Tuesday, December 10, 2013

Updates On Cravatex, Infinite Computer and Capri Global Capital

As I missed the post on these 3 companies after Q2 results, here is the brief about their numbers and expectations. There were no major attractive factors in any of the company, hence I avoided the post at that moment.

1) Cravatex Ltd:
Even in slight subdued markets, the company was able to show a growth in sales, which is good, but the downfall in net profit, because of Rs depriciation, is still, a major concern for the stock. In Q2, the company was able to show a sales growth of 18% YoY, and 45% QoQ, which was slightly above expectations. But the net profit figures are going from bad to worst.
Net Profit declined 64% YoY, and it was close to flat QoQ. Already there was higher cost of raw materials consumed, but Finance cost, which grew from 1 Cr to almost 2 Cr this quarter, made it worst for the company.
Those with big hearts, can continue to hold for longer term, hoping that some day, Rs might recover, and company might again be able to post an EPS of above 10 per quarter.

2) Infinite Computer Solutions Ltd:
This company, when suggested on this blog around 80 Rs, looked quite undervalued, which was major reason for the suggestion. The performance of the company doesn't look as good as expectations from IT companies in current scenario, where they are heavily benefitted from Rs depriciation.
Company was able to show a 37% growth YoY in revenues, which was lesser than expected, mainly because of under performance of their standalone business.
Net Profit was down 16% which was the biggest surprise, under current circumstances.
With current set of numbers, I feel the company is fairly valued at this price, wnless, we have some announcements, or strong numbers going ahead.
I booked some profits around 125, holding minor quantity now, if there is any surprise in store.

3) Capri Global Capital Ltd:
Lack of volumes in the counter is major concern, due to which we are not able to see movements in stock price. There was a time earlier, when we used to see, a unbelievable sort of growth in sales, and net profit, mainly because of the fact that company had a new beginning from scratch after the scam that happened in late 2010. That growth on quarterly basis, seems to have come to a halt now, as they might have got the confidence of clients back, and now they are sitting with healthy set of customers.
On net basis, the revenues in Q2 grew by 18% YoY, and 16% QoQ.
Net profit remained flat, both on QoQ and YoY, basis.
Valuations point of view, the company is still undervalued, but it is observed that most of the movements in stock prices comes after promoters gallop 5% shares from open market around April.
On current numbers, company seems to be fair valued around 200, but stock price is not something we can control. Hold for now, is my call, rest is upto the person to decide, as always. :-)

51 comments:

  1. I offloaded all of Infinite shares @118. They have completed 40% of the maximum buyback offer. Do they plan to buy some more ? I don't know, I might have missed any news on this. If they intend to buy more, management certainly wants share to be priced below 120. Also I saw an interview where Upinder Zutshi mentioned that they invested around 60+ crore on a telecom product and cost is being charged equally on each quarter of this financial year. This brings down 15 crore in profit every quarter this year. Q1 and Q2 results have already taken hit of 30 crore in profits, however no clarity is offered in results about this.

    Completely agree that share is fairly priced.

    Thank you,
    Shekhar.

    ReplyDelete
  2. Hi Shekhar,

    40% completion of buyback was their last official shared report, but I found plenty of days when they bought even after this announcement.
    Last report that I found on NSEIndia, was buying of about 40k shares on 19th Nov.
    They already declared that they would be completing the buyback process within 1 year, hence they would not be in any hurry. Also, they mentioned that the maximum price at which they will buyback was about 120. So, they might not be much interested at levels above 125.

    The positive about the company is that the company is high dividend paying and is trading way below industry P/E. The buyback would further take the P/E down, as the number of outstanding shares in the market would be less. This might attract few. But if you do performance analysis, its not that great since last 2-3 quarters.

    I am still holding a minor position in the company, lets see how it goes.

    ReplyDelete
  3. Gulshan Poly - It seems major shareholding of Khurana and Viveksheel has been delivered in the market and majority of it has been absorbed by the promoters. A part of it has also been purchased by retail investors. Now this counter is trading in the range of 70 !!!!!

    ReplyDelete
  4. Thank you very much for info from NSEIndia. It never occurred to me.

