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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » RICH, NAMU, KGAL - All in one value analysis

RICH, NAMU, KGAL - All in one value analysis

+3
MoneyMaker
Slstock
smallville
7 posters

Go down  Message [Page 1 of 1]

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics

Guys I did some home work to see whether my original assumptions of these shares are still valid or not, lets see what I've come across;
Pls share your views;

RICH Valuation


PAT after removing of minority interest;

31.12.2010 – 640.60 Mn
30.09.2010 – 434.25 Mn
30.06.2010 – 270.50 Mn
31.03.2010 – 330.70 Mn

Last 04 quarter earnings = 1676.05 Mn
No. of Shares (rounded) = 1935.49 Mn
EPS = 1676.05 / 1935.49 = 0.87 (rounded)

RICH can Value at diversify sector PER of 34.10

Sector PE Share Valuation = EPS 0.87 x PER 34.10 = Rs.29.52/- level.

If we take Fair Value of sector PE as a 30% discount to normal value it is 23.87, hence taking this as the fair sector PE;

Fair Share Valuation = EPS 0.87 x PER 23.87 = Rs. 20.77/- level.
Current Share price - Rs. 14/-
With the current massive earnings of KGAL and NAMU (subsidiaries), RICH is worth more than Rs.20.77 now.

So is RICH ready to run RICH?

Lets have a look at RICH's subsidary performance and decide that.....

NAMU Valuation

PAT after removing Other income;

31.12.2010 – 116.19 Mn
30.09.2010 – 106.62 Mn
30.06.2010 – 78.79 Mn
31.03.2010 – 75.66 Mn

Last 04 quarter earnings = 377.26 Mn
No of Shares = 23.75 Mn
EPS = 15.88

NAMU can be Valued at Plantation Sector PE of 24.3;

Sector PE Share Valuation = EPS 15.88 x PER 23.75 = Rs. 377.15/- level.

If we take Fair Value of sector PE as a 30% discount to normal value it is 17.01, hence taking this as the fair sector PE;

Fair Share Valuation = EPS 15.88 x PER 17.01 = Rs. 270.11/- level.
Current Share Price = Rs. 125/-

NAMU has a ton of Rubber + palm oil and palm oil has gone up 50% since September 2010. And
also the Rubber price is at industry high.

KGAL Valuation

PAT after removing Other income;
31.12.2010 – 205.222 Mn
30.09.2010 – 189.416 Mn
30.06.2010 – 99.06 Mn
31.03.2010 – 212.63 Mn

Last 04 quarter earnings = 706.39 Mn
No of Shares = 25 Mn
EPS = 28.25

Sector PE Share Valuation = EPS 28.25 x PER 23.75 = Rs. 671/- level.

Fair Share Valuation = EPS 28.25 x PER 17.01 = Rs. 480.5/- level.
Current Share Price = Rs. 208.9

Now we could see KGAL's year ended profits as at 31.03.2010 was so high and assuming its due to year end result pattern, if we take it at a 50% discount the earnings will be 106.315 as at 31.03.2010.
Hence taking this amount for our calculation we arrive at a 04 quarter earnings of 600Mn.
So the EPS would be 24.0.

Now lets recalculate using the Fair Share Valuation with 30% discount to the Sector PE;

Fair Share Valuation = EPS 24 x PER 17.01 = Rs. 408/- level.

What this means? Whatever the calculation we take, discounting here and there still we arrive at a figure more than Rs. 400/- and even with the Wage hike that could result in a revenue drop for Tea segment, still its fair to assume this share worth more than Rs. 400/- now..

KGAL is exposed to massive Ruber + COCO combination apart from TEA, last qtrs Rubber contibution is so high and due to prevailaing rubber prices we can expect the same for atleast another 2 qtrs..

Also tech charts show all three are at oversold region now, and RICH indicates it can go down t0 13.80-13.90 before it goes up.
http://www.bloomberg.com/apps/quote?ticker=KGAL:SL

Open for discussion Cool



Last edited by smallville on Sun Apr 03, 2011 8:16 am; edited 1 time in total

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

smallville wrote:Guys I did some home work to see whether my original assumptions of these shares are still valid or not, lets see what I've come across;
Pls share your views;

RICH Valuation


PAT after removing of minority interest;

31.12.2010 – 640.60 Mn
30.09.2010 – 434.25 Mn
30.06.2010 – 270.50 Mn
31.03.2010 – 330.70 Mn

Last 04 quarter earnings = 1676.05 Mn
No. of Shares (rounded) = 1935.49 Mn
EPS = 1676.05 / 1935.49 = 0.87 (rounded)

RICH can Value at diversify sector PER of 34.10

Sector PE Share Valuation = EPS 0.87 x PER 34.10 = Rs.29.52/- level.

