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We scan through 100s of stocks in a year and analyze several of them to come up with few good stocks recommendations for our Alpha/Alpha + members.
Our focus is medium-long term wealth creation and the idea is to try identify opportunities with long runway for 20-25% CAGR possibility.
A few days back, we released our new stock recommendation for our Alpha and Alpha + Members and would like to share with you details on the same.
It’s a leading company indirectly related to Real estate segment.
Based on our analysis, the stock looks very interesting for the next 3-4 years due to the following reasons:
- Recent change in management
- Structural changes in organization leading to creation of focused verticals like – Sales, Collections, etc.
- Strong growth outlook of 15-20% annualized over the next 2-3 years from abysmal 2-3% in the recent past
- Extremely attractive valuations @ 0.9 times book value and less than 10 times TTM earnings
Note: We have started a telegram group by the name of Katalyst Wealth. The purpose of the same is to disseminate information/knowledge. You can join the group by Clicking HERE
Currently we have around 10 stocks in our buy-list.
Also, a few days back we recommended a new stock to members.
You can get the above stocks and other recommendations by signing up HERE
Key Points about the New Stock Recommendation
- Indirectly related to Real estate segment
- 24 years into business
- Growing market – The segment in which the company operates has low penetration as compared to other developed and developing markets
- Change in Management team – New management has brought in structural changes which has helped improved growth rate and brought in positive changes in balance sheet
- Stronger growth outlook – Before the new management came in, the company was growing at abysmal 2-3% annually. The company has now set a target of 15-20% annualized growth for the next 3 years
- Valuations – Extremely low valuations @ 0.9 times book value and less than 10 times TTM earnings
Normally, we don’t like to project numbers 3-4 years down the line. However, based on what the management has shared and our assumptions, we believe the company has the potential to cross Rs 5,000 crore market capitalization mark in the next 3 years.
Risks – Our investment thesis incorporates assumptions about growth; if the demand doesn’t grow at the expected rate or if the cut-throat competition results in contraction in yields, the company might end up reporting lower numbers than our expectations.
We have assumed exit multiples in the range of 1.5-2 times book value. In case the market attributes lower valuations to the business, the returns can be lower than expectation.
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Best Regards,
Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.
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