    As you mentioned, maximum buyback price was the primary reason I sold my position. I feared stock may have to face headwind with management trying to show moderate profits to keep the price low. The product they are developing is not operational yet ( not not generating any revenue) . They will deploy with verizon and possibly other telecom clients, only next year. However development cost of 15Cr is charged every quarter this year. I took this as management intention to show low profits. This may be good for company for long term. But I was not intending to be long term investor in this co.

    Warm regards,
    Shekhar

    ReplyDelete
  5. Stock price movement in past few days has been very exciting and seems it is going to higher levels, but still, with stock being in PCA category, there always remains a question mark on such speculations.... :-)
    In most of the cases, where stock gets appreciate heavily, there is a strong amount of intraday happening, which helps their cause, which is difficult with stock in PCA category, and with amount of volumes traded on Gulshan daily, it doesn't seem to be coming out of PCA soon...

    Just a few day back, I saw a news related to relaxing of norms from SEBI for stocks in PCA category. Will find out more details and post it over here.
    Will have to find out if there is a ray of hope for these companies.. :-)

    ReplyDelete
  6. It is possible that company might have invested 60 Cr+ on telecom sector, just to keep profits in check, otherwise why wouldn't they mention it in the press release.

    Even after such a move, the company is not able to keep the price in check. :-)

    Again, as you said, it might be a good company for long term, but my reason for selling was that, somehow, I don't tend to trust IT companies much as a candidate for multibaggers. It has gone against me also many times, but still, it has been that way for me. (For eg. Bought RS Softwares at 44 and sold at 70)

    I am also not sure on how IT sector will perform when Rs starts to appreciate against dollar, but that again, is a question in itself.

    For now, its like wait and watch.

    Btw, when I checked the press release again today, I found that they mentioned in the press release, that they have completed 78.31% of buyback
    http://www.bseindia.com/xml-data/corpfiling/AttachHis/Infinite_Computer_Solutions_%28India%29_Ltd1_131113_Rst.pdf ( Page No. 8)

    And after the result date also, they have bought back some quantities.

    ReplyDelete
  7. Was thinking if Suven Life Sciences can be bought again, for those who missed it earlier around 25, as one of my research company came out with report on it suggesting a buy.
    http://www.moneycontrol.com/news_html_files/broker_report/2013/Dec-091213-37091213.pdf

    But one has to keep in mind that the stock has already jumped 3 times since July this year.... so there is always enough risk associated with such stocks...

    ReplyDelete
  8. Sebi may tweak periodic call auction to improve efficacy:

    Less than a year after implementing the periodic call auction (PCA), the market regulator isn't very sure if the system is working, and plans to review it following severe criticism from brokers and investors.

    The periodic call auction system, introduced by the Securities and Exchange Board of India ( Sebi) in April this year to check manipulation through a separate window, has failed to show results and has dismayed millions of retail investors.

    The market watchdog is now planning to tweak the norms from every hour to twice a day, a person familiar with the exercise said.

    The norms have, in fact, resulted in a sharp drop in trading volumes in small and mid-cap counters at the two bourses -BSE and NSE. While volumes in four-fifths of the stocks, shifted to this system, have declined over 50% in the past few months, one-tenth of the stocks are not being traded since June.

    "The PCA system isn't convenient; volumes have declined and liquidity in many of these companies has dried up," said Dinesh Thakkar, chairman & managing director of Angel Broking. "Though we are advising our clients not to trade in illiquid or smaller stocks, unfortunately some of the good stocks have also been shifted to PCA as they fall under such parameters," he added.

    This has impacted the trading turnover on BSE, where most of these companies are listed. The daily average turnover of BSE cash market dropped by nearly Rs 300 crore a day to rs 1,952 crore during the July-September quarter from Rs 2,221 crore in the January-March quarter. As opposed to the continuous order-matching system in the regular market, in call auction, orders are aggregated every hour, of which 45 minutes are allotted for order entry, modification and cancellation, 8 minutes for order-matching and trade confirmation, while the rest 7 minutes are a buffer period for closing the current session and facilitating the transition to the next.

    For a small investor, it is very difficult to log in multiple times a day to feed in the same order many times over if it remains unexecuted. It may also be difficult for him to log in towards the end of the first 45-minute period of each hourly session to give him the best chance of executing his order. Even for a broker, the small brokerage on his orders may not justify the effort of re-entering his order every session.

    Of the 2,300 illiquid stocks that are currently trading through the periodic call auction route at the exchanges, the average volume in 1,200 stocks has halved in the September quarter compared with the January-March quarter (before the implementation of periodic call auction).

