Gujarat Ambuja Exports: Ready Steady Go!!

I was just looking at the charts of GAEL. This is a 10 yrs chart and here is what I see.

1. in 2003 Split adjusted GAEL was quoting at 1.8-5 per share. Right now the stock is quoting at Rs 23.5 which would mean GAEL on a 8 yrs period has multiplied wealth 13.05 to 4.7  times ie a return of 1305% (if invested at Rs 1.8) or a more modest 470% return (if invested at Rs 5 per share).. Anyway we look at it GAEL has given us great returns if we stick with the company on a long term basis.

2. GAEL Stock has been technically forming a higher bottom and there is a strong support at 22.35 level.

3. The stock has consolidated long term and will be a strong buy if it crosses 30 we will have some resistance at 40 and then its all open blue skies. The sky is the limit as they say.

Conclusion:
I have never really looked at the technical charts but come to think of it 2012 looks all set to be an exceptional year for GAEL technically and with the new Maize Derivatives plant it all looks like the stars are getting aligned. Also long term the company has delivered. We know GAEL is a consistent dividend paying company with conservative management with eyes set at "Maize Derivatives" business as the money spinner.

Gujarat Ambuja Exports: Funds invested in Gujarat Ambuja Exports

Here is the list of funds invested in Gujarat Ambuja Exports.

The list seems to be only of Foreign Funds invested in Gujarat Ambuja Exports as it does not have Reliance Growth Fund listed which holds 4.55% of GAEL's Equity

Dimensional Fund Advisors seems to "Like" GAEL and the Star ratings are Morning Star rating of the funds..

Conclusion: We have good company and we just need to hold on to our "Cheap" GAEL stocks. In case you have not bought you can make an entry at these levels as company is all set to report 85-90Cr net profit(Est. March 2011) and current market cap of GAEL is just 421Cr "Deep Value Buy for a Fundamentally Strong Company" 

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GAEL: HSBC Mutual fund buying into GAEL

Looks like there is accumulation by HSBC mutual fund into GAEL ..

at 32 bucks that is 9.24Cr worth of cash into GAEL.. in past 6 months.. WOW!! 

Also the 180 days(6 months) and 90 days (3 months) avg prices are 33.1 and 35.37.

(link to original source in moneycontrol)

Conclusion: This is a great price.. and we are seeing acknowledgement from professionals like HSBC mutual fund.. since they have bought for more than 1 fund which means that its an identified stock by the fund house.

Thanks Purushottam for the follow up and sharing the info with everyone on this blog.

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Company: Gujarat Ambuja Exports: Dec 31,2010 - Segmental reporting...

Gujarat Ambuja Exports GAEL segmental data review is as follows:

1. Revenue breakup for Dec 31,2010 quarter is as follows:

- 75% of the sales are from the "Other Agro Processing Division" (Profit Margin: 4.88%) 

- 15% of the sales are from the Maize Processing (Bio Chemical) division. (Profit margin: 18.56%)

- 10% of the sales are from the "Cotton Yarn Division" (Profit Margin: 4.82%) 

- 0.20% of the sales are from the "Wind Mill Division" (Profit Margin: 35.36%)

As can be seen Other Agro processing division has driven the Dec 2010 quarterly revenues.. Company management had clearly stated that Dec and March quarter are the best 2 quarters for GAEL.

Looking at March 2010 Full year revenue breakup (Other Agro Processing: 62.34%, Maize: 24.38% and Cotton yarn: 12.80%) I would expect Maize division to contribute more for the next quarter of March 2011.

Also Maize division enjoys tax free status for Uttaranchal plant and we can expect the margins to be maintained.

2. As we can see the margins are as follows:

- Highest margin in Wind Mill division 35.36% but it is variable and dependent on wind patterns and other parameters out of company management control.

