Sunday, March 2, 2014

Dynemic Products - The Name Behind Colors Of Modern Life



Dynemic Products Ltd. is an ISO 9001:2000 & HACCP Certified Company. The company is one of the major manufacturer and exporter in India, offering complete range of Food Colors, Lake Colors, Blended Colors, FD&C Colors & Dye Intermediates.
Dynemic believes in continuous development by incorporating the latest technology to achieve better quality. Dynemic's colours are 100 % safe for human consumption and as per international standards.
Manufacturing facilities include two well equipped plants spread over 50000 Sq Mt of area. Plants are HACCP (Hazardous Analytical Critical Control Point) & ISO 9001:2000, ISO 14001 (Environment Management System) certified.
From inception, The company has laid emphasis on eco-friendly process development for food color and lake colors etc., with high yield and minimum waste & emission levels.

The food colors manufactured by Dynemic Products have variety of Applications such as:
1) Confectionary
2) Beverages
3) Proceed Food
4) Bakery Products
5) Dairy Product
6) Pet Foods
7) Pharmaceuticals
8) Cosmetic & Personal Care Products
The detailed product level application can be found here:
http://www.dynemic.com/application.html#

Moving onto fundamentals now. The stock has been able to grow steadily in highly competitive markets.
This year has been a revelation so far. This year, so far, i.e. for first nine months of FY14,
Sales have grown by 28% over last year.
Net Profit have grown by 151% over last year.
Sales have grown on both, domestic and exports front, for all 3 quarters this year, which is great.
Major R&D expense last year, was one of the responsible factors for good increase in sales and profit, which was expected by the company as per the annual report of FY13.
Last year, for the first time, Company got its Credit Rating through CRISIL, where they assigned BBB/stable on long term and short term bank facilities.

The industry is pollution prone, hence company had installed MEE for treating the effluent generated by both the units as per GPCB norms. This was the major reason, why company saw a decline in net profit last year. But that is past now. They will get benefited going ahead, as there are plenty of companies in their competition, who have not yet installed the same.

Major Risk:
1) Highly competitive market
2) Increase in manufacturing cost on account of higher power and gas prices
3) Strict Pollution norms
4) Exchange Rate Fluctuations

The company has been consistently paying good dividend. Even at current market price, the dividend paid last year makes the dividend yield stand at 4.6%, which is excellent. With good profit this year, the company might pay even better dividend.

Also, recently, the company has been allotted a plot in Dahej - III Industrial Estate having plot area of 80000 sq.mt. Company is planning to start Unit III for manufacturing Dye Intermediates and other Allied chemicals.
This could further boost the development plans of the company.

My Views:
The company is expected to end the FY14 with sales figure of 110 Cr and net profit of 10 Cr, which will take their full year EPS to 9.5. So at current market price, the stock is trading at a P/E ratio of 3, which suggests the undervaluedness of the stock. The stock might face some pressure as stock has already jumped 50% from its result day this quarter, but that should not be a worry for long term investor.

66 comments:

  1. Between 22 and 30 there has been very heavy trading on Dynemic Products counter which is not normal !!!! It seems investors stuck in the scrip have unloaded in a rising market. It may come to stay in 28-30 range for some time or even possibility of a downward bias !!!!

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  2. Yeah that is true.....
    But that's where one can find opportunities to enter.
    I already mentioned in the post that it might face some downside.

    Long term it looks good. It should get over this dip soon.

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  3. Photoquip again attracted an Upper Circuit @ Rs.39.20 today !!! Total volumes traded 1230 !!! :-)

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  4. The way Photoquip is trading, I don't think many retail are investors are involved. Hence it could either be instituitional investors, or promoters proxies, where chance of later is 90%. It confirms the 5% acquisition by promoters this year also.

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  5. Institutional investors are almost ruled out !!!!! Somehow I have a feeling that some investor wants to get out of the scrip :)

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  6. Hi Kunal,

    Before few days you wrote on one of the post that you were analyzing Helios And Matheson... I brought the stock @ 78. Today stock crashes so hard... Why sudden downfall? Any news? How u look the stock in short term? Should I book profit and reenter later or should I continue to hold it.. Fundamentally stock looks very strong. Shown consistent growth, good divident player but can u tell me about its technicals chart?

