ThExpertInvestor

JITF Infralogistics - Gem - from the Garbage

noreply@blogger.com (Anonymous) — Sun, 26 Mar 2017 19:07:00 +0000

Disclaimer

This article is only for information purpose and we are not recommending anything here. The article is not encouraging any reader to take any investing decision. The purpose of this article is only to appraise the readers with a company which has just recently got listed and holds a good potential.

We are holding a number of stocks in our portfolio, including the ones mentioned in this blog, before writing this article. We may buy more, hold or sell in the market based on what we think is good for our portfolio at any point of time in future.

We are not registered or accredited research analyst under SEBI or any other regulatory agency. We are not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: "Any person who makes recommendations or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations"

The facts, numbers and statements presented here are from the collection of various readings, news articles, information available on the internet, company’s annual reports and other filings etc, which we believe are correct & true. We couldn’t verify the authenticity of these nor could we keep a track of the exact sources of information shared here. Readers are advised to do their own due diligence.

We are back. (or lets say, we are trying to be back)

Hello Friends. Greetings and Apologies. In the last few months we had received a number of requests from many of you that why we have stopped writing/publishing. Being working professionals , it sometimes get very taxing to find enough time for a detailed research & share a detailed write up. Second reason is, in last few months, anyone who has remained invested anywhere has made money, regardless of the stock pick. There were too many smart investor who were multiplying money every month and promising the same to others - so we chose to stay away from this madness. Second reasons being, we couldn't find any stock idea which was available at an attractive level with a significant margin of safety. To re-start the efforts, We are writing about an interesting company which has moat, pedigree management, an interesting sector, a push from Govt. and with all this, still available at attractive valuations.

Due to lack of available information, we have kept this note short and crisp. This time we call it -

“Gem – from the Garbage”

JITF Infralogistics – CMP – 80 – Market Cap – 207 Cr

JITF Infralogistics (JIL) was formed after the recent scheme of arrangement between Jindal Saw Limited, JITF InfralogisticsLimited, JITF Shipyard Limited and JITF waterways limited.

Upon the Demerger, Existing shareholders of Jindal Saw limited have received the shares in JITF Infralogistics, in a Swap ratio of 50 shares of JIL against every 622 shares of Jindal Saw limited held by investors.

The detailed scheme of demerger can be found at:-http://www.jindalsaw.com/composite-scheme-of-arrangement.php

JIL got listed on the BSE and NSE just recently and presently it trades in the T2T segment. Let us see what is the business model of JIL. The company has 3 major subsidiaries:-

1. Jindal Urban Infrastructure Limited (168 Employees)

2. JITF Water Infrastructure Limited (236 Employees)

3. Jindal Rail Infrastructure Limited (90 Employees)

Jindal Urban Infrastructure Limited (168 Employees)(JUIL) – This is the main business vertical of JIL. This entity is involved in Municipal Waste management. In layman terms it produces electricity from garbage. Presently the company is engaged in the processing of 2050 tonnes of Municipal waste per day to generate upto 21 MW of power in Okhla (Delhi). In Punjab also the company has operationalized solid waste management plants which processes upto 1500 tonnes of municipal waste per day. The company has also been awarded projects in Madhya Pradesh, Hydrebad and Gujarat. The company aims to have 100 MW capacity by end of 2017. As of March 31, 2016 Company had Reserves of 64.8 Cr and Networth of 113.8 Cr.

The company has various step down subsidiaries as each project is to be executed under a separate subsidiary just like a BOT road project. Company is the leader in Waste to Energy segment in India and it should be the biggest beneficiary of the “SwachhBharat” theme.

Imagine the company is present in a business that uses an input which is in oversupply (municipal waste) and producing an output which will always be in demand ( Electricity).

One of the subsidiaries of the company - The “Timarpur-Okhla Waste Management Company Private Limited”is a state of the art waste to energy treatment plant which is owned by JUIL. As of March 2015, the company has infused equity of 60 cr in this subsidiary and the total fixed asset are roughly valued at 265 odd crores. This project is the first commercial waste-to-energy facility in India that aims to convert one-third of the Delhi garbage into the much-needed electricity, enough to serve 6 lakh homes. Visit www.towmcl.com and get the hang of this project. It may be noted that company has already been awarded projects on similar lines from MP government, Hyderabad government and Gujarat government as well. Infact Gujarat government has already allotted the company 14 acre land for executing the waste to energy project. Link attached

http://epaperbeta.timesofindia.com/Article.aspx?eid=31805&articlexml=2-companies-set-to-generate-25MW-each-from-21032017002031

JITF Water Infrastructure Limited (236 Employees) – This subsidiary is primarily engaged in Potable Water management, Sea Water desalination plants, Pipeline of drinking waters and Waste water management. The vision of the company is to provide drinkable water to every individual in India. The company aims to provide water for human consumption in Industrial as well as Residential areas and to lay down, build, operate, construct, renovate any plant and machinery, pipeline projects, pumping station, treatment plants, water distribution systems etc. Company is presently executing 19 projects worth 1800 Crs primarily in MP, UP, Delhi, Bihar and Assam. As of March 31, 2016 Company had reserves of 42.3 Cr and Networth of 72.3 Cr. The details about the company and the listing of all the ongoing projects can be found out at the official website of the company:-

http://jindalaquasource.com/

Jindal Rail Infrastructure Limited (90 Employees) – This entity is into designing, procuring, laying and operating railway lines, railway tracks, and other accessories required for smooth functioning of railways for passengers, cargo and goods of all description in India and abroad. The company also owns a wagon manufacturing unit (120 acres) in Gujarat with capacity to produce 3000 wagons per annum. Company manufactured 1250 – 343 -140- 250 wagons in last 4 years (starting from latest year). As of March 31, 2016 Company had reserves of 141 Cr and Networth of 171.7 Cr. Many companies are eyeing stake in this venture of Jindal group. Few links attached

http://www.jindalrail.com/

http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=204608557

As per the Information memorandum JIL had Networth of 318.6 cr as of September 30, 2016, on a standalone basis. On a consolbasis, the networth is negative. We were not able to find out the reasons for negative networth since the company just got listed and no clear information is available in the public domain.

