My top 5 picks

1.Ajanta Pharma

2.Gujarat Reclaim And Rubber

3.PI Industries

4.Confidence Petroleum

5.TTK Pretige

Please share you opinion on the above.I do have a strong conviction on all the stocks for long run.

And I forgot to add VST Industries.

Doesn’t that make it six :slight_smile:


any thought on the above stock.

And I forgot to add VST Industries.


VST Industry is a great company. However the stock is ruling at around 20 times ttm earning, which is very high as compared to historical PE of the stock, which has traded at around 10-13 times.

When we look at the net earning figure of the company, we can see slow growth in the net earning figure- 55 Cr. (2007), 58 (2008), 61 (2009), 62 (2010). The company distributes most of the earning in dividends. When we see the slow growing, solid company, 10-12 times earning is acceptable.

Something happened in 2011- its profit grew to 95 crores, growing by 47%. In the latest quarter its marging has grown smartly, and profit has grown by 90%. If such growth can be maintained, pe of 20 is pretty cheap!! But I have not been able to understand as to why has it happened? Is is sustainable? Can it maintain its growth rate or it will come back to earlier growth rate? We need to examine these issues. If you have any information about reason of such spurt in growth/growth rate, please do share.

The reason as stated by the management in the AR 2011 for a good growth in there business is as follows:

i.Foreign exchange volatility was lower compared to previous year.

ii.There was a 8.6% growth in the volume however the industry growth was flat.

iii.There was no increase in the excise duty in the union budget.

iv.The new brands like the Special Extra Filter and the Moments have done well .

v.Going ahead the company will focus on building new brands in Value for Money segment .

vi.The value realization was higher due to 17% increase in the price of the brands with a slight movement of 8.6% in the volume.

vii.There was a rise in the Leaf Export turnover as well.

Going forward the company plans to sustain the growth by:

i.Focusing on building business tie up with the the premium customer for the new variety of Sun Cured and Fire Cured Tobacco which will ensure steady exports going forward.

ii.The company is also establishing special tobacco for niche market which will be produced by large farmer base of the company.

My Conclusion :

The year 2011 saw a jump mainly because of the rise in the prices of brand that the company sells.Going ahead the management plans to hedge themselves by going big on building value for money brands and concentrating on exports.But given that the tobacco industry is governed a lot by government intervention we cannot be sure of what the government can do which can affect the profitability of the company but however the management plans to do a lot of thing and they believe that the growth can sustain.

Confidence Pet Ltd - The business looks good,but have concern about the management team…

Can you please elaborate about the concern …so that i can look in the details and reply.

my understanding of the promoter in the confidence petrolem story is that the stock price is managed…it continues to hover between 9 and 13…