Saturday, April 20, 2019

Sunflag Iron and Steel Company Ltd - Special in Steel



Sunflag Iron and Steel Company Ltd is a flagship company of Sunflag group. Initially company was started for producing normal mild steel and spring steel rolled products since than company has been continuously upgrading its manufacturing facilities and products, presently it has transformed itself into high grade special alloy steel manufacturer.



CMP     47



The state of the art integrated steel plant is set up by Mannesmann Demag and Krupp Industrietechnik Germany, located near Nagpur, at Bhandara, Maharashtra. The plant has a capacity to produce 500,000 tonnes per annum of very high quality special steel using liquid pig iron and sponge iron as basic inputs. The company has technical collaboration with Daido Steel Co Japan. The company has captive coal, manganese and ore iron mines.  The steel plant is equipped with 30 MW captive power plant based on thermal and waste heat recovery.






Specialty steel is made by combining steel with different alloying elements to improve various mechanical and chemical properties such as resistance to heat, abrasions, rust etc. The automobile, defence and industrial machinery sectors are the primary users of specialty steel. The common grades include silico manganese, chrome and vanadium steel.



Sunflag Iron and Steel Business Film 



https://www.youtube.com/watch?v=5gWskCU8liA



Presently, the company produces wide variety of steels, tailor made to specific requirements of customers in various grades and profiles covering all categories like  carbon steels, alloy steels, free  & semi free cutting steels, micro-alloyed steels, stainless Steels, spring Steels, valve Steels, bearing Steels, cold  heading quality steels, tool steels, etc.






Sunflag mainly caters to the demand of the automobile, railways, defence, power, and engineering sectors. The steel used for manufacturing various components like crank shafts, springs, suspension mechanism, transmissions parts, axle beams, connecting rods, bolts, nuts, shafts, keys, critical machine components, steering components, axles, gears, and high resistance screws.






The manufacturing facilities of Sunflag Iron include sinter plant, mini blast furnace, direct reduction plant, electric arc furnace, ladle heating furnace, vacuum degassing unit, blooming mill, alloy steel mill and garret coiler amongst others.






The company is giving prime focus to maintain high quality product standards. The manufacturing and quality management systems has been standardized and certified under ISO 9001, TS 16949, ISO 14001, OHSAS 18001, AD-2000-Merkblatt WO certified & ISO/IEC 17025 approved testing laboratories by NABL. The Sunflag steel is produced using 100% Iron ore as a basic raw material input and no scrap steel is sourced from outside.


Clients





The company has established itself as a major producer and reliable supplier of alloy and special steels in Indian and overseas markets. The company is having robust market position in the auto-grade micro-alloy steel business. Apart from catering to the domestic steel requirements, Sunflag Steel also exports to South East, Middle East, European countries, United States etc.



Joint Ventures (JV) and Technical Collaboration






In order to meet the market demands for new grades /applications, to improve existing processes and products and to support the customers in their efforts for localization of their steel requirements, Sunflag Iron & Steel Co. Ltd. has entered into technical collaboration with Daido Steel Co. Japan, it is one of the largest manufacturers of specialty steel in the world.



In fact Daido Steel Co. Japan has chosen the Sunflag Iron and Steel Company because it is the first company which meet their 4 phase investment and expansion criteria around the world. The Sunflag has technical collaboration with Daido Steel Co.  Japan since 2010. After successful completion of five years of technical collaboration with Sunflag, Diado Steel Japan has made decision for equity participation in 2014 and hold 10% stake in Sunflag as strategic partner.





Daido Steel has further expanded their ties 2015 by forming Daido DMS India Pvt Ltd.  A Joint Venture (JV) Company between Sunflag, Daido Steel Co and Daido Die and Mold Steel Solutions Co. Japan to manufacture, import, export and distribution in die, mould steel , tool steel and other metallic materials, processed products and mould parts.



For further detail refer page number 4, 7, 25 and 26 in below presentation of Daido Steel Co. Japan.


https://www.daido.co.jp/en/ir/presentation/2017mid.pdf


There is significant financial improvement since last 3 - 4 years  supported by development of new grades  of specialty steel and continuous improvements in existing business process of Sunflag.


 Ramesh Sunwire Private Limited



Sunflag has formed joint venture company with Stumpp Schuele & Somappa Springs Pvt Ltd. The main object of the said JV Company is manufacturing high quality of alloy steel wire for automobile and auto component industries both in domestic and export markets. The new plant will start contributing revenue from this year. Stumpp Schuele & Somappa Springs has about 30-35% market share in the domestic springs industry, and supplies about 4,000 varieties of springs.



 Coal, Iron Ore and Manganese Ore Mines



The Company is having operational captive Coal and Manganese mines at Belgaon Chandrapur and Bhandara in Maharashtra

Belgaon Coal Mine  is having  383.56 hectare area  at  Chandrapur, Maharashtra. This underground Coal mine is having estimated reserves of 8 millions tons (MT) with extractable balance of about 6.23 millions tons (MT)

Navegaon Manganese Mine is having  15.90 hectare area  at Bhandara, Maharashtra. It is open cast mine with reserves of about 30,000 tons

Navegaon Manganese Mine 2 is having  48.78 hectare area  at Bhandara, Maharashtra. Application for conversion of Prospecting Licence into Mining Lease is under process

Warpani Manganese Ore Block is having  1419.65 hectare area at  Nagpur, Maharashtra. Application for conversion of Prospecting Licence into Mining Lease over an area of 460 Ha is under process

Bande Iron Ore block is having 236.75 hectare area at Gadchiroli, Maharashtra. Application for conversion of Prospecting Licence into Mining Lease over an area of 205.75 Ha is under process

Kodalibad Iron and Manganese Ore Mine  is having 120.00 hectare area at Singhbhum, Jharkhand. Iron and Manganese Ore mining Lease is yet to be executed



Investment Rationale



Sunflag has large capacity manufacturing steel plant with latest technology from Mannesmann Demag and Krupp Industrietechnik Germany,  all required raw material  from captive coal, manganese and ore iron mines near to the plant,  allocation of large mining block for long term future use, captive power plant, cash rich strong balance sheet, visionary & experienced promoter and well-known successful partners make Sunflag a very asset rich company and ideal for investment.

