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Monday, April 24, 2017

Mold-Tek Packaging - ROI @ 132% in 2 Years

Dear Reader,

We are pleased to inform you that our Hidden Gem stock of March 2015 - Mold-Tek Packaging Ltd (BSE Code: 533080, NSE Code: MOLDTKPAC) which was released on 22nd Mar'15 is giving as on date returns of 132% to our Hidden Gems members in period of 24 months. Our team suggested Buy on Mold-Tek Packaging Ltd at price of Rs. 109.25 (stock split adjusted price, actual recommended price was Rs. 218.50) on 22 Mar'15 with a target price of Rs. 225 (adjusted target price post stock split, actual target price was Rs. 450). 

Mold-Tek Packaging has already achieved our target price and we informed our members to continue to hold it, stock made its 52 week high of Rs. 258.50 today and closed at Rs. 253.75 giving absolute returns of 132% to our Hidden Gems members in period of 2 years.

In Dec quarter, net profit of Mold-Tek Packaging declined 7.65% to Rs 5.55 crore against Rs 6.01 crore during the previous quarter ended December 2015. Sales rose 0.07% to Rs 67.74 crore in the quarter ended December 2016 as against Rs 67.69 crore during the previous quarter ended December 2015.

Below is the summary of Mold-Tek Packaging Ltd shared by our team under Hidden Gem stock of Mar'15 released on 22nd March 2015.

Note: This report is shared only for the purpose of information and not an investment advice. Kindly carry out your own due diligence in case of investment in Mold-Tek Packaging Ltd. 

1. Company Background:

Mold-Tek Packaging Limited traces its origin to Mold-Tek Plastics Private Limited founded in 1985 by Mr. J Lakshmana Rao and A Subrahmanyam to manufacture rigid plastic packaging materials with units located in Andhra Pradesh. The company was listed in BSE in 1993. Subsequently, in 2000, the promoters also commenced outsourcing services for engineering to overseas clients in the USA and EU and the company was renamed as Mold-Tek Technologies Limited.

Thereafter in 2008, the company underwent a restructuring process, post which two de-merged listed entities were formed - Mold-Tek Plastics Limited (MTPL), engaged in plastic packaging business and Mold-Tek Technologies Limited (MTTL), which is mainly engaged in offering KPO services for Engineering and Design, specializing in civil, structural and mechanical engineering. Subsequently Mold-tek Plastics Limited was renamed as Mold-tek Packaging Limited.

Mold-Tek Packaging Limited is involved in the manufacturing of injection molded containers for lubes, paints food, FMCG and other products. Mold-Tek Packaging Limited is the leader in rigid plastic Packaging in India with 25% market share. Company clientele include Castrol, Exxon, Shell, Valvoline, Gulf, IOCL, HPCL, BPCL, Asian Paints, Kansai Nerolac Paints, Akzonobel (ICI Paints), Amul, Cadbury, Heinz, Hindustan Unilever. Company also exports to UAE, Singapore, Malaysia, Nepal and Bangladesh.

The Company has seven manufacturing units of which four are in Andhra Pradesh (all near Hyderabad), one in Daman, one in Hosur (Tamilnadu) and one in Satara (Maharashtra). The combined production capacity is ~25,000 MT per year with over 63 injection moulding machines (Ferromatik, Toshiba, etc.) Multi-location presence helps company to drive cost efficiency and optimizing logistics.
The Company has four warehouses in Chennai, Hosur, Kolkata and Kanpur and a marketing office in Mumbai.

Mold-Tek Product Range
  • 100ml to 5ltrs Thin wall containers
  • Injection Molded, 750ml to 75ltrs plastic pails (with in-mould or external spouts), for packing lubes, greases, chemicals, paints, Bulk Drugs, Inks, Synthetic Adhesives
  • 35, 50 & 75 liters bulk packs for chemicals, agro and other applications
PAINTS: 1 kg to 25 kg packs for Paints & Emulsions
LUBES: 1/2 ltre to 25 litre for Lubes and Grease packs
FOOD & FMCG: 100 ml to 1000 ml thin wall containers

Strong Clientele from Oil, Paint, FMCG and Food Sector:

In Mold Labeling (IML) – World Best Technique

Mold-Tek Packaging developed In Mold Labeling (IML) decorated packaging for the first time in India. In a growing sector like packaging, IML decoration would be the first choice to improve product`s brand image. IML decorated thin wall containers are suitable for storage conditions like microwave, dishwasher and the deep freeze and are used for food and FMCG products world over.
The advantages of IML over traditional decoration include:
  • IML offers outstanding quality decoration, and picture quality.
  • Photographic quality and complete container coverage.
  • The IML operations are hands free as handling is done by ROBOTS. Thereby the packaging is hygienic for D2F (Direct to fill) operations.
  • IML can assist in improving the barrier properties to extend the shelf life of the filled goods.
  • The label becomes an integral part of the pail and offers a no-label look. It offers better heat, moisture and chemical resistance.
Mold-Tek offers integrated cost-effective In Mold Labeling (IML) solution with in house label manufacturing and die-cutting machines to enable quick production:
  • Lower prices for IML decoration complying with international standards
  • Quick delivery, customizability and maintenance
  • No chance of a stock out situation due to in house labels/mould maintenance
Production Process for In-Mold Packaging

In-Mould Labeling (IML) eliminates the cumbersome decoration step by clubbing it with the production of pail. This results in better efficiencies (50% better lead time) and adherence to container.

