Happiest ever decade !!!

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Dear Readers,

Another excellent year and a remarkable decade are departing. I wish you all a merry X-mas and a prosperous new year in advance, moreover wishing you the happiest ever decade ahead in your investment life. Investing in carefully selected Indian equities, taking part even at the current levels will be one of the consummate decisions for you in this New Year. Because India and its market is developing such an outstanding base of opulence to multiple your money in coming years.

Money simply doesn’t make money in the market. Money, even a small portion, with a better level of awareness will surely help you to achieve your goals. Internet, the largest and fastest knowledge base is in front of us at the cheapest cost. Today, knowledge is at our finger tips or we can unearth any information with in seconds. I think, its obligatory to keep up-to-date ourselves before any kind of investment decisions, especially in the current scenario. I personally know people who lost more than 50% as well gained more than 150% in the recent course of Sensex’s 9000-21000 rambles. So, wisdom matters. The awareness or reasonable understanding on your stock selections worthier than anything and it’s the most important point you have to carve on your brain at this New Year.

Stocks discussed a lot by media or experts may not beneficial for you always and generally they burn your fingers. You have to develop a reasonable decision making strategy considering the news and it’s probable impact on the share prices. Never ignore technicals, as these figures will give you an insight on the way how the company is performing. But you have to focus on the probable demand of the product/service offers by the company or weigh, how it can turn vibrant in the future.

I think, short term trading will be more hazardous in the days to come because of rising contribution of fastest communication means like internet/Mobile phones etc... And the increasing number of market participants as well high scale of volatility on indices will compel you to be faster than anyone. I know people who trade everyday as a routine and some others trades once in a while or so. The second category reacts only to accurate news thread after confirmation on the source and correctness of the information. Interestingly they are even ready to wait weeks for such a suitable event.

I am equally passionate on launch of this new decade with the previous extreme lows of market, where we had enough to hope. Its again the time is arrived to fill your bags with good scrips in small batches with an ownership mood. Its sure, the span of next 10 years or coming decade will reshape the face of our great nation and I would like to invite you all, to participate in this excellent journey and to grab your own portions.

Even after all the ongoing anarchies, I am keeping 100% confidence on our scenario and there is hardly anything visible ahead which enough to deviate my morale. Yes, further unbelievable corruption revelations might have there in future, but personally I am positive to all those processes. Cyclic refinement is one of nature’s unquestionable practices or we can take it as, cutting down certain weak or overgrown branches will surely boost the growth of core trunk.

The coming New Year and decade is one of the rarest occasions to us and I would like to stress on that point. It’s a time to forget all the failures and to adopt a cognizant and calculated strategy with a long term vision. Forget all the bitter experiences and look for a bright future ahead stepping with our promising financial system. Just focus on the size and power of one of the world’s most persuasive purchasing/consuming band of population. I think, the single reason is enough to up keep the trust on our economy.

Naughtily, I am keeping an inflated wish or it may be a cycle of economics. A recession born from us (not from US) on any possible grounds at a certain point of time in future, may be after some 10-15 years, which will trembles the global economy, like what we suffered of late. I am totally not interested to consider anything negative on our growth course prior that possible threat.

If you are an investor with long term vision, don’t bother much on Index figures or on its temporary wavering. An easy target for Sensex’s 30,000 is there with in a short span of time. A new journey for the market has begun few months back which might have take it to much higher levels over the next few years. Probably 35-40k levels over next 5-7 years is imaginable and I strongly believe its attainable.

The above statement is clearly not a prediction, but I am compelled to believe like after a close watch on the Sensex’s history of past couple of decades. I would like to place some interesting statistics on Sensex to convince you the possibilities of above said figures at my next post. Hope, it may help you to get convinced on the trend of overall growth trajectory of Indian market and relevant future figures too.

Before that, I wish every one of you have read the pages at following link, what people thinking on us.

http://www.ibef.org/resource/quotes.aspx

Once again, Wishing you and family a Happy and prosperous year ahead filled with peace, joy and wealth as well welcome all those who joined in the Portfolio Advisory Services in the month of Dec.

Comment please...

Shabu Thachat – sthachat@gmail.com

Alert on Parekh

Dear Readers,

Please refer the SEBI order at following link and have a full read with patience, Its informative.

http://www.sebi.gov.in/cmorder/SanjayDangi.pdf

SEBI has banned promoters and promoters group of certain companies on further buy/sell in their own companies cause of some violations of rules/regulations noticed. The name of the companies revealed in the above order is nothing related to us, but name of one entity who is under suspicion, Pacific Corporate Services Ltd has considerable stake in Parekh Aluminex. (Check the following link)

http://www.equityintelligence.com/profile/ShareHPMoreOne.aspx?code=7902

Parekh Aluminex has already crashed by almost 20% (LC) on yesterday (03 December 2010) by when the news spread and I hope the blind sentiment may bring down the stock bit more. There is nothing fundamentally changed with the company/stock/business but there is a chance of possible illegal trades might have revealed in the future on Parekh Aluminex too by Sanjay Dangi group or Pacific people.

I hope its better to exit from Parekh Aluminex, whether lose or profit. Another possible strategy can be take out the Capital or Profit which ever is greater. The stock is fundamentally strong and we can think a re-entry at lower levels once the issues settled.

Check the following link too on revealed insiders...

http://www.moneylife.in/article/72/12111.html

regards

Shabu Thachat – sthachat@gmail.com

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Scam season – the endless story

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We are in earshot of multi-crore scams and scandals involved by our Honourable Ministers, politicians, senior Govt servants, corporate negotiators, media icons and other top class officials. Filthy CWG scam, outrageous 2G Spectrum deals, greedy loan scams headed by officials of India’s Largest Home lenders LIC Housing finance, escorted by reputed PSU bank officials of Bank of India, Central Bank, Punjab National Bank etc..etc.

The amounts involved in such scams/scandals are proportionately increasing like the prices of Sugar, Onion or Gold. Money is becoming valueless. I remember the days; 1Kg Sugar was less than Rs.1.50/-, Onion at less than Re. 1/Kg and Gold was less than Rs. 100/Gm. The then scams were limited too with in thousands or lakhs keeping the ratios. Now we have grown, paying 20-40 times higher for above stuffs. The proportion of sums involved in scams are more attractive and may be its the reason, majority is interested in fiddling than anything.

Negative global developments including Irish reactions, Korean build-ups and finally serious wikileaks paranoia are adding the fuel. The Korean and probable revelations from wikileaks are more serious than anything. My assumptions may be wrong, but I am anxious because, US is playing at both the faces, they even took official advance bail on the wikileaks revelations by alerting us, you don’t believe all these.

