Saturday, 28 February 2015

Budget Highlights

Saturday, 28 February 2015 4 comments

Budget Highlights 

A TV grab of Union Finance Minister Arun Jaitley presenting the Budget in the Lok Sabha.

1. Overall deduction benefits to individual taxpayers hiked to Rs 4.5 lakh

 2. Rs 50,000 additional exemption for contributions to NPS

3. Tax ease on serious diseases for seniors raised to Rs 80,000:FM

 4. Exemption on health insurance premium hiked from Rs 15,000 to Rs 25,000. For senior citizens it is hiked to Rs 30,000

 5. Service tax rate hiked to 14% from 12.36% 6. All contributions, except CSR, to Swachh Bharat Abhiyan and Clean Ganga project to enjoy 100% deduction allowed

 7. Transfer pricing threshhold hiked to Rs 20 crore from Rs 5 crore

 8. Wealth tax abolished. To be replaced by surcharge of 2% on income of Rs 1 crore and above. Move to fetch govt Rs 9,000 cr against Rs 1,008 currently mobilised under wealth tax

 9. Corporate tax rate reduced from 30% to 25% over four years; exemptions removed for companies

 10. Proposes to exempt special additional duty on all items

11. Basic custom duty to be reduced for 22 items

12. GAAR deferred by two years would apply prospectively on or after April 1, 2017 13. Total expenditure estimated at crore Rs 17.70 lakh crore: FM

 14. A new benami transaction bill to be introduced to tackle domestic black money; enforcement agencies empowered to attach assets held abroad illegally; Undisclosed income to be taxed at maximum marginal rate, deductions and exemptions for such income won't be allowed; 10 years RI for concealing foreign assets.

 15. Plan spend at Rs 4.65 lakh cr for FY16; non-plan spend at Rs 13.12 lakh cr; Total expenditure 17,77,477 lakh crore


Friday, 13 February 2015

Sanghi Industries - High Potential Multibagger

Friday, 13 February 2015 3 comments
After researching on Saurashtra Cement, I found another Interesting company in the same sector.


Sanghi Industries Limited is the flagship company of The Ravi Sanghi Group dealing in the production and distribution of Cement under the Brand Name "Sanghi Cement". Sanghi Cement, is produced at one of the world's largest single stream Cement Plant located at Sanghipuram in the Abdasa Taluka of Kutch District of Gujarat State. This plant is completely programmed with cutting edge innovation from Fuller International, USA and having limit of 3.0 MTPA. The organization produces prevalent quality 53 Grade OPC and PPC Cement and have altered the way concrete is created and sold in India.The organization likewise surprisingly has its hostage warm plant of 63MW.Sanghi brand is exceptionally remarkable in the locale of Gujarat and Rajasthan.It generally concentrates on four businesses in the country:Gujarat, Rajasthan, Maharashtra and Kerala.Currently piece of the overall industry remains at 10-12% in Gujarat upheld by a hearty deals system of around 1500 dealers.Company fares to the Middle East, Africa and Sri Lanka.Cement request has been really predictable in the western and focal regions.With the bond business entering a stage where interest is enhancing crosswise over regions,Sanghi Industries will be one to profit the most.



Enhancing business blend and cargo cost savings:Religare report focuses at, "SNGI has its own wharf and jetty port, other than as of late setting up two terminals - Navlakhi (Rajkot, Gujarat) and Dharamtar (Mumbai) - for less expensive hostage transportation of mass concrete load. With the new limit extension, SNGI is relied upon to offer higher volumes in Mumbai, which is a mass bond business, empowering effective utilization of ocean courses for conveyance at a lower cargo cost.With expanded commitment from Mumbai,the business blend is required to change as takes after Gujarat:73% by FY17(vs. 80% in FY14), Maharashtra:2o% (i2%) and Others:7% (8%). With the full increase of waterfront terminals, the degree of street to-ocean transport is relied upon to decrease to 80:20 versus 95:5 now, getting expense funds".


( Navlakhi port in Kutch owned by sanghi industries )

Lessening of debts+High money flows+Dividends:Company in the course of the last few years have effectively pared its obligation from around wooers to pretty much 500crs.It found the middle value of working money streams of more than 1.70cr throughout the last five years.What is the greatest edge of security in a company?Obviously the dividends.Management has implied of a profit next financial which can again prompted a rerating."Do you know the main thing that provides for me delight? It's to see my profits coming in." - John D. Rockefeller.