2. Recent Developments: (as on 22 Mar'15)

i) Shares of Mold-Tek Packaging lists on NSE – 19th Feb 2015

Mold-Tek Packaging informed that the Company, vide circular dated 19 February 2015 has received an approval from National Stock Exchange of India for listing the securities on National Stock Exchange and commencement of trading with the effect from 23 February 2015.

Listing in National Stock Exchange is a good move as it will increase trading volumes and allow Investors to do transaction in both the exchanges.India has a large textile manufacturing base and has the potential to become a leading producer and exporter of nonwoven products. The cooperation between fibre suppliers and nonwoven fibre producers is an important factor for the growth of the industry.

ii) Mold-Tek Packaging allots 24,98,350 equity shares – 03 Feb 2015

Mold-Tek Packaging informed that in respect of the QIP, the QIP Committee of the Company has at its meeting held on 03 February 2015, inter alia, approved the following.
  • Closure of the QIP on 03 February 2015;
  • Adopted the Placement Document ("PD") dated 03 February 2015 in connection with the QIP;
  • Company has issued 24,98,350 equity shares of Rs. l0/- each to QIBs pursuant to Qualified Institutional Placement at issue price of Rs. 220.17 /- per share.
Company has raised Rs. 55 crores by issuing 24,98,350 equity shares at price of Rs. 220.17 per share through QIP. This will be used by Company to set up new plants in the United Arab Emirates and two plants in India apart from expanding the existing tool room, FMCG and food packaging capacities.\

iii) In Mould Labeling (IML) Segment to Drive Future Growth

Company’s in-house manufacturing of labels and robots considerably reduces the IML costs, hence will lead to improvement in EBIDTA margins. Most of the clients of the company started shifting to IML decorated pails from traditional silk screen printing.

As IML offers photographic finish and hands free operation, most of the paint, lube and food companies are gradually shifting to IML. This enables Mold-Tek to lead from the front, as it is way ahead of the rest of the competition in IML decoration in India.
Currently, IML Pails and IML Food contribute only 25% and 4% of total sales and have registered strong growth in last one year. Company’s revenue from IML & IML Food segment is gradually increasing which is a good sign as IML segment have higher EBITA margins. Contribution from IML is expected to improve significantly in future.

3. Financial Performance: (as on 22 Mar'15)

Mold-Tek Packaging standalone net profit rises 74.80% in the Dec 2014 quarter

Net profit of Mold-Tek Packaging rose 74.80% to Rs 43.7 million in the quarter ended December 2014 as against Rs 25.0 million during the previous quarter ended December 2013. Sales rose 13.45% to Rs 719.3 million in the quarter ended December 2014 as against Rs 634.0 million during the previous quarter ended December 2013.

Mold-Tek Packaging standalone net profit rises 72.62% in the Sept 2014 quarter

Net profit of Mold-Tek Packaging rose 72.62% to Rs 45.4 million in the quarter ended September 2014 as against Rs 26.3 million during the previous quarter ended September 2013. Sales rose 20.02% to Rs 791.2 million in the quarter ended September 2014 as against Rs 659.2 million during the previous quarter ended September 2013

With ongoing expansion, we believe Mold-tek stands out to be the leading player to capture the rising demand of rigid plastic usages in the organised retail space. Moreover, increased thrust on In-Mold Labeling (IML) will help company to improve its profit margins by offering value added products to various clients from different sectors. 

Company is setting up new IML plants in UAE and Gwalior to meet growing demand of its products. Company has also expanded its tool room and IMP thin wall container facility at Hyderabad.

4. Peer Group Comparison:
5. Key Concerns & Risks:

i) The company’s capacity addition has come with rising debt levels and debt-equity ratio stood at 1.4 times. Fall in demand of company’s products offering can adversely impact the profitability of the company.

ii) Low rupee value augurs well for focusing on exports mainly to nearly countries like Middle East. Company is exporting its products to UAE, Singapore, Malaysia, Nepal and Bangladesh. The Company is adding new robots manufactured in-house to enhance capacity to meet the growing demand for IML products. Appreciation in rupee may have negative impact on exports of the company.

iii) Rising cost of capital equipment is also a concern for the company. Company needs to make huge investments towards latest technology / machinery to remain ahead of competition. Rapid advances in other packaging products can adversely impact the performance of the company.

iv) As Packaging Industry is a highly fragmented with lot many unorganized players, retaining qualified and skilled manpower is a challenge.

6. Saral Gyan Recommendation: (as on 22 Mar'15)

i) Per Capital consumption of Plastic in India is 9.5 Kg which is much below compared to developed countries like US, Europe, China and Brazil. Plastic Industry in India grew by 15 percent annually, however flexible packaging growth was at 18 percent which is expected to grow at faster pace with increase in per capita consumption in India and rising exports. According to the Indian Institute of Packaging, the packaging industry in India (pegged at around Rs 170,000 crore) is the 6th largest in the world, and is expected to grow by 12% over next 4-5 years. With unorganized players making up 85% of the industry, it is highly fragmented and localised. But there’s plenty of room to grow in a country where per capita consumption of packaging is significantly low compared to other countries

ii) Indian plastics exports have grown at a rate of 20% since 2007-08. India is one of the most promising exporters of plastics among developing countries. The Indian plastics industry produces and exports a wide range of raw materials. With low rupee value, Mold-Tek started focusing on exports mainly to nearby countries in Middle East

iii) Company’s EBITDA and PAT margins are expected to increase significantly with entry into high value added products. Company has achieved revenue CAGR of 20% with ROE of 21.4% over period of last 5 years.
Total Debt to Equity ratio is 1.4 which is on higher side. However, Company is going through aggressive expansion plan to increase its capacity for In-Mold Labeling and expected to deliver strong revenue growth, hence it’s a concern only in short term

iv) Mold-Tek Packaging is the only company with integrated facilities for manufacturing In-Mold labeled containers and is India’s fastest growing packaging company with CAGR of 20%. To meet increasing demand and to tap opportunities in other consumer segments, company is about to set manufacturing units in UAE, Andhra Pradesh and North India. Company has already raised 55 Crores through QIP route and is working towards capacity expansion to cater the growing demand during next 2-3 years.