The technical collaboration and partnership with Japanese steel maker Daido has enable Sunflag to get the direct access to latest technology for producing high quality specialty steel without any additional cost. 

Sunflag get easy access with trust to Daido's global relationship with leading automobile manufacturers such as Honda, Suzuki, Toyota in India. It has helped Sunflag to build and maintain its strong market position in automotive-grade micro-alloy steel business with wide product mix and established clientele base.

Alloy and special steel market are one of the fastest growing markets in India steered by the accelerated growth in automobile, infrastructure, defence and engineering  sector. Sunflag has large scale of operations with stable revenue outlook.

To meet the increasing demand and to keep-up with expanding special steels market, Sunflag is consistently developing new grades of steel and doing incremental investments for adding up new production capacities. 

Sunflag is one of the few companies in steel sector which are net debt-free. It has ended the last financial year with net profit of Rs. 128 crores and this year ( FY 2018 -19) it is expected to give even better results than last year.  The company is having enough cash in the balance sheet and healthy cash flow from current operation is giving scope for higher capacity expansion to meet the growing demand of special steel.

The company is already expanding its existing steel melt shop to produce high quality clean steel. This will enable the company to diversify its products.

Company improving capacity utilization with controlled working capital and cost savings by improving the operating efficiencies.

Even in the past its promoters has shown their excellent ability and vision to expand the steel business with keeping well control on debt metrics and working capital requirement. It is the critical area where most of the major Indian steel companies have failed and still struggling.


For further detail refer page number 1 and 18 to 24 for old report on steel sector in below pdf presentation


Note - Below 2015 report is given just for your reference. Since 2014 Sunflag has reduced its long term debt around 200 crores and increased its cash reserve above 600 crores due to its exceptional performance in steel sector.


https://www.motilaloswal.com/site/INST_RESEARCH/Sector%20update/METALS-STEEL-20150827-MOSL-SU-PG026635762971622391709.pdf


Auto industry is expected grow more than 7% and most of the world famous automobile companies are setting-up their manufacturing units in India. The cost of imported auto components is very high in India due to higher import duty. In current scenario these companies have to manufacture all critical components locally, it gives very good growth opportunity to special steel manufacturers to supply quality steel for these critical components.


Conclusion



Sunflag is very strong fundamental, asset rich, fast growing company in special steel segment. Sunflag mainly serving to the automobile, railways, defence, power and engineering sectors which are backbone of economy and growth possibilities are huge.


Market correction has given ideal investment chance to buy it 50% below from yearly peak. Sunflag Iron and Steel stock at cmp Rs 47 is one of the best investment opportunity in steel sector. It can be bought + / - 10% from cmp with 10 -20% of portfolio allocation.



654 comments:

  1. Dear Ma'm,

    Thank you for the new stock pick.

    Regards,
    Joby

    ReplyDelete
  2. Thank you madam. One request from my side. can you please include pledged shares and debt information in your analysis . During mkt depression I found this is extremely critical for investment decision. I am sure you got the info. Request you to please include in your all future analysis. Best Regards

    ReplyDelete
  3. Thank you so much maam for your another wonderful recommendation...
    Recently i came to saw that your firm has increased allocation in butterfly gandhima.. is it advisable to buy at current rate?? If so how much return can be expected? ?

    ReplyDelete
  4. Dear Mam
    Is steel sector on path of revival?
    Metal stocks have not performed well for many years

    Regards
    Ajay

    ReplyDelete
    Replies
    1. Yes, cash rich or low debt steel companies will rebound very quickly and lead the metal sector in coming quarters. But very few companies are having strong balance sheet in the steel sector and Sunflag is the one of the best company which has performed very well in last 2 - 3 years and it will continue to perform well in future .

      Delete
  5. Thank you madam for suggesting multi-bagger stock from steel sector after long time. I will buy it on Monday, I am expecting that it will give much better return then Kamadhenu

    ReplyDelete
    Replies
    1. Yes at current market price Sunflag is much better option then Kamdhenu

      Delete
  6. Thank you madam

    How much return we expect in short-term and long-term from Sunflag

    ReplyDelete
    Replies
    1. It is expected to give around 50 -100% return in next one year and around 300% in next 3 - 4 years

      Delete
  7. Dolly madam thank you very much for caring and sharing wonderful stock ideas since long time. I like the video & suggestion on Sunflag because it is debt free specialty steel company and having huge growth potential and low competition in this segment

    ReplyDelete
    Replies
    1. Special steel is associated with brand image and technology because it’s in use is in critical critical component of vehicle or machinery or defence equipment so due to this reason original equipment manufacturer they don’t want to take any risk even it is little bit costlier but want to ensure the highest quality standard.

      Delete
  8. Sir this company is same sector like SAIL, because I have SAIL stocks so if I buy SUNFLAG then I will need to consider the allocation % including sail.

    ReplyDelete
    Replies
    1. Sorry I’m not tracking SAIL but definitely there is no comparison between both

      Delete
  9. Thanks for the new recommendation sir/ma'm. Please let us know how it compares to Kalyani Steels.

    ReplyDelete
    Replies
    1. Kalyani steel is in same business segment but most of their sale is limited to Kalyani group companies. Kalyani have lower product diversification and no captive mining asset

      Delete
  10. मैडम जी धन्यवाद

    यह बहुत यह बहुत बढ़िया शेयर है हम इसे सोमवार को ख़रीदेंगे आपका पोस्ट हमें बहुत पसंद आया जिसको आपने बहुत विस्तार में लिखा है

    ReplyDelete
  11. Dolly madam thank you very much for your great effort for in-depth analysis. It is very interesting to know about Daido Steel and their selection process to find the suitable partner for their expansion and growth. It gives me a feeling that promoters are very honest and they can take this company to very high level. I will give 20% allocation in it. Thank you again for this gem stock.

