Last Year in December 2014 I had been featured as One of the 10 and my pick Shemaroo for 2015 at Rs 159 had surged 102% to Rs 321+ and currently as of December 18,2015 a year later yet quotes strong up 70% at Rs 270 .Here’s that blast from the past link ~ this in a year 2015 where the Sensex & Nifty are about to close the year down 7%
😆 This must have given confidence and conviction to the Outlook Business Editors to invite me yet again for the second year in a row & I accepted
For my Pick for 2016 in this Special Edition,I’ve gone with Astec LifeSciences @ Rs 238….it’s now a Godrej Group Company with a Market Cap of just over Rs 450 crs
Economic Times has quoted me extensively in today’s edition for my US $ One Billion Valuation for the Fertiliser Business of Tata Chemicals in their headline story on Tata Chemicals mulling to sell their Fertliser Business
On May 31,2011,while the Iron was yet Hot, I had blogged extensively giving vivid details of the Blatant Insider Trading in Sabero Organics before the announcement that it was being acquired at Rs 160…The Price was just Rs 58 ! in mid May 2011 and flew in the second fortnight of May 2011 just prior to the the Takeover announcement
Well Done SEBI in 2015 for the Sabero Organics Insider Trading in 2011 !
Finally SEBI nailed A Vellayan,the Chairman of Coromandel International (CI) and others for their role in the blatant Insider Trading in Sabero Organics (SO) in May 2011 before CI announced they were acquiring SO at a price three times more than what it was quoted prior to aggressive buying before making the announcement…Here is their Order
It’s an Eight Page SEBI Order by Whole time Director Prashant Saran of SEBI
A Vellayan,Chairman of CI and EID Parry of the Murugappa Group has been accused too with Saran stating that unpublished price sensitive information (UPSI) must have been communicated by Mr Vellayan to his distant relative and accused A.R. Murugappan who is the father in law of accused V Karuppiah who in turn was a friend of chief accused Gopalkrishnan C who was funded Rs One Crore to buy Sabero Organic Shares by A R Murugappan
Group Spokesman said that in keeping with family values and tradition, A Vellayan has stepped aside as the Chairman of the Murugappa Group till this matter is resolved and he will contest the SEBI Order.The Group states that SEBI’s observation in linking A Vellayan to the two who actually did the Insider Trades is based on suspicion and is a far-fetched tenuous conjecture and the interim order does not prove the link conclusively
A few threads I have picked from SEBI’s Order and my views on them :
SEBI has been reactive in this case….they needed to be proactive when this blatant game was being played out in May 2011 or immediately thereafter rather than await someone to lodge a formal complaint……what happens in many insider trading cases where no one complaints to SEBI ! ? The Order begins like this:
1. SEBI on receipt of certain complaints alleging therein that the unpublished price sensitive information (hereinafter referred to as ‘UPSI’) pertaining to the acquisition of the shares of one Sabero Organic Gujarat Limited (hereinafter referred to as ‘Sabero’) by Coromandel International Limited (hereinafter referred to as ‘Coromandel’) was leaked to certain persons, who were acting in concert with the management of Sabero/ Coromandel, initiated a preliminary examination into the matter. Later, a detailed investigation was conducted by SEBI for the period of May 15, 2011 to June 15, 2011.read more
