Top 8 Microcaps To Buy

TOP 8
MICROCAPS TO BUY
March 20, 2019
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TABLE OF CONTENTS
Page
Introduction 3
Stock # 1
6
Prakash Constrowell Limited
Stock # 2
10
Aro Granite Industries
Stock # 3
14
Hindustan Tin Works
Stock # 4
18
Swelect Energy Ltd
Stock # 5
22
The Great Eastern Shipping Company
Stock # 6
26
Navkar Corporation
Stock # 7
Unichem Laboratories 30
Stock # 8
Gujarat Mineral Development Corporation 34
Conclusion 38
Disclosure 39
Disclaimer 42
Index | 2
Introduction
The BSE Sensex has seen its fair share of ups and downs over the last few years. And
despite the valuations the broader markets are trading at, it’s not a bad idea to park
some money in stocks for the long term.
In fact, how about giving your investments that extra edge by taking an exposure in
Microcaps.
For it is doing precisely this that can mean the difference between good returns and
great returns for your stock investments!
To give you a head start, we’ve created this special report just for our subscribers.
This report is aimed at those subscribers who joined us recently on our long term
wealth building journey through Microcap Millionaires.
We hope the new members have had a chance to go through the Microcap Millionaires
guide which gives a detailed step-by-step explanation of how to go about investing
under this service.
In case you haven’t had a chance to do the same yet, you can do so by clicking here.
The service rests on three simple principles as espoused by the father of value
investing, Benjamin Graham himself.
• The individual investor should act consistently as an investor and not a

speculator. He should be able to justify every stock purchase he makes
by impartial, objective reasoning that gives him the satisfaction that he
is buying the stock with a significant margin of safety
• The investor should have a definite selling policy for all his common
stock investments, corresponding to his buying techniques and lastly,
3 | Introduction
• Investor should always have a minimum percentage of his total portfolio
in common stocks and a minimum percentage in bond equivalents.
He then recommended at least 25% of the total at all times in each
category. In other words, under no condition should stock holdings
go above 75% of the total portfolio and the same applies for bond
equivalents.
As can be seen, MCM’s reports will include stock recommendations and will also give
subscribers suggestions on how best to use the flexibility of increasing or reducing
exposure to equities based on the overall market conditions. Based on valuation
levels of the stock market as well as individual stocks, money would be varyingly
distributed between stocks and bonds.
The next question that is likely to come up is what are the stocks that can be bought
and how many of them? We think this is where the report will be extremely useful.
In this report, we have put together a one-page synopsis of the top stocks that we
think every new subscriber should consider making a part of the equity portion of the
Microcap Millionaires group of stocks.
Therefore, if you are starting out, there’s no better stocks to start your wealth building
journey through Microcap Millionaires than the ones we are covering in this report.
Do note that as per the rules, depending on the targeted exposure to stocks and
bonds at a particular time and the resulting total number of stocks to be had in the
group, new subscribers may still be few stocks short. As a result, our recommendation
would be to consider keeping the remainder of the money in fixed deposits and the
same can be moved into stocks as existing companies become available to be bought
in case of a fall in prices and also as we recommend more companies over the coming
months.
Also, do note that in order to keep the group of stocks adequately diversified; limit
your exposure to any one stock to not more than 3%-4% of the total exposure to
Microcap Millionaires. In other words, if a subscriber is starting with a corpus of Rs
100 (including both fixed deposits and stocks), investment in any one stock should
Introduction | 4
not be more than Rs 3-4. This allocation will of course vary from person to person.
For something that works best for you, we recommend you talk to your investment
advisor.
We think this is enough background for a subscriber to be able to begin his Microcap
Millionaires journey. Therefore, do go through the synopsis of all the stocks that we’ve
put together below and get off to a great start.
5 | Introduction
Stock # 1
BUY
Maximum Buy Price: Rs 8
Prakash Constrowell Limited (PCL) is a leading construction company, predominantly

engaged in the business of infrastructure development and civil construction. PCL
provides integrated engineering, procurement and construction services. It under-
takes projects for various government / semi-government bodies and other private
sector clients.
The company is a ‘Class-IA Contractor’ for Public Works Department (PWD) of the
Government of Maharashtra. PCL is an ‘ISO 9001:2008 Quality Management System’
Certified company for construction of Roads, Bridges, Buildings and Development of
Land.
In FY18, the company recorded a 26% jump in topline over the previous year where-
as the bottom line came in flat. Operating margins stood at 6%. The company has
a strong balance sheet with consolidated debt to equity ratio averaging a safe 0.3x
over the last 10 years, with the maximum being 0.4x back in FY09.
As per the chairman, the company has an order book of considerable size and at
present, these projects in hand are at various locations, and are in various stages of
execution.
However, there’s one negative in the form of the promoter holding coming down
from 64% in June 2016 to 27% currently. Given the current low valuations, this seems
to be already factored into the stock price in our view.
6 | Prakash Constrowell Limited