    Nearly 400 stocks have not seen any trading during the July-September quarter, while volume in another 300 stocks have declined up to 50%. There are 1.16 crore investors holding shares worth Rs 11,916 crore in these stocks.

    Many investors have complained that brokers have stopped taking buy or sell orders for those stocks which are classified under PCA. "If an investor needs urgent money and is unable to sell stocks under PCA, he may be forced to sell a liquid stock instead," said an investor.

    Source: The Times Of India

    ReplyDelete
  9. Dear Kunal,

    Are you tracking Acrysil? They make Quartz Kitchen sinks.

    ReplyDelete
  10. Hi Pratul,

    I am tracking this stock from 120 levels, and it seems it has got great growth potential....
    It is good to see that the stock is able to generate about 15k vols on an avg even in PCA segment, which shows tremendous interest of investors in the company... and now on that daily average volumes basis, it will be out of PCA segment...
    This move will further appreciate the share price...

    My only concern is that, going ahead to become a multi-bagger, they need to increase their product portfolio through R&D, and penetrate more into the domestic markets... If they are able to do so, then we can expect it to be a multibagger even from these levels.

    Numbers definitely looks very good and promising....

    Overall it looks like a good bet!!!!!

    ReplyDelete
  11. Vikram Somany continues its buying from open market even when Cera is around 630.... Great to see... lots of expectations from the company is coming quarters...
    http://www.moneycontrol.com/stocks/reports/cera-sanitary-disclosures-under-reg-292sebi-sast-regulations-2011-749654.html

    ReplyDelete
  12. Dear Kunal,

    What's your take on JB Chemicals and Pharmaceutical ?

    Regards,
    Shekhar

    ReplyDelete
  13. Positives of JB Chemicals and Pharma
    - Domestic revenue is around 300 Crore, out of which 100 crore comes from its two products - Metrogyl and Rantac. With new DPCO policy price of these two can be increased by upto 10%.
    - Rs 500 Crore+ lying idle in balance sheet ( proceeds from J&J deal ) which may be used for expansion.
    - Few other positives...

    It may not be multibagger. However downside is limited and upside scope is high. Have not invested yet.

    ReplyDelete
  14. Hi Shekhar,

    Not tracked this stock before, hence need some time to research.

    On first look, I have some queries, need to figure out that first.

    1) Why cash flow in 2013 is negative for the company? What major investments have they done in past 1 year?
    2) What was the exceptional Items profit in FY12, which took their annual EPS to 75?
    3) Why there was a decline in sales in FY12 when compared to FY13?
    4) How much revenue is company generating from exports, because even in Sept qtr results, the sales jump is not significant, and profits have gone down, while the situation is very much profitable for export based companies?

    I will try figuring it out. Will update you then.

    ReplyDelete
  15. Value-addition must for Indian API makers to take on the Dragon challenge

    To counter the challenge of rising API imports from China, Indian pharma industry should focus on value addition and high-potency products

    It is said that cost of manufacturing APIs in China is increasing. So, will this help India become competitive vis-à-vis China in API manufacturing? Though costs in China are increasing, which is partially levelling the playing field, Krishna Prasad, Managing Director, Granules India, feels that it is important for Indian pharma industry to not get too comfortable.

    He believes that it is not prudent for Indian manufacturers to directly compete with the Chinese strictly on price. “There needs to be a sustainable advantage and we believe Indian manufacturers should use this opportunity to focus on quality and new technology,” he added.

    He believes that it is not prudent for Indian manufacturers to directly compete with the Chinese strictly on price. “There needs to be a sustainable advantage and we believe Indian manufacturers should use this opportunity to focus on quality and new technology,” he added.

    To compete, Indian companies need to build more advanced facilities to manufacture highly potent active ingredients. In addition, domestic manufacturers can partner with other international companies having niche capabilities. Case in point is Granules India’s joint venture with Omnichem, a wholly-owned subsidiary of Japan’s Ajinomoto, for high potency products.

    Prasad said, “Indian manufacturers need to focus on differentiators in order to thrive. They should focus on customers that want quality and service. This does not mean just the regulated markets but also branded generics in the semi-regulated market. Indian manufacturers need to see how else they can add value. Perhaps it makes sense to forward integrate into PFI or finished dosages in order to bolster their value proposition. We are also seeing many Indian manufacturers backward integrate into key intermediates that they used to buy from China, this trend will continue because Indian API manufacturers can get a cost benefit.”

