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!