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Monday, November 29, 2010

Company: Nitta Gelatin: Value Buy Shares



Nitta Gelatin:
CMP: 142
Market Cap: 119.28Cr
Reserves: 99.43Cr
Debt: 0.26Cr
Sales TTM: 205.49Cr
Gross Profit TTM: 28.11Cr
Net Profit: 14.47Cr
5yrs Avg Cash Flow from Operations: 19.98Cr
ROCE: March 2010: 27.79%
Last dividend: Rs 6.0
Dividend Yield: 4.23%
http://www.gelatin.in/


Nitta Gelatin India Limited (NGIL), one of the most successful Indo-Japanese industrial ventures, was incorporated in 1975 and started commercial production in 1979. Using state-of-the-art production facilities NGIL manufactures Gelatin, Collagen Peptide, Ossein, Di Calcium Phosphate. and Chitosan.

This downturn has provided excellent opportunities to accumulate great companies at great prices.. Nitta Gelatine would be one such company available close to its 52 Week low. Company dividend payout contained a special dividend so dont expect the dividend yield to continue.
Consistent positive cash flows from operations
80% promoter holding
Zero Debt status..
Introducing new value added products ..

This is a great company at a great price.. and your money is safe the stock will also easily double from these levels in 1-2 years time frame for sure.. Must buy!!

Conclusion: Must buy!! 

9 comments:

has2008 said...

Dear Sir,

There is an article on the following blog:

http://openforumtcr.blogspot.com/2010/11/struggle-against-nitta-gelatin.html

implying the company polluting the environment.

Would like to have your opinion on this, please

Thanks

Ladha

What'sUp Prahalad said...

Ladha:

This is a very sensitive topic.. and to really reach the bottom of the subject you must reply back ..

1. If you follow the link that you have provided and read the first few lines..

It says: The Kathikudam struggle against Nitta Gelatin India Ltd (NGIL)...
but if you read a few more lines..
=======================
From - Kathikudam’s Tryst with ‘Development'
========================

The book from which the extract is taken is titled: "Kanthikudam's Tryst with "Development"

=========================
It is not about "Nitta" its about "Development"
=========================
You can decide to "NOT" invest in Nitta Gelatin but what the author is talking about is "Development" Growth!!
=========================
Nitta is the fruit of each and every one'd desire for "Growth" Development
=========================
India has the largest cattle population in the world but .. we are also the largest "vegetarian" population in the planet..

The fact is a cow can give milk only when it delivers a baby .. and we ALL LOVE MILK!! so a cow is forced into labour so that we can get our cup of milk..
==========================
Even though "Milk" is an Animal product its the main stay of a vegetarian diet .. On a day of fast we do not eat cereals..but you can drink "Milk"
==========================

I have thought a "Lot" about "Vegetarian diet" a lot about killing (whether its plants or animals )

The bottom line is (according to me) the desire for more..

The only answer is moderation in personal demands (new clothes, new toys .. more variety.. wastage of any kind..) we need moderation at every level.. then and then only can we live in peace..

The real goal in our lives is not to acquire more and more "Assets" its to live with what we have in moderation.. and seek the true purpose of life..

=====================
The pregnant king.. is not about a man and his desires .. its about how everyone of us is caught up in the "Maya Jaal" the web of "Ego, Wants and Desires and unfortunately one does not understand the "Maya Jaal" till we are taking our last breath.. are too old to do anything..
=====================
Nitta Gelatin is not the "Problem" the problem is within each and everyone of us..
=====================
"WHEN ONE KNOWS THEE, THEN ALIEN THERE IS NONE, NO DOOR IS SHUT.. OH, GRANT ME MY PRAYER THAT I MAY NEVER LOOSE TOUCH OF THE ONE IN THE PLAY OF THE MANY"
=====================
When Arjun Said I do not want to fight this war.. a war where I will have to win by killing my grandfather.. my uncle's and relatives.. Krishna disagreed.. and thus the geeta..
=====================
---- Geeta Saar----
Whatever has happened, has happened for good.
Whatever is happening, is happening for good.
Whatever is going to happen, it will be for good.
What have you lost for which you cry?
What did you bring with you, which you have lost?
What did you produce, which has destroyed?
You did not bring anything when you were born.
Whatever you have, you have received from Him.
Whatever you will give, you will give to Him.
You came empty handed and you will go the same way.

