Saturday, February 1, 2014

OPTICAL FIBRE CABLE - SECTOR TO RE - RATE









Last few years were very tough for OFC manufacturers both locally and globally.In India ,year long unhealthy competition eroded the financial health of many user companies which forced them to postpone their telecom infrastructure expansion programs .On the other side prolonged recessionary situation in developed countries adversely affected Indian OFC makers’ efforts to tide over the difficult situation through export.Lot of consolidation happened in this industry and now only the fittest is surviving.After a long period ,signs of recovery is visible in this industry.In our country National Optical Fibre Cable Network( NOFN) project will be a big boon for OFC makers.NOFN is an ambitious project of India goverment to provide broadband connectivity to over two lakh  Gram Panchayats at a cost of Rs.20,000 crore . A special purpose vehicle -Bharat Broadband Network Ltd (BBNL) - was created for the execution of this project. BBNL has divided the project into 6 packages- East, West, North, South, Central and Northeast , and this project is scheduled to be completed by September 2015. But like the case of any other government projects ,it already delayed and only recently orders for supplying cables and equipments started to issue to various companies. I think it is a huge opportunity for Indian OFC manufacturers and will be an additional push along with the over all revival in industry. Suggesting two low priced stocks from this sector in this week .
  

Aksh Optifibre

Aksh Optifire is a leading OFC maker from India with two manufacturing facilities ,one each at Bhiwadi and Sikar in Rajastan.Company is a major exporter of OFC and earning more than 70 % income from exports .Recently company awarded an order for supplying OFC worth Rs.200 Cr under the NOFN projects .For the first half ended in September 2013 ,Aksh reported a top line of Rs 122 Cr and a net profit of Rs.11.5 Cr .Promoters are continuously buying shares from open market in recent times and stock is currently trading around Rs.15

 Link to Company Website HERE


Birla Ericsson Optical Ltd

It is a joint venture between M P Birla Group of India and Ericsson Cables AB of  Sweden.Company reported good  performance in first nine months of this FY where it reported a Sales of Rs.189 Cr ( Rs.89 Cr ) and a profit of Rs.11 Cr ( Rs.5 Cr) . Currently stock is trading around Rs.23

Link to Company Website HERE



Along with NOFN ,some other major initiatives which will aid the growth of this industry is at various stages of planning and implementation.A project for connecting all locations of our armed forces points through OFC is expected to kick start in near future.Private sector players are keen to tap new  opportunities  through FTTH (Fibre-to-the-home) projects.All together the next few years will be good for this industry and recommending the above two stocks. Both stocks are listed in both exchanges.

35 comments :

  1. Very Interesting ! u pick about 50 comapnies per year as multibegger?

    ReplyDelete
    Replies
    1. Where I mentioned every company will become multi bagger ?

      Delete
    2. Sir,

      Thanks for your wonderful recommendations.I bought ard 500 shares of Liberty around 150.Although the result was good but becuase of very high expectation from the company,the market reacted in a negative manner.

      1.My question is ,can I average it out at the current market price.Do u still feel that going forward it can maintain its promise of delivering good set of numbers and rewarding shareholders with good wealth and dividend.

      2.Can I add acrysil india at the current market price?

      3.What is your view on PI Industries.

      Would really appreciate if you can answer these questions.

      Thanks in advance.

      Delete
    3. Liberty shoes recommended twice at Rs.95 and again @ Rs.112 which is currently trading around Rs.120 ,but you bought it @ Rs.150 .Entry price is very important in any investment .In case of Liberty Shoes ,I believe ,it came down mainly on account of delivery selling by a single person from the promoter group and I think it is nearing completion by now .

      Acrysil recommended at lower level and it is a HOLD at CMP

      Not tracking PI Ind.

      Delete
  2. Sir, appreciate ur efforts, I request all the followers do their homework before buying any stocks, its not fair to comment u, and that too u r giving ur ideas free of cost, others who charge huge amount did not worth of. Need ur advice on Shalimar Paints (results not good) for 2-3 years, also invester Dolly Khanna increasing her stake......thanks (Nikitha from Hyderabad)

    ReplyDelete
    Replies
    1. Many readers are thinking company is going to end only because of a single bad result.In this challenging business environment some factors are beyond even the management's efforts .Such things will revive when the economy pick up .As you mentioned above Dolly Khanna increasing stake in a company which reported bad result .Prudent investors always keeping long term view on cos and take temporary set backs as opportunities where many of our readers have only one week or maximum one month view on all stocks and expecting a multibagger over night.Thats the difference.

      Delete
    2. Sir, I don't see Dolly Khanna's shareholding in Shalimar Paints for Dec 2013 shareholding pattern. Am I missing something (if she holds investment in some other name)?

      Delete
    3. Sorry ,Since I am not tracking that stock I didn't cross checked it and just replied to the query as a general case.

      Delete
    4. @ Nikita: Could you please let us know from where you found out that dolly khanna has stack in shalimar. I am a cloner and this information affects me. Thanks.

      Delete
  3. Views in stone india ltd plsss sir

    ReplyDelete
  4. Pls. Suggest on shirpur gold. I am holding it from last two years.

