Feedback Result Update

Dear Readers,

We have received overwhelming response on feedback. Most surprising fact was that 66% readers have given feedback who never posted any comment before on the blog or on G+. Some most valuable suggestion and ideas received from the readers who has opted 'c - your suggestion' and explained their views in details. Now it is very easy to conclude and go with points which are helpful to the most of the readers as given below

1.   Is it required to modulate the comments on the blog? 

88% readers have given opinion that it is required to modulate the comments and spamming , promotional, abusive and personal attacking comments need to be removed to maintain healthy outlook of the blog board. 

Action - We will continue as before to modulate the comments in addition to restrict the spamming comments.

Suggestions - Need to search in the blog search box to find answers for similar questions to reduce the repeated questions again and again.

2.   Is it required to post every month new stock suggestion?        

71% readers have given opinion in favor to post new stock suggestion every month. Common reasons are monthly systematic investment plan (SIP), unable to enter in last stock, salaried person or limited investment options etc. 

 Action - We will continue with 9 -10 stocks per year and add 1-2 more if some good opportunity available in the market any time. 

3.   Is it required to give clue for new stock suggestion? 

91% readers have given opinion against posting the clues for new stock suggestions because very few blog readers are getting benefit from clues. Common feedback - no time to search and difficult to find the stock for new investors, traders and punters are cracking the clues early and buying in big quantities, some people selling the tip after finding the stock from given clues, unable to buy the stock on first day,  etc. 

Action - We will not post any  clues for next stock suggestions and comments asking for clues will not be entertained. 

Suggestion - Stock exchanges are processing the orders on first come first serve for the top price bidder. In this case if buy order placed after seeing the stock on blog by using after market order option (AMO) than there is maximum probability to get the stock once market will resume trading on Monday. For example if someone wants to buy 1000 shares than he can place 500 stock order at cmp or little bit higher and remaining 500 at market price. It will ensure the stock purchase on time. Those who have not yet used AMO option they can practice it today buy placing few stock order for Monday trade.

4.   Is it better to post long or repeated comments with anonymous ID  or critical inquiries on mail ? 

55% readers given view to continue as before and keep control on repeated question. Comments posted on blog are helpful for all and they can know the others view easily. It is not possible on mail.   

Suggestions - Better to send long multiple question on mail. Need to search in the blog search box to find answers for similar questions to reduce the repeated questions. It will give some extra space to accommodate more comments on blog page. 

5.   Is it required to change the outlook of the blog, like design, name, recent picture, font style ?

79% readers are fine with light black color page and no major change required. Some good suggestions received to create small window on blog page for live stock price, stock performance summary on each post, try white page color with black font, changing blog name 'DK' and without picture to avoid misuse on FB or on any other public webs etc.

Action - We will continue with same setup and implement some suggested changes gradually.

6.   Are you getting  really any benefit from this blog?

Unanimously all are getting some help by knowing the views of each others.

Conclusion

No major change required except stopping the clue for new stock suggestion. Others minor changes will be implemented gradually in future. 

Year 2015 was good for investment and hopefully 2016 will be much better than 2015 because growth initiative taken by GOI will start translating into results from this year. Some sectors which are struggling from long time will make turnaround  in FY 2016 -17.

Our investment in 2015 has given better return from expected 35 - 40% per year.

Answer for some common questions generally we come across on daily basis.

Q - When I can sell my stock?

A - If you have limited investment option and you are in good profit than try to make your stock free of cost by booking some partial profit and keep the remaining stocks for long term. Reinvest again and continue the process. If you find some good correction in existing stock than you can buy more to increase the quantity.

Q - Can I buy the stock after more than 200% appreciation.

A - It is very common issue in common investors to chase down the stock at higher price for quick return. Some correction and consolidation in any stock is very common after big run up then these investors will feel stuck and  sell the stock in loss or going to average it. After selling, next day it started moving up again. It will add further anxiety and regret. 

If someone have enough patience than only buy good stock at very high price. 

Best thing is to enter early at lower price than wait for longer time to multiply your investment. If you will see on above investment summary table and focus on 'Inv price' than you will get some good feeling and peace of mind. It is because we tried to enter at lower and very safe level.

Q - Can I sell xyz. stock to buy stock of new suggestion?