    Source: Business Standard

    ReplyDelete
  16. http://rakesh-jhunjhunwala.in/index.php/2013/12/11/will-daljeet-kohlis-latest-stock-pick-j-b-chemicals-also-give-multibagger-returns/

    ReplyDelete
  17. Thanks a lot for updates..

    In 2011, JB sold Russian OTC business to J & J for close to 1000 Crore. This business contributed 30% of revenues. At the time of selling market cap of JB was ~ 1000 Crore. So they got paid 100% of market cap for 30% of their business. In that ~ 400 Crore was used to pay one time dividend. Rest of the money is still with company, which is close to Rs 65 per share.

    This selling was reason for declined performance and probably answer for your concerns 2), 3) and 4) . However, this sept result shows that JB is back on track.

    Before the sale Rakesh J and Ashish Dhawan made significant investment in JB. Ashish Dhawan still holds 8 million shares.

    ReplyDelete
  18. http://rakesh-jhunjhunwala.in/index.php/2013/12/11/will-daljeet-kohlis-latest-stock-pick-j-b-chemicals-also-give-multibagger-returns/
    :-)

    ReplyDelete
  19. Dear kunal,

    I have seen this report and a report from edelweiss. I started tracking this after going through a discussion in valuepickr.com. It was undervalued at 90 level. Its fast moving to fairly valued area, CMP today is 121. At this level I will be investing only on 'Growth' prospects. So far I am just 'lukewarm' about this business.

    Overall I find good businesses are either overvalued or fairly valued these days. I prefer to be mostly on cash in coming months. Today, I offloaded PVR which I had bought 2 years back.

    Thanks again for your time.

    ReplyDelete
  20. DLF completes 74% stake sale in life insurance JV to DHFL

    Realty firm DLF has completed sale of its 74 percent stake in the joint venture DLF Pramerica Life Insurance to Dewan Housing Finance for an estimated Rs 250-300 crore. In July this year, DLF had announced exit from the life insurance business by selling its entire 74 percent stake in the JV with US insurance giant Prudential Financial. The JV was announced in 2007 and started operation in September 2008. "Post completion of all the conditions precedent including regulatory approvals, DLF completed the sale of its 74 percent stake in the insurance joint venture with Prudential Financial, Inc. to Dewan Housing Finance Corporation Limited (DHFL) & its group entities," DLF said in a filing to the BSE. Name of the JV shall change from DLF Pramerica Life Insurance Company to DHFL Pramerica Life Insurance Company. DHFL and Prudential Financial Inc said that they have closed their previously announced JV transaction, following regulatory approval, to provide life insurance products to customers in India.

    "Under the agreement, DHFL, along with its promoters' entities, has acquired DLF's 74 percent stake in DLF Pramerica Life Insurance Company Ltd. DHFL has capped its stake at 50 percent in accordance with National Housing Bank requirements, while the two other promoter entities have each acquired a 12 percent stake," DHFL said in a statement. When contacted, the spokespersons of both DLF and DHFL declined to comment on the deal value. Sources said the consideration is about Rs 250-300 crore. DLF said the transaction is in line with the company's ongoing strategy to divest non-core businesses. Sources said with the exit, DLF would not incur annual loss of Rs 100 crore which will strengthen its balance sheet. To reduce debt and focus on core realty business, DLF has been selling its non-core businesses and assets such as plots, hotels, wind mills and insurance venture. It has raised about Rs 10,000 crore in last three years through divestment of its non-core assets. The joint venture had reported a combined loss of over Rs 250 crore during past two fiscals. During 2012-13, the company had earned first premium income of Rs 138.64 crore, a 35 percent increase over Rs 102.83 crore in the previous fiscal. At the end of 2012-13, the joint venture completed about four-and-a-half years of operations and had 55 branches in India and a team of 5,487 individual agents. The JV issued 1,02,418 insurance policies in 2012-13 as against 69,926 in previous year. The share capital of insurer stood at Rs 320 crore at the end of March 2013.

    ReplyDelete
  21. Cera Sanitaryware has shown some violent movements in past few days, which has and which will attract plenty more short term traders...
    There has been no sudden change in fundamentals...
    It may be an informed buying...
    But in any case, long term investors don't need to worry, even if stock is trading at P/E way above its industry P/E....