    ReplyDelete
    Replies
    1. Yes Daido Steel has made investment decision with the company after evaluating the management quality and their valuable asset held by Sunflag company. It is trust and mutual understanding between both companies which will last very long period and take this business to next level.

      Delete
  12. Madam how is this stock compared with prakash industries

    ReplyDelete
    Replies
    1. I have given update on it in previous blog on April 15, 2019 at 8:33 PM

      In 2018 Prakash industries corrected very heavily because enforcement directorate has initiated probe for money laundering in coal block allocation against Prakash Industries, still case is pending. Most of the sales coming from structural and TMT bars used in construction.

      Delete
  13. Good Afternoon Mam. Your view on Schneider electric automation india on the basis of Make in India & e-vehicle revolution of India ? Eager to know your valuable comments.

    ReplyDelete
    Replies
    1. Now almost every major automobile company have already e-vehicle but I am not tracking Schneider Electric.

      below reply is on e-vehicle comment on our way2moneymarket (it may be useful to some of our blog readers)

      I have also different view, which is going to happen in the future. In fact use of special steel will increase much more in the future.

      In future speed of every equipment, vehicles is going to increase and weight is going to reduce. But safety will come with strength of material and strength will come from replacing the old material with special alloy steel and new materials development.

      What is the special in bullet train ?

      It is the special steel which keep the structure stable at very high stress and at very high speed.

      How much we are spending to make one line to run the bullet train??

      For me railway sector alone gives multi- billion dollar opportunity for specialty steel manufacturer in India.

      Daido is having latest technology and expertise for special and alloying the steel for advance application. Just need to have a look on their website for detail product and technology.

      Japan is known for best steel quality in the world, Even one kilogram handmade Okinawa sward is costing more than five lakh rupees because it is made of special steel, it can cut anything which comes in its way.

      For example even now trains are running on electric but still all trains are made of traditional steel but in the future it will replaced with special and alloy steel to increase the durability and reduce the maintenance cost.

      What is the cost of fighter aircraft like F-16 or Rafael or submarine ?

      Aircraft and Submarines are made of which material or most of the critical components are made of which material?

      Surprisingly it is also a special steel,

      Nuclear power plants are also made of special steel. All electric vehicle frames, aircraft, goods vehicles, ships, military equipment, industrial machinery, Construction and earthmoving equipment etc I can say even every field of life will find the application of special steels with very high strength, durability and maintenance free.

      In the future infrastructure and housing steel will be also replaced with special steel to increase the lifespan and reduce the maintenance cost.

      Special steel is the future of engineering and new industrial application.

      Delete
    2. What an future understanding & explanation! !!!👌

      Delete
  14. Mahindra CIE is also restructured there business with quality products and tie up with international company what is your opinion on this large cap madam

    ReplyDelete
    Replies
    1. Sorry not tracking it

      It is in auto component manufacturing and forging business

      Delete
  15. Hello Mam, below is my portfolio. I have 14% of portfolio amount which I want to invest kindly suggest, should I increase the allocation in existing stocks if yes which stocks? or buy sunflag iron with entire amount or wait for some correction in market and then increase allocation in existing stocks.
    Sintex Plastic 14.2% @ Rs 44.8/share
    Pennar/PEBS 14.6% @ Rs 37/share
    Deepak Nitrite 14% @ Rs 234/share
    Kesoram 9% @ Rs 128.8/share
    Gati 9.8% @ Rs 106.4/share
    Nitin Spinners 9.8% @ Rs 99.9/share
    ABFRL 5.8% @ Rs 139.4/share
    Omkar special 5.6% @ Rs 160/share
    Shree Pushkar 5.4% @ Rs 127.7/share
    Orient Paper 5.5% @ Rs 99.9/share before demerger
    Surana Solar 3% @ Rs 22.1/share
    TCI 1.2% @ Rs 274/share before demerger
    Insecticides 1.1% @ Rs 341/share

    Thanks a lot for your guidance🙏

    ReplyDelete
  16. Thanks for your hard work for your followers.Iam interested.I will buy more.God is within you.

    ReplyDelete
  17. Madam, Thanks for recommending such a fundamentally strong company in steel sector, which specially requires huge working capital. Does this company shall be compared with steel sector, auto ancillary sector or specialty steel sector.

    ReplyDelete
    Replies
    1. But above case or condition is not applicable on the Sunflag, it is already running very smoothly with 250 crore credit facilities for working capital and company is keeping and investing the profit from business for further expansion so it is very comfortable situation for Sunflag without any financial stress or risk

      Delete
  18. Dear Mam,
    Thanks for new recommendation.
    How do you compare this with Maithan Alloys. I have some Mathan shares free of cost - should I sell and buy this.

    ReplyDelete
  19. Sir, thanks much for this stock reco.
    Any idea what will be likely Capex for 2018-19 and next two years?
    Looks like Capex was Rs 98 cr (2017-18) and Rs 32 cr (2016-17)

    ReplyDelete
    Replies
    1. It will be around 450 crores for next two years

      Delete
  20. Mam, Prakash Industries is going to demerger into Prakash Pipes and Prakash Industries. Its record date is 24 April 2019 with ration 1:8. Now, is it good to buy prakash Industries at CMP tomorrow i.e. Monday?

    ReplyDelete
  21. Mam its look like Steel is the input and alloy steel is output for Sunflag. So kindly elaborate the role of important Raw Materials.Does rise in steel prices would be positve or negative for the Sunflag ? And recently after Vale Dam disaster Iron ore prices is also on the rise.Would that be good or bad for the company ? Thank you.

    ReplyDelete
    Replies
    1. Rise in steel price is positive for Sunflag because most of the raw material is coming from captive mines. Increase in steel demand is also positive for company

      Delete
  22. Hello sir thank you so much for your great support to all of us,since sun flag has huge potential are they increasing capacity also a hat is current capacity utilisation.also what is the current cash and debt in the book, I mean how it is met debt free...thanx.

