Saturday, April 19, 2014

Himalaya International - 'MODI' fying Business. ?






---------------------------------------------------------------------------------------------------------------

Ever since I started writing this blog ,receiving  lot of requests from my readers to recommend low priced /penny stocks.Considering the risks involved in such stocks,so far recommended very few like  Marksans Pharma @ Rs.4 .I have one small request to my readers that , seeing the return  of Marksans ( From Rs.4 to Rs.25 ) ,never jump into this one without studying the company and generating own conviction.As you are aware ,we all are interested to get penny stocks which can give multi bagger returns.But in practice it is not an easy task and it is not possible to decide in advance that a stock will become multibagger. This will happens when many positives comes together and only over a period of time.If we take 10 penny stocks ,hardly one or two may turn as multibagger and even our capital may loose in the rest.This is the reason I hesitate to recommend penny stocks even after  receiving lot of request from my readers after the gain you  earned in Marksans pharma.One more important point – never buy this stock if you have no patience to wait for long time and you are not ready to loose even your capital. It is a strict ‘NO’ to those who demand frequent updates and ‘What to do ‘ messages on a daily basis.
----------------------------------------------------------------------------------------------------------------

The Sector
In a country like India ,food processing a is a sector with huge potential.Weather and atmosphere conditions suitable to produce wide variety of food items like   fruits,vegetables,pulses ..etc makes India as one of the most futuristic country in this segment.Large domestic population and comparatively cheap labor offering good scope for this sector for many more years.We have already discussed many stocks from this sector like Tasty Bite Eatables ,DFM Foods,Heritage Foods,Britannia ..etc and most of them already turned as multibaggers.







                                                      
  
The Company 

In this week ,we are looking into BSE listed Himalaya International Limited (HIL) .Company is jointly promoted by Mr. Man Mohan Malik and Mr. Sanjiv Kakkar. Based on the installed capacity HIL is one of the largest food processing company in India.HIL producing,processing and selling Mushroom , Vegetables,Cheese,various types of sweets and appetisers,yogurts...etc.Company selling products under the brand ‘Himalaya Fresh’ and also doing private label business.For sourcing raw materials including vegetables and mushrooms company made contract farming arrangements with local farmers in addition to own cultivation.Company’s main production facilities are located at Ponta Sahib ( Himachal Pradesh ) and Vadnagr ( Gujarat) – the home town of Shri Narendra Modi.In last financial year Shri Narendra Modi Inaugurated Himalaya’s new factory at Vadnagar which costs around Rs.160 Cr and the single largest provider of job for the locals. 



 VIDEO LINK 1

           Shri Narendra Modi Inaugurating Company's new plant at Vadnagar 

            
Financial Performance

In FY 2012-13 ,Company reported a turnover of Rs.112 Cr , net profit of Rs.20 Cr and an EPS of Rs.3.90.Out of its 51 Cr equity promoters holding around.35.44 %  and other large share holders ( > 1 %) holding around 23 % stake in this company .Promoters recently subscribed  896100 shares at a price of Rs.11 on a preferential basis.Company targeting massive increase in top line with increased capacity utilisation in its Gujarat plant.


 




Conclusion

There is lot of skepticism around this company for the past many years. Its never  ending capacity expansion ,relatively large equity base ,non payment of dividend ..etc may be the major reason for that.In addition to this ,since company supplying products to overseas markets  and concentrating in private label business , brand visibility in India is less which is also a reason for commanding lower P/E.Company’s failure to maintain relationship with global food and agribusiness conglomerate, JR Simplot Company with whom Himalaya earlier formed a 50:50 joint venture and later called off may be another reason for investors apathy.In 2013 company decided to  allot 12.5 million warrants to Trydin America LDC but the same not materialised ( Read it HERE)  .Instead of this , in last month company allotted 896100 shares to Himalya International Inc. NJ, USA (Promoter Group). As per company version, non payment of dividend is for conserving resources for recent massive capacity expansion.

   


  

Click on the above image to read MD’s  explanation for some of the negative events related with the company.




Even if company may  not be a great success in marketing side ,it has built a fully integrated sizable capacity for production of mushrooms, french fries, onion rings, appetisers, mozzarella sticks , fruit yogurts and cans of soups.Now it is the time to concentrate in marketing efforts and brand building.Since company claiming its major sales from overseas ,that itself through private label and online stores selling Indian ethnic food items,
there is practical difficulties to check the genuinity of sales figures provided by the company .
 
 Check product listing in Amazon.com HERE 

Check product listing in another selling point HERE

But I believe ,Its production facilities itself deserves much valuation compared with the current market cap of just Rs.66 Cr. The sector in which company operating is one with huge potential and the reported numbers are very good.A possible change in power equations post election may augur well for Himalaya International.Even without this  factor stock of a food processing company below 3 P/E seems very cheap where the average industry P/E is close to 15.



If everything is correct and company can materialize its future plans ,stock may turn as a dark horse from current level of just Rs.13 in next few years.Stock listed only in BSE with scrip code 526899


  VIDEO LINK 2

Himalaya International Celebrating Shri Narendra Modi's Birthday with CSR Activities


------------------------------------------------------------------------------------------

Notes : 

1) As I mentioned at the beginning ,investing in penny kind stocks always risky and advisable only for high risk takers.

