VIKAS ECO- A POTENTIAL MULTIBAGGER!

ABOUT:-

            Vikas EcoTech Ltd. Engages in the distribution of petroleum, petrochemicals, Specialty chemical and polymer products in India. The company also manufactures various products used in plastics, rubbers (eco-friendly rubber plastic compounds) and paints.

BRIEF ABOUT COMPANY:-

            Founded in 1984, Vikas Ecotech’s history is rooted in transformation through science and innovation. Moving away from trading to manufacturing of high-end specialty chemicals. The Company’s manufacturing division has grown more than 500% in the past few years. Today, the company is a leading player in specialty chemicals exporting products to over 20 countries.

            Expanding its global area, right now the company operates in more than 20 countries, mainly in EU and USA. The company’s exports have been increasing continuously showing a growth of 126% CAGR last year… This shows that the company WON’T BE AFFECTED BY DEMONETISATION!!!

            Co was founded as a NBFC in 1984, listed in NSE and BSE in 1995. Slowly started trading and distribution of petrochemical products in 1998. Now in 2014 they Received Star Export house status after establishing export division in 2011 and then upgrading to 2star export house in 2015. In 2016 Commenced construction of state of the art manufacturing plant and Innovation (R&D) Center at Dahej, Gujarat Capacity to produce 6,000 MT of Organotin stabilizers(MTM)(growing at 20% CAGR) and 5,000 MT of special polymer compounds annually.

            Each and every product be it organotin or PVC PIPE, polymer additives or specialty chemicals the company is very well known for their products. The company has achieved almost 50% of their sales from global markets!!!

            The company’s strategy of sweating our assets is helping us increase production without a corresponding increase in capex while driving down per-unit production costs. Recently installed facilities to convert waste cooking oil into specialty additives.  Vikas Ecotech is the only homegrown manufacturer in India with an in-house R&D function, manufacturing MTM right from tin metal. Vikas Ecotech’s strides as a leading manufacturer of specialty polymer compounds continued both in the global and Indian market.

RECENT  news:-

         1)        IMPROVED CREDIT RATING:

i) Brickworks Ltd. Upgraded Vikas Eco to BBB+ from BBB-.

ii) Dun & Bradstreet, a US based information rating MNC, upgraded the company’s rating from 4A3 to 5A2.

2)    MANAGEMENT CHANGE:

i)                   GRANT THORTON was appointed as internal auditors.

ii)                 The Advisory board, first of its kind in this industry is lead by chairman, SHRI G N BAJPAI, ex-chairman of LIC and SEBI.

INDUSTRY:-

Ø AGRICULTURE

Ø AUTOMOTIVE

Ø FOOD PACKAGING

Ø FOOTWEAR

Ø HEALTH-CARE &  PHARMA

Ø INFRASTRUCTURES

Ø ORGANIC INORGAINIC CHEMICALS

Ø PLASTICS & POLYMERS

Ø RUBBERS

Ø SPECIALTY CHEMICALS

Ø TEXTILES

Ø WIRES AND CABLES

SHAREHOLDING PATTERN:-

             Promoters as on Sept 16 are holding 43.51% of the company’s shares. The company is having no pledged shares! The main promoter, VIKAS GARG’s holding is 20.32%. Highest holder among the public shareholders is Globe Capital Market Limited, holding 2.01% of the company’s holding.  FIIs holding stand at 0.05% (2 FII holders) and DIIs stand at 0.05% as of june16.

Financials and future prospects:-

FINANCIALS:-

             The company this financial year posted highest EPS over last 3 year 2014-0.33, 2015-0.15, 2016-1.00! the company is having a good financial trend reporting fab Q2, more than 100% rise in EPS. Company is having consistent profit growth of 30%+ every yea, over than last 5 years!