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  7. Granules India after acquiring Auctus Pharma plans expansion to regulated markets

    Granules India after acquiring Auctus Pharma in November 2013 has now embarked on a forward integration mode in an effort to expand its global market presence primarily to regulated regions.

    Auctus has two manufacturing facilities, an active pharmaceutical ingredients (API) facility in the Pharmacity at Vishakhapatnam and an Intermediate production unit at Hyderabad. The APIs facility has approvals from leading regulatory agencies including the US FDA, EDQM, Health Canada, KFDA and WHO-GMP. While Auctus exports to 50 countries, Granules international market spread is to 70 countries.

    Further Granules has also accommodated its existing product mix of paracetamol, metformin, ibuprofen and guaifenesin with that of Auctus' product portfolio which includes 12 APIs as well as key intermediates in therapeutic categories such as anti-histaminic anti-hypertensive, anti-thrombotic and anti-convulsant among others.

    “Post the acquisition, our focus is to increase the exports to regulated markets as Auctus has also received the US FDA approval. Going forward, we will forward integrate several of these APIs into Finished Dosages for the regulated markets,” Krishna Prasad, managing director of Granules India told Pharmabiz.

    The acquisition of Auctus has now exposed us to new therapeutic sectors. “The plan is that we will continue to pursue our business model of large-volume products whether on the API or Finished Dosage front,” he added.

    “We will sustain the marketing efforts to both branded and generics leaders as well as quality-conscious customers in the semi-regulated markets. The Auctus products will be offered to many of our existing customers since they currently have a requirement for many of these, stated the Granules managing director.

    “We opted for the Auctus acquisition primarily because it was seen as the right fit to our operations. There was significant value to its purchase because it manufactures its own intermediates which makes it very cost competitive. In addition, the company has regulatory approvals from many agencies including the US FDA, EU GMP and KFDA which takes us head on with competition. In addition, the deal also supported our plans to quickly expand our Finished Dosage portfolio with the existing a high quality API manufacturing base,” he said.

    While the Granules-Auctus deal is valued at Rs.1.20 crore, the Indian pharma sector in 2013 also reported the Torrent Pharma and Elder Pharma’s domestic business acquisition. However from mid 2008 the pharma industry in India was witness to some of the major buyouts by global pharma majors which were Ranbaxy-Daichii for $4.6 billion in June 2008, and Abbott- Piramal for $3.72 billion in September 2010, Strides’ sale of its specialties subsidiary, Agila Specialties to Mylan of $1.75 billion in January 2013 and Sanofi and Shanta Biotechnics in 2009 for $783 million.

    Source: PharmaBiz

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  8. Mayur,

    Yes, I did write about it some days back, probably when it was around 65.
    But somewhere, it didn't qualify in all the parameters. From there, I stopped tracking it further.

    If you have been following this blog, you might have noted that earlier, I wrote about Infinite Computers. I gave a buy call when it was around 80, just on the basis of sheer undervaluation, and then suggested to book profits around 130. That time, I mentioned that somewhere I don't trust IT companies much as multibagger candidates.

    Helios & Matheson looks good fundamentally in terms of growth, but don't whether the growth rate will continue to be same when dollar normalizes against Rs.
    Secondly, being an IT company, I feel debt is too much on the higher side.

    That doesn't mean that stock is bad, but not among my favorites.
    I won't advice anything here, because I had stopped tracking it few days back. So don't have much insights.

    I have not got much idea about technical analysis, so won't comment on short term behavior. I feel comfortable judging the fundamentals of the company, not the technicals.

    I might not have helped you here, but I have links which might help you take a decision:

    1) Company Presentation after results:
    Link: http://www.datafilehost.com/d/ec7508d7

    2) CRISIL's latest report on company:
    Link: http://www.moneycontrol.com/mccode/news/article/article_pdf.php?autono=1046804&num=0

    All the best!!!!

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  9. Dhanuka is shown tremendous growth in volumes along with rising share price.
    Don't think, there has been a sudden change in fundamentals of the company. They are still the same, but it might have got the attention of big investors.