I shall shortly pick a gauravblog hamper Winner or maybe two where I see maximum gain potential in 2015 from the following
Participant wise
Sr No
Participant
Recommendation
Date of Recommendation
Price in Rs when recommended
1
Sumit Khanna
Subros
15.12.2014
67.85
PTC India Financial Services Ltd
17.12.2014
56.4
2
Jigam Gandhi
Wendt India
15.12.2014
2000
3
Sandeep Gahandule
Nathbiogene
16.12.2014
130.55
Prima Plastic
17.12.2014
56
JM Financial
18.12.2014
47.6
4
Bhaskar
IPCA Labs
16.12.2014
723.55
5
Nitin
Ajanta Pharma
16.12.2014
2528.65
Atul Auto
16.12.2014
601
6
Anand
Raj Rayon
17.12.2014
0.66
Jubilant Life Sciences
30.12.2014
119.95
7
Prasad
Nbcc
18.12.2014
792.05
Capital First
30.12.2014
353.4
TV Today
30.12.2014
215.2
8
Rohit
Adani Enterprises
20.12.2014
452.05
9
Prasad Shetty
Multibase
21.12.2014
227.9
10
Kushal Shah
MCX
22.12.2014
838.95
Jet Airways
22.12.2014
389.7
11
Rajan
Motherson Sumi Systems
22.12.2014
440.2
12
Hemant
NETWORK 18
22.12.2014
66
Intellect Design
22.12.2014
75.6
Pipavav Defence
22.12.2014
39.75
13
Raj
Odyssey Technologies
22.12.2014
33.65
14
Shiva
Granules India
23.12.2014
777
Mayur Uniquoters
23.12.2014
415.4
SpiceJet
23.12.2014
19.3
15
Abhay Tewari
Suzlon Energy
23.12.2014
13.45
16
Pushkar Prasad
Freshtrop Fruits
24.12.2014
115.9
17
Dhiren
Tata Sponge
26.12.2014
680
18
N Sri
Deccan Gold Mine
28.12.2014
42.95
19
Sameer
Spicejet
30.12.2014
17.95
Deccan Gold Mine
30.12.2014
44
Muthoot Capital Services
30.12.2014
207.15
20
Shahzad V
Engineers India Ltd
31.12.2014
229.75
AkzoNobel
31.12.2014
1384.1
Aries Agro
31.12.2014
117.4
21
Kiran
Vidhi Dyestuffs
31.12.2014
17.16
22
Vishal Kejriwal
CCL Products
1.1.2015
170.95
Oriental Carbon Chemical Ltd
1.1.2015
361.55
Hinduja Global Solutions Ltd
1.1.2015
631.75
23
Rudra Tandan
Ram Ratna Wires
2.1.2015
48
Foseco
2.1.2015
1227.55
Alphabetical Scripwise
Sr No.
Scrip Recommended for 2015
Price in Rs when recommended
Participant
1
Adani Enterprise
452.05
Rohit
2
Ajanta Pharma
2528.65
Nitin
3
Akzo Nobel
1384.1
Shahzad V
4
Aries Agro
117.4
Shahzad V
5
Atul Auto
601
Nitin
6
CCL Products
170.95
Vishal Kejriwal
7
Capital First
353.4
Prasad
8
Deccan Gold
42.95
N Sri
9
Deccan Gold
44
Sameer
10
Engineers Ind
229.75
Shahzad V
11
Foseco India
1227.55
Rudra Tandan
12
Freshtrop Fruit
115.9
Pushkar Prasad
13
Granules India
777
Shiva
14
Hinduja Global
631.75
Vishal Kejriwal
15
Intellect Design Arena
75.6
Hemant
16
Ipca Labs
723.55
Bhaskar
17
JM Financial
47.6
Sandeep Gahandule
18
Jet Airways
389.7
Kushal Shah
19
Jubilant Life
119.95
Anand
20
MCX India
838.95
Kushal Shah
21
Mayur Uniquoter
415.4
Shiva
22
Motherson Sumi
440.2
Rajan
23
Multibase India
227.9
Prasad Shetty
24
Muthoot Cap
207.15
Sameer
25
NBCC
792.05
Prasad
26
Nath Bio-Genes
130.55
Sandeep Gahandule
27
Network 18
66
Hemant
28
Odyssey Technologies
33.65
Raj
29
Oriental Carbon
361.55
Vishal Kejriwal
30
PTC India Financial Services
56.4
Sumit Khanna
31
Pipavav Defence
39.75
Hemant
32
Prima Plastics
56
Sandeep Gahandule
33
Raj Rayon Ind
0.66
Anand
34
Ram Ratna Wires
48
Rudra Tandan
35
SpiceJet
17.95
Sameer
36
SpiceJet
19.3
Shiva
37
Subros
67.85
Sumit Khanna
38
Suzlon Energy
13.45
Abhay Tewari
39
TV TodayNetwork
215.2
Prasad
40
Tata Sponge
680
Dhiren
41
Vidhi Dyestuffs
17.16
Kiran
42
Wendt
2000
Jigam Gandhi
Note :
Sandeep Gahandule who just won the hamper for Alphageo’s spectacular 720% run in 2014 has contributed three selections for 2015 this time too
Anand,who ran neck to neck with Sandeep till November 2014,when his low priced Rs 7 YBrant was up against Alphageo has yet again given one really low priced selection Raj Rayon of just 66 paise !
