Sudhir Valia is the brother-in-law of Dilip Sanghvi, the founder of the Pharma behemoth, Sun Pharma. He is a Chartered Accountant and owns an investing company called Lakshdeep Investments & Finance Pvt. Ltd.
Lakshdeep Investments’ crown jewel stock is Sun Pharma. It holds a gigantic quantity of 339.86 lakh shares worth Rs. 3,091 crore. It also holds 39.12 lakh shares in Sun Pharma Advanced Research Co (SPARC) worth Rs. 153 crore.
Sudhir Valia and Lakshdeep have been very active in recent times. In 2012, Lakshdeep acquired a minority (26%) stake in Telenor’s Indian arm. Valia appeared to be inspired by the investment made by his illustrious peer, Ajay Piramal, in Vodafone. This stake was sold back by Lakshdeep to Uninor in 2014 for an undisclosed sum. It would be safe to assume that Valia would have made a nice little packet from the deal.
Another notable investment by Sudhir Valia is the acquisition in 2014 of a majority stake in Fortune Financial Services India Ltd from whiz-kid Nimish Shah.
The other big ticket investment that Sudhir Valia is working on at present is the acquisition of a 26% stake in Suzlon Energy by Dilip Sanghavi & Associates. The deal involves an equity investment of Rs. 1800 crore.
Today, 24th February 2015, Lakshdeep scooped up a chunk of 727,975 shares of Greenply Industries from Citigroup, Mauritius at Rs. 1010 per share. The investment is worth Rs. 73.50 crore.
Greenply Industries is a smallcap stock with a market capitalisation of Rs. 2323 crore.
|Greenply Industries Ltd – Financial Overview|
|Figures in Rs crore||2014||2013||2012|
|Profit After Tax||117.58||119.68||56.71|
|Earning Per Share (Rs)||48.20||49.07||23.17|
|Greenply Industries Ltd – Ratios|
|Figures in Rs crore||2014||2013||2012|
|Operating Margin (%)||11.97||13.04||10.24|
|Net Profit Margin (%)||5.09||5.63||3.19|
|Return on Capital Employed (%)||17.05||19.66||13.12|
|Return on Net Worth (%)||22.23||28.61||16.84|
Greenply boasts of a roster of top-notch investors. Ashish Dhawan of ChrysCapital fame is the single largest shareholder with 23,69,488 shares worth Rs. 237 crore. Jwalamukhi a.k.a. Westbridge Capital holds 23,76,884 shares. Prashant Jain’s HDFC MF holds 19,13,642 shares. Vallabh and Mangal Bhansali of ENAM fame also hold a chunk of shares.
Prashant Jain’s HDFC MF bought Greenply in June 2013 at Rs. 660 per share. At the CMP of about Rs. 1000, there is already a gain of 51% from the stock.
According to experts, the plywood sector is the ideal way to play the great urbanization boom that the Country is witnessing. Greenply and Century Plyboards are the two dominant players in the field. Both have well known brands. It is also believed that the onset of GST means that the market share of the organized players will increase at the cost of the unorganized players.
Rahul Arora of Nirmal Bang recently stated that he is very bullish on the entire sector and on stocks like Greenply, Century Ply & Kajaria Ceramics. Nirmal Bang has issued a detailed research report in which it has advocated a buy on the basis that Greenply has a “healthy balance sheet with strong return ratios”. Nirmal Bang has foreseen a target price of Rs. 1,407 for the stock, which means an upside of 46%+ from the CMP.
There is also an Investors’ Presentation which gives a quick snapshot of Greenply such as it’s’ growth drivers, business overview, financial highlights etc. There is also a Q3+9MFY15 report which gives you updated information about the Company.
Some impressive facts discernible from the report are that the Revenue and PBT have seen a CAGR of 24.5% and 81.0% respectively over FY11-14. The pre-tax ROE and ROCE was 27.3% and 17.7% respectively while the post-tax ROCE was 14.4% in FY14. The net debt to equity also reduced to 0.77x as on December 31, 2014 as compared to 1.05 as on December 31, 2013. The report expresses confidence that the strong growth trajectory of the past will continue if not improve further.
So, we have to compliment Sudhir Valia. It does look like his Midas touch has gotten him another winner stock in Greenply.