Mcleod Russel - The world's largest producer of Tea ( Stock Analysis )

India wakes up with tea every morning. It is the drink that enlivens, energises and rejuvenates the mind and the body. It is the drink that binds people across cultures. This is why Eveready has lined up a wide range of tea blends to match the needs of a diverse tea-drinking nation and the different "tea cultures" that are an integral part of the country’s socio-cultural fabric.








Eveready, the group Company of the largest bulk tea producer in the world, McLeod Russel India Limited,  A member of The Williamson Magor Group, markets and distributes packaged tea across the nation.
From the valleys of Assam to the hills of Darjeeling, our promise of bringing the freshness and strength to each cup of tea can be experienced in the brew of all our brands.
The superior quality is a result of meticulous process that involves skilled selection of tea leaves based on expertise in tea tasting and understanding of Consumer needs. Eveready today has offerings worthy of the name of Williamson and Magor as well as Eveready Industries India Ltd. - Eveready Premium Gold, Eveready Tez Premium, Eveready Tez Red  and Eveready Jaago. Brands, which satisfy the diverse moods of the tea drinker.






McLeod Russel India Ltd. is a Tea company having 53 Tea Estates in India (58 in Assam and 5 in West Bengal) and several other tea estates in Vietnam, Uganda and Rwanda. The company including its subsidiaries had produced 112.23 Million KG’s of Tea in FY 2014 and on a stand-alone basis the company had produced 87.1 million KG’s of Tea in FY 2014. Mcleod Russell (India) Ltd. happens to be one of the largest listed Tea companies in India.

Employee costs are the single largest cost component in a Tea business in India and makes up for nearly 1/3 of a company’s revenue. The number of employees’s are significant in Tea industry and usually companies enter into Labour agreements with respect to wages and are revised periodically. The company had mentioned in its annual report that wage revision is due in the State of Assam in January 2015 and on 1st April 2014 in West Bengal.  If the wages are raised significantly without corresponding increase in Tea prices (Due to global supply demand factors), it could have an adverse impact on the margin’s of the company.

In spite of various ups and downs in Tea prices in the past several years, the company has been able to maintain its EBITDA in the range of Rs. 300-330+ crores range. However increased finance costs seems to have eaten much into the profits of the company. The increase in finance costs is surprising given the fact that the Debt figures have been at near  stable levels for the past several years. The company continues to maintain comfortable debt to equity ratio. The dividend payout has been excellent so far.



The company is one of the largest exporters of black tea from India and it has consistently exported nearly 30% of its production in the past few years. This had helped the company capitalize on higher export realisations when the global tea markets are tight.

At current market capitalisation the stock is trading at a trailing around of  PE of 20,  Even assuming better profits for FY 2015, I find the current valuation to be fairly valued for an agricultural commodity company . The recent surge in tea prices along with bullish market mood , should keep up the momentum in the stock for sometime


McLeod Russel India Ltd. is a Tea company and is one of the largest producer and exporter of black tea in India . As the North Indian tea auction prices have moved closer to record levels and with the current stock market mood being bullish , the momentum have propped up the stock price . However for long-term investment the stock offers little valuation discount at current market price . This is certainly one of the best Tea companies to own.

Premier Explosives - stock analysis

Note - I have recommend this stock 3-4 weeks back. Here is the full Analysis. 

The BJP-led NDA Government seems to be serious about encouraging private investment in defence. Undoubtedly, the move to allow FDI in the defence is aimed at boosting self-reliance in defence production, encouraging more private sector manufacturers to enter the sector, cutting expensive imports, bringing more clarity on guidelines and curbing corruption.


Premier Explosives Limited (PEL) is one of the major companies manufacturing the entire range of explosives and accessories for the civil requirement. Starting as a Small Scale unit in 1980, it was founded by A.N.Gupta, a Gold Medallist in Mining Engineering. Its current turnover is about Rs. 600 million per year. The export earnings of the company are about Rs. 200 million per year.

PEL is the first manufacturer in India to deploy totally indigenous technology. PEL today has the widest range of products and technologies in the manufacture of Explosives & Accessories. These include Emulsion and Slurry explosives, LD cartridge explosives, Bulk Explosives, Small-dia non-permitted explosives, Permitted explosives, Cast Boosters, Pillow-packs for secondary blasting; Detonating Fuse of various core-loads, Plain detonators, Instantaneous Electric Detonators, Electric Delay Detonators, Permitted Detonators, Cord Relays and Amardet NoN Electirc Shock-tube Detonators.



 



The Indian explosives industry is fragmented with around 45 units and around 10 major manufacturers Premier Explosives is the 6th largest manufacturer of explosives with around 5% market share.

PEL is also the first and only Indian private entity designing, developing and manufacturing solid propellants for country's prestigious missiles Akash, Astra and LRSAM.

