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Wednesday, July 22, 2009

Hot Pick: Compact Disc India Ltd. Bse Code : 526141

Compact Disc India Ltd. is in the sunrise sector of Animation and has reported fabulous results for FY ended 2009. FINANCIAL HIGHLIGHTS OF FY 2008-09:

* Sales Revenues higher by 87% at Rs.192.10 crore.- Profit-After-Tax (PAT) increases by 102.51% to Rs.39.50 crore.
* Profit-Before-Tax (PBT) increases by 101.21% to Rs.43.81 crore.
* Earning per Share (EPS) higher at Rs.41.27 as compared to Rs.20.51 last year; higher by 101.21% (annualized).
* CDI continues to be the largest animation film outsourcing company in South Asia.

Source : http://www.compactdisc.co.in/

The EPS of this stock is reported at Rs.41 and the stock is trading at a dirt cheap PE of only 1.5 at cmp of 61.15. The company is promising to triple its Net Profit in FY2009-2010. If it's able to fulfil its promise, then you can well imagine where the price of this extremely undervalued stock can go, considering the fact that the PE ratios for companies in the Animation & Media sector enjoy PE ratings between 10 and 20. The company has announced several tie ups with reputed movie production houses. CDIL has informed the exchange that the Company has signed a MOU with BBC Films to co-produce the film, "Blame it On The Bhangra". The Promoters have increased their stake in the company by 4% during the last year. This is a high risk-high returns kind of stock which is a potential multi-bagger.

Cheers!

15 comments:

Street said...

I have become your huge fan, Superstar!All the market went down but this stock recommend by you closed at 10% up price.Compact disc is really a gem of stock and kudos to you for discovering this gem.Yesterday I booked Rs 27 profit in Jklakshmi...sold it at 127.I am now investing the money I made in this and in Balaji tele on your advice in CDIL. Thanks a million.....HP

Vijayta said...

keep up the good work superstar. you are our guiding light in the market. compact disc numbers are very good and when I told my broker about this stock, the price target he gave to me is very high. regards
vijayta

somen said...

Navin Sir. Thanks a lot. I have Country Club from Rs 10/- Plz help me to get the update If I can hold..

shashjpn said...

Naveen sir, I have IFCI@55. It will reach my level in this month ? Please advice me and should i hold this stock for long term with this price or sell&reenter with lower levels. Thanks.

Guru bhai said...

Sir,

I have 50 HOEC @ 199.50/- wat si the your view for the same.

Regards,

Tejas

Superstar said...

Gurubhai, HOEC is making new highs but valuations are now getting stretched. It's at 219 now and I would book my profits if it goes up another 10-15%.

Shashjpn, sorry for the late reply but I'm not an admirer of the IFCI stock. It's largely a speculative counter and can go wherever the operators wish to take it. At 55 it was a sell and is now at 46. You can always trade in this stock for small trading profits, but I don't like this stock for long term investment unless some changes occur in its fundamentals.

Cheers!

Superstar said...

Thanks Vijayta, Street & Somen for your appreciation.

Cheers!

Guru bhai said...

Boss,

My New purchase is KCP sugar 100 stock @29.50 and KRBL 50 stock @137/- Assam Company 100 stock @18.50

Need your assistance for the same.

Can I enter in FCS in current rate?

Superstar said...

Guru,
You have purchased KCP Sugar at a high price. Most sugar stocks had run up too fast and will now correct for some time.
KRBL has been one of my favorite stocks which I had originally picked up around 50 levels. It may correct some more from its current level but can be held for long term.
You seem to have purchased all your three stocks at high prices so your risk-reward ratio is not very favorable. Assam Company is a momentum stock & will move in line with the world Oil prices and is a high risk-high return kind of stock. It can go up a lot or go down a lot, depending on your luck.

Cheers!

hari said...

Hello,

I am being recommended by one of my friend to this site. I have studied your website and its quite interesting.

Ihave a query : I am holding hindalco 110 @ 198 from almost more then 3 years and currently its trading at 106. I am a long term investor. So shoulld i hold it and when should i exit. Please advise.

Guru bhai said...

Thank you sirji.

Guru bhai said...

Sir,

Need your help for Fame india and 3i info.Pls suggest entry and exit level.

Superstar said...

Hari,

All metal stocks, including Hindalco are likely to be very volatile for a while. The stock price is directly dependent on the price of Aluminum in the world markets. Fundamentally I don't see much upside from current levels, but technically it may even go to 140 levels in case there is a rally in aluminum prices. I would cut my losses if I was you then.

Gurubhai,
As per valuations, 3i is a better stock than Fame. Although both are currently more of momentum stocks. Ride Fame till it moves, then dump it. Can't recommend an investment in that stock at cmp unless some fundamental news is on the way.

Cheers!

Saravanan said...

Friend,
Is there any good reason why the stock has zoomed to 53 to 65-69 level.
What'z the next target?

Superstar said...

HiSaravanan,

Compact Disc has a strong support zone around the 54-55 levels. It has bounced back from there to current levels. Fundamentally, the stock is trading cheap if the books of the company are to be believed. Next technical resistance for this stock is around 74-75 levels.

2010 is going to be the come back year for beaten down small caps, which didn't do so well in 2009.

Cheers!