    ReplyDelete
    Replies
    1. As per last year annual report Long-term debt is around 80 crore, cash balance Is around 600 crores and credit facilities for working capital is around 250 crore (short-term borrowing). Around 130 crore net profit is expected for 2018-19 financial year and it will be addition to the above given cash figure

      Delete
    2. Dear Sir. Quick clarification.

      As per 2017-18 Annual report, page 82 in Balance Sheet section
      http://www.sunflagsteel.com/wp-content/uploads/2018/08/32nd_Annual_Report_2017-2018.pdf

      How is Cash Balance = 600 cr? What line items did you add? In section 2 Current Assets, it says

      a) Inventories = 432 cr
      b) Fin Assets
      Trade Receivables = 301 cr
      Cash & cash equivalents = 6 cr
      Bank balance other than above = 49 cr
      Others = 5.9 cr
      c) Current tax assets = 10 cr
      d) Other current assets = 49 cr

      Thank you
      Krish



      Delete
    3. Need to refer page # 10 of annual report 2017 -18 Board Report under

      2. FINANCE

      Your Company has ended the financial year 2017-2018 ended 31st March 2018 with a profit after
      tax of Rs. 12,867 Lakhs. After taking into account the brought forward profit of Rs.48,760 Lakhs, your
      Company has carried forward an amount of Rs.61,627 Lakhs to the Balance Sheet of the Company as at
      31st March 2018.

      Delete
    4. For 9 month of 2018-19 financial year ( up to December 31 2018) company has declared net profit already 100 crores and we expect around 130 crores for full year ended on 31.03.2019. It is addition to the above given figures of last year

      https://www.bseindia.com/xml-data/corpfiling/AttachHis/9868ff15-237f-4f29-a52e-45a2f3a8595a.PDF

      Delete
    5. Thanks Sir. I thought the 6.1 cr "Cash & Cash Equivalents" in the Balance Sheet was the Cash Balance.

      Delete
    6. you will find clear idea ij page 85 in cash flow statement under reserve 5 surplus which is 61732 lacs

      Delete
  23. Replies
    1. It is good stock, you can continue to hold or add more

      Delete
  24. mam
    when will small caps and mid caps start rally

    ReplyDelete
    Replies
    1. Will small cap and mid cap outperform compared to large cap?

      Delete
  25. Thanks for very good pick. In Q3Fy19, company's turnover has been increased but operating profits have been decreased because of high raw material cost. It they have everything captive then why their gross margins have been decreased ?

    Prashant

    ReplyDelete
    Replies
    1. Final product cost is also directly proportional to the margins, labour, transportation cost, indirect fuel costs are also changing

      Delete
  26. Hello mam i bought bit early today at 48.5 is it good buy price.

    ReplyDelete
    Replies
    1. It is very good price, now need to hold 3-4 years with patience for good returns

      Delete
  27. Madam , your view on PTC India & PTC India Financial Services Ltd..

    ReplyDelete
  28. Dear Madam, Thank you for suggesting a new stock. I’ve been following and investing in stocks from early 2017 with my own interest and invested almost 5 years of my saving into it. Since I came from middle class family, my parents/in-laws, relatives and friends always inject a second thought in investing in real estate, leveraging bank loans to buy properties and talk about how they have made money in real estate.

    Though I feel we can make more money in stocks than real estate if we invest in good stocks for long-term but sometimes my logical sense is getting shattered by others for sometime!!. Maybe because I’ve not enjoyed the returns in stocks yet.

    From your experience, do you think we need to diversify our investments also in real estate? Like buying apartments and plots?
    And, How to think long-term and be stable and calm in thoughts especially when you don't have experience in dealing with them.
    Thank you for guiding us madam and I’ve a high respect for your words.

    ReplyDelete
    Replies
    1. 1) it is not advisable to buy any property or make any investment in stock market with borrowed money on loan.

      2) Property rate already shoot up at very high level since last 7 years. It may not able to give good returns similar to the past.

      3) How much money required to buy a plot or apartment in a city? Is it easy for middle-class person to make such investment?

      Making an investment in property is different thing and buying a house to live in it is different thing. One good house in the city is a dream for average income person and generally end up with a whole life saving on it.


      In stock market, it can be started with small investment and slowly grown up much bigger than dream, without taking much risk and without any additional time on it.

      Most of the people have seen that several people earned from property in last 25 to 30 years, but equity investment is new trend among young generation in India , if we compare with countries like USA or China our participation is very small. So you have started investment at very right time, there is huge scope in equity and mutual funds in India, active investors will invest directly in equity and passive investors will invest through mutual funds in next 10 to 15 years. Investment & return from property will decline gradually.

      Delete
    2. Thank you for your insight madam, it was very helpful

      Delete
  29. dolly mam,

    One issue with this stock is it has very less volume of shares traded. How will it grow?

    ReplyDelete
    Replies
    1. The business growth is important for any stock, once business will grow then trading volume and stock price will also grow.

      Delete
  30. Thanks madam... I used the mkt correction to include your recommended stocks in portfolio.

    May I request you to kindly include debt situation if the company and also the status of promoter's pledge shares in your future recommendations and analysis regards

    ReplyDelete
    Replies
    1. Actually both above mentioned conditions are fulfilled by company itself on quarterly basis to file the shareholding pattern and the quarterly result.

      Generally our investment are based on future growth potential of the business with manageable debt.

      Definitely we will go for stocks with no debt or very less debt

      Delete
  31. Hello Madam, thanks for such informative stock recommendation from a tough sector. If you could let me know approximately how many stocks you will be recommending this year, just like last year, will be able to set money aside accordingly.

    ReplyDelete
    Replies
    1. We’ll go for 3 to 4 stock from different sector in this year.
      It is right time to build the portfolio, you can choose the 2018 stocks from different sectors.

      Delete
    2. Sir, Ma'm - any stocks from consumer oriented sector that you might pick this year ?

