diamond Unveiled- Sujana Metal. Multi bagger No.4

Thanks a lot for your trust and encouraging replies which makes me go in search for great companies with good fundamentals and a great future.

I have come with my 4th recommendation and hope u love the ride.
Please read my message fully. I have spent day and night in analysing and getting info from the company .This stock has passed to through so many testing paths and has proved successful. Its a great company to be in.


Sujana is emerging as South India’s largest manufacturer of value-added steel products conforming to global standards.

Sujana Metal Products Limited (SMPL), incorporated in 2000, is the new-age company of the group and comprises four divisions:

>>Towers manufacturing,
>>Structural Steels,
>>TMT Bars and
>>International Trade.

Two trend-setting products from SMPL include Galvanised Towers and >>TMT, which have placed this company as the leaders in South India. They have a significant presence in other markets.

>>SMPL also manufactures a wide range of construction steel products that can be customized to user needs. SMPL is also envisaging the introduction of value-added products like high voltage towers (above the 400KVA currently manufactured).

The Trading Division of the company improves bottom-line and enhances the range offered to customers. telecom and power sector applications.

"Sujana's improvement continues.........."


>>In continuation of how Sujana's products are reputed for strength and specification-adherence,the company has recorded lower than 0.4% rejections and less than 1% complaints across xx,xxx tonnes dispatched from the ISO certified facility in the last quarter. This is due to efficient operational management systems for continuous improvement instituted for the ISO 9001:2000 process, which were duly certified by Det Norske Veritas.."

>> In keeping with Sujana's explosive growth, they are exploring options with view to enter export markets like Sri Lanka and other South East Asian countries. As a first step, and keeping in mind backward integration, an ingot/billet manufacturing facility using mild steel scrap is planned in the Middle East .

>>The Bollaram unit of Sujana Metal Products Limited, was awarded ISO 9001:2000 certification last month for manufacture and supply of structural and alloy steel sections.


Scope for Expansion

>> To meet the growing demand requirements of the domestic and export markets, the company proposes to increase the manufacturing capacities by way of consolidation and integration of the existing steel businesses of group companies and also through fresh investments into various value added steel product segments.

>> To capture a significant share of the tower market, the company proposes to increase the capacities of our tower making division at Hyderabad from 28,400 TPA to over 1,00,000 TPA.

>>Currently, we have the capacity to manufacture 55,000 MT of Structural steel. With increasing demand for it, it is proposed to modify the mill and also increase the capacities to 70,000 MT. After this exercise, the structural mill will be in a position to manufacture larger sizes of channels and angles required by the Towers Division. Presently the structural mill is meeting 40% of the steel requirement of the Towers Division; after the expansion/ modification, the structural mill will be in a position to meet 80% of the steel requirement of the expanded capacity of the Towers Division.

Global demand


>>The global steel market was exceptionally buoyant with a jump in steel consumption by 8.8%.
--->>> This growth was fuelled by an increased consumption of 22.5% last year in China .

>>Global steel prices are expected to remain strong in the near future on strong demand from the US Global steel prices are expected
to remain strong in the near future on strong demand from the US , Europe and Japanese markets coupled with the growth in the Chinese and other Asian economies.

>>According to International Iron and Steel Institute (IISI), the global demand for finished steel products would exceed one billion MT during 2007-08. The total world demand for steel is estimated to grow by 4.5% in 2008. The value of steel production during the last 5 years had experienced a compounded growth rate of 16%.


Thus i am done with profile and history of the company

Now its for the fundamentals to join the party
>>>> Lets go party tonight. <<<<

CMP 42.00, and it is a stock with an average 10 day volume of 9,50,000

Starting with the shareholding pattern
Promoters

Indian 29.49%
FII 44.37%
--------
Total 73.86%

Institutional Investors, Other
Private bodies, banks
and Mutual funds 08.92%

General Public 17.22%
---------
Total Shareholding 100.00%

>>The promoters hold a great chunk of the total shares and this clearly states the promoter interest in this company.

