Jimit Zaveri’s Stocks Idea Diwali Festival Stock Idea – 2014

We are welcoming Samvat 2071 with joy and prospects. As our Samvat 2070 was rewarded us with new all-time high of the Indian stock market and give us a handsome return. Our Indian stock market has provided a highest return with 24.44% from last Diwali (03-Nov-2014) to 20-Oct-2014.

Jimit Zaveri’s Stocks Idea Diwali Festival Stock Idea – 2014 

JIMIT ZAVERI’S STOCKS IDEA DIWALI FESTIVAL STOCK IDEA – 2014

Detail report will be update soon.

Kindly construct portfolio as per weightage (%) recommended…..

Astrazeneca Pharma India Ltd. Part 2

Herd Behaviour

Herd Behaviour is involves people using the actions of others as a guide to sensible behaviour, instead of independently seeking out high-quality information about the likely outcomes of these actions.

One real Example of Indian Stock Market ----> ASTRAZENECA PHARMA INDIA LTD_Part 2

Sharda Cropchem Limited IPO: SUBSCRIBE

For Detail Report, Kindly Visit--- Sharda Cropchem Limited

Sharda Cropchem Ltd. commenced its operations through their sole proprietorship concerns, namely, M/s. Sharda International in 1987.

Crop protection chemical company engaged in the marketing and distribution of a wide range of formulations and generic active ingredients globally. Company are also involved in order based procurement and supply of Belts, general chemicals, dyes and dye intermediates. Company have, primarily, grown organically and core strength lies in identifying generic molecules, preparing dossiers, seeking registrations, marketing and distributing formulations or generic active ingredients in fungicide, herbicide and insecticide segments. Company also recently entered into the biocide segment and have acquired several registrations from the existing registration holders, primarily, in Europe.

A typical agrochemical value chain consists of the following key activities: (a) basic and applied research, (b) identification of new product and registration opportunities, (c) seeking registrations, (d) manufacture of the active ingredient, (e) formulation and packaging, and (f) marketing and distribution.

As of August 5, 2014, the company has over 180 Good Laboratory Practices ("GLP") certified dossiers and as of July 15, 2014, the company owns over 1040 registrations for formulations and over 155 registrations for generic active ingredients across Europe, NAFTA, Latin America and Rest of the world.

Sharda Cropchem Limited is also engaged in the supplying a variety of Conveyor belts, V-belts, etc. These belts are used mainly in mining projects followed by Steel plants, quarries, grain silos, cement manufacturing facilities, ports, tunneling projects, etc.

Company providing exit offer for the HEP Mauritius whose has 15.87% stake in company and also 9.13% stake of promoters. Company has strong registration competency in generic molecules, experienced management, asset light business model, zero debt company, sound financial performance. On upper price band of Rs.156, P/E is 13.2x on FY14 EPS of Rs.11.82 which is cheap available compare to its peers.

I, Jimit R. Zaveri recommend investors to “SUBSCRIBE” to the Sharda Cropchem Ltd. IPO considering its strong registration competency in generic molecules, experienced management, asset light business model, zero Debt Company and sound financial performance. Sharda Cropchem is available at very cheap by P/E, P/BV and EV/EBIDTA.

Price Band Rs.145-156. Issue open on 5th September and close to 9th September. Market Lot 90 Shares.

Update: Bajaj Corp

I had recommended Bajaj Corp as an investment advice on 18th May,2014.

I recommended Book (50%) profit on 12th June,2014. Now, at the price of Rs. 29, I recommend to book further 10% profit in Bajaj Corp and hold remaining qty.

Return in stock : 36.79% (Recommended on Rs.212) 
For detail visit:
http://jdrkz.blogspot.in/2014/05/bajaj-corp-ltd.html

SNOWMAN LOGISTIC LIMITED IPO: SUBSCRIBE

For Detail Report, Kindly Visit--- Snowman Logistic Ltd.

Snowman Logistic commenced their business as a trader of frozen marine products in 1998. After this business company commenced cold storage operations at 4 (four) locations. 

Snowman Logistics Limited is an integrated temperature controlled logistics services provider with 23 temperature controlled warehouses across 14 locations in India including Serampore (near Kolkata), Taloja (near Mumbai), Palwal (near Delhi), Mevalurkuppam (near Chennai) and Bengaluru capable of warehousing 58,543 pallets and 3,000 ambient pallets as of 31st March 2014.

