Sunday, October 31, 2010

Compact Disc.....cmp..Rs.57.25...Dark horse..

I donno whether this call I am giving , many will like it or not but after observing Compact Disc for many qrs I had come to the conclusion that it is now high time for investors to have a look at it.
I have read messages at mmb and at other places and expert has come upon a decision that Compact Disc is not worth looking at.It is a penny stock and will become penny again.
But my view is totally opposite to what expert thinks.
The positive I am seeing here is Compact Disc is listed in Forbes Asia Magazine as one of the fastest upcoming Co under billion dollar category.
What I was thinking was that if Compact Disc is not worth looking at then how Forbes took note of it?Without checking the credentials how Forbes can consider it?If the sales are fictitious then why it should be included in Forbes list?
That has prove to be a storng point for me to write it down about Compact Disc here.
Cos last year eps was 50 and quoting at rs 57? means going at 1 p/e?The BV is also 100 , so available at .5 BV to price ratio.
The sales was 228 cr last year and Mcap is 54 cr....
Well, it kept on declaring dividend and investor never got the Div.That was because there was a case going on against Compact Disc and it has come to an end and hence the Div will be depatched this year.
The Sep qr results has been fentestic and is coming in line with previous qr.

This is CM statement which I have copied from the AR of 2009-2010....

Dear Friends,

In the financial year 2009-10, Compact Disc India Ltd. (CDI) has witnessed accelerated growth andmarket leadership.

The company is anticipating significant growth in its business and with the growing business it needs to set-up Pre-Visualization Studios at Los Angeles, London and Singapore. All existing business from affiliates shall be consolidated in Chandigarh by the end of this year. CDI will also be holding company for all overseas subsidiaries. These subsidiaries will be serviced by establishing marketing offices in Sao Paulo, Tokyo and Johannesburg.

The company has also decided to set-up five world class state-of-the-art Animation & Gaming Centres of Excellence at par with IITs, which would be the first of their kind in India. The first such centre at Chandigarh is already in process of commencing Animation & Gaming courses for engineering students to impart highest level of quality education from the session 2011-12.

During the year 2009-10, CDI, the largest animation film company of South Asia, reports the following achievements:

 Sales Revenues higher by 18.78% at Rs. 228.17 crore

 Profit-After-Tax (PAT) increases by 19.82% to Rs. 47.33 crore

 Profit-Before-Tax (PBT) increases by 9.73% to Rs. 48.07 crore

 Earnings per Share (EPS) higher at Rs. 49.45 as compared to Rs. 41.27 last year; higher by

19.82% (annualized).

With best wishes of the shareholders, CDI is going to take a giant leap ahead.

Warm regards,

Suresh Kumar


The AR report of the Co can be read at its website if anyone wants to read it thorougly.
Well, I have written about Compact Disc and let us see where it goes in a year or two.
DD is a must for anything one wants to buy after reading here what I write.But I feel that Compact Disc is grossly underpriced and should be given a look at it...
Well friends, I have no access to go to the plant and have a look at it but anyone residing at Chandigadh should take a chance and visit the plant and meet someone there.
I think my blog reader who resides in Chandigarh should go there and write it down here what he saw and what he talked with the management.
I think management will be most willing to talk with someone who visit the plant because many things has been written against the Co and they would like to come out clean in investors eyes....
It is not so that those living in Chandigarh need to visit the Co, if someone is interested in buying good stake then he/she can go to Chandigadh from any part of India.
Depends upon the passion and how much one wants to do.


  1. rajeev ji do you recommend any mutual fund for sip i saw a person portfolio he used to invest 1000 via sip in reliance growth from 01 jan. 1997 and till now he invest rs 1,56,000 and the return he got is 25 laks... which is unbeleive able......

  2. Thanks Rajeev for update even I track this share regularly & I bought the same at 65/- for long term but one thing I can't understand how is it possible that u get share at 1 PE and price to Book at .5 its really strange so I stop accumlating it as it could be chance of some manipulations in result same is tha case with Temptation foode kindly update me about it also Thanks


  4. Dear Rajeev,

    I would like to know your view on 2 companies and I have put what I found,
    1. Sumeet industries
    1. textile industry is shining back again (I have seen this comment is many places)
    2. Lot of expansion work happened and below is the interview with its chairman on Feb 22
    The company is a fully integrated manufacturer of polyester yarn. We have a new and improved strategic approach to future growth and ambitious targets.