The investor fraternity is in negative sentiment and its reflecting in the market as usual. Market has corrected almost 10% since the recent peak on 5 November 2010 due to a blend of international and India specific issues and is gradually recovering. There is no vaccine to cure the corruption plague. It was there in our blood, it is there and it will be!. We have keep roared as much with the media whenever we noticed such dirty practices. Media, the people we trusted or leaned on all these times, who shared our pain and enlighten our wishes each time we hassled by scams/scandals/politicians. They are also leaving us by realizing that they can make much more than what they earn by strolling within the four walls of channel studios. They too, finally found the alluring outside world which provides huge opportunities. If the revealed tapes are correct, its highly harassing. I could not yet convinced my sense up on the rolls played by our reputed media idols, especially Padma Shri Barkha Dutt. Recall her Kargil & Mumbai attack reporting, and the Padma Shri, our fourth highest civilian honour is still with her name. Won't we respect that class civilian decoration or we disregarding the others who awarded it?

Lets come back. Crashes and booms are common phenomenon towards every market and economy. I think whatever going on is simply related to sentiments and the economy is intact in our case. Such types of scams/scandals were there with every emerging economies and history denotes the same. Its our good luck that things revealed even lately because we are in a democratic structure. As investors, we should not be paranoid on such temporary sentiments but its wise to be very aware and cautious on such developments. Whatever going on is just a psychological extract and I don’t feel any big thrust on such issues. I am happy that, finally we got to know all these, God is with us and we are skilled or immunized to absorb all these shocking deeds with a cool sense. I think its an opportunity for our politicians for self realization as well thinking on remedies. From our part, we can only pray for some kind of Wikileaks exclusively for Indians and it will provide us some more interesting times with the market, moreover we always need some kicks to walk straight.

Market is a place where investors should prepare for the worst always and expect the unexpected. We have to be firm in such testing periods because we are strong enough. We are one of the fastest recovered markets from the recent historic downturn and there is hardly anything hazardous ahead. In the recent tweak, some sectors and stocks have corrected much more than the main stream because of certain sector specific bad news related to telecom, infrastructure, realty and banking etc... The valuations have turned more reasonable for certain scrips and those who unreasonably punished will recover fast.

regards

Shabu Thachat - sthachat@gmail.com

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How the crash worked?

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Dear Readers,

Sensex crashed 1419.52 points (6.76%) from its ever high from 21004.96 on 05 November 2010 to 19585.44 by 19 November 2010. We can expect few more in this series, adding fuel by the ongoing issues related to 2G Spectrum and further its political consequences. However, I would like to place few interesting statistics for readers from my master file happened in past 9 market sessions.

You can find stocks gained or lost more than 20% during the past 9 market session at following link.

https://spreadsheets.google.com/ccc?key=0AtfBgkcWwwWTdFhoQkdtYVVwSFNVWGdybzR6dHFKZXc&hl=en

Comment please....

regards
Shabu Thachat
sthachat@gmail.com

Decorate your Portfolio

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Dear Readers,

The Sensex is floating around 20K levels, just few points back to its record heights. Foreign Institutional Investors were pumped around Rs. 80000 cr to our market in the year 2009. In 2010, it is almost a record breaking Rs.113500c r till this October end. Such huge involvements of foreign money can formulate some temporary upsets in the market, but I hope this flow will continue for few more years because India is remaining as one of the most dependable economy in the world. Our stocks will surely be expensive but a serious thinking on safe and long term investment in Indian equities is still worthy considering the thrilling verve developing around us.

People, who approach long term investment as a passion, seeking credible sectors and companies to invest. Further, our media and experts are busy in debates/forecasts on probable emerging sectors including Infrastructure, Power/Energy, Finance, Agriculture, Automobile, Technology, etc.etc. Few of these sectors or most of them will shine in the days to come by stepping with the Indian growth graph. When an economy is getting bold, every portion of the system has to perform in a steady manner. So, its sure, all the above sectors will shine with their own magnitude and might give us good returns in the future.

Today, I wish to light on a less discussed segment considering it's infinite growth trajectory. Can we spot an industry where all the above hot sectors can collectively influence them to perform a superior pace of business? Do you noticed an area of business where each and every growing sectors/companies, majority of their products/services, entire infrastructure spectrum continuously consume their products directly or indirectly?

I am talking about the evergreen decorative segment or the paint industry. It seems majority of our investors, media and experts are not paying adequate attention to this area of business in contrast with their other hot topics. I wish to place few statistics on this segment; moreover history attested the real strength of this business already, even in the most critical times. Its one of the very few industries which shown remarkable resistance in the worst ever phase of economy, moreover recovered faster, further busted their existing record heights in the shortest span of time. The positive environment is just sprouting after the pit, what ahead is ,how this industry going to perform when everything under a fine tune?

From its unprecedented peak at 08 Jan 2008, the BSE Sensex was declined around 60% by 09 Mar 2009. The collective market cap of our 5 major players in the decorative segment were dipped just around 40%. Interestingly, when things reversed, (09 Mar 2009 to 09 Sep 2010) they gained more than 230% compared to Sensex’s 130% ramble.

The growth of decorative segment is entirely associated with the growth of economy. We can find a lot of positive symptoms around us which might fortify this tenable sector. Increased(ing) number of companies under construction/infrastructure band including revival of real estate business, gigantic figures under planning on projected infrastructural development by Govt, escalated growth pace of automobile industry, growing consumption of industrial hardwares, higher disposable income of our middle men, average Indian’s awkward and opulent spending behavior to decorate his own and only abode, availability of alluring decorative house hold products including furnitures etc.. etc.. I hope all these rationales are enough to explode the decorative segment in coming years. And no doubt, we will repaint everything in certain frequency whether its automotive coating, industrial products or premises. In addition, we have sufficient traditional custom oriented festivals to re-paint/refresh everything.

There is hardly anyone between us who keeps a qualm on the apparent growth of our great nation. We had enough talk on this theme, the obvious growth prospects of India from different angles. I wish to roar it again to the investor community considering the entire observable symptoms; “don’t miss the decade ahead”. I hope, the decorative segment and companies involved in the sphere will turn as real as well reliable winners behind the screen among all other sectors contributing to the optimism.

Comment please…

Shabu Thachat

sthachat@gmail.com

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Anniversary notes

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Dear Readers,

The blog and associated Portfolio Advisory Service is completing 3^rd successful year by October 2010. I would like to sincerely thank you all for the active and coherent support extended during the period.

The service

It was a challenging experience of preserving portfolios in the midst of uncertain or highly volatile market conditions. We have witnessed the peak levels of market and craziest falls in the history during these three years. When looking back, it seems I have successfully managed to preserve the funds of clients, moreover channeled them to have superior returns keeping the best level of transparency. Anyhow, I am not the person to evaluate the success rate or decency level of this service; instead clients can cite their experiences in the comment session. Further, I am getting contented reactions from readers who have enjoyed fabulous returns from the stocks suggested through this blog (multibagger series) by time to time. (Kitex , Om Metals, Hanung, Manjushree, Parekh Aluminex etc..)

