Sunday, June 26, 2011

#12 Stock Update: Portfolio Pick:- Jain Irrigation

CODE: JISLJALEQS     Sector: - Plastics

CMP: - 157.25     Strategy: - Buy on Dips   SL: - 125   Targets: - 176/183/200/215/237/270

About the Company: -

 The Corporation has multi product industrial profile and manufacturers of Drip and Sprinkler Irrigation Systems and Components; PVC, Polyethylene (HDPE, MDPE) & Polypropylene Piping Systems; Plastic Sheets (PVC & PC sheets); Dehydrated Onions and Vegetables; Processed Fruits; Tissue Culture, Hybrid & Grafted Plants; Greenhouses, Poly and Shade Houses; Bio-fertilizers; Solar Water Heating Systems and Solar Photovoltaic Appliances (Solar lighting systems) and Bio-Energy sources. We render consultancy for complete or partial project planning and implementation e.g. Watershed or Wasteland and / or Crop Selection and Rotation.

My Views:-

Jain Irrigation is a Multinational company with presence in over 120 countries and around 22 plants across the globe. It has been performing well over the years with the CAGR of 41% which is simply outstanding. Its book value as per last financial year ending balance sheet is 176. It is in the business of making products which are helpful for agricultural and agricultural is the sector which won’t die ever in the world. In India, farmers are going towards professional farming and the demand for such products is going to increase which is a good sign for the company. The company has its FCCBs and listing even on Singapore and Luxembourg which means company is world renown.  Technical speaking it is available at discount because market value is 157 while book value is 176. If we check out daily chart, then a probable inverted Head and shoulder is about to form which has a breakout at 176 levels which ought to be book value too. Weekly chart has shown bullish engulfing pattern with the strong support of all the indicators. I recommend making some space for this stock for your long term portfolio.


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