GUESS THIS STOCK - 3

Thanks for your overwhelming response to previous questions in this series.This is the third one .Don't take it as a competition,just an effort to  stimulate your stock research skills in this boring market.Try to find out the name of company from the below indications and send it to valuepick@rediffmail.com.Please don't post the same as comment.Name of readers sending the correct answer and name of the company will be posted on next Saturday.



1) This company manufacturing few niche products having great potential in future 

 2) Company obtained more than 25 patents for their products across the globe

3) For one of its main product ,company is the only producer in India and one of the three producers in the entire world. 

4) Currently ,consumption of its main product is in nascent stage in India .This company  is in existence for the past 20 years .Its top line crossed  double digit mark( in crores)  in last financial year after a gap of 5 years.

5) In FY 2012-13 ,company reported more than 250 % increase in its turnover and turned to profit after reported losses in previous consecutive 5 years.

6) In latest June quarter ,company reported more than 350 % rise in turnover and 400% jump in net profit, compared with same period of last year.

7) Promoter holding is very high in this company and If promoters raise their stake  by another 1 % it will violate the minimum public share holding norms issued by SEBI

8) Total share holders of this company is less than 2000

9) Company is liberal in dividend policy and distributed dividend in every year if there is any profit in corresponding year. 

10) At current market price,stock is trading with a dividend yield of  7.5 % 

11 ) @ Friday's closing price stock is trading @ 1/10 th of its life time high and  20 % below its yearly high.

ADVANTA INDIA - REPEAT

This stock earlier recommended @ Rs.389 in 2010  which touched a high of Rs.1177 in February 2013 . Thereafter  company splitted the face value of its shares from Rs.10 to Rs.2 .This United phosphorus promoted seed company reported very good numbers in latest June quarter and the prospects of the industry is very bright . Advanta corrected sharply in past few months( even after  FV adjustment) and I believe it is the time to consider it again @ CMP of Rs.134.( FV Rs.2) . For more details about Advanta ,refer the old posting about it HERE

HERITAGE FOODS, SABERO ORGANICS GUJARAT - UPDATES

HERITAGE FOODS  declared bonus shares in the ratio of 1:1

Company recorded a net profit of  Rs.14.7 Cr in  June quarter ( Last year same period Rs.8.5 Cr) .

Company  decided to Set up another  Ice Cream Plant  in Chittoor Dist., of Andhra Pradesh

* Recommending to HOLD the stock

* For more details about this company ,refer the old posting HERE

  SABERO ORGANICS GUJARAT 

Company reported excellent numbers for the June quarter- Sales improved from Rs.121 Cr to Rs.174 Cr .From a loss of Rs.2 Cr its bottomline turned into a profit of Rs.10 Cr.

 * Recommending to HOLD the stock

For more details about this company ,refer the old posting HERE

GOKALDAS EXPORTS - ONLY FOR HIGH RISK INVESTORS

In 2007 ,world’s largest Private Equity firm  Blackstone bought  close to 70 % stake in India’s largest garment exporter Gokaldas Exports by paying Rs.660 Cr .Mandatory open offer for  20% stake came @ Rs.275 per share.Due to bad timing this turned as one of the biggest blunder of Blackstone ( So far ) in India and the total market capitalisation of Gokaldas now  is only below Rs.100 Cr.Stock is now trading around  its lifetime low of Rs.25.Company turned to huge loss just after the completion of acquisition and the pain is still continuing.Many of the factors which added fuel to fire was beyond the  control of management .The most important factors were - sharp appreciation of Rupee during that period against US dollar , poor off take by customers due to pathetic situation of US Economy ,Sharp increase in cotton prices..etc. Gokaldas is India’s largest garment exporter with more than 1000 Cr sales and 30 factories across India with an employee strength of 30000 people. Company manufacturing  about 2.5 million garments in a month .Company supplying its products to many well known brands like Adidas,Levi’s ,Nike,Reebok..etc and  earning more than 90 % of its income from export .Close to 65 % is coming from US market alone.This higher dependency of US market negatively impacted the company when there was a weak economic situation in US .Even after acquisition of the company by Blackstone in 2007 ,till 2011 its operations were controlled by the old management .But in 2011 Blackstone appointed their own nominees  to run the company in a professional way. But even this didn’t bring any fruits due to the impact of above mentioned negative factors.Only in last quarter ( March ) Gokaldas reported some improved performance .Its loss reduced from Rs.51 Cr to Rs.10 Cr in March quarter.From a debt of Rs.350 Cr in 2010 now it reduced to Rs.250 Cr.

                                                                                   I believe ,many of the recent developments including the revival of US economy ,sharp depreciation of Rupee against Dollar,stability in cotton prices ..etc will help the company to perform better going forward.Chances for a turn around is higher in this FY .As I mentioned above, this  company is fully owned by world’s largest private equity firm ,and normally the ultimate object of such firms are encashing these type investments when good opportunities arises.Hence , I think they will try their level best to get a better valuation for the company .Since it is a high risk high profit kind opportunity ,those with high risk appetite and willing to loose even the capital may take limited  position @ CMP of Rs.29.Stock listed both in NSE and BSE.

Link to Company website HERE

Disc: I have vested interest in Gok.Exp. 

BASF INDIA - REPEAT

BASF INDIA earlier recommended @ Rs.510 on March 23,2011 ( Old Posting HERE). After hitting a high of Rs.770 ,now it is trading around Rs.585. This company is a 73% Subsidiary of worlds largest chemical company BASF SE (Baden Aniline and Soda Factory) of Germany. User Industries of BASF products can be  broadly classified into five  - Chemicals,Plastics,Performance Products,Functional Solutions and Agricultural Solutions.Now a days many MNC parents are less interested in the growth of their listed companies in India and trying to push the business through their unlisted outfits.Some of them even de-merged the high profit-high margin products divisions from the listed firms and merge the same with their privately owned companies operating in India.BASF is an exemption and few years back they merged their entire Indian operating companies -  BASF Coatings (India) Private Limited, BASF Construction Chemicals (India) Private Limited and BASF Polyurethanes India Limited with BASF India Limited- into this listed entity.Now company is working on a massive capacity expansion with a new new project at Dahej with an estimated cost of Rs.1000 Cr.This is BASF's single largest investment in India.This new facility will significantly increase company's production capacity and part of this will be utilised to meet overseas demand .Production from this new facility is expected to start from the first half of 2014.For the latest March quarter ,BASF reported a jump of 70% in its net profit and declared a dividend of 40% .Due to parent company's increasing commitment to BASF India ,addition of massive PRODUCTION capacity ,support and availability of technology from the world leader , possibility of revival chances in Indian Economy ..etc , I believe this is the right time to include BASF India in the core portfolio of any long term Investor @ CMP Rs.550/-

MARKSANS PHARMA - UPDATE

This low value stock recommended @ Rs.4 on 23rd March 2013 ( Old posting HERE) which is currently trading above Rs.8 ,an appreciation of more than 100 % in three months.Some more clarity about its revival plan is expected after the BIFR hearing which is scheduled to be held on July 30,2013 .Recommending to HOLD at CMP.