Investment Idea : Aksh Optifibre Ltd.

Stock business outlook for the Turnaround candidate

company : Aksh Optifibre Limited (AOL)
CMP: Rs. 74
Short Term Target : Rs. 90 (2-3 Months)
Long Term Target : Rs. 120 (12 months)
Investment risk : Moderate

About the Company
Aksh Optifibres Limited is the second largest player in the Optical Fibre Industry. The company is mainly into manufacturing of Optical Fibres, OF Cables and FRP Rodes.
The company boasts of being the only company in the whole industry to manufacture OFC through co-extrusion process.
The company caters to the need of Telecom sector. In view of the strong Telecom growth story, AOL should gain immensly and should be able to turnaround its operations.

The company is undergoing a major expansion of its production capacity to cater to the growing demand of its products. The capacity expansion is estimated to be in tune of 50%.

The company is also undergoing a debt restructuring by transforming the high rate debt components to lower rate debts. This restructuring will show up on the improved margins of the company.

Turnaround to boost valuations
The capacity expansion and cost reduction initiative embedded with the strong industry outlook has made Aksh Optifibre a strong Turnaround candidate.

The company incurred a loss of Rs.3.24 crores in the last year on a turnover of Rs. 38 Crores. However, this year in six months only, the company has achieved a turnover of Rs. 47 crores and a profit of Rs. 8 crores. This gives a clear indication that the company is out of the blues and is on the verge of turnaround.
The company's order book is strong at Rs. 86 crores and is expected to swell further @ 50% given the strong demand for its products.

The stock is also recommended for a long term position since the real fruits of the performance will be available in FY07.

(Disclosure: Investment Guru has a position in the Investment Idea discussed. Investors are advised to use their discretion and read the disclaimer clause before acting on any recommendation discussed on this blog)

34 comments:

sriram said...

Good to see an investment idea after a long time on the blog. I am planning to buy some on monday. I also read your comments on moneycontrol mesage board.

Investor Forum said...

Investor Forum Blog updated!
The latest clarification from CBDT on the ELSS expemtion.
http://investorforum.blogspot.com

Anonymous said...

Good to buy
1. IndusInd Bank
2. SQL Star
3. Escorts
4. Sunflag
5. GE ship
6. Vishal Exports
7. Mphasis BFL
hold for short (a month) / medium term (2 to 3 montha) ... sell when profit goes beyond 15%...

Anonymous said...

Not sure of Mphasis BFL... My opinion, doesn't looks to be a buy.

Anil Kumar said...

Can anyone tell me about Beeyu Overseas, it was recommended 18/- not it is not going after 15/-

spi_spot said...

Dear Guru,

If i see all the cable laying works for telecom happening around and AOL is getting a major chunk of it, then there is tremendous growth potential. Do you agree?

FYI, i picked up 500 at Rs.76/-

Let's wait for the 1st target 90/-.

Murli said...

You posts are just becoming copy paste. I had received this research from a leading brokerage house 2 weeks ago.

Please give your own views or atleast mention from where you are picking the text.

Aksh may be a new find according to you but the research houses are telling it for last many days - I request readers to try & search in Business standard which published a story couple of months ago.

I have seen lot of guys creating volumes for the scrip they hold...please don't mix urself up with them - you write well..keep doing it...Thanks

Rajesh Soni said...

Dear Mr. Murali
I do not blame you for this allegation. This is common psychology. But my understanding is that if a stock is good, and before me somebody has said that it is good, it doesn't stop me from saying that it is good. Because, good things remain good irrespective of the person certifying it. For example this blog was the first to recommend SKumars as a "Buy" and two months after my recommendation "Economic Times" published it as a "Buy". I do not mind this.
Another thing, I do not copy from any source, nor I subscribe to any research house publication like you do. I think many of the visitors on this blog may not have access to research reports of premium research houses like you have. Hence , I believe, it is beneficial for the visitors of the blog .
Thanks

Jonathan Anchen said...

Mr Soni,

Please continue the good work. My understanding after following your blog for the last few months is that though much of this information is commonly available to all, it takes a seasoned eye to pick good growth candidates from the multitude. Many of us do not have the time to keep updating ourselves and we value this service.

Another positive I observe is that you take the time to reply to your readers. I think you show a strong degree of accountability to the online community. Cheers and thank you!!

Rahul Munjal said...

Mr Soni,

Is there any reason why this script is going down over 3% today?
I purchased @ 76. Should i average out if it goes more down or should i stay away from purchasing more in this downtrend??

Waiting to act according to your advise.
Thanks and Regards,
Rahul Munjal

Pradeep said...

Dear sir,
We have full confidence in your blog and your articles. I agree with your view that good stocks will be recommended by most of the experts hence we cannot blame anyone for copying. Very well said.

Anonymous said...

Thanks Rajesh for another good investment Idea. The company looks well poised to do good in future. I will wait to see if Market corrects a bit and can get this one at around Rs/60.
Thanks again for keeping up the good work.
Sushil.

Anonymous said...

I personally agree with the bullish nature of Aksh optifibre and have been accumulating with every downward movement. However, the overall market is currently very heated and thus, extremely difficult to predict, but even if the rally does not sustain for some more side, I think, may be 3-5% drop will be an excellent buy.

Rastogi said...

since i purchased, its going down :(

I purchased @ 76.30 + Brokerage

What should i do now? Book Loss?? Or Purchase more???

Also, Mr Soni... please comment on ur previous recommendations (Investment Ideas) regularly. What abt Gujrat Ambuja? Today it is also falling... :(

Anonymous said...

it's going below 71 levels. Currently trading @ 70.20.

Should we place a SL @ 70 ??

