Views on Life & on Equity Investing

Wonder, Wealth & Abundance

The Long and Short of 2012

with 83 comments

Hello Happy Souls

By short I don’t mean shorting stock, I imply buying stocks for short term.

For the long term, 3+ years:

– Titan Industries

– Wim Plast, no nonsense silent work horse management with decent brand image

– Page Industries

– Cravatex – I cant advertise and promote enough shamelessly, even though Batra’s should be doing it instead of me

– Cera Sanitaryware

– Globus Spirits – repeat order business, govt. enforced oligopoly in Delhi, Haryana with 20-30% market share

– J&K Bank

Following can be considered for short term trading ย 3 – 9 months:

– Infinite Computer Solutions – 27 Rs consolidated EPS and 4-5 Rs dividend expected, no debt by end of year

– Falcon Tyres, lots of debt but expansion coming

– Eclerx

– Technofab Engineering

By the way my luck has been sucking all this week, so please do your own diligence have already spilled milk on carpet and burnt food beyond recognition.

Written by amitdipsite

January 27, 2012 at 9:41 pm

Posted in Uncategorized

83 Responses

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  1. New Water Shoes for surfing / kayaking / rain

    Amit Arora

    January 27, 2012 at 11:00 pm

  2. Hi Amit..

    What according to you could be the reason for such undervalue at which Infinite is quoting right now…. Anthing fishy happening in the background??? I have been watching this for long time but not taking the risk of buying as i have lost huge amounts due to some scripts still dont know the reason for such a big fall in them.

    sandeep maddali

    January 28, 2012 at 3:21 am

  3. My dear Sandeep,

    When you are not so sure about the company, then don't put too much in terms of portfolio percentage.

    I read a lot of reports on Infinite Computer Systems, then asked analysts who wrote those reports, three reasons were given to me

    – No FCF
    – Management participated in buyback
    – No stickiness of consumers since they lost largest customer – VERIZON

    I agree with middle part, does not show well for CEO to sell during buyback, but its allowed, legal and I think Piramal Healthcare's Ajay Piramal also did it, I can forgive that.

    While there was abundant CF – No FCF – because they invested / bought Motoral company for 80 Crores as Capex item

    Client Stickiness – Worst thing that can happen to a company with 8 clients comprising 90% of revenue and top client 35% is that top client leaves, this is what happened. VERIZON is downsizing wireline business and all IT vendors are hit, not just INFINITE.

    INFINITE will get China's Huawei soon as client – 20 Billion $ company, so they target few exclusive clients but big ones. They can always change strategy to serve smaller clients, which is much easier, it servicing Fortune 50 companies the hard part.

    Also, the sentiments of Remote Infra Management got damaged ala Zenith, Allied Digital, etc. , hence collateral damage in this space.


    Amit Arora

    January 28, 2012 at 6:16 am

  4. i heard sales for cravatex in q3 is very good and still the stock is moving down , is there any reason for this let down in the stock


    January 29, 2012 at 5:35 am

  5. “already spilled milk on carpet and burnt food beyond recognition”
    ..Whats going on Amit? ๐Ÿ™‚

    Rahul Paliwal

    January 29, 2012 at 5:43 am

  6. More pain in West as a result of greed

    Amit Arora

    January 29, 2012 at 5:49 am

  7. Added J&K in above list. Expecting decent growth from Cravate and Astral

    Amit Arora

    January 29, 2012 at 6:10 am

  8. Result has not been announced, check to kara karo Bse website mate

    Amit Arora

    January 29, 2012 at 6:21 am

  9. Sorry about that I will clean it Boss

    Amit Arora

    January 29, 2012 at 6:22 am

  10. Ha Ha Ha ..:-).

    Rahul Paliwal

    January 29, 2012 at 9:49 am

  11. hi, should we buy page now when its PE is approaching 50?? And, may i ask why one of your favourites Photoquip is not in the list?


