Wednesday, December 25, 2013

Dhanuka Agritech Ltd - Is it too late or sometimes it's never too late?

An Appreciation of 118% in past 2 years, but sometimes, its never too late, especially in fundamentally strong stocks. The major benefit in such investments is that we almost eliminate the risk of losing over money over a period of time. Even if you see the strong stocks falling, use that opportunity to buy more, as the company will surely hit the interests of big investors in times to come. We have seen such scenario earlier with Ajanta Pharma, Cera Sanitaryware, Dewan Housing, to name a few.

Dhanuka Agritech Limited manufactures a wide range of agrochemicals like herbicides, insecticides, fungicides, miticides, plant growth regulators in various forms – liquid, dust, powder and granules. The Company has a pan-India presence through its marketing offices in all major states in India, with a network of more than 7,000 distributors/ dealers selling to over 75,000 retailers across India and reaching out to more than 10 million farmers. The Company has technical tie-ups with 4 American, 5 Japanese & 2 European Companies.

Talking about valuations, I understand that stock has done too much in past already, but the company is not sitting with same set of products, it is putting continuous efforts to build its product portfolio, by introducing new products every year. The company launched 4 new products in FY13, 3 so far this year. According to management, they are planning to launch at least 2 new products every year going ahead.
Company is right now trading above industry P/E, but I expect margins to improve going ahead in the long run.

The company has already started work on its new facility at Keshwana, Rajasthan, which is expected to be commissioned in Q3 of FY15, which is a year away from now.

Talking about Q2 numbers, the revenues grew by 23% and net profit grew by 36% on back of good monsoon this year.
Overall result of H1 FY14, shows growth of 34% in revenues and 42% in net profit over H1 FY13.

Talking about scope, I found some stats from HDFC Securities report, which says, that although India has the largest area under cultivation in crops such as paddy and wheat, it is lagging behind in total production. As much as Rs.1.2 lakh crores worth of potential crop production in India is destroyed due to insects, fungus and weeds.
It has been estimated that the country is losing food grain production worth Rs.2.5 lakh crore per annum. At present, the pesticide use is only for a few crops and in a few States only. Thus, there is a vast scope for expansion in area and crops under assured plant protection coverage.

Few recent Achievements:
1) The company has been assigned 4/5 Fundamental grade by CRISIL, which suggests superior fundamentals of the company.
2) The company has been presented precious award for branding excellence in Agrochemicals by ABP News during 22nd World Brand Congress.
3) For the 3rd time in past 4 years, the company has bagged a coveted place in prestigious "Forbes Asia - 200 Best Under A Billion" list in Asia Pacific region

The company has taken many initiatives to strengthen its brand image like signing Amitabh Bachchan as brand ambassador of their company.

The management has a strong vision of achieving revenues of 1000 Cr by FY16.

Latest Ad Of Dhanuka Agritech (Just a latest ad, plenty more available on youtube):

Stock Price Estimates:
Being a stock in agrochemicals sector, the major revenues are generated in Sept Qtr of every year. Remaining quarters are slightly subdued on account of lesser demand. Taking that into account, I expect the total revenues for FY14 to be somewhere above 700 Cr, which would be great. If that happens, and we have good monsoon in next 2 year also, I don't doubt management saying that they will achieve 1000 Cr revenues in FY16.
Keep in mind that stock is trading above its industry P/E. Kindly do all required analysis from your side before investing.

I am closely tracking JB Chemicals & Pharmaceuticals, Vardhman Textiles, Plastiblends and few other stocks, which are looking good for long term investments. Will come up with separate post on those stocks very soon, if everything seems fine about them.


  1. We are off to a great start..... on the next day of this post, we have this news...

    Dhanuka awarded by INC India Innovative 100 Award : 2013

  2. Granules continues its positive trend....still looks good for much more...
    Yesterday, it closed above 200 for the first time after a year or so.... things are looking good so far, so no need to worry as an investor (no comments on short term gains/loss)....
    Gulshan Polyols is also looking good, slowly moving towards its correct valuation. It might achieve it once it is out of PCA.....
    Superhouse was just an idea, but it has outperformed, along with Paushak.
    Superhouse has hit all time high of 100 today, with strong volumes...
    Puashak has mostly been in upper circuit, so not much to comment on it...

  3. CARE assigns ‘AA+’ rating to debt programme of Dewan Housing Finance Corporation

    Credit rating agency, Credit Analysis & Research (CARE) has assigned ‘AA+’ rating for Dewan Housing Finance Corporation’s debt programme amounting Rs 2,000 crore. The instruments with this rating are considered to have high degree of safety regarding timely servicing of the financial obligations.

