PERIODIC CALL AUCTION - UPDATE

After creating lot of confusion and frustration among retail investors who are investing in small and mid caps , SEBI now proposed to change the criteria for selecting stocks to be included in Periodic Call Auction .Read the circular link HERE . I think, it is really a relief  up to a certain extent even their new circular is also a confusing one especially in the case of scrips included in 'T' group. I hope at least 75 % of the scrips currently included in PCA will come out of it in the next revision .

Happy Investing....

MARKSANS PHARMA - UPDATE

Marksans Pharma recommended @ Rs.4 on 23rd March 2013. ( Recommendation link HERE ) .Currently stock is trading above Rs.17   ,an appreciation of whopping 300   % in less than 10 months.Recently  management indicated their confidence to reduce the balance FCCB obligation substantially in next couple of years. Those interested to take some  risk can still HOLD the stock.

NEULAND LABORATORIES LTD - BOOK PARTIAL PROFIT

NEULAND LABORATORIES LTD - initially recommended @ Rs.119 ( Old posting HERE) and again repeated @ Rs.126 ( Repeat HERE ) .Today stock hits its 52 week high @ Rs.316.35 . Those who are interested to take only moderate risk can SELL half of your  holding and keep the rest as cost free for long term.

ACRYSIL INDIA - QUALIFIED FOR AN EXIT FROM PERIODIC CALL AUCTION...

We have discussed a lot about Periodic Call Auction trading system – the system SEBI introduced to suck out the remaining retail investors from equity market. It also proved once again -  theories successful  on paper may not repeat success in practical  life. Why SEBI continuing this system without any modification even after it  proven as an utter flop is the big question  !!!. Introduced for reducing manipulation and increase liquidity , this system actually  reduces  liquidity further and caused for sharp crash in the market capitalization of  even standard companies included in this list. On the other side, it did not contribute anything to control manipulation and manipulators still have their own tools for manipulation. In nut shell ,PCA is the worst and anti retail investor trading mechanism ever introduced by the authorities . To come out from PCA ,SEBI stipulated some criteria which  also included some funny conditions . An average volume  of 10000 shares per day or average 50 trades per day in all days of any quarter are the  two major criteria fixed by SEBI . The anomaly in this system is, it is not considering the equity base or floating stock of any company .I don’t think it is fair to fix same  criteria for companies with 3 cr equity and 25 % floating stock and 300 cr equity and 75 % floating stock .  Another point is -  a low quality stock which is trading @ 0. 5 paise can exit from this system if there is an average turnover of mere Rs.1000 ( 0.10*10000)  per day where a  quality stock  trading @ Rs.2000 can't escape from this system even if there is an average turnover of Rs.1.99 Crore ( 2000*9999 ) .Frankly speaking ,I can't understand the logic behind it .More than this ,automatic cancellation of orders in each hour and need of re-entry in each hour creating lot of trouble both for investors and broking firms . Retail investors apathy towards this mechanism truly reflecting in the falling trading volume and sharp decline of the prices of even goods stocks which included in PCA in the past few  months . The real irony is – this mechanism is introduced by the same SEBI who are spending time and efforts  to promote retail participation in market and also encouraging the listing of small companies . Prevention of manipulation is necessary, but  I don’t think ,killing 99 innocents  to prevent the manipulation by the  remaining 1 is not the proper way to execute this .

                                                                              Let us come to the point .Only very few  quality companies managed to come out of this deadlock once it entered into PCA. Exit and entry revisions are normally happening in the first week of each quarter. Acrysil India will be a surprise exit candidate in the next revision . Total trading days during September – December quarter is 62 days and company already recorded a trading volume of more than 781500 shares which is enough to qualify for an exit ( 62*10000 = 620000  is the required quantity ) .

ACRYSIL INDIA 

Acrysil India is one of the rare companies I recommended earlier  even from the PCA list due to its unique products,robust financial performance ,excellent dividend distribution history ..etc. It is also one of the rare companies recorded its life time high price even after inclusion in Periodic Call Auction. In addition to the exit of PCA ,this Kitchen appliances manufacturer reported very good performance in first half  of current financial year where it reported an EPS of Rs.11.05 against Rs.12.35 reported for the entire full year in 2012-13 . I believe ,company’s positioning as a niche high end producer and its successful efforts to find strong foreign collaborators for financial ,technical and marketing alliances will bring more success going forward. Germany based  Schock and Co GMBH ( leader in Quartz Kitchen Sink’s in various countries ) holding more than 10 % stake in Acrysil and marketing Acrysil’s products in many countries. Recently company started co operating with  Berbel Ablufttechnik ,another German company  for Kitchen Chimneys and appliances. .Management is also investor friendly and  not showing any  hesitation to share their success with minority share holders  .Last year they distributed bonus shares and a dividend @ 33 % .


