Swami's Stock Idea
Swami is Bullish on Vijay Solvex Ltd.
Idea Submitted on 20Jul,2021
  • 23 Total Ideas
  • 3 Active Ideas
  • 20 Closed Ideas
  • 48 Friends
  • 56 Followers
  • Avg. Returns
     36.72%
    Rank
    2
    Success Rate
      60.87%
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      Idea Status :  Active
    Idea is Open
     Time Frame
    3year
     Start Price
    3685.5
     Target Price
    7369
     Stop Loss
    1959
     Projected Gain
    3683.5 (99.95% Upside)
     Live Returns
    1228.5     33.33%
     Analysis
    (A) My 5th call on the stocks, after two 100% gains, one stop-loss hit and another 100% gain. Essentially this is long-term buy and hold, which the site does not allow if the stock price goes up or down beyond a point. Hence the repeated calls. Read earlier descriptions as well. Find them on the stock's page. (B) Mustard Oil has all the tail-wind of the edible oil sector, plus a few more. 70% of India's edible oil is imported, because of the legacy of faulty policies. This is unpardonable when 40% of Indians are into agriculture, when edible oil is into our daily meals, when largest crop areas go to rice and wheat and we export these and government also has to save such farmers continually due to depressed price of their crops. NAMO government has taken up the issue with renewed focus on edible oil farming via good MSP and other policy actions. Results are showing with increased crop area and production from this year. It will have to continue if India becomes self sufficient in edible oil. 30% is produced here. 100% is to be produced. That's 3-4 times if we include some exports. In how many years? Possibly in 10 years. (C) 2021's banning of blending in mustard oil is adding to the businesses of the organized players in the sector, in a sector which is hugely in the hands of small scale unorganized players. Banning blending in mustard oil further adds to the demand of mustard and mustard oil production. Next policy due, is increase in MSP by say 15-20% which should come by October, and that shall continue long-term given imports have to be stopped, some farmers and farmland needs to be diverted from rice-wheat every year. (D) This is not a Corona Play although Covid did bring focus back on to this sector, when companies started marketing the health benefits to increase their sales. Traders may play for that. Investors need not. Investors can stay on and on. With next two quarters, Q1 and Q2-2021 results visible, which will be great, traders can get the target price mentioned here even by this period. (E) For the company the next steps needs to be increasing capacity at a brisk pace, if they are to maintain their market share and not dilute their legacy brands foraying into all kinds of businesses. Adani is major player but they are new, say 1-2 decades, with all kinds of edible oil and food. This family is possibly into mustard oil 3-4 generations for 6-7-10 decades. Will be good if they can leverage it. With Father son due, some management breadth exists into the company, and outside into the extended family. But management intensity needs to be improved and increased. Consistent growth to maintain market share in a market which will grow 15% automatically due to government action and per capita consumption increase due to economic development of people, and then get a share of the unorganized to organized business movement, and doing that for 10 years at a stretch until India becomes self sufficient in edible oil production (which will perhaps remain a moving target with per capita consumption increasing every year - by the way, this is no SS Steel, so, here 1000+ Million would ultimately participate) and starts to export seriously, would require serious improvement in management bandwidth. (F) Consistent performance in that line, along with high governance standards can make Vijay Solvex a 10-15-20 bagger from here, over the next 10 years. On the contrary, little expansion, tax evasion, internal unprofessionalism (check interest cost for this FY for the debt in the books. it shows internal family arrangements. not ok for listed entities, although could be 100% honest and clearly of no harm to vijay solvex.) will make it pause at 2-3-4 bagger during this period. Keep tracking likewise.
     Stock Price Movement (EOD Basis)
     C.M.P Vijay Solvex
    4914
    Sentimeter
    Buy Calls: 6 Sell Calls: 0
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