The company makes cigarettes with charminar name brand and located somewhere in Hyderabad.

The company right from the year 2005 have been declaring dividend above rupees 10 per share and this year around rupees 45.

Wanted to know technical wise EPS and PE whether its expensive than its competitor or not?

It's generally a very low volume trading stock.

VST Industries is a great story.

When the above post was made, the stock was at 800.

Today, it is at 1200.

In short,

- an FMCG stock.
- Tobacco and cigarettes are evergreen businesses.
- Revenues and profits steadily growing at 15% annually.
- Great cash flows.
- 4% dividend yield at current price.

I am thinking of buying a few shares now and averaging if I get a lower price.

__________________
Read All Rules Before Making Any Post | E-Investing on Google+

Vantage Point: 8 Points of View For Evaluating a Stock | Fundoo Professor.

Bought 5 shares @ 1200.25 (all inclusive).

I have bought only 5 shares as I want to average at lower levels. As markets are weak, I think this stock may correct a bit too.

__________________
Read All Rules Before Making Any Post | E-Investing on Google+

I missed the bus.As i was looking to buy it than with long term horizon especially because of its good dividend track record.

Best of luck to you i might give a thought again about it when it comes around 900 levels.Another stock from almost similar field with good dividend record is Kothari Products.Also keep a track if its cash flow if it interests you.

VST Industries announced its results on Thursday.

PAT was higher by 40% compared to same quarter last year.

I added 10 shares at 1370.45 (all inclusive).

However, after looking at the details, I don't think the results are really that great.

Revenue growth (net sales/income from operations) was up only 6%.

PAT growth was added by higher other income and reduced expenditure. Both can't be long term growth factors.

Any way, VST Industries is a stable and growing business.

I will hold the shares for now, but sell reduce my position if the stock goes above 1400.

__________________
Read All Rules Before Making Any Post | E-Investing on Google+

With a market cap of 2092 crore, a profit was delivered of 95 crore. As per management this was highest profit delivered in 10 year, I don't think they can repeat this every year! This happened due to no increase in tax burden in budget last year!

In upcoming budget any increase in tax on cigarette business will impact margins! The NPM was 13% this year!

Debt Free Company with Return on Assets = 36% on Assets of 264 Crore and Profit = 95 Crore, which is impressive.

But seeing the market cap, price is too high. This business has intrinsic value (using 10% rate of FD) of 531 per share. Adding cash and investments per share of 129, I arrived at total value of 661 Rs.

I will not touch this scrip until it falls below 700!

Results are due today, bought small quantity at 1106 yesterday. at cmp dividend yield comes at 4%.

On first look results seem to be good. Net profit up by45% and sales up by 23%. Stock hit an intraday high of 1270; for me it's +164 only .

Closed short term position at 1286. Banks seems to be moving up!!!!

Declared a dividend of 65 rs. Last 3 years dividend payout at 140 rs. and 3 years back price at 260 levels I think. A price return at 600%

Can we find such stock now?

That's the problem. If one knew one would have bought it earlier.

I posted about it when 45 rs dividend news came. But I myself missed the bus.

Also in news once a chap was asking question on bajaj auto. He had bought the share in 2008 recession period. He had bought the share for 180 bucks just 4 years back and he invested 75000. Now that 450 something shares are worth 7-8 lakhs rupees. Plus on top of that the person so far have received 50000 rupees back as dividend. An investment of 25000 4 years back is worth 7-8 lakhs.

In short its all about timing and the sector to work. I feel rather than choosing the stock, if one ask i'll say alternative fuel is the future especially solar. Then suzlon comes into picture but again it has just depreciated. It's all about timing.You never know 20 rupees suzlon might change to 200 or 1000 rupees stock in 2015+.Or the way company works it may cease to exist.

Cigarettes is one business which returns tons of cash, so either the company pay hefty dividends (VST) or diversify heavily (ITC). Here the concern is price, no one is concerned over the business, debt levels etc as this is a typical low capex, high free cash business.

If you study intensely multibaggers of the past be it Hero Motocorp or Bajaj Auto or Infosys or VST all have this tendencies of zero debt, high ROE and generating loads of free cash.

So it is highly highly unlikely that debt laden players like GVK Power, Suzlon, Unitech, Aban will become huge multibaggers going forward. It inherently depends on the fundamentals as well.

So a Suzlon from 20 to 200 or 1000+ by 2015 is a far fetched dream. Ultimately stock prices are slaves of earnings. A fanatic bull hype may take bubbles to sky levels but those do not repeat often.

I can name a whole bunch of debt-ridden companies that turned out to be multibaggers.

I had purchased Arvind and SAIL when their prices were in single figures. If I had held on to those companies for a few years, I would have made a little fortune. .

I had purchased Tata Motors when it was at Rs 18 (adjusted for split).

Don't forget that leverage is an ROE-multiplier. In favorable economic conditions, leveraged companies can outperform non-leveraged companies in the same sector.

__________________
Read All Rules Before Making Any Post | E-Investing on Google+

True, but leverage being a double edged sword have create many multibeggars as well. Stocks which were growing on leverage, likes of Unitech, Aban etc at the height of the bull run in Jan 2008 paid a very high price.

Debt is a concept very dear to Indian companies, as they prefer to leverage and grow faster. When the cash flows are in place debt funded acquisitions do make sense (Bharti - Zain) but companies need to visualize the worst case scenario too (the likes of Hindalco, Tata Steel are steel reeling from the high cost debt funded acquisitions)

All in all, what I tried to emphasize was that if one sticks with low to zero debt stable companies, chances of turnaround and finding multi baggers are much better than as compared to a bunch of debt ridden, low free cash flow stocks.

Company came with good numbers. Stock was on steroids.

Is anyone planning to exit or holding further?

I might enter after dividend record date now.

I exited the counter yesterday at 1945 almost 20% gain for me in 10 days, I felt it's enough for me and moved in to BBL [Bharat Bijlee].

VST Industries making attempts to close above 2000 psychological mark, Sachinjee can we buy this if it close above this mark for 2 days. What is the price target in your mind?

I don't have any price target in mind.

I want to hold this stock for the long-term.

Do you want to trade in this stock or hold for the long-term?

__________________
Read All Rules Before Making Any Post | E-Investing on Google+

sachinjee i want to trade in this, i would have gained more if i invested in it. but now at this price i feel i do not have the price cushion

I am not sure where the stock will go in the short to medium term.

If you want a risk-free trade, wait till the stock falls to 200 EMA.

There is a very high probability that the stock will bounce back from the 200 EMA.

I know the 200 EMA is far away, but if you have the patience wait till the price and 200 EMA meet.

__________________
Read All Rules Before Making Any Post | E-Investing on Google+

Hi Alchem,

Can you post the chart for VST ? The dividend record date is Jun-15th.

Looking at market scenario, planning to add on dips (50% allocation)

Will add the other half post ex-date. Tenure: Long term

Added 1 share at 1928 ( -65 for cum dividend= 1863).

Here is the chart of VST Industries.

It's the daily chart with 200 EMA, 50 EMA and 21 EMA.

__________________
Read All Rules Before Making Any Post | E-Investing on Google+