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!
Investment Rationale (as on 31 Mar'12)
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.
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.
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.