Hello Senior members,
Last week there was stock split of kriti Industries (BSE code -526423). The stock was trading at Rs 200 and currently below RS 20. The company has posted good Q3 results.
Please is it possible to see whether the cost is expensive or cheap at current levels? If it is cheap then how much growth is expected, approximately, in one year?
Please reply your thoughts on this.
Thank you for your precious time
regards
Raj

The stock actually split of 13th December 2007.

Open-High-Low-Close figures from BSE:

12 December 219.00 219.95 211.00 219.95
13 December 22.95 23.00 21.00 23.00

Small companies like Kriti Industries are rarely tracked by analysts and it is difficult to predict their future prospects.

The company had not shown much growth till FY 2007.

FY 2008 seems to be a good year for the company.

In FY 2007, the company had net profit of Rs 2.62 crore.

Already in first three quarters of FY 2008, the company has achieved profit of Rs 7.21 crore.

If the company manages a profit of Rs 9 crore or so, the eps would turn out to be Rs 1.45. (with around 6.21 crore shares outstanding).

At the current price of Rs 16, the stock is trading at 11 times FY 2008 earnings, which is a fair valuation - neither cheap nor expensive.

Kriti Industries is in expansion phase and may improve revenues in the future.

The company has few businesses including edible oils, pipes, plastics etc. I will try to find which division is responsible for the good performance in FY 2008.

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What price did you buy the stock?

If you bought it at a relatively low price, I suggest you hold the stock for some time.

Technically, the stock is in a correction, but seems bullish in the long term.

The 200 day EMA is at Rs 13 right now. One can keep a stop-loss of around Rs 12 - Rs 12.50.

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Dear Alchemist,
The explanation what you have provided is just mind blowing. Thats really appreciable. I am very glad that i am part of this forum.
Thank you so much for your valuable time.
Based on your inputs i have done some search on this stock.
News is that " Imports of cooking oil is likely to increase by 15%" this is because there will be shortage of cooking oils.
As this company is in production of Edible Oil, please is it possible for you to provide your views on this matter? I mean whether this shortage of oils will spurt the price of this stock later in this year?
Thanks
regards
Raj,

Excellent.

I really appreciate when investors take the initiative to analyze the details themselves. .

I haven't seen the details yet, but I do suspect that it is the oil division that has boosted the company's earnings in FY 2008.

Plastics and PVC pipes have not been doing well as industries. Thus, I don't think these divisions can be responsible for the company's earnings growth in FY 2008.

I was looking at MCX's site and found for India produces only 1 million ton of soy oil per year, but consumes 2.5 million tonnes.

http://www.mcxindia.com/products_RefineSoyOil.html

With such dependence on imports, Indian prices will follow global prices.

This is the price chart for Soy Oil. It is definitely in a bull phase.

From around Rs 470 per 10 kg (April 2007), prices have gone to almost Rs 600 per 10 kg.



Now two facts are important:

How much of the company's revenues comes from the edible oil business and how much of edible oil business is from soy oil?

Secondly, how much capacity the company is currently using and how much will it be using in next 1-2 years?

As India is a big importer of soy oil, all additional capacities will find buyers in the local market.

Go to the company's site and see if this information is available.

Usually the annual report contains all such information, but quarterly results do not mention them.

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Dear Friend.
Based on your inputs i tried to gather some more information about edible oil stocks.
To your previous question the answer is YES. The kriti industries most of the revenues comes from solvent division which is nothing but oil extract section.
I have gathered some following information about its peers .
Please have a look and please see if it is possible to provide some inputs?
According to you which other fundamentals should be included to find best vaule stock? You valuable inputs are very important to take very cruicial step. Please.

stock PE EPS Book.V MARCAP CMP Net.profit cr Sales in cr
1) Ruchi 17.39 6.88 231 2183 121 100 8582
Soya
2) KS oil 29.47 2.9 74 2694 85.5 57 1087
3) Kriti 13.13 1.2 43 99 16 2.62 332
ind
4) Guj Amb 14.59 5.31 21 1072 77.5 46 1398
Exp
5) Mura Ind 12.87 45.85 94 604 573 28 510
6) Sanwari 13.01 9.64 19 545 123 12.2 445
Agro
7) Agro T. 23.35 7.51 39 427 160 19 1038
foods
Only Ruchi soya has mutual fund investments.

Hello,
Is there anyone to give inputs on this?
Its very important for a forum to be succcessful that some one from forum should be there to give some inputs.
Thanks
regards
Raj

If the company is getting most of its revenues from its edible oil business, it becomes a commodity company.

I would not expect such a stock to trade at more than 15 times earnings.

In the long term, I am bullish on almost all edible commodities except a few like sugar.

I do not expect price of edible commodities to come down substantially - even in case of a US recession.

However, I don't have much idea about fundamentals of Soy Oil. I am trying to find some kind of reliable analysis on Soy Oil.

If you have made big profit in this stock, book partially and hold the rest with stop-loss of Rs 12 - Rs 12.50.

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