SHAH STOCKS wishes every Investor a very Happy Diwali and a New Year.!!!
As everyone knows Shah Stocks does share its research on special occasions. Stocks recommended for last 3 years include.2015: Nucleus Software. Returns: 3x (High of Rs. 601, recommended at Rs. 185.00)]
2016: RamRatna Wires. Returns: 3x (High of Rs 244 after recommended at Rs 60.00)
2017: Shivam Autotech. Returns: 0.5x (At Low of Rs 50.00, recommended at Rs 100.00)
Nucleus and Ramratna Wires are giving more than 300% returns but last year pick Shivam Auto is almost 50% down. Shivam Auto is a HERO Group company and its a pity, shareholders lost their capital in such a good company over last 1 year but I believe a moment will come when the company is gonna bounce much stronger.
Please note here that "There is always risk associated when we work in stock markets. Even though we work really hard and go through tiniest detail before recommending any stock, out stock analysis may fail sometimes."
So this years Diwali Pick is a company which is a top manufacturer of Winding Wires in India, Precision Wires India Ltd.
CMP: Rs 235.00
About Company:
- Precision Wires India Ltd (PWIL) headquartered in Mumbai is the largest manufacturer of Copper Winding Wires in the country and uses a combination of Indian skill and foreign technology. PWIL has three manufacturing facilities, located at Silvassa, Dadra Nagar Haveli and Palej, Gujarat.
- Installed capacity of over 35000 MT/year being increased to about 45000 MT/year by 2019, company is the largest producers of Winding Wires in South Asia. Company’s state-of-the-art facilities at Silvassa manufacture a wide range of products including Enamelled Round and Rectangular Copper Winding Wires, Continuously Transposed Conductors (CTC) and Paper/Mica/Nomex® Insulated Copper Conductors (PICC), which are used across the globe by the electrical/electronics industry.
Investment Rationale:
- · The company is all set to deliver the output from the extended capacity.
- ·
The company’s clientele is Huge and it involves all the names, one can
think of. Many leading large and medium electrical and
electronic equipment makers in India and abroad are among the customers of
Precision Wires Limited. The company has been increasingly targeting overseas
markets over the past few years.
- · The sector too is at the sweetest spot; the government being very much dedicated towards the growth of the industries. Infra space like airports, metros is also a great boost for the company.
- · The company has been very much investor friendly. It regularly pays dividend, last year being the highest; Rs 4.50 to be precise.
- · The company’s fundamentals have been growing always. Company’s management has done a recommendable job and that shows the potential of the company.
- · Impressively the company has no long term debt, which makes it a great stock even for a long term.
COMPARISON of Results:
- If compared last quarter QoQ, sales grew by 70%; from 241 crores to 419 crores. The Profitability has not grew much because of the high price of the Raw Materials consumed. We expect it to rise continuously as the expansion is supposed to get complete in this fiscal year.
- · P/E Ratio is 17.00 compared to Industry P/E of 22.00
- · The company’s fundamentals will further improve once the expansion is complete. The company being one of the most attractive in valuations as well as having competitive edge in business; makes it the most attractive stock to invest in.
- September Quarter results are out and company posted good set of numbers posted. Sales came at around Rs 431.8 crores vs Rs 306.76 crores previous year. Net Profit increased to Rs 10.18 crores vs 7.66 crores, making an EPS of Rs 4.40 vs Rs 3.31 in previous year.
OUTLOOK/Verdict:
Looking at the future outlook, Shah Stocks expects the stock price to reach target of Rs
350.00 in next 6-9 months. Also looking at the investor friendly management,
one can hold the stock and keep it portfolio for a long term. This company has
all the potential to be MULTIBAGGER.
Disclaimer: Equity
Market comes with risk associated with it, Invest accordingly. Shah Stocks
recommends a BUY in this counter with very limited risk associated to it.
Before acting on any advice or recommendation in this material, investors
should consider whether it is suitable for their particular circumstances and,
if necessary, seek professional advice. The price and value of the investments
referred to in this material and the income from them may go down as well as
up, and investors may realize losses on any investments. We don’t accept any
responsibility for any Loss/ Profit arising from your decisions. Past
performance is not a guide for future performance, future returns are not
guaranteed and a loss of original capital may occur.
