Growth with value unlocking.

All we know what's happening in the market. Mutual funds too made negative returns in last 3 months. We started with covid recovery and ended up in Nov 2021 at 18000 nifty. After nov 2021 to march 2023 our markets are almost everytime below it's high of 18000 After every rally there will be consolidation phase in nifty. But look after march 2023 we again had rally from 18k to 26k. We are gone in consolidation phase from last 3 months. Market too require time to breath after every race. In this market we needs to shift out portfolio from high valuation stocks to fair valuation with decent growth Just an example ( this is not buy recommendations) Shankara building products They had two business 1.Retail- home building products like steell tubes, sanitation products and tiles 2. Manufacturing business Regenue growth : June:- 1291 cr( 1132 crore last june, 14% growth) July:- 1329 Cr( 1142 crore last sept, 16.5% growth) Ebita June:- 41( 34 last year) Sept:- 37( 36 last year) Profits:- 16&15 in first half and 17& 18 last year. Seems negative growth Revenue growth are excellent, ebita is good then why profits are dipping Trade receivable and soft steel price caused them to one time inventory loss All we know that ceramic, tiles and steel companies are struggling a lot to sell their products. Just see orient bell, kajaria etc But this company is making good growth in revenue because of expansion they are making in Western side of india where market sentiment and premium products demands is good.Their trade receivable are increased because to manage low demand scenario with taking hit on finance cost. Last year they paying 8-9 crores as finance cost but now they are paying 16 crores pee quarter What management doing? Last quarter they said they will slowly brings trade receivable to last year position. Last quarter They paid 16 cr as finance cost This sept quarter they decrease it to 13 crores If the finance cost per quarter comes below 11 crores then easily they can grow profits by 13-15%. Looking ahead for next quarter how they are going to manage finance cost will be our major concern. What making me but this stock is Revenue growth, undervaluation and demerger of retail and manufacturing business Current valuation of the company is 1475 and this year profit expected to be 78-80 crores PE will be around 19 From It's charts we can see it's in negative trajectory. If this stock comes below by 20% more then market cap will come at 1250 to 1300 crore. Getting a company of 80 crore profit at 1250 cr is good and seems undervalued. Fii and dii holding are in range In 2022 march Apollo mart bought 4.38% from. Promotor and it's strategic investment In March 2024 too again they bought stake from promotors. Apollo itself is big brand in home building Demerger:- Manufacturing business has 2.5 to 3.5% margins But reatail business has 6-7% of the margins They did almost all the procedure to demerge it. From board approval to nclt procedure has been done. It is expected that after nclt approval and sebi approval they will Dermerge it and list seperate in the market. This going bring value unlocking in the company. Retail business business having margins 6-7% may get good valuation of 22-25. Keep your eyes on the stocks and read a lot. I personally bought this stock at 584 and sold at 682 when it reached 20 PE multiple in this year. Next quarter is very crucial from this small cap.