Whatever is yours today was somebody else's yesterday and will be somebody else's tomorrow.

SO WHY WORRY UNNECESSARILY?
=======================
So what is "Geeta Saar" ?
Is it "Stop worrying"
=======================
Look deeper and you will know the "Real Meaning"

The "Truth" will set you free!!

=happy investing
whatsup-indianstockideas.blogspot.com

Raja said...

Hi Prahalad,

Any idea on why the EPS has reduced so drastically in recent quarters even though the sales has remained good.

Regards
Raja

Purushottam said...

prahalad:

hope u are non-vegetarian.. it reflects on your favorite stocks picking ..SKM,Venkys all chicken related :)

What'sUp Prahalad said...

Raja:

The company has said its due to a new product related expense " Gelixer" Collagen Pep" 2.6Cr but.. I feel its also because of cost inflation creeping into the system..

everything is getting expensive as govt tries to push growth .. and at the same time trying to tame inflation..

I think 12 months down the line when US/world comes out of recession we will have more inflation to cope with (just my guess..)

Right now companies do pass through a period when profits drop cause price adjustments will take time (look at SKM same problem) to push it through their system..

If the company is stable (+ve cash flows) and product is in demand then we just need to weather the downturn..

=happy investing
whatsup-indianstockideas.blogspot[dot]com

What'sUp Prahalad said...

Purushottam:

I am a non vegetarian.. but the point is not about my preference..

The question is unadulterated greed..

which results in over exploitation of resources.. both forest and animal resources....

I would dare to say we will see population reduction programs .. one way or another (forced or through natural/man made calamities )

Half the things we consume is not even utilized but a waste of resources..

It was said that oil and natural gas were always selling at a specific ratio: 10:1 oil:gas
ie if Oil was 50 USD gas was 5 USD
(cause consumers of oil and gas could switch fuel types..)

It seems this ratio no longer holds true.. Oil is 89-91 Gas: 4.2-4.7 thats 19:1 ratio..

partly because of new shale gas finds and also because OIL is no longer freely available.. and the transportation industry cannot switch to natural gas (industrial complexes used to switch their fuel type but that does not seem to bring down oil prices or increase gas prices.. there is not sufficient oil for transportation industry itself..)

The fact is we are all enjoying the prosperity of cheap energy and soon that is going to be history!!..

The question is are we holding the right set of assets for the future?

====================
I think we have deviated far away from the topic of veg and non veg..
====================

conserve resources.. and build/repair your home now!! cause next year you might have to pay a higher price for the same..

I think all these financial turmoil is because of a titanic shift in type of assets by deep pocket investors.. and the financial turmoil is a smoke screen to shift from one type of asset into another type without making it obvious (My conspiracy theory..)


=happy investing

http://whatsup-indianstockideas.blogspot.com

Anonymous said...

Hi Prahlad, Nitta Gelatin come out with a disappointing numbers. It is countinues down after your recamentation. I heard company introduced new product in the mkt ? What is your update on this stock?

Anonymous said...

Hi Prahlad, Nitta Gelatin come out with a disappointing numbers. It is countinues down after your recamentation. I heard company introduced new product in the mkt ? What is your update on this stock?

What'sUp Prahalad said...

Anonymous:

Nitta looks like a good buy.
Company has market cap of: 84.8Cr
Zero Debt and positive Operating cash flows for past 10 years or so.. so All this is short term..

generally cosumer products require a lot of marketing .. and that could be the thing.. company is fundamentally sound.. I would hold or buy more at these levels (52/week high low is 247/98) so I would say a good price to buy for long term..



=happy investing
whatsup-indianstockideas.blogspot[dot]com