v) Mold-Tek is taking all necessary steps to increase product offerings by expanding its product range. Company offers Food & FMCG packaging solutions with superior technology, in house tool room, robots, hot runner and IML labels. Mold-Tek is a dominant player with strong clientele which include companies like Castrol, Heinz, Asian Paints, ICI Paints, HUL, ITC, Cadbury, Indian Oil, British Petroleum etc.

vi) Management has rewarded shareholders by paying consistent dividend since last 7 years. Company has been maintaining a healthy dividend payout above 27% during last 5 years, dividend yield at current market price is 1.4%. With expected increase in revenue and profitability in coming quarters, we believe company dividend payout will increase going forward.
vii) As per our estimates, Mold-Tek Packaging Ltd can deliver bottom line of 255.4 million for full financial year 2016, annualized EPS of Rs. 18.4. With forward P/E ratio of 11.9X for FY16, valuations look attractive for a company which is expected to deliver strong revenue growth with increase in profit margins.

viii) On equity of Rs. 138.4 million, the estimated annualized EPS for FY 15-16 works out to Rs. 18.4 and the Book Value per share is Rs. 86.9. At current market price of Rs. 218.50, stock price to book value is 2.5.

Considering company’s aggressive expansion plans, focus towards high margin IML segment and recent allotment of equity shares to QIBs above current market price, Saral Gyan team recommends “Buy” on Mold-Tek Packaging Ltd at price of Rs. 218.50 for target of Rs. 450 over a period of 12 to 24 months.

Buying Strategy:
  • 80% at current market price of 218.50
  • 20% at price range of 180-200 (in case of correction in stock price in near term)
Portfolio Allocation: 4% of your equity portfolio.

To Read / Download Saral Gyan Hidden Gem - Mar'15 Research Report - Click Here

An opportunity missed an opportunity lost. If you have patience and want to add extra power in your portfolio, start investing some portion of your savings in fundamentally strong small and mid cap companies - Hidden Gems & Value Picks.

The stocks we reveal through Hidden Gems & Value Picks are companies that either under-researched or not covered by other stock brokers and research firms. We keep on updating our members on our past recommendation suggesting them whether to hold / buy or sell stocks on the basis of company's performance and future outlook.

Add power to your equity portfolio by investing in best of small & mid cap stocks - Hidden Gems & Value PicksIts our mission to ensure that you reap the best returns on your investment, our objective is not only to grow your investments at a healthy rate but also to protect your capital during market downturns. Avail attractive discounts by subscribing to our combo packsclick here for details.

Do contact us in case of any queries, we will be delighted to assist you.

Wish you happy & safe Investing. 

Team - Saral Gyan

Monday, April 17, 2017

Peter Lynch: Making Money by Investing in "Fast Growers"

“The investor of today does not profit from yesterday’s growth.” Warren Buffett

Most of us have relatives who like to fashion themselves as ‘stock-gurus’, with their stories revolving around how they ‘could have been’ millionaires now, if only they had held their nerves. The stock that comes up frequently in these conversations is Infosys. If you had invested Rs. 9,500 to buy 100 shares of Infosys in the IPO (that went undersubscribed in 1993), 51,200 shares (adjusted for bonus issues) worth sum of Rs. 4,73,54,880 would be in your kitty.

Infy has given CAGR returns of whopping 42.6% to investors during last 24 years (that too after keeping dividend payouts aside). Infosys got listed in June 1993 at price of Rs. 145 per share and investment of Rs. 9,500 in June 1993 is valued at 4.74 crores today. But, is Infosys still the key to riches? As often repeated, past performance is no guarantee of future results. So, how does one find out the next ‘Infy’?

A Fast Grower is a small yet aggressive & nimble firm, which grows roughly at 20-25% a year. This is an investment category which can give investors a return of 10 to as much as 200 times the investment made by them. No doubt, it remains a favourite of Peter Lynch!

In 1950s, the Utility & Power Sector were the fast growers with twice the growth rates to that of the US GDP. As people got more power-hungry gadgets for themselves, the power bills ran through the roof & the power sector surged with booming demand. Post the Oil Shock in 70’s, cost of power generation became high with power tariffs going up; people learnt to conserve electricity. Demand, thus, fell and power sector witnessed a slowdown. Prior to it, similar decline was observed in the Steel Sector & Railroads. First, it was the Automobile Sector, and then the Steel, followed by Chemicals & Power Utility & now the IT Sector is showing signs of slowing down. Every time, people thought, rally in the fast growers of the age would never end, but it did end, with people losing money as well as their jobs. Those who thought differently like Walter Chrysler (founder of Chrysler Corporation), who took a pay cut and left the railroads to build new cars in the turn of the last century, became the next millionaires.

Three phases involved in their life cycles, are:

1. The Start-Up Phase: Majority of the companies either burn up all the cash or run out of ideas by the end of this phase. Maximum casualties have been observed here, making it one of the riskiest phases. However, maximum returns can be made from them, if one enters near the end of this phase.

2. Rapid Expansion Phase: The Company’s core proposition has worked now, with the strategy being replicated by expansion of product/service portfolio or consumer touch points.