Increase in promoter stake:Promoters over the last four years have swallowed 20% stake through market purchases.Every single year for the last few years,they exhausted the maximum permisable limit of 5%.Present stake stands at 71%(already acquired 5% for the present fiscal),Its of an easy assumption that the remaining 4% stake too would be acquired in the next fiscal.When you own the company(insider) and you are on buying spree it only hints at the things to come.Hiking of promoters stake gives tremendous amount of confidence and conviction.

Entry of reputed MF:Reliance Mutual Fund A/C Long Term Equity Fund recently has bought 32.65 lakh shares in the company for an average price of Rs 44.50.With the performance expected to better in near future as just a matter of time before other similar biggies plunge in to have a bite of the counter.

Wednesday, 11 February 2015

Wanbury ( Turn Around Company ) High Potential Multibagger

Wednesday, 11 February 2015 6 comments

India is now among the top five pharmaceutical emerging markets. The Indian pharma industry has been growing at a compounded annual growth rate (CAGR) of more than 15 per cent over the last five years and has significant growth opportunities. The domestic pharmaceutical market is expected to register a strong double-digit growth.

The cumulative drugs and pharmaceuticals sector has attracted foreign direct investments (FDI) worth US$  13 Bn during April 2000 to February 201 and to reach US$ 90 Billion, according to the latest data published by Department of Industrial Policy and Promotion (DIPP)
The Indian pharmaceutical industry accounts for over 8% of global pharmaceutical production. The industry has over 60,000 generic brands across 60 therapeutic categories and manufactures more than 400 different active pharmaceutical ingredients (APIs). The manufacturing cost of the Indian Pharma companies is up to 65% lower than that of US firms and almost half of that of European manufacturers, due to which India has been emerging as the Drugs manufacturing hub of the world. The industry registered exports of US$ 13 billion at a growth rate of 30%, as per Dr P V Appaji, Director-General, Pharmaceutical Exports Council of India (Pharmexcil). The Ministry of Commerce has targeted Indian pharma sector exports at US$ 25 billion by 2014 at an annual growth rate of 25%.




Wanbury was incorporated in 1990 as a private limited company under the name of Pearl Distributors Private Limited. The name of the company was changed to 'Pearl Organics Private Limited on January 17, 1991 and the company was converted into a public limited company on August 6, 1991. Wanbury Limited, one of India’s fastest growing pharmaceutical companies amongst the ‘Top 50 Companies’ in India (as per ORG-IMS), has a strong presence in API global market and domestic branded Formulation. Wanbury’s major thrust area lies in Active Pharmaceutical Ingredient (API) sale in over 70 countries and Pan-India Formulation presence.

In 2007,Pharmaceutical Products India Ltd was amalgamated with the company pursuant to the BIFR order.In the same year, Doctor's Organics and Chemicals Ltd also came into the fold of Wanbury as this also merged with Wanbury.The company has entered into a strategic association with Bravo Healthcare Ltd and also incorporated Ningxia Wanbury Fine Chemicals Co Ltd to source raw materials from China.The company has opened its office in Zurich,Switzerland for its CRAMS business and incorporated Wanbury Global FZE in Middle East for carrying out its trading activities in the year 2008.



The Company was doing extremely well and was making esteem by assuming control focused on resources and turning them around, until it committed a disaster error of purchasing a Spanish organization Cantabria, which demonstrated an exorbitant resource purchased at a wrong time. The advantage was purchased totally in 2007, equitable before the 2008 emergency and shockingly, what was required to be the most prized resource, ended up being its close demise warrant. Wanbury's timing went terribly wrong, as after 2008 emergency the Spanish economy could never recoup and went into profound budgetary emergency and melancholy and on an awfully wrong direction of unemployment chart (at present around 27% on the off chance that I am not off-base).