The company has an established presence in Pan-India for integrated temperature controlled logistics services. Company proposes to set up 6 temperature controlled warehouses and 2 ambient warehouses at 6 cities by issue capital. Besides strong and experienced management, strong promoters and investors base, established clients, Quality focus, technological advantages and sound financial performance, etc. At the price band of Rs.44-47, the company is quoted at 22.21x and 23.73x on its FY14 EPS of Rs.1.98.

I, Jimit R. Zaveri recommend investors to “SUBSCRIBE” to the Snowman Logistic Ltd IPO considering its strong and experienced management, strong promoters and investors’ base, established clients, Quality focus, technological advantages, sound financial performance and future growth potential in temperature controlled logistics services.

Price Band Rs.44-47. Issue open on 26st August, 2014 and close to 28thAugust, 2014. Market Lot 300 Shares.

What was it???? Shocking...... :P Kya chal raha hai market main... ;-)

I found some very interesting things to share with you all.

Company suspended…….

Not traded for last 30 days on BSE and not listed on NSE......

Buyers—Sellers—Volumes….. Shocked!!!!!! 

I also got shocked because 1.24 close and 680.10 was open price…….

  

Next Day, No buyers – No sellers – No Volume……

How it can be possible????

My mind got stuck.......

;-) :-) :P

Update: Bajaj Corp

I had recommended Bajaj Corp as an investment advice on 18th May,2014. Now, Book partial (50%) profit at CMP of 245.

Keep further position open with more 5-7% upside expectation.

For detail visit:
http://jdrkz.blogspot.in/2014/05/bajaj-corp-ltd.html

CLARIS LIFESCIENCES LTD.

Claris Lifesciences Ltd. is in process of buy back of 15% of the total number of Equity shares which held by the investors to the buyback price of Rs.250. This process will complete on 22th may, 2014. I am expecting effect in price and recommending to “BUY” Claris Lifesciences Ltd. With target of 190-200. 

BAJAJ CORP LTD.

BAJAJ CORP LTD.

Bajaj Corp incorporated on 25^th April, 2006 but its products have been in existence since 1953 and were sold by different Bajaj group companies. The company is in manufacturing of hair-oils and its key products are Bajaj Almond Drops, a premium brand that is currently the market leader in the light hair oil segment.

The company manufactures its products at company-operated facilities in Parwanoo, Dehradun and Paonta Sahib.

Industry Overview

Company Overview

Products of Company

Source: Company’s investors’ presentation

Investment Rationale

Ø Increasing in rural wages: Wages in rural India have grown at fastest during 2008-13 at the annual rate of 8%.  Increase in rural income spending of them increasing. Also urbanization of rural area helps to increase sales of FMCG companies.   

Source: CII rural report      

Ø Product Range: Company has major hair oil products in its products portfolio and recently company diversified it to face cream segment by acquisition of Nomarks brand.

Ø Increase market share in Bajaj Almond Drop, which is premium brand of the company. For increasing market share, company never have to sacrifices its pricing power. Nomarks brand also start contributing to revenue of the company, and in FY14 Nomarks has contributed 2.4% to the company revenue. 

Source: Company’s investors’ presentation

Ø Strong Performance: From 5 years, company has generated positive cash flow from operating activities. Company has recorded CAGR Net Sales and Net Profit of 19.94% and 28.74% respectively in last 5 years. Average 5 years ROE (%) of company is 98.05%. Cash Conversion Cycle of Bajaj Corp is -6.97 days in FY13 which is low compare to Cash Conversion Cycle of Marico and Dabur which is 38.91 days and 35.81 days respectively.

Ø Total debt/Equity was 0 in FY13 and Interest coverage 2544.18x in FY13. Company has taken nominal debt in FY14 for acquiring Nomarks brand.

Risks

Ø Strong Competition: Company facing competition with Marico in Hair oil segment. Parachute of Marico is leader in coconut hair oil, company also facing competition with Dabur amla of Dabur India Ltd. Though strong competition in hair oil segment, Bajaj Corp positioning leader market share in Light Hair Oil segment.

