Fundamental Analysis of Stocks - India Focus

Fundamental Analysis of Stocks - India Focus

Fundamental analysis will gives better understanding and foundation on investment decisions. When determining whether a company's stock is a good investment, fundamental analysis is a great tool to reach a conclusion. 

• What is a Fundamental Analysis?

          A fundamental analysis is all about getting an understanding of a company, the health of its business and             its future prospects. It includes reading and analyzing annual reports and financial statements to get an               understanding of the company's comparative advantages, competitors and its market environment.

• Why use fundamental analysis?

          Fundamental analysis is built on the idea that the stock market may price a company wrong from time to             time. Profits can be made by finding underpriced stocks and waiting for the market to adjust the valuation           of the company. By analyzing the financial reports from companies you will get an understanding of the               value of different companies and understand the pricing in the stock market.

After analyzing these factors you have a better understanding of whether the price of the stock is undervalued or overvalued at the current market price. Fundamental analysis can also be performed on a sectors basis and in the economy as a whole.

• True value of a stock?

          For a fundamental analyst, the market price of a stock tends to move towards its 'intrinsic value', which is           the 'true value' of a company as calculated by its fundamentals. If the market value does not match the               true value of the company, there is an investment opportunity.

Example of this is that if the current market price of a stock is lower than the intrinsic price, the investor should purchase the stock because he expects the stock price to rise and move towards its true value. Alternatively, if the current market price is above the intrinsic price, the stock is considered overbought and the investor sells the stock because he knows that the stock price will fall and move closer to its intrinsic value. To determine the true price of the company's stock, the following factors need to be considered.

JVL Agro Industries Limited Multibagger 3 yrs timeframe Target of 100 Rs

JVL Agro Industries Limited Multibagger 3 yrs timeframe Target of 100 Rs

• This Young Company was started in 1990 and operates mainly in Vanaspathy oil was started by Mr. D. N. Jhunjhunwala who is also the Chairman of the company.They are today the single largerst producer of Vanaspati oil in the Country.

• The company has set many milestore on the way with first company in the industry to achive ISO 9001:2008 certfied.

• The company famous brand is "JHOOLA" which is used all through Noth  east and middle India.The company toady focus on various refined oils and more focus is given by the company on healthier oils such as Mustard oil.

• They have also built a 3 MW power plant which further reduce the power cost of the company.

• Our country which hugely depends on imports (60 % is imported) to meet is Oil demand of consumers.In this industry the company is taking various steps to encorage the local producers, on such step is increase of Oil import duty by 5% which the government is planning to take.This will hugely benefit the local players.

• Company is also diversifying its business and focusing on Food sector.Its building the indias largest food park in bhiar and we expect this ti boost the earning from end of 2015.

• Also the Mangement is taking various meassure to increase the profit which is currently at 1 % to 5% which they have setup as their goal.

• With good track record of the company and favorable growth environment, good risk management i see this company growing in to new high in coming year.So recommending this stock for 3 yrs time frame and target of 100 Rs.

  

SML ISUZU Multibagger another Eicher Motors in Making Target 5000 Rs in 5 yrs timeframe.

SML ISUZU Multibagger another Eicher Motors in Making Target 5000 Rs in 5 yrs time frame.

• This Commercial Vehicle company was started in 1985 and since than has been growing strong. Sumito Corporation Japan holds 44 % in the Company followerd by 15 % by ISUZU.

• The company has full in house body building and there Maza model are very famous.Till 2011 the company was called Swaraj Mazda and it got renamed as SMI Isuzu Limited.

• In 2009 Sumitomo increased its stake to 53 % and that when the company started expanding Rapidly after that.

• In 2012 they entered the Luxury bus segment and 10000 Kg Trucks.

• Its profit in recent years where affected because of mining ban and exconomic slow down.

• The company has strong presence in Commercial vehicle segment and penetrate new segments in coming years.

• Its almost a Zero debt company with good Cashflow.The EPS has dipped this year to 12 from 25 as they used the money to payoff the debts which is smart move.

• So in coming years the Comany will furthe expanion and growth will benefit the investors.

• The stock has goe from 300 to 800 in 6 months,but we still feel lot of value unlocking is still there and with strong support from Japanese promotes this comany will gor to 5000 Rs like eicher motors in longterm of 5 years. 

SONATA SOFTWARE - Multibagger Zero Debt Company with Profit doubled.Target 350 2 yrs timeframe.

SONATA SOFTWARE - Zero Debt Company with Profit doubled.Target 350 2 yrs timeframe.

• SONATA SOFTWARE is a Midcap IT stock which has now fallen in Radar of lot of Big Fund houses.This Stock is Part of Goldman Sacs CNX 500 Fund.
• Company is aglobal IT services company that focuses on enabling businesses win value with strategic IT initiatives.
• The focus on Product Engineering, Professional Consulting Services, Early Adopter Programs, Implementation and Alliances.
• Thier netsales has increased sone 20 % and company is expecting to keep this growth momentum going.
• There Cash reserve is 245 crores and we can expect hefty dividends in coming years.
• The have very low or nil debt and we expect the company to be debt free in coming years
• Also the company EPS has increasd from 3 to 7.4 Rs and we expect this to double in next 2yrs.
• With strong dollar and US economy booming, all IT stocks will have there next IT run.So we recomend to enter this good stock and see it reach 350 Rs in next few years. 

