NARMADA GELATINES Value Pick Multi Bagger

BACKGROUND

-Set up in 1961 also known as shaw wallace gelatines ,located in Madhya Pradesh

-Does Manufacturing of Ossein and Gelatines abd by product di calcium phosphate 

-Gelatine is natural animal protein composed of various amino acids required for human nutrition.

-Wide usage in pharmaceutical,edible,photographic and other technical industries.

-The Company Was awarded Capexil award for gelatine exports

-Sound Management team including a director of gelatine manufacturing association of asia pacific



STRENGTHS

-Gelatine is a only natural gelling protein of commercial inportance ,there is no satisfactory alternative or substitute for gelatine.

-Rapid growth of pharmaceutical industry in india and across the globe which drives the gelatine industry.

-Growing use of gelatine in Food and beverages  and Cosmetics industries

-The office international des epizooties ,paris  contiued the status of india as 'Negligible risk' as far as BSE categorisation is concerned which is a good opportunity for this industry.

-Strategically located in Madhya Pradesh close to its essential inputs .

-Total Revenues increased from 87 crores in 2009-10 to 140 crores in 2014.

-

NEGATIVES

-Upward trend in raw materials and non availability of good quality raw materials

-import of poor quality gelatin in India which is a health concern too and affects proper price realisation for domestic players

-Alternatives for the by-product DCP(Di Calcium Phosphate)are emerging could be a concern in future

-Growing regulatory issues in food and Pharma industry directly affects players in this industry.



Recommended at current market price of 145 for long term .

Stock Updates

Sunil Hitech-

Just after 2 months of recommendation at rs 150 ,it reached Rs  314  (doubled) on 7th on July currently trading at 275 still recommended to hold.

Waterbase Ltd-

Recommended at rs 49,Reached  Rs 91(appreciation of 80%) on 15th of July,currently trading at rs 84 still recommended to hold.

All Other shares still recommended to hold.

JINDAL STAINLESS-Growth Unlimited

BACKGROUND

Jindal Stainless, a part of the $ 18 billion USD, OP Jindal group is the largest integrated 

manufacturer of stainless steel in India and is ranked amongst the top 10 stainless steel manufacturers in the world, with a capacity of 1.8 million tons.

JSL product range includes: Ferro Alloys, Stainless Steel Slabs, Blooms, Hot Rolled Coils, Plates and Cold Rolled Coils/ Sheets, Stainless Steel Strips for Razor Blade Steel and Coin Blanks for mints in India & EU.

FINANCIAL PERFORMANCE JSL’s (Standalone) gross revenue for the financial year ended 31st March, 2014 at `12,942 crore as against `11,091 crore in fy 12-13, has been highest ever, a growth of 17% year-on-year, mainly due to increased volume of sales at the new plant at Jajpur. Exports sales surged to `3,482 crore from `3,220 crore in fy 12-13 with year-on-year growth of 8% and Domestic sales grew by 20% to `9,460 crore from `7,871 crore in fy 12-13. Profit before depreciation, interest and taxes stood at `886 crore as against `615 crore in fy 12-13.

POSITIVES

Today with a crude stainless steel production of 3 mmt, India ranks as the third largest producer and second largest consumer of Stainless Steel.

Over the past 5 years imports from China have gone up by close to 700%. Apart from dumping activities, large scale circumvention of import duties is also rampant. But, with new government promising to focus on growth of domestic manufacturing and on the infrastructure sector,stainless steel sector will get a boost.

Strong sales push in hitherto less penetrated market segments like nuclear power, industrial, process industries, oil & gas and kitchenware segments in domestic market contributed significantly to this growth.Special drive has been organized in hitherto untapped segments like elevators, pumps, plumbing, sugar, rice and petrochemical industries.

Promoters stake has increased.

NEGATIVES

Company has low interest coverage ratio.

Company has a low return on equity of -28.12% for last 3 years.

Contingent liabilities of Rs.5134.92 Cr.

Promoters have pledged 71.84% of their holding

Highly recommended at cmp 41 price right for medium to long term perspective.

NITIN FIRE PROTECTION - Value Pick Multibagger

Nitin Fire Protection

Background

-Promoted by Nitin Shah manufacturing Fire extinguishers and fire fighting equipments

-Existence in fire protection space since 29 years, have expanded foot hold not only in India but also in United Arab Emirates, South Asia & Europe.

-NFPIL is associated with Beijing Tianhai Industry Company Ltd. (B.T.I.C), China for contract manufacturing of High Pressure Seamless Cylinders for Industrial Gases(BTIC got manufacturing capacity of 1.5 million  cylinders per Annum ) 

-Diversification in CNG by forming Nitin Cylinders Ltd., Manufacturer’s of High Pressure Seamless Cylinders, having manufacturing facility at Vishakapatnam SEZ, Andhra Pradesh and Divestment joint venture with Worthingtion Industries limited 

-Acquired 40% stake in a Dubai based fire protection company ‘NEW AGE COMPANY – LLC’ 

Major Clients

INOX Air Products, Indraprastha Gas Limited (IGL), BOC, Praxair, Air Liquide etc.

