padiyaraa
Long

Jindal Poly Films Ltd: ₹420 (omg) A Fundamental Call,Target ₹700

NSE:JINDALPOLY   JINDAL POLY FILMS
216 10 9
Jindal Poly Films Ltd:
Current Price: ₹ 420 (omg')
Market Cap.: ₹ 1,851.73 Cr.
Book Value: ₹ 607.70, PE Ratio 5.42
Return on capital employed: 21.38%
Quick ratio: 1.05
Dividend Payout: 1.20%
Number of equity shares: 4.38 Cr.
Annual Sales:2644 Cr. EPS: ₹ 78.78 Expected EPS: ₹ 112.08
Cash end of past year: ₹ 99.82 Cr. Cash end of last year: ₹ 110.31 Cr.
Price to Cash Flow: 2.97.

Everything looks fine,at the current price the stoke is under valued, and find it is far better than its peers like Aarati, Alkalies or Tatachem'.
This numbers are Extracted from the internet, if it is true the stock worth ₹ 5000.
Well i agree this stock is under-priced but dont you think that target of Rs 5000 /- is too high even from 5 years point of view
Reply
padiyaraa SagirKazi
@SagirKazi, Value unlock, when it happen in any stock, the percentage gain will be enormous.That is why I said 5000 as it looks quiet possible
to me. if you ask me for details also I have justification. it has a good ROE. My expectation is only a 55 PE multiple.Already it competitor the Godrej Ind is trading with 56 PE.

Always welcome a genuine doubt.
Thank you
Reply
SagirKazi padiyaraa
@padiyaraa, Well Godrej Industries enjoys Goodwill due to there good reputation over the years.

If you ignore Godrej and check any other company in the same sector they are trading around 12-22 times PE
Eg Aarti Inds. @ 22 times, Tata Chemicals @ 12.6 times

I agree that Jindal Poly Film has good ROE of around 18%, but 56 times PE may happen in case of extreme bull-run.

I may give PE of around 22 times and with EPS of around 62 , 62*22 = 1364 looks fair valuation in current scenario.

Let me know incase i am still undervaluing the same.

Thanks
Reply
SagirKazi SagirKazi
@padiyaraa, I have just now check its Annual Result for March 2017, there is a fall in EPS from 77 to 44 per Share on Consolidated lvl.
So 44 * 22 = 968 will be the revised Valuation from my side.
Reply
padiyaraa SagirKazi
@SagirKazi, I agree that, you have given quiet a natural projection, and I can agree with any price greater than the current price. I am not adamant in my view.
it is just my view on set condition, as every one has a different view based one their convenient comparison. We all do that. never mind it. But all will agree that it is undervalued at current price.That is what I want to point out here. Forget the projection I have given, it can vary any time based on the fundamentals,management actions,goodwill,& finally as you mention market conditions( in case extreme bull run) etc.
Reply
SagirKazi padiyaraa
@padiyaraa, Fair Enough . Agree with you that every one has a different view.

Yes stock is undervalued so lets hope the same to spike in near future.

Thank you for your Valuable time.
Reply
padiyaraa SagirKazi
@SagirKazi, I really appreciate your interest in finding or confirming the worthiness of the projections.

Generally people doesn't bother all these calculations.
But before entering in to an investment one has to think twice,and discuss it in a forum like this
with your friends or blog-mates,exchange and share your concern, opinion and ideas,
which can give us more insight about an investment,may help us to take a better decision.

I remain.
Reply
SagirKazi padiyaraa
@padiyaraa, Yes i agree with you.

However People are generally interested in Tips and quick money.

Hence they dont work on numbers and end up buying companies at overvalued levels.
Reply
padiyaraa SagirKazi
@SagirKazi, true
Reply
Yes the Stock is Much lower than book value , and its good investment
Regards
Reply
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