2) Many of the information provided above taken from publicly available sources,company claims and projection which is prone to higher degree of errors and I have no guarantee about its accuracy .Assumptions arrived on such factors  may result in wrong judgements and hence requesting self study before acting on this recommendation.

3) I have vested interest in HIL




                                                   News on  Inauguration of plant 






65 comments :

  1. Once again one of the best pick of 2014

    ReplyDelete
  2. Hi Value pick,

    Good research. I was initially sceptical about this company but hats off to your analysis and research which will definitely make me have a 2nd look towards this company.

    I have purchased Orchid chemicals. According to you after the transfer of the pencillin and API business to Hospira, what would be the Quarterly sales of Orchid.

    ReplyDelete
  3. if the co posts 7 to 8 cr net for Q4 then one can buy confidently as it indicates co is on course and its products are well accepted

    ReplyDelete
  4. Respected Sir,

    We need your comments on Liberty shoes post the Q4 result.It has posted an excellent result in Q4 and hope they will continue growing @25%.Also our own famous investor dolly Khanna has increased her stake in liberty shoes which shows her confidence in this company.

    Please let us know whether we should hold the stock or buy more at the current level or at dips.Can it be a multibagger even from current levels

    Thanks & Regards,
    PB

    ReplyDelete
    Replies
    1. Good Result as expected .Hold the stock and one can buy in dips around Rs.150.

      Delete
  5. Sir indeed a value pick, but I'm still waiting for fundamentally strong companies like BASF or Vesuvius recommended earlier which can be included in core portfolio.
    Pls do reply.
    Thank You.

    ReplyDelete
  6. Dear VP

    I am following your BLOG since last three to four month and after analyzing your research pattern, i just want to say one word " God bless you" for doing such a wonderful job for small retail investors.......Keep it up...

    ReplyDelete
  7. Replies
    1. For my old readers Fluidomat already turned as a 4 bagger.Stock recommended earlier @ Rs.29 which is currently @ Rs.115


      See the below link

      http://value-picks.blogspot.in/2010/07/fluidomat-watch-it.html


      At CMP neutral on it.

      Delete
  8. I am new as a investor. But this blog has helped me on how to research on a particular stock. Thanks for your efforts sir. Greatly appreciated.

    ReplyDelete
  9. I am new to this site and i am already loving it. Great research and hard work from ur side.

    ReplyDelete
  10. whats your view about MCX reports suggest that reliance group is going to buy the 26% share. should one book profit. personally don't like reliance group. would love to hear your view

    balaveera

    ReplyDelete
    Replies
    1. If we don't like anything in a company no meaning in staying invested in it

      Delete
  11. sir please express your views about man industries ltd.

    ReplyDelete
  12. sir,
    Doing very great job for small investors,other wise they could loose their capital, hats off to you, hope you are going to do the research sill scientific way in future by virtue of your experience, Thanking your sir,
    yours,
    I. Muralidhar Reddy,

    ReplyDelete
  13. Thanks for the pick. What do you think of Bambino Agro which is from the same segment. Stock doesn't seem to move at all

    ReplyDelete
    Replies
    1. Still positive on Bambino Agro.If business is growing ,once investors will identify it .Wait with patience and enjoy the dividend till then.

      Delete
  14. Hello VP,
    Could you please share your view on HEXAWARE technologies?

    ReplyDelete
  15. Himalaya Intl targets over Rs 500cr turnover by 2015.........


    Himalaya International Ltd has informed BSE that the Board of Directors of the Company at its meeting held on March 30, 2014, has reviewed and approved as under:-1. Board allotted 896100 shares on conversion of warrants to Himalya International Inc. NJ, USA (Promoter Group).2. The COO Mr. Dhanota reported his meeting with Ministry of Food Processing and informed that Ministry is waiting for release of funds from Finance Ministry and the amount is likely to be released in April 2014.3. Board reviewed the ongoing projects and directed COO to implement all pending projects within first quarter of new FY 2014-15.4. Targets for FY 2014-15 Presented by COO have been taken on record and Board assured all assistance to the Executive Team headed by COO. Board considered & agreed in principle on the proposal submitted for a three year ESOS scheme to reward and motivate the Key Performers. The number of ESOS shall be restricted to 2% of the subscribed equity and shall be restricted to the Key Performers to be decided by the Special Committee headed by Mr. Sanjiv Kakkar.Source : BSE

    ReplyDelete
  16. Sir thank you for your wonderful dedicated service for investment

    ReplyDelete
  17. At the time of expansion they said they are targeting 400 crore revenue from Vadnagar Plant. Lets see wat materializes.

    ReplyDelete
  18. Dear VP,

    Butterfly Gandhimathi Appliances acquired the Domestic Kitchen and Domestic Electrical Appliances division from its Associate Company – LLM Appliances Ltd. (LLMAL) on March 29, 2014. According to their recent result presentation published in BSE says, through the acquisition, BGMAL secures the perpetual rights to the “Butterfly” brand The acquisition immediately adds several product categories to BGMAL‟s existing product portfolio. Also they have improved their advertising these days. Considering above factors and previous/coming results, can we re-look into this stock at the current market price.
    Please advice.