Some details of consolidated half yearly financials (i.e 30thSeptember 2016)

• Fixed assets - 637 Cr + CWIP 20 Cr

• Deferred Tax asset – 62.7 Cr (Accumulated Losses)

• Trade receivables - 187 Cr

• Cash and bank balances – 88 Cr

• Equity – 5.1 Cr

• Reserves and Surplus – (44.1Cr Negative)

• Long term debt – 470 Cr

• Working Capital Debt – 463.4 Cr

• Trade Payables – 175 Cr

• Trade Recievables – 187 Cr

• Inventories – 129 Cr

• TOI – 242 Cr

• LAT –54 Cr (Yes It’s a Loss Figure)

Caveat and Concerns – There is a lot of confusion w.r.t the standalone and consolidated numbers made available by the company. More clarity will emerge once the company starts reporting the quarterly numbers and more importantly when the company will publish its official Annual report for FY2017 with Management commentary. It is safe to assume that company has present order book of 3000+ crores (1800 odd crores in water management and 1200 odd crores in waste to energy segment). The company will surely require debt to execute these projects and also there is no clarity on the serviceability of the debt as the company is presently running in losses at consolidated level. Still we feel that raising of debt should not be a problem for the company as long as the debts are backed by promoter entities. It should also be noted that the company primarily deals and relies on the Municipal Corporations for their waster to garbage businesses , which themselves are politically influenced entities and most of them in bad financial shape. In short company will always have elongated receivable cycles. Also the projects in which company operates have long gestation periods and sometimes take many years to become profitable. However, we believe that if taken a long term view, the company can emerge a leader in this relatively untouched sector.

There are number of subsidiaries with somewhat similar names which also leads to a lot of confusion w.r.t interpreting the numbers. More clarity will emerge after first annual report.

Summary – JIL is very well positioned and interestingly seems to be present in all the right sectors at the right time. Waste management, Waste to electricity, Drinking & Waste water management, Seawater Desalination, and Railways track laying- All these sectors are the top priority of Government and getting a right push under the initiatives like “Swachh Bharat”, Water conservation & management and huge capex planned by Railway . There isn't much financial information and valuation nos. are available to validate the right price but this company can be treated as more of a concept stock and will evolve as the company start making progress with its existing projects and awareness about the company increases. (We have not yet touched the positive Carbon Credit gains impact to the company from the Waste 2 Energy segment). Another company with the same W2E theme allured many Marquee investors (big bull) but the company couldn’t stand upto market’s expectations after the much hyped IPO and fell flat. (A2Z Infra) . However since JIL is successfully running one plant, we can safely assume that within next two years the company will be having waste to energy power capacity of close to 100 MW as planned.

As per us the real reason for Jindal Saw to demerge JIL was (a) to enhance the focus and (b) to ease the fund raising options. These kind of businesses require huge Capex and accordingly debt and equity contributions. Equity infusion should not be a challenge with Jindal group being the promoter and raising debt from banks should not be challenging for these projects if banks are made to participate & support the Swachh Bharat Abhiyaan. The Timarpur Okhla project was funded by some of the best banks of the country. (Similar to Rural lending, Government might push PSU banks for Clean India projects lending under priority lending )

At a current mcap of 200 crore this seems to be a bargain buy considering 3000 crore worth of projects in pipeline, the pedigree of Jindal group (to support in getting new funding, projects etc.) , attractive sector and a very limited floating stock. There is hardly any liquidity in the market, stock trades in T2T segment with very thin volumes.

Do your own due diligence and research before taking your portfolio bets. Happy Investing!!

Upper Ganges Limited – at a sweet spot in an even sweeter sector

noreply@blogger.com (Anonymous) — Fri, 10 Jun 2016 23:51:00 +0000

Disclaimer

This article is only for information purpose and not be understood as any recommendation. We are not encouraging any reader to take any investing decision purely based on this article. This is only our best attempt to appraise the readers with the current situation in Sugar sector and the potential investment opportunities in our view.

We are holding the shares of Upper Ganges and other sugar companies along with many other stocks in our portfolio, before writing this article. We may buy more, hold or sell in the market based on what we think is good for our portfolio at any point of time in future.

Registration status with SEBI: We are not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: "Any person who makes recommendations or offers an opinion concerning securities or public offers ony through public media is not required to obtain registration as research analyst under RA Reguations"

The facts, numbers and statements presented here are from the collection of various readings, news articles, information available on the internet, Company’s Annual reports and other filings etc. which we believe are to be true. We couldn’t verify these sources nor could we keep a track of the exact sources of these information. Readers are advised to do their own due diligence.

Upper Ganges Limited – at a sweet spot in an even sweeter sector (CMP Rs. 262 )

This one is going to be a bit longer – so have patience, enrich you with knowledge instead of jumping on to execute any market order.

In our previous article we had mentioned that, we were bullish about the near term prospects of the sugar sector but the picture wasn’t very certain till then, so we opted to play safe on sugar sector and found Kakatiya Cement which offered the good mix of exposure to booming sugar and cement sectors together and available at a very reasonable price.

And it paid off - much earlier than we expected!!!! – A more than 100% appreciation within 2 months.

(The caution - we re-iterate that we do not write this blog as a recommendation and the stocks discussed are only for the benefit of a common investor to understand a company/sector much better. -Read disclosure again at the top if you have ignored it in the first place)

Now, as evident – with some more recent and visible developments in the sugar sector at global level, we are more confident about performance of this sector now. We strongly believe that its just the start of an inflection point for a huge J curve type returns in coming months.

Most of the sugar stocks have already given returns of more than 400-500% in last less than 12 months and still this sector remains a highly neglected and under owned sector. Despite of round the clock 24 hours cacophony of 10s of business news channels and 100s of brokerage houses publishing their colorful research reports every day, the sector has been heartlessly rejected by the so called big and famous investors. The reasons for this apathy generally quoted – Government intervention in the sector, Cyclical nature of the business, the rise in sugar prices is temporary, Govt. will not let the prices increase due to elections, all the companies are loss making & heavily debt ridden etc. etc. Well we do not deny any of these, but at the same time we also acknowledge that there will be significant deficit in world sugar production vs. demand in the coming year(s) and the sector is in for a good ride even from these levels. Just to highlight how under owned this sector is - still after so much of run-up, of all the 32 odd listed sugar companies market cap put together is close to 20,000 crore- this is when most of the companies are already up by 4 to 5 times in last 8-10 months.

And on an average – even if we take out roughly 50% of promoter’s stake, just 10000 crore worth of public + HNI+ Institutional (FII, DII, Mutual Funds.) holding remains. Imagine the whole of India’s listed sugar sector (floating stock) is available for 10000 crore, this is not even 4% of Infosys’s market cap. Another interesting observation is, if we exclude the top 6 large sugar companies, the market cap of remaining 25-26 sugar companies are hardly 5000 crore put together and less than 2500 crore of floating stock on an average.