3. Mature Phase: Growth slows down, either due to high debt or low cash, owing to the massive expansion witnessed in early stage. Fall in demand or legal restrictions might also contribute to faltering growth.

The trick is to track, which phase the organization is in, at the moment. If the firm is in late start-up phase with possibility of moving to rapid expansion phase, buy the stock when it is still cheap. Once firm’s earnings start falling with its products witnessing poor demand, it’s time to bid goodbye to the stock.

The key parameters involved in Peter Lynch’s ‘two minute drill’ are:

1. P/E Ratio: avoid stocks with excessively high P/E
2. Debt/Equity Ratio: should be low
3. Net Cash per Share: should be high
4. Dividend & Payout Ratio: should be adequate
5. Inventory levels: lower the better

Stay away from companies which are being actively tracked, followed & invested in by large institutional investors. News about buy back of shares or internal stakeholders increasing their stakes should be construed as positive.

Checks specific to Fast Growers:

1. The star product forms a majority of the company’s business.
2. Company’s success in more than one places to prove that expansion will work.
3. Still opportunity for penetration.
4. Stock is selling at its P/E ratio or near the growth rate.
5. Expansion is speeding up Or stable

One must judiciously walk the tightrope between the unquestioning belief that made the stock to be held for so long and the fear of the end from nose-diving prices due to a one-off bad year. The key is to always keep revisiting the story & ask some pertinent questions like ‘What would really keep them growing?’, ‘What is their next offering? or ‘Are their products & services still in vogue?’ It is here, that one must track the point of time when the phase 2 of the firm’s expansion comes to an end. This is usually the dead-end for organizations as success is difficult to be replicated. Unless, innovation happens, downfall is imminent & thus, an exit is necessary. P/E of these stocks is drummed up to unrealistically high levels by the madness of crowd towards the end. One must keep one’s eyes & ears open to signs, which mark the end of the road for these fast growers. A great case in point is Polaroid which had its P/E bid up to 50, only to be rendered obsolete later by new technologies.

A sure shot sign of a decline is a company which is everywhere! Such a company would simply find no place to expand any further. Sooner, rather than later, such a company would see its ‘Manhattans’ of earnings reduced to ‘plateaus’ of little or no growth, simply because no space is left to expand further.

1.The quarterly sales decline for existing stores.
2. New stores opening, though results are disappointing: weakening demand, over supply.
3. High level of attrition at the top level.
4. Company pitching heavily to institutional investors talking about what Peter Lynch calls ‘diversification’.
5. Stock trading at a P/E of 30 or more, when most optimistic estimates of earning growth are lower than 15-20%, thus, unable to justify the high price.

Fast Growers, which pay, are ephemeral & one misses them more often than not. It is a High Risk & High Gain Category of Stocks. One must remember along the classic risk & return principle, that when one loses, one loses big! So, if you are in the quest for magnificent returns, a Fast Grower can be your bet provided you know when to bid Goodbye!

If you feel its difficult for you to identify Fast Growers stocks at early stage, you can subscribe to our Hidden Gems and Value Picks subscription services. We put best of our efforts to identify companies having potential to give exponential returns in medium to long term. Its our mission to ensure that you reap the best returns on your investment, our objective is not only to grow your investments at a healthy rate but also to protect your capital during market downturns. 

If you have patience and want to add extra power in your portfolio, start investing some portion of your savings in fundamentally strong small and mid cap companies - Hidden Gems & Value Picks.

Subscribe to Hidden Gems & Value Picks and start investing systematically. Avail attractive discounts by subscribing to our combo packsclick here for details.

Do contact us in case of any queries, we will be delighted to assist you.

Wish you happy & safe Investing. 

Team - Saral Gyan

Saturday, April 15, 2017

Grab our eBook - How to Grow your Savings? for Free!

A complete guide to help you ensure, you get the best returns on your investments from equities.

This e-book will provide you important & relevant information supported by facts & figures to help you grow your savings by investing in stocks to succeed:

Key Mantra’s:

1. Adopt discipline approach for Savings
2. Find out the ways to get passive income
3. Set your financial goals & start Investing
4. Do invest in equities for long term

Getting the most out of this book is simple, “How to Grow your Savings?” requires practical approach. Execute your learning experience in your day to day life by managing your finances effectively and achieve your long term goals.

Traditionally, Indians are Savers. The savings rate is as high as 30 percent. If not a direct savings in the bank, the money goes into a fixed deposit, gold or real estate. That trend might change soon if more people invest in stocks, which have outperformed every other asset class from 2001 to 2007.

Stocks have outperformed other asset classes by as much as 60 percent, yet only 3 percent of Indian population directly invests in stocks.

The main reasons for this is a lack of knowledge, awareness as well as unethical practices by a small minority of participants who encourage regular churning based on tips and rumours without giving proper financial planning to investors.

If someone invested in a Bank of India fixed deposit account in 2001, he or she would have an 8 percent return per year. If the same person invested in Bank of India stock he or she would have a total return of 4,800 percent as the stock rose from 12 rupees to all time high of 588 rupees in 2010.

Though Indians continue to be underinvested in the stock market there is more interest coming in from all corners. 200,000 new demat accounts are opened every month. Recent transparency measures should also bring more people in. The stock market will no longer be treated as a gamble but will be put on par with real estate and gold.

The irony is that even though stock markets as a long term asset class have given the highest returns, short term trading in futures and options has also caused the maximum losses. The maximum numbers of bankruptcies were caused due to the stock market crash in 2008-2009 amongst high risk speculative traders.