    Dewan Housing Finance Corporation (DHFL) is among the oldest private sector Housing Finance Companies (HFC) in India. Today, DHFL with its Corporate Office at Mumbai strives continually to reach out to its customers through its extensive network of 140 Branches, 72 Service Centers, 32 Camps and 8 Regional Processing Offices spread across the length and breadth of the country.

  4. Making it big with Cera Sanitaryware:


  5. Dear kunal,

    Coming back from long vacation. Hope you too had great holiday season.

    Thank you for the post. I am invested in Dhanuka at the average price of 152. This share is fairly valued and I feel is a good long term buy for less than Rs 200. This is one of the stocks which one need not worry tracking daily (Last five days I did not see sensex, price of dhanuka never bothered me ). I considered few things

    1. Market cap is around 900 Crores. Even if PE re rating does not happen, increase in share price should come from increased earnings. Only Bayer's Market cap is around one billion dollar. Rallis market cap is half a billion dollar. This is fairly less for a nation with second highest arable land ( Major pesticide companies have big space left for growth in coming years.

    2. I usually prefer Indian companies with foreign technical collaborations. Dhanuka has partnerships with many leaders including Sumitomo Chemical, Bayer.

    3. It is positive 'Yes' for one question that should asked while buying any stock - Is this stock worth holding for next ten years ?.

    Warm regards,

  6. Gulshan Polyols next two quarters should take decisive steps for re-rating of the scrip !!! It's still available at a PE of just 2.5 !!!!! Market Capitalisation is still below Rs.65 crores !!!!

  7. hi,,krunal

    plz tell about kpr mills ltd....


  8. Ricoh India : Result Of Postal Ballot

    99.81% of total votes agreed to the delisting proposal....

  9. Extremely sorry guys, as I came to know that site was down for the entire day almost.

    I was busy whole day and couldn't see that.

    Someone did try to temper this hosted site due to which there was misconfiguration.

    We are back live now.

  10. Sure, I will take a look..

  11. Hit almost 80 today..... and I don't think promoters were involved in buying on daily basis. Still for the entire past week (or probably 2 weeks), we had good volumes almost daily.
    That means we have some other big party also, other than promoters, who are filling their pockets with Gulshan at cheap price.
    Eagerly waiting to see movements once its out of PCA..

  12. Thanks for that nice little piece of information from your end.

    Yes, I also, probably feel, that out of all stocks we discuss here in this blog, Dhanuka and Cera, are probable candidates for whom, we should not worry holding it even for more than 10 years....

    Today, again, CNBC TV18 interviewed MK Dhanuka, and it was very inspiring one.
    Will be posting it here...

  13. Optimistic on GM crops; eye 25% growth in 3 yrs: Dhanuka

    According to MK Dhanuka, monsoon is the biggest challenge for the agro-industry and if it will be normal then the company will have minimum 25 percent growth in next three years.


  14. It's an excellent response to delisting proposal !!! On the basis of postal results it looks likely that the delisting has very high rate of success. I am eking out to say more than 80% !!! At present it's trading around 130 !!! Those who are not chicken-hearted can resort to buying at CMP for arbitrage. I expect a decent return and exit price may be around 180 !!!! However, as usual the risks of "delisting" failure are there !!! Without risk hardly there are superlative gains as are present in Ricoh's case :-D

  15. Hi Kunal,
    You didnot check-up Royal Orchid Hotels !!! In the meantime, I am noticing decent volumes in recent trading sessions at BSE and NSE with delivery volumes being good as compared to previous month at CMP !!!! If you find time, do analyze it and put your thoughts !!!!

  16. Sure, I will..
    I have started with that already..
    Checked few parameters... one thing I found was that many promoters of the company have pledged all their shares in recent past... which is a point of concern.,. unless there is a particular reason for it...
    Secondly, with economy slowing down this year, one can hardly expect a hotel company to earn well, which is evident from their results, in spite of adding hotels this fiscal.

    I found this news in Economic Times (bit old, but still the situation is close to same), which stated:

    "The hospitality industry is becoming another high-profile casualty of the slowing economy, with nearly 75 big hotels putting up the 'for sale' boards and several others raising the red flag amid falling check-ins and wilting room rates.
    Most hotels in the country are running half empty, as the GDP growth slips to 5% levels this fiscal year, says the Federation of Hotel and Restaurant Associations of India (FHRAI). In a preliminary report, the hoteliers' body has found that average hotel occupancy in 2012-13 dropped to the lowest in a decade at 58.3% and average room rates fell to Rs 6,214, the lowest in six years."