What is happening to Sugar (Globally as well as locally)

Some basics first - . Total Sugar production as well as consumption in the world is largely in the range of 174 to 180 million tons. Brazil is the largest producer of Sugar with an annual production of 38 million tones out of which it can export 24-26 million tons which depends of many factors like world sugar prices, price of ethanol, currency value etc. India is the second largest producer with production in the range of 28M tons however India is also a big consumer and therefore not a large exporter. Thailand is a large producer with annual production of 9 to 10 million tons but more importantly the second biggest exporter after Brazil. Despite of good production numbers Europe US and China remain a large importer of Sugar. So the basic stats are that the total Sugar demand of the world stands in the range of 174-175 million tons and production stands at almost similar levels 175 million tons in a normal year. And opening/closing stock keeps on changing based on fluctuations in demand & production. Another important point is world demand for sugar is increasing steadily for past many years with increasing income levels of emerging markets consumers and changing lifestyles.

What has happened over the years is that due to Surplus production from last 5 years in India, Thailand and Brazil ,better yield in Sugar, favourable Brazilian Real-Dollar-Ethanol equation, the world supply of sugar has been constantly going up resulting in huge inventories and subsequently fall in the global sugar prices.

However, due to severe climatic conditions in last 2 years (Drought, El Nino etc.) resulting in widespread sugarcane crop failure , all major South Asian producers including India has suffered significant decline in production. As a result, there will be a sugar Deficit ( demand more than production) in the world first time after 2011 and likely to continue next year.. Almost every major international commodity firms have predicted a deficit between 3 to 11 million tons this year at Global level. (The US Department of Agriculture also forecast global sugar consumption would again outpace production in 2016/2017 and would draw stocks to the lowest level since 2010/2011. The last time world production was less than consumption was in 2011 and since then sugar has always been into surplus leaving a huge supply glut build over last 5 years.)

Another point is, theoretically, the opening stock of sugar this year was supposedly sufficient to meet any shortfall in sugar production, but little is known that this stock is not distributed evenly. Countries like India & China were holding large opening stocks at the start of the year and because of the drought situation are not keen for exports as the domestic price is more favourable. This has created an imbalance in Global sugar availability and Globally Raw sugar prices have already gone up more than 60% from their lows of 11 Cents per Pound last year to more than 19 Cents per Pound now. Due to adverse weather condition, there will be a dip in production in all South Asian countries India, China and in Thailand in current and next year and the only major force is Brazil which is going to see record production & export to feed the sugar hungry world.But there is a catch in Brazil as well. Brazil is the second largest producer of ethanol worldwide and the single largest producer of sugar cane based ethanol around 28 billion Liter. In Brazil, Ethanol is produced directly with Sugarcane (and not from Molasses after crushing sugarcane like India) and a lot of factors decide whether mills in Brazil will use the sugarcane to divert to ethanol production or to sugar production. Currently between 55%-58% of sugar cane in Brazil goes into ethanol and this nos. keep on fluctuating depending on these three factor. - Price of Ethanol (which in turn is affected by price of Oil) , the price of Sugar in international markets and value of Brazilian currency.

For how long this sugar under-production will last – With receding El Nino weather conditions and normal climatic conditions in south and south east Asian countries, rainfall is going to be normal in sugar producing areas, but most of the crop for next year production is already destroyed due to drought and new sowing also couldn’t be done due to lack of rainfall. This makes it obvious that next year sugar production in India will be lower as well (Close to 21-22 million tons as against consumption of 26-27 million tonners). At the same time, this year Brazil has suffered some heavy rainfall just before the crushing – this has slightly delayed the crushing and slightly negatively affected the production.

Another important factor is –La Nina ( the sister climatic condition of El Nino) mostly follows in 80% of the cases after El Nino diminishes . This climatic condition is set to bring heavy rains in Indian subcontinent and south Asia but will result into dry parts of South and North America including South Brazil after next year . There is no clarity on its impact on Sugar crop of Central-South Brazil (the part which produces 90% of sugar of Brazil) though, but most likely after next year , the production in Asian countries will return to normalcy but Brazil might suffer sugarcane production . Also, if Oil sustains recovery or Brazilian currency continues to appreciate, the current international price will not remain attractive for Brazil to export sugar and the price will have to go up. Thus since for current & next year South Asian countries’ production is affected and after that possibly Brazil’s production will be less , we expect this sugar prices to remain firm for sometime.

The price in international markets has already close to its 3 year high , and the net Long position in sugar contracts in international market is at its all-time high suggesting further bullish trend and the contracts’ Relative Strength Index is not yet in the territory to suggest that its overbought or headed for a fall.

Now lets talk about the Indian Scenario –

Without going much in detail, sugar remains a highly regulated and most intervened commodity by Central as well as state Govts. The central govt. declares FRP (Fair remunerative price for sugarcane ) and on top of it, states add their own SAP ( state administered prices ) which varies from state to state. There are talks that to converge this mechanism and follow only one FRP , but all states are not yet willing to follow that mechanism. Apart from this, most of the sugar companies are involved in distillery and power business over which also states policy have high influence.

Indian sugar stock- at a glance -.

Current year Indian opening stock 9.5m

+Production 25m

-Consumption 27m

-export 2m

=Stock at the end of this year=5.5m

+Production next year 22m (could be even less)

-consumption next year 27m (without assuming any growth)

-export 0 m

=closing stock next year =0.5m

India may be having a deficit of sugar by next year crushing season.

When it comes to Sugar sector in India – the biggest risk is govt itself. Sugar has been a politically sensitive commodity and for some reason always heavily controlled by Govt. historically. (Till few years back, Govt. even used to fixed the sale quota per month for the mills). To make sure that the prices do not go out of sync due to traders & hoarders activities, Govt. has already taken many steps which may have impact on the sector, even ignoring the facts that the Mills were suffering for last 6 years and almost reached to the stage of bankruptcy and before their Balance Sheet could be repaired with the sector turnaround, the Govt. started its curbing measures.

Lets see what are the measures that are already applied and what more Govt. can do.

1. Stock limits (applied already and seems ineffective)

2. Reducing import duty (Govt. already mulling over it, but high chances are that this also will be ineffective given the high global prices)

3. States increasing their SAP over the Central Govt. fixed minimum price- this indeed is a real risk. However we think that with global momentum, the price in domestic commodity market will be able to pass on some of this hike. But as mentioned, this remains the biggest risk to profitability.