Financials at a glance
(Rs m, Consolidated) FY14 FY15 FY16 FY17 FY18
Net sales 2,146 1,587 1,965 2,256 2,839
Sales growth (%) -62.9% -26.0% 23.8% 14.8% 25.8%
Operating profit 225 30 126 109 168
Operating profit margin (%) 10.5% 1.9% 6.4% 4.8% 5.9%
Net profit 85 -8 39 71 71
Net profit margin (%) 4.0% -0.5% 2.0% 3.2% 2.5%
Balance Sheet
Fixed assets 40 35 94 170 185
Investments 47 109 112 23 7
Other non current assets 308 316 308 362 380
Current assets 1655.08 1924.69 1870.00 2091.85 1877.81
Total Assets 2,051 2,385 2,384 2,646 2,449
Net worth 1,148 1,103 1,142 1,199 1,267
Non Current Liabilities 270 209 116 207 225
Current liabilities 633 1,072 1,126 1,240 956
Total liabilities 2,051 2,385 2,384 2,646 2,449
Prakash Constrowell Limited | 7

Valuations*
(Rs m) FY14 FY15 FY16 FY17 FY18
Net sales (Rs m) 2,146 1,587 1,965 2,256 2,839
PAT (Rs m) 85 -8 39 71 71
Adj. EPS (Rs) 0.7 -0.1 0.3 0.6 0.6
Price to earnings (x) 6.7 -68.3 14.5 8.0 8.1
Price to sales (x) 0.3 0.4 0.3 0.3 0.2
Price to book value (x) 0.5 0.5 0.5 0.5 0.5

*Adjusted basis
Market Data
Current Price (Rs) 4
52 week H/L 10.8/4
BSE code 533605
No. of shares (m) 125.7
Face value (Rs) 1
FY18 dividend/share (Rs) (Adjusted) 0.0
Free float (%) 72.6
Market cap (Rs m) 573
Average 52-week liquidity (Rs m) 6
Price to sales^ (times) 0.2
Price to earnings^ (times) 8.1
Price to book^ (times) 0.5
Debt to Equity^ (times) 0.3
Dividend yield (FY18 at current prices) 0.0%
Promoter pledging (% of Total Equity) 0.0%

^Based on Consolidated Balance Sheet as at March 31, 2018
8 | Prakash Constrowell Limited

Rs 100 invested 5 years back is now
2,500
Prakash Constrowell Ltd Rs 518
Sensex Rs 171
2,000
1,500
1,000
500
-
Nov-13 Feb-15 May-16 Aug-17 Nov-18
Source: Company, Equitymaster
Annexure for Prakash Constrowell Ltd:

Shareholding (%, Sep-18)
Category (%)
Promoters 27.4
Institutions 0.0
Others 72.6
Total 100.0
Prakash Constrowell Limited | 9

Stock # 2
Aro Granite Industries (AGIL) started operations as a 100% Export Oriented Unit in
1991 for processing Polished Granite Tiles and Slabs. The company has installed the
most sophisticated and environment-friendly granite processing machinery import-
ed from Italy. Technically qualified and fully trained personnel operate this state-of-
the-art machinery.
Its plant is ideally located at Hosur, Tamil Nadu, which is just 35 kms away from Ban-
galore - the Granite Hub of India. The strategic & geographical location of the plant
ensures close proximity and direct access to quarries in South India which are known
for the finest and widest range of Granites.
The company saw its topline fall 16% YoY during FY18, operating margins decrease
to 6.9% from 12.9% in the previous year, and a 90% YoY fall in bottomline. The op-
erating environment for the granite industry in India has been challenging this past
year. Further, due to non-availability of GST refunds for exports on time, GST created
shortage of working capital which in turn impacted business.
A strict 100% inspection system is adopted at all stages of manufacturing process.