    January 29, 2012 at 4:40 pm

  12. I think because he is not expecting the price to shoot up unless promoters finish 75% of the buying…

    Stock is more than excellent but management is rather cunning…..they will pay divident also once they cross 60-65 or may be after 75% holding only….

    Kunal Banker

    January 30, 2012 at 8:53 am

  13. Fila India's 35 exclusive stores up. Were they planning 70 by 2013 ?


    January 30, 2012 at 2:43 pm

  14. Dear Amit

    Good to see Wimplast and Globus Spirits in your list again, which are my top holdings.



    January 30, 2012 at 4:02 pm

  15. Amit,

    Watched the pimco video. Excellent primer to understand the macro picture and the fundamental/ tectonic changes in the global markets. Thanks for sharing.



    January 30, 2012 at 5:11 pm

  16. Hey Jatin,

    Yeah that was the plan announced. Not sure if they need to anymore, everyday more ecommerce sites are coming up, so does not make sense to invest in shops and pay 1 lac rent monthly except for keeping obligations with FILA

    and also stock now but has widest range

    REEBOK + ADIDAS have 70% market share, from where I see, they have only to lose

    REEBOK was loss making until 2008 almost, for 13 years ! NIKE India is still loss making in India today ! over 150 Crores annual losses. If FILA can make money in 2 years of operation Kudos

    Amit Arora

    January 31, 2012 at 6:01 am

  17. Dear Manjunatha,

    Wish you the best with those two


    Amit Arora

    January 31, 2012 at 7:41 am

  18. In case you were not aware Wim Plast owner who runs Cello Pens as well got 800 Crores cash INR for 40% stake in cello pens, 3 years back !

    Amit Arora

    January 31, 2012 at 7:44 am

  19. absolutely agree with you,These ecom sites are free marketing channels and advertisers.
    With such high prices adidas reebok will have to face loss for atleast a decade more. FILA by pricing lower has higher chance of grasping greater share from these “tycoons”.

    One ques for you do these ecom sites stock the products to their warehouse or they have some tie- ups with the merchants ?


    January 31, 2012 at 9:39 am

  20. sir , where is the cash ? i can't see it in the balance sheet


    January 31, 2012 at 10:35 am

  21. Dear Amit

    Thank you very much for the info.
    I am able to make 25% return this month based on my own analysis.



    January 31, 2012 at 2:57 pm

  22. Hi, is there any periodical like Value Line Investment Survey for Indian companies?


    January 31, 2012 at 3:27 pm

  23. Hi Amit,

    I am not able to understand why you have considered wimplast over nilkamal Ltd.
    1.Nilkamal is leader in space with sales nearly 5 times.
    2.Nilkamal is more reputed brand.
    3.Market cap is just 2.5X Wimplast.
    4.@home subsidiary is performing well.

    Only -ve is 300 cr debt ,which i think will value @home.


    January 31, 2012 at 5:44 pm

  24. No stock is held by Ecommerce sites, directly sourced from Cravatex which stocks inventories

    Wholesaler/retailer concept exists for brick shops

    Amit Arora

    February 1, 2012 at 11:40 pm

  25. Thats no mean achievement 25% portfolio return in a month. Congrats.

    Amit Arora

    February 1, 2012 at 11:41 pm

  26. Fila getting aggressive with their alliances with ecoms. now with every second .com co.


    February 3, 2012 at 2:22 pm

  27. I am not that optimistic about stores but Nilkamal is decent company. The list has only 8-9 stocks and are by no account BEST stocks, idea is to make more returns by active management and not buying ASIAN Paints for 30 years, its possible someone may end up doing as good as us sleeping on Asian Paints for two decades. 10 crores quarterly interest payment for Nilkamal – turn off.

    Amit Arora

    February 3, 2012 at 9:15 pm

  28. NIKA and ADIDAS are not going anywhere, they're big and successful worldwide. There is enough room to have 20 more multi billion dollar shoe companies, going worldwide is the key. And more than 25 footwear companies in India can have 1000 Crores+ turnover.