    Regards,

    Harisree

    ReplyDelete
    Replies
    1. Positive development ,expecting better performance in future.

      Delete
  19. Dear sir, needed your take on wounderla IPO, hope u will replu , thanks

    ReplyDelete
    Replies
    1. No great expectations ,but slightly positive .If the IPO price was below Rs.100 ,it was fine.

      Delete
  20. Sir Excellent call. but the nly prob is which ever stock u recommend hits UC v dont get chance to buy nly. But ur study is Awesme. keep it up. GOD BLESS U.
    Bdw any views on Steel Strip Wheels n Kanoria Chemical?

    ReplyDelete
  21. Dear VPji,

    Could you please share some view on L&T Finance Holding, especially since it missed out on the Banking License recently?

    Regards,

    Vishesh

    ReplyDelete
    Replies
    1. Positive for long term but may test your patience.

      Delete
  22. Dear Sir,
    We are daily follower of your site since 2010.You are giving one recommandation in a week ( i.e.on Saturday).May I request you to please see, if possible you can give surprise recommandation in middle of week once or twice in a month.So that daily follower can benifit from the same.Hope that you will think on it.Kindly reply.
    Regards
    Jitendra

    ReplyDelete
    Replies
    1. My recommendations are not intended to those who only need the name of company to jump into it for quick bucks.

      Delete
  23. Dear sir thank you to u for sunshiled checmical buy at 100 Rs 67 still holding today it is Rs 188.Please advice what to do?

    ReplyDelete
  24. Dear Sir,
    I have earned good profit in Alphageo and Panacea Biotech as per your rec.
    please guide for Nilkamal @CMP of 220.00?

    Regards
    JD

    ReplyDelete
    Replies
    1. Nilkamal is a stock already recommended , no change in previous view.

      Delete
  25. Sir firstly thank you. Do you track gateway distripark. Planning to add to core portfolio. Waiting for your reply

    Ashutosh tripathi

    ReplyDelete
  26. Please provide your view on sharon bio-medicine? Hope my query is posted and replied by you.

    ReplyDelete
  27. Dear VP, I have vbc ferro alloys @ 190. Do you track this. What can be done?

    ReplyDelete
  28. Sir, Any idea why people are suddenly bullish in Tecpro System. I am holding it from long time. Shall I use this rally to exit?
    ASH

    ReplyDelete
  29. sir please give your view on ptc financial ltd(listed in BSE)
    i am holding 5000 share at 13/-.

    ReplyDelete
  30. Sir,

    Pancea biotec has appreciated a lot in the last one week. Is it still a buy at the current 160 levels ?

    Thanks

    ReplyDelete
  31. Dear Valuepick,

    First of all thank you for the efforts and hard work put by you in this blog, really appreciate. Can you advice on Elantas Beck India, which is currently quoting at INR 875/share? They are consistently delivering good results. With Nil debt, low equity base, high reserves and high promoter shareholding, this Company looks like a promising one. Do you have any take on this one?

    ReplyDelete
  32. Res sir, Wud luv to hear ur views on modern dairy....

    ReplyDelete
    Replies
    1. A good company in the hands of a bad management.

      Delete
  33. One of your old recommendation Astec Life science is now ready to bear fruits

    ReplyDelete
  34. Hello Sir, kindly can you suggest your views on JK cement and Motilal Oswal financial services?

    ReplyDelete
  35. You do not seem to be allowing any adverse posting.I asked for your opinion on Himalya a couple of months back around Rs. 9.5 ,but you did not respond.Now you recommended it at Rs. 13!!!

    ReplyDelete
    Replies
    1. I don't know what is adverse in your message !!. Many readers asking questions about many companies.but I don't think it is prudent to give an instant answer without studying the company it it is already tracking one.

      Delete
  36. how did you master the psychological aspect of investing.( long term). when stock rises it ok but when it falls I kill my long term vision and sells everything.

    ReplyDelete
    Replies
    1. Interesting question . :)

      I prefer to pay much attention on the reason of fall.If it is due to over all negative sentiment in the market due to some macro factors ,generally I don't mind it and prefer to buy more at lower rate .I believe ,most of the macro factors are cyclical and that will come and go ,only patience to keep calm is needed.But if a stock is falling due to a genuine company/industry specific reason -effect of which may last long - I never hesitate to throw it away even at deep loss .

      Consider stocks as part of business and an asset ,you will get answer for this problem.

      Delete
  37. Sir, your view on Thomas cook and TGB. Whether it will create massive wealth in years to come.

    ReplyDelete
  38. Hi sir
    Thank for suggesting all good stocks,
    what will be good stocks to buy in this result season for quick gains.

    ReplyDelete
    Replies
    1. Sorry,quick gains is not the purpose of this blog.

      Delete
  39. Sir pls share ur views on himalya international at current market price

    ReplyDelete

Followers

Tweet TopOfBlogs