A WORD OF CAUTION .....

Nowadays I am receiving lot of requests to share the details of paid subscription services offered by me.Surprisingly received few requests to extend the last date of spacial package of paid subscription too.In this regard ,I would like to clarify again that I AM NOT OFFERING ANY PAID SERVICES  and in no way responsible if somebody is collecting money in the name of ' VALUEPICK'.

VA TECH WABAG - UPDATE

VA TECH WABAG recommended as a long term BUY @ Rs.539 .Today stock hits its life time high ( Adjusted to stock Split) @ Rs.1443 .Stock already appreciated more than 160% .Still recommending to HOLD this stock


Old Recommendation Link HERE

BRITANNIA INDUSTRIES / SEQUENT SCIENTIFIC - UPDATES

 BRITANNIA INDUSTRIES


Britannia Industries recommended @ Rs.493 hits its life time high today @ Rs.989 . Stock already appreciated almost 100 % ,still recommending to HOLD the stock for long term

Old posting HERE

SEQUENT SCIENTIFIC

This stock recommended @ Rs.138 which hits its life time high today @ Rs.353 and closed at upper circuit . Stock already appreciated more than 150 % .Irrespective of its poor past financial performance still recommending to HOLD it for long term


Detailed report on Sequent Scientific HERE

SUNIL HITECH ENGINEERS - UPDATE

This stock recommended on MAY 17,2014 @ Rs.76.Today it hits its 52 week high @ Rs.152 and closed in upper circuit . Stock already appreciated 100 % in less than one month. Those with some risk appetite can still hold the stock and others may sell half of your original quantity and keep the rest as cost free.

Recommendation Link HERE

BILCARE LTD - PHOENIX FROM THE ASHES ?

Success of business depends on the outcomes of  calculated risks.A single miscalculation may lead to serious problems or even ends in total collapse of well run firms.Many Indian companies including large and  led by well known promoters caught on wrong foot few years back. Those are the companies initiated large  acquisitions just before the sub prime led global recessions. Leveraged buyouts creates severe pressure on their balance sheets on one side and lower demand for products on the other side worsened the situation.Many Indian promoters learned valuable lessons from this crisis and some  are still fighting for a come back.On the other side this unfortunate events this offering some attractive  opportunities to investors with high risk appetite to invest in companies with ability to come back, at attractive valuation . This week Let us look into one such opportunity – Bilcare Ltd

Bilcare was a high flying stock for past many years and its stock price touched a level of Rs.1830 in 2008.It was the  darling of  Foreign Institutions,Indian Mutual Funds and well known HNI investors including Mr .Rakesh Jhunjunwala.RJ is still holding 8 % stake in this company . Its business units are mainly classified into three divisions viz – Packaging Innovations,Global clinical Supplies and Non Clonable Id Technologies .Bilcare is the market leader of Blister packaging in India with more than 50% market share . It can’t be called as a packaging company but an R&D driven packaging solution provider mainly for pharma sector.As on March 31, 2013 Bilcare has filed over 167 patents worldwide .Out of this 34 have been granted and balance under process at various stages.Its Indian business is only a small  part  - 20 % of total turnover - and company is a preferred supplier of packaging solutions for world pharma leaders like Bristol-Myers Squibb, GlaxoSmithKline, Johnson & Johnson, Merck, Novartis, Pfizer, , Sanofi-Aventis, Teva ..etc .Company operating from 9 manufacturing facilies across the globe including India,US,Germany,Singapore, and Italy.Company supplying its products in more than 50 couturiers through own marketing channels.On a consolidated basis company reported more than Rs.3000 Cr sales in last financial year.

