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Friday, March 18, 2011

Multibagger Stock Analysis - Bilcare Limited

I heard about Bilacare being discussed as Multi Bagger Mid Cap Stock To Buy recently. So I thought to do some research on it. Here is the Stock Analysis of Bilcare and conclusion.

Bilcare Limited is engaged in pharmaceutical packaging and solution research. Bilcare provides solutions for global Pharmaceutical and Health Care industry. It is an MNC with R&D and manufacturing plants in USA, India, Europe and Singapore. Various solutions that company provides includes Pharmaceutical Packaging, Global Clinical Supplies, and Bilcare Technologies for brand authentication and security. Packaging solutions from company include Bilcare Ultra R, Bilcare Ultra TX, Bilcare Protect R and Bilcare Secure.

Bilcare has major share in Indian blister packaging markets. It's share of pie is as much as 60% that shows it's leadership in this business.

One important factor being discussed for Bilcare by Stock Analyst was company's business dependence on crude oil. This stock is favorite stock of Stock Traders due to it's dependence on crude oil prices. Look at below Stock Chart of Bilcare.

Stock Chart of Bilcare Limited

When crude prices were high (July-August 2010), Bilcare was trading a bit above 400. Then crude prices cooled off and Bilcare went on trading upto 773 within 6 months. In past 3 months crude prices have again started rising toward $100 and Bilcare started it's downward journey. Currently it is trading at Rs.420 company's business dependence is a lot on crude prices that could result in instability in stock prices.

Stock Financials
Company's sales turnover has shown constant steady growth (although not on steroids!) for past 4 quarters. Same we can say for net profits for past 3 quarters. Company's book value is 332 which puts it's price to book value ratio at 1.26

Stock Valuations
EPS for trailing 4 quarters is 36.66. At current Stock Price of Rs.420.7 price to earning (P/E) ratio comes to be 11.47

Looking at volatility in prices due to crude price factor and moderate valuations, this is certainly not the level to Buy Stocks of Bilcare. If crude oil prices ease of and stock corrects below Rs.400, it could be a good stock trading opportunity for mid term, but after keeping an eye on crude prices and company performance.

5 comments:

  1. Hi ... I follow your blog regularly ...
    Thanks for all the analysis. It really helps...
    Could you please provide your thoughts on Punj lloyd and IVRCL infra? To me, these 2 stocks look like multibaggers. My conviction is due to the fact that they have been pounded heavily to the tune of atleasat 50% in the past 6 months.

    ReplyDelete
  2. Hi,
    I also once had bought Bilcare around 550 & was lucky to get out @ 600.Few major problems with Bilcare are
    - Huge Debt
    - Always will be in need of huge amount of capital for R & D ( Company cant survive without R & D)
    - Promoter's have 83% of their shares pledged, which is massive %age.

    I know markets can be very different. And it may become multi-bagger in future. But I personally dont have the daring to invest in it even @ 300.

    With Regards,
    Vikas

    ReplyDelete
  3. i took bilcare @ 626, 55 share.should I hold or sell. Please advice.

    ReplyDelete
  4. Its a great analysis and the dependence on crude price I learnt from this blog. I have some shares at very high price of 680. Should I buy more below 400?

    ReplyDelete
  5. helpful tips n news about bilcare found to be valuable for traders like me.thanks!

    ReplyDelete

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