A - It should be decided by you because I may not tracking that stock, your investment price, your profit or loss. I can assure only about any stock suggested on this blog will be good strong fundamental, high growth potential and able to give multiple gain in long run.

 Q - How much return it can give?

A - If you can compound your investment 30% per year than it will be 10 fold in 9 years and at 40% it will be 10 fold in 7 years. We have to go for these returns without taking unnecessary risks.

Next stock Suggestion

It will be posted after market hours on 01 January 2016. It is one of the best stock with very high growth potential in 2016 -17. I hope two and half day is sufficient time to study the stock and sector thoroughly. 

Feedback for Improvement

Dear Readers, 

We are very near to complete the first anniversary of this blog. All of you have given your commendable contribution by posting valuable comments to create positive outlook for investment specially among the new investors. After analyzing the feedback from last one years on different issues, I need your suggestion to for better improvement on below points. 

1.   Is it required to modulate the comments on the blog? Without modulation all comments will be get posted either it is positive or negative or personal remark on someone. Some time I have  filtered  few comments with personal or negative remark.

a)  Yes

b)  No

c)  Your suggestion if any

2.   Is it required to post every month new stock suggestion? In 2015, total 9 stock suggestions were posted but now every month 10 -15 % new readers are joining us and they are looking for new stock suggestion instead of investing in old suggested stocks which are already appreciated more than 35 - 50%.

a)  Yes

b)  No

c)  Your suggestion if any

3.   Is it required to give clue for new stock suggestion? In the past we have seen that some messages were posted on public web sites before publishing in the blog. But in the previous stock more than 40 readers are able buy it before publishing based on given clues and maintained the confidentiality.

a)  Yes

b)  No

c)  Your suggestion if any   4.   Is it better to post long or repeated comments with anonymous ID  or critical inquiries on my mail dolly1970.khanna@gmail.com ? Up to 250 comments per post can open normally after that it start hanging & it is taking time to load the comments.                                                                                                                                                                                                                         a)  Yes       b)  No            c)  Your suggestion if any

5.   Is it required to change the outlook of the blog - like design, name, recent picture, font style ? Some of the readers have given suggestion for change.

a)  Yes

b)  No

c)  Your suggestion if any

6.   Are you getting  really any benefit from this blog? It may be giving confidence, knowledge, guidance or financial benefit etc.

a)  Yes

b)  No

c)  Your suggestion if any

Please give your true feedback on mail dolly1970.khanna@gmail.com 
You can also post it on this blog ( feedback related comment will not be published on blog) so that we can improve it accordingly.

You can reply  just by putting # 1 Yes, #2 No etc.

I will publish the feedback results in % by next week end (Saturday 26.12.2015).

Update on Waterbase, JK Agri and Chemfab

Recent Developments

Our blog readers have posted several comments to know the impact of recent rainfall on their investment. This post is in relation to our future action plan to safeguard our investment.

Recent heavy rainfall and cloud burst triggered massive flooding in southern states of India. Even though flooding is localized but heavy rain has adverse effect on the crops, aquaculture, construction and other businesses. 

Earlier in Q2 seed and pesticide industry has posted very poor results due to drought in some part and overall 10-15% rain shortfall in the country. Price capping on high margin hybrid seeds has added further pressure on margins. Next best performance quarter for these stocks will be Q1 2016-17.

Shrimp farms and salts fields are effected due to heavy rain and floods. There will be some financial impact on the companies operating their business in heavy rain affected areas. There is possibility of some muted results  in Q3 from these companies.

Our Strategy 

• Investors with large portfolio and allocation less than 10% each in Waterbase or JK Agri or Chemfab Alkali and sufficient fresh fund flow to meet future investment plan can hold these stocks and add more on further fall.

• Investors with small portfolio and allocation more than 10% each in Waterbase or JK Agri or Chemfab Alkali with limited option for fresh investment can switch some part of their investment into Technocraft  or DTIL. 

• It will be very good investment opportunity if Waterbase slide below 100 and JK Agri slide below 400. Need to re-enter before Q4 results in case of swap.  

Conclusion

This is temporary situation and there is no change in fundamental of any company. Any deep correction in these stocks due to above situation or poor results should be taken as opportunity to add  at lower level.