Now, the market is once again parked near the crest. Benchmark indices are close to their previous heights and the investor community is at optimum buoyancy on breaking previous heights. Every one of us seriously concerned on market indices and these numbers are playing a crucial role in our investment decisions. Today, I would like to place few personal notions on the topic considering the current Indian scenario or the mounting energy level of our economy.

Ignore Indices!

I think, we can simply shut our senses towards these index figures (Sensex, Nifty etc) in view of the current Indian milieu. I am seriously thinking to adopt this practice with a full heart and hope its the strategy of time. Bothering these jumbling numbers are quiet futile as it may soar few more thousands up or can be down few in the days to come. I don’t believe, these figures have much importance, especially in a country like India at its ongoing status.

You may feel odd on the above statement as, how we can neglect the so called benchmark indices? Most of us did or doing everything considering these figures, resistance levels etc. Is it possible to invest in Indian stocks with out considering this level of mercury? A number of questions are there to rise. But I think we can!, especially at the current phase. All the above are genuine queries at their respective levels and I will not argue on. But I wish to affirm that, we can invest now, not considering any of these benchmark indices but with sheer logics., further we can limit the importance of these figures to have better entry points.

India, our beloved motherland is undergoing the highest economical growth pace in its history. It is expected that our trillion dollar economy will accomplish a two fold growth in next 5-6 years. The unavoidable transformation of this great nation to a super economical power is already ignited. Try to understand the long term growth prospects of this sleeping lion, smell the strong economical fundamentals, unbeaten outlook and the conquering emotion of this community to grow despite of upsetting negatives. You can feel it from your surroundings if watch closely.

My reasons to affirm this point are numerous. A stable Government leading by a band of visionary professionals(no politics), increasing infrastructural spending in billions, steadily growing economical platforms, strengthening rupee between international currencies, strongest banking sector both private and public players, skilled and low cost work force, powerful & transparent financial bodies/regulatory mechanisms, escalating number of youths, rising focus on agricultural developments, strengthening village bases, growing communication developments, solid state reserves, band of honest and visionary entrepreneurs etc.. etc..

Try to find out good companies, intellectual entrepreneurs, evaluate their visions which can make miracles for us instead of hanging around the indices. The share market of such a growing economy must give incredible returns to the investors, if we plant our money in a genuine and cautious manner. The recent economic symptoms are assuring this fact that we are moving at a fastest pace ever to our inevitable destination. Its estimated that our growth will be around 8.5% in current FY. We are one of the very few economies recovered from the ever worst slowdowns in the history, moreover, it is expected that we will switch to double digits within next 2-3 years. I strongly believe, we never had a real recession but just hangovers imposed on us. Any way, we have almost recovered, moreover immunized upto an extent unlike the rest.

You must have selective on stocks with high degree of logics considering the business model and the management efficiency. My point is, an alluring horizon is developing around us to make money in legitimate way by investing in good Indian companies. What we underwent is the past. The scenario has totally changed and its the time we have to realize and be proud on the power of this great nation. Every one of us must have to develop a fool proof strategy to exploit this rare opportunity positively. I hope the next decade is ours, will transform this great nation to unreachable heights, and its sure the age will be carved in golden letters in the history of India.

We, few Indians are the only people underestimating ourselves. The entire world is so positive or bit scared on our growth prospectus. Check details of Barrack Obama’s speeches whenever he spells on India. I feel, he is the only US president who iswell convinced or so disturbed on the apparent Indian growth story and mechanical in expressing his views unlike his cautious predecessors. The entire world is stunned on our growth as how we manage all these. We are growing between bundles of negatives. The blood shed and horrific terrorism activities supported by neighbors, internal security issues including naxelism spread over more than half of the states, growth blocking trade union practices, substandard education/literacy level in the mainstream, largely corrupted politicians, heavy number of unemployed and poor, heavy numbers of polluted bureaucrats, unbeaten underworld dawns, casts/religions/ethnic groups ready to fight on simple issues, unsolved national and international issues, lack of roads, rails & airways and other infrastructural requirements etc.. But still we are growing!

Excess media freedom is another issue. Our media is more interested on unwanted surgeries than positive findings. It seems India has surplus number of media stuff and everyone needs negative news to promote themselves. I never noticed any Indian media educating all those positive developments around us with real patriotism rather they are people born to criticize each and everything.

Let me conclude. All the above statements does not means, you can invest in any stock considering India is growing and every stock will provide you extra ordinary returns. The impacts of heavy fluctuations on indices will definitely reflect on stock prices, but genuine stocks will recover promptly and the rest will cornered to their respective levels. Heavy storms can make only slight jolts on brawny trees or leans them a bit.

Try to understand our strengths rather constraints of this great nation and it’s economy. All those limitations are there but we are growing rapidly. The final result will be gorgeous like a handicapped contestant wins the medals between wholesome racers. I wish to place few interesting news threads at following links, a must read for every one of us.

India’s GDP to touch 205 Trillion Rupees by 2020: Edelweiss Report

India to develop its own futuristic computer operating system

Learn to live like they do in Dharavi: Prince Charles to UK

In praise of India .. what they see..

India's September Domestic Motor Vehicle Sales

Share market is a place where we can grab unbelievable gains as well unaffordable loses, both adequate to change our lives for ever. If you are proficient to observe the pulses of stocks/business/company/industry, you can avoid loses up to an extent. Still, making better returns are away. You have to develop skills to analyze those pulses logically.

I would like to invite all kind of investors to the Indian market, because it’s the final destination you are searching for. I would like to repeat the same words to freshers. “If you are not yet started investing in equities, you will soon be, its sure everyone of you must do that, if not now, later with the crowd, be a part of this impressive growth fusion developing around us and don’t miss it”.

"India is, the cradle of the human race, the birthplace of human speech, the mother of history, the grandmother of legend, and the great grand mother of tradition. our most valuable and most instructive materials in the history of man are treasured up in India only."

Mark Twain,

Comment please ...

regards

Shabu Thachat (sthachat@gmail.com)

Multibagger series – A muscular one

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Dear Readers,

As promised in the previous post, I wish to light on a probable multibagger stock from my list as belated Onam gift to readers. The stock has made a pretty jump during this period due to increasing demand shaped by the known fundamentals as well the support of on going market sentiments. I have already suggested this scrip to most of my clients well in advance and hope, all of you are positioned.