    As usual, I won't comment on short term behaviour. It might show some violent up/down movements for few days, because of such rise in volumes.
    But as long term investor, there is no need to panic, in either case.

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  10. Suven grants an exclusive license & right to distribute its Malathion Lotion in USA, CANADA and MEXICO to Taro Pharmaceuticals
    Link: http://www.bseindia.com/xml-data/corpfiling/AttachLive/Suven_Life_Sciences_Ltd_040314.pdf

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  11. Similar thing applicable for Can Fin Homes also today..
    Don't find any specific news today, which could have triggered the upmove...

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  12. Dynemic is not ready come below even ?27. What do you think?

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  13. Mayur,

    As mentioned earlier also, I normally, don't hesitate in buying at higher price also, if the stock is fundamentally strong. It doesn't matter to me even if it goes down from that level. Instead, I try my best to use those dips to buy more.
    Most of the buying, therefore, are done in parts, so that I have enough cash to average out if some script goes down from my initial buying levels.
    Best example to learn that was Granules India. I recommended on this blog around 180, and it went down till 90 after that.
    Those who had confidence, used those levels to buy more, and reduce their average buying price.

    Not forcing anyone to take certain actions but in case of Dynemic Products now, I would have bought 25-40% of my total planned allocation in Dynemic, at CMP.
    My second lot would have been mostly bought either below 24 or above 30 according to situation, which would comprise of another 25-30% of total allocation.
    In the meanwhile we will have some news surrounding the company, which could trigger the movement of script in particular direction, and my actions follow accordingly.
    Most of my investment in 1 company is spanned across 2 quarters on an avg. It varies according to sector, size of company, macro-economic data of the country etc.

    Hope that helps!!!!

    Regards.

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  14. I understand and agreed to all points.
    Just out of curiosity, may I ask you if you have vested interest in Dynemic?
    No force, its your choice to answer it.
    :)

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  15. Yes you can definitely ask that question. :-)

    Most of the cases, I mention that along with the post itself.

    Here in case of Dynemic, I haven't made an investment yet, as I am running out of cash. But, if you see, with time, I enter in all stocks that I mention here...
    I will be getting into the stock very soon.

    Lastly, I entered Camlin Fine Sciences around 23.5. The next investment would surely be Dynemic Products.

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  16. Photoquip has started trading on daily basis with multiple trades and modest to good volumes as opposed to it's trading behaviour during June-December 2013 period when it was not traded for days together. At times, it traded even just four or five trading days in a month with negligible volumes and even single trade :( !!!! Incidentally, together again the share was locked at Upper Circuit @ Rs.39.25 :) !!! I only hope that I get proved wrong that some sizeable investor is unloading in the market ?

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  17. Hi Kunal,

    What PE discounting you would like to give to Camlin Fine and Dynemic Products keeping in view the industry and other parameters?

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  18. If you have observed the actual post of this 2 stocks, they are 2 of the rare stocks where I haven't posted any targets, because considering the size of the company at present, it would be difficult to judge the correct valuations at this point of time...

    Both the stocks have very recently discovered the pattern of improving margins. Hence its getting slightly difficult to judge the profitability going ahead, but the good thing is that they are in the right direction...

    Based on turnaround in recent times for both, I feel, too premature to judge the forward earnings for FY15-16, hence finding it difficult to set the targets for both of them.
    Right now, what I am doing, is taking these 2 stocks quarter by quarter, and try to predict the numbers in next. Till the time, I feel, they are showing good numbers, I would continue to accumulate.

    I know it doesn't answer your question satisfactorily, but this is how it has been for these 2 stock. In terms of valuations, you can compare these with Photoquip India. Of course, not comparing the scope ahead between Photoquip and these 2, but just about difficulties in calculating the valuation in these 3.

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  19. Kunal what is your view in alphageo&arrow coated product?

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  20. Arrow Coated Products was being discussed few times on this blog since the first posting here:
    http://fundamentalstockideas.in/few-interesting-micro-caps-that-may-have-bright-future/

    It was trading around 21 that time. Now with stock price almost doubled, you might well have to wait for longer term to get good returns. The stock is very strong fundamentally, but to an extent, it has got its reward, in a way, that script has gone up by 500% in past 1 year.