Donear Industries - India Ka Style

Donear Industries Limited                CMP  Rs.- 16.6 

                                                       

                                                                         

Company Background 

Donear Industries was promoted by Vishwanath Agarwal in the year of 1977. The Company is manufacturer of fabrics having its own brand name “Donear” and also trading in garments under the brand name of "D' Cot” value retail chain. The Company has manufacturing facilities located at Silvassa and Surat. Company has invested Rs.500 crores for backward integration to set up of world class production capacity and design studio in Surat and floating D'Cot retail chain  in 2007-09. It has one of the best process house in textile industries in India. With its three decades of expertise in the textile industry it has flourished into one of the largest textile–business enterprise in India and became a household name along with other top Indian textile brands. One of the top ten well–known brands in India in its product category. Donear primarily caters to the middle and the premium segments with high quality apparel fabrics that are woven with natural fiber, synthetic fiber and its various blends. Products from their own manufacturing house, produced from LA (liquid ammonia) machines. It produces zero wrinkle product of high end cotton for the bottom and top wear. The company is engaged in the manufacture of fabrics like Suiting, Trouser & Shirting created by Donear in a wide variety and range meant for Menswear & Womenswear. As a brand, Donear has succeeded by maintaining pace with the changing demands of the local and global fashion trends, and primarily due to the innovative approach in continuously developing newer products, using latest technology along with highly–skilled workforce, and strong logistics.

High quality fabrics created by Donear have steadily captured the domestic textile markets as a result of its well–planned and expanding sales network consisting of 300 D'Cot retail outlets, 44 Agents, 290 Wholesalers and 12000 Retailers, that are spread in all the 29 States & 7 Union Territories of India. Donear is also supplying fabric to the top 40 garment brands nationally and internationally also exporting to 18 countries across the globe

Turning Points

Company was debt free before setup of Surat plant. Before the completion of 220 crore Surat project in 2008 -09 Indian textile sector went into deep recession. High growth plan of the company hampered due to extreme slow down in textile sector until 2014. Expansion plan to increase the outlets of apparels value retail chain D’Cot was also put on hold. With improving business conditions for textile industry the Donear Industries has turnaround back to growth path and started posting very good results form last year and Indian government is giving full support for revival of textile sector. 

• Recently government has allowed 100% FDI  in textile retail and manufacturing to attract investment to revive the textile sector 
• Government is setting up world class integrated textile parks and clusters of power-looms.
• Govt. has invested in textile worker skill development and R&d in product design and fashion at NIFT and SVPIITM.
• Trading agreements with several countries in the world
• Domestic demand conditions are improving with world largest youth population becoming brand and quality conscious. In last 2-3 years purchasing power has grown up with increase in disposable income of middle class families.   
• India has abundance resources like raw materials, skilled man power and installed spindle capacity in India counts 24% of the world. 

Product Range

• Polyester Viscose Blended Fabrics
• Polyester Cotton Blended Fabrics
• 100% Polyester Fabrics
• 100% Cotton High Value Plain and Yarn Dyed Shirting Fabrics
• 100% Cotton Plain and Yarn Dyed Bottom wear
• Polyester Wool, Wool Rich & All Wool Fabrics
• Apparels & accessories

Brand and Sub Brands

Company owns "DONEAR" as a mother brand and several sub brands. Roughly estimated market value of these brands is more than Rs 150 crores. 

DONEAR SUITINGS & SHIRTINGS

Donear is a flagship brand which represents a diversified range of fabrics for Trouser, Suits, Shirts, Casual Safari etc.

DONEAR ROYAL CLASSICO


It  Is a luxury premium suiting fabrics blended with superfine wool. It is specially tropicalized fabric having breathing properties to suit all kinds of climatic changes.

           
 DONEAR SOFT & SMOOTH


Donear Soft & Smooth is fine fabric which gives feeling and comfort of Cotton, soft touch of silk, and easy to maintain along with wash & wear qualities of polyester.

   
DONEAR INTERNATIONAL WITH FIT



Fabric Integrated Technology (F.I.T.) is light weight fabric, made from micro fibers spun into a two ply yarn which is finest of the suiting yarn available. It is treated with a special weight reduction finish for added softness and comfort, dimensional stability and crease recovery, excellent smoothness, luster, uniformity and durability.