    This single awesome brand recently catapulted Wolverine from nowhere to two billion dollar company

    Under Armour came from nowhere to become a 4 Billion dollar company

    FILA has much richer history since 1911 unlike Nike but vanished between 1999-2007 due to over endorsements. Used to pay 300 Crores to athletes in late 90s and priced the brand par with GUCCI, ARMANI. Its a volte-face strategy now.

    Look at this

    and this

    Amit Arora

    February 3, 2012 at 9:30 pm

  29. wow the Fila chart looks nice.
    if it was a stocks price then from a technical analysis prospective it is a breakout from a long multi year consolidation :p


    February 4, 2012 at 9:37 am

  30. Hi Amit,

    Thanks for your prompt reply, it will be really grateful if you clarify on below doubts

    1. Is cello pen is subsidiary of company,if so what they have done with Cr rs after selling stake.

    2. revenue break up from each segments are not given in their AR.

    3.Apart from wimplast ,which all company are manufacturing bubble guard type products, which what % is rule by organized players.



    February 4, 2012 at 8:37 pm

  31. Hi Amit,

    Just wanted to caution that WIM Plast promoters (Rathod) belong to Akruti group which has been banned by SEBI in sanjay Dangi case.
    Probably that could be the reasons why MKT is not giving this business the current euphoric valuation as other consumer business are commanding.



    February 5, 2012 at 6:22 pm

  32. Thanks Vikas,


    Cello Pens and Cello Thermoware are not subsidiaries, they are group companies.

    Majority share is with un-organised sector in bubble guard type of products.


    Amit Arora

    February 5, 2012 at 8:13 pm

  33. Following link gives the description on the roles of the cello directors in the akruti city.

    Antriksh Patel

    February 7, 2012 at 2:37 am

  34. Hi Amit,

    Just out of interest why did you remove A.K.CAPITAL from the list (this was there in 2011). Any major changes in the company or managment of the company.?

    How do u rate it as a BUY or Sell w/r/t 3 year period?


  35. Hi Amit,

    Do you have any idea who is ” Karuna Rajan ” in technofab holding nearly 11%.

    apart from that how u looking over order inflow into the company,from last 1 year no inflow have been seen into power sector.



    February 7, 2012 at 6:16 pm

  36. Fascinating documentary of Rockefeller and Oil

    Amit Arora

    February 7, 2012 at 6:46 pm

  37. AK capital fin pvt ltd the subsidary of ak cap has investments of 56cr. and their numbers are not stated in ak caps qutarly results !!! interesting.


    February 8, 2012 at 5:33 am

  38. Hello Amit…

    In recent past promoters are buying in photoequip regularly. Can u please give your views on the company for MT/LT perspective..

    Kishor Barhate

    February 8, 2012 at 7:10 pm

  39. Hi Amit

    Good results of Cravatex.Almost 58% jump in sales but not much jump in profit.!!

    How do you see the results?


    February 10, 2012 at 9:40 am

  40. Hi There,

    Mate, I am not sure how you determined 58% growth in Sales ?

    Standalone Sales are up by 82% (44cr vs 24 cr) and standalone profits up by 70% (1.35 Cr vs 80 Lacs – exclude rental income from building) – so this is good result. Margins are not that good.

    Foreign subsidiary is also not making much dough yet.

    Consolidate Revenues is what we need to look at which are up 350% (84 Cr vs 24 Cr) and consolidate Net Profits up only by 66% (2.98 Cr vs 1.79 Cr). Margin expansion period is still away.

    FILA just came in 2010 so may need more time to get settled. Even great companies like TTK Prestige and Hawkins with 5 decade history were living on 3-4% net profit margins as recently as 2005-2006-2007 so can take more years to earn higher margins.