Outlook

Ø Bajaj Corp Ltd. has leading market share in Almond drop hair oil and also leading market share in Light hair oil segment. Company has included Nomarks brand in product portfolio which contributing value to company’s revenue. After acquiring Nomarks brand company’s products portfolio not only remain limited to hair oil segments.

Ø Currently company trading at TTM PE of 21.00x and TTM EPS of Rs.10.10, and it’s expected that TTM PE of 22.40x and TTM EPS of Rs.10.78-11 so that upside in this stock can be Rs.240-250 so accumulate “Bajaj Corp Ltd.” for the horizon of 15-18 months.

WONDERLA HOLIDAYS IPO: SUBSCRIBE

Wonderla Holidays Limited

The company has an established presence in South, which will be expanded further in the south region. Company planning to enter Chennai after Hyderabad. Besides this its has many advantages like near to debt-free company, strong and experienced management, strong positioned for amusement parks, robust financial performance, in-house manufacturing facility, etc. At the price band of Rs.115-125, the company is quoted at 14.38x and 15.63x on its FY13 EPS of Rs.8.00.

I, Jimit R. Zaveri recommend investors to “SUBSCRIBE” the Wonderla Holidays Ltd IPO considering it’s strong and experienced management, strong positioned for amusement parks, robust financial performance, in-house manufacturing facility at Wonderla Kochi and long term gorwth opportunity in the amusement parks industries on the back of spending for leisure activities and for amusement parks by people in India.

Wonderla Holidays IPO: SUBSCRIBE

WonderLa’s FY13 EPS is about Rs. 8 and at Rs. 125, the PE of 15.63x which is looking attractive at issue price band. One can apply in the issue based on strong fundamental such as Operational experience in the amusement park industry, In-house manufacturing facility at Wonderla Kochi, High profit margins, High safety and hygiene standards, Experienced promoters, management and qualified staff, Entry Barriers and Constantly innovate new attractions at our amusement parks.

The company’s Promoter, Kochouseph Chittilappilly in the year 1996 incorporated V-Guard Industries. Also key management personnel information George Joseph (Chairman, Non-Executive Director (Independent)) serving as director at Muthoot Finance Limited, Ramachandran Panjan Moothedath (Non-Executive Director (Independent)) serving as director at Jyothy Laboratories Limited, Jyothy Consumer Products Limited.

On above strong investment rationale and reasonable valuations, I recommending investors to “SUBSCRIBE” Wonderla Holidays-IPO.   

Detail report will be soon updated.

Visit For Further Details,

http://www.bseindia.com/markets/publicIssues/DisplayIPO.aspx?id=803&type=IPO&status=L&idtype=1&IPONo=864

INFOSYS Q4FY14 Result Update

Infosys Ltd.- Q4FY14 Consolidated- Net Profit Rs.2992 cr in Q4FY14 v/s Rs.2394 cr in Q4FY13., up by 24.98% (Y-o-Y).
Revenue- Rs. 12875cr in Q4FY14 v/s Rs.10454 cr in Q4FY13, up by 23.16% (Y-o-Y).

Net Profit- Rs.2992cr in Q4FY14 v/s Rs.2875cr in Q3FY14, up by 4.07%. (Q-o-Q).
Revenue- Rs.12875cr in Q4FY14 v/s Rs.13026cr in Q3FY14,Down by -1.16% (Q-o-Q).

Infosys declares final dividend of Rs 43/share.
Guidence- FY15 revenue expected to grow by 7%-9% in US$ terms.


INFOSYS Q4FY14

Herd Behaviour

Herd Behaviour is involves people using the actions of others as a guide to sensible behaviour, instead of independently seeking out high-quality information about the likely outcomes of these actions.

Here, people not take their independent decision, they see, observe others decisions and driven by those decisions. They are not going to evaluate other’s decision before using it as benchmark, just follow other’s decision blindly.

This kind of mentality originally seen in animals as they follow groups and roaming under the group. Same as humans follow their group and follow decisions of group.

Stock market bubbles, 2008 global crisis, and so on are the examples of herd mentality.

One real Example of Indian Stock Market-

ASTRAZENECA PHARMA INDIA LTD.