             Company’s operating profit per share is Rs1.93 against 0.65. the OPM, CPM NPM stands at 15.94%, 9.21%, 8.31% against 7.88%, 3.35% and 1.79%!!! Even the ROCE increased to whooping 32.03% against odd 15.46% while RONW touched 38.54% vs 8.74%, rising more than 4.5times!!!

             While revenue increased at 34% CAGR, ROE and DER stood at 98.5%, 1.45% against 8.7%, 1.56% respectively!! During the previous FY, the mix of domestic and export revenues stood at `158.18 crores and `148.97 crores respectively, a share of 51.50:48.50.

FUTURE PROSPECTS AND ESTIMATIONS:-

              In India, VIKAS ECO is focusing on penetrating the Western and Southern markets with their new plant coming up at Dahej in Gujarat. The state-of-the-art plant and innovation Centre have started its initial operations in this fiscal year and contribute to a 200% increase in capacity. This will help them to serve their local customers in a shorter time and also enable them to shorten the timelines for exports.

              With their market domination in North India continuing, they hope to create a pan-India marketing and distribution network in the next few years. They plan to export over 30 countries divided into 5 clusters i.e. EU, USA, MENA, South East Asia and African countries in coming years.

               Gujarat Capacity to produce 6,000 MT of Organotin stabilizers (MTM) will grow at 20% CAGR. The nascent CPVC (Chlorinated polyvinyl chloride) pipes and fittings market is estimated to grow at more than 100% CAGR over next 2-3 years Stated for production by early next year, it will add over 200% capacity for the company. As a move forward and with the help of information technology, the Company is planning to introduce new products in market.

               The Company is scheduling another manufacturing unit at land allotted by Gujarat Industrial Development Corporation (A Government of Gujarat undertaking) at Dehej-II, Industrial Estate, District- Bharuch (Gujarat) to cater the market of Western and Southern India and also for exports its products like Methyle Tin Mercaptile and Epoxidised Soya Bean Oil.

         

               The company expects to grow at a CAGR of 35-40% in next 2-3 year, a conservative estimate. The company has capex plans of about Rs 20-25 crore coming by over next 2 years!!!

ESTIMATIONS OF 2017:-

               The company expects revenue of 400crore in FY2017.  The company is expecting to increase its exports to 50% i.e. 200crores revenue from export. EBIDTA is expected around 40-45crores in FY2017. The company is expecting 40-45% growth compared to last year in exports. Capex of 5-10% is in their existing unit of rajasthan; rest are in Gujarat in 2 locations... Already acquired land in mundra from GIDC. This capex is of 25-35crores.

RETURNS:-

                All in all to summarize expect this stock to be a 4 bagger from reco price, 13.85 in next 2 years.

UPDATE 25th July, 2018 (CMP 21.7):-
Vikas eco already gave a 3.5x returns in less than 2years. One may invest for 50-70% returns in next few quarters.

Disc:- All the info are based on the writer's own research/gathered from public domains. The writer of this Blog is  neither any advisor nor related to any brokerage houses!! The writer might be  himself invested in the stock after his own research so the views might be biased. One must do their  own research before investing. The writer of this blog won't be held responsible for any of your profit/loss in your investment/trading career!

TRIGYN TECHNOLOGIES- A POTENTIAL MULTIBAGGER!

Trigyn Technologies Ltd., earlier known as Leading Edge Systems Ltd., (“Trigyn” or the “Company”) is a leading IT company providing IT solutions & services to global clients. Its services are spread all over the world such as USA, Canada, Europe, India, Africa and so on... The Company offers a comprehensive range of service offerings including Offshore Development and Maintenance Solutions & Services, Staff Augmentation, Managed Services, and Business Process Outsourcing. Trigyn has established partnership with the leading technology companies like Microsoft, EMC2 , TIBCO and IBM. 

RECENT NEWS: Recently their subsidiary Trigyn Technologies INC has been awarded an extension of theirICT services contract to OICT, New York city, till November 2017! 