    I would recommend a hold / buy on dips strategy for long term.

    Not tracking Alphageo.

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  21. In any case, atleast we have some one who is ready to buy at those levels, which is great!!!
    And as you said the surge coming with good volumes, which is a better news..
    Hope the annual numbers will bring the company into eyes of many more...

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  22. Tech tie-ups with MNCs yield a rich harvest for Dhanuka Agritech
    Link:
    http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-analysis/tech-tie-ups-with-mncs-yield-a-rich-harvest-for-dhanuka-agritech/articleshow/31507387.cms

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  23. With move in Dhanuka Agritech in past few days, and move in Cera Sanitaryware today, both the companies are now having more than 1000 Cr market cap, which is a great news......

    With that, they both seem to have entered into expensive zone now...
    But as said, the valuations are more because of good forward earnings expected in coming years...

    No threats to long term investors, and no comments on short term movements...
    All the best!!!!!

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  24. Expect royalty of USD 2-2.5 m from Taro: Suven Life

    Suven Life Sciences today has granted an exclusive license and right to distribute and market its Malathion Lotion in USA, Canada and Mexico to Taro Pharmaceuticals North America, a subsidiary of Taro Pharmaceutical Industries.

    Link: http://www.moneycontrol.com/news/business/expect-royaltyusd-2-25-mtaro-suven-life-_1051212.html

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  25. Hi Kunal,

    Gulshan Polyols promoters are continuously active in the market but their purchases are not aggressive. Today's disclosure is for 1300 shares and that too for 5 days' trading. What does it indicate? As on date their holding is 72.26% !!! Price is hovering around 71-72 for quite some time. If they want they could have....

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  26. Ricoh India subsidiary of Japan based Office and IT solutions provider Ricoh, is aiming to reach Rs 3,000 crore in revenue by 2017. Elaborating on the target, Manoj Kumar, senior VP and CFO, Ricoh India, in an exclusive interview with The DQ Week, said, " With our aim to achieve Rs 1,000 crore this year with 58% growth from a total of Rs 633 crore done till March'13, we now intend to increase our target by three times, that means we are eying a growth of Rs 3,000 crore, by 2017." The company is also eying the production printing market in the country, big way. Aiming a Rs 100 crore business from the segment, it recently launched three new production printers, to achieve the same. Speaking on the expansion plan, Kumar mentioned, " We have already achieved the milestone of reaching 100 installation base of color and black and white production printers. We are glad that coastal areas like Kerala are doing thriving business using Ricoh products. Even in West, in the interiors of Gujarat, Ricoh machines, used to take the pictures of intricate handi craft work, are a hit." Kumar also mentioned that the company products are being used for bulk printing in various banks too. Meanwhile, talking about the IT services segment, the company is currently targeting the domestic market, especially the government sector. " Although we have already worked for the government like projects for AADHAR card and data networking for e-panchayat, but we are looking forward to more projects in the sector," shared Kumar - See more at: http://www.dqweek.com/dq-week/news/210196/ricoh-india-eyes-rs-crore-revenue-2017#sthash.QbdGl7IB.dpuf

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  27. It seems that very less number of stocks are left in weak hands, who might be ready to sell.... hence they are finding difficulties in accumulating at lower price... Rest of investors like us are just waiting and watching... :-)

    I am also thinking why promoters are so aggressive that, almost all shares traded in a day are going to their account... Are they really thinking of delisting?
    Because, I dont see any news on basis of which they might be such aggressive.

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  28. Thats a great news!!!!!
    But looking at the price at which stock has been trading in past few days, don't think they will cancel the delisting proposal....
    Bad luck... :-(

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  29. Long term value investors may wish for failure of delisting !!!! :) There is confidence as to what the management has stated as three years back they had projected 1000 crores topline and which is going to materialise by all counts !!!

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  30. Granules India nurses itself back to health on better utilisation of plants

    Hyderabad-based drug manufacturer, Granules India has improved its performance after its struggles in FY10 and FY13 thanks to better utilisation of its plants. The stock market has already taken note of the turnaround with the company's scrip surging 2.7 times in the last eight months.

