Aditya birla fashion at 175/- (merged co. madura + pantaloons) buy??

Friends are you buying ABFRL at 175 which has fallen 16% today. this is merged entity of pantaloons and madura garments. good co.great potential. what you think?
I expect a 20 bagger in abfrl. ( only if you can wait for 15 years)

 

Abfrl will be 20 bagger? Sorry but I don't agree with you
I don't think it will become 20 bagger. I think it will become 25 bagger

However I don't understand why it was punished so severely today. Not that I am complaining but it seems absolutely absurd. Does anyone have any idea what irked the shareholders so much?

 

@Parin Gala
Dear friend , now its my turn. I will go some steps further.
SELL YOUR HOUSE and INVEST IN Aditya Birla Fashion and Retail Limited to get rich.(just joking)
i think that its pure selling pressure by institutions.. look at the volumes on nse- 86 lakh shares. the value of transaction is about 200 crores. since market is in a bad mood, selling may continue. if you want to buy , i think it can go below further.

 

Sir,
With due regards, may I say that you are bit excited. It may well be your prerogative to say ,"SELL YOUR HOUSE and INVEST IN Aditya Birla Fashion and Retail Limited to get rich". There are a few naive investors like me, who may actually do it or worse, may even borrow money to ensure that we don't miss out on this once in a lifetime opportunity.

 

Relax mate.. @w4wealth is just joking. Its pure common sense.
By the way, would you really bet your house on a stock recommended by a random stranger?

 

Dear Parin,
its real bargain available, best blue chip in making available at throw away prices, thats what I will say .
Market proves again and again, no logic works in crashes and market melt down .
I think it may be due to increased shares with merger .

Thanks & Regards,
Prashant

 

May not bet on the recommendation of a stranger, but here the recommendation comes from senior members, who can't be equated with strangers.

Jokes aside, the underlying message was clear - One should have it at any cost. This is how I interpreted it, being a newbie. My only concern was - the point is being stressed a little too much. Spare a moment and think, how this may get interpreted by an anxious new investor, who can't decide for himself. No offence meant.

 

Friends , Dont get over excited it was a joke and not a buy recommendation . just dont read one post and decide to buy a company. Dont take jokes seriously.

 

So what shd be a good price to enter this stock from long term view point

 

I think today AB Nuvo shareholders got shares of AB Fashion and they sold off their bit - this resulted in heavy volumes as well.....this is a good stock. can not say whether it is 20 or 25 bagger - but can certainly say that this will give very good returns over the next 2 - 3 years time frame.

Page Industries, LaOpala etc all have one brand and look at their valuations. AB Fashion has multiple brands all owned by them...the company has great future. Do not expect any near term gains as Q3 results may not be good - company is deep in debt and cleaning debt will take some time.....

 

While it's difficult to put a precise value on Aditya Birla Fashion at this point in time, one would do well to take into consideration the following facts regarding its financials:

1) its current equity (post amalgamation of Pantaloon Fashion and Madura Garments) is Rs. 768.84 Crores (76,88,42,726 shares of 10/- paid up);

2) debt (again, post-merger) could be in the region of Rs.1675 Crores or thereabouts (Rs. 1236 Crores in the books of Pantaloon in March, 2015 and the debt transfer of Rs. 439 Crores from AB Nuvo to ABFRL);

3) in the year ending March, 2015, Madura Fashion (as part of Adiya Birla Nuvo) made a Profit Before Interest and Tax of Rs.264 Crores on sales of approx. Rs. 5500 Crores, and taking into consideration that AB Nuvo transferred Rs. 439 Crores of debt from its books to the newly created ABFRL and accounting for the interest expense thereon, as well as accounting for taxes, the profitability of Madura Fashion as a division in itself should have been significantly low compared to the size of capital employed;

4) Pantaloon, in March 2015, posted a Net Loss of Rs. 228 Crores on sales of approx. Rs. 1850 Crores;

5) the three quarters, this year, for both Pantaloon and Madura Fashion divisions is nothing to write home about;

6) the current Market Cap of ABFRL (at today's price of Rs. 145 or so) is a little over Rs.11,000 Crores.

While I find these to be a few points to ponder about while trying to estimate its present value, there could be more significant ones which I must have missed out and would be happy to have them discussed here. There is no doubt the size of opportunity for ABFRL is significant going forward, but how do we account for the mediocre performances of both Pantaloon Fashion and Madura Fashion, with all their "multiple" brands, while a Page Industries during the same period excelled like there was no body around?

 

may be 100