>>Great improvement shown in this company is due to the great interest the promoters have on this company and the percentage of holding by foreign promoters is getting increased year on year.

>> The holding of some portion of the companies capital by banks gives a great confidence regarding the stability and the prospects of the company

>> Despite the increase in the no. of shares of the company, the earnings per share has increased.

>> The sales of the company has increased from 726cr to 858cr which marks a growth of 18% whereas the industrial growth has been only 8.5%.

>> This company has surpassed the benchmark growth by more than 100% which is a great sign for the company.

>> The EPS of the company is at a staggering Rs.8.66 in FY06-07 compared to Rs.3.63 in FY 05-06 and the EPS has grown by more than 220% from the previous quarter. improvement is seen qoq.

>>As per the fundamental analysis, the book value of the company is Rs.68.61 and the CMP is Rs.42 and this clearly says that the stock is cureently underpriced and has a long way to go from this point.

A minimum increase till the book value is certain and inevitable and to defend the future increase technically,

The P/E Ratio of this company is 4.85 against an industrial average PE of 19 which 14.15.
If the company had been valued properly by the public this should have reached 152 (ie) P/E=19 Price = 19*8=152. It is assumed that the eps remains constant and the improvement in the company is going to increase the EPS and not decrease it.

If we expect a PE of atleast 10 we should get an 100% appreciation from the current price which is really achievable.


Buy, hold and Enjoy.

I expect this reco to be a real booster to my trustworthiness among members of traderji.

You can Continue to hold SAH Petroleum,SAPL and Pennar Industries as there is a great path ahead of them.

let our wealth grow.
let us enjoy the profits.
its WE and NOT me.

Hi Karthik,
I read ur analysis on the stock Sujatha metal, seems u really done a wonderful work.

Anyways thanks a lot for the great info sharing with us.
Pls keep continue and suggest some more multibaggers.


Appreciate ur time and efforts.


Thanks
Madan

The analysys has given the complete particulars
which makes me to start buying today onwards.
VCRAlan

Thanks for your recommendation. Can you specify whether it is good for LONGTERM or MEDIUMTERM.
Thanks a lot
Syed

Hi Karthik,
I read ur analysis on the stock Sujatha metal, seems u really done a wonderful work.

Anyways thanks a lot for the great info sharing with us.
Pls keep continue and suggest some more multibaggers.


Appreciate ur time and efforts.
regards
krishna mohan

Hello Guys,

Well 7th jan 2008 what a move in last 10 minutes reach 44.80 from 43.20 with good volume & 70 Lac shares traded on 7th jan. almost 403% from 2 Wk Avg Qty with 77% delivery based buying wow…. & one more thing is that stock closed almost Wtd Avg. Price. Seem like that stock come out from weak hands as well as FIIS hands also. After result they will buy this stock again

Lots of Bulk deal happens today. FIIS seller again & India DII & Indian people as well as Co’s Promoter are buyer again.

BLACKSTONE ASIA ADVISORS LL.. Sold 25 Lac shares @ 44.45, MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. S.V. sold 7,41,919 shares @ 44.98, MINIVET LTD sold 4,05,000 shares @ 44.22, GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD sold 6,27,500 shares @ 43.79 and BSMA LTD Sold 5,03,571 shares @ 45.06.

Another side SANJAY JAGDISH PODDAR bought 4,60,000 shares @ 44.29 and PARAM CAPITAL RESEARCH PVT LTD bought 3,00,000 shares 45.44.

Almost 14% of total equity capital traded today & nearly 10.5% of total equity capital change hands (means delivery based buying)

8th Jan & 9th Jan stock able to give closing above 43/- & trader above 43/- well mkt. are so volitile.

Stock will consolidate in the range of 44-47/- now almost 1-2 days more & when ever it give break out from 46/- means close above 46/- with 2 wk avg. volume then stock reach to 60/- easily .

If you have 8-12 months time then stock realy become a multibagger & our target after 1 yr for this stock that it will trade in three digit.

Happy Investing Time.