    "The company's profits stagnated in FY10 and FY13 due to periodic capacity additions that took time to reach their full utilisation level. This had kept margins low as there were some commissioning delays," said Krishna Prasad, managing director, Granules India.

    That was when the company — which was earlier focused on the drug Paracetamol — moved into newer products, while venturing into finished dosage formulations. Today, paracetamol contributes less than half of the pharma company's revenues.

    Granules India sells five Active Pharmaceutical Ingredients, or APIs, with their formulation intermediates and finished dosages.

    Since the finished dosage formulations are entirely sold in the regulated markets, profit margins are higher. "If the operating profit margin of APIs is in low double-digits, the finished dosages earn in high teens to 20%," Prasad said. The company is focusing on increasing revenues from finished dosages, which contributed 38% to revenues in the nine months ended December 2013. Granules JV, Granules OmniChem, is setting up a plant in the Visakhapatnam SEZ for customised research and manufacturing services (CRAMS), which will be commissioned by June 2014. By end 2016, it is expected to secure US FDA approval, after which it will become a source of major revenue. The latest round of capacity additions were completed in the quarter ended June 2013 under which the finished dosage capacity was tripled to 18 billion. "The focus now onward will be on increasing the capacity utilisation.

    We don't have any major capital expenditure planned for next year," Prasad said. The improving capacity utilisation is set to help the company's operating profit margins, which were 13.9% for the ninemonth period ended December 13.

    Granules India recently acquired and merged with itself an API manufacturing company with a turnover of close to Rs120 crore, which has expanded its product portfolio. Although this company had incurred losses till FY13, it is expected to turn profitable in FY15.

    The company's debt-equity ratio was close to 1.1 at the end of September 2013, although its operating profits were 8.8 times its interest obligation in the nine-month period ended December 2013. The management expects to end the current fiscal with a turnover of Rs1000 crore, which will surge in FY15 as capacity utilisation improves and the acquired unit starts contributing. "We have grown our revenues at an annualised rate of 25% for the past five years. We expect that to continue," Mr Prasad said. Customer acceptance of its products will be the most important hurdle it needs to surmount to achieve this. Granules India is valued at 8.5 times its profits for the last 12 months, which is not very high considering its healthy growth prospects.

    "FY14 has been a game changing year for Granules India. The relative valuations yet look compelling with PBV below 2 and P/E below 10. The company's Non Linear Earnings growth should sustain in the coming years," said Gaurav A Parikh, MD, JSA Advisors, a Mumbai based advisory firm.

    Source: Economic Times

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  31. Cera Sanitaryware denies take-over rumours

    Cera Sanitaryware Ltd on Friday denied rumours in the market about the company being taken over by some “legal entity.”

    In a statement here, N N Patel, President and Company Secretary, said here the management and its officials have been receiving phone calls and communication for quite some time from shareholders, analysts and dealers in this regard.

    “The management strongly denies such baseless news about take over. The management appeals to regulatory authorities like SEBI, stock exchanges as well as share holders and other investors not to rely on such baseless rumours”, he said, adding the promoters have no intention to sell their majority stake in the company.

    Source: Business Line

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  32. This was probably one of the reasons why Cera was continuously showing uptrend, but management has denied that rumor.
    Of course, it doesn't make it fundamentally weak, and one should remember that the promoters are still buying from open market, even at a price close to 800.

    So, nothing to worry.

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  33. Whether Indian market euphoria is justified?

    http://www.business-standard.com/article/markets/indian-market-costliest-among-brics-nations-114031000466_1.html

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  34. No, it is not, at present, but it certainly won't remain unjustified with NIfty around 6500-7000, if a stable govt is formed in elections.

    One of the factor which initiated the current rally, was improving CAD numbers, which has also boosted the Rs. But with the given macro economic data, I don't Rs rallying too much further from current levels, at this point of time.

    So, coming to your question, whether it is justifiable or not, that can only be decided after the election outcome.
    Right now, FII's are speculating something and they are taking decisions based on that... if things don't go as per their speculations, markets can fall badly...
    If you see the daily net buying/selling, FII's have been buying continuously, where as domestic investors have been majorly involved in selling in this current euphoria. So there is a bit of risk involved.