PRODUCTS AND SERVICES OFFERED BY THE COMPANY:-

Products:

• Apollo Apollo is a network independent billing application and works on the philosophy of 'Customer Empowerment'. The product is built entirely around the client, allowing the client to play a key role in planning his services & rate plans. 

Global financial trading suite      Trigyn Technologies has developed a comprehensive range of financial solutionswhich provide information systems with an array of analytical, risk- eliminating, controlling and decision making tools. 

Fundpro     It is a sophisticated package for investment management and accounting catering to the needs of mutual funds and insurance companies.


Services:
Outsourcing services.
Re-engineering and migration practice
QA Practice
Governance practice.
Engineering practice
Staff Augmentation services.
ECDM services.
Documentum Practice.

ACHIEVEMENTS AND RECOGNITION:

Trigyn has been been awarded EMC channel partnership (July 04, 2008).

Trigyn was Awarded Multi-Year Solutions Provider Contract by Massachusetts (July 01, 2008)

Accreditation as “Microsoft Gold Certified Partner” by Microsoft Corporation (June 23, 2008)

Trigyn was Awarded Multi-Million Dollar UN Managed Services Contract Extension (May 29, 2008)

Trigyn was Awarded Microsoft Gold Certification (April 01, 2008)

2009 - Trigyn Wins State of Texas IT Staff Augmentation Services Contract

Trigyn Wins State of South Carolina IT Temporary Staffing Services Contract

2010 Trigyn Wins 3 Commonwealth of Massachusetts Multi-Year Contracts

2011 - Trigyn Awarded Commonwealth of Massachusetts Solution Provider Contract2012

Trigyn Awarded New York City IT Services Contract Extension

Trigyn Awarded IT Staffing MSA by Fortune 500 Financial Services Company. 

SHAREHOLDING PATTERN:

47.65% of the company's holding are with promoters. The company has 0 pledged shares. Highest holding is with UNITED TELECOMS LTD Intfact the entire holdings are with UTL! DIIs holding have increased by 0.15%. FIIs holdings are neglible(0.01%). NIIs holdings stand at 0.09%...2013 - Trigyn Awarded Washington State Contracts

2014 - Trigyn Awarded Multi-Year California IT Consulting Services MSA

FINANCIALS AND FUTURE PROSPECTS AND ESTIMATIONS:

The company is in a good financial trend in the current year, reported a strong Q2 this year, showing a growth of 20% in EPS and a growth of 12-13% in revenue on YoY basis. Even the Q4 reported by the company was a fantastic one reporting a growth of 11.4 percent at Rs 173.4 crore versus Rs 155.6 crore in the third quarter. The EBITDA margins for the quarter were also up at 12.7 percent versus 9.5 percent QoQ and the PAT stood at Rs 13.54 crore versus Rs 8.92 crore QoQ. The year-on-year revenues, too, were up 27 percent for FY16.

The company is debt free and so faces no interest burden(Long term loans). Company's operating profit per share was Rs0.70 against -0.93. The operating profit margin is 1.35% against -1.83%. The Gross profit and cash profit margins stands at 1.05%  and 1.70% respectively. The ROCE & RONW of the company is 2.04% and 1.08% against -0.50 and 0.01% respectively! All the data are of Mar2016 and on STANDALONE BASIS

Consolidated ROCE, RONW, Operating profit margin, and cash profit margin are 21.82%, 13.20%, 9.98% and 6.28% against 15.86%, 9.89%, 7.36% and 4.73% respectively!

Company has a consistent profit growth of 23% from last 5 years!

The results might be muted this year because of DEMONETISATION move, but company is expecting 11% organic growth for FY17.

With the company already being present in America, entering Latin America makes a logical sense. Moreover, they also plan to enter the continental European market. Entering both these markets will be through the organic route. However, he does not rule out inorganic expansions going forward. The company is also expecting strong forays in Latin America and EUROPE. Since they are new entrants in these markets their focus continues to be organic in these places.