    ReplyDelete
  22. I went through some details...and it seems like it can give good returns, as you said earlier...
    But again, to be probable candidate for multibagger, we will have to observe results in coming quarters, because, the growth seems to have picked up since last 2 quarters...
    If they are able to generate 1000 Cr with PAT close 100 Cr for FY14, it should move to levels of 150 or above....
    Lets take a look at growth in next quarter results...
    I agree on the point that downside seems limited....

    ReplyDelete
  23. Indian Big Pharma companies buck the global economic trend

    At a time when strong competition, quality issues and economic slowdown are being experienced in developed countries, India’s top 25 pharmaceutical companies are registering impressive growth in their global business, despite the fact that a slight slowdown has been reported in the Indian pharma sector.

    A recent study shows that they recorded global revenue growth of 27.6% during 2012–13, compared with 13.8% growth in their domestic sales revenue. Ranbaxy Laboratories registered sales of €1.18bn (Rs 101bn) and Dr Reddy’s Laboratories €1.14bn (Rs 97bn), while Sun Pharmaceuticals had sales of €899m (Rs 76bn); even Lupin managed sales of €808m (Rs 69bn) and Wockhardt touched €541m (Rs 46bn).

    Sanofi has been the fastest growing multinational drug company in India for five consecutive years. Its revenues have consistently risen from €121m (Rs 10bn) in 2008, to €152m (Rs 12bn) in 2011, and €175m (Rs 14bn) in 2012. Sanofi’s performance stands out because the Indian pharmaceutical market has grown by just 9.8% in 2013, compared with 16.6% in 2012.

    The slowdown in the industry has rung some alarm bells. Market observers say it can be attributed to the new drug pricing policy and the regulatory interventions over the past year. ‘The economic environment in India is tougher now than ever before,’ said Sujay Shetty, leader of the pharma and life sciences vertical at PwC India. ‘While pharma companies focus their attention on measures to combat the growth slowdown, they will need to work with the government and other stakeholders to resolve regulatory challenges.’

    The slowdown is also reflected in the fall in the number of new product launches, down from approximately 1,900 in 2010 to 1,700 in 2012. However, there have been close to two dozen pharma merger and acquisition deals in the 2013 calendar year, of which around half were domestic deals. Hyderabad-based Granules India is acquiring privately held active pharmaceutical ingredients (API) company Auctus Pharma, which has an API facility in JN Pharma City near Visakhapatnam in South Indi, and an intermediates facility at Bonthapally.

    Granules has also announced the opening of a 10,000ft2 R&D facility in Hyderabad, which will focus on full scale generic API development.

    Source: manufacturingchemist.com

    ReplyDelete
  24. CRISIL revises Thangamayil Jewellery's fair value to Rs 171

    Link: http://www.moneycontrol.com/mccode/news/article/article_pdf.php?autono=1011183&num=0

    Can Thangamayil make a comeback in crisis situation and still prove to be a good long term bet?
    Seems difficult, but then, why are promoters buying the stock daily?
    Lots of questions, no answers. :-)

    ReplyDelete
  25. Finally FirstCall Research came out with very detailed report on Granules India, but again, with very conservative target, but thats their way of doing it, so no worries

    Link:
    http://www.indianotes.com/uploads/article_pdf/fce_Granules_18Dec13.pdf

    ReplyDelete
  26. httpv://www.youtube.com/watch?v=DU5Gboioumk

    ReplyDelete
  27. CARE reaffirms ratings of Suven Life Sciences’ bank facilities

    Credit rating agency, CARE has reaffirmed ‘BBB-’ rating to Suven Life Sciences’ long term bank facilities worth Rs 138.11 crore which was enhanced from Rs 105.56 crore and ‘A3’ rating to company’s Short term Bank Facilities worth Rs 22.50 crore which was enhanced from Rs 16.50 crore.

    The company has received the said rating on the back of its experienced promoter and management team, established track record under CRAMS with reputed clientele, strong Research & Development (R&D) competency, growing scale of operations with improving profitability margins and satisfactory gearing levels over the period.

    Suven Life Science is a biopharmaceutical company focused on discovering, developing and commercializing novel pharmaceutical products, which are first in class or best in class CNS therapies through the use of GPCR targets.

