Friday, March 9, 2007

Buy premier Exposives.

CMP :-44
Target :-100


Pls read the following points to get more information about the company.

 1. Value unlocking will take place from the Unused Assets of the Mushroom division. Maharaja Brand of Mushroom which is its brand is a well known product throughout India and abroad.
2. The real Estate Value of the company's plants located in Madhya Pradesh, Maharastra and Andhra Pradesh cosidering that Real Estate prices are shooting over the roof specially in Maharastra and Andhra Pradesh. Also Real Estate Value fo its Mushroom firms are huge.

3. The company is into maintenance of Defence Equipments, where the deals are very lucrative and there is less chance of payments to the bills getting blocked like in Private Contracts.
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4. The company's Specialised Product division has started operating and this has to some extent lifted the profits in the December, 2006 quarter.

5. The company has formed a Joint Ventures(JVs) with a number of Overseas firms in coutries where the margin is high. This shrewd policy of the company will give them huge returns in the days ahead.

6. The Company is mainly into domestic selling of Mushrooms and hence less affected by the appreciation of rupee unlike Agro Dutch Industries Ltd which is mainly into exports.

7. Defence allocation of the government in future will only increase to combat domestic insurgencies and also to thwart the attempts of the territoists coming from across the border.

8. Also due to the the rise in Terrorism, throughout the world, the defence budgets of all the countries are set to increase, boosting the sales of Private explosive making companies.

9. The company's main clients are Cement, Mining and Infrastructure Companies, who are booming due to government's increased stress in Infrastructure spendings.

10. Karvy Stock Broking firm which has earlier recommended the stock, with a price target of Rs.80 plus should revise their targets now to Rs.100 plus in view of the wonderful performance of the company in the last quarter, where it is seen that the margins of the company's business is increasing. There are also chance that the company could beat the Karvy's Estimate of Rs.7--8, EPS per shares as traditionally the 3rd and 4th quarters are the strongest for the company. The company has revamped its marketing and Sales division by the introdution of new professionals and this is paying them.


11. Its R & D division has been recognised by the government and is one of the best in the Industry and hence there are very few competitors of the company; as far as new product inititiatives are concerned.


Considering all these I think the stock at the current price of Rs.44, is highly undervalued and has a chance to shoot above Rs.100 in the days to come. If the company is able to sell the Assets of its Mushroom division fast then the price target could be achieved much earlier

Posted by Ayush Jain at Friday, March 09, 2007

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