FIEM Industires - fundamentally sound, capturing the 1 lakh Cr LED market

FIEM Industries - capturing the one lakh crore LED market successfully
FIEM is a reputed auto ancilliary company, quickly transforming itself into an LED company.
The company plans to expand fast into LED generic lighting and LED lighting in automobiles.
In the next 2 years, FIEM plans to have a revenue of Rs 600 Cr per year from LED business.
At which point,  LED business shall become  more than 40 % of the total business. The
fundamentals of the company  is  improving dramatically as shown in the numbers below.
The company can give you a return CAGR of 30% over the next 3 - 5 yrs
Current market price: Rs 807/-
Industry	Electric Equipment/ Auto ancilliary/ LED lighting
Chairman	J K Jain					Promoters stake		69.96%
Face Value(Rs)	10					FIIs		5.15%
Book Value(Rs)	210.04					DIIs		1.46%
Market Value(Rs Mn)	9584.73
P/E(x) TTM Dec 15	18.74
EPS(Rs)	42.76
Dividend Yield%	0.87
	Mar-10	Mar-11	Mar-12	Mar-13	Mar-14	Mar-15	TTM Dec 15	Last 5 yrs CAGR %
Sales ( Rs Cr )	294	421	534	602	718	825	931	23
Op. Profit ( Rs Cr )	27	38	68	70	88	102	118	30
Net Profit ( Rs Cr )	11	11	21	27	37	42	51	31
ROA(%)		3.76	5.47	6.42	8.43	8.84
ROE(%)		11.01	17.46	19.20	22.16	21.30
ROCE(%)		12.85	19.95	17.84	22.80	22.97
Cash Conversion Cycle (days)		8	16	16	11	10
Total Debt/Equity		1.17	1.25	0.87	0.65	0.55
Dividend (%)		25	30	40	60	70
Note: This is not a solicitation asking you to buy the shares. Consult your financial advisor if you are investing.

Stock Tip: Sonata Software – on the way to becoming a major IT player !!

Sonata software Ltd

Price : Rs 146                         Date: 13th Feb 2015

Target: Rs 300                        Time Frame: 3 years

Sonata Software has business around the world. It has several subsidiaries around the world. So, one should look at the consolidated financials to arrive at the valuation. The standalone results and the valuation shall be misleading and shall show it as an expensive stock. Sonata, unlike other software companies, has a large domestic business of about 60 – 65%. And the exports contribute to the rest. There is immense potential in the domestic business due to the DIGITAL INDIA initiatives. The company has been making good profits from the local projects in the last few quarters. The best signal for the company is the excellent improvement in numbers for the 9 months in FY 15. See the company’s fundamentals on a consolidated basis below.

-       RoE ( TTM till Dec 14 ) : 32.72% -       RoE ( FY 14 ): 20.77%	-       RoCE ( TTM till Dec 14 ) : 28.92% -       RoCE ( FY 14 ): 16.91%
-       Cons Sales ( TTM till Dec 14 ): Rs 1629 Cr -       MCap ( 13th Feb 15 ): Rs 1531 Cr	-       Net Profit (TTM till Dec 14): Rs 122.41 Cr
-       Op profit ( TTM till Dec 14 ): Rs 167.2 Cr	-       Op cash flow ( FY 14 ): 129 Cr
-       EPS (TTM till Dec 14): 11.64	-       Current P/E ( TTM ): 12.50
-       MCap to Sales ( TTM ): 0.94 Times	-       MCap to Op Profit ( TTM ): 9.15 Times

The company had a RoE and RoCE of 20% and 17% till FY14 quarter but moved to more than 32%(TTM ) and 29% (TTM ) due to the excellent 9 months performance till Dec 14 quarter. The company looks to offer deep value in following

-     

          TTM PE is just 12.50.

-       The MCap to Sales TTM ratio is just 0.94 times

-       The MCap to Operating profit in just 9.15 times

-       The MCap to Net Profit ( TTM ) is just 12.50 times.

