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Showing posts from September, 2010

Default Strategy for Investment Helps Make Me a Better Investor

For people who invest in the stock markets for the long term, perhaps the most critical point to note is to have a default strategy for action. This is a very overlooked part of investment and forces many otherwise brilliant investors to do foolish things. Most people tend to like action and that is why they buy or sell stocks to get into “action”. This results quite often in either selling good business too early (booking profits to satisfy the “action” bug) or to buy into questionable companies following a “tip” heard on TV(or from a friend). I have the same problem. So, here is what I do to keep myself safe from the “action” bug. I have a default investment strategy. That is whenever I have money and do not have a company that I really want to buy, I buy into either a liquid fund (typically LiquidBees on NSE) or buy into an index fund (again typically NiftyBees on NSE). I chose a liquid fund when I don't have a good company identified and I feel the markets are overvalued. I c…

Balaji Amines - An Interesting Play on Specialty Chemicals

I am in the process of studying Balaji Amines in greater details. Here are some of my thoughts.

From the AR - "Some of your company's new products are 100% import substitutes and other products are commanding 100% market share in India and are being exported to major customers worldwide" .... could not ascertain which specific products they are talking about. Some of company's new products are 100% import substitutes and other products are commanding 100% market share
in India and are being exported to major customers worldwide. Di-methyl amino ethanol (DMAE) plant with a capacity of 10 MT/day was commissioned during the year. This process was developed through in house R & D Team of the company. This is a forward integration project for methyl aminesplant and the product has good demand in the domestic and international markets.To meet the increasing domestic and international demand, new plant for manufacture of GBL and NMP with a capacity of 50 MT/d…

Supreme Industries - Interesting Play on plastics and Real-Estate

Notes from Annual Report 2010

* The company expects to achieve 20%+ volume growth per year in medium term
* No significant change in product wise share of revenue
* Crisil has upgraded the rating outlook from A+Stable to A+Positive
* 1, 3 and 5 year sales growths are: 20%, 17.76% and 18.45% respectively
* 1, 3 and 5 year PAT growths are: 48.6%, 42.39% and 43.66% respectively
* Last 3 years average RoCE is 33%
* Last 3 years average RoE is 34%
* Long term Debt-Equity ratio has reduced from 1.02 to .49. This should reduce even more with the increased sale of the commercial building space.

PLASTIC PIPING SYSTEMS
* India's capacity for PVC resin is 67% of demand. Rest is imported.
* Kanpur plant's capacity to be expanded from 8000 tons p.a to 15000 tons p.a. Plant is to be commissioned by Dec'10
* Newly launched Lifeline CPVC grew more than 120%
* "Aqua Gold" plumbing system for cold water has grown by over 50%. It is successfully replacing GI pipes.
* Expects the renovation marke…