 

Reason for pain 

As I mentioned at the beginning ,many Indian promoters caught on the wrong foot due to large acquisitions just before the beginning of recession. Bilcare done the same mistake ( since nobody was aware about the arrival of recession in advance we may not call it as a mistake) which acquired the Switzerland headquartered plastic film making unit of  INEOS at a cost of Rs.607 Cr . One third of this all cash deal funded by the company’s internal accruals and the rest raised in the form of bank loans .With this acquisition INEOS’ film units manufacturing facilities in  US ,Germany ,Italy and India ( Caprihans Ltd) came under the fold of Bilcare  .Company expected good growth post acquisition of this unit which commands more than 20% market share of high quality polymer films in the entire world.. Contrary to the expectation of the management ,Bilcare become a victim of world wide recession . In addition to lower demand growth ,company could not service its large debt which taken to acquire the INEOS division. This market leader struggled for working capital and debt repayment and reported huge loss . Share price nosedived from Rs.1800 level to Rs.40 level.

Why this stock

Yes,there is many companies from listed space facing similar situation .But I believe this is something special due to following reasons.

1)      Promoter’s capacity to  realise mistakes ,learn lessons  and bring back to normalcy with quick and accurate decisions is an important factor in business . I believe ,its promoter Mr Mohan H Bhandari is capable to handle the situation and able  to bring back from the verge of collapse .

2)      Bilcare is not a small company .It is a large organisation with sizable market share in its products not only in India but globally too.

3)      Company having good assets across the globe

4)     BILCARE  is not mere a packaging company but driven by  strong R&D capabilities and innovations with many patented technologies in its credit.

5)      Company already started initiatives to reduce its debt by divesting non core assets and already sold its US and European Global Clinical supply related operations for Rs.340 Cr .Management also promised to concentrate in further debt reduction initiatives in the ongoing financial year.

The most Attractive Point 

R&D is the key strength of Bilcare Ltd. Company successfully developed an innovative  first-of-its-kind technology named  - nonClonableID ( nciD) .This is a nano technology based solution which  can be seamlessly integrated with products, ID cards and documents to provide a totally secure and reliable identification and authentication solution.Even this technology developed to fight against Counterfeiting and piracy of medicines ,Company is extending its scope to a number of fields including e-governance ,security ..etc. Pharma makers are loosing crores of Rupees due to counterfeit medicines and such medicines are estimated as high as 30 % of the total sales. This is a big headache for global pharma giants and nciD technology is emerging as a viable solution for this issue . Company claiming Biocon and Luping already started using this technology in medicines  exporting  to certain countries .This invention recently won the National Intellectual Property award 2014 by Government of India. ( Details  HERE ). Management made representations to  RBI to introduce this technology which can help to make Indian currency notes fake-proof in the future. This is a complete track and trace system which can be widely used in the field of export of any product. Since many technical terms are involved , it is better to go through the below links for more understanding about this technology 

1 ) Innovative Product of the month - Non Clonable Id Technology 

 

2)  New tech can check whether your medicine is fake

3)  Poker gaming to benefit from Non-ClonableID Tech

4) CSIR okays Bilcare’s nonClonableID tech to authenticate drugs

5) Track & Trace: A distant dream for domestic supply chain

6) Non ClonableID Technology for Secure Public Service delivery System

7)  Smart’ cards for Bryan Adams’ show in Pune

8) Bilcare’s nonClonableID Technologies -1

9) Bilcare’s nonClonableID Technologies -2

I believe this is a break through in fighting against piracy in many fields. New govt's expected initiatives in e-governance may open up big potential for this technology .Company already signed agreements with state governments for similar projects

Conclusion

This is not a stock for skeptics or critics but for optimists and risk takers . Many negatives are still there like promoter pledge ( pledged to avail loans for INEOS acquisition) ,huge debt,loss in last FY ..etc..etc.etc . But above all , I strongly believe, It is a must buy in the portfolio of an extreme risk taker. Company’s latest quarter consolidated figures indicating an early sign of revival . European economy is in a recovery path ,promoters taking steps to reduce debt , company improving in R&D front and inventing technologies with good potential. If nothing will happen – you will loose Rs.70 but if something happen on positive side ( probability is high)  this stock still possess potential to regain four digit figures  in few years down the line . This may be one stock which can change your fortunes .Yes ,risk is there ,patience is needed - take it or not .Stock listed only in BSE  ( Scrip Code - 526853) and CMP is Rs.72  . 