    But as far as I feel, you've got to be selective in stock pickings, if you are not ready to take a risk. Good performers wont be affected badly, even if nifty falls about 600-700 points from here....

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  35. My apprehension stems from the fact that China is continuously going down !!! Today Shanghai has closed below 2000 psychological levels !!! I remember last downfall of the market !!! At that time Shanghai and Nifty both were quoting at the levels of 6300+ which was life-time high for both the Indices !!! Today Shanghai is quoting 2000 and Nifty is 6540 !!!! Clearly there is some disconnect between the two markets !!! All these years China has been churning out decent macro numbers !!!! PE - Ratio wise also China is much much cheaper !!!! Global players will at some point of time try to see the parity and justification for such high valuations !!!!! Incidentally, Europe main markets and US markets are also over-heated and may be on the verge of "beating-retreat" may be once Dow kisses 17000 !!! But these are just louder thoughts :-D

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  36. Gulshan Polyols traded with robust volumes of more than 20k shares out of which more than 70% resulted into delivery !!!! Volumes were very good after 3.00 pm !!!! After the stock came out of PCA system there has been greater interest on the counter. Let us watch whether it's promoters' buyer or someone else !!!

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  37. Seems like promoter buying only...

    In most of the cases, whenever there is an institutional buying taking place, the price shoots up, as they generally do it, without any proxies transferring the shares on their name..
    Only in cases, where promoters are involved, we see continuous accumulation in that same price zone, which is what is happening with Gulshan Polyols.

    But the question, still remains open, as to why promoters are in such a hurry, to complete 75% acquisition.

    Lets wait and watch the show!!!

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  38. Camlin Fine Sciences has appreciated by 30% in less than a month, since its recommedation here:
    http://fundamentalstockideas.in/camlin-fine-sciences-hidden-player-in-food-industry/

    The stock hit a new all time high
    I don't see a particular news flow that could have triggered the move, it just might be the re-rating based on its recent performance...

    The volumes are increasing which will bring in more traders. The delivery has been very good in past few days.
    Ignoring the possible ups and downs in short term, the stock looks good for long term holding...

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  39. Sarath RamakrishnanMarch 12, 2014 at 8:10 AM

    Hi Kunal,

    What triggers do you think will take Suven life science to next orbit of price movement?
    Waiting for next quarter results??? There was'nt any upward price movement even after execpetional results in last quarter. Do you think at the current price it is good buy for long term?

    ReplyDelete
  40. Gulshan Polyols has three possible triggers over the next three to six months (1) Commencement of bottling operations(Indus Sprits) at Chhindwara, MP (2) Completion of expansion project for Sorbitol at Jhagadia, Bharuch, Gujarat and (3) Commencement of Rice based processing unit for production of MDP and DMH at Muzaffarnagar, UP !!! All these should result into a growth of 20%-25% on topline. I foresee re-rating of the stock during this period which should result into it trading atleast at a PE of 4 !!!!! Very very moderate discounting :-D

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  41. Yes, it definitely is a good buy for long term..

    If you have been following this stock from about a year or so, it has already jumped 3 times since June'13, when it was first discussed on this blog...

    So, generally, what happens is that the stock is, more often than not, going to face some downward correction after that, unless, your company is able to show consistently good performance, which is the case with Suven Life Sciences..

    So, as you said that there wasn't any price movement after Q3 numbers, I would say that remaining at that same level after 3 fold rise in 9 months, is also a big achievement..

    At a market cap of 850 Cr and possible sales of 500 Cr this year with net profit close to 135 Cr, the stock right now, is not far away from fair value, but if you see the news flow surrounding the company, you will find plenty of their products getting patents, which will help in generating more and more revenues in coming years...
    So, another series of taking the stock to new higher levels should follow someday...
    In my opinion, you can definitely stay invested for long term..
    All the best!!!

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  42. Definitely, very moderate PE discounting...

    Increase in volumes, is also one of the factor, which can bring the interest of investors/traders in a particular script...

    So, yesterday's move might help in that way....

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  43. Granules India seeks to tap 30 per cent growth

    Drug making company Granules India is looking at tapping a 25-30 per cent growth in the coming fiscal, and will be able to continue at this pace, according to a top company official.

