All of these stocks are having very strong fundamentals with high and increasing promoter, DII and FII holdings, low or no debt, increasing profits, revenue, good dividend yields along with good future potential. These stocks are also trading near or below their intrinsic value so they are a good bet for future. These parameters have made this our favorite stocks amid the volatile stock market. The thing to be noted here is that, all of these are a long term bet - meaning that you have to hold them for minimum 5 years to gain some extraordinary profit. Scroll down and see the detailed analysis of the potential multibagger stocks which will become real wealth creators in 5 – 10 years.
1. Globus Spirits Ltd.
Globus Spirits Limited, established in
1992 is primarily engaged in the business of manufacture and sale of Indian
Made Indian Liquor (IMIL), Indian Made Foreign Liquor (IMFL), Bulk Alcohol hand
sanitizer, and Franchise Bottling. It has a unique 360⁰ model straddling across
the entire alcohol value chain. It is the 1st to set up a grain distillery and
launch branded DDGS in India. It is the largest grain-based Extra Neutral
Alcohol (ENA) manufacturer in India.
Manufacturing
Business (64% of revenue in FY20 from 49% in FY16)
Bulk Spirits (77%) Its major customers are reputed
IMFL players. It also provides high-quality ENA to its other divisions
while the bottled ethanol is sold to OMCs
Franchisee Bottling (3%) - It has bottling contracts with India’s
Top 3 IMFL companies.
By-Products (20%)
1. DDGS is a major by-product of the alcohol manufacturing process which is
used as food for the animal feed industry.
2. CO2 is commercially available as high-pressure cylinder gas, dry ice, etc.
It is also used for carbonation of soft drinks, freezing of food products,
etc.
Hand Sanitizers (Globus Prosanitize) - It carries out contract
bottling for major FMCG and OTC brands in some of our facilities. Later it
initiated manufacturing of sanitizers under its own brand that is sold directly
to retail
Revenue
and Exports
The revenue growth in FY20 was led by a 31% growth in manufacturing. It
exports to the Middle East, US, etc. contributing to 1.6% of the total revenue
in FY20 from 4% in FY19.
Future
Plans
The company will focus on Innovation through Investment in R&D in IMIL and
the premium IMFL business. It will also build strong brands with a value
proposition for the bottom of the pyramid consumer. During Q3FY21, the
flood in Bihar led to lower production and sales in the quarter at its Bihar
Plant. It will de-leverage the Balance Sheet and have made a re-payment of
52 crores in FY20 for the same.
Key
Managerial Personnel
Mr. Vivek Gupta has been appointed as Chairman of the Board of Directors w.e.f.
03rd August 2019. It seems a futuristic business with excellent growth, and
a capable management. A great bet for future.
Product Portfolio
Packaging (72% of revenue):
Food: Retort Pouch, Meat Wrap, Easy Peeling Lids, Wafer Bag, Rice bags, etc
Non-Food: Healthcare Products , Liquid Packaging, Product Labels, Carton
Packaging etc.
Industrial (28% of revenue): Solar Panel Back sheets, Wire and Cable over wrap, Flexible
circuits, Plastic Optical Fibre, Barcode Labels, Window Film, Cards Lamination,
Adhesive Tapes etc.
Expansion Projects
The Company has embarked upon a 2,11,442 TPA
expansion project across various product lines. This includes:
Brownfield Expansion: 60,000 TPA BOPP Film Line 12 in Turkey, 50,000 TPA
BOPET Film Line 14 in USA, 28,400 TPA Resin plant debottlenecking in USA.
Greenfield Expansion: 25,000 TPA Post-Consumer Plastic Waste Recycling
in Thailand, 4392 TPA Blown Film Line in Turkey.
Integration Exercise: 43,000 TPA forward and backward integration
projects across Metallizer-II, Batch Plant-III etc. All the projects are
expected to be commissioned by the end of FY22 and FY23
Capacity Utilisation
While industry wide capacity utilisation for PET films has ranged between 71%-82% over the past 5 years, Polyplex has displayed an industry leading capacity utilization of >95% resulting in market share of about 25% in Thailand and Turkey, and around 10% in India, the US and Indonesia. This has been possible due to ability to run at higher average / peak speeds, optimal downtime and better deckle (width) utilization
Value Added Products
Over the past five years, the share of
High Value Added (HVA) film in the total film sales turnover has increased from
24% in FY 2016-17 to 34% in FY 2020-21. HVA film sales usually are
higher margin sales arising from differentiated product characteristics
R&D
The Co spent ~6 crores on R&D during FY21.