If we take Fair Value of sector PE as a 30% discount to normal value it is 23.87, hence taking this as the fair sector PE;

Fair Share Valuation = EPS 0.87 x PER 23.87 = Rs. 20.77/- level.
Current Share price - Rs. 14/-
With the current massive earnings of KGAL and NAMU (subsidiaries), RICH is worth more than Rs.20.77 now.

So is RICH ready to run RICH?

Lets have a look at RICH's subsidary performance and decide that.....

NAMU Valuation

PAT after removing Other income;

31.12.2010 – 116.19 Mn
30.09.2010 – 106.62 Mn
30.06.2010 – 78.79 Mn
31.03.2010 – 75.66 Mn

Last 04 quarter earnings = 377.26 Mn
No of Shares = 23.75 Mn
EPS = 15.88

NAMU can be Valued at Plantation Sector PE of 24.3;

Sector PE Share Valuation = EPS 15.88 x PER 23.75 = Rs. 377.15/- level.

If we take Fair Value of sector PE as a 30% discount to normal value it is 17.01, hence taking this as the fair sector PE;

Fair Share Valuation = EPS 15.88 x PER 17.01 = Rs. 270.11/- level.
Current Share Price = Rs. 125/-

NAMU has a ton of Rubber + palm oil and palm oil has gone up 50% since September 2010. And
also the Rubber price is at industry high.

KGAL Valuation

PAT after removing Other income;
31.12.2010 – 205.222 Mn
30.09.2010 – 189.416 Mn
30.06.2010 – 99.06 Mn
31.03.2010 – 212.63 Mn

Last 04 quarter earnings = 706.39 Mn
No of Shares = 25 Mn
EPS = 28.25

Sector PE Share Valuation = EPS 28.25 x PER 23.75 = Rs. 671/- level.

Fair Share Valuation = EPS 28.25 x PER 17.01 = Rs. 480.5/- level.
Current Share Price = Rs. 208.9

Now we could see KGAL's year ended profits as at 31.03.2010 was so high and assuming its due to year end result pattern, if we take it at a 50% discount the earnings will be 106.315 as at 31.03.2010.
Hence taking this amount for our calculation we arrive at a 04 quarter earnings of 600Mn.
So the EPS would be 24.0.

Now lets recalculate using the Fair Share Valuation with 30% discount to the Sector PE;

Fair Share Valuation = EPS 24 x PER 17.01 = Rs. 408/- level.

What this means? Whatever the calculation we take, discounting here and there still we arrive at a figure more than Rs. 400/- and even with the Wage hike that could result in a revenue drop for Tea segment, still its fair to assume this share worth more than Rs. 400/- now..

KGAL is exposed to massive Ruber + COCO combination apart from TEA, last qtrs Rubber contibution is so high and due to prevailaing rubber prices we can expect the same for atleast another 2 qtrs..

Also tech charts show all three are at oversold region now, and RICH indicates it can go down t0 13.80-13.90 before it goes up.
http://www.bloomberg.com/apps/quote?ticker=KGAL:SL

Open for discussion Cool

Good analysis SmallVille. Rep from me.

Yes these shares especially KGAL, is highly undervalued as you pointed out. December Quarter actually reaped lesser revenue as Rubber tapping was less due to technicals of the period and also due to bad weather. It can be expected KGAL atleast sustain same earning as last quarter for March ( if not more which I am rather positive about as March quarter should be more than December due to above). With the current scenarios for the year KGAL should report around Rs 30 EPS. So even with a discounted PE of 12 for the Skeptics of plantations sector risks I think KGAL should be valued at around Rs320- 350 now.

Even with plantation sector wage issues if we discount 25% of profit of KGAL to wage hike ( this effects TEA sector mostly and KGAL is lesser exposed to TEA as it is the largest Rubber plantation company )
even the June quarter should be decent for KGAL.

I think people are unnecessarily panicking. To me the safest plantation companies out of the bunch is KGAL and NAMU.

RICH chariman said he was expecting 2.5 Billion profit for the year. I was skeptical before but after seeing ;last quarter results they can get mighty close. To me RICH is worth Rs 20 easily being a blue chip also.

MoneyMaker

MoneyMaker
Senior Equity Analytic
Senior Equity Analytic

Thanks for this one Smallville... Very good calculations.
I am a great fan of your comments.
Keep it up!