The company is still expecting a revenue of 250million of revenue by 2020. The company is also expecting EBIDTA MARGINS between 12.5-15% in FY17!

RETURNS:
In nutshell, the company is at an infancy stage and should be bought before its too late... The company has a great financial growth and great future prospects. At CMP 83 its a good bet for coming 4-5 years with a minimum 50% returns each year. Its a HIGH BETA stock so the stock should be bought keeping the risk in mind.




UPDATE 24th July, 2018(CMP128):-
Trigyn tech was recommended on 22nd Nov, 2016 at mkt price 83. Given 50% CAGR returns the price this year should be 186 and the yearly high is 189.One can buy this now and average it around 100 for target 200 in next 12-18 months.




Disc:- All the info are based on the writer's own research/gathered from public domains. The writer of this Blog is  neither any advisor nor related to any brokerage houses!! The writer might be  himself invested in the stock after his own research so the views might be biased. Please do your own research before investing. The writer of this blog won't be held responsible for any of your profit/loss in your investment/trading career!

VIRAT CRANE- A POTENTIAL MULTIBAGGER!

OVERVIEW: 

Virat Crane Industries Limited involved in manufacturing the dairy products and Famous CRANE masala products in India. The company offers its products under the brand name of CRANE. In addition, the company through its subsidiary, Durga Dairy Limited, produces and sells ghee. Virat Crane Industries Limited is based in Guntur, India.

VCIL listed in 1992 and is promoted by Subbarao, who started career as selling betel nut sachets and built 'CRANE' group of companies(Agriculture,Real Estate,Infrastructure,Finance and IT products)ore organization under 'CRANE'.The company manufacturing plant is located at Guntur.

PROMOTERS:-


Born on February 13, 1931, at a small village near Guntur(AndhraPradesh Capital), Grandhi dropped out of school in the sixth class. He started working with a beedi wholesaler, then set up his own shop before driven by his entrepreneurial quest. Now he owns the Virat Crane Industries listed company on BSE. 

 Who started his career with 100 rupees note as a beedi worker now created a CRANE empire worth more than 100 crores.

Promoters are very much ethical and investor friendly.He asked his son to work as a office boy in career starting unDer him to know the value of work.I had a lengthy chat with key management today they replied for all my questions patiently.

Can read more @below link
 www.deshvidesh.com/success2.htm151

PRODUCTS:-

The current facility can produce up to 2,400 tonnes of Ghee every year. The production facility is spread over XX of land along with 1,300 sq.ft. of attached cold storage.


 SHP:-

74.85% of shares are held by promoters... Out of this the main share-holder is V S L KANTHA RAO holding 71.4%. Promoters have pledged no shares. DIIs holding  0.11%.

SUBSIDIARIES:-

Virat Crane Agri Tech Ltd:a world class fruit processing facility at Berhampur, Orissa, for exclusive manufacture of premium fruit concentrates/fruit pulps of Mango, Papaya, Tomato and Guava in aesthetic tetra packs. A full-fledged 100% Export Oriented Unit with technical association M/S Sasib Foods, Italy in 800 acres collaboration with Orissa GOVT.

SALES AREA:-

Company's CRANE betel(fruit masala) commands 85% market share in United AndhraPradesh,60% in karnataka and 40% in tamilnadu.

POSITIVES:-

Company's DURGA brand is monopoly in andhrapradesh and telangana states and have presence in orissa,Bangalore and chennai. Company plans to expand it to further states.

  The company's subsidary Durga Dairy Products(DDL) has production capacity to manufacture 1500 tons of ghee per Anum.

 Company is regular dividend(5%) paying company for the last 4 years.

 Company products are recession proof because they are like FMCG products.

 Durga Dairy has entered into similar alliances with major retail players like Walmart,Reliance Retail, Trinetra, Gaint, Spencers, Foodworld, Subhiksha and Metro.

