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Sunday, May 22, 2011

Gujarat Ambuja Exports: Moneysights Rating: Strong Financials, Strong Upside

Here is a copy of the ratings given by Website www.moneysights.com for Gujarat Ambuja Exports
All Thanks to "Kalpesh Bhai" for sharing his knowledge and info with readers of this blog.



As can be seen GAEL has good financial strength and is poised for a leap in stock price. A "Must Buy" at these prices for any portfolio. Infact GAEL has outperformed Gold also!! 


27 comments:

Kalpesh said...

will firstly I should thank u for sharing loads of info with all of us..u do a lot of sincere research n give/share infos...I did a little part of my self came across with the website soo thght of sharing....whiich i need not be thankd...anywys..u doin gr8 work plz keep it goin ...n hope to have a lot of knowledge learning from u..

What'sUp Prahalad said...

Kalpesh:

As the saying goes..

Sharing multiplies happiness
Divides Sorrow..

=happy investing
whatsup-indianstockideas.blogspot.com

Kalpesh said...

haha...yaa thnx anywys... :)

Kalpesh said...

hii..I came across with a stock Called "hitech Plast" ...seems to be interesting. if you could jus have a look and advise on it .. thnx

What'sUp Prahalad said...

Kalpesh:

Hi Tech Plast:
CMP: 93.75
MCap: 123.52Cr
Net Profit TTM: 9.33Cr
Sales TTM: 191.71Cr

you are already paying more than 13 PE and Stocks like GAEL (PE: 4.74 ) and Jayant (PE: 5.3) are quoting at such single digit PE..

Mind you ..there is a possibility that a lot of packaging will move into paper tetra packs with a lining of plastic with rising crude prices.. from complete plastic containers..

Personally I would say a strict avoid for Hitech Plast due to the industry and because we have better opportunities in GAEL and Jayant

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

Anonymous said...

what's up, hitech plast is asian paint group company.if business is good then i dont think PE 13 is big deal.please check OPM of both . Jayant is too low. if OPM is high definetly we need to pay more premium

What'sUp Prahalad said...

Anonymous:

Jayant is a 1171Cr sales company with net profit of 24.57Cr available at a market cap of 131Cr

Hitech Plast is a 320Cr sales company with net profit of 16Cr available at a market cap of 118Cr

I really dont see any value add. cause the company is in manufacturing of Plastic containers.. we are paying a premium already for the management and its market credentials..

I see greater potential in Jayant as it is an established company in its field (castor oil and its derivatives)
- it has unique advantages with India being one of the largest producers and exporters of castor

There is a higher probability of appreciation in jayant as compared to hitech plast as jayant gets Valued for its products and its management..

Hitech is an already identified company and the valuations are already reflected in the premium one has to pay for the company stock..


=happy investing
whatsup-indianstockideas.blogspot.com

what can we expect to change out there..

perspectives said...

thanks for mentioning moneysights. we are glad that we were useful to help you explain the strengths of this stock with the readers of your blog

Neeraj said...

here are 5 more stocks seems promising , any views?

Anonymous said...

What'sUp,moneycontrol message board I saw your recamentation on SELL Godrej Industries. I really surprised becasue since long time Ramesh Damani is recamenting this as value stock. Every value investor must hold this shares. so why recamented sell this share ? Any sell recamentation rational ?Kindly share retail investors like us.

What'sUp Prahalad said...

anonymous:

Godrej industries is reporting its results in a different format

Godrej industries has also some ESOP loans of 85Cr and the stocks are quoting at such prices that losses in the ESOP account are around 25 cr..

Also consolidated earnings cannot include earnings from companies that are less than 51% owned.. and I think godrej industries is reporting earnings of "Associates" which are actually less than 51% owned.. (This is my understanding and I could be wrong on that)

I think at these prices the stock is fully priced.. and I would say its a sell..

A much better stock to buy is
1. Jayant Agro
2. GAEL

Pls note these are my personal opinions.. about the status of Godrej industries..

It is generally very difficult to give a sell recommendation and that's one reason Mr Damani is recommending it as a "Long Term" buy.. Pls note these are my personal views and opinions and you need to deep dive into Godrej industries annual report to understand what is happening..

=happy investing
whatsup-indianstockideas.blogspot.com

What'sUp Prahalad said...

anonymous:

Godrej industries is reporting its results in a different format

Godrej industries has also some ESOP loans of 85Cr and the stocks are quoting at such prices that losses in the ESOP account are around 25 cr..

Also consolidated earnings cannot include earnings from companies that are less than 51% owned.. and I think godrej industries is reporting earnings of "Associates" which are actually less than 51% owned.. (This is my understanding and I could be wrong on that)

I think at these prices the stock is fully priced.. and I would say its a sell..

A much better stock to buy is
1. Jayant Agro
2. GAEL

Pls note these are my personal opinions.. about the status of Godrej industries..

