DIALWEALTH VALUE PICK HIDDEN GEM MULTIBAGGER STOCK OF THE YEAR 2016
I HAVE BEEN RECEIVING LOTS OF MAIL AND QUERIES REGARDING WHAT TO BUY IN FALLING MARKETS WHICH HAS LOADS OF INTRINSIC VALUE AND A GOOD BUSINESS POTENTIAL HERE IS MY PICK OF THE YEAR TO ALL MY CLIENTS AND FOLLOWERS AND THIS WILL BE MY STOCK PICK OF THE YEAR 2016 WHICH WILL GIVE SUPERLATIVE RETURNS
NOTE:-PLEASE READ THE REPORT CAREFULLY AND UNDERSTAND THE COMPANY AND BUSINESS BEFORE INVESTING
Scrip name :JHS Svendgaard Laboratories
cmp-20
Nse listed
Bse Code:532771
Target:100
mcap-50 crores
Duration :12 months
Return:500%
Business:Starting with manufacturing of only Toothbrushes the company widened its scope to Toothpastes, Mouthwash and Denture Tablets and today is an oral care product manufacturer and exporter. Apart from working on its own brands the company also offers Contract Manufacturing Partnership to brands in the domestic and the international market. One of the most prominent brands
manufactured under the company’s name is Dr. Gold which was launched in April 2009 with economy, mid economy and premium
Toothbrush categories.Some of the prominent brands partnered with in the domestic market are P&G, Amway India Enterprises Pvt. Ltd., Dabur India Limited, Elder Health Care Limited, J. L. Morison’s India Limited and in the international market are – Dr Fresh
manufactured under the company’s name is Dr. Gold which was launched in April 2009 with economy, mid economy and premium
Toothbrush categories.Some of the prominent brands partnered with in the domestic market are P&G, Amway India Enterprises Pvt. Ltd., Dabur India Limited, Elder Health Care Limited, J. L. Morison’s India Limited and in the international market are – Dr Fresh
Tano mauritius,the private equity firm which got a great success ratio, bought shares worth 25crs at 98rs around 2010
What went wrong:-Company took many small clients for volume growth resulting in sticky receivables .Few large clients halved their off-take.Numbers nosedived and company postedlosses.Input prices went through the roof but because of fixed price contracts company couldn’t pass it to the clients.The company had one of the worst financial years during 2010-2014.
Whats happening right:It sacrificed the smaller clients and concentrating on fulfilling the requirements of the large reputed ones.Changed its business model in an unique manner where the clients would pass on to everything and JHS would only concentrate on global product quality and timely delivery.In this way it would avoid the prolonged receivable cycle and any volatile input prices.Merged its group companies for better synergies.Started exporting again after a long time.A stock worth betting on at present prices.
JHS SVENDGAARD is a perfect fmcg proxy.Thelargest toothbrush manufacturer from India(300 million tooth brushes).It caters to the need of 1 trillion Proctor and gamble in our country.Thecompany has got number of amazing tax and excise benefits.Replacement cost of its assets would be minimum 300-400crs.Present marketcap is only 75crs.
JHS has a client base of strong & leading players in the Industry.
Proctor & Gamble : JHS manufactures ‘ORAL B’ toothbrushes for P&G.
Pantaloon : ‘SACH’ brand for toothpaste & toothbrush.
Dr. Fresh : ‘Dr.Fresh’ is the largest selling oral care brand in America.
Himalaya : Leaders in premium dental cream market.
Dabur : Owns big brands like ‘Promise’, ‘Babool’, ‘Dabur Red’, ‘Meswak’.
Elder Healthcare : Sells mouthwash & other dental care under ‘AMPM’ brand.
Aquawhite : Sells premium category mouthwash & dental whitening gel.
Lavoris : One of the leading oral care brands in America.
recently promoters infused around 30 crores to clear old debts company will be debt free by this year and will be posting strong results and will be the turn around story of the year
promoters have recently increased there stake in the company from 37.55% to around 44.8%
Here is the link to recent interview of companies management given to cnbc
Conclusion:The company is in the early stages of an emerging opportunity. Buoyant trends in the oral-care segment augur well for contract manufacturers, with FMCG players launching new products. For JHS the opportunities are in catering to the rapidly expanding retailers.Thecompany is growing rapidly and this phase will continue for the next 2-3 years.The company has the potential to be one of the largest company in the Indian dental care industry. Those who are looking to invest in stocks from a very long term view i.e 1year+ or more.Thisstock is a must in their portfolio. This stock can give superlative returns in the long run.Its not a play on valuation metrics but a play on potential,robust prospects and great future.Should give multibagger returns in the next 5 years it will be a 10 or 20 bagger in times to come.
Present fall in global and indian market should be seen as a chance to buy stocks like jhs. even during such falling markets stock is hitting 52week highs which suggests insiders are accumulating the stock at every price once the mood of market changes this stock wont be available one should try and accumulate this stock as it has lot of value.
Another big news is patanjali is in talks with jhs for contract manufacturing as it has huge spare capacity and good quality control
USE ALL THE DECLINE IN THE MARKETS TO BUY THIS STOCK SOME DAY MARKET AND SENTIMENTS WILL TURN AND DURING GOOD TIMES WE WONT GET THIS STOCK AS THE STOCK IS DEBT FREE AND BUSINESS IS GLOBAL AND REPLACEMENT COST OF THE SAME IS BETWEEN 300 TO 400 CRORES WHILE MARKET CAP IS JUST 75 CRORES
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Note: The above is not a research report but information as available on public domain and it should not be treated as a research report.
Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”
Disclosure: It is safe to assume that i have JHS SVEENGAARD Ltd in my portfolio and hence my point of view can be biased. Readers should consult their financial advisory before any investments.
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