Following lines are my plain personal conclusions, compilations or suppositions to have and hold this stock for a long time or collectively inspiring me to act on the same. I feel comfortable on the horizon developing by this company or when I search for good scrips to invest, it is one of them I found with appealing rationales and hope the path ahead is promising. If you feel comfy, go ahead.

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As we know, a healthy body can merely clinch a brilliant mind. Every one of us keeps a desire to shape or having a healthy and masculine physique or an elegant feminine figure. The wellness service industry is an emerging sector in India with vast opportunities ahead and it covers a large number of services/products related to health, beauty, fitness & rejuvenation line up (yoga, spa, massage etc.). We are going to discuss on a fuel filled business under the wellness service sector, innovative and efficient to tap the essence of health/fitness market.

The Indian equity market has witnessed an IPO, first in it’s kind in April 2010, nothing else but entry of a promising brand from the fitness industry. Talwalkars Better Value Fitness Limited (TBVF) is the leading, reputed as well experienced fitness chain service in India rather an established name in the industry. The company is already a distinguished name in the sector and I was eagerly waiting this listing by a couple of years. I think, the management has delayed the listing process till April this year, maybe cause of negative atmosphere linked with recession clutter or so. Here, I wish to disclose about one another company from my hot waiting list(ing), possible in a year or two, the “Unitek Power Solutions India Ltd”. Hope you will keep an eye on it.

Company : Talwalkars Better value Fitness Ltd

CMP : 239.35 (BSE-17-09-2010)

BV : 49.54

FV : 10.00

EPS : 3.91

PE : 61.21

52 Wk High/Low : 259.90/132.00

Promoter’s holding: 59.49

The fitness industry is growing at a fastest pace with support of various positive factors in conjunction with the promising Indian scenario. Average Indian’s rising disposable income, increasing numbers of young population and growing awareness on fitness/health concept are few of the supporting factors. There were 5mn people in India had annual income of more than Rs.6 lakh in 2005-06. The figure is expected to go up by 20mn by year 2014. I hope this portion of the population must provide a superior market for the fitness industry in the days to come.

We have more than 83 towns which have a population of around five lakhs, offers a massive opportunity ahead in the concept. There is a significant pent-up demand exists in most of the Tier I & II cities for a stylish health/fitness experience, only if, someone provide in an adequate manner with affordable pricing. However, in India, the age group of 20-45 can largely be identified as the key client group for fitness clubs. A study reveals, the proportion of people in that age group is estimated to go up from 37% in 2006 to 40% by year 2016.

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Indian fitness industry is very much under-penetrated compared to several develop(ed, ing) countries in the world. Statistics says, about 22% of the US population have fitness club memberships, China has around 3% and we are at less than 0.4%. (Our count is even limited to Metro/Cosmo cities). According to International Health, Racquet & Sportsclub Association (IHRSA), about 30% of America’s larger firms sponsored health club memberships for their workforce. The number of companies providing such subsidies has increased significantly in the past few years. It’s a pure business strategy proven by researches and related to productivity issues, rather concerns on the fitness/health of employees. I hope our companies must follow this practice as usual. Shortly, genuine fitness companies have limitless opportunities ahead, cause of the huge supply-demand gap in the industry. Or, there is a visible unexpressed demand for value health & fitness services at average Indian’s affordable price where the term affordable is in a steady uptrend.

The Talwalkar story started in the year 1932 by late Mr. Vishnu Talwalkar in Mumbai and the long existence of the brand equity enables them to stay ahead of the competition. We must value this rich and long-standing experience (almost 8 decades) in the industry as one of the most significant advantage. Recall an ad word, “If you do something by long years, you will be master in it”. Today the company has enhanced their goodwill and clutched a pan-India presence, operating around 70 health clubs in 30 cities belonging to 12 states of the country, serving around 60000 members. By statistics, all these numbers are mounting at an amazing pace too.

TBVF offers a network of complete health clubs to achieve the goals in health, fitness or figure by providing a band of skilled specialists equipped with world class gym gadgets, ready to supply the top-notch fitness experience available in the country. The company offers a diversified suite of services including gyms, spas, aerobics and health counseling under the brand of Talwalkars. I think, they can attach the beauty salon/parlor facilities too for both the genders which will augment their business by availing full set of craze to the generation under a single roof. It seems, they are planning the same with "Star and Sitara" project and no doubt, our youngsters will throw money. The company also have a JV with Pantaloon Retail (India) Ltd, named as TPFPL ( Talwalkars Pantaloon Fitness Pvt. Ltd). The joint venture is focusing in the business to set up health/fitness clubs or similar services especially in reputed malls under the sub brand "Fit & Active".

Talwalkars seriously focusing on the modern marketing strategies including event promotional programs, ads in cleverly selected media platforms etc..(Please watch the appealing ad at HBO). They usually runs several promotional schemes as part of the marketing strategy linked with elating occasions like New Year, Valentines day, Women’s day, Summer, August, and Christmas etc.. In addition, TBVF joins with various reputed national events focusing the brand building. Talwalkars were the Official Trainer” for “Standard Chartered Mumbai Marathon” for the year 2008-10 as well Official Fitness Partner” for “Femina Miss India Contest” 2009.

There are no existing listed peers in India which are purely into the fitness industry. The business model is proficient to unearth the primacy due to factors like strong sector fundamentals including increased demand. In addition, sturdy growth in income from operations as CAGR of 80% and PAT has grown at a CAGR of 100% in last three years. Talwalkars has been achieved a nationwide foot print in a fragmented health and fitness industry which is difficult to replicate. The continuous expansion plans will boost their brand presence on pan-India basis. TBVF has almost tripled the number of health clubs in the last 3 years. The company is continuously explores attractive and innovative business opportunities with reputed brands.

My View on the scrip

I had casual visits at couple of their locations in different cities. Yesterday only, I am visited my nearest branch at Calicut and honestly, I was thinking to set up such a business as my own, by return. I had a talk with few of their trainers and it was an impressive experience to assess the fundamentals of the company/business. The branch is just 3 month old, operating with more than 350 members, average 3-4 add ups in last 90 days in a Tier II city like Calicut!. The list of customers is compelling me to think like, the membership in Talwalkars gradually becoming a symbol of status by the time, the basic symptom I was searching and to confirm.

They are smartly arranged most of the must have things at their alluring centers. Glamorous club atmosphere, smartly selected location/premise, vast range of innovative add-on facilities, modern/quality gym gadgets from reputed brands; smart, structured, cool as well skilled set of gym staff, rare standard of customer care crew band, genuine membership pricing, flexible time scheduling etc.. It is a different world, where you can see few celebrities as your co-exercisers. Shortly, if you are subscribed for a good physique, health or for whatever, Talwalkars will induce you to reach them, every next day the time scheduled for you.

