Identify & Value this Stock
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=3001
Printed Date: 21/Apr/2025 at 4:26pm
Topic: Identify & Value this Stock
Posted By: iaditya
Subject: Identify & Value this Stock
Date Posted: 23/Sep/2010 at 10:16pm
|
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 ------------- Buy Solid Companies. Hold for 5 years. Avoid watching TV. Sleep Well. |
Replies:
Posted By: yogishkamath
Date 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. " |
Posted By: master
Date 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.
------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: iaditya
Date 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 ------------- Buy Solid Companies. Hold for 5 years. Avoid watching TV. Sleep Well. |
Posted By: master
Date 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). ------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: iaditya
Date 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  ------------- Buy Solid Companies. Hold for 5 years. Avoid watching TV. Sleep Well. |
Posted By: master
Date 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.
------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: hit2710
Date Posted: 23/Sep/2010 at 12:14pm
|
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. ------------- 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. |
Posted By: go4sheel
Date Posted: 23/Sep/2010 at 1:30am
| MCap might be around Rs.2000 cr |
Posted By: ravi
Date Posted: 23/Sep/2010 at 7:16am
|
Master seems to be brilliant....Gitanjali Gems?
------------- |
Posted By: om2112
Date Posted: 23/Sep/2010 at 9:14am
|
BGR ENERGY ? |
Posted By: iaditya
Date Posted: 24/Sep/2010 at 12:41pm
|
*am figuring out what are the questions to be asked while choosing stocks.
@Master: There has been a QIP of INR100 cr in March 2008 @Hit: Yup these numbers are as reported in the Company's annual reports. ------------- Buy Solid Companies. Hold for 5 years. Avoid watching TV. Sleep Well. |
Posted By: master
Date Posted: 24/Sep/2010 at 12:54pm
|
Another key issue to analyse with such companies is operating & financial performance of its associate companies.
My feeling is this company should have a number of subsidiaries/ associates/ partnerships belonging to the promoter group with whom this will have related party transactions, including some of them overseas. Problem is financials of all of them will not be consolidated in the results you're seeing due to lesser holding % and complex ownership structure.
Let me add i don't mean to discourage you from investing, please take your own call. ------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: camanoj
Date Posted: 24/Sep/2010 at 1:14pm
|
Stock: Shree Ganesh Jewellery
Mcap: 1100 cr
My ballpark valuation - equity: 2400 cr ------------- Manoj |
Posted By: camanoj
Date Posted: 24/Sep/2010 at 1:23pm
|
Good pick Aditya. I bought the stock myself in 110-130 range when it went below half its issue price (260) in may-jul2010. Co to do sales of 4000 cr this year (py 3000 cr). ------------- Manoj |
Posted By: Catalyst
Date Posted: 24/Sep/2010 at 1:52pm
|
The Debt and Cash figures provided are incorrect, corrected data is as follows:
Consolidated Debt Rs.370 cr (FY10) Rs.372 cr (FY09)
Consolidated Cash Rs. 715 cr (FY10) Rs.598 cr (FY09) ------------- What’s Euphoria, think of it as obscenity. Though its probably impossible to formulate a test for Obscenity but you know when you see it. |
Posted By: camanoj
Date Posted: 28/Sep/2010 at 12:38pm
|
Aditya, you have not mentioned whether SGJHL is indeed the stock. ------------- Manoj |
Posted By: iaditya
Date Posted: 28/Sep/2010 at 5:04pm
|
Indeed, SGJHL is the stock. ------------- Buy Solid Companies. Hold for 5 years. Avoid watching TV. Sleep Well. |
Posted By: prudentinvestor
Date Posted: 23/Jan/2011 at 2:49am
|
Even after such a good quarterly result, with intraday rise upto 218, the stock has been beaten down badly for the last two days. Any specific news regarding this ? |
Posted By: prudentinvestor
Date Posted: 23/Jan/2011 at 2:50am
| Request moderators to change the name of this thread. |