4. Removing production subsidy – govt. did already remove the 45 rs. Per ton subsidy, but the this subsidy itself was so meagre that removal didn’t impact the financials much.

5. Making export costly or Banning Export – Govt. already thinking about putting export duty on sugar. Though this will have only psychological impact on NCDEX prices to some extent , as companies are not interested in exporting since the domestic prices are higher than export prices currently. However, with exports banned, the domestic prices will be practically de -linked to global prices and any major spike in international prices will have a limited impact on domestic prices.

6. Putting excise on ethanol.- currently ethanol is given the preferred treatment , however this is not going to impact sugar prices , and Govt. has to increase the uses of ethanol, so this incentive should continue.

7. Putting some arbitrary taxes, VAT, entry taxes, Octroi and so on – there are smaller tools, and state govt. will continue playing with these. This shouldn’t affect the sugar market demand and supply situation in a big way.

8. Putting direct limit on sugar prices or directly controlling the sugar distribution quantity – after the decontrol of sugar, such steps are out of question. Especially the current Govt. at the center is known for being friendly with the industries, step of this kind will not be expected.

What is ironical is that Government fails to recognize that most of sugar consumption is by industrial buyers and household direct sugar consumption is less than 10% of the total sugar consumption. Sugar is largely used in Industries such as Confectionary, Soft Drinks, Syrups etc. etc. But yes, eventually the increase in price of these items is also passed on the retail customer.

If the sector looks convincing, which company to pick out of 35 odd big small listed companies available.

After studying many factors – fundamental, technical , political, management quality, current valuation and other company specific factors – we have zeroed down to Upper Ganges. Read on to know why !!

Upper Ganges limited

Imagine a company of an excellent pedigree, available at Forward PE of 2 (may be less than 2), in a turnaround sector – with a reasonably comfortable Balance sheet and an improving leverage situation.

Upper Ganges is a KK Birla Group company existing for many decades and, KK Birla Group is a major player in key industries like fertilizers, chemicals, textiles, shipping, etc. apart from sugar. From a modest beginning in 1932, UGSIL has grown to become the pioneer in the Sugar Industry. UGSIL has three sugar manufacturing units situated in the cane rich region one - as an integrated sugar unit in the Bijnor district of U.P. - and the other two in Gopalganj and Samastipur districts of Bihar. In last few years, like any other companies Upper Ganges also had suffered from depressed situation of this sector in India and globally. Till last year, the sugarcane FRP price was 2300 Rs and SAP price in UP was another 500 Rs which means , the company had to buy sugarcane at 2800 and then after processing into sugar had to sell at ruling price of less than 2500. But with the increase in price of sugar to 3500 now, an exponential jump in the profits of the company is expected and this is going to continue as sugar prices are going to remain firm for many quarters from now.

Now, the valid question: When everyone is making the same product - why Upper Ganges and not any other sugar company or for that matter why not Oudh sugars, its bigger sister from the same group.

Here are our rationales on why Upper Ganges have some distinct advantages:

Financials.

Lets have a look at the most important aspect of any balance sheet, that’s the Debt figures. As per the recent numbers declared by the company, the total debt on the book stands at 562 odd Cr which comprises of Long term debt of 186 and short term debt of 376 Cr. The company’s current inventory of 529 Cr ( recorded at cost and market value of almost 750 crores) is sufficient to take care of its short term debt and its payables. The long term debt of 186 crore, which was taken for the capex, is at a comfortable level compared to annual cash generation as we expect a PAT of close to 150 Cr (conservatively) for the next fiscal year (PAT for the last quarter was 57 odd cr.). The best part of this industry is that there are practically no receivables, the entire stock is sold either on cash basis or on Sales+30 days basis. Apart from this, they have investments in their Balance sheet worth 250 crore market value.

The company made a profit of 57crore last quarter including Cogen & Distillery business. In UP based sugar mills, since crushing season ends by march, the Q1 doesn’t have any Cogen business & Distillery also has only marginal volume. So Q1 and Q2 will see only sales of the inventory of sugar which is crushed in last 2 quarters. Now the case on the point is – The Q4’16 average sugar price was in the range of 3150-3200. But this quarter the sugar ex-mill prices has been in the range of 3400-3500 and this will reflect in the sugar segment profits of all the company in Q1'17 results.

Demerger: The Company's Board has recently approved a complex scheme of demerger of entangled holdings of KK Birla’s group’s sugar mills in UP and Bihar owned by Upper Ganges and Oudh sugars – and their investments in group companies and other businesses of food processing and tea etc.

In principle- what will result into is ;

· The Bihar based mills of Upper Ganges and Oudh will be transferred to a different company Magadh Sugars.

· UP Based mills of Upper Ganges and Oudh will be transferred/merged to a separate company Avadh Sugars.

· The investment & Tea business of Upper Ganges will be transferred to a separate company Ganges securities [ which will further be separated into separate investment company & Tea company ].

· The investment & food processing business of Oudh sugars will be transferred to a separate company Palash investments [ which will further be separated into separate investment company & food processing company ].

Company has made it clear that upon demerger , all the resulting companies – Avadh Sugars, Magadh Sugars, Palash , Ganges will be listed.

The details of demerger can be found on the Company’s website and also on the BSE notifications.

In summary, a shareholder in Upper Ganges will get some shares in Magadh Sugars, Avadh Sugars, Ganges securities and also the demerged Tea Company of Upper Ganges.

We believe that this demerger will unlock huge wealth tapped into these investments and other sundry businesses of Upper Ganges and Oudh Sugars. Also, from what appears that Upper Ganges will benefit slightly over Oudh looking at swap ratios of resulting companies. This is however, only an assumption as a lot of details is not clear relating to what profitability & debt is attributable to Bihar based mills and UP based mills. And we are sure that market will value these demerged companies accordingly so that the Upper Ganges & Oudh Shareholders get an equal deal and none is favoured over the other.

Our belief is: this is a special situation opportunity which is not available with other sugar companies. The sum of parts will always be more that the whole – at least in theory and empirical evidences suggests (reliance demerger is a case in the point)

Huge Non-Current Investments – Biggest Margin of safety

Very few people know that Upper Ganges is one of the holding companies of the KK Birla Group. i.e. the company holds large number of equity shares of the group entities, which are tabulated below

Script Name	Numbers	Price	Total market Price
New India Retailing and Investments	285,573.0	-	-
Chambal Fertilizers	1,966,795.0	65.0	127,841,675.0
Oudh Sugar Mills	3,326,901.0	97.0	322,709,397.0
Haryana oxygen Limited	5,000.0	-	-
SIL Investments Limited	2,019,339.0	84.0	169,624,476.0
Sutlej Textiles and Industries	3,041,697.0	583.7	1,775,286,454.1
Manbhawani Investments	73,500.0	-	-
Manavta Holdings Limited	73,500.0	-	-
Total in Rs million			2,395.5

As per the above table, the company with a market cap of 250 odd crores already holds equity shares of group companies valued at over 240 odd crores. So practically you are getting the entire sugar business for free. No other company in this sector has this kind of valuation comfort.