BSE Code	506820
NSE Code	ASTRAZEN
Sector	Pharmaceuticals
52 week high/low (Rs.)	1285.00/595.00
No. of shares (Cr)	25
Latest Book Value(Rs)	40.73
P/BV (x)	27.58
Beta	0.24
TTM PE (x)	0.00
TTM EPS (Rs.)	-6.61
Latest Dividend (Rs.)	3.50

03 Mar 2014- AstraZeneca Pharma India Ltd has informed BSE that the Board of Directors (Board) of AstraZeneca Pharma India Limited (Company) have, on March 01, 2014, received by email a scanned copy of the letter from AstraZeneca Pharmaceuticals AB (AZP AB) Sweden, promoter of the Company, proposing to make a voluntary delisting offer (the Delisting Proposal) to the public shareholders of the Company in accordance with the Securities and Exchange Board of India.

After above announcement price shoots up like anything, as people believe that delist price can be Rs. 1400+ and that we can experiencing in price.

18 Mar 2014- AstraZeneca Pharma India Ltd has informed BSE that, pursuant to and in accordance with Regulation 8(1)(a) of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, the delisting proposal received from AstraZeneca Pharmaceuticals AB, Sweden, the promoter of the Company, vide their letter dated March 01, 2014, was considered and approved by the Board of the Company at its meeting held on March 15, 2014.

This shows behavior of people that reflecting into the price of the stock and drive price to upward direction. As announcement of delisting happened volume in particular stock also shoots up.

Irrationality

Irrationality is thinking, acting, behaving or talking without inclusion of rationality.

Rationality is the quality or state of being reasonable, based on facts or reason. We evaluate each and every possible steps, cost and benefits from doing something or not doing that activity. Come up with proper reason and select or avoid decision.

So irrationality doesn’t involve rationality. As tradition economic believes that people always behave rationally in every situation. But is it really happen????

Ex:-

You are roaming at forest and lion comes and stand in front of you. At that time what will you do?

Do you think about all options, cost and benefits? What’s the cost of running? What’s the benefit of running?

NO

We just start running as fast as we can.

Thus, at that time our emotion replace on our thinking system and order to run as fast as you can.     

So Irrationality is about the forces that drive our behavior that can be economic forces, social forces.

As when we come to the policies, we just can’t consider only standard economy. We think about society’s care and take a broader picture, broader perspective that just not included only rational. We also have to include what we know about human nature.

We had seen stocks bubbles (Sub-Prime crisis, IT bubble, etc.), people over extending limits of credit cards, taking mortgages, etc. in which where we can see the rationality???

Rationality says that people are strong enough to calculate everything, consider all options then make decision but in real world people are confused, have an emotions, not every time thinking about future, fall in love and so on.    

So that people behave irrationally most of the time which not included under standard economic and pre-assume that people behave rationally.

We rely on contextual information to make all sorts of judgments and decisions. Illusion under us is that we know the answer, we know the right thing to do. But in fact we are wrong. That is just a mental, visual illusion many a time which shape our decision and judgments.

Ex:-

See the below picture…… at top what color is it look like????? 

Your answer is its look like brown.

Now, at the bottom one what color is it look like????

Your answer is its look like orange.

You can’t see both the color as an identical.

Let’s see now….. Cover all side and what both color is it look like???? Is it identical????

Now, our answer is yes both the colors are identical.

It is a visual illusion which drives our decision of those both colors are not an identical.

But is it really????

No, In fact those both colors are identical. Thus, illusion which drives our decision.

Many times we took decisions which are driven by some of the forces and those are not be a rational. We are human and we makes some mistakes repeatedly again and again but benefit of being the human is that we can identifies our mistakes and can take steps for improvement.

See the above video and get more insights.....

VINATI ORGANICS LTD.

VINATI ORGANICS LTD.

Vinati Organics Ltd. Was established in 1989 and it is a specialty chemical manufacturing company. The company started operations in its first plant in Mahad in 1992, with focus on Isobutyl Benzene (IBB), and then in 2002, it started production in its second plant in LoteParshuram, producing 2-acrylamido-2-methylpropane Sulphonic acid. Company focused on the research led conversion of generic raw materials into value-added niche specialty chemicals.

Products of Company includeIsobutyl Benzene (IBB), 2-acrylamido-2-methylpropane Sulphonicacid (ATBS), Isobutylene (IB), N-Tertiary Butyl Acrylamide (TBA), N-Tertiary Octyl Acrylamide (TOA) and Di Acetone Acrylamide (DAAM).