1.  Company has reduced debt.
2. Company is virtually debt free.
3. Stable Cash-flow. 

FINANCIALS:-

RATIOS-

Comparing 2014 and 2016 its Operating profit per share has drastically increased from 1.21 to 4.25 (2015=4.22)

Net operating profit per share is 29.8 vs 22.34(15=30.84)

Operating margin at 14.27& against 5.4%(15=13.89)

PBT margin at 13.68 against 4.91(15=13.35%)

GP margin at 13.87% against 4.94%(15=13.41%)

Cash profit margin at 9.5% against 4.94% (15=8.95%)

NP margin at 9.34% against 3.07%(15=8.49%)

ROCE at 29.93% against 10.17%1(15=31.22%)

Return on net worth is 19.45% against 6%(15=19.64%)

EPS @2.8 against 0.69(15=2.63%)

FINANCIALS-

Reserves were -0.19 in 2005, 0.00 in 2006 and 9crs in 2016, increasing every year.

Net worth multiplied 3 times in last 10 years.

Debt continuously decreased in last 3 years-(2014=1.30cr, 2015=0.30cr and 16=0.14cr).

This year might be a subdued year but with future prospects in their hand it might turn anytime.

EPS showed an increase (Q-o-Q).

The co. achieved highest profit ever of 5.72crs.

Co. transferred 28.60lacs to reserves.

Mkt capital increased by 225% in last 1 year(MAR-2015).

The co. is entering to new business from this financial year- into Curd and buttermilk... They invested 2.5cr pilot plant for production of curd and buttermilk currently they are sold locally.

Increased their promotional expenses by 53.%.

All the positive vibes factored in this sector and firm ensures that Virat crane is a pure buy at CMP 48 for a tgt of minimum 100... Tgt can be upgraded on the base of company's performance.



UPDATE 24th July, 2018(CMP-44):-
                    
one of the rare scrip with no movement since last 2 years. While the profit continues to increase. Share price shows no changes. A decent bet even now if one can muster patience.


Discl- All the info are based on the writer's own research/gathered from public domains. The writer of this Blog is  neither any advisor nor related to any brokerage houses!! The writer might be  himself invested in the stock after his own research so the views might be biased. Please do your own research before investing. The writer of this blog won't be held responsible for any of your profit/loss in your investment/trading career!

VEDAVAAG SYSTEMS LIMITED- A POTENTIAL MULTIBAGGER!

Vedavaag Systems Limited, formerly SARK Systems India Limited is an IT services company promoted by Mr. J S R Durgaprasad and Mr. J Muralikrishna in the year 1998.

 BUSINESS SEGMENTS:

Vedavaag is not only an IT player but also conducts business in various sectors such as:

1. E-Governance Solutions:- 
2. Knowledge Center Solutions
3. Citizen Service Delivery Platform Management
4. New Services e-Integration

> Now under E-governance solution Vedavaag has following segments:

1) Local body management solutions:-
             VEDAVAAG delivered its Panchayat solutions to over 25 Panchayats in Andhra Pradesh and other Nagar Palikas in Madhya Pradesh. VEDAVAAG developed IT solutions for Mandal Parishad Development Office (MPDO) that helps in administration and control of various government sponsored schemes management. The application has been suggested for nation wide distribution by the Registrar General of India to MCD.

2) Employment Exchange Solutions:-
              VEDAVAAG has designed the directorate of employment exchange portal for Ministry of Labour and Empoyment, Government of Delhi. VEDAVAAG is executing the facilities management contract since 2005.

3) Tourism & Transport solutions:-
               
              VEDAVAAG has been a pioneer in e-ticketing/pass solutions for state road transport undertakings. VEDAVAAG has rendered these services for 6 years to Delhi Transport Corporation. Similar services have been rendered to North West Karnataka Road Transport Corporation, North East Karnataka Road Transport Corporation, Metropolitan Road Transport Corporation, Chennai, Thane Municipal Transport Corporation (TMT) and Navi Mumbai Municipal Transport Corporation. VEDAVAAG developed online reservations portal for Delhi Tourism and Transport Development Corporation (DTTDC).