Positives

-large scale fire protection system installation  across india (5000 direct and 20000 indirect)

-Revenue increase by 44% post Middle East venture

- Factors contributing growth 

A) Increasing awareness through media for protection from fire 

B) Threat of heavy losses due to fire 

C)Strict rules by Governement for fire protection

-55% of revenue comes from UAE 

world expo 2020 will be held in UAE will push the growth further in this market.

Negatives

-Despite a lot of media,ignorance is still there among small and medium companies and cooperative residential societies which hinders it's growth 

Conclusion

At Cmp 36.5,it's superbly attractive !!a definite buy!!

Nikhil Adhesives - WoW Value Pick

 NIKHIL ADHESIVES 

Background 

-Manufacturing various types of polymer emulsions that are used for different applications. 

-In this business for over 28 years and has three manufacturing units located at Dahanu (Maharashtra), Silvassa(Gujarat) and at Dahej(Gujarat). 

-The current production capacity is 60000T p.a. which can be enhanced. 

-Acquired the emulsion business of Mafatlal Dyes & Chemicals Ltd. in 2003 and its products are sold under the brand name Mahacol,Emditex, Emdilith, Emdicryl

Positives/Strengths

-Strengthened Brand Image resulting in sales growth of 26%

-Addition of capacity at Dahej plant lead Production capacity increase by 13%

-Backward integration by manufacturing Plasticizers important ingredient of emulsions

-Dividend payout is at 32.5% which is very satisfactory.

Negatives/Risks

- Fluctuating Foreign Exchange lead to loss due to import of raw material

-Slow pace of growth in Construction Sector 

-Increase in the cost of Vinyl acetate monomer important raw material for manufacturing emulsions.

Conclusion

Highly recommended at current market price of 33.5

Munjal Auto Industries Ltd- a multi-bagger Value Pick to bet on

Background 

-Munjal Auto Industries Ltd., (MAIL) promoted by Munjals(Hero group) is a TS 16949 and ISO 14001 accredited, leading auto component manufacturing company in India producing Exhaust systems complete for two wheelers and four wheelers, Spoke rims for two wheelers, Steel Wheel Rims for Two Wheelers and Four Wheelers, Fuel Tanks for Four wheelers, Seat Frames for four wheelers and other automotive assemblies.

-Technical collaboration with Samsung Industries Ltd. of Korea for the manufacture of Fuel Tanks for Four Wheelers. 

-The largest manufacturer of the exhaust systems in the world, manufacturing close to 22,000 systems per day. Besides the company produces more than 10,000 spoke rims for motorcycles and steel wheel rims every day.

Major Clients

Tata Motors limited

Tata Johnson Controls Automative Limited

Piaggio Vehicles

General Motors India

Hero Motocorp limited

Suzlon

Risks/Threats

-Hero Motors contributes maximum to the revenue,one customer concentration

-Fuel price increase has an adverse impact in automobile industry,it's a concurrent feature in india barring last 10 months when internationally oil is down.

-Environment Regulations

-Increase in the price of raw materials — nickel, paints, steel, etc.

-Fierce competition from organised and unorganised players in the auto ancillary sector.

Positives

-Strong Experienced Management support 

-continuous research and development 

-very wide product range which includes both for two wheeler and four wheeler.

-largest exhaust systems manufacturer

-Healthy dividend payout

-Good free Cash Flows

-debt is reduced 

RECOMMENDATION

At current market price of 75,the company looks really attractive and under valued.Its highly recommended at this price.

Sunil Hi Tech Engineers Limited - Growing Value Company

SUNIL HITECH ENGINEERS LIMITED

Background
Sunil Hitech was incorporated on 29th May 1998. 

Engaged in the niche segment of Fabrication, Erection & Testing and Commissioning of 

Bunkers, ESPs, Boilers, TG sets in the Power Plants, both in Private & Public sector.

Habit of Fast track Completion of Projects(Ironic for Indian Companies)

Few examples 

Fast track construction of 500 MW, 7th unit at Chandrapur, Completed 8500 MT of Power House Structures in 18 months against 24 months schedule.

Fast track construction JPL’s 2x250MW, Raigad Project and completed TG area structural works with an achievement of 13200MT of Fabrication & 11500MT of erection in a year.

U-2 Chandrapur STPS Completed Reheater replacement within the scheduled time of 25 days & complete total replacement of Condenser Tubes in a record time of 35 days

Completed total replacement of LTSH, Economiser Coils, HRH including Hangers, terminal 

and supply tubes replacement was done in a span of 25 days involving 5400 HP Joint 

at Tuticorin TNEB.

CLIENT LIST
The Company’s customer portfolio comprises reputed names like the NTPC, Chhattisgarh State Power Generation, BHEL, BALCO, Reliance Energy, Jaypee Group, JSW Steel, Punj Lloyd, Tata Projects, Adani Power, L&T, RINL, Mahadiscom, Hindalco, Dodson-Lindblom, Maharashtra State Transmission, Tamil Nadu Electricity Board, Skoda Exports, Punjab PWD, Gujarat State Electricity Corporation

Positives

Revenue CAGR of 15.32% over the past five years 

Strong EBIDTA CAGR of 7.30% over the past five years 

Net profit CAGR of 2.51% over the past five years Consistent dividend payout; cumulative dividend distribution of 5.65 crore over past 5 years

Negatives

Debt is over 380 crores

Recommendation

Highly recommended at current market price of Rs 150 .