Thursday, December 15, 2011

Investment rationale of Atul Ltd: Some jottings

Factors that attract towards Atul:
  • 1200 acre land bank on Mumbai-Ahmedabad highway,
  • 100 cr investment in Wyeth,
  • 60 years operational history and proven track record,
  • Trustworthy promoters with sale 50% holding. promoter
  • Integrated operations with captive power plant, infrastructure and water resources.
  • On MCap of 450Cr the company is generating sales of 1500Cr and net profit of 90Cr
  • Continued and rising dividend since 2001.

Concerns:
  • Debt of over 300Cr is worrisome. But most of it is working capital loan.
  • Rising raw material prices. Weakening dollar will further take a toll on cost front.
  • Weak market sentiments.

Outlook: Despite concerns over short term the stock could return decent return over coming 2-3 years.

Source:
Anavaran Investments

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