Sandur Manganese and Iron Ores

Sandur Manganese is involved in the mining of manganese ore and iron ore. The company carries out mining activity in 2,000 hectares in Bellary Region of Karnataka. The total reserves of iron ore are 50 million tonne and manganese ore is 25 million tonne. The company was a big exporter of iron ore to China and made big money in 2008 & 2009. The Reddy Brothers issue and the subsequent mining ban imposed affected the company very badly. It had to almost stop the mining activities. Recently the Karnataka High court lifted ban on mining by companies having Grade 'A' licence and Sandur got relief. This is evident from the september quarter results of the company. The company reported a sales of 80 Cr and a profit of 13 Cr compared to 30 Cr & 1.5 Cr in corresponding period last year. This year the company is expected to report an EPS of 50 Rs.

The marketcap at the current price of  Rs 625 is about Rs 550 crore. It is a debt-free company. This gives more comfort. Given the recent happenings and issues like Coal Scam,the mining sector is expected to get more regulated for licences and companies like Sandur which already have Grade 'A' mining licences will be benefited

Even during the last 3 years when the iron and manganese ore prices were at bottom, the company reported profits. There was a time when the company reported 225 Cr profit in one year. The worst is behind the company. The mining activity has already started and any recovery in global iron ore & manganese ore prices will push Sandur Manganese back to its glory days.The market has already rewarded the Superb results of Sandur. The share price hit a 52 week high of 720 Rs/- last week and is now trading at 625 Rs. I feel that one can add this mining company into the portfolio in SIP mode for long term gains

Note:-I have vested interests in SANDUR MANGANESE and its safe to assume that i am holding it from lower levels

V-MART

V-Mart Retail Limited was incorporated as Varin Commercial Private Limited in 2002. The Company started its operations in the value-for-money retail segment by opening its first retail store in Gujarat in 2003. In 2006, the name was changed to V Mart Retail Pvt. Limited. V-MART’s business can be classified 

into three verticals viz. apparels, general merchandise (non-apparels and home mart) and kirana bazaar

The company operates primarily in tier II & tier III cities with the chain of “Value Retail” departmental stores. The stores cater the needs of the entire family altogether by offering apparels, general merchandise and Kirana goods.The company has 86 stores across 73 cities in 12 states and union territories, with a total area of nearly 7 Lac sq.ft. The stores are located in  New Delhi, Gujarat, Uttar Pradesh, Bihar, Punjab, Chandigarh, Haryana, Uttarakhand, Jammu and Kashmir, Rajasthan and Madhya Pradesh. They are pioneers in setting up modern ambiance stores across various small towns and cities like Sultanpur, Ujjain, Motihari etc. As per the annual report they are focussing on a single customer type (evolving from aspiring to consuming) with an annual income range between H1 lakh to H10 lakh and largely residing in Tier-I, Tier-II and Tier-III locations in India

The company came out with IPO last year at a price of 210 Rs. The proceedings of IPO were used for setting up new stores and for working capital requirement. The promoters hold 59% stake in the company. The company is founded by the Ex-CEO of Vishal Retail. In the first year after IPO, V-Mart reported a 36% growth in its revenues and a 72.2% increase in its profit after tax in 2012-13.The company policy clearly says that it always aims to keep debt equity ratio below 0.75. 

The company intend to establish an online portal (www.vmart.co.in) to address the growing online shopping potential in Tier-II and Tier-III Indian cities without a substantial investment. In the 2012-13 annual report the company said that it was aiming to set up 25 stores this year and they have already setup 17.The most recent store was at Jhansi which was opened on 4th week of October. Though they had to close down some stores like that in Karnal due to poor footfall,they are making for it by adding mores stores in areas that attract more people

The company came up with superb results in the recent quarter.Its sales increased to 128 cr from 79 cr(comparing sept quarters) and profit more than doubled to 2.8 cr from 1.3 cr. The market gave a thumbs up for the company and the share price moved up smartly to hit a life time high of 242 rs before closing at 238 rs. Organised retail is expected to grow at 25 per cent and reach a size of US$ 200 billion by 2020.The company was aiming for a 30% growth as per the recent management conference call. I think we can expect significant upside even from current levels if the management is able to deliver their promise. Any correction in stock price may be used as an opportunity to add V-MART into your portfolio.CMP-238 Rs/-

Note:-I have vested interests in V-MART and its safe to assume that i am holding it from lower levels

ACRYSIL

Acrysil Ltd manufactures and sells kitchen sinks (installed capacity of manufacturing 2,75,000 sinks per annum).The Company markets its products under CARYSIL brand. It sells granite sinks, stainless steel sinks, and Vetro Inox sinks, as well as faucets and food waste disposers.But its main product is the niche quartz sink.Majority of companies revenues come from exports to foreign countries(export contribute nearly 80%).The company started manufacturing granite sinks through a technical collaboration with Schock & Co of Germany (it owns 10.15% stake in Acrysil. Acrysil has also entered into manufacturing of stainless steel kitchen sinks to cater to the domestic market, through its subsidiary Acrysil Steel Private Limited

Now the management of Acrysil has decided to tap the potential of domestic market & diversified its product portfolio. Recently, the company launched a range of lifestyle kitchen appliances like faucets, hoods and chimneys, hobs and cook tops, ovens and microwave ovens, food waste disposers and wine chillers. With the improvement in economic levels of people,more are ready to spent on luxury interiors.This is a major positive for Acrysil.

The operating margin of this company is about 15%.The recent rupee fall is an added advantage to Acrysil which has 80% of its revenues coming from exports. But at the same time we also should keep in mind that the main raw material Quartz is imported. So one need to watch out for the price of raw material. As Acrysil is targeting mainly the premium segment customers, i feel that the company can pass on the increase in raw material costs to it customers

The company has a low equity base of 4.5 crores.This is after the management recently giving bonus in the ratio 1:2.The management is investor friendly and the dividend payout ratio is 25%. They have sent a positive signal to the market by balancing their growth objective with sharing the profits with the shareholders. The sales growth, profit growth and ROE for company is 21%,11% and 27% over the past 5 years.This year the company is expected to do an EPS of 22 Rs per share

The company has aggressive plans of becoming a Rs.1,000 cr company by 2020.During the last one month the stock had a very good run.On 28th October the stock hit life time high of 155 Rs and is currently trading at 129 Rs.The current market Capitalization of company is just 60 Cr rupees. At the moment its too premature to compare it to TTK Prestige or Hawkins or Gandhimathi Appliances. But this is a small company where the potential for growth is good, they are into niche products & their product is perceived as a premium product. As the equity base is small, the volume of stock traded is very low. I feel its a good bet to be in one's portfolio if you are looking into a mix of export and consumption story.One can start adding at the cmp of 129 Rs in SIP mode and any fall in share price can be used to add more

Note:-I have vested interests in Acrysil and its safe to assume that i am holding it from lower levels