Deccan Gold & Spicejet occur twice as they constitute selections from two different participants
Prices at which Recommended have either been provided by the Participant when making the Reco and reflect the current market price at the time or where they have not stated the price,the last price when they made the reco has been sourced from the BSE & NSE
Most have not given targets for 2015 Selections but the four selections that have been given targets and all are over 100% + except one,are as follows : Freshtop Fruits Rs 250,PTC India Financial Services Rs 90,Subros Rs 150 and Tata Sponge Rs 1500+
Adani Group finds representation but none from the Ambani Groups ~ perhaps realisation that Reliance Ind has been a losing 5 year Investment thus far and ADAG Companies have struggled
Tata Sponge is the lone entry from the Tata Group.
Media and Aviation have two each in Network 18 and TV Today and Jet Airways & Spicejet respectively
Pharma & Auto Ancilliaries & NBFCs & IT & Speciality & Commodity Chemical Sectors are well represented
Can see a few potential turnaround selections as well as a few that have already run up huge in 2014
Tea & Coffee Beverages & Renewable Energy & Defence are represented but none from direct Power,Telecom or Real Estate or Retail
No Bank & no Oil & Gas Major & No visible Large Cap ! but Three Selections are also traded in the Derivatives Segment,namely,Adani Enterprise,Engineers India & Motherson Sumi
Going to be an interesting few days filtering all the above
Residents of this West Virginia Town have a right to file individual suits against Monsanto if medical tests show they suffered physical harm due to dioxin exposure.
Monsanto is under seige too for using Glyphosate…. another deadly toxin used in Monsanto herbicides such as RoundUp
India needs to be aware of these developments as Monsanto is very active in India and this giant biotech company is right up there in genetically modified production of crops….Bt Cotton and Brinjal for instance……and there is a raging debate in India to go ahead full fledge on this
Monsanto India is a listed company at Rs 2000 with a Market Cap over Rs 3400 crs…FY 14 saw Sales of Rs 582 crs and Profit of Rs 123 crs with an EPS of Rs 71…Equity is low at Rs 17.26 crs (FV Rs 10) with two Monsanto Companies holding an aggregate of 72.14% of the Equity ….Reserves are Rs 327 crs and Book Value is Rs 200….PE works out to 28 and PBV to 10….It’s a Zero Debt Company and paid 30% Final Dividend and a 120% Interim Dividend
Monsanto Controversial Chronology is briefly documented here
Two Interesting Names come up on the Board of Directors of Monsanto India:
R C Khanna ~ As on June 30,2014 held 389976 Equity Shares or 2.26% Equity Stake => worth Rs 80 crs today
He is the Non-Executive Director. ~A Cost & Chartered Accountant from England & Wales ~he retired as the Senior Partner of M/s. A.F. Ferguson & Co., Chartered Accountants, in 1989 (Merged into Deloitte ). He joined the Board of MIL in 1975.
