Stock Idea From: - www.indianmoneyplus.com Scrip: - Rajesh Exports Ltd.CMP: - 46BSE Code:- 53150052 Week H / L: - 168.30 - 45.80Market Cap: - 1059.73Target: - 120 (1 Year)
Summary: -Rajesh Exports is involved is business of exporting gold and diamondcutting. Recently this stock has hammered due to weakening rupee.Dollar has appreciated at Rs 44 which come to 17 months low. Thesecond reason why it came down is Gold from 13 K sliped to10.8K.Rajesh Export now the largest established private gold buyer,accounting for 1.2% of the global gold trade. Having attained thisscale of operation, the company is now shifting its focus to find waysof increasing its net profit margin.In order to meet its objective of increasing its net profit margin,Rajesh Exports has identified three major divers of growth:Jewellery retailing: increasing presence across value chain bycatering to different segments of consumer needsDiamond jewellery: expanding product range with higher marginsWhite labels: expanding its market by supplying white labels to retailchain stores across the world. Key Financials: - Its sales keep on increasing almost every quarter.Before the recent split and bonus of this scrip this was one of thefavourate scrip of the investors.EPS & PE both have bottomed out.Rajesh Exports Ltd had reported revenue growth of 40.7% on year-on-year basis to Rs 25.25 bn for Q4 FY 08. Profits grew by 46.8% YoY toRs 489m as against expectation of Rs 528m,according to marketanalysts. This was due to high tax outflow in the last quarter, which was notprovided for in the previous quarters. Operating margins declined by298bps YoY to 3.3% due to higher share of its low margin bulkbusiness. For the year, revenue grew by 25.7% YoY to Rs86.67bn and PAT grew by103.9% YoY to Rs2.07bn against our expectation of Rs2.11bn and OPMincreased by 130bps to 4.4%. The Real Estate: - Rajesh Exports has about four million sq.ft. landin Bangalore and Kerala. It is now planning to develop theseproperties and acquire competence in property development by settingup a 100% subsidiary, Bangalore Infra. The company may look atproperty development as a separate business in future. Calculations: - Calculating all the above points and the real estateit has the Market cap should be the double of what it is now. So thestock prices will give 100 - 200 % returns in 1 Year. Positive Factors: -World's largest gold exporter at lowest cost.Stock is currently trading at low valuations.Big order book.Foreign investors increased their stake by 10% .FIIs bought this stock at around Rs 95 then why should you wait tograb this stock at Rs 46. Key Concerns: - Continued volatility in gold prices and adverse marketconditions have forced Rajesh Exports, India's leading gold anddiamond manufacturer to go slow on its retail expansion plans. The 100 Shubh stores which were expected to be rolled out by FY09, hasbeen reduced to 40 due to continued volatility in gold prices andadverse market conditions. It is not expanding its Laabh storeseither, and would keep the number of stores at a 30 inFY09. However, the growth in bulk business to Middle East would compensatefor the loss of growth in retail, according to company sources. The company expects its other businesses of bulk exports,white labelsand diamond jewellery to more than compensate for the slowdown in itsretail division. The slowdown in its retail business is likely to affect its overallfinancial performance. -- Posted By Ronald Chisley to Investor Forums at 8/31/2008 01:56:00 PM --~--~---------~--~----~------------~-------~--~----~ Get latest market updates & search internet right from your browser-download our toolbar here- http://investorline.ourtoolbar.com/ Visit our site at – http://investorline.co.in/ Newsroom: http://newsroom.investorline.co.in/ Learning Center- http://learning.investorline.co.in/ Mutual funds - http://mutualfunds.investorline.co.in/ Life Insurance - http://insurance.investorline.co.in/ Investor Journal - http://research.investorline.co.in/ Newscatcher- http://catcher.investorline.co.in/ Interested in Financial Planning-Let us Contact you- http://spreadsheets.google.com/viewform?key=pb_z4f1_zGMg4iBBFT3-SWQ&email=true If you like the site then promote it here- https://www.freetellafriend.com/tell/?url=http://investorline.co.in/blogs/news Create your own free blog on- http://investorline.co.in/blogger Visit this group at http://groups.google.com/group/india-investor -~----------~----~----~----~------~----~------~--~---