    ReplyDelete
    Replies
    1. Due to the change in gold and gold ore import duty of government on account of increasing deficit ,all related stocks beaten down in past one year or so. Govt is expected to allow some relaxations once the burden eases ,then only company can improve its business.

      Delete
  5. Hello Sir,
    I need your suggestion in Paushak ltd. I hold 1000 shares of Paushak @230. Q3 results were very disappointing. Post results it is closing on Lower circuits. Should i buy more at lower price to get my avg. price down. I do trust this company and business as it is part of alembic group. I sincerely request you to please advise on the strategy for Paushak Ltd post Q3 results. Thanks. Sandeep

    ReplyDelete
    Replies
    1. There was some high expectation about its third quarter result which didn't materialized ,but still company already reported more sales and profit in these 9 months compared with last full year.I don't think there is any need of panic.

      Delete
  6. Dear Vp what's your call on Pvr after recent huge correction, as the company has two big movie releases in the month of February. Moreover they plan to add 20 more screens in March to the already 60 screens opened this year. This will take their screen count to 428 in about 42 cities. PVR has plans of opening 80 more screens next year.

    ReplyDelete
  7. Dear VP Sir, Granules entering wine business through KRSMA Estates. Do you foresee any effect on the stock ? Thanks. Vishala

    ReplyDelete
    Replies
    1. Read the news correctly .Not granules entering in wine business .Krsma Estates is a private company promoted by the same promoters of Granules which is in existence for the past many years

      http://www.hospitalitybizindia.com/detailNews.aspx?aid=18673&sid=1

      Delete
  8. Sir
    whats ur veiw on lakshmi electrical and control.
    good result , good cash in hand , good FD , good land bank.
    is it a buy at CMP?

    ReplyDelete
    Replies
    1. Stock once recommended around Rs.200 which hits a high of Rs.388 and later came down .Stock gained post declaration of 3 quarter result .Better to enter after a consolidation.

      Delete
  9. VP,
    I understand you also may have constraints that restrict you from investing in all the stocks that you recommend...Any specific reasons for deliberately staying out of the Fibre optic stocks??

    Pls Post this so that we are further educated....

    ReplyDelete
    Replies
    1. Depth of my pocket is not unlimited

      Delete
  10. Dear Vp, I am waiting for your result update on MAFATLAL and Saksoft

    ReplyDelete
    Replies
    1. Commended about Mafatlals result as a reply below the posting of Granules on 29/01/2013 itself.

      Delete
  11. sir, please evaluate the q3 result of ,sunshield chemicals ltd,.hari k

    ReplyDelete
  12. Hold Sunshield if ready for long term

    ReplyDelete
  13. Any suggestions on Indiabulls Housing Finance.
    I've been holding it for almost an year. (5000 shares).
    Not sure whether it would ever rise or not. Although the company has shown good results in the past. Still nothing reflected in the stock.

    ReplyDelete
  14. Sir,
    Birla Ericsson optical is at 34 now...Can I enter at this price? ...Thank you...

    ReplyDelete
  15. Dear Sir,

    Optical fiber market is going to boom now after stable gov has come up.

    According to u which one is better choice Aksh Optifibre , Finolex Cables and Birla Ericsson Opticals

    Or you recommend some other stock in this sector.

    ReplyDelete
  16. Dear Sir
    After following your post, I was thinking of entering Aksh Optifibre as it looked the best bet but I noticed that its promoters have recently reduced their stake from 34.4% to 33.9% (From September 14 to December 14). Although not material, the interesting point is that it has been done at a price of 15 per share even thought he company has reported stellar numbers for the last 2 quarters. Just wanted to know if you had any views o the development.

    Thanks
    Sachit

    ReplyDelete
    Replies
    1. It is one point we should keep an eye . Let us wait and see whether this trend is continuing or selling by promoter is over , and only then take a decision

      Delete
  17. Sir, for Birla Ericsson both Mar 15 quarter and FY 14-15 has not been good. Operating margin also seems to be fluctuating every quarter. What is your view sir.

    ReplyDelete
  18. Aksh has paid dividend in 2014 but none in 2015.
    The board has announced expansion plans to increase capacity by 80%. The stock is at a 3 year low.
    Based on the above facts is there a change in your opinion? Thanks

    ReplyDelete
  19. Respected Sir,

    Long ago almost 2.5 years ... You had started this article and by your great experience and far sightedness you had said time is ripe for this fiber optic industry...
    And looks like on ground level things are going as what you had predicted

    Though for this many years nothing much changed for the price of Aksh ... Suddenly it has spurred with huge volumes and given a breakout of multi year on Technical terms ..

    And on the fundamental side it looks like fiber optic cable now have even more great demand after this Jio launch and many initiatives by government too for smart city and e-governance... And even the quarterly results have improved for Aksh and also FCCB issue is been sorted out as per company annual reports ...

    Your view and guidance will be highly appreciated.... Looking forward to your reply

    Regards,
    MANISH

    ReplyDelete

Followers

Tweet TopOfBlogs