BSE Code : 531266, CMP 510. Buy in range of 480-510, and hold for 1.5-2 years for handsome gains...
V.S.T Tillers Tractors Ltd is a bangalore based company. It is promoted by the V.S.T Group, in collaboration and joint venture with Mitsubishi Heavy Industries and Mitsubishi Corporation, Japan for the manufacture of Power Tillers and Diesel Engines. The company is into manufacturing of Power Tillers, Engines and Tractors.
As India economy is dominated by Agriculture and still it is have large scope for introducing technology into it. Since population is growing, food prices are also rising slowly. To increase productivity in agriculture sector government is bringing in various schemes and giving subsidies to farmer on use of Tractors and other machinery. The sales of power tillers have been increasing since last couple of years and VST tiller future looking promising as per that.
The Company is a market leader in Power tiller and have 50% market share. Earlier company was producing tiller and tractor on its same Bangalore plant, but seeing the demand of tiller company had started a new facility for tractors and Bangalore plant will be making tiller, so it should post good growth in sales of tiller in coming years..Company is planning to focus on tiller with 65-70% revenues coming from tiller segment.
The company has market capitalization of INR 440 Cr, and trading at FY 12 PE of 9.5 approx. We expect it to command PE of 13-15 in good markets and as its profit grows, one should see re-rating happening in the counter. The company maintains a very good operating profit margin of 17.41% and net profit margin of 10.86%. The company has proved its worth over the years by maintaining Return of Equity of over 33%.
Company is looking good at this valuation and one can look forward to 100%+ returns in next 1.5-2 years in this counter.
For any query mail us at multibaggerpicks.info@gmail.com
Showing posts with label Agriculture. Show all posts
Showing posts with label Agriculture. Show all posts
Sunday, September 11, 2011
Sunday, April 17, 2011
Dhanuka Agritech
Dhanuka Agritech (507717) looks, good in short term play. It is trading around 82.5 and we have targets of 100 rs on it in next 2-3 months and 140 rs in 1 year.
Accumulate 50% at 82/83 and more 50% if it fall to 70 levels.
Dhanuka Agritech Limited have business of Agro-Chemicals, Fertilizers, and Seeds. The company has a farmer network of more that 1 crore whr in its products are used by them. The Agri-Division has a pan-India presence through its marketing offices in all major states in India. It has a vast dealer network of distributor and DHANUKA is one of the preferred choice of the farmers. Dhanuka Laboratories Ltd, another Group Company dealing in pharmaceuticals was started in 1998, with an objective of leveraging the groups’ expertise in providing solutions to Healthcare Industries.
Companies four pesticides manufacturing units located at Gurgaon, Sohna (Haryana), Sanand (Gujarat) and Udhampur (J&K). The company has Agro-Chemicals, Fertilizers, and Seeds as their main segments. Pesticides include herbicides/weedicides, insecticides, fungicides. The company is also in the business of seeds which accounts for a meager 2-3% of the business.
In Pharma, Dhanuka Laboratories Ltd., is also actively doing the research and is manufacturing Active Pharmaceutical Ingredients (API) and Advanced Intermediates in the field of Cephalosporin Antibiotics.
Dhanuka 9 month ended results was good and declared a EPS of 7.86 against last financial of 9.42 for 12 months. We expect EPS of FY11 around 10.5-11 which makes its PE of 8-8.5 against industry PE of 12-13. Hence target of 130-140 possible.
Promoter have good holding in the company shows the confidence in the business. Holding high stake of 74.99 per cent. Institutional holding is 8.25 per cent. The company has around 80 brands in their portfolio. Recently they came out with Luster, a fungicide for Paddy. Company has an edge over its competitors on account of its diverse product range and market reach -60000 retailers and 10 million farmers.
Only problem is its raw material dependence which is imported from Nissan Chemical Company, Hokko Chemical Industry Co, Mitsui & Co etc and hence risk of foreign exchange. Company’s products are dependent on the Rain Gods which cannot be predicted with certainty. Raw material prices depend on crude prices- higher the crude prices, higher the input costs for Dhanuka.
But technical chart is looking fine and accumulation phase is on.
Accumulate 50% at 82/83 and more 50% if it fall to 70 levels.
Dhanuka Agritech Limited have business of Agro-Chemicals, Fertilizers, and Seeds. The company has a farmer network of more that 1 crore whr in its products are used by them. The Agri-Division has a pan-India presence through its marketing offices in all major states in India. It has a vast dealer network of distributor and DHANUKA is one of the preferred choice of the farmers. Dhanuka Laboratories Ltd, another Group Company dealing in pharmaceuticals was started in 1998, with an objective of leveraging the groups’ expertise in providing solutions to Healthcare Industries.
Companies four pesticides manufacturing units located at Gurgaon, Sohna (Haryana), Sanand (Gujarat) and Udhampur (J&K). The company has Agro-Chemicals, Fertilizers, and Seeds as their main segments. Pesticides include herbicides/weedicides, insecticides, fungicides. The company is also in the business of seeds which accounts for a meager 2-3% of the business.
In Pharma, Dhanuka Laboratories Ltd., is also actively doing the research and is manufacturing Active Pharmaceutical Ingredients (API) and Advanced Intermediates in the field of Cephalosporin Antibiotics.
Dhanuka 9 month ended results was good and declared a EPS of 7.86 against last financial of 9.42 for 12 months. We expect EPS of FY11 around 10.5-11 which makes its PE of 8-8.5 against industry PE of 12-13. Hence target of 130-140 possible.
Promoter have good holding in the company shows the confidence in the business. Holding high stake of 74.99 per cent. Institutional holding is 8.25 per cent. The company has around 80 brands in their portfolio. Recently they came out with Luster, a fungicide for Paddy. Company has an edge over its competitors on account of its diverse product range and market reach -60000 retailers and 10 million farmers.
Only problem is its raw material dependence which is imported from Nissan Chemical Company, Hokko Chemical Industry Co, Mitsui & Co etc and hence risk of foreign exchange. Company’s products are dependent on the Rain Gods which cannot be predicted with certainty. Raw material prices depend on crude prices- higher the crude prices, higher the input costs for Dhanuka.
But technical chart is looking fine and accumulation phase is on.
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