Saturday, October 3, 2015
Share to look for
Company name : Waterbase Ltd
Industry : Aquaculture Integrated
CMP : Rs.130.00 on 01.10.2015 closing
Traded in : BSE
Why to invest
Waterbase is involved in shrimp exports and shrimp feed incorporated in 1987. The company is operating in its full capacity – 100% capacity of 35,000 MTPA (which is really rare in the capacity utilization), planned to amalgamate with the group’s another company with 75,000 MTPA for utilizing additional capacity and increase its revenue. Due to this amalgamation, the company has to issue additional shares to the amalgamating company and hence the company acquiring additional capacity without any cash payment. This scheme will lead to issue of more shares as we have seen, which will lead to lower the EPS but that will be compensated by additional revenue and profit by using nearly 3 times the present capacity. Hence as per my opinion, this will become a multibagger in future.
Sales Growth – CAGR over 5 years : 10.90% but increased to 38.95% in last three years – means growing fast recently.
Net Profit Growth – CAGR over 5 years : 95% but for the latest three years counts to 51.33% and for the latest 12 months it amounts to 76.42% which shows the company’s growth momentum.
Market share in the Industry : In a way this enjoys monopoly and shall be compared with Avanti Feeds which is only shrimp feeds whereas Waterbase is involved in exports with its famous brands which are popular in overseas market.
Recent Return On Net Worth – RRONW : 18.40% for the Fy 2014-15
Dividend Payment (No. of years) : The company started to pay dividend during FY 15 (2014 – 15)
Disclaimer : I have shares of this company in my portfolio. You are advised to do your own research and judgement before taking any decision to invest / trade in this share.