Just as a comparison – other comparable companies like Ugar sugar is currently at more than 3 times of Price to book Value ( book value 11 rs. Vs. price of 36 rs.) while Upper Ganges is practically available at less than its book value.

Book Value = Fixed Assets : 331 crore + Quoted Investments 240 crores less long term borrowings of 186 crore = 500 crore vs. market cap of 290 crore. = A price to Book value of close of 0.5 times. Vs. 3 more than times of Ugar sugar.

3. Huge Inventory – Upper Ganges is holding close to 21 lakh bags of Sugar inventory from the current crushing season , and valued them at around rs.2700 per quintal in books. The current quarter ex-mill prices have been in the range of 3400-3500 per quintal. You can calculate the gains on inventory that will be realized in the following quarters when this inventory is sold. Its safe to assume that sugar segment profits for current quarter will be even better than previous quarters. And mind it, this inventory gain is a certain gain sitting in the books if the price of sugar doesn’t go down in next 2 quarters. If the price of sugar goes further up from here, the gain on this inventory is going to be even higher which will reflect in the results of Q1 & Q2. In our personal opinion, the ex mill prices are going to be up to anywhere close to 3800-4000 levels. This inventory advantage is generally not available to south based mills because their crushing season goes on for 180-220 days in a year and they do not hold large inventories. ( Which means they didn’t get the advantage of increase in sugar price by 50% since last year on their sugar inventory?)

4. Limited Liquidity and Floating stock (shares)

The actual floating shares of the company in market in actually much lesser that what is visible in the shareholding structure. After including the (most likely) promoter pseudo entities shareholding, there is practically only 22%-25% of the holding is floating in the market, including HNIs. If we take out the physical shares, HNIs & non promoter members of Birla families etc. practically 20-25 lac shares (Roughly 20% available in the market). This gives a good insight of the liquidity situation. We have been closely observing the delivery stats for the company for the last 3 months, it is easy to see that more than 70% of the above mentioned stock has been churned and people have entered and bought the stock at much higher levels.

2015 March 31st list of large shareholders is as below. If our assumption is right, some of these are pseudo promoter entities which might not be part of float. The below top shareholders already constitute 75% of the equity leaving practically much lower quantity of floating shares:

Entity	Number of Shares	%ge of total shares	Our assumptions
Promoter	6514304	56.37%
LIC	397210	3.44%
Manu Chabaria	142020	1.23%
Earthstone	141561	1.22%	Pseudo entity-our guess
Navjeevan	718317	6.22%	Pseudo entity –our guess
Parasram	115625	1.00%	Pseudo entity – our guess
Akhtar Banu	70000	0.61%
Jyotsana Poddar	59243	0.51%	Promoter family
Shobhana Bhartia	59243	0.51%	Promoter family
Globe Capital	58364	0.50%	New entered in 2015
Kunar rakesh	53380	0.46%
Tejinder kaur	50225	0.43%
Physical shares	200000	1.73%

5. Birla Pedigree – Though not the best wealth creators, at least people trust Birla’s that there companies are clean and will not be involved in any misdeed. The name of Birla’s still carries trust, among investors, bankers and people in general. And these companies are existing since before independence and have survived many ups and downs. Especially when the sector now is booming (and other companies of this group – Chambal Fertilizers, Sutlez Industries etc. are doing good) there is no reason to believe of any wrongdoing from the management’s side.

6. Much efficient Co-generation (power) business with among Industry high margins – Upper Ganges has a much better profitability in co-generation business. The reason for this could be either 1) probably better tariffs rates signed with state govt. (UG has 2 mills in Bihar compared to other companies who are all in UP . This is not verified yet – just an assumption ) or 2) a more efficient co-generation power plant as suggested below - a quote from their Balancesheet.

“Efficient conventional electricity generation using a large scale centralised power plant is assumed to be at 35%. A typical medium pressure boiler operates at an efficiency of about 85%. Assuming that an industrial process needs both heat and power in a ratio 1.5:1, the overall energy generation efficiency will thus be about 54%. In case, similar thermal and electrical energy is supplied using a suitable co- generation system, the overall efficiency could range from 65 to 95%. If the efficiency is assumed to be 75%, the total primary fuel savings would be about 28%.” – source - Annual Report 2014-15

7. Credit Rating of Investment grade (BBB -) Upper Ganges has the credit rating of BBB- for its Bank Facilities -fund based long term. This is better than most of the other comparable sugar companies of same size (who are mostly either Speculative Grade or Default Grade).

To conclude, Govt. is trying everything possible to curb the price of sugar but is unable to do it because of the global shortage and reduced production at India. The price of sugar is only going to go up in next 3-4 quarter at least. Next year production in India will also be affected because of the drought conditions this year. And following the next year - there are strong chances of La Nina hitting Brazil - which might affect the production there. Overall the sugar sector is set for giving much sweeter returns from current levels and Upper Ganges will be front runner.

Kakatiya Cement Sugar industries Limited- Sitting pretty on two hottest sectors

noreply@blogger.com (Anonymous) — Sat, 09 Apr 2016 10:59:00 +0000

Kakatiya Cement Sugar industries Limited

(Before we could stop being lazy and prepare a fancy detailed write-up to put on the blog – this stock has already gone up 20% - so publishing here the quick summary catching the key points )

Kakatiya Cement Sugar Industries Limited: CMP 264 ( 8^th Apr’16)

This company is slowly gaining limelight because of the spurt in price of close to 100% (from March 8^th price of 130 exactly 1 month back, while the Sensex remained flat during the same time).

Here are my reasons what is behind this rally and what is there for future.

Without going much in detail, KCSIL is an almost 35 year old Telangana based company mainly operating in three diversified but synergistic sectors – Cement, Sugar and Power. They own the lease for limestone for cement production, Bagasse from sugar is used for power and power is used back in running Cement and Sugar Plants and also for external sales, creating excellent synergy and industry highest margins in all three businesses.