DONEAR GIFTS 4 U 


This concept is to gift various kinds of suiting, shirting, trouser fabric, finely crafted suit lengths as well as safari lengths in elegant gift packs on special occasion like Events, Festivals, Weddings and Special Occasions.

DONEAR NXG



Donear NXG offers a premium and internationally styled collection for youths and professionals.  It has wide exciting range of shirt, trousers, denims and accessories designed with the finest quality of fabrics, contemporary cuts with superb fits and soft and bold colors that brings in freshness & the transparent meaning of fashion with quality. Company is in process to launch XNG exclusive brand outlets pan India. Currently these products are available in D'Cot store.  



D'Cot - Value Fashion Retail Outlets



D'Cot is company owned and franchise model retail outlets offers the most trendiest & quality style apparels & accessories at competitive price. it has complete range of formals, casuals, denims, shirts, T-shirts, jackets , suits and accessories like wallets, belts, caps, neckties, watches, eyewear, footwear for men, women & children.

Conclusion

• Company is well prepared to catch the opportunities of fast growing demand of fabric / apparels in India and other developing countries in the world.

• Company has wide range good quality product, well established  infrastructure (plants and retail outlets).

• Company is expanding the network of D'Cot and NXG outlets in  Metros , Tier I & Tier II cities by focusing the middle class and upper middle class population with enough purchasing power and willing to spend on branded apparels,  which counts 60% of total population of the country. Link for further details  -http://www.franchiseindia.com/interviews/established/Donear-to-have-1000-EBOs-by-2020-679/

• Due to 100% FDI in textile retail, several multinational brands are in process to tie up for fabric and manufacturing services.

• 'Donear' is well -known brand name and itself valued more than  current market capital of the company.

• Company has shown good growth in revenue even during recession and tough period of textile industries, proves the ability of promoters.

• Promoters have paid the dividend regularly even after posting poor results (2009 - 2013) during slowdown period of textile industries. It shows their confidence in them and in the business.

Overall company is poised to regain its old glory and the stock is highly under valued by seeing the deep hidden value of the company. Investors can buy and hold it for decent multiple gain in 2-3 years.

Q2 RESULTS UPDATE

Pondy Oxides & Chemicals

Company has maintained the OPM  over 6% from last 3 quarters which is very good sign. Depreciation cost is higher due to new plant asset with full book value. There is significant improvement in ROE in the first half of the year. Overall results are good and performance is improving. Hold the stock for better gain in 1-2 years.

Waterbase

Company has posted very good results with revenue growth 21% and PAT growth 50% YoY for Q2. Management has given detailed presentation on future guidance on business and merger of PFL. It is available on company web and BSE announcement on 26 Nov 2015. Hold and further add the stock during market correction for 2-3 year investment plan.

Xpro India

Company has posted negative results and poor performance in all business segment due unfavorable conditions. Even considering all negative factors still this company is fully capable to show excellent performance in future. Hold and add further if it slide near 40.

Dhunseri Tea & Industries

DTIL has posted very good results and OPM is above 40% for Q2. Its P/E ratio and dividend yield is best in Tea / Coffee  sector. Company is going to enter in FMCG with 'LAL GHORA' brand and its products will be marketed initially in Rajasthan where its tea brands have very good reputation. It is still value buy at CMP and hold for multiple gain in 2-3 years.  

Kothari Petrochem

Company has posted good results for Q2. Even though significant reduction in top line but very good improvement in OPM and it able to post better results YoY for Q2. Need to hold it for long term for multiple gain.

Technocraft Industries (India)

Top line growth remain flat for Q2 but significant growth in OPM and PAT. Proposal for buy back of 52L shares is good for retail investors. Company is generating good consistent profit and completed the expansion and acquisition. Utilization of free cash reserve for buy back of share is good option to increase EPS and dividend. It is still value buy at CMP and hold for decent gain in 1-2 years.     

JK Agri Genetics

Company has posted poor numbers similar other seed and pesticide companies due to unfavorable condition. It can give good results with improvement in agri sector. Hold for long term.