      Delete
    3. Yes we will if any stock available in good buying range in coming months

      Delete
    4. Mam,

      Tata global will buy dhunseri tea branded tea business of LAL ghoda and KAALA ghoda for 101 crore rupee to expand Tata tea business in Rajasthan

      What to do now and is it a good sign as dhunseri will sell its tea business

      Delete
  32. Madam

    Thank you for supporting us by giving right stock in service motto.we learned a lot in this blog.
    Still I hv a big doubt that companies like RCOM,JETAIRWAYS have destroyed the wealth of many retail investors.In future,how to avoid such companies
    By seeing which parameters in balance sheet is the most important to avoid such companies .

    Pls guide us

    Thanx

    ReplyDelete
    Replies
    1. Some business failed due to external factors which are not in the control of company or promoter. Jet Air is best example, high fuel prices, low fare, high maintenance cost has brought it down. There is nothing wrong with Jet promoter Naresh Goyal he is the same person who has started run it successfully for 26 years.

      Delete
  33. Thank you Dolly Ji!
    Please advise - which other companies are close competitor to Sunflag in current scenario. I understand Kalyani is already out as per comment mentioned above.

    ReplyDelete
  34. Madam is there any concern in gati because there share holding since last two year has come down from 40 to 20%

    ReplyDelete
    Replies
    1. There is no any concern but correction is almost for every stock in this sector and most of the correction is already done so you can continue to hold it for long term. If you want to keep your investment risk moderate then always use 30% stop loss in case of severe market correction.

      Delete
  35. Madam

    Selling of TEA brands to Tata global is good for dhunseri or it is bad?

    Kindly give your views

    Thanx

    ReplyDelete
  36. Mam, how do you see DTIL selling tea business to Tata coffee

    ReplyDelete
  37. dolly Mam,

    Can you comment on this

    https://www.thehindubusinessline.com/companies/tata-global-to-acquire-dhunseris-branded-tea-business-for-101-crore/article26924814.ece


    Thanks

    ReplyDelete
  38. Dhunseri Tea has sold its brand Lal Ghora and Kala Ghora for 101 crore to Tata global which is more than 60% of current market capital of the company it is fair deal for both. How the company is going to utilise this fund is important, for example some options for acquiring some other brand or paying high dividend to the investors or paying the balance loan on African tea estates. Need to wait for further update from company on this matter

    ReplyDelete
  39. Sir, is it better to make free of cost shares in Orient and invest in sunflag, because I have no funds available now? OR as the growth of the orient electric is clear visible, is it better to ride the rally and hold it with out making booking profit to get more profit in future? I have 10% allocation on this.

    ReplyDelete
    Replies
    1. It is not necessary to invest in every stock, Investment should be done on the availability of fund and it is continuous process. It means that whenever you have some money and you don’t need it for next 3 -4 years then you can put that money in to the equity market.

      Delete
  40. dear Ma'am
    Could you please update on Kesoram tyre business demerger?
    Should i wait for the demerger to complete or sell and invest in sunflag iron as i dont have money. Please suggest.

    ReplyDelete
    Replies
    1. It is not necessary to invest in every stock.
      30% stop loss is good option if not willing to take higher risk in equity.
      Generally demerger process will take 12 to 18 month for completion from the date of announcement.

      Delete
  41. Madam, PNB Housing Finance has corrected to Rs 780.Is it a good buy at this rate. Valuations seem to be reasonable now.Your views please.

    ReplyDelete
    Replies
    1. Sorry not tracking it but most of the Housing Finance stock corrected in the same ratio. Housing finance sector is good to invest it is good for long-term investment

      Delete
  42. Madam
    Today huge fall in price DTIL.it indicates selling two brands of the company is market taking it negatively?
    Other than tea business any other improvement?

    Thanks

    ReplyDelete
    Replies
    1. Stock moved up from 220 to 315 in two days so some profit booking is normal. They have sold two retail brands for 101 crore which is equal to almost four-year net profit of the entire company. We’ll see how the company is going to utilise it, need to wait for company update

      Delete
  43. Mam, in case of TPL, it is trading at 3.5 times lower than industry PE; currently there is no sign of stock recovering to general market valuation of 1/2 of industry PE for such companies, if i am right. Is there possibility (in terms of capacity utilization) of sudden and consistent rise in earning to be able to see rise in price of stock? also, sever market correction has happened due to selling of bridge India fund, is the only possibility is to similar FII/institutional buying in the stock to see earlier levels?

    I had invested 20% in this stock and worried to exit at 30% loss, now is not the right level to exit as well and scared to see the situation carried for another year or so...it will still be in loss. Not hesitant to hold for several years but at the same time missing opportunities to invest in other spaces...how should i deal with this situation? is the holding on to stock for 2-3 years going to be the best possible choice? It is very difficult to see that all profits in other spaces being eaten by single stock...i hope nothing has changed for a stock as a fundamental.

    Similar situation with Ganesh housing as well, invested 20% and is currently in loss.
    These two stocks have pulled entire profits in last 2-3 years in to negative return.

    I think we can at least be hopeful for rest of this year to see buying in mid/small caps.

    ReplyDelete
    Replies
    1. If you will analyse that it is not only the TPL but almost every plastic moulding stock has corrected severely in last one year. But definitely TPL will lead the rally off once they complete sector will reverse it’s trend.
      Hopefully within a year all small and mid cap stock will recover.

      Delete
    2. Same is the case with me. Betted heavily on SPTL and TPL

      Delete
    3. SPTL + TPL = 20% of my portfolio and they are both down 50%.

      But we need to stay in this for 2+ yrs for the entire SECTOR to be back up. Does not look like any problem with the companies itself. I know it is difficult looking at loss everyday...but we need to have conviction and stay with patience.

      Delete
  44. Hi Sir/Mam, please suggest if Ambika Cotton Mills can be baught at CMP of around 1125. How much return can be expacted in 1 to 3 years? Thanks!

