Simran Farms Ltd. - A Multibagger in the Making

Simran Farms Ltd. - A Multibagger in the Making



Industry Poultry
BSE Code 519566
Current Price Rs. 40/-
Target Price Rs. 91 /-
Target Price Period Short to Medium Term



Equity Capital 3.79 cr.
Promoter Holding 36.22 %



Market Cap Rs. 15.16 cr.
FY10 Sales Rs. 136.68 cr.
FY10 Operating Profit Rs. 5.89 cr.
FY10 Net Profit Rs. 3.48 cr.


FY10 EPS Rs. 9.19
Current P/E 4.35



A Brief Overview of the Company :



Simran Farms Limited is a 21 year old company operating in poultry industry. Under the broad spectrum of poultry industry, Simran Farms is mainly engaged in Parent Poultry Breeding activities and Commercial Broilers. The Company has most modernised parent poultry breeding farms near Indore in Madhya Pradesh and commercial broiler farms in Madhya Pradesh, Chattishgarh, Gujarat & Maharashtra.



Management & its Competitive Strength :



Simran Farms is managed by Mr. Harender Singh Bhatia who is a veteran in poultry industry with 32 years of rich experience in all the facets of poultry industry right from poultry keeping, feed management, farm management, hatching of eggs, management of hatcheries to marketing of chicks, eggs & birds. His contribution in the development and growth of poultry industry in Madhya Pradesh is very well recognised.



Since inception, i.e., since 1989, Simran Farms has seen many ups and downs of poultry industry and it is worthwhile to note here that the management of the company has depicted its competitive strength by sticking to the same line of business despite severe recessionary trends that poultry industry went through since last many years. The management of the company not only enabled the company to sail through the recessionary phase but proactively built pillars for exponential growth of the company during good phase of poultry industry.




Investment Rationale :



Embeded above is the investment rationale for the company. The pain that management took of sustaining the company in recessionary phase of the industry and the proactive steps taken by the management to ensure exponential growth of the company in good phase of poultry industry make Simran Farms an excellent pick in current scenario. Let us first understand the macro perspective then the micro perspective and then the valuation perspective for investment into Simran Farms Limited.



Macro Perspective :



Poultry Industry is currently Rs. 40,000 cr. Plus industry in India. The industry has transformed itself from a mere backyard agricultural activity to a profitable, dynamic commercial industry. One of the fastest growing segments of Indian agricultural sector, its growth is driven by an increasing urban population, a growing middle-class with increasing per capita and disposable income apart from rising foodgrain and cereal prices and stable poultry prices.

India, with a poultry population of 489 million and estimated more than 532 billion eggs production, ranks among the top three countries in egg production in the world. While the production of agricultural crops has been rising at 1.5-2 per cent a year, the broiler production is growing at the rate of nearly 8-10 per cent every year and growth in production of poultry/chicken meat increased from mere 0.12 million tonnes in 1981 to 2.2 million tonnes presently.

Consumption of chicken in the country is expected to double in the next five years. The eating out phenomenon coupled with more quick service restaurant chains is changing the consumption profile of Indians. The changing eating habits, cropping fast food outlets and quick service restaurants speak highly in favour of improvement in levels of poultry production over the next many years. Domestic poultry industry currently produces 240 crore birds commercially every year. To cope with the doubling of demand by 2014-15, the industry will need to grow at a rate of 12-15% annually.




Micro Perspective :



After looking at the macro perspective, let us look at the micro perspective i.e. a perspective specific to the company Simran Farms Ltd.. For this we need to look at four aspects viz.,



(1) Management Initiatives in the past and whether such initiatives met success or
not
(2) Management Goals for the future
(3) Current Industry Developments which can immensely benefit the company
(4) Possible and Most probable future scenario for the company



Now, lets explain in detail each aspect one by one:



(1) Management Initiatives in the past and whether such initiatives met success or not :



We will start with this aspect only, because, for any company which is into a transformation phase of becoming a mid-cap from a small-cap company, management initiatives and success of such initiatives in the initial transformation-phase is extremely important. As stated before, Simran Farms management stuck to the same line of business i.e. confined their operations to only the industry of their expertise viz. Poultry industry despite severe recessionary and adverse pressures that poultry industry went through since last many years because of rising prices of maize and soyabean which constitute 70% of the cost for any poultry-based company, spread of diseases like bird flu, stagnant demand and prices of poultry products, etc. This fact depicts the credibility of management of the company as otherwise in these many years any uncredible management would have easily ventured out into some other line of business.