 > Under knowledge Center Solutions Vedavaag is operating in 3 segments:

1) Infrastructure Management Solutions:-
VEDAVAAG is executing IT Infrastructure management services contract for MCD teachers training since four years. VEDAVAAG is now taking up an order for e-learning infrastructure creation for over 600 schools in Bihar. The project will get a support price of Rs 21,000 per month per school for a period of 3 years from Govt. of Bihar that translates into revenue of over Rs 40 Crs.

2) Content Delivery Management Services:-
VEDAVAAG is launching education content delivery and testing solutions to serve the K1-K12 student community and leverage its market presence. The company by virtue of its CSC project has access to over 16 districts covering 8000 schools that gives tremendous opportunity to advance the e-learning solutions to the rural students.
VEDAVAAG has partnered with Microsoft and it is offering digital literacy solutions through its CSCs in Haryana and Bihar. VEDAVAAG already registered Rs 1000 per month per center computer education income in Haryana from its centers.

3) Pre-Employment Training Solutions:-
VEDAVAAG's reach to rural unemployed youth and its solutions for employment exchanges has offered a unique business opportunity of pre employment training solutions.


> Under Citizen Services:
 1) Abhee- services at the door step:-

VEDAVAAG has setup citizen service bureaus to render municipal e-governance services through these centers in Delhi. VEDAVAAG has setup 38 centers in Delhi and now expansion plans are afoot to increase this to 100 plus centers.
VEDAVAAG received the mandate under National E-Governance program to setup 700 centers in Haryana and 1300 centers in Bihar. Already 1500 centers have been rolled out and the rest are in progress. These centers are being promoted as rural delivery platform for G2C, B2C and b2B services enablement in rural India.
Many service providers from Insurance (Birla Sunlife, HDFC, ICICI Pru, ICICI Lombard), Banking (SBI), Telecom (Idea, Airtel,BSNL) Education(Microsoft) and Retail sectors have evinced interest and made tie-up with VEDAVAAG.
VEDAVAAG has launched Agri Trading services through these CSC. It has deployed its transport to facilitate timely movement of material from/to farmers. The service has been greatly appreciated by the forming community. Now these services are being expected to all the centers from the pilot scale.
VEDAVAAG is launching health care services also from these CSCs that covers eye and ear care apart from the diagnostic services using mobile medical van.


> Now coming to e-integration:-
                  

                VEDAVAAG is replicating its solution in other states and in B2C and B2B segment to leverage its experience in G2C services delivery, proximity to the assured customer base, reach to the service providers.

E-publishing:-

 

One of the leading content management and data conversion organizations in India. They have set up a state-of-the-art facility and gathered a highly motivated team of professionals with expertise in XML/SGML/XHTML/Image-to-PDF-Conversions conversions.

VEDAVAAG SYSTEMS converts existing electronic text from any of a number of sources to XML, SGML, HTML and PDF or any specified e-book format. Source files can be converted from word processor formats such as Microsoft Word or WordPerfect. They are especially skilled in all aspects of managing content in :

• Books
• Journals & Periodicals
• Newspapers
• Digital Archiving
• Scanning OCR
• Type Setting
• Forms Processing
• PDF & Other Conversion

 MANAGEMENT:

1) Mr. J.S.R. Durgaprasad (Chairman), a Fellow Member of ICAI (Institute of Chartered Accountants of India) and Associate Member of ICWAI (Institute of Cost and Works Accountants of India) with independent practice in Taxation and Project Finance for over a decade. He was earlier with BHEL (Bharat Heavy Electricals Limited.)

2) Mr. J. Muralikrishna (Managing Director), a Management Degree holder, has headed IT Department at Indian Express, ITW Signode India Limited and Bakelite Hylam Limited. He has started his career from one of the leading Indian IT corporates, Mastek Limited.

