Value Picks – Long term Investments

Wealth creation with Long term investment 5-10-15-20 years

Subscribe Paid investment Newsletter
Join Telegram Channel
Paid Portfolio Plans

Tag: undervalued stocks

  • Laxmi Organic: Pioneering Specialty Chemicals with Sustainable Growth Strategy

    Laxmi Organic Industries Ltd. – Comprehensive Investment Report

    Laxmi Organic Industries Ltd.

    BSE: 543277 NSE: LXCHEM

    Value Pick Multibagger Best Stock for long term investment

    Company Overview

    Market Cap: ₹6,331 Cr.

    Current Price: ₹229

    52-Week High/Low: ₹326/₹212

    Stock P/E: 46.5

    Financial Highlights

    Sales (FY24): ₹3,068 Cr.

    Profit After Tax (PAT): ₹136 Cr.

    ROCE: 9.40%

    ROE: 7.36%

    Future Growth Drivers

    Capacity Expansion

    • Launch of India’s first 70KTA n-Butyl Acetate plant at Dahej by Q1 FY26
    • New 70KTA ethyl acetate production line at Lote, Maharashtra
    • Incremental CAPEX of ₹11,000 Mn across FY25-FY28

    Strategic Initiatives

    • Focus on fluorospecialties and advanced diketene derivatives
    • Aim for 20% revenue contribution from new products by FY28
    • Backward integration into raw material production

    Financial Projections

    Revenue

    FY24: ₹28,650 Mn → FY28E: ~₹57,000 Mn

    Approximately 2x growth

    EBITDA

    FY24: ₹2,839 Mn → FY28E: ~₹7,666 Mn

    Approximately 2.7x growth

    ROCE

    Targeted increase from 10% to 20% by FY28

    Through efficient capital allocation

    Competitive Landscape

    Essentials

    • Largest domestic producer of ethyl acetate
    • Among top 3 global players (ex-China) in acetyl intermediates

    Specialties

    • Dominant player in diketene derivatives
    • Among top 5 globally
    • Sole domestic supplier of electrochemical fluorination products

    Inherent Risks

    Market Risks

    • Commodity price fluctuations
    • Crude oil derivative dependency

    Operational Risks

    • Regulatory approval delays
    • CAPEX timeline challenges
    • Execution risks

    External Risks

    • Geopolitical trade uncertainties
    • Increasing competition
    • Export market volatility

    Valuation Estimate

    Target Price

    ₹275 – ₹300

    Assumes EPS CAGR of ~20%

    Valuation Metrics

    • Forward P/E: ~40
    • Current Stock P/E: 46.5
    • Dividend Yield: 0.26%

    Investment Thesis

    Laxmi Organic Industries Ltd. is a leader in acetyl intermediates and specialty chemicals, with a proven track record of strategic acquisitions and operational excellence. Its focus on innovation, sustainability, and cost efficiency positions it well for robust growth in the next 3-5 years.

    With an ambitious plan to double revenues and triple EBITDA by FY28, the company offers significant upside potential for long-term investors.

    Disclaimer: This report is for informational purposes only. Consult a financial advisor before making investment decisions.

  • Stove Kraft Ltd: Unlocking Growth in Home Appliances Market

    Stock Research Report – Stove Kraft Ltd

    Stove Kraft Ltd

    BSE: 543260 NSE: STOVEKRAFT

    Value Pick Multibagger Best Stock to buy for long term Investment

    Market Cap

    ₹ 2,806 Cr.

    Current Price

    ₹ 847

    52-Week Range

    ₹ 410 – ₹ 977

    P/E Ratio

    81.7

    Key Financial Metrics

    Metric Value
    Book Value ₹ 138
    Dividend Yield 0.30%
    ROCE 11.3%
    ROE 8.32%
    Debt ₹ 295 Cr.
    Sales ₹ 1,420 Cr.

    Company Overview

    Stove Kraft Ltd is a leading player in the kitchen and home appliance segment, with renowned brands like “Pigeon” and “Gilma.” Known for its wide product range, the company serves diverse consumer needs in cookware, small appliances, and kitchen solutions. With a strong distribution network and emphasis on innovation, Stove Kraft has positioned itself as a household name in India.