Now, the second thing which demands an investment in Simran Farms is the initiatives or pillars that the management started to build to ensure the exponential growth of the company in the good phase of poultry industry. Such pillars came in the form of the company venturing into commercial broiler farming in FY07 apart from parent poultry breeding farms which was its main activity since last many years. Immediately after that i.e. in FY08 it ventured into contract farming for quick ramp-up of scale and based on this plan it started 80 farms in FY08. Immediately after that i.e. in FY09 company ventured into other states like Gujarat and Maharashtra apart from Indore which is its main hub. In FY09 company started its operations on 200 farms and built a vision to consolidate entire simran group operations under one roof i.e. Simran Farms Ltd. For this, initially it started to consolidate activities of the listed company itself. In addition, company also started in-house feed production on large scale in FY09 to imrove the profitability of the company as feed cost constitute 70% of the total cost of any poultry-based company.



Now, the third thing which we cant ignore is that whether the initiatives taken by the management of Simran Farms since FY07 met any success or not. The best answer for this is to look at the financials of the company for last six years which are given below :



FY05 FY06 FY07 FY08 FY09 FY10
Sales 11.99 12.33 17.14 30.78 72.30 136.68
OP 0.09 0.59 0.60 0.82 2.50 5.89
NP -0.89 -0.12 -0.17 0.25 2.90 3.48



As can be seen from the above, from FY07 onwards companys sales more than doubled every year while on bottomline front it staged a great turnaround with FY08 seeing the company coming out of red and FY09 and FY10 seeing the company more than doubling its profit every year. FY09 included exceptional gain of Rs. 1.50 cr. pertaining to one-time settlement with bank and so its real net profit for FY09 comes to 1.40 cr. All these numbers clearly show that the initiatives which management of Simran Farms took in the past have met with immense success.




(2) Management Goals for the future :



Management of Simran Famrs Ltd is working with a vision to consolidate all the activities of Simran Group under the listed entity viz., Simran Farms Ltd. This vision was charted out in FY08 and to start with, it was planned to first consolidate each and every activity of Simran Farms to bring-in operational efficiency and then to move on to bring unlisted group firms under its belt. FY09 and FY10 saw the consolidation of activities of listed firm and from FY11 onwards we can see the group firms merging with the listed entity.



The group frims of Simran Group include :



Simran Hatcheries
Singh Hatcheries
Simfa Labs (Vetline)



With consolidation of these group firms into the listed entity, Simran Farms will be present in all segments of poultry sector including breeding, hatching, broiler farming, feed production, vet medicine(via Simfa Labs), etc. Only the segment left out will be retailing of poultry products which can fetch decent margins for the company, however, this segment can be ventured into at a later stage.




(3) Current Industry Developments which can immensely benefit the company :



There are three major developments pertaing to poultry industry which will lead to a rerating of the listed companies operating in this industry and more specifically will immensely benefit Simran Farms Ltd. Those developments are :



(a) Declining-to-Stable Input Prices
(b) Rising Output (Product) Prices
(c) Double Digit Growth a Compulsion for Poultry Industry


(a) Declining-to-Stable Input Prices :



Feed in the form of Maize (Corn) and Soyabean constitute 70% of the cost of production for any company operating in poultry industry. In last many years prices of this commodities shot up because of excessive demand and limited supply. However, now the scenario is entirely different. Stiff decline in export of soyabean because of bumper soyabean output in Brazil and USA has put pressure on soyabean prices in the domestic market. Soyabean meal prices have declined from January 2010 price of Rs. 19,000 per tonne to Rs. 15,300 per tonne as of today. Similarly bumper corn crop in Karnataka and Bihar has put extreme pressuse on corn prices too wherein the prices have declined from Rs. 11,200 per tonne as of January 2010 to Rs. 8700 per tonne as of today. This reduction in prices of major input of poultry industry has enabled the average cost of live bird to come down to Rs. 45 per live bird.



Also, the prices of soyabean and corn are likely to decline or at the most remain stable in the near future too because (i) The southwest monsoon which covered half of the country last week, has entered the soybean belt. Good monsoon rains, which irrigate 60 percent of the country's farms, will boost soybean output. (ii) Inspite of bumper corn crop in Karnataka and Bihar, corn export is likely to fall due to lower priced global offerings and quality issues. In early part of 2010 because of quality issues, there were rejection of large consignments of corn meant for exports. Because of this in contrast to last year wherein for the entire export year ending September 2009 India exported 2.3 mn. Tonne corn ; whereas this year ending September 2010 India is likely to end with just 0.8 mn. Tonne of corn export.