Pradeep Poddar
He is the Non-Executive Independent Director ~ A Chemical Engineer from UDCT, Mumbai and an MBA from IIM, Ahmedabad ~ served as part of the top-management at Glaxo, Heinz and the Tata Group. He is presently the Managing Director of Mount Everest Mineral Water Limited, a Tata Enterprise and is leading the Tatas’ foray into water and functional beverages globally. He represents the Tatas’ interest on the Boards of Nourishco, the Joint Venture Company with Pepsico and the Rising Beverage Company (Activate Beverages) in USA. He is also a trustee on the Board of United Way, Mumbai. He joined the MIL Board in January 2006.
There were 15770 Shareholders at June 30,2014 including the Two Promoter Monsanto Holding Companies
Wonder why the controversial Monsanto remains Listed and thus more in the Public Eye !read more
Being saying this for a while now….Bottom Up as Top Down may not produce strong returns in the short term….this is being indicated even now….be Stock Specific,rather than bet on Indices…keep a longer term perspective…You begin with Rs One Lakh and whore it technically or fundamentally on the bourses every single day,churning trades in and out to end the year struggling to preserve the Capital itself ! …your Broker’s mighty pleased…not you !….The Other Option is to risk a specific stock for portfolio selection and give it time to flower so that you get a nice alpha return on your principal over time….
In March 2011,a year ago,I had strongly recommended JUBILANT INDUSTRIES @ Rs 171 as a SS Scriptech Stock Select with a target of Rs 250 to Rs 300 in the ensuing 12 months…..It touched Rs 300 last month and is now @ Rs 290….appreciating 70% in a year and meeting target set…in the same period the Sensex has lost a 1000 points or over 5% end to end reacting from 18200 then to 17200 now
The Idea of this Blog is not to Boast on this Selection,but emphasize the Other Option of being Stock Specific and giving it time to flower….going Bottom Up to seek Alphas…and not focussing your resources of both,Mind and Money on Indices
Reproducing the Recommendation Template below…why I liked Jubilant Industries @ 171 in March 2011
A SCRIPTECH SPARKLE SS 2 STOCK SELECT
JUBILANT INDUSTRIES at Rs 171
AN AGRO CHEMICALS STOCK AT HALF IT’S BOOK VALUE,LESS THAN 4 PE AND ZERO DEBT CURRENTLY
NETWORTH : RS 291 CRS
MARKET CAP : RS 137 CRS
TARGET RANGE =>Rs 250-Rs 300 INSIDE 12 MONTHS
SENSEX : @ 18200 NIFTY : @ 5450
LIMITED DOWNSIDE …VERY GOOD UPSIDE OF 40% TO 70% IN A YEAR
TARGET RANGE OF RS 250-Rs 300 MAY BE BE ACHIEVED IN THE NEXT FEW MONTHS !
Jubilant Industries Ltd (JIL) looks good at Rs 171… it’s a SS 2 Stock Selection….It’s been listed on BSE and NSE for a month now registering a High of Rs 300 and a Low of Rs 100 on the day of listing itself on February 14,2011
There are four straight catalysts that may push JIL towards the target range inside the next few months
Recently the Agri Products(single super phosphate and agro chemicals for crop protection) ,Performance Polymer(Food Polymer-Solid PVA…VP latex and SBR Latex….consumer and application polymer products) and IMFL Divisions got demerged from Jubilant Life Sciences Ltd (JLSL) into JIL….JIL listed last month…Not many are aware of this new listing..they soon will be….the demerger share ratio was 1:20…every shareholder of JLSL,and there were 25285 of them,got 1 share of JIL of FV Rs 10 for every 20 shares of JLSL of FV Rs 1 held by them
JILhas no debt currently although it has an enabling resolution to borrow upto Rs 500 crs
JIL had a networth of Rs 275 crs,excluding defered tax, at September 30,2010 It grew to Rs 282 crs at December 31,2010 and is likely to cross Rs 290 crs at March 31,2011….Equity is Rs 8.01 crs of FV Rs 10 while Reserves are expected to cross Rs 280 crs this month end…this should result in a Book Value of @ Rs 362…giving a Price/BV of just 0.47…in other words JIL is available at half it’s book value
JIL has recorded a net of Rs 27.59 crs for the nine months at December 31,2010….It should close the year at a net of over Rs 35 crs…that’s an EPS of @ Rs 45…and that’s a PE of below 4 !
