Swasti Vinayaka Art & Heritage Corporation Ltd : A HIDDEN GEM

       Swasti Vinayaka Art & Heritage Corporation Ltd : A HIDDEN GEM

CMP : 4.14

BSE CODE :512257

Market Cap : 16 Crores

       LISTED ON : BSE

TARGET : 10/12/16

TIME-FRAME : 12-16 Months

History of the Company :

Swasti Vinayaka Art & Heritage Corporation Ltd was incorporated way back in 1985. It considers itself custodian of Indian art and craft heritage and aims to preserve , nurture and revive priceless historical traditions , via rare pieces of aesthetic beauty that are individual and exclusive.

The company deals in couture jewellery that transverses the territory of mere ornamentation into that of high art. The company also deals in signio paintings that throw the spot light on the distinctive Indian miniature technique, via canvases that tell tales of Hindu epics, as well as Islamic histories and chronicles.

Off late the company has also entered into segments like corporate gifting, gemstone carving, taking part in various art fairs. The company has taken efforts to reach global markets and is also exporting various articles like signio paintings, miniature art , gemstones etc. to countries like UK and USA ; where it is able to built a loyal base of customers gradually.

Financials of the Company :

• Profit After Tax (PAT) for the year ended on 31st March,2017 has been reported  at Rs 2.57 Crore against PAT of Rs 2.09 Rs for March,2016.
• As per the numbers as on 31st March,2017 the company has generated Return on Equity (ROE) of approx. 30%. At an EPS (Earning per share) of 64 paisa the share is currently trading just at a P/E ratio of 6.
• The company is a regular dividend paying company and has paid dividend for past 10 consecutive years.
• Current year the company has declared dividend of 20 paisa per share which at current price of 4 Rs per share generates a dividend yield of approx. 5.00% which is tax free and very attractive in nature.

Investment Rationale : Why to Invest in this Stock ??

• Shareholding of the promoters in the company is 51.00% as on 31st March,2017 which strongly indicates interest of promoters in growth of the company.
• With the Indian economy poised for growth and increased recognition and awareness of art the management is confident of delivering better results in the future.
• It is the only listed player in the segment. The company has gained experience in the sector and will be able to leverage the same in future to generate super profits from the sector that is in growing stage in our country.
• Debt to equity ratio has gradually come under control as company has repaid debt in past 3 years.
• The company has dividend yield of 5.00% at current price. The history of company profitability is great and has paid dividend for past 10 years consecutively.
• At current price of 4.14 per share and EPS of 0.64 , the stock is presently trading at an attractive P/E ratio of 6.
• At a forward reasonable P/E of 15 and EPS of 1.00, we expect the stock price to soar higher atleast to 15-16 levels in coming time.

Disclaimer Note: The above is not a research report but information as available on public domain and it should not be treated as a research report. Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations.

Disclosure: It is safe to assume that I might have Swasti Vinayaka Art & heritage Corp  in my portfolio and hence my point of view can be biased. Readers should peform own due diligence before investing. We do not assume any responsibility or liability resulting from the use of information , judgements and opinions for Trading or Investment purposes on the Blog.

How to save your Portfolio from a Stock Market Crash ? Is it possible ?

Stock Market crash and how to save your portfolio

Stock market crash is the only major fear that is faced by investors in equities. Stock market crash when happens, results in erosion of wealth of investors to the tune of billions. Equities is one of the asset class which provides a superior return in the long-run when compared to other well-known asset class. The exponential growth potential that equities provide is not available in any other asset class. 

How beneficial it would be if one could take benefit of investing in equities along with safeguarding portfolio against a crash ?? Is it possible ??

The answer to above question is YES. Just like we have insurance for our home, life, car etc. similarly it is possible to have insurance for our portfolio. The technical term used in financial markets for insurance is called "Hedging". Hedge means a fence or boundary formed by closely growing bushes or shrubs for protection from any external threat. There are many methods and instruments available for purpose of hedging. 

Mutual Fund managers/ HNI investors / FIIs whose portfolios run into tens of thousands of crores use hedging strategies to reduce the risk of portfolio to a great extent and are protected from a stock market crash majority of the time. 

The most effective and cost efficient mode of hedging is purchase of PUT OPTIONS in our opinion.

There are two types of options : Call option and Put option.

A put option is an option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time. This is the opposite of a call option, which gives the holder the right to buy shares.