- Maize processing division Profit Margin is 18.56%. dropped from 20.40% in Sept but for the whole year April 2010 till date company has been reporting steady operating margins of around 18%

- Agro Processing division  Profit Margin is 4.88% which is slightly below year end march 2010 5.22% .. Also year end March 2010 Agro processing division margin was 9.18% so definitely in quarter ending March 2011 we should see higher margin around 5.5 to 6%

3. Increase in sales of lower margin "Agro Procesing Division" as compared to "Maize Processing Division" has changed the revenue mix .. resulting in lower "Net Profit Margin" as percentage of sales!!


Would expect GAEL to maintain margins and with expanded capacity in Agro processing division (new solvent extraction plant) we should see higher topline.. and as mentioned before we should be able to see 1900Cr to 2000Cr topline for GAEL for year ending march 2011. Year end March 2011 Net profit should also be around 90-100Cr.

In my previous article we were focussed on Quarter on Quarter growth numbers which are impressive to say the least.. the year on year numbers are even better (as last year results were subdued due financial crisis and global trade issues impacting trade for GAEL) Generally analyst look at "year-on-year" considering the fact that GAEL business is seasonal in nature.. here is the Y-Y and Q-Q % change data for everyone's consumption..

Conclusion: GAEL is a Strong Strong player.. much stronger that the other popular commodity companies. 
- GAEL has zero Long term loans (except for TUFS loan Technology Upgradation Fund Scheme) 
- All GAEL plants have co-generation plants which bodes well in a future where energy is bound to be scarce.. 
- GAEL has a judicious mix of segments (Spinning Division, Agro Processing division, Maize derivatives [Bio Chemical division] and Windmills) 
- GAEL is also expanding capacity in Maize Derivatives division by 70% by 2012. Maize Derivatives division is a higher margin business and has number of downstream application industries.
- GAEL is focussed in taking advantage of agricultural diversity of India and benchmarking itself to global standards.
- GAEL has also entered the markets of Sri Lanka with Agro processing plants.
- GAEL is also one of the largest castor oil and its derivatives producer. 
GAEL is a deep value stock yet to be discovered.. and the best part is a focussed and conservative(low leverage) management. A Stock that still qualifies for "Best Buy" rating as the best years are still ahead for GAEL.

Link to Dec 31,2010 Published Result (Company website)

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Company: Gujarat Ambuja Exports: Dec 31,2010 Shareholding data review

Gujarat Ambuja Exports latest Shareholding report has been published in National Stock Exchange (NSE) website www.nseindia.com

We compare the shareholding data for Sept 30,2010 and Dec 31,2010 for Gujarat Ambuja Exports

As we can see.

1. Total number of shareholders has reduced further from 56690 to 56156 .. which means consolidation is still "on"

2. Individual shareholders (Weak hands) are the largest sellers. No of Individual investors has reduced from 55949 to 55362 a decrease of 587 individual shareholders.. In terms of  number of shares shareholding reduced from 35,284,376 to 34,297,786 reduction of 986,590 shares. 

3. High Net-worth Individuals (HNI) who hold more than 100 thousand  (1 lakh ) face value equity ie 50,000 shares (Face Value = 2). HNI have reduced from 28 to 27 but the number of shares held has increased from 2,701,554 to 2,988,361 an increase of  286,807 shares even as number of shareholders has reduced.

4. No of corporates have increased while the % shareholding has reduced.. 

5. Mutual funds have also entered into GAEL and no of MF/UTI has increased from 11 to 14 also the number of shares held has also increased from 6,353,255 to 9,132,745 an increase of 2,779,490 shares.

6. Promoters have also increased shareholding from 63.93 to 63.95 an increase of 25,000 shares.

Conclusion: Public shareholding is decreasing and decreasing fast. Individual shareholders avg shareholding was 630.65 in Sept 2010 and in Dec 2010 avg. has fallen to 619.50. Weak hands are defined as fickle minded short term oriented and Individual investors are living up to that definition. 