It is generally very difficult to give a sell recommendation and that's one reason Mr Damani is recommending it as a "Long Term" buy.. Pls note these are my personal views and opinions and you need to deep dive into Godrej industries annual report to understand what is happening..

=happy investing
whatsup-indianstockideas.blogspot.com

What'sUp Prahalad said...

GAEL Recommended by HBJ Capital.. (though not to their paid customers.. but just as a good value buy..)

=================
Gujarat Ambuja Exports Limited [GAEL] having a Marketcap of Rs. 410 crores and headquatered in Ahmedabad is engaged in agro-processing. Company’s core competence is in exports and international business.The Company operates in four segments:
Agro Processing
Cotton Yarn
Maize processing and
Windmill.

The Agro Processing segment consists of solvent extraction of edible oilseed, edible oil refining, de oiled cakes, wheat processing and cattle feed manufacturing.

Gjarat Ambuja Exports Limited’s business model generates low margins but high turnover. Even then, the company’s margins are improving gradually over the years- 1.46 per cent, 3.49 per cent and 4.82 per cent that’s what the PAT margins were from FY09 through FY11. Total Revenues increased in FY11 by 38.16 per cent to Rs.1953.78 crores from Rs. 1414.08 crores in previous fiscal. Net Profits increased impressively by a whopping 90.9 per cent to Rs.94.10 crores over previous fiscals Net Profit of Rs.49.29 crores.

On a y-o-y basis the Q4FY11 results were not too bad - Q4FY11 total revenues were up by 70.94 per cent to Rs. 620.79 crores [in Q4FY10, it was Rs.363.15 crs] and Net Profits in Q4FY11 stood at Rs.27.56 crores against Rs.20.30 crores in Q4FY10. ROE and ROCE 16 and 20 per cent respectively.

Promotor’s hold 63.95 per cent stake in the company whilst Institutional holding is 6.98 per cent. The 52 week range was Rs.51.30 – 22.50.

Conclusion; Considering GAEL’s vision of becoming a leading Indian company providing good quality products to its global customers along with pretty attractive PE being 4.32, Dividend Yield 2.04 and P/BV 0.81 the valuations appear to be reasonable.
-----------------
=happy investing
whatsup-indianstockideas.blogspot.com

What'sUp Prahalad said...

Sunidhi Securities has also recommended GAEL with target of 42:
Sunidhi Securities Finance has recommended `Buy` on Gujarat Ambuja Exports with a price target of Rs 42 as against the current market price (CMP) of Rs 30 in its report dated June 8, 2011. The broking house gave the following investment rationale:

GAEL`s judicious mix of segments, benchmarking of global standards, high margin maize derivative business with number of downstream applications, increased demand of value added products, further expansion of maize processing, focused approach and fiscal prudence all point to a brighter prospects.

This new project will help the maize processing division to gain more market share and will help the company by improving overall financial performance.

At the current market price (CMP) of Rs 30, the share is trading at a P/E of 3.7x on FY12E and 2.7x on FY13E. We recommend Buy on the stock with a price target of Rs 42 in the medium term.

http://breport.myiris.com/SSFL/GUJAMBEX_20110608.pdf

=happy investing
whatsup-indianstockideas.blogspot.com

Anonymous said...

Dear WhatsUP,

I am one of the follower of your thought process.I know you have experienced person in the market.I would like to know how you manage this type of bad situation in the mkt. Buy or sit sideline ???Please guide us. I am a retail investor, living with salary income.I appreciate your response

What'sUp Prahalad said...

Anonymous:

you should invest your monthly savings into stocks for long term..

Worldwide interest rates are low and RBI cannot increase interest rates for long...

This is a great time to invest in Indian stocks as most of them are quoting at rock bottom prices..

It is always advisable to buy when there is negativity all around..

A 20-50% return from these levels is almost guaranteed added advantage is that long term capital gains is tax free.. (Fixed Deposits are clubbed as income and taxed at higher rate while capital gains is taxed at a lower fixed rate of 15%)


Go ahead.. Jayant GAEL, NHPC, Tata communications (Best Buy's) are "all weather" investment ideas

Personally I am focused on Jayant Agro.

=happy investing
whatsup-indianstockideas.blogspot.com

Purushottam said...

Prahalad:

I was calculating the CAGR on Earnings and i see that CAGR 2005-11 stands at 26% . But on 2009 EPS had gone down to 1.7.
Any idea why this had happened.?

Purushottam said...

I was speaking about GAEL.
CAGR(01-05) 61%

2006 2007 2008 2009 2010 2011
2.18 3.36 5.15 1.7 4.34 6.8

CAGR05-011 26%

What'sUp Prahalad said...

Purushottam:

As far as I remember this was the year of the financial meltdown .. GAEL had derivatives contracts for future price of US Dollar as it was widely expected that the dollar would crash.. (to cover its export contracts)

but actually the dollar strengthened as every one fled for the safety of the federal reserve and as the crisis unfolded there was Zero risk tolerance and there was a credit squeeze.. (dollar was in short supply and trades could not be completed as banks refused to lend..)

