Multibagger Power- Diamond Power Infrastructure Ltd
MY VIEW---:Being my first blog so it has to be safe and sure shot rocket it to new high on valuation and fundamental so i recommend it at Rs 65/share.At PE of 3.1 where as Industry PE is 8.18. What is surprising is that on such a high Revenue it is trading at only .39 P/B. Book Value is Rs 170. So huge appreciation is at this counter.
TGT 140 ( Anytime ) Because of cheapest and Undervalue Stock
Diamond Power Infrastructure Ltd., incorporated in the year 1992, is a Small Cap company (having a market cap of Rs 366.36 Cr.) operating in Cables sector. It is Listed in both BSE and NSE.
BSE: 522163 | NSE: DIAPOWER | ISIN: INE989C01012
Market Cap: [Rs.Cr.] 361.80 | Face Value: [Rs.] 10
Industry: Cables - Power
About Bussiness
Diamond Power Infrastructure Ltd , a leading player in power
Transmission and Distribution (T&D) equipment space, has product range
covering nearly 80% of the T&D infrastructure requirements and would be a
big beneficiary of the increased spending in the domestic T&D space. To
match the rising demand for its products, the company has undertaken capex
to raise its conductor capacity by 4x and cable capacity by 20%. The company
has completed its Phase‐I expansion and expects Phase II to be commissioned
by end‐FY15. In H1 FY15, It has managed to register topline growth of 29% yoy
despite the plant being shut for some days due to floods in Gujarat. We
expect topline growth to remain high on account of rising contribution from
new capacities, higher demand and recovery in T&D spending. With earnings
CAGR of 36.2% over FY14‐16, the stock looks quite attractive at 3.1x FY14 P/E.
We recommend a BUY on the stock with a price target of Rs140.
Topline to jump 50% over FY14-16E
It has executed a Capacity extension worth Rs7.5bn to augment its cable capacity
by 7,500kms and conductor capacity by 0.2mtpa along with a backward
integrated facility to support the expansion plan. Phase‐I of the expansion
plan was commissioned in Q4 FY15 and the rest is expected to be completed
by end‐FY15. We believe, the rampup in new capacities coupled with rising
demand from the T&D sector would aid the company in registering strong
revenue growth over FY14‐17E. DPIL’s current order book stands at Rs23bn
with conductors and cables segment accounting for 64% of order book and
towers & transformers accounting for 23%. I expect earning to be 35 per share in 2016. So at 2016 it is trading at 1.85 PE. I was surprised why so called Stock Guru can Never come across such a low Valuation and High growth stock. If we consider 2016 Earning and give only 6 PE. Then our TGT is 140
FII is constantly Increasing its Stake
| Date | Holding(%) | No. of Shares |
| 30-Sep-14 | 17.9365 | 5,40,00,495 |
| 30-Jun-14 | 16.1828 | 5,40,00,495 |
| 31-Mar-14 | 11.6778 | 5,40,00,495 |
| 31-Dec-13 | 12.7308 | 4,96,08,495 |
| 30-Sep-13 | 12.7227 | 3,72,06,371 |
Pros
Cheapest in Its Category i.e Low PE
Capacity extension
Good CAGR from last 5 Year
Below Book Value
FII increasing stake
Cons
Brickwork rating has downgraded its rating to BWR BB+ from BWR A- for long term
Links
http://www.dicabs.com/
http://www.indiainfoline.com/markets/company/diamond-power-infrastructure-ltd/522163
http://www.bseindia.com/stock-share-price/diamond-power-infrastructure-limited/diapower/522163/
http://www.brickworkratings.com
Other Financial websites
Note: I am neither a Research analyst nor acting like one as a writer of this blog. The information about the company referred in this blog is available in the public domain which might not be 100% truthful and has only been systematically produced for one to understand about the company. The stock ideas in this blog are my personal opinions as an experienced investor and are only meant for educating the readers. Readers should always consult their financial/investment advisors before investing in any stock idea given in this blog. I am not responsible for any loss arising out of any information, post or opinion appearing on this blog.It may automatically be assumed that I am a long-term investor in the stock idea being projected in my blog.