This is the kind of stocks having almost all ingredients to become a  multi bagger over a period of time  due to many reasons like :

* Low floating stock

* Niche Products with reputed brand "Carysil" targeting ultra premium market segment ( Company is the only producer in India and one among the total four producers in the entire world for first quality Quartz Sinks 

* Investor friendly management 

* Revival in the economies of its major markets 

* Huge untapped market potential in India itself.

* An under invested stock by Mutual funds,Institutions and Big Individual Investors

* Large capacity addition in recent times backed by strong marketing alliances with world leaders .

* Aggressive R & D efforts to develop new models...etc

. I expect more serious investors will look into this stock once it came out of PCA within four weeks  and chances for sharp re-rating .Recommending this stock @ CMP of Rs.150 for investors with some risk appetite .

To get more understanding about this company ,you can refer the following  links.

LINK 1  ,  LINK 2 

Product Demo LINK

Link to Company Website HERE

Link to Latest  Annual Report  HERE

Use the search option to find out my  old recommendations of this stock  in this blog 

Disc: I have vested interest in Acrysil India

KAVERI SEED COMPANY - TAKE SOME PROFIT FROM THIS 6 BAGGER

KAVERI SEED COMPANY initially recommended @ Rs.272,currently trading  @ Rs.1677 .( Old Posting HERE) . This stock already given a whopping  6 fold return to investors with enough patience.Requesting  to SELL 10% of your holdings to recover your cost  and keep the rest as cost free.

LA-OPALA RG - HOLD THIS 10 BAGGER

LA-OPALA RG  initially recommended @ Rs.66  hits its life time high in this week @ Rs.629.Even if this stock already turned as a 10 bagger during this period ,those with some risk appetite can still HOLD it.

Old posting on La-opala HERE

SASKEN COMMUNICATION - UPDATE

SASKEN COMMUNICATIONS LTD  recommended @ Rs.118   hits its 52 week high today @ Rs.175  , an appreciation of more than 50% in  three months period   .Still recommending to HOLD this stock for long term

Link to old posting HERE

CROMPTON GREAVES - UPDATE

Crompton Greaves recommended @ Rs.90  today hits its 52 week high , an appreciation of more than 50% at CMP  .Still recommending to HOLD this stock.

Recommendation Link HERE

ADOR WELDING LTD - BUY

 

Ador Welding Ltd ( Formerly Advani-Oerlikon) was a sector out performer in the past .During 2005 its share price recorded a high of Rs.520 .But later ,as a true reflection of slowing industrial growth in our country ,its share price came down to lower levels.

This company started operations in 1951 with technical collaboration of Switzerland based Welding Industries Oerlikon-Buhrie Ltd. AWP  is the pioneer and one of the market leading companies in Indian welding consumable sector.Company’s Indian manufacturing facilities are located at Silvassa, Chennai, Raipur and Pune.AWP producing various types of electrodes, wires , fluxes and welding and cutting equipments , CNC Machines,Gas cutting products and accessories..etc.Company supplying its products to many industries which includes Automobiles, Oil and Gas,Power ,Construction ..etc.In order to avail latest technology ,company recently acquired 60 % stake in Israel based Plasma Laser Technologies Ltd.Using modern technology, company Introduced many new products in India in recent past.Even during this tough times company showing resilience and reported better numbers compared with last year.Now ,many stocks from Industrial growth sensitive sectors started to perform on anticipation of bold decisions by the coming government .Based on many parameters Ador Welding is one of the best companies in this sector .

                                                                                       
 In last FY company reported a top line of Rs.364 Cr and a net profit of Rs.19 Cr .AWP is a debt free company with 57 % promoter stake and out of this not a single share is pledged .What is more attractive is its dividend paying record .For the past four years ( actually these period was really a challenging one  for a company like AWP) company maintained a dividend of 60 % .This implies a dividend yield of close to 5 % which is  highest among the listed companies on a continuous basis. I believe,this is a good opportunity to include a clean company in your  portfolio and  there is every chance for out performance once Indian Industrial growth pick up, till then you can still enjoy 5 % or more dividend yield .Recommending a BUY @ CMP Rs.123 ,which is even below its book value .Stock listed both in NSE and BSE

Link to Company website HERE

Latest Annual Report HERE