Monday, 1 August 2016

Hidden Gems: Piramal Enterprises: Ajay Piramal : Impeccable management pedigree !

Dear all,

Today after stupendous results, I added Piramal Enterprises decisively. (Entry price 1605 ) It was already there in my portfolio but holding was not significant. With today's excellent numbers, added Piramal enterprises
with such conviction that it has now entered into top 5 holdings by allocation !!!!


Link: Company Website

Why I entered?
Piramal was on tracklist as small portion of portfolio:

Piramal Enterprises basically consist of 3 business verticals: Pharma, Technology, Financials

Earlier the company was dominated by Pharma vertical , What has happened recently, in last 2 quarters, its financial vertical is growing at scortching pace !!!


Link: Piramal Q1FY 17 result presentation

Read slide 13/17 of presenation ! Most important slide :

Total Loan Book size Rs.16,112 Crores
Average Yield on Loans 16%
Cost of Capital 9%
Cost to Income Ratio 7%
Gross NPA ratio 0.6%
ROA 6%
ROE 25%

On next slide, PEL is promising to increase loan book from 16 k to 43k in next 2-3 years...


In my opinion, in next 3 years,  out of PEL overall revenues, 70℅ plus revenue will get generated from financial vertical and pharma and analytics will constitute rest 30% revenue contribution.


Ajay Piramal is a astute wealth creator and is eyeing for value unlocking. He is trying to demerge pharma, financial srvs biz, which will take 2 years..

Link:demerger

Parallely, Ajay Piramal has grand plans : He want to merge Shriram group finance business with Piramal Capital (Demerged entity as mentioned above) !!!

LInk: Merger with Shriram Group


If one want to see the detailed article about how Ajay Piramal want to steer the businesses and create long term wealth for shareholders, Dont miss reading this superb article : cover-story/flush-with-rs-23500-crore-ajay-piramal-is-making-bold-bets/story/235343.html


FIIs are gung ho on stock !!!Yet this giant in still un-noticed by domestic investor fraternity.... !!!

I am really amazed by the fact that, not a single DII is tracking this scrip.Not a single brokerage firm has coverage/ buy targets on this company..

Please listen below video carefully where Ajay Piramal is explaining all the three core business verticals himself !!!




Recommendation:
This stock is just buy and forget kind of stock... Not to be sold in next 5 years in any condition.... Returns, what can i tell, let market re-rate it to whatever levels it want to :-) Gem Stock, Hold in core portfolio with Conviction !!!(My Hunch : Piramal enterprises can go bajaj finance way (Note: not comparing businesses just stock price).two and half years ago bajaj finance used to trade at 1600 rupees per share,Today it is trading at 11226 ! )

31 comments:

  1. Stock looks ok, i would prefer Goldcrest corporation as to me it looks a multibagger. 02/08/2016- Goldcrest Corp trading @42.
    Regards 2089Ankit

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    Replies
    1. OK? Ok :-) I would look at Goldcrest.

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    2. ignore goldcrest. after deep dive i find it not worthy for investment. Regards Ankit

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  2. mmb @282682.. added 8% to my portfolio.. will see it in 2020 :)

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  3. great bro, Hold it tight, get richer with me :-)

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  4. I hope this is not a case of diworsification like Peter Lynch calls out and is a true diversification!!

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    Replies
    1. For Diversification/ diworsification, you have to first understand Ajay Piramal! Had you, you wouldn't have written above lines in your dream !

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  5. Hello Sir... Got to know this website from MMB. Really very valuable information is present.... Thanks a lot.

    1.Wrt Piramal.... Can I enter @ current levels? 1800? Or should I wait for correction?
    2. Wrt REC.... Is it worth buying @ current levels?


    Where to find new multibagger picks?

    ReplyDelete
    Replies
    1. REC i had recommended at 153 and Piramal at 1605...
      Having said that, they can be bought now also if you have 3-5 years time horizon, they are excellent investment grade scrips

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  6. Thanks for the reply. Would like to know are there any new multibagger picks from you? I couldn't find any new ones.

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  7. Thanks. It's rare to find this kind of stock. Company goal - $4.5B to $20 B by 2020. just financial growth is crazy !

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  8. I am expecting at least 10000 levels in 5 years. so,why not?

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  9. Looks like, scrip is being acquired crazily !....With Down Market, each big lot is getting sold fast....I am sure now as you said, it will continue slow and steady march...

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    Replies
    1. Alpesh, it would be foolish to predict short term price movement.. it may go up or down. As investor, we should assess our long term targets with respect to fundamentals which change each quarter :-)

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  10. Do you see any consolidation as it has moved quite high? Willing to buy little more.. but scared to accumulate thinking if it comes down drastically.
    Please let me know is it ok to add more?

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    Replies
    1. Sometimes, waiting to buy at exact price point many miss the bus :-) real truth in stock market.. if I were in your shoes and if I were convinced about 10000 in 5 years, 100 Rupees here and there doesn't matter actually :-)

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  11. I have bought shares in K.C.P.Sugar industries.I read conflicting reports in business dailies wherein one day they say there is likely to be a sugar shortage.After a few days they say situation is not very bad and the present stock limit can tide us over till next year.I'm confused,Can you advise in this matter?

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    Replies
    1. D.Harish bro, If you read 'Target audience' page, I have clearly mentioned, I stay away from hot sectors :-)
      I love compounders who can grow money year on year. Cyclicals are good but you have to be extremely on edge for timing the entry and exit which doesn't suit my style of investing.

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  12. Thank you Chillax Bro.My mistake, I ought to have read the guidelines.What you say about cyclicals is true,they reverse immediately after making a top. I have followed your advise in moneycontrol with good profit in REC and DHFL.Thank you and hope you keep sharing knowledge as you always do.

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  13. Dear sir,
    God bless u sir .u are doing a great job for the small investors.I purchased today 50 shares of piramal ent and like to keep it for my son whos is just 3 years old.I want to invest another 1.5 lakhs for 1 to 3 yeas time frame.Kindly suggest some of very best 2-3 stocks u mentioned above.

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    Replies
    1. Dear SUR, Thank you very much for kind words. You can buy safely Indiabulls Housing finance at CMP. Best luck

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  14. Chillax you are doing great job pal. I mean no one in this selfish world would give free advice on multibaggers. But you doing it.

    #Respect.

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  15. Hello Chillax... How are you... Thanks for all your support and valuable information. I hold 400 pel @1700. Want to know when can I add more? Hope you will reply.

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    Replies
    1. I have given target valuation of 5 digits in next 5 years... When to add is entirely your decision

      Delete
  16. Thanks for sharing such a wonderful article. This company is so clear in their investments and justifying each idea so wonderfully...

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