JHS Svendgaard Laboratories may be a multibagger stock in 2017. The stock looks good for a buy on declines for a long-term investment portfolio.
It has all the qualities that investors and traders look for in a multibagger stock such as debt-free status, good management, operating capacity, strong brands etc.
Business
Starting with manufacturing of only Toothbrushes the company widened its scope to Toothpastes, Mouthwash and Denture Tablets and today is an oral care product manufacturer and exporter. Apart from working on its own brands the company also offers Contract Manufacturing Partnership to brands in the domestic and the international market. One of the most prominent brands manufactured under the company’s name is Dr. Gold which was launched in April 2009 with economy, mid economy and premium
Toothbrush categories.Some of the prominent brands partnered with in the domestic market are P&G, Amway India Enterprises Pvt. Ltd., Dabur India Limited, Elder Health Care Limited, J. L. Morison’s India Limited and in the international market are – Dr Fresh
Tano mauritius,the private equity firm which got a great success ratio, bought shares worth 25crs at 98rs around 2010
JHS SVENDGAARD is a perfect fmcg proxy.The largest toothbrush manufacturer from India(300 million tooth brushes).It caters to the need of 1 trillion Proctor and gamble in our country.The company has got number of amazing tax and excise benefits. Replacement cost of its assets would be minimum 300-400crs. Present market-cap is only 75crs.
JHS has a client base of strong & leading players in the Industry.
- Proctor & Gamble : JHS manufactures ‘ORAL B’ toothbrushes for P&G.
- Pantaloon : ‘SACH’ brand for toothpaste & toothbrush.
- Dr. Fresh : ‘Dr.Fresh’ is the largest selling oral care brand in America.
- Himalaya : Leaders in premium dental cream market.
- Dabur : Owns big brands like ‘Promise’, ‘Babool’, ‘Dabur Red’, ‘Meswak’.
- Elder Healthcare : Sells mouthwash & other dental care under ‘AMPM’ brand.
- Aquawhite : Sells premium category mouthwash & dental whitening gel.
- Lavoris : One of the leading oral care brands in America.
Another big news is patanjali is in talks with jhs for contract manufacturing as it has huge spare capacity and good quality control
Promoters hike stake
Recently, total warrants of Rs 3.3 crore were issued. Out of this Rs 1.2 crore have been converted which is promoters and non promoters both in accordance with the SEBI guidelines allowed by the promoters.
After the warrant conversion, the promoter holding in the company goes up to 38 percent of the total equity. The Company gets Rs 11 crore in the form of converted stocks.
JHS Svendgaard Laboratories already has about Rs 5.5 crore of the warrant money.
The promoter holding will go up from 38 percent currently to 43 percent on full conversion.
Debt Free
JHS Svendgaard Laboratories would be a debt free company as on March 31st 2016. It will have no debt on books whether it is in form of secured or unsecured loan.
Profit making
The losses have started coming down in FY17 because as the Company improve the capacity utilisation it has a huge asset base and needs to churn out production from that asset base.
JHS Svendgaard Laboratories is expected to become profitable in the first quarter of FY17. It is working hard and trying to make it as soon as possible.
Revenue Growth
In the last two years JHS Svendgaard Laboratories has grown almost 80-85 percent on revenue basis. If it is able to utilise capacities, it should be at least between 30 -35 percent this year also because the baseline has almost tripled as compared to the last two years.
USE ALL THE DECLINE IN THE MARKETS TO BUY THIS STOCK SOME DAY MARKET AND SENTIMENTS WILL TURN AND DURING GOOD TIMES WE WONT GET THIS STOCK AS THE STOCK IS DEBT FREE AND BUSINESS IS GLOBAL AND REPLACEMENT COST OF THE SAME IS BETWEEN 300 TO 400 CRORES WHILE MARKET CAP IS JUST 75 CRORES
NOW LET US LOOK AT THE EVENTS WHICH WILL CAUSE UNCERTAINTY AND MAKE PEOPLE BELIEVE THAT RALLY WONT SUSTAIN
