Buy Panchsheel Organics at cmp of 31.35

Panchsheel Organics was started in 1990 by Turakhia Brothers and deals in  globally sourced, as well as indigenously manufactured, best-in-their-class life-saving medicines covering APIs, Intermediates, Specialty Chemicals, Hormones, Steroids etc. Its products complies  with complies to all the norms applicable as per Schedule ‘M’, GMP & WHO standards.

Companies clientele are names like Dr Reddy’s Labs, Ipca Labs, Nicolas Piramal, Macleods, Lintas etc. Company’s product include familiar names like Levocetrizine, protomax, Coldarex, Gripe water etc among hell lot of products. Just browse through Products on company’s website. I am sure one would be able to identify many familiar names.

·         Company’s topline has been consistently increasing over the Years.

·         At the end of June 2014, company networth comes to be Rs 16.47 Crs and book value comes to around Rs 32.83. Further a company with sales Rs 40 Crs is available at a market cap of Rs 16 Crs!.

·         At an EPS of Rs 3.51 for FY 14, the current PE comes out to be less than 9, which is very low compared to the industry average.

·         What caught my attention is the fact that promoters have been consistently increasing the stake. In the month of August, promoters have further acquired 3.53% shares thereby taking total holding to close to 67%. This is a big comfort for the investors.

·         As on 30^th June 2014, there are only 1395 individuals holdings shares under public shareholding which would have further come down post above.

·       Company declared the dividend for the first time in past few years which is a big positive for the  investors. 5% dividend has been declared today for FY 14.

·       There is hardly any long term debt on the book as on March 2014.

Basis the strong product portfolio, vintage, customer profile, aggressive promoter stake increase  and low floating stock, recommending to buy.