BILCARE IN BRIEF  LINK

Link to Company website HERE

Corporate video HERE



Disc: It is safe to assume that I have vested interest in Bilcare Ltd.

SIYARAM SILK MILLS LTD - BOOK PROFIT

I have recommended a BUY on SIYARAM SILK MILLS LTD at Rs.168/-  ( OLD REPORT HERE ). Yesterday stock hits its life time high @ Rs.564 and closed around Rs.540 ,an appreciation of 3 times .Recommending to book profit in this stock.

V.S.T.TILLERS TRACTORS LTD - BOOK PARTIAL PROFIT

VST TILLERS TRACTORS   recommended on 18 May 2013 @ Rs.340 ( Link HERE) .Today stock hits its life time high @ Rs.1487 and closed around Rs.1422. Stock appreciated about 430 % in less than one year .Recommending to sell half  of your  holding and keep the rest as cost free.

UNITED DRILLING TOOLS LTD - ONE STOCK TO WATCH

 

 

Self sufficiency in energy resources is the key for the growth of any economy.Unfortunately ,at present , position of our country in this matter is a reason for concern. Lack of  framing and implementing  policies, red tapism..etc are the major reason for our failure. Be it coal or oil our policies are vague  and can be interpreted in different ways. Only these type vague policies will help to earn maximum bribery for the officials and hence majority of the babu’s are not interested to frame a concrete policy which is clear and without any doubt. Take the case of oil exploration ,where no major global players are keen to explore in India when our government invites tenders for NELP .In the past ,our govt announces one policy at the time of inviting tenders and change that policy when a company identify oil after spending crores for exploration activities. Even after finding oil ,it will take years to get permission to erect pipes and other facilities to link the well with refinery  .This is why  still we meets close to 80% of its oil needs and half of its natural gas requirement through imports. There is  lot of tax,environment related issues  which is quite natural but the  time lag to sort out such matters makes global giants desperate to bring their technology and efforts to a country like India. Any govt with a vision should be  aware about the  importance of energy security and the importance of the same  to become a super power.In  a recent interview ,our new minister emphasizes the importance of this factor and let us hope for the best going forward.

                                           Any positive effort in this direction will revive many sectors like mining ,oil exploration,shipping,engineering..etc. About six months back we have discussed some companies like Alphageo, Selan Oil Exploration etc from oil exploration and allied sectors. This week let us look into one more company related with this sector- United Drilling Tools. This company may be  an unknown one to the investor fraternity and I believe it even not discussed anywhere in message boards  or discussion forums.In one sense it is a niche company in the listed space from the oil exploration related business.Company manufacturing many sophisticated equipments used in oil exploration industry like Winches,Gas lift valves,mandrels,sliding sleeves ..etc. These equipments are critical parts of oil exploration industry , sophisticated in nature and manufactured by very few companies in India.Earlier company was supplying products mainly to ONGC and Oil India but with the completion of its two units one each at Kandla and Noida ,company is planning to ramp up exports.In another move ,promoters are merging  privately owned companies with the listed entity .Recently they merged P&K Hitech Systems P. Ltd and another one Macro Steel engineers is in progress.Post merger UDT’s equity will be close to Rs.8 Crore.