Over the years, AGIL has earned a high degree of credibility with its broad clientele
base as the most reliable and consistent supplier of premium Indian Granites. The
customer network of AGIL spans the globe and is currently meeting the granite needs
of USA, Canada, Europe, South America, Japan, Far East and South Pacific Countries.
10 | Aro Granite Industries

Net sales 2,513 2,548 2,156 2,387 2,007
Sales growth (%) 34% 1% -15% 11% -16%
Net profit 211 167 59 126 12
Net profit margin (%) 8.4% 6.6% 2.7% 5.3% 0.6%
Balance Sheet
Fixed assets 836 737 726 906 898
Other non-current assets 9 83 229 50 89
Current assets 2,075 2,278 2,138 2,127 2,049.85
Total Assets 2,919 3,098 3,093 3,083 3,037
Net worth 1,419 1,547 1,587 1,695 1,706
Current liabilities 1,385 1,349 1,259 1,185 1,170
Aro Granite Industries | 11

Valuations*
Net sales 2,513 2,548 2,156 2,387 2,007
PAT 211 167 59 126 12
Adj. EPS (Rs) 13.8 10.9 3.8 8.3 0.8
Price to earnings (x) 4.1 5.1 14.6 6.8 72.9
Price to sales (x) 0.3 0.3 0.4 0.4 0.4

*Adjusted basis
Market Data
52 Week H/L 98/49
BSE Code 513729
NSE Symbol AROGRANITE
No. of Shares (m) 15.3
Face value (Rs) 10.0
FY17 Dividend per Share (Rs, adjusted)^ 1.0
Free float (%) 58.9
Market Cap (Rs m) 855
Average 52-Week Liquidity (Rs m) 7.1
Price to Sales* (times) 0.4
Price to Earnings* (times) 72.9
Price to Book* (times) 0.5
Debt to Equity* (times) 0.5
Dividend yield (on FY17 dividend) 1.8%
Promoter pledging (% of Total Equity) NIL

*Based on FY18 Financial Statements
^NIL dividend for FY18
12 | Aro Granite Industries

420
Aro Granite Ltd Rs 233
Sensex Rs 171
360
300
240
180
120
60
Annexure for Aro Granite Industries:

Shareholding (%, Sep 18)
Category (%)
Promoters 41.1
Institutions 1.5
Others 57.4
Total 100.0
Aro Granite Industries | 13

Stock # 3
Hindustan Tin Works
BUY
Hindustan Tin Works (HTW) is one of the leading manufacturers and exporters of
high performance cans, printed sheets, and related components to consumer mar-
keting companies in India and abroad. It is one of the leading and established com-
panies in Metal Packaging Industry. Established in 1958, the company has a historical
long-term track record of business performance. It has an established customer pro-
file and wide customer base.
With more than 700 employees, yearly production capacity of 260 million units and
annual sales turnover of over Rs 3 billion, HTWs is a renowned name in metal packag-
ing industry. Building growth through innovative packaging solutions and close part-
nerships and long lasting relationships with customers, HTW supplies diverse range
of aerosol cans, food cans, beverage cans, baby food cans and can components to a
wide variety of foods, beverages, baby food, health, beauty and luxury companies in
more than 30 countries in Africa, Australia, Europe, Middle East, New Zealand, USA,
and parts of South East Asia.
Amidst fierce competition and extremely challenging domestic business environ-

ment, the company delivered a topline of Rs 3.15 billion in FY18 as against the pre-
vious year's revenue from operations of Rs 2.67 billion which was a growth of 17.6%
YoY. Export sales increased from Rs 529 million in previous year to Rs. 738 million in
current year i.e. Increase of 39%.
There is a trend towards alternate packaging which is cheaper as compared to metal

packaging with shorter shelf life inspite of the fact that metal packaging has an edge
over them in terms of shelf life, sustainability etc. Notwithstanding the challenges,
the company had been mainly focusing on food products and now gradually expand-
ing its base in non food sector also. In addition, company is also developing new in-
Hindustan Tin Works | 14

novative products for domestic and global market. It remains keenly focused on the
emerging opportunities in the can-manufacturing sector in India as well as abroad.
(Rs m, standalone) FY14 FY15 FY16 FY17 FY18
Net sales 3,136 3,177 2,980 2,674 3,145
Sales growth (%) 15% 1% -6% -10% 18%
Net profit 84 86 140 70 96
Balance Sheet
Fixed assets 685 712 851 824 793
Current assets 1,642 1,885 1,790 1,747 2,011
Total Assets 2,429 2,691 2,680 2,590 2,972
Net worth 1,040 1,092 1,220 1,291 1,378
15 | Hindustan Tin Works