To conclude, Input prices for poultry industry are likely to remain soft in the near future too.




(b) Rising Output (Product) Prices :



This is the main factor which will lead to significant rerating of, specifically Simran Farms, and broadly all the poultry stocks. The main product in which Simran Farms deals in i.e., Broilers has seen its price shoot up in last few months. Wholesale live weight Broiler prices have shot up to Rs. 78-80 per kg. From Rs. 58-62 prevailing just few months back. This has resulted in increase in retail prices of dressed broiler to Rs. 140-150 a kg. Up from Rs. 110-120 prevailing few months back. Similarly, egg prices have also started to move up in the last few months across the country. Wholesale egg price is currently quoting at Rs 2.58 per egg, up from Rs 2.40 per egg a month back. In the retail market, egg is currently selling at Rs. 3.50 per piece.



Normally, during summer months, poultry products prices, especially that of broilers, normally remain stable because of low demand in summer months due to hot conditions. However, this time, in summer months too demand has remained constant because of high prices of cereals and pulses which are otherwise a rich source of protein. Hence, people have instead turned to broiler meat which is a very rich source of protein and other vitamins. India is fifth ranked broiler producer in the world with an estimated production of 2.3 million tonne of broiler meat per annum. However there is a huge scope for the growth of poultry industry as the country's per capita consumption is only 2.4 kilogram per person per annum and per capita consumption of broiler meat has grown at 10% in last 15 years.



Hence, prices of poultry produts, especially broilers, is likely to remain rising-to-stable in the near future.




(c) Double Digit Growth a Compulsion for Poultry Industry :



As discussed before in the section Macro Perspective, consumption of chicken in the country is expected to double in the next five years. The eating out phenomenon coupled with more quick service restaurant chains is changing the consumption profile of Indians. The changing eating habits, cropping fast food outlets and quick service restaurants speak highly in favour of improvement in levels of poultry production over the next many years. Domestic poultry industry currently produces 240 crore birds commercially every year. To cope with the doubling of demand by 2014-15, the industry will need to grow at a rate of 12-15% annually. Thus, double digit growth is more of a compulsion than a luxury for poultry industry.





(4) Possible and Most probable future scenario for the company :



In the next few years Simran Farms Limited is likely to emerge as a strong player to contend with in the poultry industry. Already in the current year i.e., in FY10 it has surpassed Srinivasa Hatcheries on the Sales front. The pace at which Simran Farms is growing and the aggresive management style that the current management of the company is adopting, will surely make Simran Farms a completely integrated end-to-end player in the poultry industry with a presence in all segments of the curve. The consolidation of the company as well as group firms and the initiatives like in-house feed-production, contract farming, etc. will dramatically improve profitability of the company in the coming years. Coupled with these micro factors, macro factors like fall in input prices, rising demand of end products, spike in end-product prices is likely to add to the growth momentum of the company and will lead to dramatic improvement in topline and bottomline of the company in the coming years.





Valuation Perspective :



This is the third and most important perspective to be looked into deeply for investment into any company. Here again we need to look at four aspects, viz.,



(a) Current Financials
(b) Future Financials
(c) Current Valuation
(d) Peer Group Valuation


(a) Current Financials :



Before looking at current financials aspect, let us first look at past 5 years financials of the company to check the quality of current financials. Financials for last five years is given below :


FY05 FY06 FY07 FY08 FY09 FY10
Sales 11.99 12.33 17.14 30.78 72.30 136.68
OP 0.09 0.59 0.60 0.82 2.50 5.89
NP -0.89 -0.12 -0.17 0.25 2.90 3.48