Example of using Put option : 

Suppose you own a portfolio of stocks worth Rs 100. You purchase put options in index (Nifty) of Rs 2 to protect your portfolio from crash. In case a crash happens and your portfolio and or index both experiences a decline of 40%. The new portfolio value will be Rs 60 from Rs 100. However the value of put option in index will have increased from Rs 2 to somewhere around 30 or may be more. So the overall value still remains Rs 90 ( Rs 60 of portfolio + 30 Rs of Put option).

Incase you had not purchased Put Option , your portfolio had declined to Rs 60 from Rs 100 as per the above example. 40-50% loss is substantial and can gravely affect achievement of long-term goals of growth. In scenario that the market crash does not happen by the time of expiry of put option, the Rs 2 invested in put option becomes worthless. However the same is more or less compensated by increase in the value of portfolio incase the market had soared higher instead of crashing.

Purchasing appropriate Put Option is a WIN-WIN Situation for equity investors because it gives protection against sudden unprecedented stock market crash. It is like an insurance premium. If the stock market crashes the protection is available, if it does not the premium is gone.

Conservation is pre-condition to growth. If you can conserve your portfolio and protect it from crash, the growth will be great in the long-term and there will be no disasters. 

If you like our post share it !

Note: Put option is a derivative instrument. Options are of different strike prices and different expiry and may have different outcomes. You can contact us or your financial advisor before purchasing put option and have a practical understanding of the same.

Sanwaria Agro Oils Ltd : A Growth Story

SANWARIA AGRO OILS LTD : A Growth Story

CMP : 14.00

BSE CODE :519260

Market Cap : 515 Crores

       LISTED ON : NSE AND BSE

TARGET : 25/36

TIME-FRAME : 12 Months

History of the Company :

Sanwaria Agro Oils Ltd is part of Sanwaria Group, which is FMCG Food Products Company. Sanwaria was originally incorporated on 22nd April, 1991 with its registered cum corporate office in Bhopal Madhya Pradesh, India. The company has three brands name ‘Sanwaria’ ‘Sulabh’, and Narmada. SAOL is an integrated agro food processor having the following lines of business:

• Seed processing and Solvent Extraction
• Producing and selling Soy meal (De-oiled cakes) in domestic and international markets
• Refining of crude Soy oil to produce refined Soy oil
• Distribution and sale of bulk and branded Soy oil
• Producing and selling value added products like Soy Flour, Soy Chunks (Nuggets),Soy Lecithin and Acid Oil
• Producing and selling Basmati Rice in domestic and international markets
• Producing and selling Wheat Flour, Fortified Wheat Flour
• Trading of other agro commodities like Wheat, Gram & Pulses etc

Financials of the Company :

• Profit After Tax (PAT) for the year ended on 31st March,2017 has been reported  at Rs 44.13 Crore against PAT of Rs 15.68 Rs for March,2016.
• Revenue for the year ended on 31st March 2017 has been reported at Rs 3526 Crore which is 31% higher than previous year.
• Owing to substantial improvement in financial performance the company has announced bonus and dividend, proportion of which will be finalized at board meeting on 22nd May 2017.
• Promoters have sensed need for additional capital and so have issued themselves equity shares to the tune of Rs 50 crores on preferential basis at 25 Rs per share in August 2016.

Investment Rationale : Why to Invest in this Stock ??

• Shareholding of the promoters in the company is 71.68% as on 31st March,2017 which strongly indicates interest of promoters in growth of the company.
• Being a FMCG company involved in products like rice, soya oil, flour etc which being a major necessity in nature the scope for expansion is substantial. 
• The promoters themselves have acquired shares on preferential basis @ 25 Rs per share for capital infusion recently which gives us the conviction that stock price shall move up.
• Market Cap to Sales Ratio : 0.15 ( Considering March 2017 sales and current market cap) is very attractive
• At current price of Rs 14 per share and EPS of 1.20 , the stock is presently trading at an attractive P/E ratio of 11.67.
• At a forward P/E of 20 and EPS of 1.6 we expect the stock price to soar higher atleast to 32 levels in coming time.
• As per certain information available in public domain, the Company is a major supplier to Patanjali for various products. It could give company a huge boost in its sales considering the fact that Patanjali is expanding at an enormous pace.

Disclaimer Note: The above is not a research report but information as available on public domain and it should not be treated as a research report. Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations.

Disclosure: It is safe to assume that I might have Sanwaria Agro Oils Ltd in my portfolio and hence my point of view can be biased. Readers should peform own due diligence before investing. We do not assume any responsibility or liability resulting from the use of information , judgements and opinions for Trading or Investment purposes on the Blog.