    Thirdly, I found the news off-late, that they got the approval from share holders to sell their Hyderabad property, through postal ballot, which may be signs of things to come in future, we don't know

    But most analyst still believes that hospitality is a long term play. It may take time for returns to come in.
    Once economy is back on track, I feel this is one sector, which will get benefited more.

    I found this news pretty interesting though, with Royal Orchids, as they are eyeing tier-II cities for expansion.

    For now, I have started tracking the stock, and will let you know, as you as I get something more and deep on it. This is just the basic information that I could collect as of now.

  17. Promoters were required to pledge all their shares in favour of SBH as a part of the CDR package. However, since Re:Gen:ta Hotel, Hyderabad has been disposed of in November/December(sale price not yet disclosed but should be minimum 200+ crores as it's a brand new 5-star hotel and came into operation in August 2012 only) which had a project cost of around 200+ crores. You can overlook promoters' pledging just a technical matter. I hope they must have repaid entire/substantial portion of the loan on Hyderabad hotel to SBH in December itself since the deal is through. In nutshell, they bit more than what they could chew(just because of the slowdown, another example of Corus-Tata deal) :-)

  18. Hope we have not missed the bus :-D Very good volumes today on both the bourses and price is up by `10% !!!!

  19. Of course not, I see plenty of value once a stable government is formed in 2014. Hospitality sector will definitely shoot up then....
    Btw, are you still not invested in it? I thought you would be....

  20. A small position but on other confirmation may be a bigger slice of the pie :-)

  21. H2FY14 unlikely to be as robust as H1: Suven Life Sciences

    Speaking to CNBC-TV18, Venkat Jasti, chairman and chief executive officer, Suven Life Sciences, says the company expects three compounds to go into phase I in FY15 and lower research and development expenses in H2FY14 vis a vis H1FY14.

    Read more at:

  22. One of my friend informed me that I forgot to mention about the new product from Cera. Its probably their first product concerned with women hygiene.

    Highly impressed with innovations from Cera!!!!

  23. Reminds me of hazardous behaviour seen in case of Saint Gobain, when they attempted delisting a year or two back.... :-D

  24. Vikram Somany still not hesitating in buying shares from open market....

    Another 4000 shares bought from open market at 705 Rs...

  25. Hi Krunal,

    I did try to find out details regarding KPR Mills.
    It generally happens with me, that I dont tend to look at stocks which are from sector, less preferred, even if they are performing very well.
    KPR Mills is again of that same kind. Excellent fundamentals.
    Good book value, good dividend yield, excellent P/E ratio, when compared with peers.

    2013 was excellent year for textile industry. One of the primary reason was increase in cotton yarn exports to china, and a good contribution from Rs depreciation as well.

    India's total textile export till September this fiscal was $13.6 billion from April till September this fiscal compared to $12 billion in the same period last year.
    Apparel exports from India have also increased by 31% to $1.2 billion in the month of October due to strong demand for Indian apparels. India has started eating into competing countries share like Bangladesh and China. From April till October apparel exports increased by 15.5% to $8.26 billion.

    And some more good news for textile industry here:

    Things are looking good for textile sector as of now, but not sure on its sustenance.

    One concern with KPR is their margins, which are pretty low, when compared to something like Orbit Exports, even when Orbit Exports is smaller size organization compared to KPR MIlls.

    Looking at parameters, which we have been looking at in searching for good quality investment, KPR looks cheap, along with Vardhman Textiles.

    I feel that you can invest in these stocks, but you will have to keep a check on news following the textile sector. You might get appreciation when overall sector is doing well, but it can go the other way also.
    Rest is one's own decision.

    Referred site for industry numbers:

  26. Hi Kunal,
    I think Cerenity could find its application in huge number of malls and office toilets! Great stuff from Cera and also agressive promoter buying indicates huge further potential for the stock.

  27. thanks for valuble advice......

  28. Ricoh India sets 120 Rs as an indicative price for delisting...

    Seems fair enough from company's perspective, considering the stock price in past few days....

  29. Looking at indicative price, I dont think, they will hesitate buying around 150 Rs, but not sure, beyond that....

  30. Dhanuka Agritech: Long-term rating of the Company has been upgraded from A to A+ for Rs. 50.0 crores fund based facilities. ICRA has also upgraded the short-term rating from A1 to A1+ for Rs. 50.0 crores non-fund based limits of Company.


