Hi All
Today I will talk about three companies all of which are betting on a massive investment. These stocks have a long gestation period, however, I am very confident 2 out of these will surely be able to product 2-3x return.
All of these company have four things in common
(i) Capacity expansion almost 2-3x of its current capacity
(ii) Massive capital expenditure for future expansion almost 2-3X of its Market cap
(iii) No fancy historical statement so the historical analysis is irrelevant for these companies as these are potential small cap companies from its current phase of Microcap
(i) due to small-cap and mid-cap crash, the company share price has dropped to almost 52 week low which makes it extremely attractive given above three fawith
witho above three themes in mind lets examind the three companies
Stock 1: Shri Keshav Cement & Infra Ltd (CMP: 81)
Market Cap: 41Cr
If you look at the past performance of this company then you won't find anything fancy to be honest. Profit has been all time low.
Lets now focus on the recent cash flow of the company . we can see that company has made massive investment in the plant and machinery which is almost 2 times its market cap of 40cr.
The company did disclose in its annual report that company it has set-up 20 MW Solar plant at Bisarahalli Village in Koppal, Karnataka. The project was financed by Bank and successfully commissioned in March 2018. Due to Karnataka State policy to promote Solar investment, company is exempted from Wheeling & Banking charges and cross subsidy charges for Ten years. Currently Wheeling & Banking charges are 7% and Cross subsidy charges are INR 1.52 per unit. The power cost is expected go down significantly and expect new revenues from selling excess power generated.
Just few days after that company also did the below BSE announcement:
With respect to the above stated subject, Karnataka State Government permitted M/s. Shri Keshav Cements and Infra Limited to sell the excess solar energy produced in open market.20 MW solar unit was commissioned in March 2018.
link :https://www.bseindia.com/xml-data/corpfiling/AttachHis/0a85df3d-878f-483f-a3c7-e193fa201bd3.pdf
Stock 2 : Damodar Industries Ltd (CMP :100)
Market cap :110Cr
The Damodar group is in the textile industry for more than three decades which has helped the company to establish strong relationships with almost 500 customers such as Arvind Mills Limited, D Decor Exports Private Limited, Donear Industries Ltd, and Siyaram Silk Mills. Moreover, it has an established clientele in China, South Korea, Bangladesh, Europe, the United States of America, and Egypt. Also, the Damodar group has established relationships with suppliers such as Reliance Industries Ltd
Now like above company, there is nothing fancy with the past performance of the company while looking at the cash flow , this company is also making a huge expansion which is almost 2 times its market cap which caught my eye.
DIL is undertaking capital expenditure to set up a manufacturing facility at Amravati, budgeted at Rs 172 crore, funded in debt-to-equity ratio of 2:1. Phase 1 of the facility became functional in May 2018 and phase 2 is expected to be operational in August 2018. The entire plant is expected to be commissioned in April 2019.
The company has already commenced the land and site development work, building & civil work, etc. The company has already initiated procurement of plant and Machinery and looking forward to its delivery, erection and commissioning of the same. On the basis of the progress made so far, the implementation of the project is going as per schedule and barring unforeseen circumstances the project would be completed as per schedule
Stock 3 : Manaksia Coated Metals & Industries (cmp: 8.5)
Manaksia Coated Metals & Industries Ltd (MCMIL) was incorporated on March 25, 2010 and was a dormant company till October 01, 2013 when the coated metal division and mosquito coil division of Manaksia Ltd (ML) were transferred to it under the scheme of demerger.
MCMIL has a colour coating line capacity of 39,000 MTPA in Kutch, Gujarat. The company is also into manufacturing of mosquito repellent coils. MCMIL is setting up a 1,08,000 MTPA Continuous Galvanizing line (CGL) for manufacturing of Galvanized steel coils/sheets at its existing plant at Kutch, Gujarat at a cost of Rs.74.61 crore. The project is expected to become operational in Q4FY18.
PLEASE NOTE THAT I AM NOT A SEBI REGISTERED ANALYST. I HAVE HOLDING IN THESE COMPANIES AROUND CURRENT PRICE AND MY VIEWS MIGHT BE BIASED.
