Cravatex Ltd.

Cravatex is basically a trading company currently trading at 450 with market cap of 125 crs.. It trades in two segments Sports and Fitness.

In fitness equipments it has rights to sell products of Johnson ( no.4 brand in world) , Horizon , BodySolid , Magnum under the brand name of Proline Fitness.

In sports segment it has rights to sell product of brand called FILA. Fila is a 100 yr old Italian brand which ranks 5th in world after Nike , Adidas , Reebok and Puma. Fila worldwide sells 15000cr. of merchandice yearly worldwide. In 2008 Batra brothers got right to sell FILA in India along with North Africa , Bangladesh , Srilanka.

In June 2011 results cravatex turnover was 42 cr (26cr domestic , 13 cr international) with Net Profit of 2.8. Since FILA brand has priced lower than top 4 brands, middle class people will get attracted to FILA. Assuming in next 5 years they manage to clock 500cr. of sales with Net Profit of 50 crs. we get an EPS of 385 ( 50/0.13 ) . Since its a pure consumption story market gives high PE to this sector . Assuming worst case PE of 10 while best case of 35 we can see this stock in range of 3850 - 13475.

Calculations are based on BOTE and has few risks attached to it. Do your own Diligence before buying.

Delta Corporation

Delta Corporation, the first, biggest and only listed Casino company in India is a promising Future Bluechip stock. Today it has market cap of 2200 cr. and trading at 113.

If one looks at Singapore with annual visitation of around 9 million annually 2 casinos have clocked around 28000 Crs. in just 2 years of starting its operation. While when we look at Macau China, in 5 years it has managed to clock wopping 1,00,000 crs. . Delta corp has an annual sales from Gaiming and Hospitality of 100crs v.s 11cr in 2009.

Logic is simple if Singapore with 9 cr. population and 9 million visitors can do such a big business, why cant India with 121cr population and 2 million visitors in Goa cant manage to do 10% of the business done in Singapore in next 5 years.

So assuming if Delta indeed does a turnover of 3000 crs. and Net Profit of 900cr annually, we get and EPS of around 45 ( 900/20 ) . Its a unique business and thus should command a high PE,

so let worst case PE be 15 while best case be 40, we can see this stock trading in between 675 - 1800 in next 5 years.

This is a simple BOTE calculations. There are various risks involved. Do you own diligence before buying