Financials 

 

2013-14 was the first full year of operations post merger of P&K hitech systems . Company reported a Sales of Rs.78 Cr and a net profit of Rs.4.72 Cr in this years .In the previous FY ( Prior to the merger of P&K hitech systems ) it was Rs.36 Cr and Rs.87 lakhs. It is noted that in this FY’s numbers there was an extra ordinary income of Rs.1.96 Cr . Clarity on this point will be available only on receipt of latest balance sheet.The next company to be merged (Macro Steel Engineers) seems small in size but as per management claim  they are holding some  patented niche technology in this field.Post merger of this company, promoter’s stake will be close to 74% and non promoter body corporates’ stake will increase from less than 1% to more than 13 %  .I believe ,this non promoter corporate entities are linked with promoters itself and the share holding pattern arranged in a manner to avoid the violation of public share holding norms of listed entities.Other than this corporate entities ,general public will hold less than 15% stake post merger.

Conclusion

Potential of oil exploration sector is bright especially if the government is committed and the power to implement policies . Company producing niche and import substitute  products for this sector. Starting of export from new units will minimise the uncertainties of local market and reduce the volatility of earnings .In many other cases promoters merging their loss making private companies with the listed ones but here the top line and bottom line improved substantially post merger.Company’s results are volatile on a quarter to quarter basis, profit margins are also highly volatile.Management clarified that this is because of the tender based purchasing method by oil PSU’s  and hence there is no rationale in analysing company’s performance on a quarterly  basis . This volatility is expected to come down once there is improvement in earnings from exports going forward. This is an unknown company with unknown promoters which always increase the risk of investment,but at the same time it is a niche one with good potential.Last year company reported an EPS of Rs.8.72 and currently trading with a P/E multiple of close to  3.Even if we reduce the entire other income and re calculate the EPS ,P/E is only 6 at current market price of Rs.30 .All together ,a high risk high profit kind opportunity and suitable only for investors with high risk profile  . Others can keep this stock in your watch list and take decision after seeing the consistency in performance for the next few years. Stock listed only in BSE with trade code .522014 and CMP is Rs.30

Link to company website  HERE

Disc: I have vested interest in this stock

ALPHAGEO INDIA ,GALAXY ENTERTAINMENT CORPORATION - UPDATES

ALPHAGEO INDIA 

  


Alphageo India is a stock  recommended @ Rs.38 about 6 months back ( Link HERE) Today it hits its 52 week high @ Rs.221. Company reported excellent number for the FY 2013-14. Turnover jumped from Rs.24 Cr to Rs.94 Cr and reported a net profit of Rs.26 Cr V/s  a loss of Rs.11 Cr .EPS is Rs.48 . Company also reported a dividend of 20 % . Recommending to HOLD this stock.


GALAXY ENTERTAINMENT CORPORATION 

  

This is one stock recommended long back in 2011 @ Rs.13 ,and mentioned as a potential multi bagger. But nothing has happened as expected so far . The entire future group was in trouble due to huge debt burden and falling revenue mainly on account of recessionary situation for the past few years. Now they are trying for a come back by restructuring of their businesses .This may be the reason they ignored this small company for the past many years.Now , It seems  there is some light at the end of tunnel . Company recently clarified that they are taking this business as serious and planning to expand the business through various initiatives. As part of this ,they already sold some units and acquired some other and planning ambitious expansion going forward .

Read more details in the below link

Future Group’s Galaxy bets big on food courts

Today company reported its March quarter numbers .In this quarter ,Galaxy reported a top line of Rs.22.5 Cr V/s Rs.3.1 Cr  and a net profit of Rs.1.6 Cr V/s a loss ( Excluding exceptional item ) . It seems after long waiting of  four years ,company now started to move through the right track. The potential of industry is very good and if  they can tap it ,stock may be a multi bagger from current level of Rs.24

Related Readings in the below links:

1 ) New Place for a Night Out

2) Sports & the city

3) Galaxy Entertainment Corporation Limited launches a new sports bar “SBX”

 

4) Sports Box, Finally A Sports Bar In The Eastern Suburbs

5) Galaxy Entertainment Launches SBX Sports Bar

6 ) White Rivers Digital Bags Creative & Digital Marketing Account of Galaxy Entertainment Corporation Limited

For old recommendation on this stock ,Click HERE 

Disc: I have vested interest in both stocks.