JHS Svendgaard Laboratories may be a multibagger stock in 2017. The stock looks good for a buy on declines for a long-term investment portfolio.
It has all the qualities that investors and traders look for in a multibagger stock such as debt-free status, good management, operating capacity, strong brands etc.
Promoters hike stake
Recently, total warrants of Rs 3.3 crore were issued. Out of this Rs 1.2 crore have been converted which is promoters and non promoters both in accordance with the SEBI guidelines allowed by the promoters.
After the warrant conversion, the promoter holding in the company goes up to 38 percent of the total equity. The Company gets Rs 11 crore in the form of converted stocks.
JHS Svendgaard Laboratories already has about Rs 5.5 crore of the warrant money.
The promoter holding will go up from 38 percent currently to 43 percent on full conversion.
JHS Svendgaard Laboratories would be a debt free company as on March 31st 2016. It will have no debt on books whether it is in form of secured or unsecured loan.
As the Company has consciously taken a decision to move from a pure contract manufacturing to brand owners, it has done a lot of work on building its own brand called Aquawhite.
The money will be used to build in the Aquawhite brand. The Company has a huge capacity available which has been built in the last few years.
The current capacity utilization is close to 60 percent.
The losses have started coming down in FY17 because as the Company improve the capacity utilisation it has a huge asset base and needs to churn out production from that asset base.
JHS Svendgaard Laboratories is expected to become profitable in the first quarter of FY17. It is working hard and trying to make it as soon as possible.
In the last two years JHS Svendgaard Laboratories has grown almost 80-85 percent on revenue basis. If it is able to utilise capacities, it should be at least between 30 -35 percent this year also because the baseline has almost tripled as compared to the last two years.
Nikhil Nanda is MD
Nikhil Nanda, the Managing Director is 38 years old. he is a first generation entrepreneur with over 17 years of experience in the oral care industry. He holds a degree of Post Graduate Diploma in Business Management – Finance and Marketing from FORE School of Management, New Delhi. He is the vision and direction behind the Company in tune with the current market scenario, of being a global village working and establishing manufacturing facilities to service the world. Since 1996, Mr. Nanda has been actively involved in the day-to-day activities of his family owned oral care business, namely SSL, SOC (since 2002) and JHE (since 2003) respectively.
Before joining the family business in 1996, Mr. Nanda was associated with Gillette India Limited (formerly known as Indian Shaving Products Limited as a summer trainee during May 1995 to August 1995, as a part of the management course the was pursuing with FORE School of Management. Mr. Nanda had started his career as an Executive with BKC Home Products Private Limited (August 1993 to July 1994) where he was involved, among others, in Planning, Sales Support and Customer Analysis. As the managing director of the Company he has been instrumental in the growth of the Company, defining the investment plans, business strategy, market orientation and customer relations.
He has dealt with all the facets of the business ever since the constitution of proprietorship concerns to corporatisation of the same. His achievement includes exploring international markets for the Company’s growth and is lead source of product development.