DATAMATICS GLOBAL MULTIBAGGER POTENTIAL STOCK D20M08Y2014

Datamatics Global Services is a company founded by Dr. Lalit S. Kanodia, an indian IT industry pioneer with a Doctorate from MIT, USA. Datamatics helps large global companies in managing their end-to-end application life cycle and business processes. Their next generation solutions span Document management, Portal management, Publishing solutions, Data warehousing & analytics and several others. For more info check, http://www.datamatics.com  

Datamatics client footprint is spread across all four major continents, Americas, Asia, Europe and Australia. The company is a trusted partner to many Fortune 500 companies and help them power their business process automation by creating next generation solutions.

PRESENT DAY NUMBERS
CMP on Day20 Aug2014: Rs 58.40       Market cap: 350 crores         BV: 59            FV: 5           
Revenue FY14: 733 cr (FY13 550 cr)     Net profit FY14: 48 cr (FY13 26 cr)  EPS: 8.2 (FY13: 4.4)
Debt: 80 cr (on consolidated basis)       Current assets and cash balances: 160 cr (approx) 

BRIEF HISTORY 
Datamatics was one of the early companies in the indian IT industry. The company was founded in the year 1975. This was the first indian IT company to win "International Asia Pacific Quality Award" in the services category in the year 2007. Over the last 2 - 3 decades the company has won several awards and recognition in areas such as Quality, Corporate governance, HR, Job creation, etc 

MULTIBAGGER POTENTIAL 
1. Revenues of Datamatics grew by 24% in FY 2013; significantly higher than 10.2% growth of the overall industry
2. Remarkable achievement in the growth of the acquired company Cignex
3. Cignex revenues grew from 99 cr to 193 cr in the 2 years after acquisition
4. Datamatics has maintained an excellent and consistent profit growth during the last 4 years.
5. The company's reserves (excluding revaluation reserves) as per balance sheet increased from 268 cr in FY13 to 306 cr in FY14
6. Except for 2-3 years, the dividend payout ratio has been in the range of 40% over the last 10 years

INTERESTING INFO
1. Datamatics Global Services was voted as India's "Most respected software company in corporate governance" at the 5th Annual India leadership conclave & India affairs Business leadership awards.
2. The company has delivery centers in 7 cities; Ahmedabad, Mumbai, Nashik, Delhi, Bangalore, Chennai and Puducherry
3. The company has overseas subsidiaries in Germany, USA, UK, Australia, Switzerland, Mauritius and Singapore
4. The export revenue of the company is 86%
5. Prior to founding Datamatics in 1975, Dr. Kanodia was one of the persons instrumental in setting up TCS in 1967

MY TAKE   
From an investment perspective, Datamatics ticks all the boxes. It is a fine IT company; superb track record, consistently profit making, excellent promoter pedigree, financially stable, wide range of clients, management execution capability and more than anything; deeply deeply undervalued.

A million rupee question? Why on earth is this stock available so cheap? Market cap of 350 cr.
This is a question to which I have no answer. Mr Market has missed out on this one(thus far).

A company with 700+ cr annual revenue, 48 cr net profit, current assets worth 160 cr, dividend paying; solid, stable and robust in every which way. I am reasonably sure that this stock cannot continue to be ignored for ever. This is a great time to buy, hold and sit tight. Bright and profitable future ahead. For the company and its stock holders.

This belongs to Warren Buffett philosophy: Great Quality business at a reasonable (read, rock bottom cheap) price. An inevitable potential multibagger!!

Disclosure: I own shares in Datamatics

You can contact with me via zorbayogi9@gmail.com

AVT NATURAL MULTIBAGGER POTENTIAL STOCK D15M08Y2014

AVT Natural Products Ltd. is one of the finest, high quality, profitable, well managed and niche company based in Kerala. This is a 100% EOU. The various businesses of this agri company are Marigold Oleoresins, Spice Oleoresins & essential oils, value added beverages (mainly Decaffeinated tea). They have recently ventured into specific health suppliments (nutraceuticals). For more info check, http://www.avtnatural.com/     

The company belongs to the AV Thomas group which consists of business in diverse areas such as Plantations, Tea, Spices, Rubber, Leather, Food ingredients, biotech, etc. One of the group companies is AVT McCormick, a 50:50 joint venture between AVT and McCormick & Co Inc. of USA.    

