In announcing the 5Gems, we have tried to create a balanced portfolio of stable and aggressive stocks.
Two good stocks providing good compounding entry are ATUL and Kirloskar Bros.
Jash, Selan and Jayant Agro as sprinters.
Gem 1
Atul Ltd
CMP 9267.00
This company segments, namely Life Science Chemicals and Performance & Other Chemicals, under seven sub-segments, namely Aromatics, Bulk Chemicals and Intermediates, Colors, Crop Protection, Floras, Pharmaceuticals and Polymers.
- Market Cap ₹ 27,531 Cr.
- High / Low ₹ 10,975 / 6,220
- Stock P/E 40.7
- Book Value ₹ 1,437
- Dividend Yield 0.21 %
- ROCE 24.0 %
- ROE 18.3 %
- Face Value ₹ 10.0
- Int Coverage 109
- Sales growth 3Years 2.02 %
- Return over 3years 39.0 %
- Debt to equity 0.01
- EPS ₹ 228
Expansion Plan Projects like Mono-Chloro-Acetic acid (MCA) could provide growth for next 1-2 years.
Good time to Buy and Hold for Compounding.
At this price, it is an ideal compounding candidate better than any Mutual Fund.
Expect +40%; Target 13353 by Jun22.
Gem 2
Kirloskar Brothers Limited
CMP 370
Complete fluid management solutions for large infrastructure projects in the areas of water supply, power plants, irrigation, oil & gas, and marine & defense.
- Market Cap ₹ 2,958 Cr.
- High / Low ₹ 505 / 131
- Stock P/E 17.2
- Book Value ₹ 138
- Dividend Yield 0.81 %
- ROCE 15.3 %
- ROE 15.7 %
- Face Value ₹ 2.00
- Int Coverage 7.17
- Sales growth 3Years -0.71 %
- Return over 3years 35.2 %
- Debt to equity 0.33
- EPS ₹ 21.6
Another Good Compounder Stock at this price can be a gem in your portfolio.
Best Buy @ 346-352 ; TGT 550 SL 315
Gem 4
Selan Exploration Technology Ltd.
CMP 150.50
Oil & Gas exploration with Government of India (GOI) for Bakrol, Lohar, Ognaj, and Karjisan fields.
- Market Cap ₹ 229 Cr.
- High / Low ₹ 180 / 113
- Stock P/E 32.2
- Book Value ₹ 217
- Dividend Yield 3.32 %
- ROCE -2.18 %
- ROE 1.02 %
- Face Value ₹ 10.0
- Int Coverage 44.8
- Sales growth 3Years -14.0 %
- Return over 3years -6.82 %
- Debt to equity 0.00
- EPS ₹ 4.68
Expect a good couple of years for oil exploration business and scope for PE expansion.
Expect the price to touch 220; SL 111.
Gem 4
Jash Engineering Ltd
CMP 484.00
Water and Waste Water Pumping Stations and Treatment Plants, Storm Water Pumping Stations, Water Transmission Lines, Power, Steel, Cement, Paper & Pulp, Petrochemicals, Chemical, Fertilizers, and other process plants.
- Market Cap ₹ 574 Cr.
- High / Low ₹ 628 / 220
- Stock P/E 19.8
- Book Value ₹ 124
- Dividend Yield 0.00 %
- ROCE 21.0 %
- ROE 21.6 %
- Face Value ₹ 10.0
- Int Coverage 4.80
- Sales growth 3Years 19.7 %
- Return over 3years 69.6 %
- Debt to equity 0.58
- EPS ₹ 24.4
Right time to Enter
Expect 775 by June22; SL 411
Gem 5
Jayant Agro-Organics Ltd.
CMP 224.50
Manufacturing and trading of castor oil and its derivatives such as oleochemicals.
- Market Cap ₹ 675 Cr.
- High / Low ₹ 324 / 118
- Stock P/E 8.81
- Book Value ₹ 140
- Dividend Yield 0.44 %
- ROCE 16.2 %
- ROE 13.6 %
- Face Value ₹ 5.00
- Int Coverage 7.35
- Sales growth 3Years -13.7 %
- Return over 3years 0.77 %
- Debt to equity 0.59
- EPS ₹ 25.5
Expect +20% rise over next 2months
Target 290; SL 194 closing basis
