To all my readers, it’s time to make merry !! Few of my previous calls have come out with flying colors making new highs on the charts this week. Simran farms(82 peak), Manjushree Technopack (102 peak) & Rama Phosphates(123 peak) are just to name a few. Please do remain invested as these are bound to rise as time passes on.
Now coming back on Liberty Phosphates -----
Business : Contrary to my practice, I am forced to repeat another bigshot fertilizer player – LIBERTY PHOSPATES LIMITED because of it repetitive prolific Q results. Breaking news !! Liberty Phosphates is repeatedly getting listed on “ET 100 fastest growing small companies” in 2009 and now in year 2010 too. With a sound track of over 4 decades, Liberty Phosphates, manufactures of Single Super-phosphate(SSP) and other phosphatic fertilizers seems to be on an expansion zoom with increasing PAN India presence starting new plants in South India. The Group currently has manufacturing capacity of 826000 MT per annum of SSP Fertilizer, 165000 MT per annum of NPK and 5000 MT of Magnesium Sulphate catering to about 18% of the SSP fertilizer demand in the country. The company have production plants at Udaipur & Kota in Rajasthan, Baroda in Gujarat, Pali in Maharashtra, Nimrani in Madhya Pradesh & Hospet in Karnataka. The company markets its SSP under a very strong brand name called “Double Horse”.
Financials : The company is witnessing a complete turnaround this FY. The company posted a trailing EPS of 3.84 with a topline of 204 crores and net Profit of 6.5 crores. The recent Government decision to deregulate non urea fertilizer prices coupled with company’s massive expansion plan has an exponential effect on company’s sales performance. LPL continues to exhibit exponential growth declaring prolific June10 Q results – an EPS of 4 with bottom-line of about 6 crores. The growth story does not stops here, the company in its latest Sept Q results posted an EPS of 5.28 with bottom-line of 7.7 crores. Riding on special attention by Govt. of India to fertilizer industry, this company seems heading for a forward annualized EPS of atleast 20 this FY. At current price of 74 Rs – Liberty Phosphates is available at a PE of less than 4. The stock is a IMMEDIATE BUY!!
Positives – The company has a very strong SHP which has increased from 34% to about 52% in last 6 years – awesome stats !!
- Paid up equity capital has not increased in last 2 years.
- Most of non urea fertilizer stocks (see my recommendation on Rama Phosphates) are on a boom due to Govt. deregulation on non urea fertilizers.
- The company just declared dividend and one can expect a rally in stock price.
Negatives – There are few strong competitors in the organized sector.
Conclusion : The stock is already on a rally and has reached 72-80 levels. Time to RUSH :) to buy LIBERTY PHOSPATE LIMITED at current levels before FII/DII start increasing their stake. Make use of the fertilizer boom cycle, buy this stock to get 250 – 300% returns in 1 yrs time visualizing an EPS of 20+ this FY.
Now coming back on Liberty Phosphates -----
Business : Contrary to my practice, I am forced to repeat another bigshot fertilizer player – LIBERTY PHOSPATES LIMITED because of it repetitive prolific Q results. Breaking news !! Liberty Phosphates is repeatedly getting listed on “ET 100 fastest growing small companies” in 2009 and now in year 2010 too. With a sound track of over 4 decades, Liberty Phosphates, manufactures of Single Super-phosphate(SSP) and other phosphatic fertilizers seems to be on an expansion zoom with increasing PAN India presence starting new plants in South India. The Group currently has manufacturing capacity of 826000 MT per annum of SSP Fertilizer, 165000 MT per annum of NPK and 5000 MT of Magnesium Sulphate catering to about 18% of the SSP fertilizer demand in the country. The company have production plants at Udaipur & Kota in Rajasthan, Baroda in Gujarat, Pali in Maharashtra, Nimrani in Madhya Pradesh & Hospet in Karnataka. The company markets its SSP under a very strong brand name called “Double Horse”.
Financials : The company is witnessing a complete turnaround this FY. The company posted a trailing EPS of 3.84 with a topline of 204 crores and net Profit of 6.5 crores. The recent Government decision to deregulate non urea fertilizer prices coupled with company’s massive expansion plan has an exponential effect on company’s sales performance. LPL continues to exhibit exponential growth declaring prolific June10 Q results – an EPS of 4 with bottom-line of about 6 crores. The growth story does not stops here, the company in its latest Sept Q results posted an EPS of 5.28 with bottom-line of 7.7 crores. Riding on special attention by Govt. of India to fertilizer industry, this company seems heading for a forward annualized EPS of atleast 20 this FY. At current price of 74 Rs – Liberty Phosphates is available at a PE of less than 4. The stock is a IMMEDIATE BUY!!
Positives – The company has a very strong SHP which has increased from 34% to about 52% in last 6 years – awesome stats !!
- Paid up equity capital has not increased in last 2 years.
- Most of non urea fertilizer stocks (see my recommendation on Rama Phosphates) are on a boom due to Govt. deregulation on non urea fertilizers.
- The company just declared dividend and one can expect a rally in stock price.
Negatives – There are few strong competitors in the organized sector.
Conclusion : The stock is already on a rally and has reached 72-80 levels. Time to RUSH :) to buy LIBERTY PHOSPATE LIMITED at current levels before FII/DII start increasing their stake. Make use of the fertilizer boom cycle, buy this stock to get 250 – 300% returns in 1 yrs time visualizing an EPS of 20+ this FY.
you always rock man .......njoy - rupesh
ReplyDeleteGood Work Vivek..I have recently became your follower and bought Liberty Phosphates as per your advise. Now lets just sit tight..!!! :)
ReplyDelete@Analyse : Happy investing dear .... Liberty phosphates will give good returns going forward
ReplyDelete25 % down since I bought it...it is now kind of testing the patience...!!!
ReplyDeleteYes, non urea & complex Fertilizer companies are facing some selling pressure due Govt latest announcement to reduce subsidy by a little under common NBS scheme. I will say to hold for a while guess people are overreacting on the news which only says about marginal reduction in subsidy.
ReplyDeleteYeah Now I am Deep In It....Just buying more at every 5 % fall...the way it is going looks this is heading at 50 or sub 50 levels...so may be Ill buy some more at 50 levels and then stay put. Would have invested quite a bit by then in this ticker..Lets see how this performs in the quarters to come. Heard the management and they are confident that the they will match the half yearly performance in the remaining half year as well...If thats the case then this stock should reach where you have predicted.!!!
ReplyDeleteBy the way totally unrelated, did you get chance to see the new listing BS Transcomm.What are your views about it ?
ReplyDelete