TEXMO PIPES MULTIBAGGER POTENTIAL STOCK D06M07Y2014

Texmo Pipes and Products is a leading player in the pipes and fittings industry. It manufactures and markets PVC pipes and fittings, SWR pipes and fittings, CPVC pipes and fittings, Molded fittings, Plumbing pipes and fittings, Casing pipes for tubewells and other agricultural fittings. For more info check, http://www.texmopipe.com/ 

PRESENT DAY NUMBERS  
CMP on Day06 July2014: Rs 18.75        Market cap: 45 crores        BV: 51        FV: 10           
Revenue FY13: 205 cr (FY12 176 cr)    Net profit: 1.2 cr (FY12 4.1 cr)  EPS: 0.5 (FY12: 1.7)
Debt: 46 cr   

BRIEF HISTORY   
Texmo pipes and products was incorporated as a public limited company in the year 2008; by conversion of Shree Mohit industries and Shree Balaji industries. The company has its manufacturing plants and head office in Burhanpur, M.P.   

MULTIBAGGER POTENTIAL  
1. The production of CPVC pipes and products commenced on June 19; Texmo is one of the few manufacturers in this product category and hence may benefit with higher margins  
2. The pipe production capacity has increased by 200 MT per month and fittings by 50 MT. This will aid in revenue growth and increased market share.  
3. As per the interview with the MD of the company by CNBC; the company hopes to execute orders of around 140 cr during FY15.   
4. Texmo bagged an order of around 60 crore from Power Grid corporation earlier this year. And another order from BSNL.     

INTERESTING INFO    

1. Texmo came with its IPO in the year 2010; at a price of 90 rs. Currently in 2014 it is available at 18 rs (a huge discount; almost like a wind up sale) 
2. During the same time its production capacity has more than doubled (plus a new plant for manufacturing of CPVC products; which are niche) 
3. Currently they are present only in 8-10 Indian states. (and intend to become a pan India company); So tremendous headroom for growth. 
4. In the last 3 months; the promoters have bought over 5 lakhs shares in the open market. VERY IMPORTANT POINT    

MY TAKE   

Texmo pipes mainly supplies to the sectors of agriculture, power, building and construction, telecommunication and infra structure. The new government will give special impetus to almost all the sectors mentioned and hence Texmo could be a potential beneficiary and hence is poised for rapid growth and profitability over the next 2 - 5 years. At current valuations, this stock is deeply undervalued.   

This is a very young company with all the right ingredients for growth; Investing in this would be like investing a small sapling. And if the right environment, necessary support(water/manure), protection is provided; this can grow up to be a strong and profitable tree.

A high potential multibagger!!

Disclosure: Texmo pipe and products is part of my core holdings. I own 9000 shares (and intend to add more)

PATEL LOGISTICS MULTIBAGGER POTENTIAL STOCK D06M07Y2014

Patel Integrated Logistics is a logistics services provider that offers a complete range of solutions. Its business activities include Surface transport, Door pick-up and door delivery, On-board couriers, Domestic cargo consolidation, International freight forwarding, international courier consolidation and Warehousing. For more info check, http://patel-india.com/ OR http://www.pill-india.com/

PRESENT DAY NUMBERS
CMP on Day06 July2014: Rs 30.80      Market cap: 47 crores      BV: 60       FV: 10           
Revenue FY13: 509 cr (FY12 452 cr)   Net profit: 2.4 cr (FY12 2.6 cr)  EPS: 1.5 (FY12: 1.7)
Debt: 40 cr

BRIEF HISTORY
Set up as a 1-truck activity in 1959, Patel roadways grew into one of the largest road transportation company in Asia which further transformed into a single-stop logistics services provider. The company has over 75,000 satisfied customers and is known for its reliable service.

MULTIBAGGER POTENTIAL
Scope of growth in various divisions of the business:
1. PATEL ROADWAYS: This division is a direct beneficiary of the rising domestic consumption; which needs last-mile connectivity to tier-2 and 3 cities
2. PATEL RETAIL: Express cargo industry in India is growing at a phenomenal rate of 35% and thanks to e-commerce will continue to do so.
3. WAREHOUSING: The company has about 1.5 lac sq ft in Chennai which is will expand to 5 lac sq ft for the automotive sector.

INTERESTING INFO
1. Early this year, recognizing the potential of the logistics industry, act investor Radhakishan Damani picked up stake in Gati; and the stock have moved 400 - 500% upwards since then.
2. Patel logistics is a formidable company in the same sector which is right there amongst the best in the industry.

MY TAKE
Logistics, as a business is closely aligned with India's growth as a country. The GDP/economic slowdown of the last few years had a direct impact on the company and therefore it struggled. How ever, the very same factor; will now act as a great driver and lever for this company to experience rapid growth along with the growth of the country over the next 2 - 5 years. This belongs to the Buffett philosophy category of "Great business at a reasonable price". In fact, this is very cheaply available; read, deeply undervalued.

A robust potential multibagger!!

Disclosure: Patel Integrated Logistics is part of my core holdings. I own 4000 shares (and intend to add more)