Tuesday, October 11, 2011

Indag Rubber - among Top 10 Investment Buys

Indag Rubber .cmp ~120. I would rate in among my Top 10 Investments Buy. That is with the usual target of ~2x upside in a year`s time.
Disclosure - Bought on 11 Oct 2011, after  great Sep 2011 quarter results were posted .

  • +136% YoY growth in PAT. ( 5 crores vs 2 crores last year FY11)
  • 52% Growth in Sales YoY
  • EBITDA margin 14% vs 10% last year
  • In fact H1 Sep 2011 / FY 12 PAT of  9 Crores is almost equal to the previous entire year PAT of 10 cr. All set to post life time high profits this year in FY12. 
  • Stock price justifiably at life time / all time high at 143 +20%  Chart here
First posted this on twitter . The shortest ever 140 characters buy report ? ( less than 30 words)
The Fixer

Investment BUY - Indag Rubber - Earnings up 136% YoY | neg. Debt | 4x PE At all time highs.Chart


I have done just a 15 minutes due diligence check. All seems fine. Other positives :-
77% promoter holding. and Valuation comparison from IndiaInfoline. ( based on ending Mar 2011 last FY 11). I`m quite sure margins, ROCE, ROE ratios are better than larger cap listed peers such as Apollo Tyres, MRF.

Mar-11 Mar-10 Mar-09
P/E (x) 4.65 4.53 1.41
P/BV (x) 1.09 1.41 0.39
RONW (%) 26.7 36.7 32.3
ROCE (%) 31.1 35.0 32.9
EBITDA (%)    11.1     12.5    13.3

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