Chemfab Alkalies

Company has posted flat results in top and bottom line. Being low beta defensive stock very less movement in either side but it will give stability and option to buy good stock in adverse falling market. It was suggested just before deep market correction on 24 Aug to keep the portfolio stable. Hold for better gain in 2-3 years.

Next Stock Suggestion 

It will be posted on 04.12.2015 (Friday) after market hours.

Several readers are asking the stock clues and some readers are not in favor of posting the stock clues in blog comments. We have to maintain trust and fairness among all blog members. To avoid any foul play by punters, we should refrain posting comments for further clues on blog or social media.

You can test your stock finding ability with given points only. 

1. Company is paying dividend regularly from last 10 years.

2. Consistent growth in top line from last 10 years.

3. Company represent  in the list of top 10 in its segment.

4. Company has posted more than 100% growth (YoY) in bottom line.

5. Stock is trading in two digit.

Please note that any comments  related  further stock clue will not be entertained before posting above stock in this blog. If you able to find above stock than you can buy it without disclosing to anyone. 

Festive Greetings

Dear Readers,



I will be out of station for ten days and may not able to reply you on time due to busy schedule. Q2 Results update will be posted  in the last week of November. Sorry for inconvenience.

Dolly

Q2 RESULTS UPDATE - WATERBASE

WATERBASE

Company has posted excellent results for Q2. Revenue growth 21% and PAT 48% YoY. It is in line with our expectation. Management has given complete details about company proceedings along with Q2 results. Expansion of dealer network in Gujarat, Tamil Nadu, West Bangal and shrimp farming others states is in progress, company has restarted the export to EU and US. Hatchery project and merger of PFL with Waterbase is moving as per schedule.

Why the stock has fallen today?

Several short term traders / investors were caught on wrong foot because they have taken position for quick gain by misinterpreting the merger of PFL in Q2 and hoping that revenue will reflect in this quarter.  

There is no any negative concern about the company, it is growing very aggressively as per plan.

It become another opportunity for long term investors to buy or add at lower level.


Please post your comments on first page of the blog, it taking time to load the comments on old posting due to large number of comments.

Kothari Petrochemicals - Changing with Time

COMPANY                                                                 CMP -18

Kothari Petrochemicals is the largest producer of premium quality Polyisobutene (PIB) in India.There are only two other manufacturers of PIB in the Country. Since inception in 1990, the company has enjoyed a strong market position in India with a rapidly growing 'KVIS' brand across the globe that represents quality, customer responsiveness, dependability and a commitment to the environment. In 2008, Kothari Petrochemicals commissioned a second plant in Manali that doubled the production capacity to 22,000 MT per annum in order to supply Polybutene worldwide. Company has offices in Chennai, Manali, Mumbai and Belgium, and supply to customers in 20 countries around the world. Company has grown as a trusted supplier to many large lubricant manufacturing companies, such as Exxon Mobil, Infineum, Chevron, BP, Castrol and Lubrizol.

Company has bought the rights to use the patented Cosden Technology, USA.  With continuous innovation and technology improvements it has consistently maintained high quality to meet the changing demand of new products across the globe. Its product find market in developed countries which are dominated by chemical giants like BASF, INEOS, Infineum, Lubrizol and TPC but these companies are buying the products from Kothari Petrochemicals due to high quality and competitive price. Company posses required certification like ISO 9001, ISO 14001 and REACH.

Management

Nina B Kothari is daughter of legend industrialist Dhirubhai Ambani, founder of Reliance Industries and sister of Mukesh and Anil Ambani.  During Reliance division in 2005 both sister Nina Kothari and Dipti Salgaocar has received 5% stake each in the Reliance empire, mother Kokilaben herself, Mukesh and Anil Ambani has get 30% each. Nina has been appointed Chairperson of Kothari Petrochemicals Ltd and all other 25 companies of HC Kothari group, with effect from April 8, 2015. Her husband and eminent industrialist B H Kothari, who was the Chairman and Managing Director of these companies, passed away due to prolonged cancer on February 22, 2015. She survive with her son Arjun and daughter Nayantara (married to Shamit Bhartia of Hindustan Times & Jubilant Group). Arjun B Kothari  has been appointed as a Managing Director, Key Managerial Person and an Additional Director of these companies, with effect from April 8, 2015. 