Power of Investing in Equity Market

Now, Just Imagine...

How much can you make in 36 years by just investing Rs.10,000 initially in any of financial instruments?

Take a wild guess?

Let us look at the real example.

If you have subscribed for 100 shares of "X" company with a face value of Rs. 100 in 1980.

• In 1981 company declared 1:1 bonus = you have 200 shares
• In 1985 company declared 1:1 bonus = you have 400 shares
• In 1986 company split the share to Rs. 10 = you have 4,000 shares
• In 1987 company declared 1:1 bonus = you have 8,000 shares
• In 1989 company declared 1:1 bonus = you have 16,000 shares
• In 1992 company declared 1:1 bonus = you have 32,000 shares
• In 1995 company declared 1:1 bonus = you have 64,000 shares
• In 1997 company declared 1:2 bonus = you have 1,92,000 shares
• In 1999 company split the share to Rs. 2 = you have 9,60,000 shares
• In 2004 company declared 1:2 bonus = you have 28,80,000 shares
• In 2005 company declared 1:1 bonus = you have 57,60,000 shares
• In 2010 company declared 3:2 bonus = you have 96,00,000 shares

In 2010, you have whopping 9.6 million shares of the company.

Any guess about the company?

(Hint: It’s an Indian IT Company)

Any guess about the present valuation of Rs. 10,000 invested in 1980?

The company which has made fortune of millions is "WIPRO" with present valuation of ~475 crores (excluding dividend payments) for Rs. 10,000 invested in 1980.

Unbelievable, isn’t it? But it’s a Fact! Investing in companies with good fundamentals and proven track record can give far superior returns compared to any other asset class (real estate, precious metals, bonds etc) in a long run.

Will Wipro provide similar returns in next 37 years? Probably not, it’s already an IT giant.

You need to explore companies in small and mid cap space with good track record and stay invested to create wealth in a long term. 

Let's take another example of little known company - Mayur Uniquoters. 

Mayur Uniquoters which we recommended 5 years back is a 7-Bagger stock for our Hidden Gems members. We recommended Buy on Mayur Uniquoter on 31 March 2012 at price of Rs. 56 (adjusted price after 2 bonus issues and stock split in last 5 years, actual recommended price was Rs. 448) and today it’s at Rs. 382 giving absolute returns of 582%. However, we missed to buy it early. You might be surprised to know that Mayur Uniquoter is a 127-Bagger stock for investors who invested in it 7 years back. Investment of Rs. 1 lakh in Mayur Uniquoters in Jan 2009 is valued at Rs. 1 Crores and 27 lakhs today. Mind boggling, isn't it? Company has posted strong growth YoY and rewarded share holders in big way, Company was trading at Rs. 3 (bonus issues and split adjusted price) with market cap of merely 13 crores in Jan 2009, today market cap of the company is 1,749 crores.

Mayur Uniquoters is still a great value stock considering its consistent performance and leadership position in artificial leather industry and robust demand for its products by esteemed clients from auto and footwear industry.

It is a garden out there and one need to simply provide sufficient time to grow his quality seeds to get the fruits. One has to know what he is doing and has to be cognizant about it. With a little research and patience stock market investments can yield maximum returns.

So, how will you grow your savings? What are you investing in?

Read complete e-book "How to Grow your Savings?", its not only a must read for beginners but also for experienced investors. "How to Grow your Savings" will definitely help you to get an edge over others by understanding the basic of investments and importance of equities in a long run to generate income and create wealth. 

Below are the chapters covered in "How to grow your Savings?"

  • Inflation
  • Past & Future Value of Money
  • Income Expenditure Ratio 
  • Passive Income 
  • Tips & Tricks to Save Money 
  • Saving Strategies
  • Difference between Saving & Investing
  • Understanding Your Assets
  • Investing in Different Asset class
  • Pay Off Your Debt or Invest
  • Power of Compounding 
  • Benefits of Long Term Investing
  • 10 Key Investing Mantra’s
  • Financial Planning 
  • Managing your Finances 
  • Making your own Investment Plan 
  • Your Investment Profile & Risk Tolerance
  • Investing in Equities
  • Investing in Bull & Bear Market
  • Invest in Individual Stock or Mutual Fund
  • Creating a Stock Portfolio
  • Investment Portfolio Mistakes to Avoid
  • Importance of Stock Diversification
  • Investing for Growth, Yield & Income
  • Facts & Benefits of Investing in Small Companies
  • Investing Risks Vs Rewards
  • Understanding Stock Market Risks
  • Different Type of Investing Risks
  • Managing Investment Risks
  • The Bulls, The Bears & The Farm
  • Stock Investing & The Age Factor
  • Don’t Count on Stocks for Short Term Goals
  • Characteristics of Successful Investors
  • Don’t try to Time Bottom of Stock Market
  • Investing in Stocks for Regular Income & Long Term Growth
  • Investing Checklist – 10 Most Important Element
Saral Gyan's 88 pages e-book is priced at Rs. 599 ($ 11.99) only. Click here to purchase it online.

Wait! You can grab it for free, simply subscribe to Hidden Gems, Value Picks or Wealth-Builder annual subscription service and get it without any additional cost. Click here to know about our services and discounts applicable on our combo packs.

So what are you waiting for? Make educated investment decisions by investing in high quality small and mid cap stocks with strong fundamentals.

Also Read: 10 Basic Principles of Stock Market Investing!

Do write to us in case of any queries, we will be delighted to assist you.

Wish you happy & safe Investing.

