Its really hard to find a penny stock which is having leadership position in the emerging sector. Once the stock is discovered one should catch hold as soon as possible in order to grab the maximum gains.
There seems to be a growing awareness across all the states and we may soon see good number of orders coming towards our Business Insight - Aug'10.
Some more Business Insight about the stock:-
The company is promoted by one of the finest First Generation Entrepreneur with a very clear vision and has helped the company attain a leadership position in a very short span of time. The company has developed various products and models that can be replicated over an over again across India and thus we may see the company scale up it's business very soon.
Some Financial Highlights
- The company has grown it's revenue at a CAGR of more than 60% in the last 4 years.
- The company has grown it's bottom-line (Net Profit) at a CAGR of 125% in the last 4 years.
- In the lastest quarter ending Jun'10, the company has again come out with stellar performance. The revenue of the company has shown an increase of more than 50% on QOQ basis and more than 100% on YOY basis. Similarly the Net profit has increased by 52% on QOQ basis and more than 150% on YOY basis.
- The company maintains a good cash reserve and has zero debt which minimizes downside risk in the stock.
- The company has a very low enterprise value of less than 50 crore on account of it's cash reserves, while the EBITDA stands at more than Rs 15 crore.
Investment Rationale
The Business Insight for Aug'10 is one of the few companies in it's sector and has already earned a leadership position.
- As mentioned in our previous article (can be accessed HERE), the Government of India has planned a huge outlay of roughly Rs 50,000 crore for the sector over the next few years.
- The Government of India has recognized the company's efforts and products. This may help the company attain big orders.
- The company is available at extremely low valuations while the Peer companies in the same sector are trading at almost 3 times the multiples of our Business Insight - Aug'10.
- The Promoter's of the company hold a sizable chunk of equity (in excess of 50%), while we believe they cumulatively hold 70% equity (direct and indirect holding) in the company.
-Team ROD
HBJ Report Factory Price - Rs 2500/-
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