Wanbury operates in a highly competitive environment with pricing being one of the key determining factors of success. In the API business, Wanbury  has been able to overcome this risk by influencing the prices as it is the largest manufacturer of Metformin in the world with over 30% market share. Another product Tramadol has also been in high demand especially in American markets. In the Formulations Business the Company has mitigated this risk to a very large extent by diversifying its product portfolio and launching new value-added products. The continuous rise in crude oil and other commodities prices impact the prices of raw material and intermediates and in turn increase the cost of APIs. Wanbury has a dedicated Research and Development team that continuously innovates and remains competitive by developing / acquiring ability to sort out simple and effective solutions to practical problems. The Company has a team of highly competitive scientists supported by excellent instrumentation



The last couple of years have been truly memorable: with new operations administration coming set up and on once more of CDR bundle getting sanction, the turnaround expert began turning around itself. Since the new presidents (API and Formulations) assumed control over, the organization has strikingly begun restoring itself. The loses began contracting and gradually it got to be EBITA positive and now positive even at the Net level. The organization has two US FDA endorsed plants and different plants for unregulated markets. The organization's details and API business both are turning upward and indicating great development in last couple of years.

 Wanbury is as of now creating positive money stream. Wanbury has demonstrated net benefits, inspite of adjusting their whole obligation's advantage and foremost and is likewise paying charges. This is huge in light of the fact that organization had ban for reimbursements till oct 12, and now since they are creating benefits inspite of adjusting their whole obligation (which is exceptionally critical at around 310cr), it implies the recuperation is for genuine and maintainable and they have demonstrated EBITA benefits un-hindered for last 6 quarters and this quarter benefits even at net level. The formula for achievement looks right this time around. The organization has incredible piece buster brands, has estimating force, expanding promoter holding, effectively began producing benefits while adjusting its whole obligation, has two US FDA affirmed plants, furthermore began creating positive money streams.



Cmp - 26

Sunday, 1 February 2015

Kalpataru Power - A defensive Long term bet.

Sunday, 1 February 2015 1 comments


Kalpataru Power Transmission Ltd (KPTL) is part of the Kalpataru group and is a leading turnkey player in power, infrastructure and asset creation (transmission systems / roads / logistics & warehouse). It exports to 38 countries. It has 67.2% stake in JMC Projects (JMC) which is in the business of civil construction of residential/commercial buildings and road projects. It also has 70% stake in Shree Shubham Logistics (SSL) which is in agro-logistics business.

Kalpataru Power Transmission, KPTL, Sensex, Nifty, BOOT model, domestic business, T&D market.

KPTL has a strong presence in domestic as well as international power transmission and distribution (T&D) markets. T&D contributes 90% to the standalone revenues of KPTL. The share of international business is at 65% of the standalone order book which, at the end of Q2FY14-15, stood at Rs5,500 crore. The current government is focused on boosting investment in the power sector. A pick-up in domestic T&D market is expected which will boost KPTL’s revenues and profits.



JMC has four road projects under BOOT (build, own, operate and transfer) model which are at various stages of completion. JMC’s revenues grew by 50.5% and 22.1% in FY11-12 and FY12-13. The order book of JMC stood at Rs490 crore in Q2FY14-15.

SSL is into agro-logistics services and is one of the largest private warehousing and agro-logistics players in India. Its revenues have increased by a compound annual growth rate (CAGR) of 39% in FY11-14 with an operating margin of 12%-15%. The current capacity of SSL is 1.7 million tonnes (mt); it is planning to add 0.15-0.2mt in the next financial year which will further boost its top-line growth.



For the quarter ended September 2014, its revenues were Rs1,140.77 crore (Rs962.20 crore) and the net profit was Rs42.70 crore (Rs30.99 crore). For the year ended March 2014, revenues were Rs4,055.25 crore (Rs3,335.40 crore) and net profit was Rs146.38 crore (Rs137.65 crore).
The shareholding pattern of KPTL includes 59.45% with promoters, 9.70% with foreign institutional investors, 21.61% with domestic institutional investors and 9.24% with retail investors and the general public.



Over the past five quarters, KPTL’s average sales growth was 21% and its average operating profit growth was 18%. Its average operating margin is 9%. The market-capitalisation is 0.81 times sales and 8.65 times operating profit. The return on net worth is 7%. The debt-equity ratio is 0.40 and the return on capital employed is 12%. The cash earnings per share of KPTL were Rs14.07.
The dividend distributed by KPTL for FY13-14 was 75%. It has maintained the same rate of dividend distribution for every financial year since FY06-07. The face value of KPTL’s share is Rs2 and the book value is Rs127.14. KPTL’s share rose from a 52-week low of Rs70.50 on 13 February 2014 to a 52-week high of Rs248.90 on 9 January 2015.