Team - Saral Gyan

Friday, April 14, 2017

Building A Long Term Mutual Rewarding Association!

Dear Reader,

Since 2010, Saral Gyan team has successfully published hundreds of articles providing insight to equity market and today cherish association of more than 35,000 members. Articles published on our website received lot of appreciation as it not only helped our readers to know the basics before investing in equities but also guided them to make educated and smart investment decisions based on facts.

During past 6 years, we launched suitable services to help Investors to create wealth by investing in Indian stock market. Its appreciation and support of our readers that one of our most admired service - Hidden Gems ranks on top not only in performance but also on Google search engine. Try it out yourself by searching "Hidden Gem Stocks" or "Multibagger Small Cap Stocks" on Google, you will find our website featuring on top in search results. Its your appreciation and word of mouth publicity which make our website featuring on 1st position in Google.

That's not all, our other services i.e. Wealth-Builder, Value Picks and 15% @ 90 Days have also given much better returns compared to major indices year on year.

Below are the details of our services:

1. Hidden Gems (Unexplored Multibagger Small Cap Stocks): Based on fundamental analysis, our equity analysts release one Hidden Gem research report every month with buy recommendation and share it with all Hidden Gems members. Stock finalized as Hidden Gem belongs to small / micro caps space with market cap of less than 500 Crores, expected returns from Hidden Gems is above 100% in period of 12 - 24 months. Once target is achieved, we inform our members whether they should continue to hold the stock or need to do partial / full profit booking. If fundamentals are intact and valuations are reasonable, we suggest to continue to hold the stock for multibagger returns in long term. Annual subscription charge of Hidden Gems is INR 10,000 under which you will receive total 12 Hidden Gems research reports (one on monthly basis). Click here to read more about Hidden Gems.

Performance Update - Hidden Gems 2016 Vs Small Cap Index

2. Value Picks (Mid Caps with Plenty of Upside Potential): Our equity analysts team consider Warren Buffet approach to short list stocks from mid cap segment as Value Picks. Market cap of Value Pick will range from 1000 crores to 10,000 crores. Holding period of Value Picks is 12 - 24 months and one can expect returns of 40-50%. Annual subscription charge of Value Picks is INR 6,000 under which you will receive total 12 Value Picks research reports (one on monthly basis). Click here to read more about Value Picks.

Performance Update - Value Picks 2016 Vs Small Cap Index

3. 15% @ 90 Days (Buy to Sell Stocks for Short Term Gain): Based on technical analysis, our team recommends one stock every month to our members. It’s a short term call under which you can expect returns of 15% within period of 90 Days. Annual subscription charge of 15% @ 90 Days is INR 4,000 under which you will receive 12 stock recommendations. We suggest lower allocation in 15% @ 90 Days stocks and higher allocation in Hidden Gems and Value Picks which are our portfolio stocks based on fundamental analysis.​ 15% @ 90 Days stocks recommendations are based on buy to sell and gain strategy, hence we suggest our members to book complete profits once target is achieved and exit in case target is not achieved or stock has broken its 2nd support level as per report. Click here to read more about 15% @ 90 Days.

Performance Update - 15% @ 90 Days Stocks 2016

4. Wealth-Builder (An Offline Portfolio Management Service): Wealth-Builder is our model portfolio of Rs. 10 lakhs and currently we are holding 16 stocks in our portfolio. We suggest higher allocation in our Wealth-Builder stocks which includes best of our Hidden Gems and Value Picks released during last couple of years. Our team suggest all our Wealth-Builder members to invest in the stocks which are part of our Wealth-Builder portfolio. Every month our team updates our Wealth-Builder members which stocks they need to buy / sell / hold with % allocation of these stocks in their portfolio, the suggested changes need to be replicated in the same proportion. Annual subscription charge of Wealth-Builder is INR 20,000 under which you will receive total 12-18 portfolio updates. We also review existing equity portfolio of our members and advise them which stocks to hold and which to exit based of fundamental analysis under Wealth-Builder service. Our Wealth-Builder service is suitable for those investors who have an existing portfolio of at least 2 to 3 lakhs or planning to invest similar amount or more in equity market. Click here to read more about Wealth-Builder.

Performance Update - Wealth-Builder Portfolio since 1st Jan 2013

We believe, investing in Wealth-Builder portfolio with regular portfolio review from our end can help you achieve market beating, very good returns over a longer team and help you take care of yourself and your family needs, which ultimately lead to a healthy and wealthy life after retirement.

Now you can add power to your equity portfolio by investing in best of small & mid cap stocks - Hidden Gems & Value PicksThe stocks we reveal through Hidden Gems & Value Picks are companies that either under-researched or not covered by other stock brokers and research firms. We keep on updating our members on our past recommendation suggesting them whether to hold / buy or sell stocks on the basis of company's performance and future outlook.

Subscribe to our services and start investing systematically, you can a
vail attractive discounts by subscribing to our combo packs. Below are the details of our annual subscription charges, simply click on SUBSCRIBE! link to subscribe to our services online using debit / credit card or net banking facility.

Hidden Gems
Rs. 10,000
Value Picks
Rs. 6,000
15% @ 90 Days
Rs. 4,000
Rs. 20,000
Combo 1: HG + VP + WB + 15%
Rs. 32,000
Combo 2: HG + VP + 15%
Rs. 16,000
Combo 3: HG + VP
Rs. 14,000
Combo 4: HG + 15%
Rs. 12,000
Combo 5: VP + 15%
Rs. 9,000

In case if you are not comfortable in subscribing online, you can make the payment through cheque / cash deposit / NEFT transfer in any of our bank and writing back to us sharing transaction details. Click here for bank details.