    Future Growth Drivers

    • Expansion of Distribution Network: Targeting tier-2 and tier-3 cities to capture untapped markets
    • Product Portfolio Diversification: Focus on high-margin premium cookware and smart appliances
    • Brand Development: Aggressive marketing campaigns for brand strengthening
    • Export Growth: Expanding presence in Middle East, Africa, and Southeast Asia

    Planned Expansions

    The company plans to invest ₹150 Cr. in capital expenditure over the next two years, focusing on:

    • Capacity Enhancement: New production facilities
    • Technology Integration: Advanced machinery implementation
    • Sustainability Initiatives: Eco-friendly production processes

    Financial Projections

    • Revenue Growth: CAGR of 12-15% over FY24-FY27
    • EBITDA Margins: 150-200 basis points improvement
    • Net Profit: Annual growth of 18-20%
    • ROE: Expected to reach 12% by FY27

    Competitive Landscape

    Major competitors include:

    • TTK Prestige: Strong brand loyalty and premium positioning
    • Hawkins Cookers: Trusted legacy brand with robust quality perception
    • Butterfly Gandhimathi Appliances: Niche player in regional markets

    Risk Factors

    • Raw Material Volatility: Price fluctuations in aluminum and steel
    • High Valuation: Current P/E ratio of 81.7
    • Debt Concerns: ₹295 Cr. debt level
    • Sector-Specific Risks: Dependence on discretionary spending

    Valuation Estimate

    Using a forward P/E of 70 and projected EPS of ₹16, the fair value is estimated at ₹1120. However, considering sector volatility and macroeconomic conditions, a more conservative valuation of ₹950-₹1000 is advised for entry.

    Investment Thesis

    Stove Kraft Ltd offers a compelling investment case with its focus on innovation, market expansion, and operational efficiency. The company’s strategic initiatives in premiumization and exports present significant long-term growth opportunities. However, its high valuation and competitive risks necessitate cautious optimism. Investors with a long-term horizon can consider the stock during market corrections.

    Disclaimer: This report is intended for informational purposes only and does not constitute investment advice. Please consult a financial advisor or conduct independent research before making investment decisions.

  • South Indian Bank: Digital-First Growth Story With Value Returns

    South Indian Bank Analysis – Complete Report

    South Indian Bank Ltd.

    Value Pick Best Share to buy for long term

    BSE: 532218 NSE: SOUTHBANK

    Company Overview

    South Indian Bank Ltd., headquartered in Thrissur, Kerala, has evolved into a pan-India financial institution with a diversified loan portfolio and robust operational efficiency. The bank’s focus on retail, MSME, and corporate loans, combined with its digital transformation initiatives, positions it as a strong contender in India’s competitive banking sector.

    Market Metrics

    Market Cap: ₹6,750 Cr.

    Current Price: ₹25.8

    52-Week High/Low: ₹36.9 / ₹22.3

    Stock P/E: 5.41

    Financial Ratios

    Book Value per Share: ₹33.7

    Dividend Yield: 1.16%

    ROCE: 6.19%

    ROE: 13.8%

    Key Metrics

    Debt: ₹1,05,832 Cr.

    Reserves: ₹8,565 Cr.

    Net Interest Margin: 3.19%

    CASA Ratio: 31.15%

    Asset Quality

    GNPA: 4.30%

    NNPA: 1.25%

    Total Advances: ₹86,966 Cr.

    Total Deposits: ₹1,05,387 Cr.

    Future Growth Drivers

    Loan Book Diversification

    • Retail advances: 26%
    • MSME loans: 19%
    • Corporate loans: 40%
    • Home loans and gold loans showing 12% and 10% YoY growth respectively

    Digital Initiatives

    • “LAP Power” and “Aawas Power” for automated loan processing
    • Strategic partnerships with MoneyView and Bajaj Finserv
    • Self-operating Dynamic QR kiosks at temples
    • Integrated UPI infrastructure

    Geographic Expansion

    • 950 branches across India
    • Focus on rural and semi-urban areas
    • 70% of portfolio from non-Kerala regions

    ESG Initiatives

    • ₹56.21 Cr. raised in green deposits
    • Renewable energy project funding
    • Energy-efficient infrastructure implementation
    • DC fast-charging stations for electric vehicles

    Q3 FY25 Performance Highlights

    Metric Value YoY Growth
    Advances ₹86,966 Cr. +12%
    Deposits ₹1,05,387 Cr. +6%
    Net Interest Income ₹869 Cr. +6%
    Profit After Tax ₹342 Cr. +12%
    CASA Deposits ₹33,530 Cr. –

    Competitive Analysis

    South Indian Bank competes with established private-sector banks like HDFC Bank, ICICI Bank, and Axis Bank. While these peers have stronger balance sheets and larger networks, South Indian Bank leverages its regional expertise and granular loan book to capture niche markets.

    Risk Assessment

    Asset Quality Risks

    • GNPA at 4.30% requires continued monitoring
    • High MSME exposure poses cyclical risks

    Market Risks

    • Interest rate volatility impact
    • 30% Kerala exposure concentration
    • Regulatory policy changes

    Investment Thesis

    Valuation Metrics

    • P/E Ratio: 5.41
    • Price-to-Book Value: 0.76
    • Favorable risk-reward compared to peers

    South Indian Bank’s strategic focus on retail and MSME loans, coupled with operational efficiencies driven by digital transformation, positions it for sustainable growth. The attractive valuations and consistent profit growth provide upside potential for investors.