    ReplyDelete
  28. Dear Kunal,

    Some good news on illiquid scrips on PCA system. Please go through SEBI website and comment :

    a) For the purpose of this circular, a scrip which trades in the normal market and is not shifted to trade for trade settlement, shall be classified as illiquid on a stock exchange if the following conditions are met:

    i. Average daily turnover of less than Rs.2 lakhs calculated for previous two quarters and
    ii. The scrip is classified as illiquid at all exchanges where it is traded
    Securities and Exchange Board of India

    2
    b) Of the scrips identified as per above criteria, scrips which satisfy any of the following conditions shall be excluded.

    i. Scrips with average market capitalization more than Rs.10Cr.
    ii. Scrips where company is paying dividend in at least two out of last three years.
    iii. Scrips where company is profitable in at least 2 out of last 3 years, and not more than 20% of promoters shareholding is pledged in the latest quarter and book value is 3 times or more than the face value.

    3.2. Para 2.4.1 shall be replaced by the following:
    "The scrip has remained in periodic call auction for at least one quarter."

    ReplyDelete
  29. Gulshan Polyols - Traded with good volumes of more than 11000 shares and price up by 10% and locked at upper circuit at Rs.72.60 !!!! Any good news? :)

    ReplyDelete
  30. I am checking but didn't find any.... may be its just a re-rating happening...
    Plenty of volumes is really encouraging.... for further upmove in longer term..

    By the way, it seems like today is re-rating day for plenty of our stocks...

    Granules went past 200 after a year..
    Dewan Housing up almost 20% to get closer to 52 weeks high..
    Can Fin Homes made a high of 170 so far...
    Superhouse & Gulshan at upper circuit price with good vols..

    Dont know what is it about today... :-D

    ReplyDelete
  31. Thats excellent news... I will check out..
    Btw, the conditions you mentioned for exclusion, all has to be satisfied or any of them?
    I will check out the detailed notice later in the day....

    ReplyDelete
  32. Dewan Housing and Can Fin Homes ran well today.
    They were flat to positive from levels at which they were suggeste on this blog
    http://fundamentalstockideas.in/few-more-multibaggers-for-long-term/

    But just in last 3 months...
    Dewan Housing made a low of 101.5 on 25th Sept. From there it has appreciated more than 100% in 3 months when it made a high of 223 today...
    Can Fin Homes made a low of 113 on 28th Aug. From there it has appreciated 50% when it made a high of 170 today...

    ReplyDelete
  33. Santa Claus rally :)

    ReplyDelete
  34. Please read it and it says any one of them for exclusion !!!! I feel almost 80% of the scrips should go out of PCA !!!!

    ReplyDelete
  35. Oh!!! I overlooked that.....

    It is seriously a great news, all the commonly referred stocks among us, are surely going to be out of PCA category. Hope we might see some movement in those scripts after that...

    Gulshan Polyols, was among highest volumes counter among all the stocks discussed here in PCA (Excluding Acrysil, as I never mentioned about it in separate post), but I feel that was because of heavy promoter activities...

    It proved to be very easy for promoters to transfer shares on their name, while the stock was in PCA, as the stock price movement was restricted in small range because of lesser numbers of trades.....

    May be, once the stock is out of PCA, we will see strong upside if results continues to be in line with expectations...

    ReplyDelete
  36. Now a party is due on you :)

    ReplyDelete
  37. Please check up the original SEBI circular and post it here in full for the benefit of all !!

    ReplyDelete
  38. Hi Kunal,

    Royal Orchid Hotels is BSE and NSE listed and at present it is quoting around Rs.26. I want you to carry out a detailed analysis whether it is worth investment and can be a multibagger. No doubt Hotel stocks are out of flavour of the market but that's probably a good time to buy else you don't get it so cheap. By the way it's IPO was almost eight years back at a price of Rs.165 if I remember correctly. Look at it from all angles - it's a CDR case and they have recently sold out their 5-st ar property at Hyderabad which was operational and a green field project of ROHL but they had to sell out because of heavy interest burden.

    ReplyDelete
  39. I have found the following stocks going good.
    1) Vardhaman Textiles
    2) Nitin Spinners
    3) Chromatic India.

    Kunal, let us know your comments on these stock.

