Mukand Ltd.

Note: Annual report not available. If available with you, pls email me at shankar.nath@gmail.com

LY profits = 61.5 crores
Share capital = 73.13 crs
Loan on books = 1,117 crs
Investments = 95.3 crs
Net CA = 962 crs
FV = 10 rupees/share
Dividend LY = Nil
CMP (Mar-16) = 78.30

Primary interests in Mukand Ltd. are on account of -
1. Core profits and sales growth at 30% and 18% resp. I estimate a profit closing of approx. 90 crores this year end. (at an EPS of 12.3 rupees/share).
2. The debt recapitalisation of Mukand is an amazing 44% of m-cap
3. Cash on books (on 31st Mar 2006) was 18 rupees per share (on account of the one-time income of 63 crs in 2005-06)
4. Trailing P/E for Mukand is 6.50 (the best in it's class)

The analyst presentation on it's website which gives a good take on it's future strategy. The company has a positive export strategy, heavy incidence on automobiles, introducing methods to dissolve the heavy debt on it's books, exploring new sectors and has strong relations with it's clients.

Do check the balance sheet of the company for three key points -
1. Nature of investments with the company (93 crores in Mar-2006)
2. Land available with the company (and value on books) (pls note: the Kurla land sold by the company for 221 crs may have been worth much much lower in the books of the company .. see gross block)
3. The management discussion & analysis of the company, w.r.t. debt-reduction, existing non-core businesses and capex. (a reduction in debt - using the cash on sale of land - will lower interest cost & boost profits; the company will however, not be in a hurry for this as they can save on taxes by this move)

At 78 rupees per share, the stock is undervalued. Mukand is a strong, solid stock and I expect it to fetch a price of around 125-140 rupees in the next 7-8 months.

The charting of the scrip is enclosed -