Valuations*
FY14 FY15 FY16 FY17 FY18
Net sales 3,136 3,177 2,980 2,674 3,145
PAT 84 86 140 70 96
Adj. EPS (Rs) 8.1 8.2 13.5 6.8 9.3
Price to sales (x) 0.2 0.2 0.2 0.2 0.2

*Adjusted basis
Market Data
52 Week H/L 116/46
BSE Code 530315
NSE Symbol Not Listed
FY18 Dividend per Share (Rs, adjusted) 1.0
Free float (%) 59.5
Market Cap (Rs m) 572

Hindustan Tin Works | 16

Hindustan Tin Works
Rs 100 invested 5 years back is now worth...
400
Hindustan Tin Rs 159
Sensex Rs 172
300
200
100
-
Feb-14 May-15 Aug-16 Nov-17 Feb-19
Annexure for Hindustan Tin Works:

Shareholding (%, Dec 18)
Category (%)
Promoters 40.5
Institutions 9.8
Others 49.7
Total 100.0
17 | Hindustan Tin Works

Stock # 4
Swelect Energy Systems
BUY
The company is into the manufacturing of solar PV modules, solar Inverters and
mounting structures. It is also into solar power systems integration & turnkey EPC
contracts in the space. Besides, it is also a solar power producer and is looking to get
into the new vertical of solar energy storage solutions. It also has the legacy business
of iron and steel foundry products for domestic and export markets.
Swelect, with a history of more than 30 years in the power electronics and power
systems space, is well positioned in the renewable energy space with over 150 MW
of Solar Photovoltaic EPC experience so far. The company currently has done more
than 9000 SPV installations (Roof Top SPV Integration & Solar Water Pumps), which is
one of the largest in the country. While Swelect saw a 22% rise in revenues in FY18, its
bottomline saw a 27% dip during the year on the back of a fall in operating margins.
The company’s technical experience and quality standards make it geared to face the
ever changing clean energy market landscape, with a unique status of one of the few
companies in the SPV Industry in India to offer the complete range of products and
services. It qualified as Tier 1 Solar PV Module Manufacturer globally in the month
May 2018.
The management maintains that the company has been able to survive the onslaught
of cheap modules imported mainly from China because of its premium quality and
after sales service. Going forward, Swelect intends to triple its solar module manu-
facturing capacity to 300 MW a year.
Swelect Energy Ltd | 18

Net sales 1,764 2,218 2,762 2,413 2,945
Sales growth (%) 0% 26% 24% -13% 22%
Net profit 162 -4 166 216 159
Net profit margin (%) 9.2% -0.2% 6.0% 9.0% 5.4%
Balance Sheet
Fixed assets 2,666 2,900 3,013 2,947 3,491
Current assets 5,170 5,568 5,149 5,542 5,700
Total Assets 8,786 9,010 8,709 9,006 9,915
Net worth 6,784 6,780 6,820 7,002 7,069
Non Current Liabilities 913 1,192 546 402 463
19 | Swelect Energy Ltd

Valuations*
FY14 FY15 FY16 FY17 FY18
Net sales 1,764 2,218 2,762 2,413 2,945
PAT 162 (4) 166 216 159
Adj. EPS (Rs) 16.0 -0.4 16.4 21.4 15.7
Price to earnings (x) 16.9 -727.2 16.5 12.6 17.2
Price to sales (x) 1.5 1.2 1.0 1.1 0.9

*Adjusted basis
Market Data
52 Week H/L 527/252
BSE Code 532051
NSE Symbol SWELECTES
Free float (%) 44.0
Market Cap (Rs m) 2,727
Promoter pledging (% of Total Equity) -

Swelect Energy Ltd | 20

Swelect Energy Ltd
420
Swelect Energy Ltd Rs 158
Sensex Rs 171
360
300
240
180
120
60
Annexure for Swelect Energy Ltd:

Category (%)
Promoters 56.0
Institutions 0.1
Others 43.9
Total 100.0
21 | Swelect Energy Ltd