    Planned Expansions

    Technology Investments

    • Enhanced Loan Origination Systems
    • Digital sourcing capabilities
    • Fintech partnership expansion

    Infrastructure Development

    • Branch network expansion in semi-urban areas
    • Green infrastructure investments
    • Renewable energy installations

    Disclaimer: This report is for informational purposes only and does not constitute investment advice. Investors should conduct their due diligence or consult financial advisors before making investment decisions.

  • Ashoka Metcast: An Emerging Infrastructure Play with great Upside Potential

    Ashoka Metcast Limited – Complete Stock Analysis

    Ashoka Metcast Limited

    Value Pick Multibagger share to buy for long term

    Overview

    Ashoka Metcast Limited operates in the trading of steel and other goods. The company is strategically positioned to benefit from India’s growing infrastructure and manufacturing sectors.

    Financial Highlights

    Market Cap

    ₹54.0 Cr.

    Current Price

    ₹21.6

    High/Low

    ₹35.3 / ₹16.5

    Stock P/E

    6.04

    Book Value

    ₹43.3

    ROCE

    5.36%

    ROE

    3.72%

    Sales

    ₹71.7 Cr.

    Recent Performance

    Revenue

    Standalone: ₹148.29 Lakhs

    Consolidated Revenue

    ₹6624.91 Lakhs (YoY growth: 31.3%)

    Standalone PAT

    ₹92.32 Lakhs (Previous: ₹9.14 Lakhs)

    Operating Profit Margin

    14.4%

    Borrowing Capacity

    Increased to ₹200 Cr

    Growth Drivers

    • Sectoral Demand: Projected growth in steel demand driven by infrastructure development
    • Operational Expansion: Network expansion and subsidiary synergies
    • Technology Investment: Digital operations and supply chain improvements
    • Strategic CapEx: Planned investments for operational efficiency

    Competitive Analysis

    Strengths

    • Established market presence
    • Strategic partnerships

    Challenges

    • High sector competition
    • Price fluctuations

    Risk Assessment

    Commodity Price Volatility: Fluctuations in steel and raw material prices

    Regulatory Risks: Policy changes impact on operations

    Debt Levels: Potential cash flow strain from rising debt

    Valuation

    Intrinsic Value Estimate

    P/E ratio: 6.04

    Price Target

    ₹30-35 (12-18 months)

    Investment Thesis

    Ashoka Metcast is well-positioned to benefit from India’s infrastructure growth, with a focus on scaling operations and improving profitability. Its conservative debt levels and strategic CapEx initiatives underscore its growth potential. The stock’s low valuation offers an attractive entry point for long-term investors.

    Disclaimer: This report is for informational purposes only and should not be considered financial or investment advice. Please consult a certified financial advisor before making investment decisions.

  • Aeroflex Industries Zero Debt Manufacturing Giant Eyes 20Mn Meter Capacity

    Aeroflex Industries Ltd. Value Pick Multibagger

    Aeroflex Industries Ltd.

    BSE: 543972 NSE: AEROFLEX

    Value Pick Multibagger Best share to buy for long term

    Manufacturing Industrial Growth Stock Zero Debt

    Executive Summary

    Aeroflex Industries Ltd.( BSE: 543972 NSE: AEROFLEX ) stands as a pioneering force in metallic flexible flow solutions, demonstrating exceptional growth and market leadership. With a diverse portfolio serving critical industries and a strong focus on innovation, the company has positioned itself for sustainable long-term growth.

    Key Highlights

    ✓ Market leader in metallic flexible flow solutions

    ✓ Strong presence in 90+ countries

    ✓ Zero debt status with robust financials

    ✓ Consistent growth in revenue and profitability

    Key Financial Metrics

    Market Cap

    ₹2,407 Cr.

    Current Price

    ₹186

    P/E Ratio

    47.3x

    ROCE

    26.5%

    Metric Value YoY Change
    Book Value per Share ₹24.4 +15.2%
    Return on Equity 20.5% +320 bps
    Debt ₹0.70 Cr. -65%

    Future Growth Drivers

    Product Portfolio Expansion

    Metal Bellows Division Growth

    Miniature Bellows Production

    Strategic Initiatives

    • Expansion to 20 Mn meters production capacity

    • Focus on value-added products (49.2% revenue)

    • Investment in automation and robotics

    • Strategic acquisition of Hyd-Air Engineering

    Financial Performance

    Metric Q3 FY25 Q3 FY24 Growth
    Revenue ₹99.8 Cr ₹73.13 Cr +36.4%
    EBITDA ₹22.27 Cr ₹15.02 Cr +48.3%
    PAT ₹15.21 Cr ₹9.04 Cr +68.3%

    Investment Thesis

    Aeroflex Industries presents a compelling investment opportunity backed by:

    • Strong market position with technological leadership

    • Robust financial health with zero debt

    • Clear growth strategy and expansion plans

    • Focus on high-margin value-added products

    • Commitment to ESG initiatives

    Target Price: ₹200-₹225 Potential Upside: 10-20%

    Disclaimer

    This report is intended for informational purposes only and does not constitute financial or investment advice. Readers are advised to conduct their own research or consult with a certified financial advisor before making any investment decisions.