GAEL had to report derivative losses as the company has Cr of losses for forward contracts..

company had 32Cr and 42Cr of foreign exchange fluctuations related derivatives losses..

the Govt of india allowed accounting norms to be changed so that exporters could book losses and companies could book losses.. and quite a few companies reported heavy losses..
GAEL stock in march 2009 was available for 13-14 Rs per share..

you can actually read the march 2009 quarterly and year end report and you will find this info..

here is the link..
http://www.ambujagroup.com/images/31032009.pdf

=happy investing
whatsup-indianstockideas.blogspot.com

Anonymous said...

Sir,

There is lot of insider buying in Kirloskar Bros Invest Ltd (Public, NSE:KBIL)

Read in another forum that though it is a holding company it is at a steep discount.

Please share your thoughts on this one.

Thanks

Anonymous said...

Hi Whatsup,

The closing of share traing happneing in Aug du u think thre can be some good news for the investors during the AGM? Something like bonus share or dividend payout?

What'sUp Prahalad said...

Anonymous:

I am assuming its GAEL August AGM Session that you are talking about...

- I dont think any dividend will be announced as the recently concluded meeting did mention that there is no dividend announced as part of the year end result report.
- Bonus also does not seem to be on cards (though GAEL has a lot of free Reserves.. to issue bonus.)

Why would GAEL go through Equity buyback if it wants to issue bonus shares??

GAEL does have a lot of Zombie shareholders and I think that is what the promoters would like to address .. but a very difficult task.

Conclusion: GAEL is chugging along just fine.. with the new Karnataka Corn Derivatives plant (one of the most advanced ..) we are all setup for a great future for GAEL as it moves up the value chain..

By the way CRISIL has reported an updated report for GAEL here is the link..
http://www.nseindia.com/content/corporate/eq_GAEL_upd1.pdf


=happy investing
whatsup-indianstockideas.blogspot.com

What'sUp Prahalad said...

Anonymous:

KBIL as per latest annual report has investments at current market rates of: 1148Cr
current market cap of KBIL is: 319Cr
but most investments are in Kirloskar companies so dont know how we can benefit..

yes long term they can be a good investment vehicle.. as KBIL has 52Cr of cash in hand and already receives 25- 30Cr in dividend income..

if this is invested wisely we can easily get good returns..

=happy investing
whatsup-indianstockideas.blogspot.com

amitjd said...

What are your views on the increase in investments in Equity shares and Bonds of other companies by GAEL? As per the latest report the Market value of Quoted shares and bonds is more Rs. 80 crores, an increase from Rs. 40.47 crores last year.

Is the company not exposing itself to risk of adverse movement in market value of these securities? It has made substantial investment in Coal India shares and SBI Bonds.

km said...

Dear Prahalad,

Nile has anounced as below
"Nile Ltd has informed BSE that the Board of Directors of the Company at its meeting held on July 09, 2011, inter alia, had approved, subject to the approval of the shareholders and such other approvals as may be necessary, the transfer of the Company's "Glass Lined Equipment & Pressure Vessels Division" with all the assets and liabilities comprising thereof, to De Dietrich Process Systems India Private Limited as a "going concern" on a slump sale basis.

The approximate consideration for transfer of the above mentioned business division is Rs. 585 million, subject to suitable adjustments at the closing of the transaction.

Following this decision, the Company will focus on building its market position in its Lead Division and pursue further synergistic opportunities in related areas."

Does this help the core business make it a rally for the stock? Your views please.

What'sUp Prahalad said...

KM:

NILE Current MArket Cap is 51Cr and as per the message posted NILE Will receive 58Cr just for the Glass line equipment business..

So it is some form of value unlocking.. having said that the fact that its a pvt concern that is buying the assets I think the glass lined business is being sold cheap.. which would be negative for the shareholders .. as over the years, the business would have generated more income than the upfront cash payment..

As of date The stock has given a return of 58.8% in 8 months which is very good..

Though Lead recycling is a business .. but I would say low value add compared to the glass lined business..

I would sell once the stock settles at higher level..and buy into Jayant, GAEL, NHPC for now.. which are cheap stocks at current prices..

=happy investing
whatsup-indianstockideas.blogspot.com

What'sUp Prahalad said...

Amitjd:

GAEL has always had investments in stocks of competitors and other important industries..

Investment in Coal india should be a good investment as long term the value of the reserves will be unlocked as the energy super cycle unfolds.. (look at prices of oil products they are increasing .. as they will be priced at higher levels.. same is the future of coal.. )

Investment in SBI Bonds at 9.95% is pretty good .. infact these bonds could be used for guarantees better then giving out cash as they earn higher returns..

GAEL is a good buy no doubt..
I also saw somewhere that actual net profit of GAEL is close to 100Cr check out section 349 in annual reports..

=happy investing
whatsup-indianstockideas.blogspot.com