Nina Kothari is born and brought up in business environment. She has monitored struggle and growth of Reliance business empire on daily basis. Even after marriage she is active in business and hold directorship of several group companies. She has also launched "Javagreen", a nationwide chain of coffee and food cafes. Earlier most of the business decision were taken by B H Kothari but complete family was disturbed due his serious sickness and several decision were on hold. After death of her beloved husband all responsibility came on her shoulder to run the HC Kothari group.

Her speech on 10 Aug 2015 the AGM of the company in Chennai has given surprise to the share holders and proof of her talent that she is fully determined and focused to take this company to next level. Within few months she has taken several decision to expand and further increase the profitability of the company as given below (details in company web -Chairperson’s Speech).

• Company has reduced its risk of raw material supply by entering into an agreement with M/s. Haldia Petrochemicals Limited, Kolkata for sourcing raw material on a long term basis with a transparent pricing mechanism.

• Company is in process to enter agreement with Chennai Petroleum Corporation Ltd for supply of additional quantity of raw materials and to reduce the dependence on other suppliers. It will further reduce the input cost considerably. 

• She has taken efforts towards shifting the product line from conventional PIB to high reactive HR PIB.

• Recently company has increased the production capacity to 24,000 TPA with minor modification in existing plant.

PRODUCT APPLICATION

KVIS is the trade name of polybutene produced by Kothari Petrochemicals. KVIS is a linear polymer of isobutylene of different molecular weights, and possesses excellent resistance to oxidative and thermal degradation. Polybutene is chemically inert, virtually non-toxic and non-phytotoxic  hydrophobic and impermeable to water vapour or gas. All these unique characteristics and its compatibility with a wide range of organic materials augment the performance properties of a wide range of products in various industries, and have made it one of the most sought after product in the world. 

LUBRICANT AND FUEL ADDITIVE

KVIS find very vast application in lubricant and fuel industries because it demonstrate very low deposit formation. Unlike typical lubricants, KVIS polybutenes depolymerize cleanly when heated above 250 degrees Celsius.

KVIS is used as additive in two stroke engine oil  and it is well proven cost effective alternative for lowering emissions in two-stroke engines. It activate cleaner burning - reduced corrosion and scoring and elimination of engine deposits.

POLYMER & RUBBER MODIFICATION

KVIS polybutene is often used in polymer modification processes.  Polypropylene random and impact co-polymers modified with polybutenes can have higher melt flow rates, greater elongation, flexibility, tear resistance and improved impact strengths. It is used in several rubber and plastic product industries like Tire, Asphalt, Electric cables, Explosives, Flex tubes, PPEs, plastic sheets etc,

KVIS polybutene is the ideal for linear low density polyethylene (LLDPE). Polybutene offers excellent cling properties to the film when added to LLDPE. The major areas of application for LLDPE are pallet stretch wrap and bale silage wrap.

ADHESIVES & SEALANT

KVIS polybutenes are vital ingredients in many pressure-sensitive adhesives (PSAs) and hot-melt adhesives (HMAs). These emulsions also offer enhanced adhesion and temperature stability while lowering adhesive costs. 

Polybutenes decrease the melt index and increases the cold temperature flexibility. Examples include packaging, disposable soft goods, carpet, shoes, furniture, book binding, carton sealing, labels, adhesive tapes  and product assembly.

PAINTS, INKS & COATINGS

KVIS polybutenes are a viable alternative to acrylic bases, since it improve water resistance, excellent adhesion,  surface finishing and result in lower manufacturing costs.

Application in wall putty, waterproofing for porous substances, such as wood or concrete, hot-applied thermoplastic road marking paints, masonry paints, spray paints, paper coatings etc. KVIC polybutene improves processing and print image quality. It ensures uniform flow of ink in gel / ball point pens.


COSMETIC & PERSONAL CARE

KVIS polybutenes are pure, clear and practically non-toxic polymers. It increase the thickness of the lipid (oil) portion of cosmetics and personal care products. It functions as a thickening and film-forming agent and does not penetrate skin due to its large molecular size. Personal care products like lip-gloss and roll-on deodorants are formulated with polybutene.

It finds various application in skin, hair or nails care products  like lip-gloss and roll-on deodorants are formulated with polybutene.