PRESENT DAY NUMBERS     
CMP on Day15 Aug2014: Rs 43.25          Market cap: 650 crores          BV: 12          FV: 1           
Revenue FY14: 271 cr (FY13 255 cr)   Net profit FY14: 51 cr (FY13 50 cr)   EPS: 3.35 (FY13: 3.32)
Debt: ZERO      

BRIEF HISTORY   
AVT Natural was formed in 1986. It started with Marigold cultivation on 200 acres of land, and has since gone up to 35,000 acres producing 100,000 metric tonnes of flowers with the support of 30,000 loyal farmers. 

MULTIBAGGER POTENTIAL 
1. The company has delivered 3 consecutive years of PAT of 50 CR plus (this during when global conditions have been challenging)
2. The company is a "Zero Debt" company as on 31st March 2014 (they walked the talk of becoming a ZD company as stated in their AR 2 years back)
3. Compounded profit growth has been around 32% over the last 10 years and RoE has been around 35% during the same period
4. The company has been maintaining a healthy dividend payout of over 20% over the last 10 years (with the exception of a couple years)
5. For the first time in its history, they clocked a revenue of 90 CR in Q1FY14; it is not far when QR will be 100 cr plus stepping up the threshold
6. The company has diversified into health supplements under the brand name "Optim Health". The launch was done in few select cities just recently.
For more into check, http://www.optimhealth.in/       

INTERESTING INFO
1. AVT Natural featured in the Forbes list of 200 best companies under a billion dollar revenue in the asia pacific region (in the year 2012)
2. The contract farming model followed by AVT is regarded as one of the best. Their endeavor is to ensure "Quality at source"
3. They have been audited and certified for Quality by BUREAU VERITAS in accordance with ISO 9001:2008 
4. AVT has a win-win relationship with the farmers maximizing net returns to the farmers and ensuring quality produce for the company at optimum price.  

MY TAKE  
AVT Natural is already a proven SUPER MULTI BAGGER. From a stock price of 40 paisa in the year 2002 (adjusted for splits and bonuses) to a life time high of 50 rupees in the year 2015; this has multiplied investor wealth by approximately 110 times in a matter of 12 to 13 years.    
Even if we were to split the stock performance into 2 separate time periods; this stock has been a multibagger twice. 40 ps in year 2002 to 8 rs in 2008 (a 20-bagger); and 4 rs in 2009 to 40 rs in 2014 (a 10-bagger).   

Now the million rupee question is "Will it became a multibagger yet again ?". I do believe it has all the potential and capability to become a multibagger yet again from the 40 - 45 levels. Tremendous strength in the existing product portfolio, uniqueness of the business model, proven management capability, and diversification into new but associated business areas; should ensure that the financial and business performance and growth should continue into the foreseeable future. At a PE of around 12 and PB of around 4 this could still become a wise investment idea.

A strong and robust potential multibagger!!  

Disclosure: I own shares in AVT Natural (and intend to accumulate more on dips)

MOREPEN LABORATORIES MULTIBAGGER POTENTIAL STOCK D12M08Y2014

Morepen Laboratories is a 25 year old company. The company's business comprises of Formulations (over 100 branded formulations in 8 major therapeutic segments), API (API's and intermediates for both regulated and non-regulated markets), Diagnostics (blood banking machines, clinical and home health devices) and OTC; some of the OTC brands include Burnol, Lemolate, Sat-isabgol, Head-X, Fever-X and others.   

The company has 3 manufacturing facilities with international standings for API, Formulations and OTC. They are located in the foothills of Himalayas in the state of Himachal pradesh. For more info check, http://www.morepen.com          

PRESENT DAY NUMBERS  
CMP on Day12 Aug2014: Rs 5          Market cap: 205 crores          BV: 4.5            FV: 2           
Revenue FY14: 352 cr (FY12 318 cr)      Net profit(loss): FY14 (2.7 cr) [FY12 (20.5 cr)]
Debt: 85 cr (approx) 

BRIEF HISTORY  
Morepen started in 1985 as a pure API (active pharmaceutical ingredient) business. They then moved up the value chain to complex multi-stage synthesis and further progressed into high value molecules. The company built world class manufacturing facilities and got them approved in accordance with USFDA standards in the year 1999. 