Vimal Oil Multibagger 400 Rs 3 Yrs timeframe Long term investment

Vimal Oil Multibagger 400 Rs 3 Yrs timeframe Long term investment

• Vimal Oil and Foods (VOFL) was started in 1993 with focus on edible oils.
• They raised from 50 tone refinery to fully automated refinery with tottal turnover of Rs 2000 Crores.
• They produce all tpe of oil like cottonseed oil, groundnut oil, mustard oil, Soyabean oil, Sunflower oil,Olive oil, Corn oil and table margarine.
• All packaging is done inhouse and this help the company save cost.
• Other products the company is involved are milk-Products, electrical, cable & wires, submersible pumps, paints and varnish, wall-floor, vitrified, porcelain tiles and micro- minerals
• The company is seated in good Oil belt which help it get easily the raw material needed.
• Sales and Profit has grown 3 folds in last 5 yrs and with strong managemnt team, we are confident that this company will continue reach new highs in coming days.
• With PE of of 16 and promotore holding close to 73 % shows the confidence the promoter has on the company
• One can invest with ta Targer of Rs 400 IN 3 yrs timefram

AVT Natural Products Ltd Multibagger 200 Rs 5 yrs timeframe Long term

AVT Natural Products Ltd Multibagger 200 Rs 5 yrs timeframe-Long term

• AVT Naturals Products Limited is part of AV Thomas Group who are well known in South india for their plantation business.
• In 35000 acres its producing  100,000 flowers.It also produces Nutraceutical products,Green tea,Marigold,paparikka,Capsicum,Black pepper and Feed grade Oleoresins.
• Marigold seeds is developed and provided to Farmers for growing.So Quality is maintained at source itself.
• The company has diversifed intot Food safe natural flavours and color production.This have given a huge global sucess for the company
• The company has Contracted 30,000 local farmers who are loyal to the company and shows that its not easy to reproduce the model.
• There plant in Cochin where the extraction is state of Art facility with ISO 9001-2000. HACCP, AIBI certifications and ability handle 55 tones per day.
• There international presence incude vendors for Kemin foods the owrlds largest produce of Lutien.
• Futures plans incude diversification in China which offers low cost of labor and good Climatic condition hence giving good growth in future.
• In past 5 years they have paid all their debt and the are now close to debt free and there sale have tripled in last 5 year profit increased 5 fold.
• With PE of just 14 and strong profit and zero debit will move the Share price to atleast 200 Rs in 5 yrs timefrae

Wires & Fabriks (S.A) Ltd Multibagger 3 yrs time frame 250 Rs Long term investment

Wires & Fabriks (S.A) Ltd Multibagger 3 yrs time frame 250 Rs Long term investment

• Wires & Fabriks (S.A) Ltd a niche company in manufacturing of wire fabrics for industries was started in 1963.

• The company is specailized in Forming Fabircs,Woven Sryer Screen,Spiral Dryer Screen,Pulp Fabrics,Stainless stell mesh,Phosporus broze mesh.

• The company has spent close to 13 million dollars to modernize the plant whihc help the company to enter into new areads like SSB Forming Fabrics

• The commpany was awarded the ISO 9002 in 1994 first in the country and later upgrade to 9001:2008.Its also the first Company to have inhouse R&D facility approved by govt.of india

• The company has technical collaboration with Albany International which help it develop world quality paper chemicals.

• The Profit after tax has increased close to 100 % yoy and total income has reached 100 Crores from 50 cores 5 years ago.

• Also the company gives 18 % yoy dividend which is good for investor.

• Overall we are very confident on the Management and Company and we expect the "Made in India" Story take this stock to new highs.

• So we suggest the investor to invest in this company with targert Price of 250 Rs in 3 Yrs timeframe.

Gillanders Arbuthnot & Company Ltd Multibagger 2 Yrs timeframe Trgt of 150 Rs

Gillanders Arbuthnot & Company Ltd Multibagger 2 Yrs time frame Trgt of 150 Rs

• Gillanders Arbuthnot & Company Ltd was founded by Mr Gillander and Mr Arbuthnot in early 1913.The Stocks then change hands and this Company became part of Kothari Group.Currentl Chariman of the Company is Mr A.K Kothari.

• The company has a very vast portfolio, especially tea,textile,engineering,chemical and trading.This diversification has helped company sustain and grown even during difficult times

• Among all the Group in the Company Tea business is the most successful business which is earning good returns for the Company.They do Bulk and Retail sales also.The company has 5860 achres under it belt.It is done in sales of Mayur Tea.

• The Engineer division has done lot of Turnkey project for Steel Companies, the Companies success is executing th project in Durgapur Steel Plant is giving new niche advantage in these kind of projects.They have a Factory of 19000 sqft from Kolkata.

• The Chemical industries is provides Lead Oxides and Stabilizers for PVC Industry.It has total Capacity of 17655 Metric tons.

• With sales increasing 20 to 30 percent, we the Company achieving good results and good profits in Company in coming years.The company has strong backing of Kothari groups and will get all the support it needed to grow.