Discounting future revenues at 15%, we get 2030 EPS projection as 327rs/share.
Multiplying this EPS with a pessimistic PE multiple of 30, we get 2030 CMP= 9810, and at a PE multiple of 50, we get CMP= 16,350.
4X to 5X growth from current rates.
Debt/Risk :
Debt in absolute terms is 727cr. To put this in context, this debt is less than 1% of it's current market cap. The company distributes twice of that every year in dividends alone. Debt/Equity ratio gives a deceptively alarmist figure. Treat it as a ZERO debt company.
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Sales, profit margin, EPS, all have recovered to previous glory. CMP's languishing because the crowd is busy chasing momentum in Pharma. Potential turnaround story.
DCF valuation.
2030 projected EPS at 14.6% discount rate= 960rs/share
2030 CMP= 960 x median PE(20): 19,200
Potential risks: Revenues (B2B) come from industrials & automobile sector. Both are cyclical in nature and rely on other cyclical factors like steel prices and interest rates.
All alpha comes from buying at the bottom & riding till tailwinds last. Keep <3% exposure in portfolio.
Don't let the crowd's madness clout your judgment.
At any point, 40% up/down is speculative froth from momentum chasers. On the first -10% correction, the speculators all jump off the ship and the stock falls another 30%. 1-2-3 provides cleaner entry point for real investors.
Fundamentals aside, #3MIndia was available at 15.8k & 23k in a short time span. 46% price difference due to crowd behavior.
21k is still a good price. This will become apparent at 26k. THEN brokerages will invite people giving 29k target celebrating 10% upside.
Some big institutional buyer has punched in a massive buy volume of 55,000 stocks on Dec 1,2, at 21k. He also knows that PE is 144, still he's buying with confidence. And retail investors are busy trying to outsmart destiny by buying cheap stocks because Warren chacha said so.
My Excel sheet based fundamental Analysis of #Kajaria
ZERO trendline/momentum, chart pattern, candle stick mumbo jumbo. Pure fundamentals.
Step 1 : Background checks👇
Step 2 : Sales analysis
Notice how the 'trendline' of sales shows a smooth, steady rise in revenues Y-o-Y, unlike the stock price which is deceptively zigzag, which clouts one's objective judgment.
Step 3 : Profit analysis
Notice how, unlike revenues, profit tends to be slightly more volatile, reason being the fluctuating raw material prices.
One can see why there was a breakout in 2014.
Hint : it wasn't because of "green bullish engulfing candle" or any other candle🤦♂️