    The company has successfully commissioned its backward integration project of 100,000 TPA Continuous Polymerization (PET chips) plant and a 6 MW gas-based genset captive power plant with a project cost of Rs 125 crore. The plant began commercial production on 1 July 2009.

    Another capacity expansion of POY production by 23,500 TPA and FDY by 21,000 TPA has been completed. Trail runs of the equipment are on and commercial production is expected to start shortly.

    In the second phase, the company plans to invest Rs 80 crore to increase its POY and FDY manufacturing capacity by another 44,000 TPA to achieve a total capacity of 100,000 tonnes. This expansion will enable the company to utilize the balance capacity of the continuous polymerization plant as captive consumption by manufacturing POY/FDY directly from MEG and PTA.

    Projected turnover for the financial year 2010-11 is Rs 600 crore.

    Projected net profit for the financial year 2010-11 is Rs 42 crore.

    Projected EPS for the financial year 2010-11 is Rs 10.60.

    At present, the market price of the stock is Rs 22. So it is available at a PE of only 2.

    3. June quarter result : net sales raise by 212%, PBT 135%, PAT 134%, EPS 132% and Sep quarter net sales raise by 155%, PBT 142%, PAT 156%, EPS 157%

    2. Electrosteel steel
    Even though the production is not started and the work in progress, in many places I found +view above this company.

    I follow your blog and your view more tahn any other. So if possible please share your view


  5. Hi Natraj,
    The link says that these were charges on MD, Mr.Suresh Kumar.But have you seen the year?It is 1996! What is the sense in looking in those news?It means that that happened even before KP bull started!
    I donno , how people try to dig out things which are so old.
    Time changes,human mind changes....oppertunity comes and same person becomes sane and make the Co prosper....
    I donno, why one should put so much emphasize of news which happened in 1996!that is terrible thinking...1996 and 2010 means 14 yrs ..and that is big in stock 14 years market hass gone from 3000 to 21000....
    Ofcourse,it will be you all who will be investing and it is your you all needs to decide what you wants to do....

  6. Hi Rajeev,
    I had gone through CDI after it was listed in Forbes list.
    Means its damn undervalued stock. As on paper, it should be quoting minimum of 200 atleast.
    It has continuous 5 yrs of increasing Net Sales, EPS , Net profit & so less debt.
    I have read so much about investing. And I personally dont believe in Efficient Market Theory.
    But still few of the stocks that I have seen undervalued but have not gone up like Micro-Tech, PSL.
    PSL - I can understand due to Hugh debt its still not flying high.But dont understand why Micro-Tech should not fly.
    On the other hand stocks like Parekh Aluminex & Jindal poly has risen 3 folds.
    I dont understand if we retail investors dont know something that big fellows know.
    I have small experience of 3 yrs. But if these undervalued stock dont run in this kind of bull phase, when will they run.
    I know you have mentioned DD is must but my such experience makes me skeptical about investing in CDI.
    Sorry for the big reply.
    But writing after long time.
    With Regards,

  7. Dear rajeev,

    Thanks for your view. yes we have seen many promotors changing their view in due course of time and have created wealth for investors. I know from my frnds that Dr Reddy's lab owner also swindled money from public before starting Dr Reddys. So one cannot rule out this possibility. But since market is supreme there must be some reason why this stock is lying low even after being shortlisted by forbes.Personally i am buying just token quantity of may be 100 or 200 shares and would want to buy more of your other recomended stocks where i have more comfort and conviction.

    thanks for your continued effort.

  8. dear rajeev,

    i have been following CDI for last one year as the results have been nothing but spectacular. i have bought them and when all the negative news came i have sold out the same. currently i have seen it included in forbs fastest under billion doller company and from then onwards i have been closely tracking the company. As you have also discussed about it it appears that i can take an exposure in the stock. generally such type of stocks when they start moving then sky is the only the limit. for me it appears that the down sides for the stock are limited.

    M.Sri Mahidar
    Trend is friend.

