GODAWARI POWER & ISPAT LTD

About Company

Godawari Power & Ispat Ltd. (GPIL) a public Ltd. Co., formally Ispat Godawari Ltd (IGL), was incorporated in
1999. Today, GPIL is an end-to-end manufacturer of mild steel wires. The company manufactures sponge iron,
billets, Ferro alloys, captive power, wires rods (through subsidiary company), steel wires, Oxygen gas, fly ash
brick and pallets. The company now owns full supply chain of steel wires.

About Economy & Industry

Indian economy is projected to grow at 6% in FY23-24, when almost every other economy might end up in red.
Growing consumption and investments will drive economic growth. Government has recently introduced PLI
2.0 for 6300 Cr to increase the production of specialty steel. Demand for steel is projected to grow to 128.9
million tonnes during 2023-24 according to Indian Steel.

Why Godawari Power & Ispat Ltd?

The company has price and earnings ratio of 9.56, making it an undervalued company. Also, the company is
spending heavily on capital expenditure which means they are growing. Promoter’s holding in the company is
constantly increasing and is above 60% since last five years which indicates promoters’ confidence in the
company.

Year 2019 2020 2021 2022 2023

Sales (in Crores) 2384.36 1976.34 1799.01 2506.19 3294.15
Operating Profit 789.57 624.24 1137.01 1867.53 1132.72
Net Profit 252.11 166.78 638.39 1466.67 793.4
Capital Work in
progress 130.24 137.46 137.22 642.74 443.04
Cash flow form
operation Activities 549.83 550.83 968.78 1330.34 962.4

Trend Analysis
3,200.00
2,800.00
2,400.00
2,000.00
1,600.00
1,200.00
800.00
400.00
-
2019 2020 2021 2022 2023

Sales Operating Profit Net Profit

Capital Work in Progress Cash Flow

The company’s sales are increasing over the last five years and so is the operating profit, net profit, cash flow
from operating operations. The company is spending on capital goods which in turn will reap future benefits.
Last year, there is decline in operating and net profit owning to increase in expenses due to disruptive supply
 chain. But we have seen a strong growth in earnings while reduction in debt as a part of overall capital
employed.

Year 2019 2020 2021 2022 2023

Operating Profit 0.24 0.19 0.29 0.35 0.20
Return on Capital
Employed 0.22 0.16 0.36 0.58 0.28
Debit To Equity 1.59 1.23 0.44 0.13 0.08
EPS 3.24 2.21 3.97 3.71 6.20
Peer Analysis

Name P/E Mar Cap Rs.Cr. ROCE % Sales Var 5Yrs %

Ratnamani Metals 35.91 18341.67 27.64 20.42
Usha Martin 28.22 9879.73 21.34 9.61
Shyam Metalics 11.43 9694.34 15.44 27.47
Welspun Corp 42 8364.35 7.91 8.98
Godawari Power 9.56 7685.73 28.07 18.08
Mah. Seamless 8.21 6275.18 20.42 21.6
Sarda Energy 10.32 6211.78 19.81 14.14
Comparison with Peers
Peer Analysis helps us to see how Godawari power is delivering a phenomenal return on capital employed
while the valuations are also reasonable at 9.56 PE.

Shareholding Pattern

Year 2019 2020 2021 2022 2023

Shareholding-
67.36 67.42 67.5 67.5 67.5
Promoter (%)

As per the shareholding pattern the promoters are increasing their stake over a period of time which is a good
sign and shows confidence of the promoter in business.

Technical Analysis
 As we see in the chart the price is in the formation of higher highs and higher lows. Also the price is trading
near its all-time highs hence we are in a bullish momentum.

Pitch
Godawari Power & Ispat ltd is a midcap stock with strong fundamentals and strong technical as well. As seen in
the balance sheet we have capital work in progress which shows us that the company is introducing a capital
expenditure. This is a good sign as this company has a lot of potential to grow. The company has managed to
keep debt low and also provide a good return on capital employed. Promoter buying over the time shows
confidence of promoter as well. If trend continues we can easily see a continuation of around 20-30%.