Youngsters are indeed in search to develop a six pack body structure, like our heroes. I too, wished to have such rolling balls on my arms/chest under tight fabrics, but in vain. Any way, fitness, figure and style are the blazing crazes of the generation, Talwalkars required to ignite all these passions properly. The busiest modern lifestyle compelled us or we are more interested to adopt paid exercises than the conventional ways. In other words, we are even ready to drive 10kms for a 10 minute tread mill walk instead of half an hour jog at out doors.

People, especially youngsters, who have such an affordable facility available in his/her surroundings will ready to take a membership in any compact/luxury fitness centre, whether intended to the fitness goal or as a status symbol. I do believe, this company will do miracles for investors and will endow with decent returns in next 4-5 years. The revenue growth of this company is sustainable and the business model is outstanding. The experienced management has set few practical goals which are likely to achieve in near future. The stock has very low downside risk and the upper side is unlimited.

Comment please..

“Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do” - Mark Twain

Regards & happy investing

sthachat@gmail.com

Multibaggers – On the way

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Dear Readers,

Thanking you all for the active and thought through support to this blog since it’s inception. Today, I wish to review on some of my previous stock suggestions or in other words, wish to remind about the track of these apparent multibagger candidates.

Please have a (re)look at the following links, where I have quoted few fundamental aspects on the said companies and some positive stances from my angle. Hope, readers too will evaluate the contents, moreover weigh up the status of returns compare to indices between the see-saw episodes of recent past. These stocks were recommended at much lower levels to my clients before publishing the respective articles.

1. Hanung Toys

Date of Post – 15 November 2009

Price(13 Nov 2009) – 115.45

CMP(05 Nov 2010) – 362.60

52 Wk High – 388.60

Link - http://www.stockinfos.in/2009/11/hanung-serious-toy.html

2. Manjushree Technopack Ltd

Date of post – 10 January 2010

Price (08 Jan 2010) – 52.55

CMP(05 Nov 2010) – 101.35

52 Wk High – 107.45

Link - http://www.stockinfos.in/2010/01/multibagger-again.html

3. Parekh Aluminex

Date of Post - 14 April 2010

Price (13 Apr 2010) -153.65

CMP (05 Nov 2010) – 565.85

52 Wk High – 584.00

Link http://www.stockinfos.in/2010/04/multibagger-series-front-runner.html

The lesson

Domination in any business is a genuine factor to weigh with an investor’s point of view, especially in listed entities. As you know, increased number of players in any industry or a tight competition in business can not furnish remarkable returns, even if we hold the best ones in the industry. Moreover, selecting such scrips to invest is not a wise decision in the current scenario. Limited number of players who provide quality products/services must grow with a peerless pace and I always keep this point at the top while selecting scrips to invest. Shortly, the company, on which we are making mind to invest, must have some special characteristics compares to others or some peculiarities its own. Hanung, Manjushree & Parekh all are enjoying the same unconventional uniqueness in them.

Foreword

I wished to publish a post again in this row as an ONAM gift to my readers by mid August, but deferred cause of busy schedules. By the meantime, the stock made an unusual jump and I feel the current valuation is bit higher. Any way, I will publish it shortly for my valuable readers. The company we are going to discuss is again a clean conviction and I am convinced with own parameters. Moreover, we can put this company too in the same basket of above trio.

I hope to see the views of my readers/clients in comment session who all are holding these stocks, because I will be happy to know that, `you are still holding’.

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regards

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Shabu Thachat - sthachat@gmail.com

Patience must pay..

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Dear Readers,

Hearty Greetings to all of you on the occasion of 64th Birthday of our Motherland. I hope, all of us to pray for the prosperity of our great nation on this auspicious occasion as well for the souls who laid their todays for our tomorrows.

Its an article by Mr. Mahesh Pidshetti, Bangalore, an active participant of this blog since it’s inception. I had an intention to provide him a platform to inscribe his thoughts as a rep of our young generation, because I usually receives worthy as well genuine comments from this guy bit differ from the age group. So, we should heed him..

Over to Mahesh

We all know that in stock market, Patience is the key factor to enjoy growth. In short term, lots of negativity bombarded to our thought process influenced by Internet, TV shows and analysts, which fluctuates our patience. People wish to be long-term investors, but when short-term shakeout happens they sell it or when they see good price appreciation they books profit in the short term for small gains. When you invested in a good company, why should you sell on nominal gains? Make the shakeout as an opportunity to buy more. Stock market consists several kind of investors, Long Term + Medium Term + Short Term + Day Traders. The interesting part is, market only fluctuates due to M+S+D.

India is poised to growth and you know, why the Govt taking divestment route, trying reducing fiscal deficit? And other changes in policies. Why RBI Bought Gold by dumping Dollar, Why RJ didn’t sold out his holding when BSE hit 7800?, instead he bought more. Why investor legend Warren buffest is focusing on Indian market?. Why NTT DoCoMo increasing its stake in Tata Tele?. Why World’s Top Class Car manufacturers opening new hubs in India? And so on. Because India is @ a nascent stage of it growth. If crisis hits back again, India will be insulated because we have 40,000 tonnes of GOLD reserve, India will have Trillion dollars of assets in hand, and its huge.

Who will prevent the consumption of young Indians?. Indian economy doesn’t have any benchmark like western have developed for their economic growth. India has its own benchmark for its growth; different villages @ different corner of India have developed their own economic growth strategy. That’s the way India growth continues. India has balanced economy (export+import). Lots of revolution happening in rural India. Keep watching ET NOW Starting up show, you will know how people are creating business.

Keeping all these factors of the growth of India, following is one of the best example to give a clear picture about why sticking long term will make you prosperous than short-term, moreover long term investor enjoy more social life, sound sleep as well peace of mind.


If an investor bought 100 shares of Wipro @ Rs. 100 in 1980, 30 Years of Patience

1981 , 1:1 Bonus =200 shares

1985, 1:1 Bonus =400 shares

1986, split to Rs 10 =4000 shares

1987,1 :1 Bonus =8000

1989, 1:1 Bonus =16000

1992 ,1:1 Bonus =32000

1995 ,1:1 Bonus =64000

1997 ,2:1 Bonus =1,92,000

1999, Split to Rs 2 =9,60,000

2004, 2:1 Bonus =28,80,000

2005, 1:1 Bonus =57,60,000

2010, 3:2 Bonus =96,00,000

Multiply CMP * 96,00,000 equal to more then 300 Crore!!

From 1981 to 2010, how many crash have occurred?. Did those crashes prevented the growth of good companies?. There are several other examples for like Titan, Asian Paints, BHEL, BEL, Hero Honda etc.

