We have discussed a lot about Periodic Call Auction trading system – the system SEBI introduced to suck out the remaining retail investors from equity market. It also proved once again - theories successful on paper may not repeat success in practical life. Why SEBI continuing this system without any modification even after it proven as an utter flop is the big question !!!. Introduced for reducing manipulation and increase liquidity , this system actually reduces liquidity further and caused for sharp crash in the market capitalization of even standard companies included in this list. On the other side, it did not contribute anything to control manipulation and manipulators still have their own tools for manipulation. In nut shell ,PCA is the worst and anti retail investor trading mechanism ever introduced by the authorities . To come out from PCA ,SEBI stipulated some criteria which also included some funny conditions . An average volume of 10000 shares per day or average 50 trades per day in all days of any quarter are the two major criteria fixed by SEBI . The anomaly in this system is, it is not considering the equity base or floating stock of any company .I don’t think it is fair to fix same criteria for companies with 3 cr equity and 25 % floating stock and 300 cr equity and 75 % floating stock . Another point is - a low quality stock which is trading @ 0. 5 paise can exit from this system if there is an average turnover of mere Rs.1000 ( 0.10*10000) per day where a quality stock trading @ Rs.2000 can't escape from this system even if there is an average turnover of Rs.1.99 Crore ( 2000*9999 ) .Frankly speaking ,I can't understand the logic behind it .More than this ,automatic cancellation of orders in each hour and need of re-entry in each hour creating lot of trouble both for investors and broking firms . Retail investors apathy towards this mechanism truly reflecting in the falling trading volume and sharp decline of the prices of even goods stocks which included in PCA in the past few months . The real irony is – this mechanism is introduced by the same SEBI who are spending time and efforts to promote retail participation in market and also encouraging the listing of small companies . Prevention of manipulation is necessary, but I don’t think ,killing 99 innocents to prevent the manipulation by the remaining 1 is not the proper way to execute this .
Let us come to the point .Only very few quality companies managed to come out of this deadlock once it entered into PCA. Exit and entry revisions are normally happening in the first week of each quarter. Acrysil India will be a surprise exit candidate in the next revision . Total trading days during September – December quarter is 62 days and company already recorded a trading volume of more than 781500 shares which is enough to qualify for an exit ( 62*10000 = 620000 is the required quantity ) .
ACRYSIL INDIA
Acrysil India is one of the rare companies I recommended earlier even from the PCA list due to its unique products,robust financial performance ,excellent dividend distribution history ..etc. It is also one of the rare companies recorded its life time high price even after inclusion in Periodic Call Auction. In addition to the exit of PCA ,this Kitchen appliances manufacturer reported very good performance in first half of current financial year where it reported an EPS of Rs.11.05 against Rs.12.35 reported for the entire full year in 2012-13 . I believe ,company’s positioning as a niche high end producer and its successful efforts to find strong foreign collaborators for financial ,technical and marketing alliances will bring more success going forward. Germany based Schock and Co GMBH ( leader in Quartz Kitchen Sink’s in various countries ) holding more than 10 % stake in Acrysil and marketing Acrysil’s products in many countries. Recently company started co operating with Berbel Ablufttechnik ,another German company for Kitchen Chimneys and appliances. .Management is also investor friendly and not showing any hesitation to share their success with minority share holders .Last year they distributed bonus shares and a dividend @ 33 % .
This is the kind of stocks having almost all ingredients to become a multi bagger over a period of time due to many reasons like :
* Low floating stock
* Niche Products with reputed brand "Carysil" targeting ultra premium market segment ( Company is the only producer in India and one among the total four producers in the entire world for first quality Quartz Sinks
* Investor friendly management
* Revival in the economies of its major markets
* Huge untapped market potential in India itself.
* An under invested stock by Mutual funds,Institutions and Big Individual Investors
* Large capacity addition in recent times backed by strong marketing alliances with world leaders .
* Aggressive R & D efforts to develop new models...etc
. I expect more serious investors will look into this stock once it came out of PCA within four weeks and chances for sharp re-rating .Recommending this stock @ CMP of Rs.150 for investors with some risk appetite .
This is the kind of stocks having almost all ingredients to become a multi bagger over a period of time due to many reasons like :
* Low floating stock
* Niche Products with reputed brand "Carysil" targeting ultra premium market segment ( Company is the only producer in India and one among the total four producers in the entire world for first quality Quartz Sinks
* Investor friendly management
* Revival in the economies of its major markets
* Huge untapped market potential in India itself.
* An under invested stock by Mutual funds,Institutions and Big Individual Investors
* Large capacity addition in recent times backed by strong marketing alliances with world leaders .
* Aggressive R & D efforts to develop new models...etc
. I expect more serious investors will look into this stock once it came out of PCA within four weeks and chances for sharp re-rating .Recommending this stock @ CMP of Rs.150 for investors with some risk appetite .
To get more understanding about this company ,you can refer the following links.
Use the search option to find out my old recommendations of this stock in this blog
Disc: I have vested interest in Acrysil India
0 comments:
Post a Comment