Saturday, December 14, 2013

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




41 comments :

  1. Thanks VP for this recommendation. After your recommendaton and my further study on this stock, I have purchased in 2 lots at avg price of 133. I am sure it will catch 200 mark in another 6 months time.
    BR
    Girish

    ReplyDelete
  2. i have spicejet 10000 @ Rs 35. Please advice whether i exit from this stock at CMP @ 17/- and shift to any other stock .PLs suggest.

    ReplyDelete
    Replies
    1. Aviation sector is not in a good shape .Only some positive news like stake sale ..etc may give positive movement

      Delete


  3. SIR,

    how about ABM KNOWLEDGEWARE. WILL IT ALSO COME OUT OF PCA. WHAT WILL BE THE EFFECT ON ITS SHARE PRICE.

    ReplyDelete
    Replies
    1. No chance to come out at present ,otherwise there should be some bulk/block deals before quarter end.

      Delete
  4. Sir please share your views for Good Luck Steel Tubes Ltd. it is available at very cheap valuations....

    ReplyDelete
  5. Sir,
    Please provide your view on Andhra Bank. At CMP they give 8-10% div yield. Stock is at around 52W low price. Fall could be due to bad earnings last quarter and also could be because of the Telengana issue? Could it be a good bet for long term?

    Thanks,
    Sunil

    ReplyDelete
    Replies
    1. PSU banks are facing serious NPA issues and it may last for more quarters .Hold it if ready for long term holding.

      Delete
  6. Hi VP,
    Kindly share your views on Orchid Chemical. I am holding 500@105..from very long time.

    ReplyDelete
    Replies
    1. Better to book loss and shift to some other stocks from the same sector.

      Delete
  7. VP Sir,First of all thanks for all the wonderful stock ideas which you have been giving us.It is really good to see someone helping retail investors in their stock selections for good returns.

    I have 2 questions:

    1.Is it advisable to buy wockhart at CMP or shall I buy it on correction?.I have read ur report on wockhart and was highly convinced about that.The kind of promoter cycle they have ,they can easily overcome this storm and can again be a multibagger.I have a time horizonn of 2 years.What would you advise?

    2.Also Shall I buy Acrysil India at CMP or on correction.Given the kind of niche products and also the future growth potential they have,can it be a next multibagger on the lines of laopola ,Page industries or TTK Prestige.

    ReplyDelete
  8. Sir I have 1000 qty of everest kanto @ 15...please suggest should I hold or exit

    ReplyDelete
    Replies
    1. Received your same questions through mail and already replied.

      Delete
  9. I have bought Sandur Magnese @ 675. now its trading below 600. I think it will go down further and hence want to exit it and put the same amount in Acrysil. What do you think about it. Acrysil, anyway i will buy more but what is your opinion on exiting Sandur magnese bought @ 675?

    Please reply.

    Regards

    ReplyDelete
    Replies
    1. Not tracking Sandur Mang. I think , answer for your question about Acrysil is already there in yesterday's posting.

      Delete
  10. VP Sir,First of all thanks for all the wonderful stock ideas which you have been giving us.It is really good to see someone helping retail investors in their stock selections for good returns.

    I have 2 questions:

    1.Is it advisable to buy wockhart at CMP or shall I buy it on correction?.I have read ur report on wockhart and was highly convinced about that.The kind of promoter cycle they have ,they can easily overcome this storm and can again be a multibagger.I have a time horizonn of 2 years.What would you advise?

    2.Also Shall I buy Acrysil India at CMP or on correction.Given the kind of niche products and also the future growth potential they have,can it be a next multibagger on the lines of laopola ,Page industries or TTK Prestige

    ReplyDelete
  11. Hello VP:

    Any latest view on Capital Trust?

    Cheers!

    ReplyDelete
    Replies
    1. Sector lost its fancy and this stock is in PCA

      Delete
  12. VP Sir, any idea, why our old pick Speciality Restaurants is underperforming?

    ReplyDelete
    Replies
    1. Due to sharp rise in the price of food articles company facing margin contraction.

      Delete
  13. Sir,
    UPL has appreciated 60% from your recommended price. Is it sill a HOLD or partial profit booking?