Stock # 5
Over the last 6 decades in the Indian shipping industry, one company has consistent-
ly dominated - GE Shipping. India's largest private sector shipping service provider
enjoys a formidable presence in the global maritime industry.
The company has two main businesses, shipping and offshore. The shipping busi-
ness is involved in transportation of crude oil, petroleum products, gas and dry bulk
commodities. The offshore business services oil companies in carrying out offshore
exploration and production activities, through its subsidiary Greatship (India) Limit-
ed.
The company posted losses for the financial year (for FY18) for the first time in past
16 years. While the company reported a standalone profit after tax of Rs 1.6 billion in
FY18, however, on a consolidated basis, GE Shipping reported a loss of Rs 2.1 billion.
This is because of two reasons: First, Greatship (India) Ltd, a wholly owned subsidiary
of the company has recorded a deferred tax liability of Rs 2.7 billion in the consolidat-
ed results. Second, a provision for impairment made by Greatship (India) Ltd of Rs.
2.06 billion. This is an impairment related to some of the offshore supply vessels. It is
important to note that both of these are non-cash charges. Excluding these non-cash
charges, the results would have been higher by Rs 4.76 billion.
As on May 2018, the company's shipping business had 49 vessels with average age
of 10.6 years. For the offshore business, the company has 4 Jack up rigs and 19 ships.
All these have an average age of 7.5 years. The company derived 71% of its total rev-
enues from the shipping segment whereas the remaining 29% was contributed by
the offshore segment.
GE Shipping operates in an industry which is not only cyclical but also capital inten-
sive.
The Great Eastern Shipping Company | 22

Despite several headwinds, the key to the company's stable performance has been
the capital allocation skills of the management. This involves buying and selling ves-
sels at the right time and price. Diversified fleet profile with the presence in the ship-
ping segment (crude, product and dry bulk) and the offshore segment has enabled
GE Shipping to gainfully deploy its assets amid a challenging operating environment
rife with oversupply in the shipping markets.
Net sales 30,919 34,380 38,078 31,169 30,384
Sales growth (%) 3% 11% 11% -18% -3%
Operating profit 16,661 17,087 21,034 19,371 13,021
Net profit 5,740 7,482 10,970 7,550 -2,096
Net profit margin (%) 18.6% 21.8% 28.8% 24.2% -6.9%
Balance Sheet
Fixed assets 98,422 108,883 89,247 103,043 98,085
Other non-current assets 5,237 6,829 4,416 950 661
Current assets 40,089 42,545 45,544 48,760 45,671
Total Assets 143,748 158,256 139,207 152,753 144,417
Net worth 67,729 74,306 65,635 72,233 69,292
Non Current Liabilities 50,032 57,865 49,604 58,260 54,237
23 | The Great Eastern Shipping Company

Valuations*
Net sales 30,919 34,380 38,078 31,169 30,384
PAT 5,740 7,482 10,970 7,550 (2,096)
Adj. EPS (Rs) 38.1 49.6 72.8 50.1 -13.9
Price to earnings (x) 7.4 5.7 3.9 5.6 NA
Price to sales (x) 1.4 1.2 1.1 1.4 1.4

*Adjusted basis
Market Data
52 Week H/L 482/267
BSE Code 500620
NSE Symbol GESHIP
Free float (%) 70.3
Price to Earnings* (times) NA

The Great Eastern Shipping Company | 24

295
GE Shipping Rs 94
Sensex Rs 171
235
175
115
55
Annexure for The Great Eastern Shipping Company:

Category (%)
Promoters 29.7
Institutions 44.0
Others 26.3
Total 100.0
25 | The Great Eastern Shipping Company