It is the first company in the world to produce safer and greener Nickel Hydrazine Nitrate detonators on commercial scale replacing Lead Azide, Lead Styphnate and Aluminum Powder detonators.




Premier is the only private entity producing oleoresin based tear gas grenades used for mob control by law enforcement departments. The company had developed this product in collaboration with Defence Research Development Establishment (DRDE), Gwalior.

Premier also produces Explosive Bolts, Pyro Actuators, Smoke Markers, Cable Cutters and many other products including Blazer Plates for the Indian defence services,providing import substitutes and saving foreign exchange.

PEL is operating and maintaining a State-of-Art Chemical Manufacturing facility of Indian Space Research Organisation ISRO at Sriharikota and Solid Fuel Complex of Advanced Systems Laboratory at Jagdalpur.

Major Customers for Commercial Explosives:


Coal India Limited
Singareni Collieries Limited
Neyveli Lignite Limited
NMDC Limited
Karnataka Emta Coal Mines Ltd
Cement companies
PEL also exports commercial explosives to S.E Asian countries,Middle East & Europe.

	Mar ' 14	Mar ' 13	Mar ' 12	Mar ' 11	Mar ' 10
Contingent liabilities	38.08	28.26	6.69	5.84	4.24
Sales	145.4	109.4	116.66	101.87	94.95
Defense Sales	26.8	13.61	8.91	8.99	5.24
Cont Liab % of sales	26%	26%	6%	6%	4%
Defense Contribution	18%	12%	8%	9%	6%

Income (Figures in Rs Cr)

Revenue

Other Income

Total Income

Expenditure

Operating Profit

Interest

PBDT

Depreciation

PBT

Tax

Net Profit

EPS (Rs)

Sep-2014

35.29

0.09

35.38

31.51

3.87

0.49

3.38

0.89

2.49

0.74

1.75

2.01

Jun-2014

35.16

0.19

35.35

33.37

1.98

0.50

1.48

0.87

0.61

0.07

0.54

0.65

Mar-2014

41.41

1.19

42.60

38.37

4.23

0.54

3.68

0.59

3.09

0.71

2.38

2.91

Dec-2013

33.35

0.05

33.40

29.04

4.36

0.75

3.61

0.60

3.01

0.94

2.07

2.53

Sep-2013

33.85

0.14

33.99

30.31

3.67

0.59

3.09

0.60

2.49

0.68

1.81

2.23

Profits for last four years[2010 to 2014] is stagnant and the stock price has gained 300%

Dolly Khanna, who is getting recognized for great stock picks like RS Software, Cera, Hawkins Cooker, Mold tek packaging etc.

Note - I have invested since 190 levels.

Futures for 24 November

CATCH YES BANK @ Opening BELL, YES,  Above 696  , Just Relax !!!!
YES ANY TIME, We Will  See BIG MOVE  ON CARDS !!!!
ANYTIME STOCK WILL Touch 721_______735 SL 685

ARVIND MILLS AFTER  @ 298, Yes once Cross 298 & Stay Above 
This Level Will Take To __- 304___307

HCL TECH
Yes SOMETHING Is Very Cooking Very BIG In Hcl TECH,

YES ANY TIME,  We WILL Seeeeeeeeeeeeeeee 1800+ In DEC First
Weeek,     YES , BUY ON DECLINE. 

Weekly market outlook 24.11.2014

Capital market's market outlook: 

Market remain volatile in the week ahead as TRADERS  roll over positions in the futures & options (F&O) segment from November 2014 series to December 2014 series. The November 2014 derivatives contracts expire on Thursday, 27 November 2014. 

Investors' focus will remain on Q2 September 2014 gross domestic product (GDP) data set to be announced by the government at 17:00 1ST on Friday, 28 November 2014. GDP grew 5.7% in Qi June 2014 over the same quarter of the previous year.

The Reserve Bank of India is scheduled to release the current account deficit (CAD) numbers for Q2 September 2014 on Monday, 24 November 2014. CAD narrowed sharply to 1.7% of GDP in Qi June 2014, from 4.8% of GDP in the corresponding period previous year.Investors' focus will remain on further policy announcements, if any, by the government. 

The month-long winter session of Parliament will start on Monday, 24 November 2014.In stock specific news, Max India turns ex-dividend on Tuesday, 25 November 2014, for interim dividend of Rs 4 per share for the year ending 31 March 2015.

Among prominent global events, oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet in Vienna on Thursday, 27 November 2014 to consider whether to adjust their output target of 30 million barrels per day (bpd) for early 2015.

Among global economic events, the minutes of Bank of Japan's monetary policy meeting will be released on Monday, 24 November 2014. On the same day, the United States' Markit PMI Composite data and Markit Services PMI data, both for November 2014 are scheduled to be released.

