IVP Ltd – Multibagger Priced Cheap

IVP multibagger stock

DATE 26-11-17 — IVP price 197

It’s becoming increasingly difficult to spot multibaggers in an overheated market. As investment advisor, Kenneth Andrade says, it is best to buy companies now that are making good money in depressed market conditions.

IVP Ltd, which belongs to the Dubai-based Allana group, is one such company, and here is why I consider it a potential multibagger:

1. PROMOTER-MANAGEMENT PEDIGREE

The Allana group, founded since 1865, is a US $5 billion dollar group based out of Dubai. IVP Ltd India is professionally managed with experienced and competent people holding the reins (Vishal Pandit and Mandar Joshi).

Now,, being a $5 billion group can can also be a negative because when you have so much money, you really may not want more. However, the businesses of IVP are such that the company’s growth looks like it is set on auto pilot.

To know why, we need to understand their product profile.

2. PRODUCTS

Polyurethane systems (used in footwear)

Foundry materials (used in iron, steel alloys making, cores & moulds, ferrous and non ferrous castings, automotive castings, graphite coatings, magnesite and other foundry coatings)

IVP India makes composite resins

Composite Resins — THIS IS THE FUTURE! — Performance plastics are set to replace conventional metals in aerospace, defence and automobile applications. You can either google this or click the link to know how performance plastics will dominate the future.

IVP India graphite and composite materials

Insulation Resins – A global major that also makes insulation resins is ELANTAS. It is listed in India as Elantas Beck – go check its price.

Refractory Resins

Here’s an extract from the IVP AR’s management discussion, enough to make one bullish:

IVP materials of the future

Okay, now we have great parentage, products with potential, and so it’s time to move on to finances.

3. IVP FUNDAMENTALS

The company has already booked expenditure for modernising its factories in Bangalore and Tarapur, and that hit been accounted for.

Equity – 10.32 crores of which 70% is held by the management
Reserves – 62.45 crores
Debt– 13.95 crores
BV – 70 PER SHARE!
EPS  10.84 in a year where its plants were being modernized.

The net fixed assets of the company have jumped from 19 crores in 2015-16 to 35.30 crores in 2016-17 – a clear indication of good times coming for customers and shareholders, and a bad time for the competitors. All investments were made from the accumulated cash reserves.

There’s one negative — the sales are 181 crores and the debtors stand at 61 crores, indicating a lengthy debtor cycle.  But that is more or less balanced out by a 2.5-month creditor cycle.

Net cash generated from operations is about 4.93 crores in 2016-17.

The company has provided for bad debts of 2.75 crores in full, so there’s no future hit expected on their accounts.

The company also pays out dividend regularly (20% in 2016-17) and it is a matter of time before it is picked up by an aggressive mutual fund.

The most exciting thing about IVP Ltd is the disruptions that are about to hit the industry. The company seems primed for the future which is not what you can say about some of its competitors.

It looks like a fabulous  medium-long term buy and as this article has been published on a Sunday, you have enough time to research and form an opinion.

12 Comments on "IVP Ltd – Multibagger Priced Cheap"

  1. Had researched this last week and made it 0.25 of PF. Seeing your post on it provided me confidence.

  2. A new CFO is appointed. Any comment on that.

  3. Sir,
    Your view on Nesco for long term investment.

  4. Looks goods and have been tracking it , ur research made me more confident and ur doing an amazing job, keep it up sir.

  5. Sir, Please give your views on Vikas Ecotech. It has been going down for the last 6-7 days. Should I hold or sell at this level..I have at 35.

  6. Kartik Nigam | June 16, 2018 at 4:37 pm | Reply

    Sir, can I buy IVP at these level & are you holding IVP in your portfolio as well?

  7. My inputs on outcome of board meeting yesterday. Stock corrected as much as 12%. Anything major has changed.

  8. Hello Sir, what is the reason for falling down.. From your last updated news, it is not going up, can you please explain so that I should not panic

  9. Hello Sir,
    Thanks for your reply..
    But Revenue is going up,May I know what do you want to tell regarding demand?

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