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics

slstock wrote:
I think people are unnecessarily panicking. To me the safest plantation companies out of the bunch is KGAL and NAMU.

RICH chariman said he was expecting 2.5 Billion profit for the year. I was skeptical before but after seeing ;last quarter results they can get mighty close. To me RICH is worth Rs 20 easily being a blue chip also.

I highly agree on this panic scenario.. if I had done this analysis earlier, I'd have collected few more shares around 200.. even at 210 I think we're not losing anymore..

RICH has gone back to 14.. can go little more down.. but now we knw the value of this blue chip.. so why not we collct?

One more thing.. RICH could be a long term investment.. So how long could you possibly gonna look at?

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

smallville wrote:
slstock wrote:
I think people are unnecessarily panicking. To me the safest plantation companies out of the bunch is KGAL and NAMU.

RICH chariman said he was expecting 2.5 Billion profit for the year. I was skeptical before but after seeing ;last quarter results they can get mighty close. To me RICH is worth Rs 20 easily being a blue chip also.

I highly agree on this panic scenario.. if I had done this analysis earlier, I'd have collected few more shares around 200.. even at 210 I think we're not losing anymore..

RICH has gone back to 14.. can go little more down.. but now we knw the value of this blue chip.. so why not we collct?

One more thin

g.. RICH could be a long term investment.. So how long could you possibly gonna look at?

I have kept some of the RICH shares I bought 6 months ago as long term investment. I am looking at rotating some of my other shsres to more RICH. The hardest part is to sell some of my shares at the lowest they have seen in the last 5 months to go for RICH!

KGAL is a bargain at Rs 210. This is share which went to Rs 280 before this butchering.

antxster


Senior Equity Analytic
Senior Equity Analytic

Hi Smallville, you mentioned rich might go down to 3.80-3.90. Why is that so? I bought RICH at Rs 13.80 o.o

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

antxster wrote:Hi Smallville, you mentioned rich might go down to 3.80-3.90. Why is that so? I bought RICH at Rs 13.80 o.o

I believe he meant Rs13.8-13.9 . If Rich goes to Rs 3.9 now I will convert my whole portfolio to RICH pirat

antxster


Senior Equity Analytic
Senior Equity Analytic

slstock wrote:
antxster wrote:Hi Smallville, you mentioned rich might go down to 3.80-3.90. Why is that so? I bought RICH at Rs 13.80 o.o

I believe he meant Rs13.8-13.9 . If Rich goes to Rs 3.9 now I will convert my whole portfolio to RICH :pirat:

lol. thanks for clarifying ;)

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics

antxster wrote:Hi Smallville, you mentioned rich might go down to 3.80-3.90. Why is that so? I bought RICH at Rs 13.80 o.o

Sorry that was a big typo Wink I meant 13.80-13.90..

U can see still u can get RICH in this range.. better to give a try..

antxster


Senior Equity Analytic
Senior Equity Analytic

smallville wrote:
antxster wrote:Hi Smallville, you mentioned rich might go down to 3.80-3.90. Why is that so? I bought RICH at Rs 13.80 o.o

Sorry that was a big typo ;) I meant 13.80-13.90..

U can see still u can get RICH in this range.. better to give a try..

Thanks~ I wonder when will the stock price goes up.

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics

KGAL is slowly heading up.. NAMU too.. so we might see some rally towards the end of the month. Not entirely sure of this.. The counters are really good to hold looking at their earnings potential..
I expect the market to be slow moving due to avurudu season.. I my be wrong, but thats how I believe..

ShareShares


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

smallville wrote:KGAL is slowly heading up.. NAMU too.. so we might see some rally towards the end of the month. Not entirely sure of this.. The counters are really good to hold looking at their earnings potential..
I expect the market to be slow moving due to avurudu season.. I my be wrong, but thats how I believe..

KGAL NAMU and RICH are moving shares. They can pickup soon, investors get various bonuses, festival advances for the New Year. Due to harvesting, businesses related to plantations can do well. Generally people do not withdraw large quantities in millions for the New Year. Some invest what ever the advances bonuses they receive. Market would pick up slowly and much more rapidly towards end of April. Milanka index, blue chips, banks might also do well.

13RICH, NAMU, KGAL - All in one value analysis Empty NAMU- Boliger Band & MACD Sun Apr 03, 2011 11:23 pm

Pira


Equity Analytic
Equity Analytic

Hi everybody
When you see this graph you will se that NAMU should go up in the near future. Smile Smile

I hope i can update this kinde of document. If not please let me know.

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics

KGAL and RICH perform well, no evidence of force selling any more.

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