Major revenue generation products are Isobutyl Benzene (IBB), 2-acrylamido-2-methylpropane Sulphonic acid (ATBS). From which 2-acrylamido-2-methylpropane Sulphonic acid - several applications in oil-field recovery, water treatment, acrylic fibre manufacturing, adhesives, personal care products, medical hydrogel, mining industry, coatings and as dispersing and flocculating agents.

Isobutyl Benzene (IBB) -several applications in basic raw material for manufacturing Ibuprofen, an Anti-inflammatory analgesic bulk drug, Perfume industry.

Isobutylene (IB)- several applications in Agro based chemicals, food additives, anti-oxidants.

*Kindly click on above image file for read it enlarge.

Investment Rationale Ø Growth in Chemical Industry:The global chemical industry historically concentrated in three regions (North America, Western Europe and Japan).  But now, Europe's share of the global production of chemical products declined from 31% to around 27%, while Asia's rose from 13% to 23%. Ø Current size of approximately $108 billion and the Indian chemical industry is of 3%of the global chemical industry and it is estimating $290 billion till 2017E.(Source: Indiamart news, January, 2013) Ø Wide business area & Product Range:Products of Company include Isobutyl Benzene (IBB), 2-acrylamido-2-methylpropane Sulphonic acid (ATBS), Isobutylene (IB), N-Tertiary Butyl Acrylamide (TBA), N-Tertiary Octyl Acrylamide (TOA) and Di Acetone Acrylamide (DAAM). Ø Company is the world's largest manufacturer of Isobutylbenzene (IBB, market share 60% and 2-Acrylamido 2-methylpropanesulfonic Acid (ATBS, market share 40%). ATBS contributed 41%, IBB contributed 43% and IB contributed 10% to the revenue of company in FY13. Ø Only two competitors for the product ATBS, one in US and one in Japan and no manufacturer in India. For, IBB Company is largest manufacturer in world and only one competitor in India that is IOL Chemicals and Pharmaceuticals Ltd. Ø Company started manufacturing TBA-similar to ATBS product and already capture 50% of global market share. Ø Company has established plant for product DAAM but still manufacturing is not started. Company doing business development activity for DAAM so that can be start manufacturing it. Ø Company generated 69% of its revenue from exports in FY13. Ø Clients: Company has big MNCs as clients, some of are Dow Chemicals, Akzo Nobel, Asian Paints, BASF, NALCO, SNF, Perrigo, Clariant, Chemtall and ShasunChemicals etc. 30+ customers retained by the Company in the last five years and in FY13 company earned 80% of revenue from clients which are stable and relationship with them of 5 years or more. Ø Threat to entry: Technology which is using by the company is not easily available or easily replicable. Company has done technical partnerships with global players- Institute Francaisdu Petrole (France), Saipem (Italy) and National player- National Chemical Laboratories (India). Ø Company has achieved a high purity standard in ATBS product, a purity tolerance of 0.5% as against a global tolerance level of 3%. IBB product achieved purity standard of 99.7% which is highest in world. Same with other products- IB achieved 99.85% purity and in HP-MTBE product achieved 99.95% purity which are the highest in the world. Ø Integration: company has implemented integrated model in which products basket has been structured as inter-consumption. So that products either consumed within company for manufacturing products or marketed to customers. Ø Strong Performance:From 16 years, company has generated positive cash flow from operating activities. Company has recorded CAGR Net Sales and Net Profit of 32.06% and 76.81% respectively in last 10 years. Average 5 years ROE (%) of company is 40.70%. Risks          Company have wide product portfolio which gives a strong healthy position but if slowdown in Paint, Oil recovery, water treatment & personal care products then it affect adversely to the profitability of the company.  European weak growth is affecting demand for ATBS so it shrinking profit margin of company. Outlook     Company is largest manufacturer in ATBS, IBB products and seeing 25%-30% growth in both this products, also company doing capex for expansion purpose and estimating Rs.1000 crore revenue after completion of projects. As per expectation, projects will be complete till FY15-FY16, and also company has 2-3 products in pipeline.       Currently company trading at TTM PE of 14.27x and TTM EPS of Rs.14.02, and it’s expected that TTM PE of 17.35x and TTM EPS of Rs.15 so that upside in this stock can be Rs.260-Rs.300 so accumulate till Rs.170 for the horizon of 12-15 months.