All the above numbers show that the company is quoting very cheap. BUY IT BEFORE OTHERS AS IT IS GOING TO MOVE UP LIKE MINDTREE and PERSISTENT. 
Feel Free to comment your views on this stock

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Disclaimer: I will have an interest in the stock. Make your own judgement and consult your financial advisor.

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Stock Tip: SKM EGG PRODUCTS: A great consumer product waiting for a big run – the next Jubilant !!

SKM Egg Products Export Ltd( listed at NSE only )

Price : Rs 153 Date: 30th Jan 2015

Target: Rs 350                        Time Frame: 3 years

SKM Egg products exports is in the business of processing eggs, convert them into powder and liquid and exports them to developed countries. The end user industries are Global bakery companies and companies making all bakery products. The company’s products are well accepted and have got food quality approvals from the European union and other markets. The company procures and processes 1.8 Million eggs per day, yes per day. This is a massive scale and is a big moat. All the people who travel abroad know how the western world cannot live without bakery products. They consume it in all the meals. So, the demand is going to be robust and is recession proof. See the company’s fundamental below.

Return on Equity ( TTM till Dec 14 ) : 46.5%	RoCE ( TTM till Dec 14 ) : 55%
Sales ( CAGR last 3 years ): 29 %	Net Profit Growth ( CAGR last 3 years ): L to P
Net Working Capital Cycle (13 – 14 ) : 37 days	Operating cash flow ( last 3 years ): 45 Cr
EPS CAGR Growth ( last 3 years ): L to  P %	Current P/E ( TTM ): 19
MCap to Sales ( TTM ): 1.47 Times	MCap to Operating Profit ( TTM ): 9.4 Times

The company had a RoE and RoCE of less than 20% till Sep 14 quarter but moved to more than 45% due to the excellent Dec 14 quarter result. The company TTM PE is 19, does not look cheap. But the MCap to Sales TTM ratio is just 1.47 times and the MCap to Operating profit in just 9.4 times which are very cheap. The EV to ebitda will still be more attractive.

BUY IT BEFORE OTHERS AS IT IS GOING TO MOVE UP LIKE JUBILANT.

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Disclaimer: I will have an interest in the stock

Feel Free to comment your views on this stock 

Follow me at Twitter: @rvetri

www.a1moneytips.blogspot.com

Stock Tip: MT Educare Ltd: A simple but great compounding business and opportunity

MT Educare( listed at NSE & BSE )

Price : Rs 117.65                Date: 23rd Jan 2015

Upside: Rs 230                 Time Frame: 3 to 4 years

MT educare is in a simple business of coaching school students, CA classes and IIM entrance examination. For the last 8 years, the company has been consistently increasing its sales and profits. With the Indian demography, the demand shall be growing steadily. See the company’s fundamental below.

Return on Equity ( 2013 – 14 ) :   20.4 %	Return on Capital employed ( 2013 – 14 ) : 30 %
Sales ( CAGR last 5 years ): 20 %	Net Profit Growth ( CAGR last 5 years ): 53 %
Net Working Capital Cycle (13 – 14 ) : negative	Operating cash flow ( last 3 years ): 55 Cr
EPS CAGR Growth ( last 3 years ): 32 %	Current P/E ( TTM ): 17.27
MCap to Sales ( TTM ): 2.47 Times	MCap to Operating Profit ( TTM ): 9.4 Times

The company has a very good RoE and RoCE. Most importantly the company has a negative working capital cycle as it collects part of the fees as advance. The company is cash rich. The company has more than 130 coaching centers in India and growing which is a big moat. FIIs have more than 10% shareholding with very little DII stakes. Valuation are very attractive with the MCao at just about 9 times its OP. The EV to ebitda will still be more attractive.

BUY IT BEFORE OTHERS AS IT IS GOING TO BE A STEADY 25% COMPOUNDER LIKE HDFC BANK/HDFC. When DIIs start buying, it will surge.

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Disclaimer: I will have an interest in the stock

Feel Free to comment your views on this stock 

Follow me at Twitter: @rvetri

www.stocks2brich.blogspot.com

www.a1moneytips.blogspot.com