December Recommendations

Market was on the bearish side for the first half of the month and has been moving sideways after that. It has witnessed a lot of profit booking in most stocks especially after results. So, some of the monthly recommendations have not performed as expected. Sakuma is in T2T segment, it should bounce back when it is out of it. You will have to hold all November recommendations until December end to see results. If you bought any of the monthly stocks above the recommended price, then just give it time until the end of december to see returns. There is not much to be worried about though; it is a minor correction phase. There will be no recommendations for December. If anything changes, or we decide to post recommendations for December, then, we will post an update.

Here was our Top Stock Picks which had the potential to do well in November 2017 hold them for December as well:-
1. SIL Investments Ltd. (NSE Price as on 30 October 15:30 pm: Rs. 323.20)
2. Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (NSE Price as on 30 October 15:30 pm: Rs. 514.05)
3. Sakuma Exports Ltd.(NSE Price as on 30 October 15:30 pm: Rs. 206.40)
4. Andhra Sugars Ltd. (NSE Price as on 30 October 15:30 pm: Rs. 607.70)
5. Manaksia Steels Ltd. (NSE Price as on 30 October 15:30 pm: Rs. 45.40)

D Mart (Buy this share to make your next gen richer)

This is an investment idea so it's a buy and hold stock (no stoploss or target), these investment ideas will be reviewed every March. This ideas may give you a multi-multibagger return in a long run.

Holding since IPO.

Price: Rs. 1100

About Company:

DMart is a one-stop supermarket chain that aims to offer customers a wide range of basic home and personal products under one roof. Each DMart store stocks home utility products - including food, toiletries, beauty products, garments, kitchenware, bed and bath linen, home appliances and more - available at competitive prices that customers appreciate. Core objective is to offer customers good products at great value.

DMart was started by Mr. Radhakishan Damani and his family to address the growing needs of the Indian family. From the launch of its first store in Powai in 2002, DMart today has a well-established presence in 140 locations across Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab and Rajasthan. With our mission to be the lowest priced retailer in the regions we operate, our business continues to grow with new locations planned in more cities.

The supermarket chain of DMart stores is owned and operated by Avenue Supermarts Ltd. (ASL). The company has its headquarters in Mumbai.

* The brands D Mart, D Mart Minimax, D Mart Premia, D Homes, Dutch Harbour, etc are brands owned by ASL

FOUNDERS

DMart is owned and operated by Avenue Supermarts Ltd. (ASL) – a company founded by Mr. Radhakishan Damani. Mr. Radhakishan Damani is respected in the business world as an astute investor in the Indian equity market, he has built a company that constantly strives towards developing a deep understanding of customer needs and satisfying them with the right products. A firm believer in core business fundamentals and strong ethical values, Mr. Damani has built DMart into an efficient, large and profitable retail chain that is highly respected by customers, partners and employees alike.

Avenue Supermarket (DMART) why a good long term bet?

1. Big play in retail sector (most profitable super market chain in India)
2. A share one should buy & hold forever
3. Long Term growth story
4. Owned store strategy reduces variable cost & shows confidence in business
5. As no rent: cuts inflation effect on major expense of the sector
6. Follows Walmart & Cosco model for doing business
7. Increase in no. of stores year on year at an awesome rate
8. Same store sales growth > 20% (while peers in sector are in single digit growth)
9. Passes on price discount to customers, which helps higher inventory turns
10. Labour management with strong IT system process
11. Business concentrated in Gujarat & Maharastra : Pros
   a) better leverage on brand, public taste, infrastructure
   b) cluster stores helps lower distribution cost

Swasti Vinayaka Art

This is an investment idea so it's a buy and hold stock (no stoploss or target), these investment ideas will be reviewed every March. This ideas may give you a multi-multibagger return in a long run.

Price: Rs 7

Swasti Vinayaka

Some times we will get stocks at throw away prices, we are going to discuss one such stock which has all the good qualities to give guaranteed returns in one year time in my perspective.

Selection of stock is done based on below merits
1. The company is maintaining healthy dividend yield of 6% for last 7 years.
2. Company D/E level came down from 2.4 to 0.6 in last 4 years, so expecting more dividend from next year.
3. Net profit margins are improved from 14 to 29% in the last 3 years.
4. Company operating margins are improved from 32% to 55% during the last 3 years.
5. Company ROE, ROCE levels are 32% & 30% respectively.
6. Any company management who maintains good relationship with retail share holders coupled with good dividend distribution policy & strong fundamentals, surely will be rewarded by market participants.