    “In the last three quarters there has been steady growth and we hope this year we will cross a turnover of Rs 1,000 crore as against Rs 765 crore in the previous year. We will be able to fetch a growth rate of 25 per cent every year, if not better, as the path has been laid,” Krishna Prasad, managing director of the company told Financial Chronicle.

    Previously, Granules was focusing more on Active Pharmaceutical Ingredients (APIs) but now says the dependence is equal on other segments — formulation intermediates (PFIs) and finished dosages (FDs), with all the three segments contributing equally to the business. Going forward, however, FDs may grab a larger pie of the business perhaps.

    “The company has taken several steps in the past not just towards expansion but also towards building up a system of integration. Next, the focus will definitely be on FDs as the margins are higher here. This does not mean that we will not focus on APIs. We would like to offer our clients products from all the three segments and in fact many find it useful too,” he said.

    According to him, “from APIs to PFIs there is a better margin and PFIs to FDs again a much better margin. And that’s where we are getting advantages now for being vertically integrated and with a security of supply and markets, especially for APIs.”

    In the past couple of years, Granules had been expanding its capacity across manufacturing sites and it now has reached 18,000 tons in APIs and PFIs where as 18 billion doses for FDs in a year. “After this, there will not be much need for expansion and we will only majorly look into utilisation,” Prasad said.

    In November last year, Granules had acquired Auctus Pharma, an API manufacturer, for Rs 120 crore. Before the acquisition Granules offered 5 APIs and it now hopes to offer 12 more. The APIs which cannot be sued towards making FDs will be sold outside strategic customers.

    “If we go for further acquisition it will be a strategic fit but not just for the sake of it. I would not mind spending Rs 500 crore but the question will be is it a right fit. But we would not raise too much funds and keep equity where it is today unless very attractive,” he said.

    Source: mydigitalfc

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  44. Sarath RamakrishnanMarch 13, 2014 at 3:22 AM

    Thanks Kunal for your valuable reply !!!

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  45. Gulshan Polyols has been on fire today...
    Good to see that counter is able to produce better volumes since last 3 days...

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  46. Kunal,

    Looks like it has consolidated very well around 72 levels !!!!! And it's not promoters who are buying !!!!! Promoters' buying has been symbolic since January 2014 with hardly 6-7k shares having been bought !!!!! Today's volumes are really heartening :) Today it made a high of 89.90 !!!!! Uptil now more than 55k shares have been traded and major trading took place at 85 levels !!!! It's a really undervalued share and at CMP it's discounted PE is just 3 :-D

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  47. Can it be some informed buying ? :)

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  48. We can figure it out based on delivery volumes today...

    Since Monday, we have seens good volumes on the counter, so I just hope these are not just intraday orders, as it would have come in the eyes of many now...

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  49. Gulshan Polyols Sharp Rise and equally sharp fall on moderate volumes !!! It seems trying to find a range !!!! :)

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  50. Close to 50% of the orders yest were intraday, and seems no different today...
    Lets see, how it behaves in the next week...

    In the meanwhile, I found Research Report on Gulshan Polyols by ICRA, but don't think there is anything new in that..

    Link: http://www.bseindia.com/download/Research_Report/Report/532457/2013-14/Gulshan%20Polyols%20Ltd.%20%20-%20December%202013.pdf

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  51. Very nice presentation on Granules India found on ResearchBytes

    Link:
    http://www.datafilehost.com/d/e40f4922

    ReplyDelete
  52. Presently studying Va Tech Wabag...
    The company looks very promising, with good business model and huge scope in operating industry...
    At 1800 Cr market cap, one may feel that stock is costly, but with future in the industry, it looks good for much more....
    Its really difficult to post something ahead of elections, as the election outcome may hamper the stock markets heavily, if results don't come as expected...

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  53. Dear Kunal,

    Any idea why Camlin Fine sciences split their stock price when it was only quoting at Rs. 100. what kind of investors do they want to buy their stock?

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  54. Kunal ji, Va Tech wabag was a great miss @330 levels....an I missed due to insufficient fund :( but its definitely looks multibager in long run though....

