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Thursday, September 6, 2007

SUPERSTAR GEM : DCM SHRIRAM CONSO

DCM SHRIRAM CONSOLIDATED Ltd. is a diversified company operating in the Agri (Fertilizers, Bioseeds, Chemicals etc.), Cement, Sugar, Rural Retail business. Fenesta Buildings systems (UPVC Window and Door systems pioneered by DSCL under the ‘Fenesta’ brand ) is a new addition to their portfolio with great growth prospects. The company has recently received Rs. 837 crores from the sale proceeds of its Mill land in Delhi to DLF. This windfall will make the company debt free. The company has cash alone of approx. rs. 100 per share. The company has also declared an interim dividend of rs. 3 per share. This stock is a multibagger in the making.

10 comments:

ashish said...

hi navin

hust bought 400 DCM @ 64....could you kidly share the prospects of the company with a probabale time frame

regards

ashish

Superstar said...

Hi Ashish,

Which DCM did you buy? The stock being recommended is DCM SHRIRAM CONSOLIDATED LTD. and its cmp is 71.80 and not 64. The prospects of the company are excellent as explained in the main post. If one hold the stock for one-two years, it should give excellent gains. Cheers!

MeMyselfIAndIrene said...

hi navin,

DSCL is currently close to its 52-week low and market is close to all- time high.

Looks to be a good mid-cap stock with good promoter holding and diversified business. However, sugar is one of their main businesses which is a negative.

Can you share some specifics why it should rise from here? 52-week high means a good 75% gains from CMP.

Keep up the good work.

Superstar said...

Hi memyselfiandirene,

DSCL is a great buy at cmp. The reasons are a) Due to Undervaluation of the stock price. b) Due to its growth prospects and possible demerger in the future.

Here is an excerpt from a recent research report on this stock :

Company has an Equity Capital of Rs. 33 crores divided into 16.5 crore shares of Rs. 2 FV.This gives the company a market capitalisation of Rs. 1200 crores based on CMP of Rs.72. Let's take a look at its assets. Its fertiliser division with capacity to produce 400,000 TPA of top quality Urea and sold under the much respected brand name of SHRIRAM Urea can be conservatively valued at US $ 150 Million. Its 173 MW power plants based on Coal and Heavy Fuel oil DG Sets and baggase can be conservatively valued at US $ 100 million. Its 2 Sugar Mills at US $ 50million and its PVC plants including Chlor Alkalies units at US $ 250 million. This gives an enterprise value of the comapny's businesses (excluding its 100% subsidiaries like DSCL Energy Services, DCM SHRIRAM INFRA its many Bioseed Research companies etc.) at Rs. 2200 crores. With the receipt of Rs. 837.5 crores cash from the SBM LAND deal from DLF, company will become a debt free company. Intrinsic value of Company's share should be minimum Rs. 230. However if company's businesses are demergeed and all the demerged entities are listed on the stock exchanges its value could go to more than Rs. 500 per share.

Cheers!

MeMyselfIAndIrene said...

hey navin,

thanks for the good information.

the only "new" thing here is the sale of the land. others should already be factored in the price.

Should this one thing be the trigger? Or any other big projects/orders/news in the pipeline?

ashish said...

hi naveen
sorry couldnt repy back earlier...was indeed mentioning DCM Shriram Consolidated..... 64 was a typo bought it at a princely price of 74 .... trading much lower now alas

Superstar said...

Hi Memyself..,
The land sale should indeed be a trigger for this stock. The news came out less than a month back and what plans the company has for utilizing this 837.5 crores would decide the future trend of this stock. The company has lots more prime real estate.

Hi Ashish,
Relax. The price was down on Friday because the stock has become ex-dividend on that date. If you had bought the share before the ex-date then you are eligible to receive a dividend of 150% (rs.3) which we should receive by the end of the month.

Cheers!

praveen said...

still a multibagger in bull run its bearing down!!!!!!!!!

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MeMyselfAndIrene said...

DSCL is not moving. Dont know why. Surprising that operators can override fundamentals like forever. This is keeping me in double mind whether to enter or not.