Stock # 6
Navkar Corporation
BUY
Navkar Corporation has three Container Freight Stations (CFS), two at Ajivali and one
at Somathane in Panvel with aggregate installed capacity of over 5,00,000 TEUs per
annum. The company has a railways freight terminals (PFT) which allows it to load
and unload cargo from container trains operating between Somathane CFS and JNPT
and to transport domestic cargo to and from inland destinations on the Indian rail
network.
The company has started ICD operations at Vapi in the last year with an approximate
installed capacity of 5,00,000 TEUs per annum. Vapi terminal volumes are growing at
the higher rate. Navkar received final approval from the Indian Railways for operating
a private freight terminal at Vapi. The approval is favourable to both the railways
and Navkar as the distance between the two is around 175 km. Commencement of
rail operation at Vapi is expected to further improve volumes and profitability as the
company has an inland container depot at Valsad (Gujarat) along the industrial belt.
The management expects to handle 5,000 TEUs per month through this terminal.
The Government’s initiative direct port delivery (DPD) to reduce dwell time and trans-
action cost for shippers is an area of threat the Container Freight Stations operators
may face in future. With DPD taking off in India in a big way towards reduction of
logistics cost, it could be a threat to the CFS business. However, more than half of
the DPD containers are resent to a CFS either because of non-clearance within 48
hours or voluntarily by importers for storage and onward transportation to hinter-
land. While the Government pushes for DPD, the management feels that the use of
CFS as a transport and storage solution would remain worthwhile.
Polyplex Corporation | 26
The future of container growth in India is bullish in the wake of various policy ini-
tiatives such as Make in India, Goods and Services Tax (GST), Digital India, new For-
eign Trade Policy and port linked infrastructure projects. As per the management,
enhanced infrastructural facilities, seamless and uninterrupted operations, stan-
dardised charges and transparency on crucial aspects such as selection of CFSs can
potentially go a long way in improving operations at container freight stations as well
as strengthening the logistics supply chain as a whole.
(Rs m, standalone) FY14 FY15 FY16 FY17 FY18
Net sales 3,494 3,288 3,473 3,709 4,282
Sales growth (%) 5% -6% 6% 7% 15%
Net profit 906 697 949 888 1,009
Balance Sheet
Fixed assets 6,555 7,897 8,591 11,938 18,714
Other non-current assets 1,393 1,502 4,206 7,579 2,600
Current assets 1,224 1,818 3,890 2,132 1,564
Total Assets 9,172 11,217 16,687 21,649 22,877
Net worth 4,385 5,073 11,363 14,609 17,013

27 | Polyplex Corporation
Valuations
Net sales (Rs m) 3,494 3,288 3,473 3,709 4,282
PAT (Rs m) 906 697 949 888 1,009
Adj. EPS (Rs) 6.0 4.6 6.3 5.9 6.7
Price to sales (x) 2.3 2.4 2.3 2.2 1.9

*Adjusted basis
Market Data
52 Week H/L 219/41
BSE Code 539332
NSE Symbol NAVKARCORP
FY18 Dividend per Share (Rs, adjusted) -
Free float (%) 31.0
Dividend yield (on FY18 dividend) -

Polyplex Corporation | 28
Navkar Corporation
Rs 100 invested since listing is now
160
140
120
100
80
60
Navkar Corp Ltd Rs 31
Sensex Rs 142
40
20
Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18
Annexure for Navkar Corporation:

Category (%)
Promoters 69.0
Institutions 22.7
Others 8.3
Total 100.0
29 | Polyplex Corporation
Stock # 7
Unichem Laboratories
BUY
Unichem Laboratories is one of India's oldest and largest pharmaceutical company

headquartered in Mumbai. Founded in 1944 by the late Mr. Amrut Mody, a pioneer
of the Indian pharmaceuticals business, the company has grown to become one
of India's respected pharmaceutical companies. Unichem aims to transform itself
into a global pharmaceutical drug company with an increasing focus on research
and developed markets. With formulations constituting the core of the company’s
business, Unichem is backward integrated to API Manufacturing.
The Active Pharmaceutical Ingredient (API) business requires strong infrastructure,

technological expertise, experience and capability to carry out contract manufacturing
and custom synthesis. Unichem provides customers a complete solution for API
development, starting from samples and trial quantities to regulatory assistance
required for registration and regulatory compliance. The company’s facilities are
designed to meet global standards for API development with a focus on complex
APIs, controlled substances and APIs for regulated markets, all of which are key to
achieving Unichem’s strategic goals.
The financial year 2017-18 saw the company undertake a strategic disinvestment
of its domestic business to focus on the international API and formulation business
backed by a strong R&D base. As per the company, the last few years have seen a
strong performance in the international markets, with the US formulation business
showing robust growth. This growth continued in FY18 and the management is
confident that this tactical disinvestment will reap rich dividends in the future and
help to ensure the long-term success of the company in the global pharma market.
Flush with funds from the sale of the company’s domestic business, going forward
Unichem intends to focus attention on all aspects of the international business
Unichem Laboratories | 30
including finished formulations, API, contract manufacturing and contract research. It
also plans to increase investments in R&D in the New Chemical and Biological Entities
(NCE & NBE), Bio-similars and complex generics. The management also plans to
focus on initiating various measures towards achieving organizational and operating
efficiencies and strengthening the core competencies of the company.
Net sales 11,334 12,018 13,327 15,401 13,833
Sales growth (%) 5% 6% 11% 16% -10%
Operating profit 1,777 1,010 1,639 1,824 216
Net profit 1,693 754 1,081 1,087 25,449
Balance Sheet
Fixed assets 4,193 4,160 4,026 4,872 5,745
Current assets 5,807 5,644 6,321 7,485 23,318
Total Assets 11,447 11,535 13,054 15,207 31,854
Net worth 8,166 8,675 9,543 10,636 26,801
31 | Unichem Laboratories
Valuations*
Net sales 11,334 12,018 13,327 15,401 13,833
PAT 1,693 754 1,081 1,087 25,449
Adj. EPS (Rs) 23.6 10.5 15.0 15.1 354.2
Price to sales (x) 1.4 1.3 1.1 1.0 1.1