As can be seen from the above, Simran Farms has maintained its topline even in recessionary period of poultry industry. On the contrary, in FY07 and FY08 there was widespread birdflu scare prevalent which forced many small-scale firms as well as farmers operating in poultry industry to go bankrupt and shutdown their operations. In such times Simran Farms actually reported healthy topline growth because of aggresive strategy adopted by the management to expand in bad times. This strategy paid of and so when the bad phase of poultry industry ended Simran Farms started reporting extremely healthy topline growth. Bottomline growth was muted in FY08 and FY09 because of investment in expanding the operations [FY09 bottomline number includes Rs. 1.50 cr. Gain from one-time settlement with bank]. However, the business model adopted of first achiving the scale and then improving the bottomline proved to be shrewd one as in the first six months of good phase of poultry industry, Simran Farms went ahead of Srinivasa Hatcheries, its immediate listed competitor, in scale and also managed a dramatic improvement in bottomline. Yes ! the fortunes of poultry industry turned corner only in October-November 2009 and so FY10 only saw six months of good phase of poultry industry. The main benefit of fall in input prices and spike in product prices is likely to be felt from FY11 onwards which will coincide with operational efficiences which the company is likely to achieve because of consolidation of activities of the company as well as group. An indication of such operational efficiences is already seen in FY10 numbers wherein company has achieved record operating profits of Rs. 5.62 cr.




(b) Future Financials



As explained above, the main benefit of fall in input prices and spike in product prices is likely to be felt from FY11 onwards which will coincide with operational efficiences which the company is likely to achieve because of consolidation of activities of the company as well as group. Simran Farms is likely to end current FY11 with a topline of Rs. 182 cr. And a bottomline of Rs. 6.30 cr. In FY12 the topline is likely to be around Rs. 210 cr. While the bottomline is likely to shoot up to Rs. 11.55 cr. In FY12 the real effect of consolidation of activities of the company, merger of group firms, geographic expansion as well as full utilization of in-house feed production is likely to be seen which will result in dramatic improvement in bottomline. Current FY11 will see a spike in topline while bottomline is likely to follow the trend of FY10 only wherein OPM & NPM were below industry average. This is because FY11 will again see expansion of operations as well as group firms amalgamation issues. All these expenses are likely to keep the margins of FY11 under pressure.




(c) Current Valuation



As discussed in above two sections, Simran Farms reported an EPS of Rs. 9.19 for FY10 and is likely to post an EPS of Rs. 16.62 for FY11 and Rs. 23.10 for FY12 (In FY12 we have factored in an equity expansion for likely capex which might even happen in FY11; if in FY11 this equity expansion happens then EPS for FY11 is likely to be Rs. 12.60).



Hence, at the current market price of Rs. 40, Simran Farms is available at a PE of 4.35 based on FY10 earnings, 2.41 based on FY11 earnings and 1.73 based on FY12 earnings. Also, on market-cap-to-sales bases it is available at just 0.11 sales based on FY10 numbers, 0.08 sales based on FY11 numbers and a meagre 0.07 sales based on likely FY12 numbers.




(d) Peer Group Valuation :



Simran Farms has only four listed competitors viz.,



Venkys India Ltd.
Srinivasa Hatcheries
SKM EGG Products
Hind Industries



Out of above, Venkys is more of an expanded player with a presence in other areas too which Simran Farms is not present in or is not planning to be present in ; SKM Egg primarily deals in egg and egg products while Hind Industries deals in selling of meat and meat products. Only Srinivasa Hatcheries can be strictly called peer as far as Simran Farms is concerned as it is this company which is present in most of the areas where Simran Farms is present in or is planning to be present in. Still, we will look at each companys current valuation on the bourses to judge the under-, over- or reasonable- valuation of Simran Farms on the bourses.



Venkys is currently quoting at a PE of 8.5 and 0.67 sales based on reported FY10 numbers. Srinivasa Hatcheries is quoting at a PE of 6.5 and 0.65 sales based on reported FY10 numbers, SKM egg is quoting at a PE of 57.5 and 0.30 sales based on reported FY10 numbers and Hind Industries is quoting at a PE of 8.4 and 0.19 sales based on reported FY10 numbers.

Based on above valuations it is apparent that Simran Farms with a PE of 4.35 and market cap to sales of 0.11 is the cheapest and most promising company available in the poultry sector.




Conclusion :



To conclude the report as well as investment argument in favour of Simran Farms Limited, a company :


(1) which is transforming itself into a mid-cap from a small-cap player


(2) operating in an industry which has just started its boom cycle (normally boom cycle in poultry industry lasts for four years)


(3) having negligible debt on its books


(4) likely to achieve operational efficiences because of scale, falling input prices, rising output prices, backward integration initiatives,


(5) available at a PE of just 4.5 and a market-cap-to-sales of 0.11 based on FY10 and a PE of just 2.41 and a market-cap-to-sales of 0.08 based on FY11 numbers


(6) having peer group - lowest of which is quoting at a PE of 6.5 and a market-cap-to-sales of 0.19 even when all the players except Venkys are smaller in scale than Simran Farms


is the safest bet in current market with a little downside risk and significant upside potential. This company warrants a significant rerating sooner rather than later and so a price target of Rs. 91 which entails to a PE of just 5.4 and a market-cap-to-sales of just 0.19 based on expected FY11 numbers is put on the stock.