  31. Expecting a minimum Discovered(DP) Price of 180 and exit price may be even more, say around 200 !!!!!

  32. It has already started quoting 137.25 and that too at Upper Circuit with pending orders for 60k shares !!!! :-D

  33. Seems to be "Lambi Race ka Ghoda" :)

  34. Was among the rare out performers today, in depressed markets, along with Gulshan Polyols....
    But don't you think 200 is too much to ask for, curious to know your views on that...

  35. If you ask my personal opinion Ricoh's fair value is much more than that !!! Even at CMP what is the market capitalisation today just around Rs.550 crores !!! FY14 sales will be more than Rs.1000 crores !!!! It"s pedigree is of Fortune 500 company !!!! Continuously rated as Most ethical and Dow Jones sustainable Company !!!! And only subsidiary of Ricoh Japan which is listed anywhere in the world !!!! Topline has been growing continuously for three years @ 50% CAGR !!! Excellent product mix !!! FY14 topline will contain a minimum of Rs.400 crores by way of servicing revenues !!!! State of the Art facilities at Kolkata, Mumbai, Delhi, Bangalore and Gandhinagar, Gujarat !!!! Excellent very valuable real estates at Salt Lake, Kolkata and Gandhinagar, Gujarat (2 acres and 10 acres respectively) with completely built-up facilities !!!! Errrrrrrr Am I marketing the Company or valuing it ? :-D

  36. Gulshan Polyols - my comments "Lambi Race ka Ghoda" !!!!!!!!!! It may prove to be a real multibagger !!!!!!

  37. The way Ricoh is trading with volumes at 140+ it looks it may cross your expected exit price acceptance of 150 getting quoted in the market itself :-D

  38. You really are marketing the company... :-)
    Whereas my question was more about the valuation of the company in current market conditions.,.
    Dont deny your facts and figures which evaluates the company's share price to more than 200, I do agree with that myself, but now it seems that nobody is curious to look at performance or fundamentals of the company, as they, in any case, are going to delist the company from stock market in short term.

    These are my views on indicative price:
    Company has started this trend of declaring indicative price, just to caution the investors that dont expect much more than that from us. The move is only to control the share price, so that it does not go beyond a certain limit. There is no hardcore rule, on how this value of indicative price, will be used by promoters, for reverse book building process.
    From an investors perspective, they are always concerned about the fact that delisting should not fail in any case, otherwise share price will take a severe hit, which has happened in few cases, in past. Hence, investors would be more than happy to come out of stock, at price 20-30% higher than the indicative price. Beyond that, you need a big heart to stay invested, and you should be strong enough to accept the failure of delisting.
    Again, failure of delisting, is such a bad news, that people will forget about the fundamentals of the company and just look to quit any price. Traders will use that opportunity to short and make profit, which will add fuel to fire, in taking the price down.

  39. That's the pain !!!! Given the option I would have loved it to be listed !!!! Am I marrying with the stock ? :-D :-D

  40. Hi Kunal

    Any updates on Photoquip India !!! It's high time and coupled with it's likely returning to normal trading segment !!!!! Your valuable comments and updates.......

  41. No updates from my side as of now...
    Frankly speaking, I have stopped tracking Photoquip on daily basis....
    If the company really deserves, it will get appreciated some day. We are positive on that...
    Some of the best example of appreciation taking its own time is TTK Prestige, which was in 50-100 range for 8 years from 2001 to 2009, and then, 100 to 4000 from 2009 to 2012....
    Just a example, not a any sort of comparison with Photoquip... :-D

  42. Elinchrom is a great innovator. Its good company for employees. It produces great products for consumers.

    I own DSLR, lots of lenses and am a regular visitor of DPreview. Usually in all comparisons Elinchrom wins out.

    However challenge is company is facing stagnant consumer base. I would even say shrinking consumer base. Rapidly increasing quality of DSLRs have made things worse.

    I have not tracked this company. But as far as business is concerned I am less hopeful. May be I am wrong.

  43. You are not not at all wrong..
    The management themselves accepted that in my last mail to them, saying that demand for photographic products has been going down in india, in past 1 year or so...
    But, its not just about the business brought by sales of elinchrom products.
    We are more hopeful with their new venture of CORVI LED Lights. The segment has tremendous growth potential, and the company has put its first step right, by winning plenty of awards on innovations, with regards to corvi led lights.
    The sales of CORVI range of products has continuously been going up, since its initiation in last Dec.
    The 20% growth seen in sales in last qtr was majorly because sales from this new venture.
    The problem with the company now, is that, they have to find out buyers in form of institutions/organizations for their corvi products, by attracting them with plenty of demonstrations, as no retail buyer would trust a new brand in market so early.
    So, they will have to wait till such products make their presence felt in market.