Another thing which is not being considered is that even within individual investors holding of 34,297,786 only 15,234,216  are in demat rest are in physical form and cannot be traded.. Actual liquidity in GAEL is pretty low and any concerted buying is going to push GAEL easily above 50 levels.. 

This is a great entry price 35-38 level. 50 is given and it would be advisable not to sell at 50 levels.. Investors who bought low and are planning to enter again at lower levels are waiting and the wait is getting longer and longer.. It always make sense to play for the long term specially when we are confident of the company financials and the overall health of the economy.

GAEL Archives

Gujarat Ambuja Exports

August 30,2011:GAEL: Promoters buy 10,000 shares from Market @ 23.08 on August 26,2011
August 30,2011: GAEL: 1MW Bio Gas Plant in Uttarakhand (Maize Starch waste)
August 30,2011: GAEL: 1MW BioGas Plant in Himmatnagar (maize starch waste)
August 27,2011: Gujarat Ambuja Exports: June 2011 Quarterly Result Review
August 16,2011: Gujarat Ambuja Exports: Ready Steady GO!!
July 18,2011: Gujarat Ambuja Exports: Year End March 2011: Review
May 21, 2011: Gujarat Ambuja Exports: MoneySights Rating: Strong Financials, Strong Upside
May 21,2011: Gujarat Ambuja Exports: Foreign Funds invested in Gujarat Ambuja Exports
April 14,2011: Gujarat Ambuja Exports: March 2011 Shareholding data
March 7,2011: Gujarat Ambuja Exports: HSBC Mutual fund buying into GAEL
Feb 8,2010: Gujarat Ambuja Exports: Company Product Video and Client List (Very Very Important)
Feb 2,2011: Gujarat Ambuja Exports: Dec 31,2010 Quarterly Results Segmented Data
Feb 1,2011: Gujarat Ambuja Exports: Dec 31,2011 Quarterly Results Review
Jan 14,2010: Gujarat Ambuja Exports: CRISIL Rating upgrade Jan 2011
Jan 14,2010: Gujarat Ambuja Exports: Dec 31,2010 shareholding review
Dec 1,2010: Gujarat Ambuja Exports: Dalal Street Journal Article
Oct 25,2010: Gujarat Ambuja Exports: Promoter Guidance for Year 2011
Oct 25,2010: Gujarat Ambuja Exports: Sept 2010 Quarterly Result Review
Oct 14,2010: Gujarat Ambuja Exports: Sept 2010 Shareholding Report
Oct 12,2010: Gujarat Ambuja Exports: Sept 2010 Qtrly results on Oct 23,2010
Sept 26,2010: Gujarat Ambuja Exports: Hold on to your cheap stocks
August 31,2010: Gujarat Ambuja Exports: Promoters buy 53,506 shares in August 2010: Annual Report 2010
August 13,2010: Gujarat Ambuja Exports: Promoter Buying SAST Disclosure August 10-11, 2010
August 4,2010: Gujarat Ambuja Exports: June 2010 Quarterly Result Review: Strong Buy!
July 17,2010: Gujarat Ambuja Exports: Announcement: Strong Buy!!
July 14,2010: Gujarat Ambuja Exports: Review: Shareholding as of June 2010
June 7,2010: Gujarat Ambuja Exports: Promoter buying from Open Market Jun 1,2010
April 28,2010: Gujarat Ambuja Exports: March 2010 Quaterly and Annual Result review
April23, 2010: Gujarat Ambuja Exports: What is the Ideal price for GAEL
April 16, 2010:Gujarat Ambuja Exports: Sharebuyback Jan 15,2008 Avg Price 34.26
April 14,2010: Gujarat Ambuja Exports: Review
June 01,2009: Gujarat Ambuja Exports: Deep Value
Dec 25,2009:  Best Value Buy
Gujarat Ambuja Exports - Website (updated)
Annual Report March 2009 (updated)
Annual Report March 2010
Annual Report March 2011 (New Link)