Objective – increase share price from Rs.30/- to Rs.287/- in three years.
Can this achievable? Let’s discuss it later. But for the moment let's take the short term view.
With the launch of "Strategic Plan" , one thing is clear, Company is looking for a re-rating for their shares in the near future, and they want it to happen with the backing of earnings. It’s clear since there wasn’t any manipulation on this share since the introduction (Swarnamahal went above Rs.120/-).
Most of the people are unaware about the COCR earnings as they haven’t published Q1 results as they are in the DIRISAVI board. But they have released Q1 net profit in the strategic plan, Rs.192.9M. And now they are about to release 1H 2012 results, probably in early Oct.which they have hinted more than Q1 2012 results.
I have obtained their earnings for last 4 quarters from the introductory document and from the strategic plan.
1Q 2011 2Q 2011 3Q 2011 4Q 2011* 1Q 2012
Profit (000) 15,911 55,241 115,970 134,878 192,900
Q on Q Profit Growth 247% 109% 16% 43%
(Within same FY)
*assumed based on yearly data.
Though COCR has shown more than 10% growth in each quarter, if we assume it at a moderate 10% growth each on 2nd 3rd and 4th Quarters of FY 2012, COCR will earn Rs. 895M for 2012 FY. They will be surely exceed Rs. 400m for the 1st H 2012, which will be released in Oct. Which means yearly earnings/share of about Rs.4/-.or more. If we assume a PER of 15x as COCR is a company with a high growth rate, share can easily touch Rs.60/- in the short run.
Obviously, COCR is trading much below the true value of the share.
This is not a BUY/SELL recommendation. But a study I have carried out based on data in the Introductory Document and their latest Strategic Plan for my decision making, which I thought to share. Please do your own study, before making any decision.
- COCR 2011-09-20.docx
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