*Adjusted basis
Market Data

52 Week H/L 382/182
BSE Code 506690
NSE Symbol UNICHEMLAB
Face value (Rs) 2.0
Free float (%) 49.3

Promoter pledging (% of Total Equity) -

*Based on FY18 Audited Financial Statements
Unichem Laboratories | 32
Unichem Laboratories
250
Unichem Labs Rs 115
Sensex Rs 171
200
150
100
50
-
Annexure for Unichem Laboratories:

Category (%)
Promoters 50.7
Institutions 11.4
Others 37.9
Total 100.0
33 | Unichem Laboratories
Stock # 8
Gujarat Mineral Development Corporation
BUY
Gujarat Mineral Development Corporation (GMDC) was created way back on 15th
May, 1963. At the time, Gujarat state acutely needed rapid industrial development, for
which it needed the capability of exploiting natural resources. This intent inspired the
state to incorporate a public sector company that would target exclusive development
of mineral resources endowed on the state. This is what GMDC's business is centered
around.
Today, the company also generates renewable power along with mining and mineral
processing. GMDC is the largest merchant seller of lignite in the country. Its other
products include fluorspar, bauxite, manganese, silica sand etc.
Lignite mining continues to be the main operation of the company. GMDC currently
has 6 operational Lignite mines with annual production capacity of 90 Lac Tonnes per
Annum (LTPA). The mines are located in Kutch, South Gujarat and Bhavnagar region.
Out of total Profit before Tax (PBT) of the company about 85% is from Lignite Mining
Operations. Other than Lignite, GMDC is also operating Bauxite mines in Gujarat. The
operations are located in the districts of Kutch as well as Devbhoomi Dwarka. The
Bauxite deposits of Gujarat are clustered deposits with numerous pocket deposits
present in near-by vicinity. GMDC is currently mining nine Bauxite deposits, of which
eight are in Kutch and one is in Devbhoomi Dwarka.
The management believes that as six mining leases are reserved by the central
government for GMDC, it will boost the Lignite Production which will help increase
revenue. There are large amount of reserves of Limestone at its upcoming Lakhpat
Punrajpur Mining, Panandhro Extension & Bharkandam. GMDC is approaching
various cement companies across India for setting up of Cement Plant where GMDC
will be a long term Limestone supplier.
Gujarat Mineral Development Corporation | 34

Going forward, the company is looking at venturing into further exploration activities,
increasing the geographical reach within Gujarat, and diversifying operations in
sectors such as renewable power generation and other minerals.
(Rs m, consolidated) FY14 FY15 FY16 FY17 FY18
Net sales 12,897 14,393 11,787 15,367 20,509
Sales growth (%) -23% 12% -18% 30% 33%
Net profit 4,391 5,009 2,190 3,251 3,531
Balance Sheet
Fixed assets 18,624 17,709 17,194 19,564 20,626
Current assets 12,978 13,041 16,259 14,412 14,664
Total Assets 39,457 49,593 47,022 51,141 54,230
Net worth 28,623 32,431 36,963 40,006 43,519
35 | Gujarat Mineral Development Corporation

Valuations*
Net sales 12,897 14,393 11,787 15,367 20,509
PAT 4,391 5,009 2,190 3,251 3,531
Adj. EPS (Rs) 13.8 15.8 6.9 10.2 11.1
Price to sales (x) 2.1 1.9 2.3 1.7 1.3

