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iaditya
Senior Member
Joined: 18/Sep/2009
Location: India
Online Status: Offline
Posts: 172
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   Topic: Identify & Value this Stock
Posted: 23/Sep/2010 at 10:16pm |
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Inspired by the many multibagger finds on TED, I decided to find one myself.
I think I have found one. But am only 25 and not yet so sure my projections :D. So I want to see what the seniors here think the value of this stock should be. Any guesses what the market cap of this co. should be
FY06 FY07 FY08 FY09 FY10
Sales 125 825 1250 2150 3000
EBITDA 12 60 100 200 250
PAT 10 50 85 125 165
Cash Flow 1 20 50 110 125
from Ops
All units in INR Crore
Edited by iaditya - 23/Sep/2010 at 10:18pm
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Buy Solid Companies. Hold for 5 years. Avoid watching TV. Sleep Well.
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yogishkamath
Senior Member
Joined: 28/May/2009
Location: India
Online Status: Offline
Posts: 110
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Posted: 23/Sep/2010 at 10:45pm |
It is hard to tell from just these figures. One has to know how sustainable the earnings are. For that, it is important to understand the business, look at competitors and so forth. As Basantji says in his signature: "
If you could tell the future from a Balance Sheet then accountants
and mathematicians would be the richest people in the world. "
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master
Senior Member
Joined: 06/May/2008
Online Status: Offline
Posts: 831
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Posted: 23/Sep/2010 at 11:29pm |
Seeing the financial trends, i would say:
1. Company must be having reasonable debt : equity of around 1:1.
2. Even at EBIDTA level this has poor margins. For sales of Rs 3000 cr, a company like Mphasis will do something like Rs 800 cr on PAT basis.
3. It should be involved with trading in some sense. Can't be sure of the balance sheets as well.
4. May belong to a dicey sector like jewellery, diamond, some of the chemicals etc.
5. Without seeing the debt levels, cash balance and the exact business, i shouldn't hazard a guess on its market cap. But would not give it more than Rs 1000 cr.
Edited by master - 23/Sep/2010 at 11:35pm
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Someone’s sitting in shade today because someone planted a tree long time ago.
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iaditya
Senior Member
Joined: 18/Sep/2009
Location: India
Online Status: Offline
Posts: 172
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Posted: 23/Sep/2010 at 11:40pm |
Bang on Master, the company is resaonably leveraged 
Here's some additional Info
FY06 FY07 FY08 FY09 FY10
Debt 25 100 250 450 900
Equity 15 100 260 400 480
Cash 2 30 250 500 650
All units in INR Crore
Edited by iaditya - 23/Sep/2010 at 11:40pm
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Buy Solid Companies. Hold for 5 years. Avoid watching TV. Sleep Well.
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master
Senior Member
Joined: 06/May/2008
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Posts: 831
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Posted: 23/Sep/2010 at 11:56pm |
Business & management have a big influence on m-cap besides the financials.
With that rider, I would maintain around Rs 1000 cr in current bullish trend for your xyz (please come back later for bear market valuations).
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iaditya
Senior Member
Joined: 18/Sep/2009
Location: India
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Posts: 172
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Posted: 23/Sep/2010 at 11:59pm |
INR1000cr for a business with INR650cr on its books? And you ask me to come back for bear market valuations 
if what you say is true, thank god i dint put a ruppee in this yet 
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Buy Solid Companies. Hold for 5 years. Avoid watching TV. Sleep Well.
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master
Senior Member
Joined: 06/May/2008
Online Status: Offline
Posts: 831
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Posted: 23/Sep/2010 at 12:13pm |
Pardon my saying but latest 2 years look made to order, and one can hold cash for so many non-core reasons like a land sale, large tax refund from a dispute, investment proceeds, need to show closing balance as at year end etc. I hope it's not done an QIP/IPO in these 2 years.
I have nothing against the company. If you like it that much give some more time for its story to unfold.
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hit2710
Senior Member
Joined: 15/Jun/2009
Location: India
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Posts: 4013
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Posted: 23/Sep/2010 at 12:14pm |
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Are you absolutely sure of the figures? Or is this just a teaser?
My guess would be it could be an infrastructure company or a jewellery company to have such thin margins.
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Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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