    Also, beggars like you and I (retailers) are selling this share back and forth at a pittance to each other. There is no backing of Institutions yet, so no re-rating yet.

    Amit Arora

    February 10, 2012 at 11:19 am

  41. If invested for long / very long term always look for sales growth and not net profit growth, latter can fluctuate wildly but cannot grow faster than former over long periods, so topline is more important for long term investing.

    Amit Arora

    February 10, 2012 at 11:47 am

  42. As I have said, retailers cannot re-rate a stock as they neither have long term vision nor funds, therefore re-rating is far away. It can continue to grow in line with sales growth though which is 30% or so.

    Amit Arora

    February 10, 2012 at 12:10 pm

  43. It seems they(Cravatex) are facing the raw material cost pressure…as it is evident from the last quarter i.e.Q2-2011-12 data.
    Do they import something for selling the product in India?
    Also by going through the consolidated data, it seems they have not felt this kind of margin pressure…i.e in their UK subsidiary…


    February 10, 2012 at 1:46 pm

  44. Dear Amit

    Among the stocks you mentioned J&K Bank is the best stock, not only for 3 years but for long term.It should give 20% CAGR return for next 25+ years along with high dividend.It is a must in everyone's portfolio.
    City Union Bank is my other fav.
    This is the Bank which created maximum wealth for investors in last decade.



    February 10, 2012 at 3:39 pm

  45. Dear Bhushan, They import everything from overseas to India for selling except human labour and sales promotion.

    I think the other way round i.e subsidiary facing raw material pressure. Standalone data gives them 9.5 Rs eps consolidated gives them only 11.5 Rs eps.


    Amit Arora

    February 10, 2012 at 8:14 pm

  46. Added Titan – I know at 18k Crore market cap.

    Amit Arora

    February 10, 2012 at 8:20 pm

  47. Here is a comparison with the best of breed for 2009 Data. A company that has 55% market share in India i.e. Reebok, backed by a giant that has 70,000 Crores INR annual turnover i.e. ADIDAS. After 14 years of operations in India 1995-2009 Reebok attained the size of 400 Crores INR Revenues, 17 Crores net profit, and 300 Crores bank borrowings. Once scale is reached, you hit inflexion making 20 crores per quarter.


    With footwear inventory takes most working capital and fine tuning it is paramount for success. When sales triple inventory will only grow 1.5 times, and when sale quadruple, inventory will only double. We can notice that for 53 crores quarterly sales 55 crores of capital was required, for 84 quarterly crores sales 64 crores of capital was required. For 250 Crores quarterly sales 100-120 crores of capital will be required. Once they reach 200-300 crores quarterly revenues we should see 5-7% consistent net margins i.e. 10-15 crores quarterly Net/ 40-60 Rs quarterly EPS.

    Amit Arora

    February 10, 2012 at 10:33 pm

  48. Hi Amit…
    yeah…that is the advantage of scale..and we shouldn't expect this company to get re-rated before it reaches that scale i.e when sale becomes multiplier of working capital and hence working capital requirement start decreasing wrt sales.
    Regarding the Q22011-12 and Q32011-12 data if you compare standalone domestic figure you would be able to understand i what meant..i.e. in Q2 2011-12 sale was 34 cr with EBIT of 4 cr and in Q3 2011-12 sale is 32 cr with EBIT of 1.75 cr…clearly they are facing raw material cost pressure and a bit of slow down in domestic market…
    I invested in this company almost 6-8 months months back…but bad luck.. i ran out of capital now otherwise i would have gobbled up a lot more given the prospect and P/E this company is valued.
    Let me know your views…


    February 11, 2012 at 3:11 am

  49. Hi Bhushan,

    >>.i.e. in Q2 2011-12 sale was 34 cr with EBIT of 4 >>cr and in Q3 2011-12 sale is 32 cr with EBIT of >>1.75 cr…clearly they are facing raw material cost >>pressure

    But I cannot see where is the number coming from in your statement “standalone Q3 2011-12 sales is 32 Cr with EBIT of 1.75 Cr”

    I can see Standalone Q3 Sales of 44.8 Crore and EBIT of 4.1 Crores

    Amit Arora

    February 11, 2012 at 3:23 am

  50. Hi Amit…
    You will find this data in the 4th page of their result where they have talked about segment revenue…
    Let me know you get it or not?