AHL SEC.
(CNI Research Team)

This scrip can anytime breakout to continuous upper circuits. See the volume and also the fact that such a downfall of all the mid/small caps did not have much impact on Sujana, makes it very bullish. Accumulate at this level to double your returns in near term.

AHL

Hello Guys

Month ago stock moves in the Range of 31-35/- & now its move in the range of 41-47/- around 30% appreciation in a month. Some one who buy in the range of 30-35/- is selling here but still stock is undervalued & even some FIIS selling here like Goldman Sachs Investments Mauritius I Ltd (10th Dec. Sold 378000 shares @ 34.94, 11th Dec Sold 295000 shares @ 37.11 & 31st Dec. Sold 472500 shares @ 44.67) , Matterhorn Ventures Fund sold 442077 shares @ 32.76 on dated 10th Dec.2007 and Minivet Ltd Sold 269163 shares @43.51 on dated 04/01/2008 but from another side Dec. month Avg. Volume is so good & delivery based buying more then 60% delivery daily. & lot of people gives attention & even prompter also give attention these stock in Dec. 2007.

Now question is who is buy here so answer is Indian MFs & co. promoter buy here but not in large quantity daily (means its not covered under bulk deal) . One of Co. promoter Y S Chowdary buy 2,55,000 shares @ 40.27 on dated 13th Dec. 2007 . Merrill lynch capital buy 400000 shares @ 38.63 dated 26th Sep. 2007

Now comes on financial Data. After Demerger of the co. means Cumulative June 2006-2007 the Yearly EPS of the co. is Rs. 4.41 on the Face value of Rs. 5/- per share so if we given 10PE of this co. then fair value is Rs 44/- now come at quarter Sep. (2007-08) EPS Comes 1.89 & now result of the 2nd Qt. will be very good becoz of boom in infrastructure sector & demand of TMT increased & profit margin of the co. also increased in 2nd qt. so EPS of 2nd Qt. will be comes around 2.45 to 2.95 & for whole years EPS will be Rs. 09.20 to 10.4 so at a PE of 10 the fair value for the stock is Rs. 92 to 104/-.

Right now stock touch the high of Rs. 48/- & now comes in the side way zone like 41/- to 44/- & when ever its give closing above 46/- with good volume then next target is Rs. 56/-. & again here stock will move in the range of 54 to 58/- zone & when ever give closing above Rs. 60/- with good volume stock will be gone in bullish mode so just accumulate here in the Range of 40/- to 43/- with the target of Rs. 57 to 64/- in short term & for long tern target will be Rs. 89/- to 96/-

Happy Investing Time

AHL Sec.
(CNI Research)

Break Out 47/- with good volume

Hello Guys

At last stock closed above 47/- with good volume & here in chart its give a break out with good volume in falling market. Well from here stock enter in bullish mode & now reach to Rs. 65/- very easily.

If Mkt closed positive today then stock will be closed above 52/- ( A 150 Avg. DMP) well for tomorrow stock will be open above 50/- & cross 52/- mark easily & Traded in the range of 53-55/- . Stock may be test upper circuit also & give another break out here.

Look at today’s volume 82,89,979 shares traded today with 43.84% delivery ( 36,34,326 shares). Most important thing is that stock closed above 47/- almost 5.73% up in falling market in another word panic selling market.

Now behind this stock buzz that promoter are so confident regarding company & increasing their stake & some HNI’s players also taking position in this company.

Another story behind this stock is Infrastructure. Company hold more then 65 acres of land & land price also going up in south India & company also doing well in its filed.
Stock is still traded below from book value & in this finical year book value will be above Rs. 80/-.

India Infrastructure story is good & demand of TMT steal is increasing day by day & margin of company also increased & that’s why promoters is consider to issue warrants & as well as issued the shares to promoters.

Buzz is that a major player in steel industry is giving open offer for this company (after increasing it stake to 11%) above Rs. 65/- (this news is not yet confirm only source based).

Well from here now we are bullish on Sujana Metal with the target of Rs. 87-96/- with in 6-9 months time.

AHL SEC.