KCP.......
A hidden gem can be considered a golden hen which shall lay golden eggs
for the investors. This is a stock smart investors must accumulate on
delivery basis at the current levels without caring for the index. This
is a specific story which shall generate enormous wealth. A strong
fundamental call getting wings to rock.
Valuation of KCP Ltd.:
KCP ltd. have undergone a capex plan and added cement capacity of 1.50
million tonnes taking their total capacity to 2.20 million tonnes.
Taking thumb rule and assuming that cost of setting up a new plant is
one hundred dollars per metric tonnes then total value of their
cement division works out to be Rs.1100 crores. If we adjust term loan
of Rs.200 crores taken for new cement plant and adjusting another Rs.150
crores of wear and tear of their old plant the net value of their
cement division works out to Rs.750 crores. If we divide outstanding
equity shares of 12.89 crores numbers of shares then we get fair value
of Rs.58.18 per shares against which the stock price as on date is
around Rs.26 levels which means stock is trading Rs.32 per shares less standalone cement division valuation basis. If we take consolidate value
of their other division like engineering, biotech, power then another
Rs.30 per share can be added making total fair value of KCP Ltd around
Rs.88 levels. Then please note the company have huge chunks of land in
Tamil Naidu and AP whose valuation is hidden. The management have taken a
capex plan to set up four star hotel in Hydrabad on their free land
which shall add at least another Rs.10 per shares. Such a mouth watering
valuation stock is available at throwaway price of Rs.26 per share. Just
grab it and hold it to get bumper killing in time to come.