    February 11, 2012 at 3:28 am

  51. OK I get it. There reporting is horrible. In Q1 they broke Standalone to Domestic and International, in Q2 there was no International but in Q3 again they have domestic and International.

    If their cost accounting is right, they made 1.8 Crores net profit on exports of just 13 crores but only miniscule 1.75 crores on domestic sales of 32 crore – that makes sense now – rupee depreciation effect shows up here.

    I am not expecting net profit margins to be over 5-7%. I'd rather go with Company A experiencing 40% sales growth and only 10% profit growth as opposed to Company B 20% sales growth and 20% profit growth as latter would not be able to grow net profits any faster than 20% over long period, whereas former will correct with time and eventual growth would be 40% as long as it survives.


    Amit Arora

    February 11, 2012 at 3:34 am

  52. Great…couldn't agree more…
    apart from these observation…what investors would love to see is their consistency in performance..and their relative market share wrt competition…biggest company always gets the biggest pie…as everybody from Nike,adidas,reebok,puma and every tom dick and harry is getting bullish on India demographic prospect…and it makes cravatex task that much more difficult…
    I think they are at 5th position if not lower so far sale figure is concern(sports marchandise segment)…if they start climbing up the ladder to 3rd or 4th position, re-rating will start happen fast…
    One more thing i am almost sure that they wud have hurt their balance sheet a bit this quarter given the domestic sales data…
    Let us wait and watch this developing story…


    February 11, 2012 at 3:48 am

  53. True, consistency is the key, not only does a stock get re-rated, goes further and Funds make it a Religion stock – blind faith in all seasons. Like a 75 PE Gillette India Ltd thanks to Buffettology. Yeah, lets see how it unfolds..

    Amit Arora

    February 11, 2012 at 4:10 am

  54. Indeed happy to note your addition of Titan Industries. I am holding it from long & is 17 % of my portfolio. But recently i got advise from broker to sell on every rise and also seen some scary tech analysis at one site projecting titan to Rs. 77 (, hence was bit shaky. But with your views bit feel confident will hold them for long with increased conviction.

    Kishor Barhate

    February 11, 2012 at 6:56 am

  55. FILA KOREA Brokerage Report:

    Sales growing 20%, ROE 22%, Operating Profit Margins 16%, USA Sales Growth 40%

    Amit Arora

    February 11, 2012 at 9:43 pm

  56. INR-USD depreciation of 22% in one quarter alone causes across the board hit – culprit for most Indian co:s whether importing raw materials or finished products, be it from Asia/China or West

    Amit Arora

    February 11, 2012 at 11:04 pm

  57. That Link isn't opening for some: Another link to brokerage report

    Amit Arora

    February 11, 2012 at 11:25 pm

  58. “beggars selling this share back and forth at a pittance to each other.” ..TRUTH…This also implies that entire capital world is driver by Big Cat/Fishes..
    Truth is what they stamps..

    Rahul Paliwal

    February 12, 2012 at 3:00 am

  59. ๐Ÿ˜€ We can take heart Rahul. Cheap stocks perpetually staying cheap (ignored by Institutions) can also make one very very wealthy. They will grow only as fast as sales growth. 40 bagger in 6 years Mayur Uniquoters has no institutional support, 12 bagger CERA Sanitaryware in past 6 years has no MFs only 2% FII etc.