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  55. Wasn't tracking the stock then, hence can't give you the exact reason, but it mostly will be to increase the liquidity.
    If you see the interest among investors, you will realize that volumes started picking up after that news of consideration of stock split was announced.
    Can't derive to certain conclusion, unless I know the actual reason...

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  56. Mayur,

    At these valuations, I don't find it too different from Cera recommended here at 500, and Dhanuka recommended here at 175. Both were equally costly.

    As you mentioned, that it still looks good for long term. It may or may not prove to be multibagger, but atleast we will be rest assured that we have made an investment in a good company, which has long way to go, in its business.

    If everything seems fine, will be posting it here in separate post.

    Election outcome is the only worry at this point of time.

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  57. In the next 12 months there are two possibilities on Gulshan Polyols (1) a liberal bonus issue say 1 : 1 since the paid up equity capital is very small just 4.22 crores and book value of the stock is bulging. It will be around Rs.200 on a face value of Rs.5. and (2) split of face value of equity share from Rs.5 to Rs.2 to ensure further liquidity on the counter and market trends although liquidity has gone up of late !!!!! Further, promoters have constantly been increasing their stake and they are holding around 72.26% leaving some more space to reach maximum permissible 75% !!! Keep an eye on the counter as there are several positive triggers during FY2014-15 on this counter including operational and expansion developments.

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  58. Bonus seems a good possibility to me, with equity at only 4.22 Cr and Company's Reserves at 122 Cr as on Mar '13...

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  59. Hi Kunal,

    Reserves are more than Rs.143 crores as on 31st March 2013 which is further expected to swell to more than Rs.165 crores as on 31st March 2014 !!!! :) !!!!!

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  60. Sarath RamakrishnanMarch 18, 2014 at 9:11 AM

    Hi Kunal,

    In case of a revival in infrastructure sector post elections ( Eventhough iam not sure about it :)) do you have any prefered stocks in this sector ? Do you think infra sector will outperform other sectors once interest rates go down & govt start boosting infra spending?

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  61. Hi Sarath,

    The entire movements in stock markets is more on basis of speculations. Just a positive trigger is enough to boost growth and development in the country by attracting more and more investors. We are not sure on actual outcome, but just a mere speculation on upcoming stable govt can help turn the story for India, as starters. That will later be validated once the govt is actually able to prove it.

    Lets hope for the best!!!

    You are right in saying that, it will help many infra and manufacturing stocks, and you can see a good re-rating on all of them. But if you ask me in small cap, I would prefer the likes of Ador Welding and VST Tillers & Tractors above all. IRB Infra can also outperform.

    ReplyDelete
  62. Schneider Electric to add to that list...

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  63. I have lost all the subscribed email ids, hence you might not get the notification of latest post on your mails.
    I will try to get back the widget working.

    In the meanwhile, new post in updated. It can be seen on top of homepage.

    ReplyDelete
  64. Hi Kunal,

    This share price is following reverse bullish pattern. It is closing at a lower price at which it closed a day before. I was trying to find out the reason, please share your views on it as the price is shown in red only. Also, please tell us if you know the result date.

    Thanks
    Kiran

    ReplyDelete
    Replies
    1. Hi Kiran,

      You can always post your queries in the comment section of latest post, be it on any stock, discussed or not discussed on this blog. No need to take effort of finding individual stock thread for your queries.

      Regarding your query, time and again, I have mentioned that, I do not follow technical analysis. Hence, if you see any of the stock post, you will find me saying for long term investors, again and again.
      I just look at the fundamentals of the stock, and based on it, give my recommendations. And of course, I am not against those who follow technical analysis. Its just not my way of judging the stock.

      For me, Dynemic was cheap when it was recommended here around 29, and it is still cheaper, whether it be on 33, today or 36, a few days back.
      One of the reason for not moving up, I think, is the presence of stock in T segment. Everyday there is only delivery based buying. Hence you can expect some under performance, as compared to stocks in normal trading category.

      I am still bullish on the stock for long term.

      Regarding result date, management has not declared the date as yet. Once it is out, I will put it the sidebar widget named, Upcoming Q4 FY'14 Results.

      Regards.

      Delete
  65. Hi,
    Please comment on Omkar Speciality Chemicals

    ReplyDelete