Moreover, our team has reiterated buy on Roto Pumps last year in July 2013 and suggested our members to buy it again at price of Rs. 19 (stock split adjusted price, recommended price was Rs. 95) in our special report: 5 Hidden Gems - 5 Bagger in 5 Years. Yes, Roto Pumps 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 1.5 year, Roto Pumps has multiplied the investment of our members by 7 times, our members who bought it again in July 2013 at price of Rs. 19 (stock split adjusted price) are getting absolute returns of 600% today. Cheers! Roto Pumps becomes our 7-Bagger stock today and multiplied investments of our members by 7 times.
Roto Pumps has announced its 2nd quarter results on 15th Nov'14, net profit of Roto Pumps declined 1.21% to Rs 2.45 crore in the quarter ended September 2014 as against Rs 2.48 crore during the previous quarter ended September 2013. However, sales rose 15.44% to Rs 26.17 crore in the quarter ended September 2014 as against Rs 22.67 crore during the previous quarter ended September 2013.
28th Nov'14 was the record date for the purpose of Sub-division / Stock Split of Rs. 10/- per share of the Company into the five shares of Rs. 2/- each. This is a good move by the management as Roto Pumps shares liquidity will improve considering stock split and increase in share trading volume will allow investors to easily buy or sell the stock. Company has also recently inaugurated its new Plant at Plot No. 31, Sector Ecotech XII, Greater Noida which will increase company's production and products offering.
We suggest our members to hold this stock in their portfolio without making any fresh investments at current levels. We may suggest partial profit booking in case stock price reaches 150 - 160 levels in short term. For such small companies, its very important to know whether management is prudent and taking care of minority share holders or not, Roto Pumps meet our expectation. Company is paying regular dividends since last 9 years and dividend payment has increased from Rs. 1 to Rs. 3 and dividend yield was 4% at the time of our recommendation. Operating profit margin of the company improved from 16% to 20% with compounded sales growth of 12.3%, profit growth of 21.6% and ROE of 23.8% during last 5 years.
There are 24 more Hidden Gems out of 36 published by our equity analysts in last 4 years which have given more than than 100% returns to our members within 12 to 18 months time period. We suggested partial profit booking in some of these stocks and our members en-cashed more than 100% returns and holding the remaining quantity for free in their portfolio.
We also like to share that there were few Hidden Gems stocks which gave negative returns to our members but downside was limited. We suggested our members to exit from some of these non performing companies to ensure that our members utilize their capital in the most optimum way.
Below is the summary of Roto Pumps Ltd shared by our team under Hidden Gem research report - Aug'12.
The Authority has allotted us 20,000 sq. metres of land in Sector Ecotech-XII. Company planned to start civil works on the expansion project by 2009-end and commercial production was expected to start by end of 2011.
Company has imported machinery to the tune of Rs 5 crore for capacity expansion. The project was funded through internal accruals and bank loans.
Roto Pumps products are widely used abroad in sectors like oil and gas, pharmaceuticals, food industry and especially in waste water treatment plants. The company is also planning to diversify its business.
- 50% at current market price of 105
- 50% at price range of 83-85 (If stock price falls during market correction)
Check out - Hidden Gems and Value Picks Performance Update - 2014
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Team - Saral Gyan.