On Tuesday, 25 November 2014, Germany's Q3 GDP data is set to be announced. On the same day, United States' Q3 GDP data is also set to be released. 

Barack Obama to visit India on  26th January 2015.

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

Short term call  for Rs software - 675 - 700 - 750 . 

For futures - Buy yes at 700 levels  bank and lupin around 1470. Both 40+ upside. 

Ive released 3 multibagger this weekend, A couple to be released by next week.

Buy Simmonds Marshal for short term and long term.  Im expecting at least  10-20% increase this week. ( written half the report)

Update - Amrutanjan  Has gone 50% up in 3 days. Enjoy

SPEL Semiconductor Ltd - Potential Multibagger?

Draft 2 - Still under research

Note -  Ive found this company after researching on Salzer Electronics.







Natronix Semiconductor Technology Private Limited, Singapore (Natronix-Sg), has on Mar 24, 2014 acquired 56% of SPEL Semiconductor Limited (SPEL). This acquisition was pursuant to the approvals granted by the Securities & Exchange Board of India (SEBI).

Natronix-Sg is a member of the Valingro Group promoted by Mr. Ar Rm Arun. Headquartered in Singapore, Natronix-Sg is focused on Semiconductor Packaging and Semiconductor Design. Natronix-Sg has already targeted further acquisitions within the Outsourced Semiconductor Assembly & Test (OSAT) and Design & Verifications (D&V) segments.

A 100% EOU, SPEL has in the past been constrained in raising debt expansion capital. With this acquisition, SPEL looks forward to securing cost-effective debt capital that will better position itself in the global scenario. The acquisition will assist SPEL in growing within its existing Customer base while also bringing in further advanced semiconductor packaging capabilities into India. SPEL will importantly be ready to enable India’s self-sufficiency within the electronics manufacturing supply chain.
Natronix is a Semiconductor Packaging & Design company focusing on complex solutions to global Semiconductor companies. Headquartered in Singapore, Natronix has carved a niche within its business, fuelling growth by continually introducing latest technologies, capacity expansions and acquisitions.

Natronix's India OSAT (Outsourced Semiconductor Assembly & Test) presence is SPEL Semiconductor Limited. With over 25 years of Business excellence & a privileged Customer base, SPEL’s Packaging capabilities include the Leaded & QFN Packages. Being India’s 1st & only OSAT facility, SPEL’s well-defined Package Roadmap entails launching further high-end Packages.

Natronix has planned strategic acquisitions of APAC OSAT companies to further its vision of
being the Natural Destination for global Semiconductor companies. This will enable Natronix’s presence within established Semiconductor Ecosystems.
Natronix has recently forayed into Semiconductor Design. Using latest technologies, we strive to improve our Customers’ time-to-market & profitability.




SPEL provides full turnkey solutions that include Wafer sort, Assembly, Test and Drop-shipment services which help Customers accelerate time-to-revenue for their new products. SPEL also offers value added services such as package design, failure analysis and full reliability test, test program development & product characterization.

SPEL initially supplied to the domestic market. SPEL soon acquired the expertise to serve the global market. SPEL’s Customers are some of the biggest Integrated Device Manufacturers (IDMs) and Fabless Companies in the United States and Asia. SPEL offers Packaging Technology for Semiconductors used in diverse end-market applications including communications, consumer electronics and computing.


Quality at SPEL is the means to customer satisfaction. This is achieved by thoroughly understanding and satisfying the needs of its customers in every product or service they offer. Quality is built into the design, selection and management of products & services to deliver the required performance at the least possible cost. Quality control at SPEL is a process of maintaining standards and not creating them. Deming's PDCA cycle is the role model followed for all activities relating to quality control and quality improvement.


Natronix is a member of the Valingro Group. The Valingro Group has diversified business interests with a Vision of Building Businesses that Transcend time.

   Singapore group NATRONIX is a promoter group holding  58.09% of 40cr paid up equity capital. Company posted  26cr sales with 0.54cr net profit in latest half year  results.

Key Points:

• SPEL Semiconductor Limited is India’s first & only Semiconductor IC Assembly & Test facility.
• SPEL pioneered the Outsourced Semiconductor Assembly & Test Services (OSAT) market in India.
• It's Parent company is Natronix Semiconductor Technology, a Singapore Headquartered Co.
• Natronix holds over 55% stake in SPEL.
• In simple terms, OSAT means a contract manufacturing partner which manufactures integrated circuits (ICs), tests and delivers to varied customers from different fields like Communication, Consumer Electronics and Computing.
• The 'Make in India' campaign of Govt. calls for indigenous manufacture of Mobiles and other Consumer Electronics items, there by reducing overdependance on Chinesen products.
• SPEL being the only OSAT fascility in India, stands poised to get the first mover advantage.
• Company's Operating Profit Margin has grown over 20% in last quarter and the company is slowly gaining momentum and turning around.
• DIGITAL INDIA strategy also complements the company growth.
• SPEL management is quite decent, stable and experienced. The track record of the management is Clean.
• The ultra advanced assy. line is at Maraimalai Nagar near Chennai.
• The customers of the company are some of the very Big names of Silicon valley.
• The company is listed on BSE and is trading at Rs.16 per share.

