atul auto looks like an out and out buy. Looks undervalued on basis of recent results and the 15% correction from peak of 135 levels.
Mayur has run up and might go up even more before bonus. But after going through the AR and the way company has reported steady numbers over the years, I think it remains a strong buy on declines.
Ajanta Pharma – I think we might get better pointers post management concall. Again a company on a strong footing with exceptional growth shown in fy 12. I would like to bet on Unichem at cmp of around 135 and on declines to 125. Ajanta becomes a good buy in the 550-600 range.
Guj reclaim suffering from a lacklustre q4 fy 12 results show. Maybe q1 fy 13 numbers will liven up the counter and hence the thread on valuepickr.
Cera and balkrishna look fairly valued. Manjushree looks good on valuations and future prospects. indag too seems good post fy 12 numbers.
Among cyclicals I think with fall in rubber prices, company like Ceat at cmp 99-100 looks interesting. Interesting charts also and if stock can manage to close above 110-115, an inverted head and shoulders breakout comes into play with targets in range of 140 plus.
Looks like a very solid list. I concur with Hitesh that Atul Auto is clearly the best considering performance and valuations.What adds to my confidence is that since I have started observing brands for LCV three wheelers in Ahmedabad, I have noticed thatAtul Shakti is so omnipresent and outnumbers both bajaj and piaggio in this segment by a large margin which clearly shows the value proposition and brand value that Atul offers. I would say for every 10 Atul shakti, I see 2-3 bajaj and 1 Piaggio.
I think Gujarat Reclaim is another wonderful company to grab at this price where downside is limited while if company continues to grow even at 15-20% (which is far lower than historical growth and management expectations), it is likely to give very decent returns from this level.
I feel Cera has run up a lot, though latest Q1 results seems very good and may run up more. but, I personally would like to take a cautious approach and see how they fare in next 2 quarters. For Cera, inventory level has increased substantially so will be closely watching that in AR and Q2 balance sheet.
Again for Mayur, I feel it can move upwards of 600, I would be more comfortable gettin in it around 500 levels. Management has been talking about adding two major OEM (BMW and Chrysler) as customer since quite some time and as per latest AR, they are very close to sealing the deal. In my opinion, that development can be a trigger for Mayur to move into higher orbit.
I also feel some of the smaller stocks likethat Fluidomat, Narmada gelatine and Mazda seems to be very decent bets at current level.
Disclosure: I have position in all the companies so my views may be biased.
How is mayur able to withstand the Chinese competition specially in US market?Chinese co hv simply destroyed competition where they get a level playing field e.g power equipment makers in India like bhel,all transformers.
Has Chinese synthetic leather makers not really focused on India n what the duty on it.is there some study on this aspect?
Thank you Mr.Hitesh for yourguidance which is quite helpful to new Investorswhich is rarely seen in this forum. Here many will discuss, discuss, discuss and discuss which is useful for doing PHD. But not much useful for novice Investors due to lack ofguidance and disclosure. It is my gut feeling as a novice Investor. sorry if it hurts anybody.
Are you tracking Wockhardt by any chance? It seems to be another turnaround story with good amount of steam left (even after rising 4 fold from 251). Last quarter consolidated EPS was 35. So next year EPS will be in and around 130, which make PE ratio of 8.75 at current price. It seems cheap to me as quite a lot of pharma companies are quoting at PE of .
I was forwarded a report by an astute investor friend of mine on wockhardt by a broking firm called namah capital resources back in nov 11. price then was below 400 odd and the analyst had forecast a target of around 872. Stock price has breached the target and gone beyond these.
At that time also the debt turned me off. Now also I thing debt remains high. How they deal with it after selling the nutrition business remains to be seen.
While it could go further up from here, debt will remain the thing to keep an eye on.
Dont look at PE in isolation. Also look at the debt of the company and if possible look at EV/EBIDTA to get a better idea about valuations. (this is not meant to discourage investors in wockhardt – i have no idea about the valuations or prospects except that wockhardt ranks among the top 5-10 pharma firms and so could command good valuations)