    Lets see how things pan out going ahead.
    I am very positive on this company, but of course, it will take time to get things on track.

  44. Corporate Video - CERA SANITARYWARE


  45. They should close FY14 on Corvi products around 18-20 crores which will not be bad figure keeping in view the first full year of operations for a new product from consumer as well as Photoquip point of view !!!!!!

  46. LED lights are most likely to replace Incandescent lights. Whether price of LED will come down enough to be attractive for retail user ? Its difficult to predict future. As almost technology becomes cheaper as the time progresses, one can bet that LED prices will come down.

    If any loss incurred by studio lighting products wont become a 'drag' for this company, I think returns will be huge.

  47. We have seen in our life till date that if any technology has to be mass based it has to be affordable - Computer, television, laptop or even CFL bulbs and tubelights :)

  48. Nice Article...

    LED technology: The wonder light

    Reduction In Power Consumption Vs Capital Cost (Fight As Of Now)

    But as totalview said, prices has to come down eventually, to survive in Indian markets, or else, you will be thrown out and some other technology may take over

  49. With effect from 13th January 2014 all scrips are out of PCA system and will trade in normal trading segment except 458 scrips (which any of us hardly tracks) !!!! Small Caps will see better trading in the days to come !!! It should prove to be a booster dose to the sagging morale of retail shareholders trading and investing in Small and Mid-cap stocks. AT NSE the list is just limited to 45 !!!!

  50. Thanks for that info, will post the actual link...

  51. Trade cautiously in 500 illiquid stocks: Exchanges

    Notice As On BSEIndia Site:
    Periodic Call Auction For illiquid Scrips


  52. Gulshan Polyols trading at @ 84 at 52-weeks high !!!! Volumes have been good keeping in view it's earlier average volumes per day !!!! Best part is that now promoters are not at all involved in mopping up the shares from the market !!!! All holdings above 1% seems to have been liquidated in the market !! Better days ahead ?

  53. Its surprising to see such trades even when promoters are not involved... who are these buyers? and where were they when stock was stuck around 60 in this same quarter itself? Is there a sudden change in fundamentals, or is there any updates or insider news on this company?
    I dont think so...

    Btw, found one report on internet, suggesting the fair value of stock around 180 Rs.

  54. Hi Kunal -

    I fully agree with the Report !!!! It's grossly underpriced at CMP !!! Do you know what is All-Time-High of Gulshan polyols? It's Rs.619 and it somewhere in January 2008 !!! However, it has traded in the range of 300-500 for quite sometime ! And at that time it was a much smaller company with a topline of just below 100 crores and share capital was Rs.3.11 crores !!! Therefore, in the last six years it's topline has more than trebled whereas paid-up share capital is just Rs.4.22 crores !!! Therefore, going by it's pedigree also it's capable of scaling up much higher tops !!!

  55. By the way w.e.f. 13th January 2014 volumes may improve once the scrip is out of ambit of PCA !!!!

  56. I did check that and was surprised to see that....
    Frankly speaking, I generally, always prefer to have a look at such details, but not sure how I missed that in case of Gulshan...
    Revenue wise, it has grown from 111 Cr to 282 Cr, in that period from Mar 08 to Mar 13.
    Then I thought, it might be margins because of which this fall might have happened, but it wasn't the case either....
    Margins have remained same in that period, with EBITDA close to 16-18% every year, which means net profit has grown equally with revenues from 9 Cr to 24 Cr.....
    Company's reserves also has grown from 18 Cr to 143 Cr in that period...
    Looking at all this, my confidence in company is increasing further.
    To add to all these, company is sitting with a book value of close to 174 Rs per share, majorly because of good reserves and lesser debt.

    Btw, SHP has been updated on BSEIndia website. promoter holding now stands at 72.19%.

  57. Hi Kunal,
    With respect to Gulshan Polyols, the attached report does not even factor in the IMFL business which they have recently entered.

  58. Suven Life secures three (3) Product Patents for their NCEs in Australia, Sri Lanka and South Korea

  59. Did they get the license for IMFL business? Till some months back there was no licence for Chindwara plant? Any update on this !!!

