Wednesday, June 3, 2015

Karuturi Global Ltd:Avoid

Dear Mahesh ji hi sir, I was doing some research thought it would be better to ask you before do any investments in karutui global ltd stock so your feedback is very much appreciated. Thanks sudheer my registration ID is 12015 
1.Karuturi Global Ltd is a 1 Rupee face value Agricultural Products Stock which currently traded at 2.30
2. Year High ( 52 week High) of Karuturi Global Ltd is 2.85 and Year low (52 Week low) is 1.16, So as per my 52 week high/low ratio formula this ratio is 2.46, If you read my book then you may knew that If any stock year high/low ratio is above 2 then stock price is not stable and generally I am not recommended to buy any stock which year high/low ratio is above 2. 
3. Karuturi Global Ltd have total 809726648 shares, Promoters hold 5.52 % FII hold 15.80% and DII hold 0.20% shares.Promoters pledged theire 22.39 % stocks so I am not like this stock due to very low promoters holding with pledged shares. 
4. Karuturi Global Ltd Net sales on FY 2013-14 is 14.1 Cr.( and not declare results after Dec 2014) So when we divided total shares 809726648 in FY 2013-14 sales then we get a ratio “Net sale per share per year” which is 0.17. 
5. So If we compare this 0.17 from current market price 2.30 then we find that CMP is above Net sale per share per year, So as per my formula of valuation CMP is much higher from fair value of stock. 
6.Book value of Karuturi Global Ltd is 12.06 , So CMP is discounted to book value price/book value ratio is 0.19, If you are not familiar with book value then please read this article Book value is not always show fair valuation of stocks
8. Overall I think I think you may avoid this stock due to very low promoters holding with pledged shares and high valuation on basis of net sales 
9. Discloser:- I am an existing research analyst and passed NISM certification for research analysts. I am also applied for a grant of registration under SEBI(RESEARCH ANALYSTS) REGULATIONS, 2014 and I have/my wife have no any stocks of this company so my personal interest is not included in this stock. 

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