  9. Rajiv bhai
    any view on tvs electronic at cmp 36
    scrip look me perfect bullish
    Simple Moving Averages
    Days BSE NSE
    30 31.50 31.56
    50 29.81 29.85
    150 27.58 27.61
    200 26.83 26.79

  10. wish u a very happy dipawali bought hbl power long back yet to deliver returns but ur recommendations will run every month promoters hiking stake when they finish huge gains hope so

  11. Rajeeviji,

    one of your call BECKONS INDUSTRIES is now days showing huge turnover. some punters r recomonding for tgt of 10+

    can you share ur view


  12. Dear Rajiv Bhai

    Kindly Put Your Review Of SNL Bearing , It Has Come Dn Sharply After Moving Above Century . Now It Runing Near Half Century,
    shal we start batting for this stock.plz reply sir.

  13. Value Pick Sir,
    Request opinion on Firstobject. Good results last year and also in both qtrs this year. BV-12 against CMP of 26 /-. Other latest developments :-
    - COO, Mrs.C.V.S. Lakshmi Kameswari Receives Rajiv Gandhi Excellence Award - 2010.

    - Approved 1st Interim Dividend for 2010-11, equivalent to 0.5% on face value of Rs. 10/- share.

    - The Company and Dr. Vivek Hebbar, Chairman of the Company have been selected for Bharat Vikas Ratan Award. Two Awards, one for the Company and one for the Chairman of the Company, Dr.Vivek Hebbar, will be given at New Delhi on November 30, 2010.

    Request ur opinion for entry into stk and if possible what would be the ideal entry level.

  14. Hi Rajeev,
    I think Forbes decided to include CDI in their list by looking purely at their financials and claims of business. At first glance, I will agree this looks like a wonderful company. But...

    The company very mysteriously held an AGM without allowing shareholders to participate. They announced many film projects and then after some time they "clarify" that they are being shelved. Nobody knows what happened to the films they claim they have completed...

    Disregard all this, all three company directors are related closely. They announce dividends but they do not pay them out saying bank has stopped them from paying dividend. In Chandigarh, nobody has heard of such a company or institute according to opinions I read on the Web.

    When IT manufacturing was the rage, they said they will make CDs. Then media sector and animation processing became prominent, they jumped into animation films. Now education is a big sunrise sector, so this amazing company has decided they will start educational institutes also.

    When we look closely at their workings all these skeletons come tumbling out.

  15. Dear sir

    it requires great guts to recommend this stock on your esteemed blog,hats of to you sir.

    after your recommendation euphoria i think it shall be available around 35,when i think it is worth taking the risk

  16. Pradeep,
    I do not track Sumeet Ind and Electro steel.

  17. ashok,
    I do not look at moving no view..

  18. Manish,
    1st Object looks good to me...

  19. JC and many others,
    Well, there can be many arguements on CDI.I have written my view.
    Depends upon what one have his own view...
    Not necessary to follow me or buy whatever I write here.
    I have always said that DD is a must for anyone so take your own decision.
    I may prove wrong and I may prove right.

  20. hi RAJEEV,hope u r doing fine,happy deepavali to u sir. kitty

  21. Hi Rajeev,

    Very correct stand taken by you. Wishing a Happy Diwali to you and your family, and to all my fellow readers of this fantastic blog!

  22. Thanks a lot Rajeev Sir for ur opinion on Firstobject. WISHING YOU & UR FAMILY A VERY HAPPY DIWALI.

  23. Hi Rajeev Sir,

    with due respect

    vakhair M J

  24. Dear RajeevBhai ,

    Wishing you and your family and all the blog-readers a very happy and prosperous Deepawali.

  25. Rajeevji,

    May this diwali illuminate, the hearts and minds of our brethren, with the grace and light of the Lord - "HAPPY DIWALI"


  26. Dear Rajeevji and others,

    Wish you all a very very happy & prosperous "DEEPAWALI".


  27. Dear Rajeev Sir,

    Wish you and your family a very happy Diwali


  28. rajeevji

    Happy Diwali sir and SaalMubarak



  30. Rajeev Bhai,

    On Compact Disc call, I still have some confusion, that Lat Year they Wrote off 18 Cr Debtors as non recovery also there Inventory stock of Animation films and rights is very confusing.Management is saying that they will co produce movies - I mean the risk of movie business.Cash flow from Op is negative.

    Although company is going in expansion mode and Outsourcing model which they are claiming is good but I also have also some doubt that there will be competition from Big IT Industry players.

  31. mahesh,
    Because of all these concerns Compact Disk is available so cheap.1 p/e!.....Market is for those who takes risk.For phenominal return one has to invest where no one is touching it....