    ReplyDelete
  40. Of course, anytime....
    You have helped a lot with your views in plenty of cases.... :-)

    ReplyDelete
  41. Yeah sure, will do it... may be on Christmas day...as I am going busy on working days.. :-)

    ReplyDelete
  42. 1. SEBI vide circular no CIR/MRD/DP/ 6/2013 dated February 14, 2013 issued
    guidelines for trading in the illiquid scrips through Periodic Call Auction
    session. After introduction of periodic call auction framework, representations
    have been received from market participants regarding the aforesaid circular.
    The issues raised by market participants were examined and deliberated in
    Secondary Market Advisory Committee (SMAC).

    2. Based on recommendations of SMAC and feedback received from market
    participants and stock exchanges, it has been decided to rationalize the
    periodic call auction mechanism.

    3. Accordingly, following conditions of aforesaid circular are modified as under:

    3.1. Para 2.2 shall be replaced by the following

    a) For the purpose of this circular, a scrip which trades in the normal
    market and is not shifted to trade for trade settlement, shall be
    classified as illiquid on a stock exchange if the following conditions
    are met:

    i. Average daily turnover of less than Rs.2 lakhs calculated for
    previous two quarters and
    ii. The scrip is classified as illiquid at all exchanges where it is
    traded





    Securities and Exchange Board of India

    2

    b) Of the scrips identified as per above criteria, scrips which satisfy
    any of the following conditions shall be excluded.

    i. Scrips with average market capitalization more than Rs.10Cr.

    ii. Scrips where company is paying dividend in at least two out of
    last three years.

    iii. Scrips where company is profitable in at least 2 out of last 3
    years, and not more than 20% of promoters shareholding is
    pledged in the latest quarter and book value is 3 times or more
    than the face value.

    3.2. Para 2.4.1 shall be replaced by the following:

    "The scrip has remained in periodic call auction for at least one
    quarter."

    3.3. Para 2.6 shall be replaced by following:


    "Number of auction sessions – Stock Exchange may determine the
    number of call auction session for illiquid stocks. However in order
    have minimum trading sessions and uniform closing session, there
    shall be at least 2 sessions in a trading day with one uniform closing
    session across the exchanges."

    3.4. Para 2.8 shall be replaced by following:

    "Order Placement- The orders may remain valid throughout the trading
    day and un-matched orders remaining at the end of a call auction
    session may be moved into next call auction session."

    4. All other conditions for trading in periodic call auction sessions contained in
    the circulars CIR/MRD/DP/21/2010 dated July 15, 2010, CIR/MRD/DP/32/2010
    September 17, 2010 and CIR/MRD/DP/6/2013 February 14, 2013 remain
    unchanged.

    5. Stock Exchanges are directed to:

    5.1. take necessary steps and put in place necessary systems for
    implementation of this circular from the beginning of the next quarter.

    Securities and Exchange Board of India

    3

    5.2. make necessary amendments to the relevant bye-laws, rules and
    regulations for the implementation of the above decision;
    5.3. bring the provisions of this circular to the notice of the member brokers
    of the stock exchange and also to disseminate the same on the
    website.

    6. This circular is being issued in exercise of powers conferred under Section 11
    (1) of the Securities and Exchange Board of India Act, 1992 to protect the
    interests of investors in securities and to promote the development of, and to
    regulate the securities market.


    Yours faith

    ReplyDelete
  43. Sebi reversal on periodic call auction pulls up market minnows
    Better volumes for illiquid stocks to aid price discovery, say analysts


    The Securities and Exchange Board of India’s decision to relaxing trading norms for illiquid stocks fuelled a rally in mid and small-cap stocks for the second day in a row on Monday.

    On the BSE, the mid and small-cap index were up 1.2% each on Monday while the broad-market Sensex was up a mere 0.1%. The BSE Sensex ended the day at 21,101 while the NSE Nifty closed at 6,284.

    Analysts said that the Sebi move had boosted interest among investors as a lot of good companies would now trade in the regular window.

    “More than two-thirds of the companies in the list will now be freed and available for trading on the regular counters. This is a good move for the investors,” said Arun Kejriwal, founder, KRIS Research.

    “Some of these companies were included in the illiquid-stocks list because they had low volumes, which was unfair. But the recent Sebi regulation could help revive interests in these stocks and boost their performance,” said Sunil Jain, VP-equity research, Nirmal Bang Securities.