Talking about the BOD:-

Board of Directors

• Chairman: JSR Durga Prasad, FCA and AICWA
• Managing Director: J Murali Krishna, MBA
• Director: V Umapathi, FCA
• Director: Dr. G T Murthy
• Director: B Locabhiram
• Director: J Sujatha

 More info coming in P2!

Well now talking about the financials, according to the available information, the stock is virtually debt-free and also the co has also delivered a profit of over 105% from the last 5years!!! promoter has increased their stake!! From 18.37% June2015 to 23.39% in this June qtr! Expecting the co to start paying dividend soon as they are increasing their profits year after year! Topline currently decreasing from last 2 qtrs due to BREXIT issues but the co. has increased its Topline over 500% in last 2 years, increasing the bottom line by more than 7 times in just 8qtrs! Even now it stands up by 6times comparing with last 10th qtr! 

the above figure were mentioned qtrly! Talking annually they have increased topline by 17times over last 10 years and bottomline around 8.5times! operating profit increases 5-fold... ROE has been increasing- last 10years it was6.71% 5years it was8.35% and 3years11.13%!! RESERVES multiplied 19-fold!!!!! PBT has grown 130% YoY

Now saying this, I am mentioning VEDAVAAG is a HIGH BETA STOCK, having a BETA of 1.22with sensex!! Its a stock which means HIGH RISK, HIGH RETURN! The co. has no pledged shares, but saying this I will mention as of now the stock is fairly valued or has a value of 32-34 max!! But considering the future growth and their expansions, its a sure-shot a minimum 2-bagger from CMP 29...

As mentioned in the previous post, the co. is planning to expand more and more! Recently they acquired Synaptic Systems Private Limited - a software product development and implementation services company with primary focus on Primary Agricultural Coop Societies. More info will be shared as and when time arrives!

UPDATE 24th July, 2018:- 
                    Vedavaag earlier rallied from 29 to 84 giving nearly 2bagger returns and is now back to pavilion... Scrip again available around 30, a value buy! The only issue that remains is low promoter holding! Overall a decent bet.Also Porinju is no longer holding vedavaag, he exited in Q2FY2017-18. A risky bet, but it's worth the risk!




Disc:- All the info are based on the writer's own research/gathered from public domains. The writer of this Blog is  neither any advisor nor related to any brokerage houses!! The writer might be  himself invested in the stock after his own research so the views might be biased. Please do your own research before investing. The writer of this blog won't be held responsible for any of your profit/loss in your investment/trading career!

ASSOCIATED ALCOHOL- A POTENTIAL MULTIBAGGER!

Associated alcohol and breweries ltd., one of the largest distilleries in India operated under KEDIA group! Incorporated in 1989 its a 1kmillion liquor conglomerate

Talking about the co. and its brand, the management is proving itself every-time, during every-qtrs, every-year! The co. has some licensed brands-
1) Smimoff Vodka
The world’s leading vodka.
2) Captain Morgan rum
The number 7 spirit brand try volume in worldwide.
3) HAIG Scotch whisky A whisky from the oldest distilling family in Scotland.
4)Masterstroke whisky
The latest brand from liquor company Diageo-Radico.
5)  Glen Drummond single malt scotch whisky
First locally battled single malt premium scotch whisky in India.
6)Royal Crown whisky
Scotch blended grain-based Indian Made Foreign Liquor.

AABL is the leading distillery in INDIA, its the only company to have a presence in every aspect of the value chain. From Extra Neutral Alcohol (ENA), potable alcohol, grain spirit (extra fine grade, triple distilled), rectified spirit and Indian Made Foreign Liquor (IMFL).

Now talking about the owned brands, AABL are having some good products  in their box are very popular in the local market niches and benefit co. by way of higher operating margins and realizations.Some of them are Royal House, James James Bond, Bombay Special, Jamaican Magic and so on!

