Two ideas of 2011 Deepavali from my side:
PI Industries Ltd. [ NSE - PIIND ; BSE - 523642 ] :
Already this company is discussed in quite a detail in “Not So Hidden Gems” section of valuepickr, link of which is :
_http://www.valuepickr.com/forum/not-so-hidden-gems/967028734_
Even after almost doubling in last six months, this company still ranks No. 1 in terms of high certainty for Capital Preservation with an equal High Prospect of Capital Appreciation. This is because, the results that have started coming in after building a strong foundation over last decade on operational front, can’t fizzle out so soon. This company is on a strong foundation and FY12 could very well turn out to be milestone year in company’s history which will make it hard to ignore for not only PMS managers but large fund houses too. This is evident from recent entry of Sequoia Capital into PI at a rate of Rs. 540-550 (5 FV).
Capital Preservation aspect of PI gets vindication from firm order-book of CSM business as also robust growth of Agri-Input segment while Capital Appreciation aspect of PI gets vindication from many future triggers in place like commisioning of CSM plant in end-Q3 or Q4-start, possible Acquisition in Agri or CSM segment this year, 7-8 products slate ready for launch by FY14, Sony-PI relationship taking a bigger shape by FY13, etc.
Q2FY12 numbers to be declared on 5th November 2011 will be key monitorable but inspite of that, at current rate of Rs. 600 (5 FV) it deserves the safest Deepavali Pick status and in all probability, it has to be at a much highervaluation than currently its quoting at by Deepavali 2012.
Jubilant Industries Ltd. [ NSE -JUBLINDS ; BSE - 533320 ] :
Already this company is discussed in quite a detail in “Not So Hidden Gems” section of valuepickr, link of which is :
_http://www.valuepickr.com/forum/not-so-hidden-gems/627522451_
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This companyis a Jubilant Bhartia Group company which counts amongst its group, successful Indian-listed companies like Jubilant Foodworks, Jubilant Lifesciences and AIM-listed ___Jubilant Energy. The compelling story which favours a strong positive investment argument for this company is its gross undervaluation on the bourses which calls for a significant rerating thereby providing scope for decent appreciation of invested capital._
Jubilant Industries is into promising business segments like Consumer Products (C.P.), Food Polymer (F.P.), Latex and Agri-Input (Agri) which together generate revenues of Rs. 554 cr. with an EBITDA of Rs. 46.8 cr… In May 2011, the board decided to merge Jubilant Group’s exponentially growing Retail Mall-cum-Hypermarket business with listed Jubilant Industries. The Retail Business generated revenues of Rs. 315 cr. in FY11. The scheme for merger is already filed with Allahabad High Court and approval is expected by December 2011.
On the current tiny equity capital of just Rs. 8.01 cr., Jubilant trades at a market-cap of just Rs. 145 cr. which signifies a gross undervaluation of even the present businesses and therefore calls for a significant rerating of the stock.
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_The most interesting aspect which significantly enhances attractiveness of Jubilant Industries Ltd. as an investment candidate is its leadership position in each of its operational business segment as well as its strong established brands in each of the segment.In addition to such strong operational segment positioning, company has a strong balance sheet with a Debt-free status _and Cash & Investments worth Rs. 77.8 cr. as at FY11. Each of its present as well as to-be-merged operational segments like Consumer Products, Food Polymer, Latex, Agri-Input and Retail are expected to grow robustly in coming years driven by new innovative product launches (in C.P. Segment a Lamino), enhanced capacities (doubled capacity of F.P. Segment with entire expanded capacity pre-booked), improving demand environment (SSP-Agri industry projected to grow 35 % p.a. till FY14) and smart expansions (in Retail segment – 2 new Malls became operational in first half FY12 in addition to 4 existing Malls with another 4 Malls planned to be opened by FY14).
With most clean and credible management headed by Mr. Hari Bhartia at its helm and a strong group backing like Jubilant Bhartia, there is not a single reason why Jubilant Industries, with an expected consolidated revenues of all business segments (including Retail) in excess of ___Rs.900 cr. in FY12, should trade at such a low valuation of just Rs. 145 cr. on the bourses. This is the reason why Jubilant Industries Ltd. Is a rare case in present uncertain markets which offers strong capital preservation certainty (because of minimal downsides from current levels) with a prospect of significant capital appreciation in medium term once formalities of Retail segment merger get concluded by December 2011. By next Deepavali, Jubilant Industries Ltd., in all probability, has to be at a significantly higher valuation than the present one and therefore is a compelling Deepavali Pick for 2011._