India will have more young (productive) population, who will spend more than their parents. Our parents had saving mentality, we have spending mentality to maintain the status along with glamour. India will have more entrepreneurs who in turn create more jobs which in turn create increase in consumptions and the cycle continues. Next decades are the youngster’s decade. We are in to age of rampant consumption; the consumption is driven by youths. Youth demands good quality from every angle, whether its food, car, mobile, e-commerce and of course good salary too, which leads to rising income which leads to creation of more middle class families and a report says we will have 80 crore middle class population by the coming decade.

Regards

Mahesh Pidshetti, Bangalore

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Broking- The promising sector

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Dear Readers,

BBC had an international poll in the year 2006 involving about 10000 people from 10 countries across the globe. The respondents were questioned on; who they believed would be the world’s top economies by 2026 or in the then 20 year term. A quarter of the participants answered that India would emerge as the third biggest economy by 2026 after China and US. I feel, the poll result is an explicit indication of comprehensive optimism, the world keeping on India’s anticipated but inexorable growth.

http://www.bbc.co.uk/pressoffice/bbcworld/worldstories/pressreleases/2006/05_may/emerging_giants.shtml

As India is rising as the world’s second fastest growing economy, the domestic equity market is also growing not only in the size of capital but in terms of the increasing number of participants. Whatever the short term reactions, I am sure, the inevitable growth is crystal-clear ahead in all respects and the next decade will witness the economical authority of this great nation. Simply, if you have a trust on our market/economy, cautious in selecting stocks to invest and having bit patience, the coming decade will surely flourish your funds.

Today, I wish to discuss on an emerging sector, realized as part of my research to find better sectors to invest for next 5-10 years. I am talking about the Broking sector or the listed equity broking firms in the segment. Its less important whether it is a defined sector in the name by conventional means or comes under any existing conservative sector heads. But, I am focusing the pure equity broking part. Yes, the stock brokers, via millions of investors buy and sell shares and pay the brokerage on day-to-day basis. The anticipated business potential of this sector already realized by our nationalized as well private sector banks and they are focusing the area as one of their imperative business segment. I hope this sector will do wonders for investors in long term as I am forced to consider the apparent growth of this business segment, more pragmatic as well undeniable with consistent reasons. I wish to list few rationales to affirm this point as it must be one of the assured sector, strong enough to bestow good returns to investors in the days to come.

120cr people! hardly 1.75cr equity investors, less than 1.5% of the total population. Try to compare, there was 4.2% of the total US population involved in the equity market in the year 1949. If we take the number of demat accounts as a measurement to count share market investors (direct or indirect), It seems the current figures are zilch, and the horizon is unlimited and appealing. Imagine, if 20% of our population participates in the equity platform in the next 5-10 years and just take this as numbers, its huge and will be near 25cr. I hope some 25-30% of our population may possibly participate in the equity market, directly or indirectly by end of next decade where the percentage stands now is just below 1.5.

The increasing trend in demat account figures showing real pace despite the markets witnessing high volatility during last couple of years. The numbers on both the depositories put together stood at 147.53 lakh as of May 2009 grown to 174.95 lakhs as per the latest data available. NSDL with total number of active accounts at 92.31 lakh as on May 2009 grown to 107.18 lakh while CDSL has grown to 67.78 lakh accounts from 55.22 lakh in the same period. On an average, about 2 lakh new demat accounts are added in the country every month and the trend is ascending. This striking statistics are impressive and the prospects for stock broking business are doubtlessly bright. The lengthy queues at Pan Card opening outlets are also surprising; our educated youngsters are interested in making money effortless or perceptive in the power of equities.

Lower penetration level to the retail investor segment in the equity market compared to developed countries offers a sizeable opportunity ahead to the brokers. Thousands of new investors opening demat accounts every day, recovery symptoms from the downturn and the positive market sentiments attracting lakhs of investors every month. Moreover, India has a positive demographic profile with a large segment of the population under 30. Increasing number of middleclass population, their increasing income level and higher savings rate offers key opportunity for brokers to channelising funds into the equity platform.

The anticipated divestment plans of Govt will probably ignite the flow of retail investors in the days to come. The robust regulatory environment administered by RBI as well the reliable controlling mechanism by Government bodies increases the trust and supports the Capital market to a comprehensive stretch. It seems the long term profitability of broking firms are intact assuming lack of hazardous negative surprises ahead in the domestic as well global economy. The fundamentals of our market/economy seems stronger and indicating further long term uptrend, despite all the possible concerns.
The short term/intra day trading, the fastest income source of brokers is easier than ever because of the dazzling development of communication/IT facet. Unlike earlier, you can enter or exit in a stock by very few clicks on your mouse button or pressing keys on your Cell Phone. You can easily transfer funds from your bank to the broker and vice-versa with in seconds. You can trade in stocks from any part of the globe irrespective of your location. The rapid spread of information technology, modern communication means and active participation of the media in the subject are played an exceptional role in creating the passion of equities to the common man. The automated screen-based trading system using modern technology makes market operations transparent as well error free.

There is hardly any specific season for the broking business or its an year full deal. If the market goes up, they do well, if it goes down, they do better. Simply, what ever you do, you have to pay them and there is no credit. And in our scene, the penetrable customer base is unlimited and it depends how the broker building up their business. Today, broking firms are growing their network at a rapid pace and even focusing in the rural areas. They are more in the way to expand their networks by franchisee route instead of company owned branches in order to keep the cost low. The flexible cost structure, appealing profit sharing ratios and lesser formalities to set up franchisee outlets encourages lots of young entrepreneurs to the zone.

Interesting links

Please refer PWC’s recent research revelations at following link.

http://timesofindia.indiatimes.com/world/china/China-can-overtake-US-economy-by-2020-says-PriceWaterhouseCoopers/articleshow/5482794.cms

Please have a look at following link where Google Trends showing search based statistics of terms. I have placed certain terms related to equity investment such as Share, Equity, share market, stock, stock broker, profit, brokerage etc.. The data is scaled based on the average search traffic of the term we have entered. You can see who people more interested in all these terms…

http://www.google.com/trends?q=share&ctab=0&geo=all&date=all&sort=0

http://www.google.com/trends?q=equity&ctab=0&geo=all&date=all&sort=0

http://www.google.com/trends?q=share+market&ctab=0&geo=all&date=all&sort=0

http://www.google.com/trends?q=stock&ctab=0&geo=all&date=all&sort=0

http://www.google.com/trends?q=stock+broker&ctab=0&geo=all&date=all&sort=0

http://www.google.com/trends?q=profit&ctab=0&geo=all&date=all&sort=0

http://www.google.com/trends?q=brokerage&ctab=0&geo=all&date=all&sort=0


Buffet says “If a business does well, the stock eventually follows” . I hope this business can do well, eventually the stocks.