Now talking about the industry, I don't think there is any need to say about the future of the industry... the demand for alcohols are rising..... increase in income of the consumers/suitable climate in growing economy/ decreasing taxes/ support from gov and various other reasons are responsible for the future growth of the co.! AABL today closing at 118 is still a BUY for a minimum tgt of 200,,,,, initially recommended at 65!!



Talking about the business areas, AABL is involved in bottling vodka and scotch whisky for large reputed international brands. AABL has a ten line bottling operations in two different sections. It packs about 45,000 cases per month and has a production capacity of around 42 million litres per annum (MLPA). AABL's distillery is located in Khodigram, in the Khargone district of Madhya Pradesh. The distillery is presently undergoing a series of transformations that will result in increasing its expanded capacity to 65 MLPA. AABL supplies Extra Neutral Alcohol (ENA), a vital ingredient, to many leading manufacturers under a special agreement. In the IMFL segment, the company has an understanding with reputed companies like Diageo (owner of brands like Smirnoff vodka and Johnnie Walker Scotch Whisky), Mason & Summers and Diageo–Radico. AABL has for long been recognized as one of the finest suppliers of high quality ENA in the Indian market. The company's relationships with leading international and national brands bear ample proof.

AABL has chalked out a huge greenfield expansion plan to capture domestic and international demand and serve all the segments of alcohol ranging from country liquors to IMFL. This plan includes setting up a multi–pressure ENA plant, a collector plant, a Reverse Osmosis Water Treatment Plant and a 2 MW power plant. AABL is setting up a multi pressure ENA plant. This plant will completely replace the older plant and increase its production capacity from the present 42 MLPA to 65 MLPA. The multi–pressure ENA plant cuts down the stages in the manufacture and thus improves process efficiency.

Talking about the financials now,
The company has 5 yr revenue cagr > 35%
5 year profit cagr > 40% yoy revenue growth > 35% profit growth > 100%.
No pledge no warrants no equity dilution no preference capital.
Debt in 2014 was 84.89cr, in 2015 its 38.42 cr and in 16 its 32.72 cr.
Inventories increased around 10% from 2014 to 2016.
Reserves in 2013 was 42.23cr, in 2014 its 48.08cr, in 2015 its 58.66cr and in 2016 its 62.82cr.
Reported Net Profit in 2013 was 3.31cr, in 2014 its 5.84cr, in 2015 its 12.34cr and in 2016 its 14.23cr.
PBDIT in 2013 was 15.5cr, in 2014 its 23.99cr, in 2015 its 35.07cr and in 2016 its 38.66cr.
Quick ratio and Current ratio both increased from 0.62 and 0.79 to 0.81 and 0.87 from 2015 to 2016 respectively.
Return on Net worth in 2013 was6.45%, in 2014 was 10.23%, in 2015 its 18.22%.
ROCE in 2013 was8.86%, in 2014 11.83%, in 2015 21.22% and in 2016 its 24.91%.

After Pioneer Dist and Pincon Spirit its 3rd ranked in case of lowest P/e 12.25 P/e where as big-brand cos like United Spirits and United Brew is demanding 111 and 67.5 P/e respectively! It has posted the Highest operating profit, Sales, NP and PBT in this qtr compared to all the qtrs!! Its OPM stands at 15.3%(qtrly basis). Yearly basis 13.8% highest ever!

Compounded sales growth is 22.45% in last 3years and 26% in last 5 years whereas compounded Profit growth is 62.15% in last 5 years and 64.7% in last 3 years! Reserves have tripled in last 10 years.

Earlier recommended at 65, one can still buy AABL at CMP 118 and on dips for a tgt of 200in coming months!!



UPDATE 24th July, 2018:-
               CMP 280. More than 5.5 bagger touching
421!! Another 1-2 bagger possible in next 3-4 years.



Disc:- All the info are based on my own research. I am neither any advisor nor related to any brokerage houses!! I am myself invested in the stock after my own research. Please do your own research before investing. The writer of this blog won't be held responsible for any of your profit/loss in your investment/trading career!