.

      Delete
  35. Sir your views on aptech ??
    Thanks

    ReplyDelete
    Replies
    1. Only attraction for Aptech is the holding of RJ ( If it is so ). Purely on business prospects I am not positive on this stock .There may be some upside possible if there is some stake selling news or so.I am negative on this stock and can't find any reason to stay invested.

      Delete
  36. Hello VP Sir,

    I have sent multiple mails but I guess you are answering way too many questions from different investors. What I wanted to know is with the current CMP, can I invest in Geometric, Canfin Homes and Jai Balaji? I am trying to focus for long term and hence I am targetting low CMP stocks. Please advice and hope to get a reply from you.

    Thanks and Regards
    Vijay.

    ReplyDelete
    Replies
    1. Not strictly tracking any of these.Even your query not answered , messages about same cos answered for others ,so please avoid repetition to save time and effort.

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    2. Yes Sir, would try not to repeat the questions. Thanks!!

      Delete
  37. sir,
    what is your view on your odl pick PIONEER INVESTCORP (PINK).Is it right time to buy?

    ReplyDelete
  38. Sir are you tracking Manali petrochem and if so what are your views
    Thanks

    ReplyDelete
  39. what is your view on MRF and is optocircuit is value buy at current level when compared to other pharma stock

    ReplyDelete
  40. Sir plz share ur view on ashapura mine.ur replay is very importent for me
    Regards
    Jasim

    ReplyDelete
  41. Does you old recommendation Interlink petroleum deserve a relook now, pertaining to new developments

    ReplyDelete
    Replies
    1. the promoter of the company changes every now and then.if the company's promoters dont have trust in it, better for us to avoid it

      Delete
  42. Dear VP,

    What are your thoughts on Mirza International (runs the brand Red Tape)?

    ReplyDelete
  43. Any reason sir, why Panama Petrochem is down from 150+ to 140 around?

    ReplyDelete
  44. Hi sir,

    What is your view on Videocon Industries and Value Industries>

    ReplyDelete
  45. Sir , What is your view on Mastek ?.I am holding it at 221/-. Pls suggest.

    ReplyDelete
  46. Sir pls suggest your views on mastek. I am holding at price 221/-

    ReplyDelete

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