Multibagger picks 2018 India: Lypsa Gems

lypsa-gems

Lypsa Gems and Jewellery Ltd. is engaged in three core activities: Rough Preparation of diamonds,Polishing of diamonds and  Diamonds Marketing. It is Mumbai based company with affiliates in Antwerp, Dubai and Moscow. Company has its manufacturing facilities at Navsari and at SurSez, Surat.

Most of company’s output is exported to USA, Belgium, Israel, UAE and Hong Kong.

Unlike most companies in the industry, Lypsa adopts a frugal attitude towards manufacturing operations without any compromise on quality. This has allowed the company to price goods competitively and penetrate the market in a short time.

REASONS TO INVEST:

Quarter ended 30th September 2017 results:

  • Revenue from operations was at Rs. 83.47 crore in Q2FY18, as against Rs. 64.20 crore in Q2FY17, growth of 30.02%
  •  EBITDA stood at Rs. 7.74 crore in Q2FY18 as against Rs.5.38 crore in Q2FY17, growth of 43.87%
  •  EBITDA margin stood at 9.30% in Q2FY18 up by 94 basis points from Q2FY17.
  •  Profit After Tax was at Rs. 7.62 crore in Q2FY18 as against Rs. 4.58 crore in Q2FY17, growth of 66.37%.
  • The strategy to realign businesses and evolve a profitability focused model has yielded good results. Going forward, management  continues to build rough trading and jewelry businesses with added focus on growing the business with Middle-eastern subsidiary.
  • Lypsa gems is increasing the presence of two brands “Oropel” and “Lypsa Atelier” through various e-commerce portals.Reasonably priced diamonds coming from Lypsa’s own factories ensure the best price possible.
  • Lypsa Gems & Jewellery Ltd’s wholly owned subsidiary Lypsa DMCC has bagged a new order to supply loose diamonds and diamond studded Jewellery worth Rs.224 million from customers in UAE as per news on 20-05-2017
  • Its wholly owned subsidiary Lypsa DMCC received a prestigious new order worth Rs.178 Million from customers in UAE for the supply of loose diamonds and diamond-studded jewellery. As per news on 24-03-2017.
  • Lypsa DMCC has bagged a new order to supply loose diamonds and diamond studded Jewelry worth Rs.224 million from customers in UAE.

Key Risks:

  • After gitanjali gems and nirav modi issue , I think the demand for diamonds in the indian market is going to be affected.
  • Also perspective in the stock market is bearish for jewellery stocks. (This scenario can bring great value once stock make base)

Technical and Fundamental :

  • Industry : Jewellery
  • Market Cap : 68.70
  • Eps(Earning per share) : 10.01
  • Price to book value: 0.56
  • Peg :0.04
  • YOY Results: Company’s net profits and opm are showing a consistent growth of at least 25 % for past 5 years.
  • QOQ Results: Net profit has shown linear growth, but opm has decreased marginally.
  • Debt to equity Ratio is 0.21 which is again signifies bargain. Also company hardly has any interest cost.
Lypsa_Gems_Result_yoy
Lypsa_Gems_Result_yoy

 

Lypsa_Gems_Result_qoq
Lypsa_Gems_Result_qoq

Entry price and Target:

  • Currently, wait until stock makes the base.

Disclaimer : 

All blog posts of wealthblog.in are for information only. No blog posts should be considered as an investment advice or as a recommendation. The user must self-analyze all securities before investing in one.

Experience of 8 years in stock investment. I learned everything by making a lot of mistakes and losing a good amount of money, I am here to make sure you don’t lose on either: Hope or Money.

2 thoughts on “Multibagger picks 2018 India: Lypsa Gems

    1. We would wait as currently diamond industry is going to see deeper corrections because of Gitanjali issue as there is a lot of negativity associated. So wait and watch still. It will take some time

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