    ReplyDelete
  45. Hi Madam,

    I am fully invested in the blog suggested stocks (except few other stocks) and I do not have more money to invest in the recently suggested Sunflag Iron & Steel. Can I reshuffle my existing portfolio and invest in the Sunflag? Please guide me. My existing portfolio along with % is given below:
    Sl No Company Cost price Portfolio %
    1 DEEPAK Nitrate 254 14%
    2 GATI Ltd 115 12%
    3 KESORAM IND 113 11%
    4 ABFRL 141 11%
    5 SPTL 48 7%
    6 GP Petro 91 6%
    7 Ganesh Housing 125 6%
    8 BHARATGEAR 175 6%
    9 PENNAR Ind 52 6%
    10 TPL PLASTEH 250 6%
    11 NITIN SPINNERS 125 5%
    12 KCP 115 3%
    13 NANDAN DENIM 125 2%
    14 PRAKASH Ind 225 2%
    15 CUPID 230 2%
    16 ORIENT PAPER 1%
    Total 100%

    ReplyDelete
    Replies
    1. It is not advisable to buy every stock but need to invest according to the availability of fund. Your portfolio is already well diversified so in case you have found you can increase the allocation in existing stock. Most of the correction is already done so you can continue to hold as it is.

      Delete
  46. Madam what is your outlook on NR Agarwal & Ashok Leyland, can we invest at cmp.

    ReplyDelete
    Replies
    1. NR Agarwal is good stock for long-term investment and can be bought in small quantities on every further correction.

      Not tracking Ashok Leyland

      Delete
  47. Thanks Madam for your new stock.
    I have basic doubt here, and hope that you will help me on this.

    1. Sunflag's price is 47 and market cap is 847 CR. Total share = market cap / price = 847/47 = 18 CR, but in balance sheet is showing as 180.
    Even this is case with TPL also.

    Am sorry to ask you to very basic question

    Thanks

    ReplyDelete
    Replies
    1. In balance sheet , it is showing equity share capital. It means that 18 crore shares of face value Rs 10 is equal to 180 crore

      Delete
  48. Sir, Thank you so much for your selfless efforts to make us more knowledgeable and wealthy in long run.

    Would you please let me know which is better pick for 2 to 3 years KCP or Kesoram? Please throw some light on these?

    ReplyDelete
    Replies
    1. Better to go with latest 4-5 stocks because If any stock unable to give desired return in three years then we have reinvest our principal amount again as mentioned under point # 4 in below post

      https://dolly-bestpicks.blogspot.com/2018/05/review-of-investment-strategy.html?m=1

      Delete
  49. I have sterlite technology from 220 levels. Should I continue to hold, average or exit?

    ReplyDelete
  50. Hello Mam, Thanks for the new pick. I have taken Sunflag. Can I add GNFC and ABFRL at CMP?

    ReplyDelete
    Replies
    1. In case of further correction in GNFC it can be bought near 250 and ABFRL can be bought near 160

      Delete
  51. Pl.give ur views on Hindustan foods & Modi naturals

    ReplyDelete
  52. Hello mam
    Friday all steel and metal was up tata steel was up 6-7% jsw steel 5% but Sunflag did not rise even 1% don’t understand the reason... 2-3% move give us satisfaction and confidence.

    ReplyDelete
    Replies
    1. Tata steel has posted a very good result and merger of BSL

      Sunflag will also move up near to its result date

      Delete
  53. Dear sir/ madam, your views on LT food. Is it worth buying at CMP for long term.?

    ReplyDelete
    Replies
    1. You can start buying it in small quantities and keep adding on every further correction for long-term investment only

      Delete
  54. Dear Ma'am,

    One company who's General Reserve is 150 crs and has no debt.Debt free company.will it be correct to divide total General reserve (considering as Cash) by total equity..to know cash per share.?

    Is this correct? Please can you throw some light..

    Regards

    ReplyDelete
  55. Dear madam, I want to invest 3L. Which stock do you suggest out of TPL plast or Sunflag If I'm looking for 50-100% returns in 1 year?

    ReplyDelete
    Replies
    1. Yes you can invest in both stocks for 3 -4 years and both are having fair possibility to good return in one year. It is not advisable to make the investment in stock market for short-term or one year.
      if you have made the investment for long-term and you are getting the profit within a one year or six months then never miss to book the partial profit early

      Delete
  56. Dear khanna maam can u post your view on possibility of sensex and our stocks falling. And subsequent recovery period for the same. In view of bjp not coming to power or low earning season.

    ReplyDelete
    Replies
    1. The rise and fall of stock market is the integral part of this business. Even any government is coming market will fall definitely and market is going to scale new heights in coming years that is also for sure.

      If you able to hold your existing portfolio without doing anything, it is going to give you multifold return in next five years.

      Delete
  57. Dear madam, Here is my portfolio. It has recovered from -25% to -15% now. Please suggest if I need to make any changes w.r.t portfolio allocation, sector allocation and swap decisions.

    Plastic & Packaging Products
    1. SPTL - 18.8% (42 - Buying price)
    2. TPL Plasttech - 5.5% (260)

    Textile
    3. Nitin spinners - 13.8% (118)
    4. ABFRL - 9% (156)

    Shipping & Logistics
    5. GATI- 12.4% (112)

    Chemicals & Fertilisers
    6. Deepak Nitrite - 10.6% (226)
    7. Rain Industries - 2.8% (105)
    8. Omkar & Lasa - 2.4% (180)
    9. Jubilant Industries - 0.8% (175)

    Cement, Steel and engineering
    10. Kesoram - 9.2% (141)
    11. KCP - 5.5% (110)
    12. Pennar - 4.8% (50)

    Consumer Goods
    13. Orient paper orient electric - 5.2% (99)

    ReplyDelete
    Replies
    1. Your portfolio is well balanced and you can continue to hold all stocks as it is. All these stocks will recover very quickly in coming quarters.

      Delete
  58. Repected Mam at what price yes bank is buy

    ReplyDelete
    Replies
    1. It is good opportunity to invest in banking sector below 170. You can start buying in small quantities at CMP and keep adding on every further correction for long term investment.

      Delete
    2. Thanks. This means according to you below 170 is a good buying opportunity and we should buy in parts

      Delete
  59. Ma'am your views in 4th qtr. result of Orient Electric, please.