Expected financial performance:

The first 9 months performance of FY’16–

(all segment profit nos. are before tax)

Cement business made a profit of 20 crore on 70 crore sales. Power business made a profit of 11 crore on 24 crore sales. Sugar business made a loss of (14) crore on 77 crore sale in first 9 months.

Now let’s see what might happen in Q4’16 and financial year FY-17

Profits before Tax – INR Crore	First 9 months (actual)	Q4’16 ( expected)	FY’17 and onwards ( if cement and sugar priced remain firm)
Cement	20	10 (assumed same as last year Q4)	30 (Assumed same as previous year)
Sugar	(14)	14 (assumed no. based on price increase on existing sugar inventory & 20% profits on sugar sales)	20 (Assumed 20% net profit on sugar production of 30000 Tonnes roughly)
Power	11	9 ((assumed same as last year Q4)	20 (Assumed same as previous year)
Total	17	33	70

Notes:

1) All segment profit nos. are before tax. After taking out an approximate tax element of 30% - FY’17 Profit no. should be close to 50 crore on most realistic basis.

2) On an average, in sugar business assuming cost per quintal is 2900 and sales and market price of 3600 avg. A 20% profit on ex-mill price can easily be assumed.

3) These are very high level rough estimates based on past results of the company and current trend; there can be some missing points.
4) Q4 of last year cement business made a profit of 10 crore (last qtrs. are generally good for cement companies because of higher offtake and pent up demand from Q3 due to Monsoon etc.). We can expect similar profit for this qtr. too .(though prices for cement are much better and this should be more than 10 crore.
5) Q4 of last year power business made a profit of 9 crore. Assuming no change in business, power profits also in Q4 should be same as of last year of 9 crore.
6) Q4 of last year sugar business also made a loss of 14 crore. – Here is the catch- during last year Q4 sugar prices were at multi-year low and all the mills were bleeding. For Kakatiya, the last year Q4 Company’s sugar sales were negligible (suggesting that they didn’t sell on losses and were holding inventory as they are cash rich and not required to sell inventory at loss to pay for farmers or to repay loans – the last year Q4 loss in sugar division might be because of loss coming from lower price of closing stock). However this year Q4, the sugar prices have been up almost 50% since then, and Q4 sugar profits should be enough to set-off the 14 crore loss on sugar business from first 9 months.

Straightaway taking out the tax 30%, still net profit for FY’16 could be 50 crore less 30% tax = 35 crore and FY’17 onwards its 70 crore less 30% tax = 50 crore. Compare this to the current mcap of 200 crore , just 4 times of Net profit !!

Enterprise Value and Asset Value: Even compared to other sugar stocks with horribly distressed balance-sheet loaded with debt and negative net worth, this company is at zero debt ( a nominal debt of 34 crore is against FD). The current Enterprise Value is equal to its market cap of only 200 crore as there is no debt. Now look at the valuation gap- from Asset value perspective - its cement capacity of around 3lac tonne itself will be close to 30M USD based on the benchmark valuation of 100$ per Tonne ( Ultratech recently paid USD125 per ton to acquire Jaypee's cement business) . This itself is 200 crore. Add to it the sugar and power plant (a replacement cost 125 crore for sugar capacity of 3200 tcd and 85 crore for 17MW power plant – a rough estimation). This makes it a 435 crore asset value company on a purely plant value compared to 200 crore Mcap/Enterprise value.

Operating efficiency – One thing which is very impressive and distinguish it from rest of the sugar and cement companies is the superior operating efficiency. Their cane to sugar conversion ratio is close to 10.5% which is best among industry. Similarly, The EBITDA per Tonne of Cement is above Rs. 1,000 which again is among industry highest. Power business also operates at a margin of 50% almost (presumably because the fuel comes from sugar plant).

Management and track record – The consistent track record and excellent operating records speaks volumes about excellent management quality and in its last 35 years of history nothing could be found to doubt about the integrity and commitment of management. Company has maintained a 17 year unbreakable good dividend paying track record. Also, it is clear that this company has proved itself as very efficient in capital allocation in business (this is the first principle Warren Buffet looks at while analyzing a company) and it is expected that the company will continue to use its surplus profits for expansion of capacities profitably.

Technicals : If you think the price of this stock has gone up very high, just to highlight that this is a 10 year breakout with a very large volume. Only to give a perspective, the stock is currently at 265 compared to its 52 week low of 93. This is nowhere compared to all sugar stocks with extremely pathetic Balance-sheet and all are currently quoting at more than 6-7 times of their 52 week low.There are hardly 30 lac floating shares available in market and only 22 lac shares in Dmat form. The limited float is going to only help in sustaining higher price. Also the company gets a unique advantage because of presence in both Cement and Sugar sector. The stock attracts buyers when sugar sector is bullish, prices remain firm when cement is bullish and also the price goes up when both are bullish.

Summary : Kakatiya is a clear re-rating case due to sustained revival in sugar and cement sectors and a 10 year breakout with very huge volumes – in a conservative scenario , given the momentum & sectoral revival in sugar and cement sectors , in short term itself the company can easily command a 400 crore mcap ( Price per share of 550 on 77 lac issued shares ). If the profit nos. for Q4 and FY’17 next year actually translate into as projected above, the company should command a standard PE of 13-14 due to:

- - High sustained margins,

- - Management track record and consistently delivering good nos.

- - Consistent dividend payment record.

- - No debt.

- - Diversified sectors of business and less business risk

This will make it a 50 crore profit* 14 PE: which is 700 crore Market cap company (translating into a price per share of approx. 900). Of course this will prevail if all remains well with the Sugar and Cement sector, and company continue to do well. The icing on the cake will be if company announces bonus as its reserves are very high and can be a good bonus candidate. Apart from this, due to high profits and management track record of delivering highly efficient business - company will continue to use its surplus profits for expansion of capacities profitably – therefore this company can be made part of long term portfolio as well for consistent value creating. The current price rise has only confirmed that the stock is finally discovered by value investors and is going to move fast. We will not be surprised if this stock turns out the stock of 2016.

[We all are part of this wealth creation and would love to hear your comments, healthy arguments, doubts, queries, correction or any suggestion are invited]

Cords Cable Industries Limited : Striking the Right Cords

noreply@blogger.com (Anonymous) — Tue, 02 Feb 2016 20:22:00 +0000

(CMP - Rs. 50.70 / 03 Feb'16)

The recent sudden crash in Indian market has many stories attributed - china, oil, Fed Rate, currency wars, Political tension and all doom and gloom about the collapse, downfall, recession, stagnant growth and many such difficult sounding words, but in our opinion – it has done a wonderful job of separating the wheat from the chaff and throwing many attractive opportunities to enter into some really good bargains on offer by Mr. Market.

