After analyzing yesterday's report, I see that the stock is very attractive at CMP.
The case for my BUY recommendation is as follows:
Net margin - 7.27% to 9.15%
ROA - 10.37% to 11.04%
ROE - 14.62% to 14.03%
However, the stronger factor is CASH. TJL continues to remain cash rich.
Rs. 2.65 cash per share as at 30th September which translates to 8% of CMP and 20% of NAV.
This is very attractive given the fact that TJL is DEBT FREE.
Cash to Profit ratio is 2x.
Also, the new subsidiaries have generated an incremental cash flow of roughly 14% or Rs. 110 Mn. TJL paid USD 11 Mn in cash (3.5 for Quenby Lanka and 7.5 for Ocean India) which leads to about a 7% cash flow in respect of the Rs. 1.6 Bn. investment just last quarter.
I believe that TJL will perform very well in the coming periods given this scenario.
Your opinions are most welcome.