    ReplyDelete
    Replies
    1. Even though company has posted lower profit yoy in Q4 but overall company has posted very good result for last year with almost 10% growth in top and bottom line. You can continue to hold the stock for long-term.

      Delete
  60. Only faith holding me at very first...on thought mentioned in last sentence.

    I believe my patience will be rewarded.
    Thanks... Many times for being with us...

    ReplyDelete
    Replies
    1. There is no secret in stock market except practicing the patience to hold the stocks for longer period in adverse market conditions.

      Delete
  61. hello maam, do you think reliance industries can be a good bet for 200% returns in 3/4 years??i am holding 20% in cash and want to make a safe bet with that 20% of my portfolio with less volitility,please advice.

    ReplyDelete
  62. Dear mam can you guide me on Ruchira papers, holding 400 @ Rs 140.

    ReplyDelete
    Replies
    1. Most of the price correction is already done, now you can continue to hold as it is.

      Delete
  63. hello maam, wanted to ask you if by any chance you track JINDAL SAW, as its quoting half the price of its book value with eps of above rs 15 and divident paying,available at PE of 5 ,pls adivice.

    ReplyDelete
  64. Hi Ma'am, can we invest in yes bank in parts given that currently it is trading below 170. I am looking for long term of more than 3 years. Pls suggest

    ReplyDelete
    Replies
    1. Yes, you can start buying at CMP and add more in case of further correction for long term investment.

      Delete
  65. Hi Maam, I have 700 shares of Yes bank. Bought at 240 Rs. pershare. What should I do?

    ReplyDelete
    Replies
    1. Need to stick with investment decision. It is temporary correction, in coming quarters there will be significant improvement in business and management quality.

      Delete
  66. Hello Mam,

    i have shree pushkar, i missed to book profit when it moved to 336, since this September it will be 3 year from recomendation, should my strategy should be exit in rise, though iam at profit @25% .

    Though i can hold for 100%, should i switch now as i have more recent blog suggested giving me opportunity to buy at low price.

    ReplyDelete
    Replies
    1. Most of the price correction is already done, now you can continue to hold as it is and book profit near 100% profit in next 2-3 quarters.

      Delete
  67. Dear Maam, Can u give your views on Tourism Finance with the new management coming in?

    ReplyDelete
  68. Good evening ma'am
    GMM pfaudler at CMP???

    ReplyDelete
  69. Good morning,
    I have recently started my investments,just got info about you and following. Can you please post me the best share that can be investments now for a long term period of 5-6years.

    ReplyDelete
    Replies
    1. You can invest in 2018 -19 suggested stocks

      Delete
  70. Madam, do you track PNB Housing? Is it at right price to enter for long term?

    ReplyDelete
  71. Ma'am your valuable comment in Orient Papers 4th. quarterly results, please.

    With regards
    Dipendra Khatiwara

    ReplyDelete
    Replies
    1. Yearly and quarterly result are very good, there is significant growth on top and bottom line, you can continue to hold it for better return in long-term

      Delete
  72. Please do suggest me if one can take a look at Tata elxsi for long term

    ReplyDelete
  73. Good morning madam
    Can you suggest me some best returns share at long term period of 4-5years. I am the new follower of you. I thank you for your replies and feedback to all your followers.

    ReplyDelete
    Replies
    1. You can start your investment by investing in last seven stock suggested on the blog

      Delete
  74. Mam daawat lt foods is a good buy at current levels?

    ReplyDelete
    Replies
    1. You can start buying in small quantities at CMP and keep adding on every further correction for long-term investment only

      Delete
  75. Madam,

    Your views on Sterling tools, Sterlite technologies and Natco pharma ?

    ReplyDelete
    Replies
    1. Sterling tools - still it is not advisable to buy at CMP

      Not tracking other stocks

      Delete
    2. Sterlite technologies profits are increasing consistantly only problem is pledge of 96.75 % of its promoter holding. Due to which investors are not happy. And debt of about 2000cr for assets of 7000cr. It will recover only if promotor release once pledge.

      Delete
  76. Ma'am- What should we do with Kesoram and Sintex plastic?It is showing no signs of recovery?

    ReplyDelete
    Replies
    1. Equity market is subjected to significant risk, So always prefer 30% stop loss to avoid such condition in the future.

      We expect the recovery from above stocks in the long run in next 3 to 4 years

      Delete
    2. Hi maam
      Will it take 4 yrs for Sintex to recover or will it be faster. What steps are being taken by Sintex to get back its mojo. Can we expect it to getback in an years time to the recomended price of 63

      Delete
  77. Dolly Madam thank you for Sunflag

    Madam one thing is that today Automobile giant Maruti has declared that coming years for Auto Industry is very tough. In this scenario where you see Sunflag and it's revenue increasing. Even weak numbers from Auto Industry and Industrial Machinery making sector is shaking the GDP and growth of India. In this whether Sunflag can sustain with huge raw materials cost increasing day by day and PAT shrinking day by day

    Thanks
    Nirav

    ReplyDelete
    Replies
    1. Yes I expect Indian economic growth is very positive for company as mentioned above in the blog.

      Delete
  78. Hi Madam, I am holding DHFL for long term. Should I exit and book losses or should I hold and look for averaging it if it will come down further?

    ReplyDelete
  79. Dear Mam,

    Deepak seems to have posted very good results with both standalone and consolidated profit increasing at high rate. Request your views of the results.

    Thanks.

    ReplyDelete
    Replies
    1. Yes result is very good and there is significant growth on top and bottom line. It will continue to grow further in every quarter for longer period, you can continue to hold the stock for much bigger return In next 3 -4 years

      Delete
  80. Dear Maam,

    Deepak has posted one of the Best Results seen in many months in a share. Standalone as well as consolidated levels.

    Is it on target to achieve Its 4 year target price of 300% Returns?

