Recently we released long/medium term investment recommendation for our Alpha and Alpha + members and would like to share with you details on the same, especially if you like to invest in high quality growth companies run by good management.
We believe high quality stocks (from diverse segments) that can grow at 20-25% on annualized basis should be part of one’s long term core portfolio and as you will realize on reading the below details, this is one of those companies.
Don’t miss out on 2 New Investment opportunities:
- Very high quality company expected to record 20-22% CAGR in sales and profitability
- A niche company ready to capitalize on the burgeoning data consumption trend
Few important points about the latest Stock Investment idea
The company that has been chosen for our latest recommendation is the leading company in India in its area of operations and commands more than 5% market share globally (striving to achieve 10% in next few years), a feat very few Indian companies have been able to achieve.
We like companies that have leadership position or are amongst the top 3 in their respective industries as it is reflective of the quality of management, their ability to outgrow competition and do things differently. With leadership position the companies also get advantages of scale, brand recognition, customer stickiness, etc.
Our stock picks like Cera (1700% return), Wimplast (1000% return), Control Print (700% return), Symphony (~500% return), Acrysil (~600% return), Amara Raja (300% return), etc are the leading companies in their respective industries and the stocks have delivered huge returns since recommendation.
What is the growth outlook for the Latest recommendation? In the last 4-5 years the company has made in-roads into new segments where the size of the opportunity is more than 8-10 times the size of the market it is currently catering to.
As a result, the company is experiencing very good demand for its products and expected to record 20-22% CAGR in sales and profitability over the next few years. In fact, the company is targeting more than 10% market share globally and has the requisite capacity and the wherewithal in place.
Industry characteristics – The Company we are talking about here operates in an oligopolistic industry with huge market opportunity to tap. From our research we also know that company’s main competitors haven’t been as aggressive in expanding their capacities and expanding the market share. In fact, their sales have actually declined in the last few years and therefore there’s high probability of incremental market share flowing down to our stock recommendation.
Promoters/Management – We like companies where the promoter’s interests are directly aligned with those of minority shareholders and frankly speaking we don’t have much to crib about when promoter holding in the company is high (more than 50%).
Operating performance – In the above sections we have mentioned about our latest recommendation being the largest company in its area of operations and also talked about the advantages enjoyed by the leading companies. Well, let’s look at if the same has transformed into operating performance or not:
- 10 years sales growth – 17% + CAGR
- 10 years profit growth – 17% + CAGR
- 10 years avg. Return on Equity – 18% +
- Debt equity ratio – 0
- Dividend payout – 15% +
- Promoter holding – 50% +
- Equity dilution in the last 10 years – none
Disclaimer: I have personal investment in the latest stock recommendation and in stocks like Cera, Wim Plast, Control Print and Acrysil. There was also a buy trade in Acrysil in the last 30 days.
This is not an investment advice. The performance data quoted at www.katalystwealth.com represents past performance and does not guarantee future results.
Ph.: +91-727-5050062, Mob: +91-9818866676
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Research Analyst Details
Name: Ekansh Mittal Email Id: [email protected] Ph: +91 727 5050062
Analyst ownership of the stock: As discussed above
Details of Associates: Not Applicable
Analyst Certification: The Analyst certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report.
Disclaimer: www.katalystwealth.com (here in referred to as Katalyst Wealth) is the domain owned by Ekansh Mittal. Mr. Ekansh Mittal is the sole proprietor of Mittal Consulting and offers independent equity research services to retail clients on subscription basis. SEBI (Research Analyst) Regulations 2014, Registration No. INH100001690
Ekansh Mittal or its associates including its relatives/analyst do not hold beneficial ownership of more than 1% in the company covered by Analyst as of the last day of the month preceding the publication of the research report.
Ekansh Mittal or its associates/analyst has not received any compensation from the company/third party covered by Analyst ever.
Ekansh Mittal/Mittal Consulting/analyst has not served as an officer, director or employee of company covered by Analyst and has not been engaged in market-making activity of the company covered by Analyst.
We submit that no material disciplinary action has been taken on Ekansh Mittal by any regulatory authority impacting Equity Research Analysis.
The views expressed are based solely on information available publicly and believed to be true. Investors are advised to independently evaluate the market conditions/risks involved before making any investment decision
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This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Ekansh Mittal/Mittal Consulting/Katalyst Wealth is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Ekansh Mittal or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Neither Ekansh Mittal, nor its employees, agents nor representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Ekansh Mittal/Mittal Consulting or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.
The recipients of this report should rely on their own investigations. Ekansh Mittal/Mittal Consulting and/or its affiliates and/or employees may have interests/ positions, financial or otherwise in the securities mentioned in this report. Mittal Consulting has incorporated adequate disclosures in this document. This should, however, not be treated as endorsement of the views expressed in the report.