  • Transpek Industry Stock Analysis: Global Chemical Giant’s 22% Upside Potential with 19.5% CAGR Growth

    Transpek Industry Ltd – Transpek Industry Stock Analysis: Global Chemical Giant’s 22% Upside Potential with 19.5% CAGR Growth

    Transpek Industry Ltd.

    Value Pick Best Share to buy

    Company Overview

    Transpek Industry Ltd. (TIL) specializes in chlorinated and specialty chemical products with applications in pharmaceuticals, polymers, agrochemicals, and dyes. The company has a global footprint, operating in 16 countries, and maintains strong relationships with major global chemical giants.

    Key Metrics

    Market Cap
    ₹869 Cr.
    Stock P/E
    22.5
    Book Value
    ₹1,413
    ROCE
    9.10%
    Debt
    ₹60.9 Cr.
    Dividend Yield
    0.90%
    Reserves
    ₹784 Cr.
    Sales Growth (3Y CAGR)
    19.5%

    Growth Drivers

    1. Diversification and Product Development

    • Transitioning from acid chlorides to non-chlorinated products, with three non-chlorinated products in the pipeline
    • Long-term focus on adding high-margin specialty chemicals to reduce reliance on commoditized products

    2. Geographical Expansion

    • Recent expansion into markets such as South America and Eurasia
    • North America and Europe remain key revenue contributors, accounting for 62% of sales

    3. Sustainability Initiatives

    • EcoVadis Silver Badge for sustainability practices
    • Focus on closed-loop chemistry and environmental protection to meet global ESG standards

    4. Capex Strategy

    • Upcoming capital expenditure for new product lines and capacity enhancement based on market demand
    • Estimated capex of ₹100-150 Cr. over the next two years for machinery upgrades and R&D expansion

    Performance Highlights

    Financial Growth

    • Q2 FY25 revenue: ₹167.8 Cr. (34% YoY growth)
    • EBITDA margin: 16.5% in Q2 FY25, driven by cost efficiencies and export incentives
    • Net profit: ₹9.6 Cr. (219% YoY growth in Q2 FY25)

    Revenue Mix

    • 86% of revenue is from international markets, with a strong presence in North America
    • Key segments include polymers (57%), specialty chemicals (21%), and pharma (11%)

    Financial Projections

    1. Revenue: Expected to grow at a CAGR of 12-15% over the next three years, driven by new product launches and market penetration
    2. EBITDA Margins: Projected to stabilize at 16-18% due to favorable product mix and cost optimization
    3. Debt Management: With a low debt of ₹60.9 Cr., the company maintains a robust financial position, ensuring room for further growth investments

    Competitive Landscape

    Peers

    Competes with Aarti Industries, SRF, and Navin Fluorine in specialty chemicals

    Strengths

    • High product customization capability
    • Long-standing customer relationships and global reputation

    Risks

    • Pricing pressure in the commoditized acid chlorides segment
    • Volatility in raw material prices and logistic costs

    Valuation

    PE Ratio
    22.5x
    Slightly above industry median
    Book Value
    ₹1,413
    Target Price
    ₹1,900
    Based on forward PE of 25x FY25E EPS
    Upside Potential
    ~22%

    Investment Thesis

    Transpek Industry Ltd. is well-positioned to leverage its technological expertise, diversified product portfolio, and global reach. Its focus on sustainability and specialty chemicals provides resilience and growth potential in a volatile market.

    Disclaimer: This report is for informational purposes only and does not constitute investment advice. Please consult your financial advisor before making any investment decisions.

  • VPRPL Stock Analysis: India’s Top Infrastructure Play | Water Supply & Railway Projects Worth ₹5,086 Cr

    VPRPL Investment Analysis | Complete Infrastructure Sector Report

    Vishnu Prakash R Punglia Ltd. (VPRPL)

    Value Pick : Best share to buy from Infrastructure space

    Executive Summary

    Vishnu Prakash R Punglia Ltd. (VPRPL) is one of India’s fastest-growing infrastructure companies, specializing in government projects. The company has a diverse portfolio spanning water supply, railway infrastructure, and road construction. With a robust order book, strategic backward integration, and geographical expansion, VPRPL is poised for sustained growth.

