Cementing your portfolio with Kakatiya

Kakatiya Cement Sugar & Industries Ltd. came on my radar and an analysis on the last 10 year data yielded the following results:

+ Sales increased 1.82 times (92.51 crore to 169 crore)
+ Current Ratio is 2.72
+ Debt Equity Ratio is 0.05 (2011 data)
+ Net profit increased 4.38 times (5.05 crore to 22.13 crore)
+ Did not suffer any loss in the last 10 years
+ EPS increased 4.3 times (6.5 to 29.94), a CAGR of  5.06%
+ Book Value increased 2.6 times (77.39 to 200.9)
+ Uninterrupted Dividend for the last 23 years
+ Promoter Holding is 49.34%

There has been a dramatic increase in the latest EPS (5.03 in Mar-2011 to 27.94 in Mar-2012). To smoothen out such fluctuations, I normally take the 3-year average EPS of ending period (2012, 2011 & 2010) and the beginning period (2004, 2003 & 2002).

At a CMP of Rs. 79.60, the MoS works out to be 227%.

Conclusion: For me, it is a buy, till I reach my diversification target or if falls out of the MOS target.

Invictus.

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