Do contact us in case of any queries, we will be delighted to assist you.

Wish you happy & safe Investing. 

Team - Saral Gyan

Wednesday, April 12, 2017

Multibagger Stocks - Hidden Gems Vs Small Cap Index

Investing in High Quality Small & Mid Caps with Strong Fundamentals 

On 3rd January, 2005, Hawkins Cooker had a market cap of Rs 18 crore and its stock was at Rs 33.25. Today, on 12th Apr'17 the stock price is at Rs 3055 and the company's market cap is Rs 1,615 crore. Rs 1 lakh invested in Hawkins Cooker in Jan 2005 is valued at more than Rs. 90 lakhs today.

Lets take another example of little known company Camlin Fine Sciences which is our 15-Bagger stock as on date. We recommended this stock 6 years back at price of Rs. 6.05 (adjusted price after 2 stock splits in last 6 years, actual recommended price was Rs. 60.50) and today it’s at Rs. 95.75 giving absolute returns of 1483%. That's too excluding dividend payouts. Mind boggling, isn't it? It's a fact! Company has posted strong growth YoY and rewarded share holders in big way in last 6 years.

Do you own such stocks which can give you similar returns in future?

The number of small-cap stocks is large and finding a quality stock that can give high returns over a long period is tough even for equity analysts. One reason is that such stocks usually have a short history and are not tracked by many analysts and brokerage houses. Then there are risks such as low liquidity, governance concerns and competition from larger players.

Scores of once small companies have over the years grown big, giving investors a 30-50 per cent annual return over 10-15 years and creating fortunes for investors. However, more often than not, we find ourselves at the wrong side of the fence and regret our inability to spot such stocks on time.

If these factors scare you but you still want to gain from the upside potential of such stocks, Saral Gyan Hidden Gems and Value Picks is an ideal choice for you.

It’s a fact that 40 Hidden Gems out of 64 released by our equity analysts in last 6 years (till Dec'16) have given more than 100% returns.

Buying Strategy for Small Caps

1. Go for companies with low debt ratio (preferably less than one)

2. A high interest coverage ratio (above 3x) and a high return on equity are big advantages

3. Avoid companies with huge liabilities in the form of foreign currency convertible bonds / external commercial borrowings

4. Look at the quality of the management, its governance standards and how investor-friendly the company is.

5. Mid-cap and small-cap companies can be future market leaders, so be patient with your investments

Those who wish to invest in small-cap stocks should do so only if they have a long investment horizon and tolerance for volatility. Small-cap stocks suffer the steepest falls in a bear market and rise the most in a bull market. An investor should stay invested for at least three-five years to allow their portfolio to gain from at least one bull run.

Benefits of Investing in Small Caps

1. Huge growth potential: The first and the most important advantage that a small cap stock gives you is their high growth potential. Since these are small companies they have great scope to rise as opposed to already large companies.

2. Low Valuations: Usually small cap stocks are available at lower valuations compared to mid & large caps. Hence, if you invest in good small cap companies at initial stage and wait for couple of years,  you will see price appreciation not only because of growth in top line and bottom line but also due to rerating which happens with increase in market capital of the company.

3. Early Entrance Advantage: Most of the fund house and institutions do not own small caps with low market cap due to less liquidity which make it difficult for them to own sufficient no. of shares. This gives retail investors an opportunity to be an early entrant to accumulate such companies shares. When company grows in market cap by delivering consistent growth and becomes more liquid, entry of fund houses and institutions push the share prices up giving maximum gains to early entrants.  

4. Under–Researched: Small cap stocks are often given the least attention by the analysts who are more interested in the large companies. Hence, they are often under - recognized and could be under-priced thus giving the investor the opportunity to benefit from these low prices.

5. Emerging Sectors: In a developing economy where there are several new business models and sectors emerging, the opportunity to pick new leaders can be hugely beneficial. Also the disruptive models in the new age is leading to more churn and faster growth amongst the nimble footed smaller companies.

Concerns while Investing in Small Caps

1. Risk: The first and the most important disadvantage a small cap stock is the high level of risk it exposes an investor to. If a small cap company has the potential to rise quickly, it even has the potential to fall. Owing to its small size, it may not be able to sustain itself thereby leading the investor into great loses. After all, the bigger the company, the harder it is for it to fall.

2. Volatility: Small cap stocks are also more volatile as compared to large cap stocks. This is mainly because they have limited reserves against hard times. Also, it in the event of an economic crisis or any change in the company administration could lead to investors dis-investing thereby leading to a fall in prices.

3. Liquidity: Since investing in small cap stocks is mainly a decision depending upon one’s ability to undertake risk, a small cap stock can often become illiquid. Hence, one should not depend upon them for an important life goal.

4. Lack of information: As opposed to a large cap company, the analysts do not spend enough time studying the small cap companies. Hence, there isn’t enough information available to the investor so that he can study the company and decide about it future prospects.

Saral Gyan team do take care of above concerns by doing in-depth research and analysis of small cap companies before releasing Hidden Gems research reports with buy recommendation.

Let us evaluate the performance of Hidden Gems stocks of 2014, 2015 and 2016 compared to BSE small cap index.

Hidden Gems Stocks 2014 Vs Small Cap Index:
As illustrated in the table above, average returns of Hidden Gems stocks released in 2014 is 192.7% compared to small cap index average returns of 63.5%. As on date, Hidden Gems stocks of 2014 are outperforming small cap index by whopping 129.2%.

Total 8 Hidden Gems stocks out of 11 released in 2014 have already achieved their target price giving more than 100% returns to our members in period of 6 months to 2 years.