One such opportunity that we believe is “Cords Cable industries Limited” (BSE: 532941, NSE: CORDSCABLE, ISIN: INE792I01017). There are some very generic and ordinary factors which are all coinciding at the same time which is making it a very attractive investment at current prices.

Key highlights:

A 30 year old Industrial Cable company, established name in B2B, catering to a wide variety of industries and have many major marquee names as customers.
Attractive Sector - Industrial cable is a proxy to Infrastructure sector. There is a clear focus on developing infrastructure in the country and its hoped that the perfect timing for delivering big on is going to be in the coming budget.
The company is also into growth sectors like PV solar cables, Metro & highway, offering a lot of pent up demand and good order book.
Once among the Forbes list of Asia’s best 200 under a billion small companies’, the performance of the company went stagnant for past few years due to sluggishness in the whole sector. Now the company is at the right inflection point to take the advantage of huge pent up demand from renewed focus on Infrastructure & favorable fiscal situation of Indian Govt.
Current valuation offers a significant margin of safety and limited downside risk. The company offers a right balance between limited floating stock and liquidity in the trade.
A highly respected name in Indian equity investor fraternity - has acquired a large stake recently in the company on a preferential allotment basis (details given below).

Introduction:

Cords Cable Industries Ltd. manufactures and sales communication, control and instrumentation cables for domestic and industrial use. Its product includes Low Tension Control Cables, Low Tension Power Cables, Instrumentation, Signal and Data Cables, Thermocouple Extension/Compensating Cables, Panel Wires, House Hold Wires, Flexible Cables and Specialty Cables mainly for industrial use. These products cater to a wide spectrum of cable users in various industries like power, steel, cement, fertilizers and chemicals, refinery / petroleum, Water Desalination, Metro Rail, Airports, solar and many others. The Company's clients include BHEL, NTPC, Hindalco, ACC, HPCL, GAIL, TATA STEEL, Siemens, Honeywell, L&T, MRPL among others

· The Company came out with an IPO (Priced at Rs. 135 per share) and got listed in Feb’ 2008 on BSE & NSE. The IPO was mainly to fund the Setting up of additional production facilities and to meet the long term working capital requirements of the Company.

· In 2008, Cords Cable Industries Limited became the only Cable manufacturer in the Asia-Pacific Region to be listed by Forbes magazine in its 'Asia's 200 Best Companies under a Billion List'.

· In 2012, Cords Cable Industries Limited was ranked 513th by International Business Times in its list, published on January 16, 2012, of world's 1000 fasted-growing companies.

Industry and market outlook

Infrastructure is going to be the big theme in budget 2016 and beyond. In the entire globe, its only Indian government which has got reasonable surplus money to spend this time on public expenditure (Govt. saves around 6500 Crore for each $ drop in oil price, effectively a saving of 5 Lac crore in a year for Indian Govt.). Considering that private sector capex spending is sluggish, credit markets are bad, there is a huge political pressure to perform at the central govt. and the perfect timing of budget session, there is every reason to believe that big bang public expenditure projects should be announced and most of it going to be in core Infrastructure sectors like Power/Road infrastructure/Railway etc.

Majority of the direct Infra Company’s Balance Sheets are completely shattered with Debt, therefore the best way to gain from this change is to bet on a direct proxy to Infra. Cords cable fits the bill because they are an old company with long relations with PSUs, & Railways as customers and they are the direct suppliers to all major infra sectors- into cables for power transmission, airport, railway, refinery and Solar Power etc.

Promoter Profile -

Mr.Naveen Sawhney - Chairman & Managing Director, A Mechanical Engineer (AMIME) with a postgraduate diploma in Marketing Management, he has been associated with the Cable Industry for over 35 years, and has an enriching experience in Strategic Planning, Marketing and Quality Control.

Financial Snapshot

Although there has been a dip in the topline of the company in last few years, but still the company has been able to maintain stable EBIDTA margins of approx. 10% in the last 3 years. The dip is attributed to the fall in commodity prices as a whole which resulted into lower reported revenues but the volumes of production activity remained up.

For year ended/ ending March 31	2013	2014	2015
Figures in Rs. Millions	Audited	Audited	Audited
No of Months	12	12	12
Total operating income	3,854.4	2,629.9	2,650.3
EBIDTA	383.4	258.2	272.9
EBIDTA/TOI (%)	9.95%	9.82%	10.30%
Depreciation	84.0	49.9	54.1
PAT	60.8	20.4	27.0
NCA(Net cash accrual)	149.7	80.1	86.2

Currently company has been generating very minuscule profit margin, much of which is because of under-utilization of capacity, but the net cash accrual (NCA) from the business is at high levels (because of higher depreciation on the relatively newer capex made few years back). In other words, in last 3 years, the total cash generation from the business was in excess of 30 Cr and company is available at a market cap of less than 60 Cr.

The company has depreciated asset base of Over 100 Cr against current market cap of 60 crore ( which means company is available at a significant discount to its book value per share) and term debt of only 15 Cr (Long term and short term except working capital finance). The breakup of total debt of the company is tabulated below:

Net fixed assets	1,093.6	1,048.9	1,001.3
Long term debt (LTD)	230.1	156.7	91.6
Short term debt (STD)	116.6	73.4	64.9
WC bank finance	481.6	493.5	525.3
Total Debt (w/o Guarantee)	828.2	723.6	681.8

Despite of tough macro environment the company has been able to maintain stable receivable days of around 4 months. Which is at par with the industry standards.

Debtors Turnover Ratio (days)

78.4

116.4

119.3

Recent Entry of Marquee investor Mukul Agarwal.

While we do not believe in blindly imitating the portfolio of successful investors, but we can't also turn a blind eye than to notice what successful people in this industry are doing. Mukul Agarwal of Param Capital is a well-known name in successful investor fraternity in the Indian equity markets with the knack of identifying winners much before anyone else does it. Few of his recent top investments include Intellect Design, Shaily Engineering, Gm Breweries, Dynamatics Technologies and many more value buys which have turned into multibaggers.

Recently, he is buying around 15 lac shares in Cords Cables at a price of 43 Rs a share through preferential allotment resulting into a stake of 11% in post issued capital. Entry of a master investor like Mukul adds to the conviction about this company – from the valuation, corporate governance and future growth point of view. Especially in the current markets when the capital is scarce , for a master picker to invest a large sum into lock-in investment of 1 year, definitely augurs well for smaller investors.