Eveready Industries – Give Me Red ( Multibagger)

Eveready Industries India Limited (EIIL)  is a leader in dry cell batteries and flashlights. Ask any Indian consumer to name a Battery and the first brand that comes to mind is Eveready. Not just among batteries, Eveready is a powerful brand across categories. It  is a good pick in the relatively defensive FMCG segment.its distribution network, the company has diversified into products like packed tea, insect repellents and compact fluorescent lamps (CFL).FMCG companies usually trade at a substantial premium to their book value.

Incorporated in 1934, the company has traditionally been the manufacturer and marketer of carbon zinc batteries, rechargeable batteries, alkaline batteries and flashlights under the Eveready brand. Over the years, the company has emerged as the largest dry cell battery player with a market share of more than 50%, with the largest distribution networks across the country.The company witnessed a period of stagnation in growth since FY02 posting losses in the four intermittent years. Higher debt on the company’s books resulted in larger interest costs. The company currently has plans to leverage its national distribution network to market other FMCGs like packaged tea, insect repellents and CFL.In the case of its tea business, the company has not really aggressively advertised its four brands such as Tez, Jaago, Premium Gold and Classic, which are positioned for different consumer segments. The company’s insect repellent business is still relatively new. It has launched mosquito coils over the target markets across the country. The market share is varying between 1% and 4% in various states.









Eveready has charted out an aggressive growth strategy by entering into new categories in the power source and lighting space. It is launching products in the alternative lighting space based on the energy-efficient LED (light emitting diode) technology. It is bullish on increasing its presence in the rural markets. Eveready Industries India plans to increase it product portfolio in future. The company is conducting test marketing of dishwash detergent and after successful completion it will launch the product. The small cap company is expecting its sales growth to increase to 13-15 percent in H2 FY15. ED Amritanshu Khaitan believes the growth is stable in battery segment with the AAA segment growing at 15-20 percent.

Key Pointers:

• Leading player with  in both batteries (more than 50% market share in 2.5 billion pieces (volume) Indian battery market) and flashlight (75+% market share in the 35 million pieces (volume) Indian organised flashlights market) segment.

• A trusted brand for over 100 years with the business verticals: Batteries, Flashlights, Lighting and Electricals, Packet Tea and Exports.

• Revenue growth: 969 cr (Mar ’10) to 1152 cr (Mar ’14)

• Last year revenue growth is 11% (from 1034 cr (Mar ’13) to 1152 cr (Mar ’14))

• Last year operating profit grew almost 37% (from 66 cr (Mar ’13) to 91 cr (Mar ’14))

• The EBIDTA margin expansion from 6.4% to 7.9% took place due to consistent price increases in core

• Debt has come down from 285 cr (Mar ’12) to 225 cr (Mar’ 14)

• EPS has gone up by 167% YoY (from 0.7 (Mar ’13) to 1.87 (Mar ’14))

Financials:

Eveready came up with excellent set of numbers yesterday. Revenues increase 11% YoY and Net Profits increased 376% YoY. If they keep growing like this then by March revenues I expect the revenues around 1200 cr and Net Profit – 50 cr at 4% net margin. This will mean EPS of 8 and with P/E of 30 the price should hover around 240+. The CMP is 140. The FII holding has also gone up in JAS to 3.4%. In March ’14 FII holding was 2.04%.

Key Numbers	Sep’ 14	June’ 14	Mar ’14	Dec’ 13	Sep ’13	June ’13	YoY% (S)	YoY% (J)
Sales	354	323	257	296	319	279	11%	16%
EBIDTA	30.8	23.3	7.3	14.6	15.2	20.2	103%	15%
EBIDTA (%)	8.7%	7.2%	2.8%	4.9%	4.8%	7.2%
Net Profit	17.6	10.6	1.25	4.5	3.7	4.1	376%	159%
Net Profit(%)	5.0%	3.3%	0.5%	1.5%	1.2%	1.5%
EPS	2.43	1.46	0.17	0.62	0.51	0.57	376%	156%

The company has venture into new categories like electricals. It is focusing on initiatives to reduce cost and increase the profit margin. The FII (foreign institutional investors) are showing interest and have increased their stake in the company to 4% and DII have increased stake to 10%. Seems like a good stock for future if they keep increasing their margins and decreasing debt on books.

Interview update of the management ( link below)

www.moneycontrol.com/news/resultsboardroom/see-topline-grow-10-15-margins-at-10-for-fy15-eveready_1225722.html?utm_source=ref_article