    In an order passed on December 19, Sebi said that companies fulfilling any of the three norms regarding profitability, dividend pay-outs or market-cap would be excluded from the illiquid stocks list.

    Earlier this year, in April, Sebi had asked exchanges to identify thinly-traded stocks and to open special trading windows, called periodic call auction sessions, for fifteen minutes during each trading hour.

    The aim was to curb manipulation in thinly-traded stocks. However, it proved to be counter-productive, said market participants, as trading volumes dropped sharply and, in some cases, came to a complete halt.

    Trading volumes, which had declined post the implementation of the periodic call auction system, will also be restored, analysts said.

    Stocks of the mid and small-cap segment also gained on the back of rising investor confidence on a day when the broader-market remained flat.

    “The market sentiment has improved a lot in the last few days with the Nifty having touched its all-time high. We are seeing interest coming back among investors, particularly the HNI segment but it is still lower than what it was during 2008,” said Ravi Shenoy, VP-midcaps research, Motilal Oswal Securities.

    Some in the market said that the rise in the stock prices was also due to the valuation—gap between the large and the small and mid-cap segments. Large-cap stocks have largely been the beneficiary of the recent rally seen in the markets. Investors were now looking to book profits and scouring for opportunities in the mid and small-cap segment.

    Market sentiment around blue-chip stocks which are generally seen to be FII favourites, remained tentative following buzz of basket-selling by a leading foreign institutional investor. The entity is said to have sold shares worth Rs 100 crore on Monday.

    Source: Business Standard

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  44. Cravatex, Photoquip, Gulshan Polyols are out prison :)

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  45. Invested in Dhanuka Agritech recently around 170....
    Will put details in separate post when I find time...
    I know stock has already appreciated, but I see further value in the company, looking at their growth prospectus and business.....

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  46. Hopeful on Photoquip and Gulshan once they are out of PCA.... still find it difficult for Cravatex, unless their sales continue to increase at good rate, even with lesser margins....

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  47. WIll have to dig in more when I find, becasue as you said, Hotel stocks are out of flavour, and not much appreciated by market at present... :-)

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  48. Hi Sridhar,

    I did check all the stocks.

    1) Chromatic has declined from 156 Rs in Feb'13 to 5-6 Rs currently.
    The reason is clearly visible when you check the performance of past 2 years. The revenues are continuosuly going down.
    People might be using this stock for trading purpose now.
    Doesn't look like a value investment. Can be used for trading if you are interested.
    FII holding increased to 14.5% in Sept is a big surprise. Dont know if company is about to revive their business.

    2) Nitin Spinners is looking good, but in weak sector. Growth is not significant, its more or less flat. I say good, because from valuation perspective, it is trading at cheap price. But being a small cap company, it has to show more growth to attract investors. 8% growth YoY, wont help the price to jump up heavily. I read that some expansion is going on, if that works out well, we might see a better performance from the company.
    Will have to dig in more before jumping on to any conclusion.

    3) Vardhman Textiles is the best of the lot you mentioned. The stock recently was close to its all time high of 420, which it hit in 2006. The reason was the current performance which is great in terms of both, revenues and margins. But again, weak sector might not help its cause to reach correct valuation. Strong growth in revenues, strong promoter holding, strong book value, good P/E ratio, good dividend yeild, good benefit from Rs depriciation.
    Expecting good revenues in Q3 also:
    http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=156722
    Looks like a decent investment, but not sure about returns because of general weakness in sector as observed by markets so far. Downside risk is less as of now.

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  49. Kunal,

    Is this the time to invest @ 175 in Dhanuka?
    You mentioned Dhanuka Agritech is already appreciated.
    Can we can expect possible hikes in future?

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  50. Sometimes its never too late to buy a good stock....
    It happened with Ajanta Pharma... when we bought around 236 (adj), it already appreciated from 100 to 236 in the year before that.... still we bought it and got fruits...
    The same repeated with Cera..
    I am just putting my views on Dhanuka, I may be wrong, but somewhere I feel, company has got tremendous growth potential...
    Do your own risk analysis before investing...
    I feel that one can atleast, get good returns in longer term, even if it doesn't prove to be a multibagger.....
    I will come up with a post on it, JB Chemicals & Pharma, plus 1 or 2 more stocks, in a day or 2...
    Take your decision accordingly.... :-)

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  51. This really is nice produce, No later than this shaire this for my very own frinds.

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