  60. My guesspeculation has proved correct !!!! Even Mr.Khurana holding more than 1% of shareholding has unloaded his holding during the quarter and only a small part of it has been bought by the promoters and the rest got absorbed by the market !!!!!! Now market is having just 19.22 lakh shares in d-mat holding !!!! Physical holdings are like "dead" shares as far as liquidity of the market is concerned !!! Can shares also die? :-D

  61. Veyry good point....

    For those who are unaware of IMFL, here is the detail:

    The alcoholic beverage industry in India is now growing at the rate of 12-15% for the past couple of years and as per a study by the apex industry organization ASSOCHAM, alcohol industry is expected to more than double in the next 5-6 years.
    Gulshan group is now venturing a new growth trajectory and adding value to its large shareholder community.Gulshan Polyols Ltd. is entering into a new vertical of Alcohol division under the Brand name of INDUS SPRITS at Industrial Area Boregaon Distt, Chhindwara (M.P). The interest lies inthe manufacture and sale of GENA (Grain Extra Neutral Alcohol), GRS(Grain Rectified Sprits), DWGS / DDGS, IMFL and CL. The above products will be available fromfacilities being setup with the state of the Art technology on the land spread over 55,000 sq mtr. The ecology and environment as well as greeneryare the prime and most important thrust of INDUS SPRITS. The technology of the plant is advanced and automated and will have zero liquid discharge. The facilities will be matching to world class quality standards
    The operations commenced around Dec 2012, if I remember correctly...

  62. At best now Mr.Khurana may be holding just 50k shares !!!! He continues to be the largest Retail shareholder of Gulshan Polyols in the present quarter :-)

  63. As per my information manufacturing process is yet to commence(atleast three-four months back) !!! They were expecting to get the license after the election is over in MP !!! Even segment wise top-line does not show any sales figures !!! However, shall be thankful if any updates on this...

  64. Very good buyers @ CMP of 84 !!!

  65. We now have some updates from Photoquip India :-)

    "Hi Kunal

    Seasons Greetings and Wishes for a Happy and Successful New Year from Team Photoquip !!

    LED segment has tremendous growth potential and that too worldwide, including India. Corvi is on the right path with a strong technological lead over competition. Almost all products available in this segment in India are Chinese; and less said the better about Chinese standards of quality. Corvi takes pride in being extremely quality conscious and delivering technologically advanced products at 'value-for-money' pricing. Photoquip as an organisation is based on these principles all along its journey since inception.

    As regards sales Corvi has grossed Rs. 1,221.12 lacs in the current financial year in terms of the topline. The monthly average works out to Rs. 135.68 lacs. However, the last 3 months' average topline is Rs. 186.96 lacs which is very encouraging and augurs well for our future. We are on track to achieve our targets."

  66. Now lets do some calculations...

    According to them, the total topline of 12.21 Cr in current fiscal would mean that in this quarter they have sales of around (12.21 - 6.6 = 5.61 Cr roughly), which is evident from what they mentioned in mail that last 3 months avg sales is 1.87 Cr.

    Looking at current scenario, if they are able to sell around 6.5 Cr in next quarter, they will be slightly short of what we thought is a magical figure of 20 Cr.

    Things are looking good, But patience is the key for returns on investment....

  67. Btw while digging internet I found one more recommendation from Ashish Chugh, investment consultant way back in 2010

    It was recommended while it was actively trading @ Rs.105 for 50% returns. Fundamentals were much underdeveloped at that time. Now fundamentals are superior and likely to bloom further !!!

  68. Hi Kunal,

    I am expecting a top-line of around Rs.20 crores from Corvi as earlier written by me !!! And I am also expecting almost a break-even on Corvi products alone. From the figures one can deduce that on a small base they are doing 70%-80% accretion q-o-q and that's simply very good !!! I see no reason with this pace they will be churning out a top-line of around 35 crores in FY15 with net profits !!! And yes the product has great potential and let me tell you that they are eyeing export markets. With this in view they are participating in international trade fairs as far as in USA !!!! No doubt investment offers multibagger opportunity !!! Finally "Patience is the mother of all virtues" rather "Patience is the mother of all investment decisions" atleast with Photoquip :-D

  69. Dear totalview,
    Are you aware of this company Jesco Lighting in the US markeiting led lights under CORVI brand name? Link here:

    They have no connection with photoquip. So how could photoquip sell the same brand in the US?

  70. Hi ipogenius,

    I have gone through the link carefully ! Now let me confess that while searching internet I used to get this link but never thought seriously about it. What I speculate is that Photoquip group in fact has borrowed the idea of branding CORVI from these lighting guys of abroad. If you carefully go through it you will find this news is dated February 2012 when JESCO guys launched CORVI series of products and it was around the same time Photoquip guys were developing their LED products !!!! It was another innovation of Photoquip group to have borrowed the name CORVI (though it was given only for a series of products and not a complete brand in itself) and got the name registered as a brand. Are you aware that now CORVI as a brand is registered almost in many important countries of the world. Great ideas although a borrowed one or a stolen one :-D

  71. And on IPR rights Photoquip has spent quite a good amount on registering the trade mark CORVI and this figure you can find out from the latest Balance Sheet as Intangible Assets !!!!