    Thanks,
    Sunil

    ReplyDelete
  14. Please provide views JHS Svendgaard lab

    ReplyDelete
    Replies
    1. I am ,and will be negative on any company promoted by the promoters of JHS Svenguard.

      Delete
    2. These promoters are running many companies operating in same field.If my memory is correct ,earlier another company ( Sunehari Exports) by the same promoters collected money from General Public and disappeared from stock exchanges.Later they came out with JHS and collected money .Now they are claiming they lost business due to some issues with one of its major client.I expect these same promoters will come out with another company in future and collect money from public and this game will go on .I am not interested to recommend any company promoted by such promoters.

      Delete
    3. Thank you very much Sir ..:)

      Delete
  15. Sir, what is your view on Talwalkars? Somehow, the stock has not been participating in market rally?

    ReplyDelete
    Replies
    1. Companies like Talwalkar,Speciality Rest..etc are spending related themes .When there is liquidity crunch in economy ,people first stop spending for not necessary items .These type cos will perform when the liquidity crunch eases .Directly or indirectly interest rate is an important factor in this .So keep an eye on Inflation figures.

      Delete
  16. Hello VP. Thank you very much for your comments.
    I would like to know a bit on HDIL, what are you views will happen in the near future. The company had two consecutive poor performing fiscal years. This year was significantly affected due to the Mumbai International Airport Limited dropout. What do you think 2014 will be for HDIL.

    Awaiting your response..

    ReplyDelete
    Replies
    1. Not expecting any big change in 2014 other than some sentimental boost if there is stable govt formation.

      Delete
  17. I just refer your blog before couple of days only and want to invest on your recommended price. But almost all stocks are above your recommendations except ANIL. So, sir should I enter into eventhough it is under PCA ? or any other stock in which i can enter around your recommended price.

    ReplyDelete
    Replies
    1. On valuation basis it is OK ,but liquidity is really an issue for PCA stocks unless promoters are taking special interest.

      Delete
  18. Hello VP:

    Sorry, was not able to reply back on the same thread regarding my query on Capital Turst.

    Thanks for your response...regarding the stock being in PCA, keeping into account there have been some bulk deals in the past few weeks, is there any chance of this coming out of PCA?

    Thanks in advance for your response.

    Cheers!

    ReplyDelete
    Replies
    1. To come out of PCA ,Capital Trust should record an volume of more than 3 lakhs shares in next 8 trading sessions.

      Delete
  19. Sir, can you please let us know your current views in Zicom Securities?
    Is there any change in opinion? I'm holding from your recommended level of 77. Pls update. I'm true follower of your blog. Sincere thanks for advises.
    Regards,
    Rita

    ReplyDelete
    Replies
    1. This stock actually recommended @ Rs.38 as a BUY and @ Rs.76 as a HOLD

      See the links below

      http://value-picks.blogspot.in/2011/10/zicom-electronic-security-systems-ltd.html

      http://value-picks.blogspot.in/2012/09/zicom-electronics-updates.html


      @ CMP of Rs.64 ,HOLD it.

      Delete
  20. Dear Valuepick! Can you kindly put some thought on the outlook of Advanta. The price has come down to an extremely reasonable label because of its poor performance in Q2 13.. Is it portending similar bad performance in quarters ahead also. Whether it is prudent to add more now?? Thanks in advance. Shall be grateful for your reply.-Follower

    ReplyDelete
    Replies
    1. Major reason for poor performance is a one time expense of Rs.12.5 Cr .I hope ,performance will improve in future .

      Delete
  21. Dear Sir,

    I was checking up on the corporate updates on Acrysil on BSE Website and noticed that, "the Board of Directors of the Company at its meeting held on February 25, 2014, broadly considered the offer for acquisition of overseas business and authorized Mr. Chirag A. Parekh, Chairman & Managing Director of the Company, to explore proposition further."

    Does this mean that Acrysil is considering selling its overseas operations and business? Or does this mean that the company is looking at acquiring some other company overseas? There was no clarity or further explanation on this matter and I was hoping you could shed some light on this matter...

    ReplyDelete

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