    Key Metrics

    Market Cap

    ₹3,231 Cr

    Industry Avg: ₹3,000 Cr

    Current Price

    ₹259

    52-Week Range: ₹141 – ₹346

    P/E Ratio

    26.3

    Industry Avg: 28.0

    ROE

    23.6%

    Industry Avg: 21.0%

    Business Overview

    Core Operations

    Water Supply Projects

    Contributes ~60% of order book

    Recent projects worth ₹342 Cr including water storage and treatment facilities

    Railway Infrastructure

    Accounts for ~30% of new orders

    Includes bridges, platforms, and ancillary work

    Road Construction

    Contributes ~5% of revenue

    Strategic importance for future growth

    Geographical Presence

    Operating in 10+ Indian states, including Rajasthan, Maharashtra, and Goa

    Future Growth Drivers

    Strong Order Book

    • Total Orders: ₹5,086 Cr
    • New Orders in H1 FY25: ₹1,104 Cr
    • Average project duration: 36 months
    • Bidding Pipeline: ₹5,000 Cr

    Financial Performance

    Q2 FY25 Highlights

    Metric Value YoY Growth
    Revenue ₹335 Cr +13%
    EBITDA ₹49 Cr +27%
    PAT ₹24 Cr +12%

    H1 FY25 Performance

    Metric Value YoY Growth
    Revenue ₹591 Cr +3%
    EBITDA ₹82 Cr +16%
    PAT ₹39 Cr +2%

    Valuation Estimate

    Relative Valuation

    Metric VPRPL Industry Avg
    P/E Ratio 26.3 28.0
    P/B Ratio 4.25 4.5
    EV/EBITDA 11.5 12.0

    DCF Valuation

    Fair Value Estimate: ₹290 per share

    Potential Upside: ~12%

    Investment Thesis

    Strengths

    • Strong order book and high-margin segments focus
    • Effective cost management through backward integration
    • Strategic geographical expansion
    • Attractive valuation entry point

    Risk Factors

    • Delayed payments from state governments
    • Rising debt levels
    • Economic and weather-related disruptions

    Conclusion

    VPRPL’s growth trajectory, combined with prudent cost management and strategic expansions, makes it a solid choice for long-term investors. At a current price of ₹259, the stock offers a reasonable entry point with an estimated fair value of ₹290.

    Disclaimer: This report is for informational purposes only and does not constitute financial advice. Investors should perform their due diligence or consult with

  • Tata Elxsi Q3 FY25: AI-Driven Growth Amid Global Tech Transformation | Investment Research

    Tata Elxsi Ltd. – Value Pick : Best share to buy Q3 FY25

    Tata Elxsi Ltd.

    Value Pick: Best share to buy today (Q3 FY25)

    Company Overview

    Tata Elxsi, a subsidiary of the Tata Group, is a global leader in design and technology services across critical industries such as Transportation, Media, Communications, and Healthcare. The company leverages advanced technologies like AI, IoT, and cloud computing to deliver innovative solutions. Despite a challenging macroeconomic environment, Tata Elxsi has maintained a stable operational performance.

    Key Insights from Investor Presentation

    Financial Performance

    Revenue

    ₹939.2 Cr. (+2.7% YoY, -1.7% QoQ)

    PAT

    ₹199 Cr. (-3.6% YoY)

    EBITDA Margin

    26.3% (-7.4% QoQ)

    Cash Position

    Reserves

    ₹2,424 Cr.

    Debt

    ₹206 Cr.

    Growth Drivers

    Sectoral Strengths

    • Healthcare & Lifesciences: Grew 1.1% QoQ, driven by regulatory services and Gen AI-powered digital engineering
    • Transportation: Growth of 0.5% QoQ, focusing on ADAS Level 3 development
    • Media & Communications: Marginal growth of 0.4% QoQ

    Geographic Diversification

    • India: 21.9% YoY growth
    • Japan and emerging markets: 66.8% YoY growth

    Product Innovation

    • Launch of AVENIR SDV Suite at CES 2025
    • Collaboration with Suzuki through Pune ODC
    • Expansion of digital twin capabilities

    Competitive Landscape

    Tata Elxsi faces competition from global IT players and niche engineering design firms. Key risks include:

    • Dependency on top 10 clients (44.8% of revenue)
    • Geopolitical instability in key markets
    • Currency fluctuations in export-heavy segments

    Investment Thesis

    Current Price

    ₹6,001

    P/E Ratio

    46.2x

    ROE

    34.5%

    Key Catalysts

    • Positive momentum in healthcare and emerging markets
    • Margin improvement opportunities
    • Long-term strategic deals ramping up

    Valuation Estimate

    Target price range: ₹6,800-₹7,200 (12-month horizon)

    Recommendation: Accumulate

    Investors can capitalize on near-term weakness to build a position in Tata Elxsi, leveraging its leadership in high-growth segments like ADAS, green mobility, and AI solutions.

    Disclaimer: This report is for informational purposes only and does not constitute investment advice. The analysis relies on publicly available data and may not account for all variables. Past performance does not guarantee future results. Consult your financial advisor for tailored advice.

  • EMS Ltd.: Unlocking India’s Wastewater Revolution with Strong Growth Potential

    EMS Ltd. Investment Analysis | Water Management Sector Leader Value Pick :

    EMS Ltd.

