# SHALIMAR PAINTS
#FEDDERS LLOYD CORPORATION LIMITED
#HBL POWER SYSTEMS LIMITED
Shalimar Paints Ltd (TAKEOVER CANDIDATE)
Story: If you see the paints sector, there are five major players there.
#The largest, of course, is Asian Paints ,which does a turnover of close to Rs 15410 crore and commands a market cap of Rs 101005 crore.
Then comes Nerolac Paints, Berger Paints, Akzo nobel india and Shalimar Paints. If you see the valuation of these companies, there is a huge valuation gap between the fourth and the fifth largest player, even though there may not be such huge differences in the size of their business.
#Berger does a turnover of Rs 4100 crore and has a market cap of Rs 23000 crore, while #Akzo nobel India does a turnover of close to Rs 2687 crore and has got a market cap of Rs 8375 crore.
#Shalimar does a turnover of close to Rs 415 crore and has a market cap of just Rs 286 crore. There is a huge valuation gap between the fourth and the fifth largest player in the sector, which I believe should narrow down. Not many people are aware of the fact that this is a company, which belongs to the Delhi-based Jindal group. This is a 100-year-old company, which was acquired by the Jindal's along with an NRI investor in 1989. Since the company is 100 years old, it is sitting on assets, which are valued at historical cost.
Ø *The replacement value of the assets would be many times more than the market cap of the stock, which is at the number one position.
Ø *Secondly, the huge differential in the market cap, which is there between the fourth and the fifth largest player will narrow down.
Ø *Takeover Candidate. All other Paint companies having huge cash in books looking for buyout.
Ø *Raw material prices at lower levels may push Margins.
At the current price of Rs 151, one does not have much to lose in this stock, but if one hopes that the profit margins will improve in the near future, which the management is confident of, then one can see a much higher market cap for this stock. Added bonanza can be the news of promoters looking to sell partly a stake to strategic investors/paints majors-reasons can be anything but the shareholders tends to gain the most if that happens at all. Paint behemoths like Asian Paints and Berger paints have shown huge interest in the company. This is the sector which has been growing massively over the last 20-25 years. If any takeover or stake sell happens expect a minimum price of 225-300 Rs for the counter. So both on the fundamentals and on the speculation front Shalimar point provides ample spice to make some good bucks on.
FEDDERS LLOYD* LEADER IN AIR CONDITIONING SERVICES *NEW PORTFOLIO PICK*FOR 30-40% UPSIDE TARGET Rs. 110+
EPS Rs. 7 Per Share
Mcap 264 Cr
Book Value Rs. 135
Industry P/E 45
COMPANY IS EXPECTED TO CLOCK GOOD PROFITS IN COMING YEARS. BIG PLAYERS EYEING THIS STOCK.
ONE CAN ACCUMULATE FOR 40-50% RETURN IN 6-9 MONTHS TARGET Rs.80-90
#BIGGEST BENEFICIARY OF GOVT. FOCUS ON RURAL INDIA
SUMMERS PLAY :::::::::HBL POWER SYSTEMS LIMITED
BUY HBL POWER AROUND 42-43 KEEP SL 39 TARGET 50/56
JAI SHREE SHYAM !!