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Dear Reader,
Moreover, our team has reiterated buy on Mayur Uniquoters last year in July 2013 and suggested our members to buy it again at price of 215 in our special report: 5 Hidden Gems - 5 Bagger in 5 Years. Yes, Mayur Uniquoters was one of the Hidden Gems selected by our team in our special report last year which have the potential to give 5 times returns within 5 years.
We are delighted to share that within first 6 months, Mayur Uniquoters has almost doubled the investment of our members who bought it again in July 2013 at price of 215. Today, Mayur Uniquoter has made its all time high of 412 and closed at 403.5 giving returns of 87% within 6 months. Cheers! We have another 4.5 years left for our members to get remaining 166% returns to achieve price target of Rs. 1075 for our 5 bagger since July 2013 and a 10 bagger from our initial recommendation at Rs 112 in Mar 2012.
Since our first recommendation, stock price has appreciated by 260% but still we are not suggesting partial or full profit booking. Quarterly results will be announced on 12th Feb'14 and stock has already started firing on all cylinders, its up by 11% today. Lets simply wait for the results. However, we find that stock is reasonably priced and Mayur Uniquoter is a great company to own for medium to long term considering its growth potential and earning visibility, stock can continue to make new highs in coming quarters. We advice all our member to simply continue holding Mayur Uniquoters in their portfolio. In case of any adverse news or impact, we will be the first to update you along with our advice!
Below is the summary of Mayur Uniquoters Ltd published in our Hidden Gem research report - March'12.
Company Background
Mayur Uniquoters was established and started operations in the year 1994 with an installed capacity of 400,000 Linear Meters per month. The guiding principle of the organization has always been fulfilment of customer requirement and progressive thinking. With constant human and technological development, the company today has an installed capacity of 2.1 Million Linear Meters per month which is fully utilized.
The Company is one of the largest manufacturers of synthetic leather industry in India and specialized in the automotive OEM Segment. Mayur Uniquoters Limited with 30 years experience has established its presence in the leading automotive OEMs across different continents. MUL is supplying to US auto major's i.e. Ford and Chrysler. The Company is in the process of developing the products for GM, Toyota, and BMW & Mercedes Benz. Supplies to these auto majors are high quality products. Besides auto OEMs, general exports would continue to grow to different region and countries like Middle East, UK, Russia, Sri Lanka, Bangladesh, Nepal, China, Mexico, and Kuwait.
Mayur Uniquoters operates with a full range of machinery to fulfill Printing, Embossing, Lacquering, Sueding and Laminating needs. The company possesses fully equipped Physical, Chemical and Product Development Laboratories capable of testing nearly all the properties of Artificial Leather for different segments and applications.
Enterprise Resource Planning (ERP) / IT is now a part and parcel of all functions in our company and with constant persistence, the organization has understood and also finds it a better way to stay organized, improve productivity, communicate faster within the organization and ensure product and process traceability from start to end. We have been certified with ISO 9001:2008 (Quality Management System) which is demonstrative of our commitment towards continual improvement.
Investment Rationale (as on 31 Mar'12)
Mayur Uniquoters is looking aggressive to increase its capacity, a 4000-5000 Cr annual market size is the scale of the opportunity for Mayur Uniquoter. Given its Profitability, strong Balance Sheet, Free Cash Flows and dominant competitive position, Mayur Uniquoters is in a strong position to scale up and address the opportunities before it.
Many leading Automotive OEMs like GM, BMW, Daimler, now have Mayur Uniquoters on their approved vendor list. Orders received from Ford & Chrysler along with other clients will further scale up the company revenue significantly.
Saral Gyan Recommendation (31 Mar'12)
i) Mayur Uniquoters has developed nearly 400 different varieties of synthetic leather to offer for diverse requirements, while the nearest competitor can offer only about 50 varieties. Many leading Automotive OEMs like GM, BMW, Daimler now have Mayur Uniquoters on their approved vendor list which is a great achievement for such a small company.
ii) As per our estimates, Mayur Uniquoters can deliver bottom line of 350 million for full financial year 2012 – 13, annualized EPS of Rs. 65 with forward P/E ratio of 6.8 X for FY 2012-13, which makes stock of the company an attractive bet for long term.
iii) Company has paid regular interim dividends to share holders and dividend yield at CMP is at 2.2%. Management of the company has rewarded its share holders by increasing dividend payouts significantly every year in line with increase in profits.
iv) Net sales and PAT of the company are expected to grow at a CAGR of 29% during next 2 years. On the basis of EV/EBITDA, the stock trades at PE multiple of 4.5 and 4 for FY12 and FY13 respectively. Price to Book Value of the stock is expected to be at 2.45 and 1.77 respectively for FY12 and FY13.
v) On equity of Rs. 54.13 million the estimated annualized EPS works out to Rs. 56 and the Book Value per share is Rs. 112.71. At a CMP of Rs. 447.75, stock price to book value is 3.97.
Considering increase in demand of artificial leather, ongoing expansion plans of the company and addition of new clients in the list, FY 2012-13 & 2013-14 looks promising for the company and makes it an attractive buy.
Saral Gyan Team recommends “BUY” on Mayur Uniquoters Ltd. at current market price of 447.75 for a target of Rs. 850 over a period of 18-24 months.
i) Mayur Uniquoters has developed nearly 400 different varieties of synthetic leather to offer for diverse requirements, while the nearest competitor can offer only about 50 varieties. Many leading Automotive OEMs like GM, BMW, Daimler now have Mayur Uniquoters on their approved vendor list which is a great achievement for such a small company.
ii) As per our estimates, Mayur Uniquoters can deliver bottom line of 350 million for full financial year 2012 – 13, annualized EPS of Rs. 65 with forward P/E ratio of 6.8 X for FY 2012-13, which makes stock of the company an attractive bet for long term.
iii) Company has paid regular interim dividends to share holders and dividend yield at CMP is at 2.2%. Management of the company has rewarded its share holders by increasing dividend payouts significantly every year in line with increase in profits.
iv) Net sales and PAT of the company are expected to grow at a CAGR of 29% during next 2 years. On the basis of EV/EBITDA, the stock trades at PE multiple of 4.5 and 4 for FY12 and FY13 respectively. Price to Book Value of the stock is expected to be at 2.45 and 1.77 respectively for FY12 and FY13.
v) On equity of Rs. 54.13 million the estimated annualized EPS works out to Rs. 56 and the Book Value per share is Rs. 112.71. At a CMP of Rs. 447.75, stock price to book value is 3.97.
Considering increase in demand of artificial leather, ongoing expansion plans of the company and addition of new clients in the list, FY 2012-13 & 2013-14 looks promising for the company and makes it an attractive buy.
Saral Gyan Team recommends “BUY” on Mayur Uniquoters Ltd. at current market price of 447.75 for a target of Rs. 850 over a period of 18-24 months.
To Read/Download Hidden Gem Mar'12 Research Report - Click Here
Mayur Uniquoters has given returns of 260% within 2 years, the stock which was bought at 447.75 has made all time high of Rs. 1648 (current price without considering stock bonus split during last 2 years). There are 10 more Hidden Gems out of 31 published by our equity analysts in last 2 years which gave more than than 100% returns to our members. We suggested partial profit booking in few of these stocks and our members registered more than 100% returns and now hold remaining quantity for free in their portfolio.
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Regards,
Team - Saral Gyan