    Value Pick: Best Share to buy today

    Date: January 8, 2025

    Executive Summary

    EMS Ltd. is a leading player in the water and wastewater management sector in India. The company specializes in the design, construction, and operation of sewage treatment plants (STPs) and effluent treatment plants (ETPs), with a unique bundled approach that includes long-term Operations & Maintenance (O&M) contracts. EMS is well-positioned to benefit from government-led infrastructure development initiatives, such as the National Mission for Clean Ganga and AMRUT, aimed at improving urban infrastructure and sanitation.

    The company boasts robust financials, with superior operating margins (26.4%), a healthy return on equity (22.9%), and a strong balance sheet with low leverage. The recently secured ₹4,164.6 crore Indore Municipal Corporation project underscores EMS’s growing reputation and ability to execute large-scale municipal projects.

    1. Future Growth Drivers

    Robust Order Book Growth:

    EMS’s ₹4,164.6 crore order win, of which it holds a 26% share (~₹1,083 crore), strengthens its visibility over the next 3-5 years. The project includes STPs with capacities of 120 MLD, 40 MLD, and 35 MLD, supported by 15-year O&M contracts, ensuring recurring revenue.

    Government Push for Sanitation:

    India’s urbanization is expected to drive demand for wastewater infrastructure. EMS is aligned with flagship schemes such as AMRUT 2.0 and Swachh Bharat Mission 2.0, which aim to modernize municipal waste management systems.

    Over ₹60,000 crore has been earmarked for sewage and water infrastructure by the government in FY25, ensuring sustained sectoral tailwinds.

    Geographic Expansion:

    EMS is actively bidding for projects in tier-2 and tier-3 cities, leveraging its expertise in scalable solutions for mid-sized municipalities. This ensures a well-diversified order pipeline across India.

    2. Financial Analysis

    Key Metrics (FY24 Actuals)

    Market Cap

    ₹4,636 crore

    Current Price

    ₹834 per share

    52-Week Range

    ₹1,017 / ₹353

    Revenue

    ₹885 crore

    EBITDA Margin

    26.4%

    ROE

    22.9%

    ROCE

    29.3%

    Net Debt

    ₹78.6 crore

    Growth Metrics

    Sales Growth (YoY): 28.2%

    Profit Growth (YoY): 29.0%

    3-Year Revenue CAGR: 33.9%

    3-Year PAT CAGR: 27.1%

    Valuation Metrics

    Price-to-Earnings Ratio (P/E): 27.0x

    Price-to-Book Value (P/BV): 5.2x

    Enterprise Value/EBITDA: 14.7x (implied FY25E multiple)

    3. Strategic Use of Capital and CapEx

    • EMS has demonstrated prudent capital allocation, maintaining low leverage while funding growth.
    • Future capital expenditure will focus on technology upgrades and increasing project execution capabilities.
    • This includes automation in STP operations, improving margins and project efficiency.

    4. Competitive Landscape

    Company Market Cap (₹ Cr.) Revenue (₹ Cr.) EBITDA Margin ROE (%)
    EMS Ltd. 4,636 885 26.4% 22.9%
    VA Tech Wabag 4,250 3,200 12.5% 15.0%
    Ion Exchange 3,150 1,150 20.0% 18.5%

    EMS’s Edge:

    • Higher margins due to its bundled approach of O&M services.
    • Niche focus on medium-sized municipal projects, avoiding over-competition with large EPC players.

    5. Key Risks

    • Execution Delays: Government infrastructure projects often face delays due to regulatory hurdles, land acquisition issues, or funding gaps.
    • Payment Cycles: High dependency on public sector clients exposes EMS to risks of delayed payments, impacting working capital.
    • Economic and Political Risks: Any slowdown in public infrastructure spending or political instability could adversely affect order flows.

    6. Valuation Estimate and Recommendation

    DCF Valuation

    Based on a discounted cash flow (DCF) analysis, assuming a 15% revenue CAGR and stable margins:

    • Fair Value Estimate: ₹940-₹1,020 per share (implied FY26E EV/EBITDA of 12-15x)
    • Upside Potential: ~15-20% from the current price of ₹834

    Investment Thesis

    EMS Ltd. offers a compelling growth story in India’s under-penetrated wastewater management sector. With strong financials, a robust order book, and long-term O&M contracts, the company is well-placed to generate steady cash flows and deliver shareholder returns.

    Recommendation: BUY

    Recommended for a 12-18 month horizon.

    Disclaimer: This report is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence or consult a financial advisor before making any investment decision. Past performance is not indicative of future results.