What it does: Company is operating in real estate, sale of jewellery & Signio paintings (through canvases that tell tales of the Hindu epics, Islamic histories and chronicles).

Promoter family hold 51% stake in company, management is clearly investor friendly considering the fact of dividend distribution across listed companies though the stock prices are less than 9rs for the last 7 years.

Currently 75% of revenue contribution is coming from risk free rental income, the other 25% is coming from other divisions such as jewellery & signio paintings sale. The Signio painting division certainly can prosper considering it as a premium segment serving for higher classes of the society where margins will be very high. This segment can provide the requisite next leg of growth for the company going forward.

Financials

Improving Financials for the last 3 years
Operating margins for the last 3 years were 32% , 48% & 55%.
EPS 0.35, 0.48 & 0.64
Continues dividend track record for last 7 years.
Positive cash flow for the last 8 years.
ROE 24, 28, 32
ROCE 22,27,30
PAT Margins 13%, 22% & 29%.
Tax rate 33,34 & 34
D/E ratio reduced from 1.9 to 0.6 in current FY.

When the fundamentals are good, business exhibits strong financial ratios, high dividend distribution track record of last 7 years coupled with promoter integrity in any company, market always will give a premium in valuation to that company.

Note : I am quite sure that this company is going be listed in next year economic times multibagger stocks section, please mark my words.

Advanced Enzymes Technologies

This is an investment idea so it's a buy and hold stock (no stoploss or target), these investment ideas will be reviewed every March. This ideas may give you a multi-multibagger return in a long run.

Price: Rs. 270

Advanced Enzyme Technologies : 

1. Blue chip stock in making
2. The operations i.e Enzymes is an extensive  R&D based technical know-how business, only very few companies can survive in the longer term. Because R&D requires good capital investment and skilled workers are required to get the work onto successful track.
3. Started from scratch by first generation entrepreneur and achieved several milestones in last one decade.
4. Business across 50 countries.
5. The products can be utilized across human , animal, food , non-food sectors and bio-fuel sectors.
6. Promoted by Rathi family
7. Company's innovation got several accolades with awards such as Most innovative exporter's award 2012, India’s Fastest-Growing Mid-Sized Cos 2013,  Bio-Excellence in Industrial Research in 2014 & Best Nutraceutical Company in 2016.

Positives:
1. Segment (Human healthcare, Animal nutrition and bio processing) have lot of growth opportunities exist going forward as people are becoming more sensitive and rejecting genetic modification & opting for natural way.
2. Operating margin remained robust & will stay so, supported by strong R&D set-up and healthy demand in the US.
3. Good to see company is spending > 5% of sales on R&D efforts across several years. 
4. Generally when any company having multiple subsidiaries difficult to expect profits from all the units, AETL is an exceptional one with profits from all the active units.
5. As the company is financially sound, expansion is coming by organic (product expansion) and  inorganic (acquisition of JC Biotech and Evoxx tech) ways .

Negatives:
1. Any sudden regulatory compliance issues may have adverse effect
2. Currency fluctuation : Susceptibility to volatile foreign exchange (forex) rates as Exports account for majority of the revenue. However currently the company does not hedge its net forex exposure, which poses a risk.

Growth triggers:
As an industry itself, enzymes market is in exciting phase projected to show high gains in light of its extensive usage across several industries food processing, germination in breweries, pre-digestion of baby food, fruit juice clarification, meat tenderization, cheese manufacturing, and conversion of starch into glucose with limited competition globally.
Company invested in Advanced Biodiesel Limited, to demonstrate company’s products usage  in the manufacturing of Biodiesel i.e. manufacturing of biodiesel using enzymatic route.
Company acquired 100% stake in Germany-based Evoxx Technologies Gmbh (Evoxx) through its wholly owned subsidiary, Advanced Enzymes Europe B.V for 57 crore. This acquisition is is expected to strengthen the group's foothold in Europe as well as boost research and development (R&D) capabilities.
Company intends to intensify its focus on new age applications such as Palm Oil extraction and Biodiesel, and set up  Malaysian subsidiary to drive growth in this highly potential market