*Adjusted basis
Market Data

52 Week H/L 147/69
BSE Code 532181
NSE Symbol GMDCLTD
Face value (Rs) 2.0
Free float (%) 26.0

Average 52-Week Liquidity (Rs m) 22

Gujarat Mineral Development Corporation | 36

Gujarat Mineral Development Corporation
Rs 100 invested 5 years back is now worth...
200
GMDC Rs 64
Sensex Rs 174
150
100
50
-
Mar-14 Jun-15 Sep-16 Dec-17 Mar-19
Annexure for Gujarat Mineral Development Corporation:

Shareholding (%, Dec 18)
Category (%)
Promoters 74.0
Institutions 14.3
Others 11.7
Total 100.0
37 | Gujarat Mineral Development Corporation

Conclusion
We hope you’ve had a good look at all the stocks.
We would like to add that the investment opportunity outlined in the report may not
be a one-time thing after all. It is a process where if the track record is anything to go
by, could lead to great returns over the long term period. However, the process is a
marathon and not a sprint. There will be downs and there will be ups.
The idea is to stick to the rules that we have highlighted in the guide and there’s no
reason why you won’t add considerably to your wealth over the long run.
With this, we come to the end of the report. In case you have any queries, please feel
free to write into us.
Warm Regards
Team Equitymaster
Conclusion | 38
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Development Corporation.
39 | Disclosure Under SEBI (Research Analyst) Regulations, 2014

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Disclosure Under SEBI (Research Analyst) Regulations, 2014 | 40

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TOP 8

• The individual investor should act consistently as an investor and not a

Prakash Constrowell Limited (PCL) is a leading construction company, predominantly

6 | Prakash Constrowell Limited

Investments 47 109 112 23 7

Other non current assets 308 316 308 362 380

Current assets 1655.08 1924.69 1870.00 2091.85 1877.81

Total Assets 2,051 2,385 2,384 2,646 2,449

Net worth 1,148 1,103 1,142 1,199 1,267

Non Current Liabilities 270 209 116 207 225

Current liabilities 633 1,072 1,126 1,240 956

Total liabilities 2,051 2,385 2,384 2,646 2,449

Prakash Constrowell Limited | 7

Adj. EPS (Rs) 0.7 -0.1 0.3 0.6 0.6

Price to earnings (x) 6.7 -68.3 14.5 8.0 8.1

Price to sales (x) 0.3 0.4 0.3 0.3 0.2

Price to book value (x) 0.5 0.5 0.5 0.5 0.5

BSE code 533605

No. of shares (m) 125.7

Face value (Rs) 1

FY18 dividend/share (Rs) (Adjusted) 0.0

Free float (%) 72.6

Market cap (Rs m) 573

Average 52-week liquidity (Rs m) 6

Price to sales^ (times) 0.2

Price to earnings^ (times) 8.1

Price to book^ (times) 0.5

Debt to Equity^ (times) 0.3

Dividend yield (FY18 at current prices) 0.0%

Promoter pledging (% of Total Equity) 0.0%

8 | Prakash Constrowell Limited

Source: Company, Equitymaster

Annexure for Prakash Constrowell Ltd:

Prakash Constrowell Limited | 9

A strict 100% inspection system is adopted at all stages of manufacturing process.

10 | Aro Granite Industries

Other non-current assets 9 83 229 50 89

Current assets 2,075 2,278 2,138 2,127 2,049.85

Total Assets 2,919 3,098 3,093 3,083 3,037

Net worth 1,419 1,547 1,587 1,695 1,706

Non Current Liabilities 115 202 247 203 161

Current liabilities 1,385 1,349 1,259 1,185 1,170

Total liabilities 2,919 3,098 3,093 3,083 3,037

Aro Granite Industries | 11

PAT 211 167 59 126 12

Adj. EPS (Rs) 13.8 10.9 3.8 8.3 0.8

Price to earnings (x) 4.1 5.1 14.6 6.8 72.9

Price to sales (x) 0.3 0.3 0.4 0.4 0.4

Price to book value (x) 0.6 0.6 0.5 0.5 0.5

BSE Code 513729

NSE Symbol AROGRANITE

No. of Shares (m) 15.3

Face value (Rs) 10.0

FY17 Dividend per Share (Rs, adjusted)^ 1.0

Free float (%) 58.9

Market Cap (Rs m) 855

Average 52-Week Liquidity (Rs m) 7.1

Price to Sales* (times) 0.4

Price to Earnings* (times) 72.9

Price to Book* (times) 0.5

Debt to Equity* (times) 0.5

Dividend yield (on FY17 dividend) 1.8%

Promoter pledging (% of Total Equity) NIL