Anonymous said...

i to purchased it @ 76.
500 @ 76

What to do of it?? I don't have money to even purchase more :(

Rajesh Soni said...

Dear Rastogi and anonymous,
I understand your concerns. However, I would advice you not tp panic. I have not advised this scrip for 2-3 days .
The whole market has fallen today and hence this scrip is not an exception.
My request to all investor is to learn to keep patience and do not swing your moods with the rise and fall in sensex.

Another thig , Please do not invest in any stock which you do not get convinced about. And once you get convinced about the stock, have a discipline to hold on to it and let it perform for you.

Happy Investing !

Anonymous said...

Readers of this blog,

Before you enter the security market/purchase please ensure you have the appetite for fluctuations in the market. It is not a fixed rule that once you buy at a script at certain price the script WILL continue only in a uptrend but will fluctuate. Some scripts will do so in a lesser range and some in a larger trend.

If you expect it to only follow the northern path and not fluctuate then you are not fit to invest or trade in securities. MF's will be a better bet.

I have taken the advice from Soni, watched for a few days and have bought 12000 at an average price of 72.30. I did not read his blog and purchase the next moment, as I expected volatality in the markets.

Soni, you are doing a good job and probably need to state your disclaimer in a direct and BOLD manner.

Cheers

Anonymous said...

Dear Rajesh, you are doing a great job.I regularly go through ur blog and find it excellent for a person like me who can't keep track of mkt every day!You DON'T have to reply every tom,dick and harry for throwing their allegations towards you!They can very well skip your blog.

Anil Kumar said...

Dear Reders,

Soni's statement is obsolutly right!!!

We will have to keep patience where as he has already given target along with time frame.

We should wait for the proper time.

I have also taken Beyuu @ 18.30 but now its going by 15. I was also in same condition as you people are and finaly I think I should keep patience.

Thanks once again Soni ji. Keep it up good work.

Anil Kumar

Anil Kumar said...

Dear Reders,

Soni's statement is obsolutly right!!!

We will have to keep patience where as he has already given target along with time frame.

We should wait for the proper time.

I have also taken Beyuu @ 18.30 but now its going by 15. I was also in same condition as you people are and finaly I think I should keep patience.

Thanks once again Soni ji. Keep it up good work.

Anil Kumar

Rastogi said...

Thanks for ur reply Rajesh.
I just wanted to ask that whether we should grab this falling market opportunity to increase our holdings at the cheaper rate and avg out the things. You recommended on 74 but i purchased it at 76+. So, that's y i was asking u the short term (2-3 days) trend of this script. If this is to fall more b4 it rises, then we have to wait for averaging and can get at a more cheaper price. Otherwise we should grab it right now. That was the only area of concern.

Rastogi

Rahul Munjal said...

Mr Soni,
please suggest me whether i should re-enter into Narmada Che... or should stay away from it at current levels??

Thanks and Regards,
Rahul Munjal

Rajesh Soni said...

I appreciate the voice of anonymous and Anil on the advice to Investors . This shows the maturtiy these guys have as an investor. I also agree to Mr. rastogi's suggestion of review of the Investment Ideas.
It's important to communicate and its good to see that the comments section on this in utilised in a very good manner.

As I often say, the objective is to benfit all of us in our investing decisions.

Let's keep this section alive.
Happy Investing !

Rajesh Soni said...

Dear Rahul,
I would advice all those who are already invested to "Hold" on to their positions. At this stage I would not recommend fresh entry, since we do not have any clear sign of what is going to happen. You can make an entry once the mangemnet comes out with a conclusive news. The blog will keep you updated on the happenings.

Anonymous said...

Soni Ji,
Congra8s!!! Your blog is becoming along very usefull to the investors... keep it up.

Howz life going on.
I have called you some days back but couldn't talk to you, may be you have changed ur nos... actually there was some other person when I called. Wanna talk to you, pls mail or sms me ur nos and mail id which u r using frequently.

k... bye

KAMLESH K. JAIN
Jaipur

Narendra said...

Hi Rajesh,

What is your opinion about ICICI FPO?
Should we invest in that?

Regards,
Narendra

Manu said...

Dear Sir,
I have bought 5000 shares of vishal Exports based on your trading idea.
The stocks was locked at upper circuit. Shall I hold or book profits.
Thanks
Manu

Rajesh Soni said...

Hi Manu
You can book profit on Monday. Please put comments related to Trader Insight Blog on that Blog itself. Do not mix up with this blog.
Thanks

Rajesh Soni said...

Hi Kamlesh ji
Nice to see you back.
Will contact you shortly from my yahoo ID. Saw your vertex portal. Looks good. Will seek your help in building up my upcoming website.

lucky said...

hello soni ji,
mubarak ho ,
u r doing a great job ,sir as i early said that when you lanuch your newsletter . i bought 800 aksh at 72 and if market go down looking to buy more.

Sir may i bought pba infast. for a long term period i am con. pls guide me.

watting for your raply

Anil Kumar said...

Hi soni Ji,

Could you please comment once again for Beeyu Overseas coz it is going down contineously. I think it can go below 14 also, which I did not expect.

It was stopped upto 15 and there was no risk.

Your comment will be appriciated.

Thanks Anil Kumar

Shankar said...

News on 26th Sep.

Aksh Optifibre Limited has informed that Dr.Kailash S. Choudhari, Managing Director of the Company has sold 2,40,500 equity shares constituting 1.09% of the total issued,subscribed and paid up equity share capital of Aksh Optifibre Limited between September 21, 2005 to September 23, 2005

Why would the MD sell so may shares???

QUALITY STOCKS UNDER 5 DOLLARS said...

Sounds very good.