Doubt Relief !!

[karthikmarar]

Agilent

Thanks for the supplementary info. Yes indeed a small error in the EPS figures. FY-06 EPS should read as 12.7 . These estimates are as per a HDFCSEC report.

About the upside, how much ...difficult to say... but definitely much more than other sector stocks, ...dont't you think?

warm regards

Karthik

 

[Dhanya]

Hi Karthik,

In case you forgot my query..........post 303 in this thread......thx in adv.

Dhanya

 

[karthikmarar]

Hi Dhanya

Ofcourse I have not missed your post. It is just that I have been trying squeeze in too many activities in too less time. And ofcourse the Budget has also weaned away my attention..

I will first answer one of your queries first. Will be back the the second one too..soon. Kindly bear with me

Granules is engaged in the manufacturing of compressible granules as a value added product to the pharmaceuticals formulations segment. The company also makes pharmaceuticals formulations intermediates (PFI.

Actualy the growth of the company started after 2003. In 2003 the company invested Rs 30 crore (6m) in the fully automated plant, designed to conform to the highest standards of Good Manufacturing Practice . The sales jumped 94% in 2004 with a 80% increase in PAT. The fical 2005 saw a growth of only 8.7% with the PAT increasing a mere 6.6 %.

The current half-year result showed a sales of 84 Cr with a profit of 4.2 Cr and a EPS of 3.3. Extrapolating the company could come out good increase of 20% in sales and profit.

Presently the company has invested another 35 Cr. in facility for manufacturing 6 bn tablets at Gagilllapur. The capacity could be expanded to 12 Bn , tablets which would make it one of the largest such facility in Asia. The company has also implemented a facility to manufacture 8000 tons of paracetomol. The plant is to commence production soon. These expansions would definitely help the company to grow further.

The growth has been slow compared to its peer group. The stock is quoting at a PE multiple of 15 of the FY06 EPS.

The company has good chances of good growth but a mutli-bagger I have my doubts.. My opinion is that it is a Good long term investment ..maybe.. but definitely not a multibagger.

Regards

Karthik

 

[Dhanya]

Hi Karthik,

Thank you for an excellent post on Granules.Awaiting Educomp with eagerness.

Thanks again,
Dhanya

 

[anthonyd]

hey karthik,

wats u r call on teledata?

 

[karthikmarar]

Antony

Teledata Informatics is in a downtrend. Avoid for the time being.

regards

 

[karthikmarar]

Hi Karthik,

Thank you for an excellent post on Granules.Awaiting Educomp with eagerness.

Thanks again,
Dhanya

Dhanya

Thanks for the kind words. Now let us look at Educomp. Sorry for sounding negative again. I would not put this one on the Multibagger List for the following reasons.

The stock is very highly priced. Even when the public issue came many recommended to avoid the issue (ICICI, Business line etc ) because of its high price. The issue price band of 110-125 discounted the estimated FY06 EPS of about 5 on the post issue diluted equity capital by 22 to 25 times. Surprisingly the issue opened almost 100% up and presently quoting at 319. This works out to an astounding PE multiple of 64.

Though the business model and the promoters are good the growth itself may not be sustainable. Agreed it is a nascent field and has potential for growth. But the segment has little entry barriers and we may see a large number of new entrants and this will greatly reduce the margins. Also digital education is new and may take a long time to grow especially considering the great Indian digital divide.

Moreover the company has presence only in the education segment and does not have other revenue stream, thus keeping its risk concentrated towards a single line of business.

Sooner or later the stock will find its realistic price. Personally I would hesitate to put my money on this one except for some short term gains based on technicals.

Regards

Karthik

 

[anilsharjah]

Dear Karthik

Welcome Back.

Please look in to Gujrath Ambuja Cement . My entry is 86 . How Holicm Play at this level, i.e above 90 .

Also Prism [email protected] , Grasim@1680 & Dabur@109

Thanks in Advance


Anil

 

[karthikmarar]

Dear Karthik

Welcome Back.

Please look in to Gujrath Ambuja Cement . My entry is 86 . How Holicm Play at this level, i.e above 90 .

Also Prism [email protected] , Grasim@1680 & Dabur@109

Thanks in Advance


Anil

Hi Anil

Did not see you around for quite some time.

Gujarat Ambuja

A HOLD for the short term and a definite HOLD for the Long term.
Why? Here is a nice analysis on that. This article says everything..about Holcim

http://www.thehindubusinessline.com/iw/2006/02/05/stories/2006020501910600.htm

Grasim..

Nice entry my friend, Again a HOLD. Would see higher levels. Ride the Trend.. Some interesting points on Grasim.Quoting from the same article
Quote
Holcim and Grasim now control a tad over 50 per cent of the cement market. On key parameters, the Holcim group is in a superior position. Grasim is a strong second player. It may have to do more to stay with Holcim in the industry sweepstakes.
There is also the possibility that this development could hasten the integration of Grasim and UltraTech Cement. We maintain a `hold' on UltraTech Cement and a `buy' on Grasim, with a one-to-two year perspective.
Unquote..

Prism Cement

Has been moving sideways for the last few weeks.. Some Negative Divergence seem in the Trix and RSIOf course does not confirm any bearishness yet. It is safe as long as the stock stays above 24. Your stop loss could be 22.

Dabur

Just check Amit post on this one
http://www.traderji.com/35460-post3033.html

Good going Anil..

Warm regards

Karthik

 

[anilsharjah]

Dear karthik,

Thanks for the fast replay.

Please give your views about banking sector.

Disclosure : bank of india , syndicate bank, SouthIndian bank & Union Bank Of india.


Regars


anil