Few words to youngsters… If you are not yet started investing in equities, you will soon be... and its sure; every one of you will do that… if not now, later with the crowd.

Comment please...

Regards & happy investing

Shabu Thachat

Goden Rules

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Dear Readers,

It is a time-honored theory and success mantra as the share market investment should be with a long term vision. Every one of us knows this hypothesis but very few percentage apply this tactic with an addiction. I am sure that short term/intra-day gaming will never make anyone prosperous or the final results will probably of negative, or in general, it will bring you back where you started. Today, I wish to quote few my favourite, Sir John Templeton’s 16 Rules of investing for readers. Don’t consider these lines as usual or as just interesting quotes, instead these are the essence of experience of an investor legend shorten in precious words.

1. If you begin with a prayer, you can think more clearly and make fewer mistakes.
2. Outperforming the market is a difficult task.

3. Invest !.. Don’t trade or speculate.

4. Buy value. Not market trends or the economic outlook.

5. When buying stocks, search for bargains among quality stocks.

6. Buy low. So simple in concept.. So difficult in execution.

7. There’s no free lunch. Never invest on sentiment. Never invest solely on a tip.

8. Do your homework or hire wise experts to help you.

9. Diversify – by company, by industry.

10. Invest for maximum total real return.

11. Learn from your mistakes.

12. Aggressively monitor your investments. Remember, no investment is forever.

13. An investor who has all the answers doesn’t even understand all the questions.

14. Remain flexible and open-minded about types of investment.

15. Don’t panic.

16. Don’t be fearful or negative too often.

http://www.counterbalance.org/bio/johnt-body.html

Equity investment is one of the riskiest segments in the whole kind of investments and you must have self convinced on the risk factors before you enters. You should have measure your own financial/emotional levels before entering in such a playground. You have to be a mindset to take things in a cool way even the sensex touches again 8000 levels. But its only possible when your selected stocks are best in their respective businesses.

Few People who capable to move with the fast moving market trends can only make gains in the same day or in short term trading. The game is highly hazardous and not for the common man. Majority of us shifting to long term investment after suffered considerable burns from the intraday/short term deals. This shift is mostly not on the basis of improving strategies, but cause of limited options. My experience says, a person who has worthy experience in long term investment can perform better in the short term games. Or it is better you start with the patience game and gradually reducing the time frame from the experience you gained or the knowledge you acquired.

Happy investing & regards

Shabu Thachat

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Market thoughts

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Dear readers,

The market is again on the same deed of flux. Frequent high pace upward movements or profound falls are usual agenda of the market at present. Such fluctuations are compelling to feel dither on the strength of our market or forced to think as nothing exists as a support. The common investors are panic like always and such volatilities placing them in a troubling environment. But actually, things are getting more prolific for us. Another golden opportunity is developing around us to get in the BUS who missed earlier or in other words, the bus is in a reverse gear to pick you back.

Is there any solid reason behind such multiple W shape nudges? Or all the reasons projecting by our media to justify such jolts are genuine? Any way, our media is surmising reasons very quickly for each and every such tumbles whether true or false. I am weighing all these news threads positively or hopefully better to ease my apprehensions. As a long term investor, I am happy and trying to believe all these justifications on market fluctuations in its real depth. Because, they says, the falls are based on global cues. I am so glad; we India, our market, our people, our corporate sector or our economy is not blamed in anyway for this crisis. In other words, we are not responsible for all these anarchies. What else I need to stay calm in such an annoying moment? My home is quiet prosperous, I am confident on my future, growth dimensions, then why should I worry excess on my neighbors, even if I have few deals with them.

I am always in bit confusion as the media is forcing reasons to us for every single point up or down in the market. I usually get baffled when they spread reasons for every such budges on indices. If market made a 100 point gain, our media will credit to NASDAQ or DOW. If the US indices are negative and we are up, they will look for Shanghai or Asian markets to lean. If both the above reasons are not favorable to justify their stands, they will find a responsible, mostly from the European market. If every reason falls illogical, they will proudly declare, our market stood solid even after the global indices are negative. But no one dares to predict a hike or fall in advance depends on what has cooked in our neighbor's kitchen. May be its my lack of knowledge, or the different way of thinking, but most of the times, I am unable to digest majority of these justifications.

Last couple of market years confused us a lot and is even compelling to rethink on the established theories/strategies on share market investments. Let us have a rough look on the market graph. The parliament election results and forming of new UPA Govt helped the market to shoot up; first quarter results fueled that booming too. The negative reports on weather forecasts washed out those good hopes in bulk. The industrial growth figures ignited the market again but the Shanghai issues dragged the market to lower levels. Further quarterly results and some positive economical news were bringing up the market again, but now the Greece factor, crisis developing in Europe including German & Spanish issues, rising geopolitical tensions between North and South Korea added the negative sentiment. I have skipped some small issues in this row, but these are the capsule history of our market. The most important thing to consider is, few good stocks are showing real growth or attaining their real values irrespective of such fluctuations.

I would like to suggest my clients to read one of my previous posts at the following link. Please utilize the current level of market at your best. You can accumulate good stocks in comparatively cheaper valuations, but in small batches only, depends on your fund levels. We have enough good scrips to choose which are corrected even more than 20-40% from their highs.

http://www.stockinfos.in/2010/02/be-cool.html

I have placed a screen shot (modified for better visibility) of BSE statistics of last 10 months on Hindalco Industries Ltd, an emerging company and index player. Please spend some time on this image which may help you to form a strategy to cope up with such market conditions. A close scrutiny on this image will answer you in some way or may help you to shape the strategy you need to adopt. I hope this image will work for you better than 10 pages of write ups. Your conclusions will depend on the time you spend on these figures or the maths you able to find between lines.

Do you wait for a stable market to invest your hard earned money? I would like to say, don't waste the time in waiting the best point of time to enter in the market; based on indices, as there is no such time exists. Or if you started realizing such a time, it will be far ahead of you. After every such fluctuating period, market will surely journeys to new higher levels. It is a basic nature of every market unless any serious injury occurred with the economy. People who enter in lower levels and who keeps the patience till the maturing period will blessed by Goddess of wealth. And I hope, the market is not going to shut down, then there is no matter of a fret. The ongoing time is precious for both long term as well as short term investors, if they choose scrips cautiously and prepared to consider a minimum level of patience.

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comment please....

Shabu Thachat

Feedbacks

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Dear readers,

Congrats to all those who secured their positions on some recent recommendations. I have placed few links below for a review and it is interesting in muse returns of indices during the period while evaluates the performance of these scrips.

http://www.stockinfos.in/2009/09/sasken-true-multibagger.html

http://www.stockinfos.in/2009/11/hanung-serious-toy.html

http://www.stockinfos.in/2010/01/multibagger-again.html

http://www.stockinfos.in/2010/04/multibagger-series-front-runner.html

I would also like to thank all of them who mailed as well commented, placed a couple of mail screenshots of one of the unknown but gratified readers.