GROWTH & MARKET DEMAND


Few year back company has invested to setup the wholly owned subsidiary companies in Singapore and Hong Kong (Kothari Petrochemicals Pte. Ltd., Singapore and Kothari Petrochemicals HK Ltd., Honk Kong) to capture the growing market of its product in Asia Pacific region.

CONCLUSION

Company has wonderful product, well established brand with wide application in different industries. Company has expanded its reach to all corner of the world. Its product will remain continuous in future demand. 

Even at current price, stock is highly undervalued by seeing the strong fundamental, promoters' capabilities, future growth and demand of the product.

Stock statistic : Price - 18.55, Market Cap - 100 Cr. , P/E ratio - 8.4,  Dividend Yield - 5.9 % 
   
In last blog I have mentioned about direct beneficiary companies of falling crude oil prices, it is very visible in last 3 - 4  quarter results of this company, NPM  and OPM has improved significantly  after fall in crude oil last year.

Investors can buy it and hold for multiple return.

Collapse of Crude Oil has triggered Rise of Indian Economy

Our blog readers have posted several comments on low price Oil and Steel stocks. This post will help to provide necessary update on current situation.

CRUDE OIL

Crude oil prices have been falling since  last year. This is because production grew faster than projections and demand deteriorated faster than expected, resulting in an excess of oil for sale in the world. In April 2015 Iran signed an agreement to end its nuclear program and let in international inspectors to prove its commitment. After confirmation of Iran's compliance,  sanctions were removed and bring Iranian oil to international markets. Currently Iran is  producing  3 million barrels per day. Iran's intention to further ramp up the oil production has fallen like thunderbolt on growth of OPEC countries. Oil prices will continue to be subdued because OPEC is not cutting down production and alternative sources of energy are adding to the supply. The Russia added fuel to fire by refusing to bend to market forces and so have made up the shortfall in their budget caused by falling oil prices by pumping out more oil. The Russian need for income means they are unlikely to make a tactical cut in oil output. Increased production adds to the downward pressure on crude oil prices.  The fall in crude oil prices is a blessing for the Indian economy as it would reduce India's current account deficit, aid infrastructure development, help in saving precious Forex reserves and also benefit manufacturers as their input cost will go down. Recent fall in Chinese growth projections and the end of sanctions against Iran have given the reason to downgrade the projections of crude oil prices. The oil price is not going to rise in near future.

Indian manufacturing sectors will have a very positive impact due to falling oil prices directly as well as indirectly for automobiles, plastic, petrochemicals,  paints, tire, fmcg, lubricant , synthetic yarns, aviation etc. Oil drilling and exploration companies will get impacted negatively. Overall, the collapse of the oil prices and Chinese slow down will have positive out come for the Indian economy.

COTTON

Cotton prices also have crashed since last year. China's cotton and textile industry is on the decline as its competitiveness is hurt by decreasing labour availability , old manufacturing  machines and process  increasing production costs. Global market share of China for cotton demand is decreasing at 1% per year, while India will increase its share at same rate 1% year and this trend will continue for next 4 -5 years. Indian Prime Minister Narendra Modi has pledged to boost manufacturing in the country and launched the 'Make In India' campaign by improving the business environment and favorable business policies and rising investment in textile sector, a young demographic profile and competitiveness as a low cost production base will support growth in the textile sector, in turn boosting the exports in medium term.

Biggest beneficiary of lower cotton prices and decline of Chinese textiles industry will be Indian garment industry. Specifically high quality garment manufacturing companies will have better margin in internal market as well as in export. 

STEEL

Surplus steel production from China has led to a crash in steel prices. China is now selling its excess steel to other countries at very cheep rate. It has put tremendous pressure on Indian steel industry and other global metal producers. It has impacted negatively on mining and steel companies in India.

End user companies and those converting  steel into final products are getting maximum benefit of low cost steel because they are not passing the benefit to consumer in same ratio. It will also help infrastructure  companies as well as Indian government in mid term.

In the  series of Best Stock Picks next stock will be posted on 16.10.2015. It is low price, very strong fundamental stock and it will get immense benefit from fall of above commodity prices.

We received several comments regarding low price stocks. Several blog reader holding penny stocks without any fundamental and poor growth prospectus. They can swap it with this stock for decent gain.

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