In January 2014, when the entire economy was in the doldrums, logistics stocks were going a-begging. At that time, when Radhakishan Damani’s investment firms, Brightstar Investments and Derive Investments, bought huge truckloads of Gati and Transport Corp, I asked the pertinent question “Why Did Radhakishan Damani Buy Gati & Transport Corp Stock And Does It Signal End of Woes For Infra/ Cap Goods Sector?”
Since then, both stocks, as well as the entire logistics sector, have been on fire and investors have reaped huge multi-bagger gains.
Today, we can ask the same question about India Cements and the entire cement sector. Does Radhakishan Damani’s interest in the stock signal the beginning of good times for the cement sector?
Radhakishan Damani’s investment arm, Derive Investments, bought 20,71,580 shares of India Cements yesterday at Rs. 86.61 each. The investment in the stock is about Rs. 18 crore.
India Cements is run by N Srinivasan, the strongman behind the BCCI and Chennai Super Kings (CSK), the IPL franchisee. N Srinivasan is more in the news for his cricket controversies than for his business deeds.
(Image credit: BS)
Prima facie, Radhakishan Damani appears to have been attracted to India Cements for four reasons:
(i) India Cements reported good results in Q4FY15 with the net profit surging to Rs. 36.6 crore as against a loss of Rs. 157 crore on a YOY basis. The EBITDA was also higher at Rs. 200 crore as compared to Rs. 119 crore on a YOY basis;
(ii) There is likely to be increased demand for cement in the south, led by growth in Andhra Pradesh and Telangana. The company disclosed that the Andhra Pradesh government alone had enquired for nearly two million tonnes of cement for housing and irrigation works. India Cements has around 7.3 million tonne capacity in Andhra Pradesh and Telangana combined;
(iii) The Union Cabinet approved a few days ago the “low-cost housing scheme with interest subvention” intended to provided housing for all by 2022;
(iv) Cement prices are expected to remain buoyant owing to increased spending on housing in rural and semi-urban areas and an improvement in orders for infrastructure projects.
Interestingly, India Cements is an old favourite of Radhakishan Damani. On 25th July 2013, Derive Investments had bought 19.50 lakh shares of India Cements at Rs. 53 each. The present holding of Derive Investments in India Cements is not known.
Now, we have to wait and watch whether India Cements will go the same path as TCI and Gati and fill Radhakishan Damani’s coffers with riches.
Two things –
The shareholding of Derive is less than 1% based on the March 2015 quarterly shareholding of ICL on website BSE, since the shareholding pattern of a listed company will only disclose shareholding of public and those holding 1% or more.
Just to be sure , are these two companies (Derive and Brightstar) of Mr. RD and that he holds shareholding in them, because these companies are unlisted and closely held, and any change in these companies will only be known based on the search done on the website of MCA and not otherwise.
I recently bought NCL Industries. Little risky but lots of upside. One thing I could not find is What is the capacity utilization of NCL Ind..
RK Damani perhaps purchased India Cement because of huge demand possibility in Andhra as new capital to be built up in the coming 10 years. India Cement can meet the maximum supply out of all the cement players in South and hence will be showing confirmed steady growth. Already India Cement is one of the lowest priced cement stock.
Only thing is Srinivasan should understand the value of his company.
I do follow investment patterns of mr. damani and mr.jhunjhunwala good. i am very very small investor . i am the expert in fundamentals. i am retired chief engineer, well i make in depth study . recent times CG igarashi best pick by mr damani . even i have purchased at 42/- before purchase i made in depth study.
india cements management has to improve credentials. otherwise it is worth 400/-. 15.3 million tonnes . i can be value addition to mr damani.
@ T R Ram, when did you buy Igarashi motor? Look good to me as well. I too love doing in-depth study. Can you share your contact so that we can sync?
At 24 PE, is the reason damani or RJ bought or is the reason u studied
Thangamayil jwellers brought by mr damani @278 is quoting at 182 rs currently….
The only advantage of these deep pocket investors is the power to average… While the small retail investors dont hv that.
Hello ( i need the email if of MrRadhakishan Damani) to escalate the belwo, ”helo bini John. Heard your the manager head of ramurthinagar Dmart store. I am really very unhappy n disappointed by the service the store people are providing. Should Dmart grow or you want to shut down by having these kind of people?today while shopping we wanted to buy peanuts. To check the quality I took 4 peanuts n started to eat, the lady in the billing place told we are not suppose to eat. I told k I stood.I had 2 in hand it was tasting bitter so I put bck those 2 and took another 2.it was just 2.so soon Anand, store manager comes and very rudly arrogantly starred to say “should not eat anything inside”I was realy shocked by his behaviour; we are not buying from road side to see this kind of behaviour, we hav cme to Dmart expected some kind of good customer service .I told it’s just 2 for that Anand went on saying if 1000 people eat n tell the same in a rude manner.After he went I billed 3kgs of peanut and majunath was there told him “look I hav put it back tell your manager there is a way to speak to customers .I agree it was my mistake, but there is a way to b handled and told.This was very shocking.so I wanted to escalate this and after billing i went to the glass room in corner and asked to whom should I escalate. I just wanted the name .so soon manjunath came there and started to raise his voice saying “in kannada -it’s over there we spoke it’s ur mistake “n so on ,he statred to raise his voice.I told I just need the persons name to whom I shd escalate. He was not ready to tell n agsin for 5 to 10 mins spoke very very rudly n very bad raising his voice all the customers were watching. What kind of people you hav hired?I was shocked and told him I don’t want any kind of approach n details from you rven then he was speaking only in kannada.told him speak in English. In turn he is telling speak in kannada rudly.God unexpected some good behaviour from Dmart.if you hav Ccvt kindly check the footage. Finally I got details of Bini john frm another petson there.He statred saying sorry madam .I was really shocked.never got to see this kind of a behaviour from a store person. I would like to knw now, we customers should we ignore all this becuse of whom you all making money or is there a solution for this?
why did you buy from them if they were so rude ? You should not have bought the peanuts ? Consumer protection and rights are very poor in India ? Punish them by not buying from DMart anymore