  • Varroc Engineering Ltd: Future Growth with EV Focus, Strong Financials & Robust Capex Plans : Value Pick

    Equity Research Report: Varroc Engineering Ltd

    Best Stock Value Pick: Varroc Engineering Ltd

    Overview

    Ticker
    VARROC
    Market Cap
    ₹9,680 Cr
    Current Price
    ₹634
    Sector
    Auto Ancillaries
    Face Value
    ₹1.00

    Key Financial Metrics

    Revenue (FY 2024)
    ₹7,839 Cr
    PAT (FY 2024)
    ₹528 Cr
    P/E Ratio
    18.4x
    ROCE
    17.5%
    ROE
    41.9%
    Debt
    ₹1,204 Cr
    Reserves
    ₹1,592 Cr
    Dividend Yield
    0.00%
    Book Value
    ₹105

    Analysis

    Business Performance

    Revenue Growth:

    Q2 FY25 revenue grew by 10.3% YoY to ₹2,081 Cr, led by a 13.4% increase in India operations. Significant order wins in the EV segment (37% of new orders) indicate a strategic pivot toward future-ready technologies.

    Profitability:

    Consolidated EBITDA margins improved by 60 bps QoQ but face headwinds due to overseas operations and R&D costs. PBT grew 62% QoQ, reflecting operational efficiencies and cost optimization efforts.

    Debt and Balance Sheet Management:

    Net debt reduced to ₹827 Cr in H1 FY25 from ₹1,554 Cr in FY24, improving the debt-equity ratio to 0.5x. The company targets further reduction to ₹700-750 Cr by FY25-end.

    Capex and Investments:

    H1 FY25 capex of ₹1,030 Cr, with planned increases in H2 to expand EV capacity and add SMT lines for electronics. Preponing investments by six months signals strong demand, especially in EV and PCB assembly.

    Growth Drivers

    Electrification:

    EV-related orders contribute significantly to future revenue visibility. Products like Battery Management Systems (BMS) and EV motors position Varroc as a leader in the EV supply chain. Content per vehicle for EVs (₹25,000–₹30,000) is 5–6x higher than ICE vehicles, promising robust revenue growth.

    New Product Development:

    Launch of high-margin products like integrated starter generators, ambient lighting, and soft-touch door panels. Increased focus on R&D to innovate in electronics and lightweight materials.

    Geographic Diversification:

    Expansion in Romania and new land acquisitions in South and West India to meet OEM requirements. Strong pipeline in overseas markets, with 37% of the order book tied to export opportunities.

    Sustainability and ESG:

    Recognition for initiatives like the Kham River restoration underlines a commitment to ESG practices, enhancing corporate reputation.

    Projections

    Revenue Growth
    15-18% CAGR
    Operating Margins
    10-11% by FY26
    Annual Capex
    ₹260-270 Cr
    Target Net Debt
    ₹700 Cr

    Valuation

    P/E Ratio: At 18.4x, the stock trades at a discount compared to peers in the EV and auto ancillaries segment, offering an attractive entry point.

    Book Value: ₹105 | Price to Book: ~6x, reflecting growth prospects.

    Risks

    Overseas Operations:

    Challenges in Europe could dampen consolidated margins; need for stabilization in these markets.

    Market Dynamics:

    High dependency on Bajaj Auto (~45% of revenue) poses concentration risk.

    Macroeconomic Trends:

    Global economic uncertainties, inflationary pressures, and supply chain issues could impact growth.

    Conclusion

    Rating: BUY

    Varroc Engineering is poised for robust growth, supported by strong order wins, a strategic focus on EVs, and operational efficiencies. With a healthy balance sheet, aggressive debt reduction, and investments in high-margin products, the company is well-positioned to outperform the industry average in the medium to long term.

    Disclaimer: This report is for informational purposes only and does not constitute investment advice. Readers should perform their own due diligence and consult financial advisors before making investment decisions. The author and associated entities disclaim all liabilities for any losses incurred based on this report.

  • Piccadily Agro: A Rising Star in Premium Alco-Bev and Global Expansion

    Piccadily Agro Industries Ltd – Best Stock to buy now

    Piccadily Agro Industries Ltd

    BSE Scrip Code: 530305

    Best stocks to buy now

    Company Overview

    Piccadily Agro Industries Ltd., headquartered in Haryana, India, is a diversified agro-industrial player with a growing emphasis on premium alcoholic beverages. The company operates in two primary verticals:

    1. Distillery: Focused on premium alco-bev brands like Indri single malt whisky and Camikara rum.

    2. Sugar: Production of crystal white sugar.

    Piccadily’s fully integrated business model encompasses distilling capabilities and global branding, supported by significant malt warehousing capacity. The company is leveraging its expertise in premiumization to capitalize on macroeconomic trends in the alco-bev industry.

    Financial Metrics and Performance

    Market Cap

    ₹ 9,019 Cr.

    Current Price

    ₹ 956

    High / Low

    ₹ 1,020 / 260

    Stock P/E

    88.2

    Book Value

    ₹ 63.9

    ROCE

    29.6%

    ROE

    30.6%

    Face Value

    ₹ 10.0

    Key Financial Data

    Debt: ₹ 209 Cr.
    Reserves: ₹ 509 Cr.
    Sales: ₹ 827 Cr.
    Profit After Tax (PAT): ₹ 102 Cr.