Today I will talk about three companies all of which are betting on a massive investment. These stocks have a long gestation period, however, I am very confident 2 out of these will surely be able to product 2-3x return.
All of these company have four things in common
(i) Capacity expansion almost 2-3x of its current capacity
(ii) Massive capital expenditure for future expansion almost 2-3X of its Market cap
(iii) No fancy historical statement so the historical analysis is irrelevant for these companies as these are potential small cap companies from its current phase of Microcap
(i) due to small-cap and mid-cap crash, the company share price has dropped to almost 52 week low which makes it extremely attractive given above three fawith
witho above three themes in mind lets examind the three companies
Stock 1: Shri Keshav Cement & Infra Ltd (CMP: 81)
Market Cap: 41Cr
If you look at the past performance of this company then you won't find anything fancy to be honest. Profit has been all time low.
Lets now focus on the recent cash flow of the company . we can see that company has made massive investment in the plant and machinery which is almost 2 times its market cap of 40cr.
The company did disclose in its annual report that company it has set-up 20 MW Solar plant at Bisarahalli Village in Koppal, Karnataka. The project was financed by Bank and successfully commissioned in March 2018. Due to Karnataka State policy to promote Solar investment, company is exempted from Wheeling & Banking charges and cross subsidy charges for Ten years. Currently Wheeling & Banking charges are 7% and Cross subsidy charges are INR 1.52 per unit. The power cost is expected go down significantly and expect new revenues from selling excess power generated.
Just few days after that company also did the below BSE announcement:
With respect to the above stated subject, Karnataka State Government permitted M/s. Shri Keshav Cements and Infra Limited to sell the excess solar energy produced in open market.20 MW solar unit was commissioned in March 2018.
link :https://www.bseindia.com/xml-data/corpfiling/AttachHis/0a85df3d-878f-483f-a3c7-e193fa201bd3.pdf
Given this mega update, i do expect company to show much better financials going forward.
Stock 2 : Damodar Industries Ltd (CMP :100)
Market cap :110Cr
The Damodar group is in the textile industry for more than three decades which has helped the company to establish strong relationships with almost 500 customers such as Arvind Mills Limited, D Decor Exports Private Limited, Donear Industries Ltd, and Siyaram Silk Mills. Moreover, it has an established clientele in China, South Korea, Bangladesh, Europe, the United States of America, and Egypt. Also, the Damodar group has established relationships with suppliers such as Reliance Industries Ltd
Now like above company, there is nothing fancy with the past performance of the company while looking at the cash flow , this company is also making a huge expansion which is almost 2 times its market cap which caught my eye.
DIL is undertaking capital expenditure to set up a manufacturing facility at Amravati, budgeted at Rs 172 crore, funded in debt-to-equity ratio of 2:1. Phase 1 of the facility became functional in May 2018 and phase 2 is expected to be operational in August 2018. The entire plant is expected to be commissioned in April 2019.
The company has already commenced the land and site development work, building & civil work, etc. The company has already initiated procurement of plant and Machinery and looking forward to its delivery, erection and commissioning of the same. On the basis of the progress made so far, the implementation of the project is going as per schedule and barring unforeseen circumstances the project would be completed as per schedule
Stock 3 : Manaksia Coated Metals & Industries (cmp: 8.5)
Manaksia Coated Metals & Industries Ltd (MCMIL) was incorporated on March 25, 2010 and was a dormant company till October 01, 2013 when the coated metal division and mosquito coil division of Manaksia Ltd (ML) were transferred to it under the scheme of demerger.
MCMIL has a colour coating line capacity of 39,000 MTPA in Kutch, Gujarat. The company is also into manufacturing of mosquito repellent coils. MCMIL is setting up a 1,08,000 MTPA Continuous Galvanizing line (CGL) for manufacturing of Galvanized steel coils/sheets at its existing plant at Kutch, Gujarat at a cost of Rs.74.61 crore. The project is expected to become operational in Q4FY18.
PLEASE NOTE THAT I AM NOT A SEBI REGISTERED ANALYST. I HAVE HOLDING IN THESE COMPANIES AROUND CURRENT PRICE AND MY VIEWS MIGHT BE BIASED.
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