I am accepting his blessings with a full heart with hundreds of others. I values every such blessings/appreciations as a common man and hope all these will serve better my ways ahead. I also wish to appreciate the sheer trust he has shown as well the daring nature to putting his whole money in such an excellent scrip. I am so happy that some of us are benefiting by the blog, moreover the efforts are not in vain.

Thanks & regards

Shabu Thachat
sthachat@gmail.com

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Multibagger Series – A front runner

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Dear Readers,

As promised in the previous post, I wish to light on an outstanding scrip in this new fiscal year. The following lines are my plain conclusions, compilations or suppositions to have this stock or all of the following grounds are collectively compelled me to hold this stock even in extreme provocative times. I am watching this scrip by a couple of years and day by day feeling more comfortable on the horizon developing by this company. When I search for good scrips to invest, it is one of them I found with alluring rationales and feels the path ahead is promising. If you feel comfy after a read, go ahead.

BSE Code---------------------------532606
CMP (13/04/2010)---------------- 153.65
EPS-----------------------------------32.98
PE -------------------------------------4.66
BV-----------------------------------205.18
FV-------------------------------------10.00
52 Week Low/High------------------ 53.15/166.90
Ever high since inception ---------301.00(Nov 2007)
Market Cap--------------------------198.82
Chairman/MD-----------------------Amitabh Parekh
Promoter’s holdings----------------33.91%

Parekh Aluminex Limited (PAL) is the leading conglomerate and exporter of Aluminium Foil Containers (AFCs), Aluminium Foil Rolls (AFRs) and Aluminium Lids. PAL is the single largest player in the organized sector in India with more than 75% market share in the business of supplying Aluminium packaging stuffs to Airways, Railways, Reputed Hotel networks and major caterers who serve food on travels/parcels. The ISO 9001:2000 and ISO 22000:2005 certified company is an apex name in AFCs in the globe and especially in the sub-continent.

AFCs are the most versatile, eco-friendly and attractive solutions for punters in this fast-food era. The compliance level and versatile features of these products are making PAL the leader in the segment and their products are utilized in domestic, industrial and commercial sectors globally. It leads the domestic market with sales to institutional/corporate customers including Air India, Indian Airlines, Indian Railways(IRCTC), various flight kitchens including Taj Air Caterers, leading hotel networks, Jet Airways, Kingfisher etc...

The flexibility and recyclable nature of Aluminium Foil Containers makes them the most appropriate packing/serving solution of the time and to the fore. AFCs are 100% recyclable and are far better for the environment than plastic or other alternatives. AFCs can be easily made as per specific requirements to suits user choices on temper, gauge and styles. These are defensive to extreme temperatures; idle from freezer to oven without trouble or damage. An AFC puts a resistant metal wall around the content, which assures product freshness and increased shelf life as well as capable to counter infections/micro-organisms.

Parekh Aluminex Ltd has around 80 avant-garde varieties of molds to form products that can pack every kind of solid, semi-solid and liquid eatable products in a hygienic, standardized and practical way. The company lead the market in the AFR segment with their ME brand of aluminium rolls and are also manufacturing the same on a job-work basis for Hindalco, the largest manufacturer of aluminium in the country, which markets it under the Fresh Wrap brand. The strategic three-year liaison with Hindalco gives the advantage of sourcing raw materials at privileged rates. It has an agreement with ALCAN, one of the established producers of aluminum in the world, to market AFCs and AFRs in Germany; and an agreement with the Danone group for supply of AFC.

The two production units are located in the Union Territory of Tax safe Dadra and Nagar Haveli with high-end production bases. PAL exports products to the United Kingdom, Bahrain, Turkey, Greece, US, South Africa, Dubai and Germany. It has acquired a Singapore-based company DES along with its customer base and has added Etihad Airways, Emirates Flight Catering, Gulf Airways, Thai Airways, and Singapore Airlines along with others as its customers. With over a decade of presence in international markets PAL has established a good name with international buyers for quality, variety and for punctual supplies. PAL has also in endeavor to trial exports to fresh markets like Nigeria, Yemen and Sri-Lanka with positive outcomes.

PAL is the first company in its category to receive the prestigious ISO 9001:2000 certification from BVQI, UK and the only company from India shining in the highly quality conscious European markets. The company assures a zero human touch to the end-product in their whole manufacturing process to preserve strict quality standards and drugs-related hygienic requirements set by international standard setters. By focusing on R&D, Parekh Aluminex is in endeavor to introduce innovative product variants which have not yet been familiar with the global markets. The promoter holding has been steadily increasing in the last few years. The company is under finishing of a 250Cr expansion project and it will boost their production in a great way.

The financial result of PAL for the current year and past 5 years are showing an increase of more than 35% CAGR on both sales and profit. In its first year of operation (1994-95) the company registered sales of Rs.4.40 million, rocketed to Rs.4212.60 million in 2008-09 and expect around Rs. 5400 million in FY 2009-10(It is one of the very few companies on which I usually sit with a calculator after every qtrly results). I hardly consider the transitory technicals while suggesting any stocks but here, having a book value of RS.205.18/- per share, and with Rs.32.98 trailing 12 month EPS, CMP around Rs. 150/- I think it will be a great buy even at current levels. Net Sales, PAT, EPS and BVPS all denotes, this business is heading to the right direction with a right pace. I think the following quote by Buffet, suits best for such scrips. “If a business does well, the stock eventually follows”..

My View on the scrip

I hope multiple fold returns from this scrip if you have patience. The revenue growth of this company is sustainable and the business model is outstanding. The gifted management has set few realistic goals which are likely to achieve in very near future, considering the history and current growth pace. The business has huge growth potential in the future and their products sell like FMCGs where the demand will keep increasing. The company has made big moves to penetrate the foreign markets. In addition, the booming retail spectrum, fast changing consumer trends, involvement of starred or reputed hotel chains, increasing fast food outlets, escalating Air & Rail traffic numbers and sizzling tourism scenarios will surely bless us in the long run. The stock has very low downside risk and the upper side is unimaginable. We will talk about this scrip after 2 more Aprils and hope you may secure your positions well before..

Dear clients , An anticipated ban on plastic is ahead and we may say “bye” to Manjushree at the right time and I hope PAL is the most appropriate substitute. Accumulate till that time and don’t skip the following link.

http://www.forbes.com/lists/2009/24/best-under-billion-09_Asias-200-Best-Under-A-Billion_Company_6.html

Comment please...

Happy investing & Regards

Shabu Thachat

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