Latest recommendations of Porinju Veliyath
Porinju Veliyath has recommended two stocks as having the perfect balance of safety and growth potential.
Everest Industries and Ramco Industries are the two stocks which have been recommended by Porinju Veliyath in his latest interview.
It is not known whether Porinju Veliyath has added these stocks to his own portfolio or not.
We can assume that the two stocks are a part of the portfolio because most of the recommended stocks are.
The recommendation is in the following words:
“We were discussing about that housing theme. Actually I was looking at two companies. One is Everest Industries. There is no hurry to buy these stocks today. You could buy it at 510% higher. There are enough opportunities in the Indian market. Everest Industries is not fancied. There are a few companies in this sector. Even Ramco Industries which is also a holding company. It has around Rs 2000crore market cap today. Ramco Industries holding in or Madras Cements kind of stocks should be more than Rs 4000 crore. That is always a margin of safety. In times of political uncertainties, you can buy these stocks at attractive levels. These two stocks came to my mind because we discussed the housing theme.”
Everest Industries is one of India’s fastest growing building solutions companies. It is the most trusted and dominant name in the construction industry today. A strong presence in the country for over 80 years has sharpened our expertise to provide complete building solutions for all. It has constantly evolved and understood every nuance of building construction while keeping up with changing times. Over time, it has also grown to understand the construction needs of a consumer better. Its in depth interaction has given it powerful insights to provide an umbrella of solutions for different sectors of the industry.
Everest Industries provides building products and building solutions for commercial, industrial and residential sectors in over 25 countries. In India, it distributes its products across 1,00,000 villages and 600 cities, through 8 state-of-the-art facilities, 6000 outlets, 38 sales depots and 14 offices.
The product portfolio of Everest Industries comprises of Roofing, Ceilings, Walls, Flooring, Cladding and Pre-engineered buildings meet every international standard. High volume exports to Asia, Europe, Africa and Australia have earned Everest Industries a powerful reputation in markets worldwide.
Research report on Everest Industries
Centrum has issued a research report where the following is stated:
“Management highlighted that its building product demand (in the domestic market) is fast recovering which should help improve utilisation and profitability QoQ. Further, we expect ACS demand in FY18 to benefit from increased rural cash-flow on better crop harvesting YoY. EVI is also implementing cost control measures across the organisation in its bid to recover from a quarter with the worst profitability ever. In PEB segment, EVI is trying hard to re-negotiate with customers to pass on the steel price hikes and remains hopeful to turn positive (at OPM level) in Q4. In CBP segment, amid a weak export outlook, the company would focus on improving domestic sales. It is enhancing its domestic CBP capacity by ~25% to ~150K MT by end of FY17 (incurring capex of Rs250-300mn). These should help EVI recover its profitability going forward.
Valuation and view: We cut our EBITDA estimates for FY17/18E by 57%/42% respectively to account for business impact in FY17 and amid slower recovery going forward. We also introduce FY19 estimates. We cut our TP to Rs160, valuing it at 8x FY19E EPS (from our earlier TP of 270 at 10x FY18E EPS) to factor in significant compression in its return ratios. We maintain HOLD as we expect the company to turn a corner over the next few quarters led by its ongoing cost improvement initiatives and on expected demand recovery.”
Ramco Industries is part of the US$ 1 billion Ramco Group with interests in Cement, Dry Wall & Ceiling products, Roofing products, Cotton yarn, Surgical cotton and Computer Software.
With 12 plants across South Asia and a 8,000 strong partner network, Ramco Industries is one of the leading building materials manufacturer in South Asia and has been at the forefront of innovation answering perplexing challenges with definitive solutions.
Ramco’s first plant to manufacture roofing sheets was set up at Arakkonam, Tamil Nadu in 1967. Apart from the Arakkonam plant, the company operates eight modern plants manufacturing high quality fibre cement roofing sheets in India today: Gangaikondan – Tamil Nadu, Karur – Karnataka, Maksi – Madhya Pradesh, Silvassa – UT of Dadra & Nagar Haveli, Kharagpur – West Bengal, Vijayawada – Andhra Pradesh, Anjar – Gujarat, Bihiya – Bihar. The present aggregate capacity for Fibre Cement Sheets manufacture in India is over 7 lakh tons per annum.
Ramco Industries Ltd has introduced the innovative Calcium Silicate Board, a versatile building material, using technology from the A & A Corporation, Japan.
Hilux Calcium Silicate boards are fast replacing conventional building materials such as Gypsum boards, Plywood & Plaster of Paris across the international markets by virtue of their sheer versatility. Several landmark and iconic structures that have stood the test of time bear the Hilux stamp of excellence, signifying stronger, safer and aesthetically appealing buildings. Hilux boards and tiles are manufactured at the world class plant at Keshwana – Rajasthan with a production capacity of 48,000 metric tons per annum.
Ramco has also set up a modern plant at Arakkonam – Tamil Nadu manufacturing high quality fibre cement boards, tiles & planks with an annual production capacity of 60,000 metric tons. The versatility of these products makes them the ideal choice in all types of Dry construction projects.
Ramco Industries also operates two state-of-the-art plants in Sri Lanka manufacturing fibre cement roofing sheets.
The entire working cycle from the feeding of raw material to the formation of sheets is automated in all the factories in order to ensure high quality production as also a pollution free environment. The company has over 3000 employees across its facilities, and makes significant contributions to social and educational projects as part of its CSR initiative.
Research reports on Ramco Industries