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Friday, November 05, 2010

Diwali Dhamaka: NILE Limited


NILE Limited:
Current Market Price: 119.90
Market Cap: 35.99Cr
Reserves: 24.87Cr
Debt: 37.63Cr
Sales: 153.19Cr
Gross Profit: 11.21Cr
Net Profit: 3.24Cr
ROCE: 14.52%

NILE Limited: Nile Limited is an ISO 9001 certified company manufacturing world class Glass Lined Equipment, Pressure Vessels, Lead and Lead Alloys. Nile has emerged as a leader in achieving customer satisfaction by delivering quality products, with a fervent desire to convert every customer relationship into a prospective partnership.
NILE Limited has 2 divisions: 
- Glass Lined Equipment and Pressure Vessels and 
- Lead & Lead Alloys (32,000Tonnes Per Annum)
GMM Pfaudler which is a leading player in Glass lined pressure equipments ..  has a 20% stake in NILE Limited  and a hostile takeover was attempted but unsuccessful and GMM Pfaudler will
have to sell its stake in NILE Limited

The company has recently expanded its capacity for Lead Recycling Plant to 32,000 Tonnes.
With profits returning the stock could easily give us 100% or more
 returns within 12 to 18 months time frame
PN: This is a Diwali Pick but does not mean that the stock is going to fly anytime soon.. It is however a
Value Buy!! HAPPY DIWALI

9 comments:

mk said...

Dear Prahalad,

I am curious to know how you pick the names from the list of thousands of listed entities? Is it by searching in any site for stocks which gives low PE , P/BV and high RONW , ROEC etc and then looking for news items around the name ? Or is it vice-versa? Or any other new method.
I am amazed that you come up with names that are not at all talked about in any site or news item. So your search appears to me original. Can you please give an insight of your meticulousness in search and research.It shall add value to me as an investor and learner.
Eagerly awaiting your honest reply.
Regards
K.Murali

What'sUp Prahalad said...

MK:

The problem is there is no such criteria.. I just scavenge through BSE/NSE Website and look at competitors and investment of investments .. like GAEL has 40Cr of cash deployed in Equities .. so looking through GAEL I not only look at GAEL as an investment but its investments in other companies..
NILE is something that came out by chance.. I frankly do not even remember how I got hold of this idea..

Its just that I am looking for discounted price, Value, ROCE, Debt etc which should work with time..

It would help me a great deal if I can get to search the database with different criteria as you just mentioned.. that would make my work a whole lot easier.. If you know of any site/service provider who can give me this customized data please do let me know..

Seasons Greetings!!

=happy investing
whatsup-indianstockideas.blogspot.com

mk said...

Dear Prahalad,

In money control site , All stats tab (5th sub-tab under market main tab) gives list of 100 companies sector-wise , dividend yield wise , PE ratio wise , price movement wise , etc ,etc. This is one place where I know some ready reference is available.

I will try to search other such service provider is there. I will share all the info that I hit upon.
Regards
K.Murali

Anonymous said...

hi Prahlad,
can you pls tell me ur take on
1.Sicagen,
2.Rico auto,
3.Electrosteel castings,
4.nakoda ind,
5.Vinati Organics,
6.kamdhenu ispat
7.Electrosteel Steel..

basically i see if a company has good promoter share holding,yoy growth,less than book value,participation of Mutual Funds..is this the right way to analyse the companies

Sorry for the looonggg comment.Hope you dont mind :)

btw my investments in GAEL is rocking
thanks for the valuble inputs...

regards..
Vishwa

What'sUp Prahalad said...

Vishwa:

Along with growth and promoter holding..you need to look at Debt, Cash flows from Operations, ROCE, Reserves.

- Debt should be low
- Cash Flows from Operations should always be positive
- ROCE should be higher than prevailing interest rates..
- Reserves should also be healthy ..

I have also replied to your other post so.. check out other comments..

=happy investing
whatsup-indianstockideas.blogspot.com

D'SOUZA said...

hi Prahalad,
Just going through your recomendation of nile ltd.

Just some observational points negative and positive.
1)The share pattern shows that besides the promotors the major holding is with general public ( weaker hands)
2) Debt (37cr)taken by the company is more than network ( 27 cr) of the company
3) Interest charges have gone up to 5 cr
4) Last three Qtr result have been negative.
5) stock has fallen from high of 163 to 115
on positive side
1) Book value is good at around 90 compared to peers
2)Market cap/sales is good compared to peers ( under value at 115)
3)EPS( march10) is better compared to its peers but last three quarters negative perhaps the reason for the stock price to come down.
4) CASH FLOW IS POSITIVE 4CR

WHAT IS YOUR SAY !!!

REGARDS
DSOUZA

What'sUp Prahalad said...

DSouza:

NILE Market Cap is: 31Cr
Sales: TTM: 227Cr
ROCE: 14.52%

There are just 2527 shareholders including promoters..
Last year Sept 2009 there were just 2688 shareholders.. so even in the current shareholders list there is consolidation..

There is a company called Gravita which had a recent IPO and is in the same line of business (Lead Recycling..) Gravita came with an IPO recently
==========================
Issue Open: Nov 01, 2010 – Nov 03, 2010
»» Issue Type: 100% Book Built Issue IPO
-Issue Size: 3,600,000 Equity Shares of Rs. 10
-Issue Size: Rs. 43.20 – 45.00 Crore
-Face Value: Rs. 10 Per Equity Share
-Issue Price: Rs. 120 – Rs. 125 Per Equity Share
-Market Lot: 50 Shares
-Minimum Order Quantity: 50 Shares
-Listing At: BSE, NSE
site: http://www.gravitaindia.com/
=======================
It had a gain of 75% on listing.. now NILE is in the same line of business and available with a market cap of just 31Cr
=======================
I would say .. backup the truck!!
buy truckloads.. this is a sure shot 100% return from these levels..
=======================

It does not get any better than this.. your next diwali could be just 6 months away!!

Wish somebody would pay me tribute for these recommendations!! ;-))

=happy investing
whatsup-indianstockideas.blogspot.com

D'SOUZA said...

Hi Prahlad,
Thank for the response. Just one area of concern , last three quarters have been negative in terma of profits and the ROCE of 14% is based on March 2010.

Regarding stock screener try
www.capital4.com it screens stock based on MC, ROCE, STOCK HOLDING ETC. I hope it will be useful to you.

Regards
Dsouza

What'sUp Prahalad said...

Dsouza ji:

Because NILE reporting losses we are getting a company close to 1/10 its sales..

What we are trying to achieve is "get in" right at the bottom and then reap the benefits (at least in NILE we can do it..)

Company is having a short term issue due to large capacity expansion..

I think within 12 months the story would be different and this is as good a time to start accumulating

Thanks for the link.. however the custom stock screener is not working..

=happy investing
whatsup-indianstockideas.blogspot.com