Wealth Creation Idea : Kajaria Ceramics

Kajaria Ceramics is the largest manufacturer of ceramic/vitrified tiles in India. It has 8 Plants- in Uttar Pradesh, Rajasthan, Gujarat and Andhra Pradesh. It offers more than 2,600 options in ceramic wall & floor tiles, vitrified tiles, designer tiles. Kajaria Ceramics exports to more than 30 countries round the Globe.

Financial Performance :

• M-cap:  INR 11633 cr
• CMP:  732 INR (27th Nov 2017)
• EPS: 15.13 INR
• PE: 48.3
• Debt equity ratio :0.17
• Book Value: 82 INR
• Promoter Share holding is 47.39 %.
• DII/FII/FPI Share  holding 29.14%

Why Kajaria Ceramics?

• Company has consistent profit growth of 27.25% over 5 years.
• Distribution Network of strong and loyal 1200 dealers all over the country.
• Company is going to Expand the ‘Prima Plus’ channel network from the current 41 showrooms to 100 showrooms by March 2019.
• Good return on equity track record: 3 Years ROE 27.33%.
• According to CLSA, India expects to build 60 million new homes to be built between 2018 and 2024.
• Smart Cities Mission, Swachh Bharat Abhiyaan (Sanitation for All by 2019), Atal Mission for Rejuvenation, Urban Transformation (AMRUT) and Housing for all by 2022 is expected to provide significant impetus to the demand for tiles.
•  Biggest organized player in Ceramics business in India.
• 29 Year of Business Experience. 
• Due to GST implementation, Organize player like Kajaria get preference in consumers as Price difference between organize and unorganized player decrease.

For long term investment this stock best suited. Next 5-7 year Kajaria ceramics can deliver 3x-5x returns.

Be Smart. Invest Smartly.

Disclaimer : Please take advice of your financial advisor before any investment.

A New Beginning :2016 Value pick 3

We have already given two value pick for 2016. Please check previous post for that.

Now let’s start with another value pick:

Larsen and Toubro:

CMP: 1239(6^th Jan 16)

     L&T is the biggest player in Construction and heavy engineering. Stock has touched 52-week low which makes it more attractive for investor. In current state L&T is well placed for an earnings recovery and improving RoE on the back of:

•   Management’s decision to change the company’s focus to asset light businesses and unlocking value from its subsidiaries/JVs over the past two years and going forward (real-estate, Dhamra & Kattupalli ports, L&T Finance, L&T Infotech). 
•   A pick-up in execution in long-gestation projects to drive 20% revenue CAGR over FY16-18F in the core E&C business, in our view. Unlike orders in the power equipment sector, we think L&T’s order backlog is only ‘slow-moving’ or even ‘slow to start’ rather than ‘non-moving’ as in the case of BHEL
• Margin recovery as several long-gestation orders reach margin recognition thresholds coupled with tailwinds from the decline in commodity prices.
• With bulk of the problems now behind the company, we expect earnings pick up from FY17F and estimate 35% EPS CAGR for L&T over FY16F-18F.(Source:http://www.financialexpress.com/article/markets/indian-markets/buy-rating-on-larsen-toubro-better-days-lie-ahead-for-lt/184330/)

        L&T is exposed to several levers across business/geographic segments and has emerged as the E&C partner of choice in India, which provides a robust foundation to capitalize on the next leg of the investment cycle. Manufacturing businesses (like Shipyard, Power BTG, Forgings, etc) also present interesting possibilities in the longer term. Many of these businesses are difficult to replicate and LT is strongly positioned as a dominant player.

According to the company, its unexecuted order book stood at an all-time high of INR232,649 crore and represents a 28 per cent growth over the order book at the end of the previous year.

For L&T near-term outlook is weak; but long-term growth story remains intact. One can enter at this level and stay invested for 3-5 years to get good return.

Be Smart. Invest Smartly

Hidden Gems: Gabriel India Ltd:

As we mention previously that small cap industry has huge potential than Blue chips.

Our last year call Sintex has given 100% return in a year.(visit: http://kevaljethi2363.blogspot.in/2014/05/gujarat-base-small-cap-multi-gainer.html ). We brings you another Gujarat base company with high growth potential.   

