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Sunday, January 24, 2016

Damodar Industries -521220: A good value pick available in price range of Rs 63-67



About Company: The Company was converted into public limited company on 20th March 1992. Since 1992 the company has expanded its production capacity and is now one of the largest producers of value added yarns in India having a turnover of approx. 600crores.
Company has strong local customers like Grasim Industries Ltd, Arvind Mills Ltd., Siyaram Silk Mills Ltd., Reliance Industries Ltd., Garden Silk Mills Ltd., Dicitex Decor Ltd. It is currently exporting to over 40 countries across Europe, South Africa, South America, Australia, Korea, Belgium, Singapore, Italy, Egypt and the Gulf countries.
Financial Performance of Company: Company has maintained profitability in last 5 years and consistently paid increasing dividend for last five years.
2015
2014
2013
2012
2011
Revenue
593.05
734.98
582.38
392.4
384.74
Other Income
0.3
0.29
1.34
0.62
0.47
Total Income
593.34
735.27
583.72
393.02
385.21
Expenditure
-543.52
-677.71
-533.94
-357.89
-354.77
Interest
-19.25
-23.54
-21.42
-17.62
-12.98
PBDT
30.57
34.02
28.37
17.51
17.46
Depreciation
-12.5
-11.11
-9.83
-8.94
-8.61
PBT
18.07
22.91
18.54
8.57
8.85
Tax
-6.18
-8.13
-6.37
-2.63
-0.65
Net Profit
11.9
14.78
12.17
5.94
8.21
Equity
8.9
8.9
8.9
8.9
8.9
EPS
13.37
16.6
13.68
6.67
9.22
CEPS
27.41
29.09
24.72
16.71
18.89
OPM %
8.4
7.83
8.55
8.95
7.91
NPM %
2.01
2.01
2.09
1.51
2.13
Dividend
25%
24%
20%
16%
15%

Company has recently declared bonus shares this year in ratio of 1:4 so the equity got increased to 11.9 crores. As on 30-9-2015 company has achieved turnover of Rs 297 crores with net profit of Rs 5.87 crores. The top line of company is affected die to week export demand however the local demand of company products is on rise. This year the growth is also muted but due to decreasing interest burden the NP margin has improved and expected to improve further.
I expect that it should deliver revenue of around 610 crores with net profit of approx. 15-16 crores resulting in EPS of 12-13 on enhanced equity base of 11.9 crores.
Stock has come down from its recent highs of 101 to 63-65 in recent down fall which I feel was unnecessary. Damodar is fundamentally strong company and has recently decided to declare interim dividend and one should expect minimum Rs 1.5.
Long term investor can consider accumulating this stock if it further goes down for target of Rs 100.


1 comment:

  1. Hi Sir, Thanks for the new stock pick. Looks like it's debt to equity ratio is high but it is coming down for last few years.

    Regards,
    Venu.

    ReplyDelete

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