JUBILANT GROUP PEDIGREE
JIL forms part of the Bhartia Group of Jubilant Companies….Jubilant Life Sciences (earlier Jubilant Organosys and even earlier Vam Organics) and Jubilant Foodworks are the prominent companies from 68 Companies in the Group…Shyam and Hari Bhartia are the Promoters…..Last year they created huge wealth for shareholders of Jubilant Foodworks..the Domino’s Pizza Franchise in India…in January 2010 Jubilant Foodworks came out with an IPO in the Rs 135-Rs 145 book building range and issue was oversubscribed over 31 times (51 times by QIBs and under 4 times by Retail Investors)…On February 8,2011 it listed at Rs 200… nearly 40% over IPO issued price of Rs 145….thirteen months later it is Rs 545 !….275% over issue price !
JIL DIVISIONS
Agricultural Products Division
There are four products segments here
Crop Nutrition……Fertilizers that increase crop yeild and quality…Primary Product is ‘Ramban’Single Super Phosphate
Plant Growth Regulators…help in plant growth and balance maturity by curtailing unwanted vegetative growth…Primary Product is Vam-C
Crop Protection…these are Pesticides,Insecticides,hebicides and Fungicides…right from Seed Sowing Stage to Harvesting…JIL currently does not manufacture these but only trades in them
Industrial Chemicals…these are Sulphuric Acid (Captive use in the SSP manufacturing process and also commercially sold to other Soap,Detergent,Fertilizer,Sugar Refiners,Colours,Dyes,Paper and Aluminium Units) and Sodium Silico Fluoride sold to Glass Units
Plant Locations
Gajraula in Uttar Pradesh…..SSP Production (Powder & Granulated Forms) 165000 MTPA…Sulphuric Acid 68640 MTPA
Kapasan in Rajasthan….SSP Production (Powder & Granulated Forms) 264000 MTPA….Sodium Silico Fluoride 1440 MTPA
Performance Polymer Division
Here too there are four product segments
Consumer Products….these are marketed under the brand of ‘Jivanjor’ and cosntitute wood adhesives(premium,middle,economy),wood finishes,footwear adhesives and epoxy sealants (for sealing leakages in sanitaryware and water pipes)…Epoxy Sealants are not manufactured by JIL but only traded
Food Products…Solid Poly Vinyl Acetate (SPVA) is a synthetic food polymer made for use in the manufacturing of the gum base used for making chewing gum and bubble gum…Synthetic Polymers ,of which SPVA is only one type,form the main gum base constituent in 90% of all gum base manufacturing activity worldwide…JIL markets it’s SPVA under the brand name ‘Vamipol’ to chewing gum base manufacturers globally
Latex…Three kinds of Latex are manufactured…Vinyl Pyridine,Styrene Butadiene Rubber or SBR and Nitrile Butadiene Rubber or NBR…the first two are used for dipping of tyre cord and conveyor belt fabric by tire manufacturers who have in house dipping facilities and also by tyre cord fabric dippers…in addition they are also used to manufacture SBR Tyre Carcasses,V-Belts and Conveyor Belts…NBRs are used in automotive gasket binding operations…JIL even exports Latex to countries in Asia,Europe and Latin America
Application Polymer Products…These are high quality polymer products developed for application in lamination,flexible and general packaging and pressure sensitive adhesives….Poly Vinyl Acetate (PVA) Emulsions and Poly Utrethane (PU) adhesives are the two product categories…PVA finds application in pressure sensitive adhesives(tapes and labels),laminated adhesives(bonding film to paper/paper boards such as books,calendars,posters and greeting cards) and packaging adhesives(side pasting in cartons and corrugation)…PU adhesives Re used to produce flexible packaging laminates used to making pouches to package products like edible oils,coffee,shampoo and detergents…these products are sold through channel partners and to original equipment manufacturers in India and even in Germany and Dubai
Sahibabad….Footwear Adhesives 2800 Kilo litres per annum
Samlaya near Vadodra in Gujarat…All three kinds of Latex 14000 MTPA + research and developement laboratory for testing all kinds of latex and recognised by the Department of Science and technology,Government of India