 Gabriel India: 

Sector: Auto Ancillaries
CMP : 103 (on 30/01/2015)
Target: 180 Timeline: 8 -12 months
M-cap:1490 cr
P/E :24

     Gabriel delivers one shock absorber every second. With close to 300 models, the company offers the most diversified basket of products to its customers, supplying to every major vehicle manufacturer in the country across segments. As the leading OEM supplier in the country, Gabriel holds a 45% share in the Passenger Vehicles segment, 19% in the Two-wheeler segment and over 80% in the Commercial Vehicles Segment. Gabriel leads in the Aftermarket with exporting ride control products to developed markets in North America, Europe, Australia and the Asia-Pacific region.

Gabriel India  has Big Customers like Bajaj Auto, TVS, Tata Motors, Ashok Leyand, Mahindra, Yamaha etc.

Gabriel India has good past performance as well.
Return On Equity :  

10 Years :20.28%

5 Years: 19.97%

3 Years:18.58%

Last year: 15.72%

 

While all are bullish on Auto sector one can bet on  Gabriel India ltd for long terms.

Be Smart. Invest Smartly.

Hotpicks of 2015.

After a 30%  upside in 2014 ,  Sensex is ready with more or even better in 2015. As 2014 in 2015 also mid cap and small cap will shine.

I have picked up some of the most prospective stock which will outperform in 2015.


Berger Paint: 
CMP: 452.
M cap: 15676cr.

Berger Paint is one of the dominant in Paint industry with good past record. Stock gain 100% last year and story will continue in 2015 also. Also stock hit 52 wk high before stock split on 9th Jan 15.
So start your new year with this stock and it will not let your money go for sure.

Ashok Leyland: 
CMP: 53

Have already mention in last blog :http://kevaljethi2363.blogspot.in/2014/12/bull-is-ready-dont-miss-opportunity.html about this value stock. Ashok Leyland was traded 17 INR on Jan 2014 and after one year it touch 53 which make 240% returns. AL tour around in mid 2014 and after that it did not look back. Stock find resistance at 54 level but soon it will cross it and make new high. So keep this Auto stock with you in 2015 aslo.

Century Ply board:
CMP: 162
M -cap: 3600

Century ply board is dominant in furnished play board  market with 25% of domestic market.
With in year stock came from 25 level to 160. We will expect same of better performance from it for 2015 as well.


KRBL:
CMP: 115

KRBL has good consistent profit growth of 40.95% over 5 years. It export rice to many country and it is one of the key player in domestic market also. One can diversify  portfolio with this stock.

South India bank:
CMP: 30

When all banking stock outperform in 2014, South India Bank also gain over 50% last year.
Company has good consistent profit growth of 21.21% over 5 years. We could expect more upside in 2015 from this stock. 


So lets begin 2015 with above great picks and grow your money.


  Be Smart. Invest Smartly 

Bull is ready.. Don’t miss the Opportunity

Indian market is set to begin roller coaster ride for next 3 to 6 year. Mid-cap will be on the front seat. Keep your portfolio ready with quality stocks to enjoy the ride.

Let's find out some of the possible candidate for our front seat:

Sintex Industries: 

CMP: 100
Sintex has shown sustain growth in 2014 and create more than 300% return this year. Balance sheet of Sintex is positive for last couple of quarters. All factors for company are positive and it will continue to grow also in FY15 with same as in FY14. So if you don't have it in your portfolio thinks again about it.
(Also read: http://kevaljethi2363.blogspot.in/2014/05/gujarat-base-small-cap-multi-gainer.html)

Axis Bank:

CMP: 490
Axis Bank is leading from front in private sector banks. Stock almost double in FY14. One must have this blue chip in his model portfolio.

Ashok Leyland:

 CMP: 49
 Ashok Leyland came from loss to profit in FY14. Stock is hitting 52 week high. It has bags big order recently and company is set to join ride.

Gati:

CMP: 280
Gati is the one of the wealth creator in FY 14. Stock was trading at 26 on DEC13 and today it surges to 280.Within a year it created 10 x returns for its investor. E Commerce market is booming in Indian and it directly bring business to logistic and courier industries. Gati will keep doing well in FY15-16.So don't miss this wealth creator.

Eveready Industries:

CMP: 190
Along with Gati Eveready was another wealth creator in FY14. Eveready stock gained more than 600% in FY14. With Warren Buffet’s Duracell buy stock of dry cell are hitting high. Keep this stock in your portfolio and see its magic.

    
    Along with above there are many small and midcaps stocks like Adani Ports, Ceat, South India Bank, GMR Infrastructure , JM Finance, Pipavav Defence, Rolta, Rico Auto, Tata Coffee. All you need to do is to buy on every dip. Indian market is now entering in Bull phase and all this stock will be the money makers for their investor. Pick your money maker smartly.




  Be Smart. Invest Smartly