I have a few queries:
1)Why is the Net Profit Margin only 2.5 % compared to Srinivasa Hatcheries Npm of almost 10 % ?
2)Why does the company not declare any dividends?
3)Why does the company not have a website for investors?
4)What kind of equity dilution can be expected when there is an amalgamation in their group firms?

Mr. Krishna23, All your queries and concerns are legitimate and demand a detailed explanation. I will take it one by one :

(1) Low NPM as compared to Srinivasa Hatcheries :

Rgdg. your first point as to NPM of Srinivasa Hatcheries at 10% and that of Simran Farms at 2.5% - here you need to look at 2 things. first - You need to look at past 10 years financials of Srinivasa wherein you will find that it had a constant topline of between 45-55 cr. right from FY01 till FY05. From FY06 onwards till FY09 it had a fluctuating topline in between 60-85 cr. and in FY10 when poultry industry started turning corner (in second half) it reported a spike in topline to Rs. 124.9 cr. Another important thing to look at behind the financials of Srinivasa is that it has a support from the largest group operating in poultry industry viz., Venkateshwara Hatcheries Group and major portion of its topline and bottomline depends on the support of Venkateshwara.

On the contrary, if you look at Simran financials for last 10 years then you will find that between FY01 till FY06 it had a constant topline in between 9-12 cr. From FY07 onwards i.e. the FY from which management of Simran adopted aggresive approach the topline spurted with FY07 topline at 17 cr. FY08 topline at 30 cr. FY09 topline at 72 cr. and FY10 topline at 136.88 cr. These financials were totally on its own without any kind of support from any sort of company or group like Srinivasa had.

Now, to come to your point, you can`t take credit out of the efforts of Simran management wherein within a short span of just 3 years they managed to surpass an established player like Srinivasa on topline front. Srinivasa management has adopted a low-risk-low-gain approach of dependence on a big group and consistent topline growth and so their topline will grow at a muted pace while margins will be consistent and higher because of predictability of topline. However, management of Simran has adopted a high-risk-high-gain approach wherein topline growth will be exponential in the initial phase while bottomline will spike up at a later stage when scale is achieved. The pain associated with initial phase is over and from FY12 onwards we will see a healthy NPM.

To conclude, when you need to take on established players of the industry and beat them you need to forego margins in the initial phase because you need to invest heavily to achieve the scale. This is the thing Simran management did and so it managed to grow its topline by more than 10 times in last 4 years. This is a thing which needs appreciation rather than sceptism.


(2) Why company is not declaring dividend:

Now, rgdg. your second point on dividend front, again you need to look at financials of both the companies. Srinivasa has reported constant profits since last 10 years fluctuating between 1-12 cr. between FY01 till FY10. Hence, it is normal to declare a dividend by the company. On the contrary, Simran had reported loss to miniscule profits between Fy01 till FY07 ranging from -0.9 to +0.3 cr. and it is from FY08 onwards that it has started reporting profits. To add, it was only FY09 and FY10 when it earned a reasonable profits of 1.5 cr. and 3.48 cr. respectively and with this profits it first needs to put its house in order and set a stage for constant growth in coming FYs rather than paying dividend. A sharp rise in market cap will give greater returns to shareholders than a 10 or 20 % dividend. Yes. If Simran doesn`t pay dividend within the coming two years then it will not be proper but a study of numerous emerging companies tells me that a maiden dividend alongwith bonus might get declared in FY11 or FY12 by Simran.


(3) No Website

This is the point on which I agree with you that a website is a necessity in today's world as it not only improves credibility of the company but also is the best tool for increasing awareness regarding a company. If Simran had a good running informative website then it would have benefited shareholders more than the company and the marketcap and valuation rerating would have been much faster. But, here also you need to look into positive side of it. Because of such conventional approach of management of not opening up website for investors, you are getting its share at bargain valuation because the way you are thinking is the way of thinking of many. there are numerous examples of companies listed on stock exchanges which have up and running websites but on business front they are very weak and hazy. Atleast Simran's management is not into the business of fooling the investors of keeping a very well equipped website and making big big announcements of their growth. Otherwise tell me there are how many companies out there who achieve a 10 fold jump in topline in 3 years and not utter a single word or make any announcements. This itself shows that Simran's management means business and once such weaknesses like having website, keeping investor friendly and informative approach, etc. will get ractified it will lead to significant rerating of the company.