It has been granted 27 patents across various
products/ processes/ countries and has filed applications for 6 more patents.
Buyback
The Co bought back 5.92 lakh shares during FY21 at
a price of 475 per share, aggregating to Rs 28.12 cr. Buyback of
share by the company’s promoters is a very positive sign for the country. It
seems a great bet for the future.
3. Supreme Petrochemical Ltd
Supreme Petrochem is engaged in the
business of Styrenics and manufactures Polystyrene (PS), Expandable Polystyrene
(EPS), Masterbatches and Compounds of Styrenics and other Polymers, Extruded
Polystyrene Insulation Board (XPS) Styrene Methyl Methacrylate (SMMA) with
manufacturing facilities at Amdoshi Dist Raigad, Maharashtra and Manali New
Town, Chennai, Tamil Nadu.
The annual installed capacity of
PS, expandable PS, specialty polymers and compounds and extruded PS is
2,72,000MT, 72,100MT, 33,500MT and 5,000MT, respectively.
SPL is likely to incur capex of
about INR6,000 million over FY22-FY24 towards PS, EPS and compounds (close to
INR2,500 million capex) and ABS (close to INR3,500 million capex) expansion.
Petrochemical Industry (Part of Speciality
Chemical) is a futuristic business and it is estimated that India will become
the centre of speciality chemicals industry due to increased restrictions on
speciality chemical business in China. This will prove to be advantage for this
growth driven company and we think it will outperform the benchmark in next few
years.
KCP Ltd is engaged in the business of
manufacture and sale of cement, sugar, heavy engineering, power generation for
captive use and hospitality.
Cement
Business (55% of revenues)
The company owns and operates 2 cement plants in Andhra Pradesh. The plants
possess a combined capacity of 4.3 million TPA of premium grade cement in
India.
Product portfolio includes Ordinary Portland cement, Pozzolana portland Cement,
Rapid hardening portland cement and others.
The company completed
expansion of its flagship plant in 2019. It expanded its capacity from 1.8
MnTPA to 3.5 MnTPA. The company is also planning to set up a 0.5 MnTPA cement
plant in Tamil Nadu.
Sugar
Business (31% of revenues)
The company operates its sugar business in Vietnam through its 2/3rd owned
subsidiary. KCP Vietnam Industries Ltd. The business has a total crushing capacity
of 11,000 TCD from its 2 plants installed in Vietnam.
Power
Business (7% of revenues)
The company has various power capacities which are primarily installed for
internal consumption for various businesses.
It has a total installed capacity of ~34 MW from different power sources i.e.
Hydel, Wind, Thermal and Solar.
Heavy
Engineering Business (5% of revenues)
The company manufactures
heavy equipment for Cement, sugar, power, mining, mineral processing, metals,
oil & gas and various other industries. It has a diverse customer base in
Australia, Malaysia, Mauritius, Vietnam, Korea, Indonesia, China, Nepal and
various other countries.
Hotel
Business (1% of revenues)
The company owns Mercure Hotel, Hyderabad which is managed by the Accor Hotels
Group, France. The hotel comprises of 128 spacious rooms spread across 4
categories from Superior (98), Deluxe (11), Suites (8), 5 Meeting Spaces, 3
Restaurants and Gym.
Joint
Venture
Fives Cail KCP Ltd is a joint venture with Fives Group of France setup in 1996
wherein the company holds 40% stake. It was setup to provide turnkey sugar
plants, co-gen and incinerator of effluent from molasses based distilleries. It
designs, manufactures, supply, install, commission and provide customer support
in all of its installations.
Important Note: - You will see that most of the times the brokerage houses do not recommend to buy these potential multibaggers because they get money from other companies to promote their stock and increase the company’s visibility which results in retail investors getting stuck in companies while earning little or no profit. Even if you gain some profit, the profit percent is taxed (STCG and LTCG) and is unable to beat the inflation.
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