CPT V24P7-Art1 (Content).pmd - Taxmann

equirements but of late has received loads of
enquiries from the export world too. It’s still
a tiny company with 100 odd crore sales. So,
increasing demand for its products can do
wonders for the company. Quoting now at `
126 it is a solid long-term player. It’s a debt
free entity with huge intrinsic value (has 2
acres of prime land in Mulund). The company
should be a 1000 crore marketcap company in
the next 3 years from the present 400 crore
net worth company. Now that certainly makes
a good bet for you to go in for its shares.
I have shortlisted a penny stock company
called Aadhaar Ventures. Should I go in for
the 1 ` counter Company’s stocks?
What caught my eye in this scrip is the amazing
movement it has witnessed over the last
3 years. From a level of 1.65 ` in March 2009
it went all the way to 87 ` in March 2011 -
an amazing gain of 50 times in just a matter
of couple of years. Marketcap vaulted to 1785
crores from 30 crores. Things changed drastically
post July 2011 when the counter nosedived to
a level of as low as ` 1 and it’s still quoting
at the same price. ‘An operator’s special’ should
be the proper words to chant here. Its sales
jumped from 8 crores in 2006 to 265 crores in
2011, whereas its net profit remained at a
meagre of 1crore. Who knows, maybe again
it can fly to abnormal levels.
An operator’s activities are still to be kept
under scanner, no matter how bad or good its
environment be. No shortcuts for becoming
rich, you see. In my teens, I loved a novel
called ‘Reminiscences of a stock operator’ by
American author, Edwin Lefevre (which is the
thinly disguised biography of Jesse Lauriston
Livermore. The Wall Street Journal described
the book as a ‘classic’. It was ranked at 15 on
‘Fortune’s 75. The Smartest Books We Know,
and Alan Greenspan said it is ‘a font of investing
wisdom’). Go through the book before buying
the scrip!
COMPANY UPDATE - JAI BALAJI INDUSTRIES
The company is one of the well known steel
manufacturing groups in Eastern India with
diversified product range which includes pig
iron, sponge iron, TMT bars, ferro-alloys, alloy
bars, etc. With rising raw material prices and
increased volatility, it plans to use its coal
assets to increase raw material integration.
The company holds varying stakes in four
coal blocks, viz., Dumri and Rohne in Jharkhand
and Andal and Jagannathpur in West Bengal.
The promoters of Jai Balaji have been on a
buying spree pocketing over 2 lakh shares
from the open market in the last couple of
months. This indicates that the worst is over
for the counter and at the present juncture
there’s nothing much to loose.
Long-term trends show that companies in which
promoters and related entities have bought
shares on sharp declines have done well when
the market came under the control of the bulls.
Jai Balaji which was recommended a few months
ago has so far been an inferior performer;
thanks to its debt and not so encouraging
numbers. But with its coke oven plant getting
operational any day now, coupled with a rise
in its margins, should see its stocks delivering
much better numbers and going forward.
August 1 to 15, 2012 u TAXMANN’S CORPORATE PROFESSIONALS TODAY u Vol. 24 u 93
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