MULTIBAGGER POTENTIAL  
1. After continuous Q-o-Q losses, for the first time since 12 quarters the company has made a quarterly net profit of approx 1 crore in Q1 FY15
2. Debts have reduced consistently from high of around 800 crores (in 2006) to less than 100 crore currently.
3. From a low of 115 cr annual revenue in FY 2006; the revenues have steadily increased to 352 cr in FY 2014   

INTERESTING INFO   
1. Morepen facilities/plants are situated in one of the most scenic, beautiful and serene surroundings on the foothills of Himalayas
2. Loratadine has been a major source for the API business. Other contributors are Montelukast, Atorvastatin, Sultamicillin, etc
3. In OTC product catrgory, 'Dr Morepen' is a well established and positioned brand. The range of products are Isabgol, C-Sip, Burnol, Lemolate, etc  

MY TAKE  
Morepen laboratories is a major turn-around story. This company got a fresh lease of life; courtesy CDR in the year 2006. The company was one of the early entrants into the pharma business. Despite having a good business plan, good set of products, early establishment of various brands; the company lost its way some time around the years of 2002-04. Everything that could go wrong, went wrong for them. The situation of the company went from bad to worse to dire.The stock price collapsed from a high of 1200 rs (FV 10) and went downhill for almost a decade to a low of 2 rs (FV 2).     

Then the turnaround started. The company went for a CDR. The Debt Restructuring Scheme was approved by the CDR cell in June 2006. Since the CDR commencement and progress in the year 2007; the company has painstakingly undertaken several steps in the right direction. In a slow and steady journey, the recovery and revival of the company appears to be taking place in a sustained manner. The worst seems to be over. The future looks to be bright and vibrant for the company. It has all the ingredients and traits to make a successful and profitable pharma company.   

Hence a potential multibagger!!      

Disclosure: I own shares in Morepen labs (and will continue to add/accumulate more)

THEMIS MEDICARE MULTIBAGGER POTENTIAL STOCK D06M08Y2014

Themis Medicare is a distinct pharma company promoted by Mr Shantibhai Patel, a pioneer in the Indian pharmaceuticals business. Gedeon Richter, a Hungarian pharma company with over a 100 years of history, owns a meaningful stake in the company. 

The company has 4 state-of-the-art manufacturing facilities at Vapi(Gujarat), Haridwar(Uttaranchal) and Hyderabad. They have a nationwide network of around 2000 stockists and field force of around 500. Company currently has presence in around 40 countries; and is looking to expand that.  For more info check, http://www.themismedicare.com/    

PRESENT DAY NUMBERS  
CMP on Day06 Aug2014: Rs 120            Market cap: 102 crores          BV: 68          FV: 10           
Revenue FY13: 173 cr (FY12 157 cr)      Net profit(loss): (4.7 cr) [FY12 (32.4 cr)]
Debt: 90 cr 

BRIEF HISTORY 
Originally established as Themis chemicals, in joint partnership with Gedeon Richter, Hungary. This company holds the distinction of becoming the 2nd company in the world and the 1st in India to produce Vitamin B12 by non-sterile fermentation. This also became the 2nd company in the world (and 1st in India) to produce Ethambutol Dihydrochloride.    

MULTIBAGGER POTENTIAL   
1. Increase of 50% in Formulations(higher margins) sales over last year (FY 2013)
2. Focus on anti malarial, Anesthesia, pain management and other research based products
3. Long term partnership signed with Novartis India for exclusive marketing rights of certain innovative products
4. Tie up with Beta healthcare on the international front
5. From loss making previous quarters; there is a profit of 1.2 cr during the current quarter(FY 2015 Q1); Turnaround clearly visible and evident    

INTERESTING INFO   
1. Break through development of Diclofenac injection using patented technology (in the year 2013)
2. Introduction of oil free Emal (alpha beta artheether injection) in ampoules and PFS (pre-filled syringes)
3. THEMISALTM, a unique gel for stopping bleeding enters European market (in 2006)
4. Themis develops and introduces SEPGARDTM; a unique wound healing agent for the first time in India (in 2002)    

MY TAKE    
Themis medicare is an innovator company in true spirits. The last couple of years had been very tough for the company. Poor financial performance coupled with quarterly losses impacted the share price badly and it touched a low of 40 rs this year. How ever the worst seems to be over. The management took some concrete steps in the last few quarters and a turn-around is around the corner. This would be a good time to accumulate this stock.   

Market cap of 100 cr for this innovator company with an enviable track record (in innovation) is downright cheap. Deeply undervalued; so to say. Even a conservative estimate of 500 CR market cap is not too unrealistic or ambitious. It is just a matter of time and a few good quarters. 

A strong potential multibagger!!      

Disclosure: I own 1500 shares in Themis Medicare (and intend to add more)