IMFL Division
JILhas been bottling IMFL products on a contractual basis for various established brands engaged in liquor business in India. Capacity is 100,000 cases per month for IMFL. with technological capacity to handle all sizes of bottles, with a configuration of five automatic/semi-automatic lines. All lines are equipped with the required Vats (used for blending alcohol) for storage of extra neutral alcohol and labeling machines which provides flexibility for bottling various sizes of IMFL. JIL also has a fully equipped, state of the art laboratory to support the bottling plant. The bottling plant is located at Nira, which is about 70 kms from Pune in Maharashtra
FINANCIALS AND BASIC VALUATIONS : A SYNOPSIS
A Synopsis of JIL’s Projected results as at March 31,2011 and for the actuals for the nine months at December 31,2010 actuals are presented below…Agri Products and Performance Polymer Divisions comprise nearly all of the sales in near equal proportion….However Agri Products enjoy a 13% operating margin against 9% reported by Performance Polymers Division…and of the Total Capital Employed of Rs 290 crs at December end 2010,46 % has been applied in the Agri Products Division while 39% has been applied in the Performance Polymers Division
Jubilant Industries @ Rs 171
Financials & Basic Valuations
(In Rs crs unless otherwise stated)
Head
March 31,2011
Full Year Projected
December 31,2010
Nine Months
Net Sales
575
446
Profit After Tax
36
28
Equity ( FV Rs 10)
8.01
8.01
Reserves (exc Deferred Tax)
282
274
Net Worth
290
282
Market Cap
137
EPS in Rs
45
Book Value in Rs
362
P/E Multiple
3.8
P/B Multiple
0.47
Promoters Stake in Equity
47.51 %
FII/DII/Public Holding (on listing on Feb 14,2011)
18.54/13.59/20.36 %
–
SOME RISK FACTORS
Promoters, Directors and Group Companies are involved in a number of legal
proceedings that, if determined against them could adversely impact JIL’s business and financial condition
JIL derives a significant portion of revenue from a few customers, and a loss of one or more customers or a reduction in their demand for JIL products would adversely affect JIL business,financial condition and results of operations
Low entry barriers may result in new smaller players entering the market and putting pressure on margins in the application polymer business which may have an adverse effect on JIL business
JIL is governed by the Fertilizer Control Order, 1985 which requires it to obtain a certificate of registration, which is valid for a period of three years from the date of issue, for it to be able to sell,offer for sale or carry on the business of selling of fertilizer at any place as a wholesale dealer or retail dealer. Further, certain of their products are required to conform to the standards as notified by the Central Government/State Government in the Official Gazette
Increased usage of radial tyres in India, which use significantly lower amounts of vinyl-pyridine latex when compared to bias ply tyres, will lead to a reduction in demand of vinyl-pyridine latex thereby adversely affecting JIL business, financial condition and results of operations
The demand for vinyl-pyridine latex used in the manufacture of tyres is directly linked to the performance of the automobile industry. Any reduction in demand for automobiles may lead to a consequent reduction in demand for tyres and vinyl-pyridine latex thereby adversely affecting JIL business, financial condition and results of operations.
Emergence of new technologies like „Hot Melts‟ and their increased use, if any, in the future will reduce usage of poly vinyl acetate based PSA‟s which may have an adverse effect on JIL business
The availability of vinyl-pyridine monomer, a key raw material in vinyl-pyridine latex manufacturing,is linked to the availability of beta-picoline. Any interruption in the continued supply of beta-picoline would affect the availability of vinyl-pyridine monomer and thus adversely affect JIL business,financial condition and results of operations. read more