  72. Nalanda Capital buys into WestBridge Capital-backed Cera Sanitaryware

    Nalanda is estimated to have spent over Rs 15 crore to acquire the stake.

    Singapore-based Nalanda Capital has built up a 2.2 per cent stake in Cera Sanitaryware Ltd (CSL), one of the largest sanitaryware companies in India, over the last two quarters.

    According to VCCircle estimates, Nalanda Capital has spent Rs 14-15 crore to acquire the stake.

    Cera counts WestBridge Capital Partners as its biggest institutional shareholder with an 8.87 per cent stake. WestBridge had built its stake in Cera from mid-2012 to mid-2013.

    Cera's scrip was trading at Rs 696.60, down by 2.12 per cent on Friday at 3:07 pm giving the company a market capitalisation of Rs 884.68 crore.

    For first two quarters of FY14, Cera reported over a 41 per cent increase in sales to Rs 285 crore with net profit rising 7.5 per cent to Rs 21.8 crore compared with the same period last year.

    "We view Cera’s entry into the faucet ware business as a positive as it provides a significant scalable opportunity; however, the business is challenging and is currently loss-making. This is primarily due to low brand awareness in faucet ware and significant competition from unorganised players and Jaguar. We expect the business to grow at 29 per cent CAGR and become profitable during FY13-15 on its plans to introduce new faucet designs with higher profitability and better branding," said a CRISIL report on the company dated August 2013.


  73. Finally, Gulshan Polyols Ltd. started trading under normal trading segment !!! On the first trading day it traded with good volumes around 80 !!!!! Today it trading with thin volumes around the same price levels !!!! Next two quarters will be important for re-rating of the stock !!!!

  74. Was on leave for past 4-5 days, hence wasn't able to post much here....

    Lets see how stocks behaves as they are out of PCA now....

    On your earlier point of Royal Orchid, I am not fully convinced with the fact that a fresh investments can be made in any hotel stocks...
    I looked at various articles, and had a discussion with few... the common conclusion out of it was that we should rather wait for the elections, before taking any position in such stocks, which would perform well in surging markets...

    Looking at the political conditions right now, I dont think any single party would be able to form government in 2014, as of now. If that happens, we might see a huge downfall in markets. So, i would not take a risk now.
    As usual, I may be proved wrong. :-)

    In that case, I would be happy with lesser profit in that case.... :-)

  75. Camlin Fine Sciences looks like a good buy for long term.... will try to come up with new post soon....

  76. I am absolutely fine with the business they are involved in... but would rather wait for the company to deliver their numbers before taking a position, as I am observing a slight slowdown in revenue growth this year..

  77. Dear Kunal,
    Do you track Bajaj corp.? Is the Nomarks acquisition just an overhang currently? I dont see anything wrong with the company and believe this will give multibagger returns going forward. Your views?

  78. Dhanuka to invest Rs 50cr on new plant; eyes Rs 750 cr revenue

    Pesticides maker Dhanuka Agritech will invest Rs 50 crore on a new manufacturing plant in Rajasthan and is expecting at least 25 per cent growth in revenue to about Rs 750 crore this fiscal on better monsoon.

    It has 3 units in Haryana, Gujarat and Jammu & Kashmir to produce over 80 plant protection chemicals. The Gurgaon-based firm had posted net profit of Rs 64.44 crore and a turnover of Rs 582.3 crore in 2012-13 fiscal.

  79. Thanks ipogenius..... will have a look and revert back soon..

  80. Dewan Housing - Board to consider Interim Dividend

    Dewan Housing Finance Corporation Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on January 20, 2014, inter alia, to consider and approve the Un-audited Financial Results of the Company for the third quarter ended December 31, 2013 and may consider the matter relating to interim dividend, if any, on the equity shares for the financial year 2013-2014, to the existing shareholders of the Company.

  81. Indian bulk drug industry: Maintain quality conscience to face competition

    Inspiring words from Mr Krishna Prasad....

  82. Hi ipogenius,

    I did take a look at some parameters in Bajaj corp, and frankly speaking, I didn't find it too strong enough to be a multibagger candidate from these levels....
    Ofc, that is my personal opinion.. :-)

    Because of recent pressure of FMCG cos, stock is trading close to 52 weeks low.... that provides an opportunity to enter for longer term, but only, with a view of getting good returns on investment, in my opinion...