More about Mukul Agarwal (Of Param Capital) and his Portfolio
http://alphaideas.in/2015/05/04/portfolio-of-mukul-agarwal-of-param-capital/

http://articles.economictimes.indiatimes.com/2015-11-17/news/68356320_1_stock-market-investors-dalal-street

Key Risks with the company

Macro environment risk, Global economic risk.

Delay in execution of large infra projects, Bad debts from distressed customers.
Sharp increase in Base metal/commodity prices.

Low Capacity utilization leading to higher proportion of fixed costs.

Recent rating downgrade by CARE (From BBB to BBB-, still investment grade)

Technicals

Though technical analysis does not matter much for a low liquidity stock like this, still few weeks back the company recorded 52 week high of 70 odd rupees with high volumes. The company is trading above its 200 DMA (34.68), 150 DMA (38.44), 50 DMA (47.87) and 30 DMA (54.89), which is a great sign. Technical analysis should not be read much into for this stock as there is no large seller at these levels and even a small buyer can swing the prices. Last 3 months trading pattern and delivery status in cords has been very encouraging, out of only 40 lac odd available float, there was a delivery based trade for above 20 lac shares in NSE alone, a good portion of which we believe is ending into strong long term hands, giving stability to the stock.

Summary:

With the ready available capacities to absorb the huge pent up demand, the company is poised at a very favorable position of better utilization of capacities and improving its margins. Here are some insights on why this company is a relatively safer and a value buy.

Negligible long term debt.
NIL Pledged Shares.
Market cap only 60 odd Crore
Healthy promoters & long term investors holding (currently close to 60% which will further increase after preferential allotment to Mukul)
40% floating stock (Which we feel is getting cornered everyday)
Recent entry of a Master stock picker taking more than 10% stake.
Reasonable valuation – The book value of the company is above 100 per share, Even IPO was at 135. The recent preferential allotment to Non- Promoter investor is made at 43 per share for a lock-in period of 1 year.
High sales to Mcap ratio – 260 crore sales vs. 60 crore market cap.
Healthy order book- Read the management interview on Moneycontrol. They 100 crore order pending Another 100 crore expected to be in pipeline in Q4.
Margin improvement in next few quarters

Important Links

Management interview Link:

http://www.moneycontrol.com/news/business/fresh-orders-worth-rs-100-cr-expectedq4fy16-cords_4762421.html

http://www.moneycontrol.com/news/business/cords-cable-industries-plans-rs-85cr-expansion_434606.html

Company website - http://cordscable.com/cordscable/

EGM Notice link ( issuance of Pref. allotment) –
http://corporates.bseindia.com/xml-data/corpfiling/AttachHis/BBFEBF71_C01D_4AE1_A09A_04E2D71BABE4_184416.pdf

Disclaimer: The above is not a research report but assimilation of information available on public domain and it should not be treated as a research report.

Registration status with SEBI: We are not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure: It is safe to assume that we might have vested interest in stocks discussed here and hence the point of view can be biased. Readers should consult registered consultants before making any investments.

General Disclaimer

Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on individual analysis and up on sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above. The stock price projections shown are not necessarily indicative of future price performance. The information herein, together with all estimates and forecasts, can change without notice.

Opening Note

noreply@blogger.com (Anonymous) — Tue, 02 Feb 2016 18:52:00 +0000

TheExpertInvestor Blog.

Disclaimer: This Blog, its owner(s), creator(s) & contributor(s) is(are) neither a research analyst(s) nor Investment Advisor(s) and expressing opinion only as Investor in Indian equities. He/ She/They is(are) not responsible for any loss arising out of any information, post or opinion appearing on this blog. Investors are advised to do own due diligence and/or consult financial consultant before acting on any such information. Author(s) of this blog not providing any paid service and not sending bulk mails/SMS to anyone.

Opening Note:

Welcome dear friends and fellow investors. We invite you to our new blog started with a single most objective of identifying and discussing high potential investment picks in Indian Listed equity space. Value investing is the core of our investing philosophy and we will stick to it in any Bull or Bear market situation. We always look for stocks which hold the potential to turn into future winners in near and medium term. We have a combined experience of over 30 years as independent investors in personal capacity in the Indian Equity Markets (and still learning by mistakes every day) and our experience has made us firmly believe that no matter what, value investing has always paid off for the patient and disciplined investors.

As a matter of introduction, we are two friends with a passion for equity investments–amateur but experienced, always finding any and every excuse to discuss about Indian equity markets no matter how tied up we are in our professional and personal lives. Both of us have learnt the good, the bad and dirty in Indian equity markets, and have learnt it hard way (Just being honest). But the one fact that has always stood out is, sooner or later market does recognize the potential in the deserving stock … in the long run – the froth subsides …… and only the substance shines. As the famous quote of Warren buffet says – “Only after the tide is gone, you find out who was swimming naked”

So this is the place for intelligent and serious discussions on Indian equity markets. Don’t expect any so called ‘tip’, don’t expect the stocks discussed here as any recommendation or endorsement or don’t expect any miracle to happen with the stocks on this blog. We are using this as a platform to express our views on the unidentified stocks/companies which holds immense potential as per our views. As a matter of fact, do not expect any miracles in the equity market as a whole for that matter. Be realistic, you are buying share in a business and not a lottery ticket - Equity is just an asset class, which offers potential for high returns against higher risk, and most of the time investments made in equities- rationally, with right basics in place, right diversification and right discipline – it has outshined everything else in the longer run.

This blogs presents stock story mixed with personal opinion and not a research , does not ask investors to buy anything. Investors should buy with their own conviction only.

Do ask questions, discuss your opinions and do give your suggestions. Everyone is invited in this exciting journey of building wealth.

We are also found visiting sometimes at the famous “Adda” of Indian Equity investors, the message board of MoneyControl.com with the user name of Thexpertadvise and Affluentinvestor1.

Reachout to us at:

Facebook -> ThExpertinvestor ( Page will be live soon)

Twitter- Thexpertinvestor ( Page will be live soon)

Email ID: thexpertinvestor@gmail.com, (Notice single ‘e’ in thexpert investor)

P.S: This blog is not involved in any commercial activities (and has never been) and there’s no charged service of any kind. The blog is purely academic in nature and does not believe in charging any money for anything. The blog is completely free, just and fair for everybody.

----------------------------------------------------------