Hidden Gems Stocks 2015 Vs Small Cap Index:
Total 7 stocks of 2015 have already achieved their target price. As illustrated in the table above, average returns of our Hidden Gems stocks released in 2015 is 94.8% compared to average returns of 32% of small cap index, out performance of 62.8%.

Hidden Gems Stocks 2016 Vs Small Cap Index:
Our Hidden Gems stocks of 2016 have also outperformed small cap index. Average returns of our Hidden Gems 2016 stocks is 55.5% compared to small cap index average returns of 29.2%, out performance of 26.3%.

And that's not all! We have a strong history of exploring multibagger micro and small cap stocks. It gives us immense pleasure to share that 40 out of 64 Hidden Gems stocks released in last 6 years (till Dec'16) have given returns above 100%. Moreover, 30 out of these 40 Hidden Gems stocks have given returns in the range of 200% to 1900%.

As we made most of these reports public, you can access read / download our research reports by clicking on the Read / Download link:

1. SAB TV NETWORK >>> Rec. Date: 05 Sep'10 >>> ROI: 890% >>> Read / Download

2. DE NORA >>> Rec. Date: 07 Nov'10 >>> ROI: 263% >>> Read / Download

3. CAMLIN FINE >>> Rec. Date: 27 Mar'11 >>> ROI: 1482% >>> Read / Download

4. WIM PLAST >>> Rec. Date: 30 Aug'11 >>> ROI: 1387% >>> Read / Download

5. KOVAI MEDICAL >>> Rec. Date: 27 Oct'11 >>> ROI: 1109% >>> Read / Download

6. CERA SANITARY >>> Rec. Date: 24 Dec'11 >>> ROI: 1720% >>> Read / Download

7. SUPERHOUSE >>> Rec. Date: 29 Feb'12 >>> ROI: 205% >>> Read / Download

8. MAYUR UNIQ. >>> Rec. Date: 31 Mar'12 >>> ROI: 588% >>> Read / Download

9. PREMIER EXPLO. >>> Rec. Date: 22 Jul'12 >>> ROI: 431% >>> Read / Download

10. ROTO PUMPS >>> Rec. Date: 05 Aug'12 >>> ROI: 206% >>> Read / Download

11. TIDE WATER OIL >>> Rec. Date: 30 Oct'12 >>> ROI: 217% >>> Read / Download

12. ACRYSIL >>> Rec. Date: 25 Nov'12 >>> ROI: 400% >>> Read / Download

13. BAMBINO AGRO >>> Rec. Date: 25 Dec'12 >>> ROI: 390% >>> Read / Download

14. TCPL PACKAGING >>> Rec. Date: 31 Jan'13 >>> ROI: 830% >>> Read / Download

15. ATUL AUTO >>> Rec. Date: 28 Feb'14 >>> ROI: 232% >>> Read / Download

16. RANE BRAKE >>> Rec. Date: 31 May'14 >>> ROI: 396% >>> Read / Download

17. DYNEMIC PROD. >>> Rec. Date: 29 Jul'14 >>> ROI: 209% >>> Read / Download

18. ASIAN GRANITO >>> Rec. Date: 29 Sep'14 >>> ROI: 283% >>> Read / Download

19. CONTROL PRINT >>> Rec. Date: 30 Nov'14 >>> ROI: 67% >>> Read / Download

20. PLASTIBLENDS >>> Rec. Date: 31 Jan'15 >>> ROI: 100% >>> Read / Download

21. MOLD-TEK PACK >>> Rec. Date: 22 Mar'15 >>> ROI: 121% >>> Read / Download

22. SMS PHARMA >>> Rec. Date: 09 May'15 >>> ROI: 66% >>> Read / Download

23. CHEMFAB ALKAL. >>> Rec. Date: 06 Sep'15 >>> ROI: 227% >>> Read / Download

24. ULTRAMARINE >>> Rec. Date: 11 Oct'15 >>> ROI: 113% >>> Read / Download

25. STYLAM IND. >>> Rec. Date: 08 May'16 >>> ROI: 220% >>> Read / Download

We are confident that we will continue to hunt best Hidden Gems from universe of small caps by doing authentic, in-depth and unbiased research work and support our members to make educated investment decision.

At Saral Gyan, team of equity analysts keep on evaluating small and mid cap stocks to explore the best Hidden Gems and Value Picks of stock market. Saral Gyan - Hidden Gems and Value Picks are the small and mid cap stocks with high probability to become multi-bagger stocks in future and a path for our investors to create wealth through equity investments in a long run.

Time has shown that smart investors have made their fortune by investing in equities in long term. None other asset class can match giving you such extra ordinary returns. Yes, its important for you to invest in right set of companies at right price for medium to long term. If you think to invest in stocks for period of 3 months or 6 months, we suggest you to stay out of stock market because you are not investing, you are betting on volatility of stock market which could be risky.

Its our mission to ensure that you reap the best returns on your investment, our objective is not only to grow your investments at a healthy rate but also to protect your capital during market downturns.

The stocks we reveal through Hidden Gems & Value Picks are companies that either under-researched or not covered by other stock brokers and research firms. We keep on updating our members on our past recommendation suggesting them whether to hold / buy or sell stocks on the basis of company's performance and future outlook.

Subscribe to Hidden Gems & Value Picks and start investing systematically. 
Avail attractive discounts by subscribing to our combo packsclick here for details.

Do contact us in case of any queries, we will be delighted to assist you.

Wish you happy & safe Investing. 

Team - Saral Gyan