    Based on current price, the company is sitting with a market cap of 3090 Cr, sales of 600 Cr and net profit of 167 Cr. When I checked its peers, I found that,
    Emami is having a market cap of 10197 Cr, sales of 1627 Cr and net profit of 324 Cr
    Godrej Cons is having market cap of 25829 Cr, sales of 3581 Cr and net profit of 510 Cr

    If you take any company is similar business, and observe the ratios, you will find that, Bajaj corp is not heavily undervalued.

    Looking at the positives now.....
    In terms of margins, they are better placed than their peers.
    Profitability is good, due to which P/E is ratio is lower than the industrial average.
    Their rural sales are growing strongly, which is very good.

    The biggest worry is that the company is placed in one of the most competitive industries in India.
    Generally, if look at the stocks, that has given multiple returns, they would have been unique in some products, where the competitions would have very less, and they would have, kind of, enjoyed monopoly. (At least for certain period of time)

    Also, when we are investing in companies involved in making of personal products, we have to be watchful, as change of trends in buying products is very fast in countries like India, where people tend to get easily attracted by a new wave in the market.
    On the other side, in such sectors, the scope is unlimited to test your competency. :-)

    Further, I am not highly attracted by acquisition of Nomarks. We will have to wait and see, how much it could add to the topline and bottomline.

    This is all what I was able to find, and all the details mentioned are based on current market situation. You, of course, might have different opinion and I completely respect that.
    Finally its your views that is going to matter, and drive your investments... :-)

  83. Dear kunal,
    Thanks for your reply. I was highly impressed by the analyst discussion which they had in May 2013, transcript is available on their website.

  84. do you have presence on twitter ? if yes , please send account name

  85. No I don't...
    I am not planning to link this blog with any of social networking sites, right now... :-)

  86. Cera Style Gallery - Vaishno Ceramics

    Now one more Style Destination @Bangalore, welcome Vaishno Ceramics to the exclusive club of CERA Style Gallery.

  87. Hi Kunal,

    Gulshan Polyols Ltd.'s promoters again appeared in the market and made purchases on 13th, 14th, and 17th January 2014 after a gap of more than two months. Quantity is small of 1000 odd shares but important point is that they have made purchases at higher price in the range of 80s whereas their all purchases were in the range of 60s !!!! It looks like they would like to reach maximum permissible limit of 75% in due course of time.

  88. That is correct, but its surprising to see that volumes have declined after stock came out of PCA....
    And as you might have observed, the avg volumes on the counter for 2 weeks prior to 13th Jan, was close to 7500, and we didn't see any disclosure from promoters on that. If that is the case, then, who was buying at that time.
    Was it some institutional buying?? :-)

  89. PCA system does not offer a very good system of market mechanism !!!! It becomes a fastest finger first exercise and in this process sometimes even extra-demand is created !!! ! My sense says that it was Mr.Khurana's holding which was getting liquidated and by now around 75% of his holding has been liquidated. There were two things matching - higher volumes higher prices and higher demand as well !!!! It seems shares have gone into deep pockets !!!!

  90. Gulshan Polyols Ltd. - some interesting figures :

    Average retail shareholding - less than 150 shares for more than 12000 shares
    Average Body Corporate shareholding - less than 1300 shares for 194 shareholders
    Average for holding 20000 shares and more - around 45k shares for 6 shareholders

    This only shows that now shareholding is quite fragmented and after some time say after March 2014 or so any heavy buying orders will lead to appreciable price rise subject, of course, to be other factors !

  91. Kunal, Could you please suggest any small cap company with good fundamentals and better future plans.

  92. Hi Sridhar,

    As we have already entered earnings season, it would be better, if we wait till results are declared and then take decisions accordingly.....
    I know result of 1 quarter is not going to change the situation dramatically, but it always helps in minimizing the risk associated with short term fall, if there is any...

    I have few stocks in mind, but will come out with post on them after results festival.. :-)

  93. Good set of numbers declared by Dewan Housing Finance, will come up with detailed post soon....

  94. Hi Kunal,

    Would you recommmend a buy on current price of 260 as the result is coming and there is no purchase from promoter side. The promoters are selling the shares. Any update on this one?.


    1. Hi Kiran,

      First of all, Promoters are not offloading their shares in the market. It is a planned transfer of shares taking place between promoters and some financial firms, which are again part of promoter group, if you see the report.

      The only transaction where it was not going into the promoters account was when HDFC Mutual Fund bought shares from some promoting firm, if I remember correctly.

      Regarding stock price, it is expensive right now, but more so, because of its strong fundamentals, and mainly because of almost negligible debt.

      If you have some short term view, better wait for results before entering, else if you are fine holding it for few years, then, it can be one of the safest bet to enter.