    ReplyDelete
    Replies
    1. Yes company has just started now giving positive result and it will continue for much longer period. And we expect that your investment will grow also multifold in this company with time

      Delete
  81. Hi Mam,
    Got following questions:
    1. You mentioned that auto players are setting up new units in India. How much extra capacity (approx) will they add and what can company's market share be possibly of that?I ask these questions, so that I can figure out how much benefit the company can make out of this.
    2. There are other companies operating in this industry such as JSW steel ,Tata steel (there could be more) who also can utilise the opportunity. Does Sunflag hold an added advantage over Tata steel or JSW steel?

    ReplyDelete
    Replies
    1. Most of the steel companies are struggling with huge debt and high interest burden.

      In case of sunflag it is having very low debt, captive raw material linkage, wide customer base diversified portfolio, high-technology access so there are a lot of positive with that company will able to maintain good growth in the future, even 10% consistent growth can bring decent results.

      Delete
  82. Dear madam, Seems to be Deepak Nitrite results are outstanding. Few Interesting points about a new plant.

    Key milestones achieved by Deepak Phenolics Ltd. in Q4 & FY19 with in 5 months
    1. Turnover of Rs. 537 crore in Q4 FY19; maiden full quarter of operations
    2. DPL contributes 927 Cr to consolidated turnover of Rs. 2,715 Cr in FY19
    3. Both plants (Phenol & Cumene) has touched 100% utilisation during the quarter
    4. Reported positive EBITDA and PAT in Financial Year 2019, despite commencing ops only 5 mths ago
    5. DPL contributes 56 Cr to consolidated PBT of Rs. 268 Cr in FY19

    Thanks

    ReplyDelete
    Replies
    1. Yes result is very good and there is significant growth on top and bottom line. It will continue to grow further in every quarter for longer period, you can continue to hold the stock for much bigger return in next 3 -4 years

      Delete
  83. Hi Madam, Takeaways from Orient paper results
    1. Sales 198cr grown by 9% QoQ, and 5.6% on YoY growth
    2. PAT 32cr grown by 105.4% QoQ and 106% on YoY growth
    3. Interest has reduced from 14.7cr to 9.97cr which is -32% on YoY

    ReplyDelete
  84. Very grateful for the new recommendation, mam. Could you please take a look at the allocation% and kindly tell me in which stock I should increase the allocation.

    KESORAM INDUSTRIES 1.32%
    KCP 1.32%
    ORIENT PAPER 1.32%
    GATI 1.97%
    DEEPAK NITRITE 10.54%
    NITIN SPINNERS 12.93%
    GANESH HOUSING 13.38%
    BHARAT GEARS 7.56%
    GP PETRO 22.50%
    SUNFLAG IRON & STEEL 8.22%

    TOTAL 81.06%
    CASH 19.94%

    ReplyDelete
    Replies
    1. You can increase the allocation in 2018 - 19 stocks.

      Till the election result market will remain volatile so you can use the market correction to increase / add stocks according to your investment capacity

      Delete
  85. Hi mam,
    Ur view on Indian bank . Kindly provide ur opinion on bank sector at present.

    ReplyDelete
    Replies
    1. Sorry not tracking Indian bank.

      Prefer private sector banks which are trading at lower level due to some temporary issue

      Delete
  86. Hi Ma'am,
    What does the forfeiture of warrants indicate in the context of sintex plastics?

    ReplyDelete
    Replies
    1. Promoter group company will not convert 2.97 crore warrants into share due to this reason start line leasing Ltd will lose around 67 crore ( 25% subscription money will get forfeiture)

      Delete
  87. Madam,

    Your views on buying price of Associated Alcohol and Sterling tools ?

    ReplyDelete
    Replies
    1. You can buy associated alcohol in case of further correction near 200

      Delete
  88. Good evening Mam. I have 200 shares of Jubilant industries. Should I shift it to Deepak Nitrate?

    ReplyDelete
    Replies
    1. It is already corrected heavily so you can continue to hold as it is

      Delete
  89. Hi dollyji - Thanks a lot for all your support. I have invested in the most of your recomended stocks. Need your advice whther LT foods or KRBL which one would be better.

    ReplyDelete
    Replies
    1. LT food can be bought in small quantities at CMP and keep adding in case of further correction for long-term investment only, not tracking other stock

      Delete
  90. Hi Mam, Thank you again for your excellent recommendation. I am following your stock's for the past 3 years. Could you please share your email address so that I will share my portfolio for corrections. Thank you once again mam:)

    ReplyDelete
    Replies
    1. In these days due to limited availability of time I unable to reply the emails from several months.

      You can send if I find some time in coming weeks I will reply it

      dolly1970.khanna@gmail.com

      Delete
  91. Hi Madam,
    I had purchased Pennar Industries and some PEBS stocks in 2017. Now they are together trading at 35% lower than the purchase price. Am planning to sell off these two and buy Sunflag.

    What is your suggestion?

    Thanks

    ReplyDelete
    Replies
    1. Most of the correction is already done now you can continue to hold as it is. Merger is expected to complete in coming quarters

      Delete
  92. I am also holding free of cost Waterbase shares. I am planning to sell those off and by Sunflag. Please let me know your opinion.

    Thanks

    ReplyDelete
    Replies
    1. It is good if you can wait some more month sell waterbase after Q1 or near to Q1 result in August

      Delete
  93. Whether we need to sale sunflag iron as stock price is falling rapidly?

    ReplyDelete
    Replies
    1. Yes you can exit if the price correction exceed more than 30% from suggested price.

      Delete
  94. Hi Sir do u track kanchi karpuram ..what is the story behind
    And your views on butterfly .

    ReplyDelete
  95. Hi Ma'am all stocks are near all time low. Time to average stocks?

    ReplyDelete
  96. Mam,
    Shall SINTEX PLASTIC can be added now or can be exited. Share your views

    ReplyDelete
  97. Dear Mam
    Do you see any corporate governance issue with sintex platics as the warrants are forfeited.

    Best Regards
    Ajay

    ReplyDelete
  98. Madam,
    I am holding Jindal Hisar @Rs 140 with 38% negative, pls advice can I swap it to SunFlag?
    Regards

    ReplyDelete