ASIAN PAINTS LTD

About Company
Asian Paints is the largest home decor company in India. The 80+yyr old company has major brands like Asian
Paints, Berger, Apco, etc under its umbrella. The co. is into wall paints, wall coverings, waterproofing, texture
painting, wall stickers, mechanized tools, adhesives, modular kitchens, sanitaryware, lightings, soft furnishings,
and uPVC windows.

About Economy & Industry

Indian economy is projected to grow at 6% in FY23-24, when almost every other economy might end up in red.
India's paints and coatings industry is expected to grow to a Rs 1 lakh crore market in the next five years from
the current Rs 62,000 crore, as per the Indian Paint Association (IPA). The industry has seen a consistent
double-digit compound annual growth rate.

Year 2019 2020 2021 2022 2023

Sales 19240.13 20211.25 21712.79 29101.28 34488.59
Operating Profit 3764.94 4156.82 4855.6 4803.61 6259.84
Net Profit 2155.92 2705.17 3139.29 3030.57 4106.45
Capital Work in progress 209.67 140.24 182.98 426.43 1019.59
Cash flow form operation
activties 2469.54 3038.15 3683.35 986.49 4193.43

As per the fundamental analysis Asian paints is one of the best stocks listed in India as it performs consistently.
Even during COVID when there was a lockdown it managed to increase its sales and there has been a steady
rise in profits. Cash flows have also been steadily rising with an exception of 2022.
Year 2019 2020 2021 2022 2023
Operating Profit 0.20 0.21 0.22 0.17 0.18
Return on Capital
Employed 0.35 0.34 0.35 0.29 0.35
Debt to Equity 0.17 0.13 0.12 0.16 0.15
EPS 22.48 28.20 32.73 31.59 42.81

Trend Analysis

The sales of the company have been increasing over time while company has managed to keep a stable yet
healthy operating profit and return on capital employed.

Peer Analysis

Name CMP P/E Mar Cap Rs.Cr. ROCE 5Yrs %

Asian Paints 3514.65 81.56 337124.45 35.23
Berger Paints 683.55 77.26 66401.58 23.75
Kansai Nerolac 315.4 55.08 25496.29 14.54
Akzo Nobel 2681.85 36.36 12213.23 34.71
Indigo Paints 1489.05 54 7086.13 21.55
Shalimar Paints 153.3 1107.09 -4.01
Kamdhenu
298.4 803.76 -7.27
Venture

As per peer analysis we see that Asian Paints provides the best return on capital employed moreover if we
compare the market cap of all the companies then we find that Asian Paints is a monopoly business. But all
these things are reflected in its PE which is currently at 81.56.

Shareholding Pattern

Year 2019 2020 2021 2022 2023

Shareholding-
52.79 52.79 52.79 52.63 52.63
Promoter (%)

As per shareholding pattern we see promoters have reduced their shareholding which is not a good sign for the
company.
 Technical Analysis

As per the charts the stock has always been in a strong momentum and is approaching its all time highs. Price is
in a bullish trend as it is forming higher highs and higher lows.

Pitch

Asian Paints Ltd have been one of the strongest stocks listed in the Indian markets. With sales increasing every
year since last 1 year the company’s growth has been phenomenal. It has very strong fundamentals as it is
delivering 35% return on capital employed. With largest market cap in the sector this company is a monopoly.
Promoter offloading some shares is a sign of caution but rest everything is good about this company. We do
have a very high valuation of 80.5 P/E but we have seen it trade above 100 P/E also in many instance like
Dec2021. So if we can buy this stock around 60-70 P/E that will be a very good purchase. Technical analysis is
also supporting the data as the price is near its all time high.

Innovative Event

As a member of Voyage Capital an innovative event that I can suggest is having an investment workshop which
is followed by a stock pitch competition. In the workshop the participants will be explained as to how can a
person start investing in the markets. Various investment topics that can be covered are fundamental analysis,
technical analysis, portfolio diversification, risk management, long term investment strategies etc. Through this
workshop a participant can be introduced to the world of investing. To further solidify this knowledge gained in
the workshop this event can be followed by a stock pitch competition wherein the participants will have to
apply the knowledge gained about the markets to research and analyse the stocks. In this event participants
will be required to present their report in front of a panel of judges who will select the best report and reward
the winners. This type of event will help us to achieve our objective of getting interaction, traction and helping
the audience relate to the club