    Growth Metrics

    Sales Growth (3Y)

    15.0%

    Profit Growth (3Y)

    69.5%

    Quarterly Sales Variation

    62.0%

    Q2 FY25 Highlights

    Revenue: ₹ 200.5 Cr (+63.4% YoY)

    EBITDA: ₹ 43.6 Cr (+74.5% YoY)

    PAT: ₹ 24.9 Cr (+109.2% YoY)

    EBITDA Margin: 21.6% (up 126 bps YoY)

    Key Developments

    • Indri single malt whisky volume grew by 443% YoY
    • Launched the “City Series” exclusive for Bengaluru Duty-Free
    • Diwali Collector’s Edition 2024 received global accolades

    Strategic Initiatives and Expansion Plans

    Capital Raising

    ₹262 Cr raised through preferential allotment to fund expansions.

    Domestic and International Expansion

    • Newly added geographies include Chhattisgarh and Fiji
    • Enhanced duty-free presence in India (Ahmedabad, Amritsar) and globally

    New Distilleries

    Planned setups in Chhattisgarh and Scotland

    Future Growth Drivers

    Premium Alco-Bev Brands

    • Continued success of Indri single malt whisky
    • Upcoming premium spirits launches

    Operational Efficiency

    • 45,000+ barrels capacity
    • Improved EBITDA margins

    Market Trends

    • Rising premium spirits demand
    • Favorable economic factors

    Risks and Concerns

    • High P/E ratio (88.2) could indicate overvaluation
    • Seasonality affecting sugar vertical revenues (-25.5% YoY in H1 FY25)
    • Rising input costs and macroeconomic uncertainties

    Valuation and Projections

    Year Revenue (₹ Cr) EBITDA (₹ Cr) PAT (₹ Cr)
    FY26 1,100 250 150
    FY27 1,300 310 190
    FY28 1,500 400 240

    Justification: Premiumization, expanded capacity, and international penetration will drive robust growth.

    Recommendation

    Given Piccadily Agro’s strong performance, strategic initiatives, and favorable industry trends, the company holds significant growth potential. However, investors should consider valuation risks.

    Rating: Accumulate with a target price of ₹1,250 over 12 months.

    Disclaimer: This report is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult with a financial advisor. The authors of this report disclaim liability for any losses incurred based on this analysis.

  • Choice International’s Future Growth Soars with SEBI Approval for Mutual Fund Launch

    Choice International Limited – Equity Research Report

    Choice International Limited

    Value Pick : Best stock to buy today : India’s leading financial services conglomerate

    Executive Summary

    Choice International Limited (Choice) has emerged as a leading financial services conglomerate in India with diversified operations spanning stock broking, insurance distribution, MSME lending, and government advisory services. The company’s robust financial performance, expanding market presence, and investment in technology-driven solutions position it well for sustainable long-term growth.

    ₹10,975 Cr
    Market Capitalization
    ₹550
    Current Price
    71.6
    P/E Ratio
    24.8%
    ROCE

    Financial Performance Highlights

    Q2 FY25 vs Q2 FY24

    Revenue from Operations grew by 29.6% to ₹2,492 Mn. EBITDA increased by 51% to ₹777 Mn, with margins improving to 31.16%. PAT rose by 56% YoY to ₹465 Mn.

    H1 FY25

    Revenue: ₹4,551 Mn (YoY growth of 37%)
    EBITDA: ₹1,359 Mn (52% increase YoY)
    PAT: ₹785 Mn (53% YoY increase)

    Strategic Growth Drivers

    1. Diversified Business Portfolio

    Stock Broking: Expanding presence in Tier III and below geographies
    Insurance Distribution: 131% YoY growth in policies sold
    MSME Lending: Recent acquisitions of Paisobuddy and Sureworth
    Government Advisory: Substantial infrastructure consulting order book

    2. Operational Metrics

    30.2% Operating Profit Margin and 23.6% Return on Equity highlight strong operational efficiency. Continuous focus on client-centric innovations.

    3. Tech-Driven Expansion

    Proprietary digital tools enhance customer engagement with upcoming features like family mapping and simplified auto-pay journeys.

    Future Projections

    Projected revenue CAGR of 30-35% over the next three years. PAT growth expected to sustain at 50-55%. Pan-India expansion through 168 branch offices.

    Investment Recommendation

    Rating: BUY (Long-Term Horizon)

    Target Price: ₹750 (12-month horizon)
    Upside Potential: ~36% from current market price of ₹550

    Disclaimer

    This report is for informational purposes only and should not be considered as investment advice. The information contained herein is based on sources believed to be reliable, but no guarantee is made as to its accuracy. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance is not indicative of future results.

Value Picks fin.ctoi.in
Value Picks fin.ctoi.in
Value Picks

Dont Miss our Value picks

SUBSCRIBE TO OUR NEWSLETTER to Get short term, long term and multi-bagger

We don’t spam! Read our privacy policy for more info.