~ INVESTMENT PICK ~

RUCHIRA PAPERS LTD

CMP : 27.00 

Bse Code : 532785

Target : 60 / 80

Time- Frame : 1 Year 

The BULL-RUN has Started you feeling left behind ? One more Stock for Our Readers!

1. History of the Company : 

Ruchira paper is engaged in manufacturing of Kraft Paper and Writing & Printing Paper.The special feature of its Kraft Paper is load bearing Capacity and tensile Strength which makes its most suitable for Corrugated packing application. Writing & Printing Paper is used for multiple purposes.The Company initially set up Agro Waste Paper Mill for manufacturing of Kraft Paper and commenced its operations with a small 2310 TPA Capacity. Over the Years, the Company has undertaken several phases of expansion and the Production Capacity of Kraft Paper since then has increased from 2310 TPA to 52800 TPA.The company had set up 33000 TPA unit for manufacturing of writing & printing paper adjoining to its existing unit in March,2008.

2. Financials of the Company : 

(I) The Company which was Debt ridden 5 years back has made a turnaround. The total debt of the company has reduced to Rs 74 Cr from 141 Cr in time span of 4 years.

(II) During the same period turnover of the Company has increased by 60% from 200 Cr to 320 Cr.

(III) The Company which was reporting loss 4 years back has turned profitable and has reported profit after tax ( PAT ) of Rs 15.28 Cr for year ended on 31st March , 2014.

(IV) Company has started paying dividend for FY 13 and FY 14 @ 10% and 12% Respectively.

(V) This all Indicates that financial Position of the Company is showing recovery trend.

3. Investment Rationale- WHY TO INVEST IN THIS STOCK ??

A. Shareholding of the promoters is 59.45% as on 30th Sep , 2014 which strongly indicates interest of promoters in growth of the Company.

B. Company operates in State of Himachal Pradesh and has been given 100% INCOME TAX EXEMPTION for first five years with effect from Assessment year 2008-09 and there after 30% exemption for next five years.

C. Power ( Electricity Charges) in Himachal Pradesh is cheaper comparatively than neighboring states which gives company COMPETITIVE ADVANTAGE over other paper sector stocks.

D. At current price of Rs 27.00 per share and EPS of Rs 7 per share as at 31st March , 2014 the stock is merely trading at a P/E ratio of 3.86.

E. The Stock should trade atleast at a moderate P/E ratio of 10-12 giving it a target of 70 to 84 Rs per share @ Rs 7 EPS. 

4. RECOMENDATION:

We recommend readers of this Report that Ruchira Papers Ltd. stock can be bought in price range of Rs 25 to 30 per share for Investment purpose with a target of Rs 60 and Rs 80 respectively.

Our last Stock Recommendation ie. COMPETENT AUTOMOBILE is presently trading @  90 which we advised @ 60 levels.( 50% GAIN) Hold the same for more returns to come.

Disclaimer :  We shall not be liable for any Loss/Gain arising from our opinion expressed above. It is purely based on our own analysis and it does not infringe any copyrights and report is prepared on the basis of information available in public domain.

~ MULTI - BAGGER STOCK RECOMMENDATION ~

COMPETENT AUTOMOBILES CO LTD

CMP : 60

Bse Code : 531041

Target : 600/800

Time- Frame : 3 Years 

The BULL-RUN has Started you feeling left behind ? Buy this stock !

An automobile player having authorised car dealership and service station of Maruti Suzuki India.Competent Automobiles Co. Ltd. is a part of Delhi based Competent group.The company was incorporated on 11.04.1985 and is a listed public limited company in BSE. The company is a profit making company since inception and engaged in Automobile business. Presently the company has its presence as a dealer of Maruti Suzuki India Ltd. in Delhi, Haryana and Himachal Pradesh.The Company is mainly involved in trading/selling of maruti cars & also provided ancillary services.

The book value of the Company is Rs 132 as on the date ( 30/06/2014).

The Company has reported an EPS of Rs 15 for the FY 13-14. The EPS Expected for next year will be around Rs 18. At current price of Rs 60 , the Stock is trading merely at very low valuations at P/E ratio of Just 4 . One can normally expect stock belonging to Trading sector to trade at a Higher P/E.

Our last Stock Recommendation ie. Kothari Products is presently trading @ 705 ( After 2:1 Bonus ) which we advised @ 376 levels. Hold the same for more returns to come.

Disclaimer :  We shall not be liable for any Loss/Gain arising from our opinion expressed above. It is purely based on our own analysis and it does not infringe any copyrights.