IFGL REFRACTORIES / NBCC - UPDATE

IFGL REFRACTORIES LTD

IFGL REFRACTORIES  recommended @ Rs.49 hits its 52 week  high today @ Rs.83.75 .Recommending to book part profit by selling half of your holding and hold the rest.

Link to Old posting HERE 

NATIONAL BUILDINGS CONSTRUCTION CORPORATION LTD.

NBCC  recommended @ Rs.95 hits its life time  high today @ Rs.204  .Once recommended  to book part profit around Rs.190 and keep the rest . On the basis of expecting order inflows ,still recommending to HOLD the remaining quantity for long term.


Link to Old posting HERE 

MULTIBASE INDIA LTD - REPEAT

 

What is common in Sunshield Chemicals and Multibase India .The easiest answer is – both these companies are operating in same sector ,broadly we can call as ‘Chemicals’. But more than that the ultimate parent company of  both these companies are world leaders in their respective fields.If the ultimate parent of Sunshield Chemicals  ,ie. Solvay is a leader ,the ultimate parent of Multibase is a giant. Multibase India owned by Dow- Corning which is a joint venture between world’s second largest chemical company Dow Chemicals and Corning Inc.Within the specialty space ,Dow corning is specialising in silicon based technology and the global leader in Silicon based specialty chemicals. Company offering more than 7,000 products worldwide.

                                                                                The company we are discussing here – Multibase India – is a 75 % subsidiary of Dow Corning .Company’s manufacturing and R&D facilities are located at Daman.Multibase producing various silicon based products finding applications in Automotive, Personal Care, Personal hygiene, Stationery,Telecommunications and Engineering Polymers.Its thrust area is Automotive segment where company is concentrating mainly in safety products – specifically in Air bags.In India more than 75% people using passenger cars/vehicle without air bag .Currently air bags are common only in high end vehicles and the potential is very vast due to this reason.Since competition is very tough and car makers are keen to offer more and more facilities in vehicle to lure potential buyers , chances for introduction of air bags in mid segment cars are very high and buyers are also preferring this due to safety reason which is most important.In future ,we can’t even rule out the chance for mandatory air bag provisioning in passenger cars which will change the entire picture of demand scenario of company’s major product. Multibase together with its global affiliates is the  global market leader for injected airbag covers has over 15 years of track records in terms of reliability and durability with material approvals at all major US, European and Asian OEM’s.Multiflex® TPO and TPE-S materials produced by the company meets all safety for driver, passenger, knee, side and curtain airbag covers.In addition to this product ,company also producing various products for fluid transportation ,sealing applications,Dash Board finishing products..etc. Other than automotive segment company’s products are finding applications in Personal care and cosmetics,Portable Electronics equipments,Houseware items,Electrical Protection systems ..etc.

At present  the size of operations of this company is not very large  ,but I believe ,the potential is very big .In last FY ,company reported a Sales of Rs.45 Cr and a net profit of Rs.4.5 Cr. The net profit figure reported more than 100 % jump over just previous year. In the latest December quarter,Multibase reported a sales of Rs.13.18 Cr v/s Rs.9.24 Cr and a net profit of Rs.1.44 Cr v/s Rs.0.87 Cr over same period last year.

     

                                                    Click on the image for a better view

 

Dow Corning Corporation ( through Multibase S A) holding 75 % stake (which is the maximum permissible % of promoter holding for a listed company in India) in this company.Another company named Dow-Corning India Pvt Ltd is also operating here which started operation before the takeover of this company by Multibase SA.But to avoid overlapping in products ,both these companies are concentrating in products with different grades.Chances for an integration between both these companies can’t  rule out in future .But if it happens most probably only after a de-listing offer for the share holders of listed entity.( Since it is only a probability or speculation  ,no need to take this part for valuation purpose) .

Earlier I recommended this stock around Rs.35 .But still I feel,this is an under researched stock by investor fraternity and many of the participants are not even  aware that it is an affiliate of a world leading MNC which owns superior  technology and global marketing network.I hope ,the changing consumer preference will boost the demand of company’s products going forward .Recommending this small company for investors with enough patience again @ CMP Rs.55. Stock listed only in BSE.

Link to Company's Global Website HERE

Link to Company website HERE 

Link to latest Annual Report HERE

Link to earlier Recommendation HERE  

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

 

GRANULES INDIA - RESULT UPDATE

Granules India reported  good numbers for the quarter ended March .Company's top line is Rs.317 Cr v/s Rs.204 Cr and net profit is Rs.24 Cr v/s Rs.12 Cr .Full year EPS is Rs.37.20 v/s Rs.17.21 .Company also declared a dividend @ 35 % . Company recently acquired Actus Pharma which owns  a USFDA approved facility .Turn around of Actus Pharma and commercial operations of its joint venture with Ajinomoto Omnichem ..etc are expected to keep the growth momentum of the company in the years to come.Recommending to HOLD the stock .

Company Press Release HERE


Old Recommendation Link HERE

LA-OPALA RG,GRANULES INDIA ,SASKEN COMMUNICATIONS,CANFIN HOMES,CAPLIN POINT LABOROTORIES,ARROW COATED PRODUCTS - UPDATES

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LA-OPALA RG

Recommended Price - Rs.66

Current Price -  Rs.815

Current Recommendation  - HOLD

Recommendation Link HERE




GRANULES INDIA

Recommended Price - Rs.79

Current Price -  Rs.309

Current Recommendation  - HOLD

Recommendation Link HERE



SASKEN COMMUNICATIONS

 Recommended Price - Rs.118

Current Price -  Rs.224

Current Recommendation  - BOOK PARTIAL PROFIT

Recommendation Link HERE

CANFIN HOMES LTD


Recommended Price - Rs.145

Current Price -  Rs.254

Current Recommendation  - HOLD

Recommendation Link HERE

CAPLIN POINT LABOROTORIES 
 
Recommended Price - Rs.86

Current Price -  Rs.184

Current Recommendation  - HOLD

Recommendation Link HERE

ARROW COATED PRODUCTS

Recommended Price - Rs.12

Current Price -  Rs.62

Current Recommendation  - HOLD

Recommendation Link HERE
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Readers are sending multiple queries about above stocks at a time many of them are hitting new high . To avoid repeating replies and save time and efforts ,please take the above general posting as my reply on these stocks..

Himalaya International - 'MODI' fying Business. ?

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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.

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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. 

Link to Company Website HERE

Suggested readings

1 ) In pictures: Narendra Modi opens the largest chilled & Frozen food Project of India at Vadnagar

2) CM inaugurates India’s biggest food processing plant in Vadnagar

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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