(4) Equity Dilution
Equity dilution on merger of group firms is not likely to be more than 12-15% while for capex it is likely to have an equity dilution of 20% and so in my report calculations I have taken the equity for FY12 at 5 cr. up from current 3.79 cr.

Hope all your queries are replied.

Rgds.

Bhutan and Oman have lifted ban on indian poultry import. Oman lifted ban before 5 days while Bhutan lifted ban yesterday. This is expected to further escalate the rising prices of poultry products in India which augurs very well for companies like Venky's , Simran Farms, Srinivasa hatcheries and Hind Industries.

-----------------
News Articles :

Oman Lifts ban on Indian Poultry Imports

Press Trust of India
Posted: Friday, Jun 19, 2009 at 0051 hrs IST
Updated: Friday, Jun 19, 2009 at 0051 hrs IST

The Sultanate of Oman has lifted a ban on import of poultry products from India, which was put in place after outbreak of bird flu in the country last year.
As a result of concerted efforts by the Indian government, ministry of agriculture in Oman, in accordance with their ministerial decree No 168/2008, lifted the ban of live bird products from India, an official statement said.

With the ban being imposed last year, India had taken up the matter with the Omani Authorities saying a blanket ban on import of live bird products from entire India was unjustified as the avian flu was limited to north-eastern region of the country.

It was also impressed that the affected birds were culled and isolated to prevent further spread of avian flu, the statement said.

-------------------
Bhutan lifts ban on Indian poultry products
Thursday, June 24, 2010 08:00 IST
Our Bureau New Delhi

Followed by the Sultanate Oman, Bhutanese agriculture and forests ministry has lifted the ban on Indian poultry and poultry products.

Last year, both the countries banned import of live bird products from India after reports of the outbreak of avian flu in some parts of the North Eastern region.

Based on the national declaration to the OIE (World Organisation for Animal Health), on the regained freedom status on Avian (Bird) by both Bhutan and India, the ministry of agriculture and forests (MoAF) hereby announce to lift the ban imposed on import of the Indian poultry and poultry products with immediate effect, Bhutanese agriculture and forests ministry stated on their official website.

Last week on June 18, 2010, the Omani authorities lifted the ban after Indian authorities claimed that ban on import of live bird products from entire India was unjustified as the avian flu was limited to North Eastern region.

The lifting of the ban would also mean that all terms and conditions previously enforced/specified in relation to the above poultry and poultry products both within and outside the country are to be treated as non-valid with immediate effect. However, import of poultry and poultry products are permitted only from those firms/companies that have been identified and approved by the Bhutanese government, the ministry added.

Accumulation Pattern seen in major poultry stocks like Venky's, Srinivasa Hatcheries and Simran Farms. Even in weak markets these companies are refusing to go down and one can find disclosed buyers at every bid rate. A significant rerating of the entire sector looks on the cards and the process can start on verge of declaration of their Q1FY11 numbers.

To add, there has been 90% delivery volume in last many days in Simran Farms and Srinivasa Hatcheries. Strong hands are entering in which is a good sign for the said companies.

Sir,

What is debt funding cost, ROCE and Return on equity for this share?

Goal100

Talking specifically regarding Simran Farms, today, the counter witnessed lifetime high volumes and a Delivery percentage in excess of 75 % with 1,17,000 + shares delivery taken in an extremely weak market. This is a very positive sign and if the counter cools of in next few days then it will be a great opportunity to enter at every lower rate.

To add, Mr.Porinju is sellling but the shares are going into stronger hands like Mr. KANTHETI GANDHI - the promoter director of Zen Securities and the fact that the shares are taken in personal capacity rather than at firm level confirm that it is not a clientle deal but a personal investment. This is again a positive sign as floating stock into stronger hands will mean exponential rerating of the counter at a slight smell of even one positive news and that positive news might come in the form of announcement of board meet for announcing Q1FY11 numbers in next 20 days.

Return on Equity (%) : 32.75
P/BV(x) :1.24
RONW(%) : 32.75

However it does have small equity base at 17 crore and Book value at 35.28 cr.
Seems promising but cannot comment of small cap investments ,am not exposed to this much.