    Amit Arora

    February 12, 2012 at 4:12 am


    Santhanam now a director of crav


    February 12, 2012 at 6:53 am

  61. Definitely thumbs up for Corp. Governance, he is well respected person in Industry.

    Amit Arora

    February 12, 2012 at 7:25 am

  62. Confirmed from Management, same person. He used to work directly under Ajay Piramal, was with Bombay Dyeing and now with Breach Candy Hospital.

    All the best

    Amit Arora

    February 12, 2012 at 7:42 am

  63. Consolidated rev hits 160 crs. much before their tgt of 2013. thumbs up to their efforts.


    February 12, 2012 at 9:50 am

  64. Sir Photoquip Dec Q Sales increased, partially due to Trading Activity. Net Profit before interest declined by more than 30%. What is future prospectus?

    S P Gupta

    February 12, 2012 at 2:53 pm

  65. What's your thesis on Titan?


    February 12, 2012 at 5:44 pm

  66. Hi there,

    Market Share of Jewellery leader is less than 6%


    Amit Arora

    February 12, 2012 at 8:31 pm

  67. Removed Indiabulls Financial Services from list.

    Amit Arora

    February 12, 2012 at 11:31 pm

  68. Hi Amit

    Good results from Infinite!!


    February 13, 2012 at 8:24 am

  69. Hi Amit,

    What do you think of holding Yes Bank for 10 years?

    Do you think it is another HDFC in making?

    Kindly do share your views about Yes Bank in detail



    February 13, 2012 at 12:46 pm

  70. Hi Amit,

    What about A.K.Capital at CMP? BUY or Ignore?

  71. What is your view on Puneet Resins after terrible Q3 results ?


    February 16, 2012 at 7:08 pm

  72. In my opinion,

    No more than 1% of portfolio in Puneet Resins.

    Ignore AK Capital

    Yes Bank, yet to read ARs

    Cravatex – just been a 6 bagger, 6 more to go.

    Consider RS Software – 1-2% of portfolio.


    Amit Arora

    February 17, 2012 at 9:02 pm

  73. One More FILA KOREA broker report dt: 17th of Feb 12

    Amit Arora

    February 18, 2012 at 4:40 am

  74. Dear Amitbhai,
    May be bit silly for asking. But you said Cravatex been 6 bagger, 6 more to go. Means are u expecting it to be total 12 bagger OR 36 bagger from your reference price…OR other way will it double from here OR expecting further 6 fold rise from CMP. I have bought 50 after reading yr blog & plan to add more please…

    Kishor Barhate

    March 31, 2012 at 3:41 pm

  75. Dear Kishor, As you know I am biased with Cravatex and invested, so please do you own analysis as well, since I do not want to be praised or blamed for consequences for a single stock. Many people emulate RJ and end up buying Viceroy Hotels as 25% of their portfolio whereas it may be 0.02% of his portfolio. I am expecting Cravatex to be 1000 Crores market cap in another 3-4 years, if they take on too much debt, it will be reconsidered.


    Amit Arora

    March 31, 2012 at 10:23 pm

  76. As per cirular from NSE Titan Ind. is to be excluded from CNX midcap Index and also from Nifty midcap 50 Index. It will be added in CNX consumption index ..What can be interpretation of this wrt to future price prospects..

    Refer circular shared at

    Kishor Barhate

    April 9, 2012 at 3:48 am

  77. she might be wife of abhiji rajan the owner of gammon india .Gammon had 15 % stake in technofab

    Vivek Gautam

    April 26, 2012 at 5:58 pm

  78. Amit..

    You said some xpansion being done by Falcon. Can you please throw some light on that??? And how is falcon looking now for the next one year… Can it do 1100-1200crores revenue and around 70 crores PAT?


    June 27, 2012 at 2:28 pm

  79. Amit – any comment on eclerx Services. the EPS # and margings are stuff anyone can die for


    January 7, 2013 at 4:12 am

  80. Dear Amit,

    Looking for similar consolidate post for L & S for 2013 please…..

    warm regards

    Kishor Barhate

    January 8, 2013 at 11:47 am

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