Compare the KITEX chart with KSCL Chart here.

Rgds

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Hi Kiran,

There's no clarity as to what the market share nos. are based on but I presume its based on sales because of something Mr. Kedar Vaze mentioned,he said International players in Indian F&F industry mainly sell to Indian and regional (Asia and Middle East) subsidiaries of their international customers and barring these sales S.H. Kelkar's market share in fragrances stands at around 40%.

Regarding convertible pref. shares,I've no clarity. Will ask some friends in institutions to find out if possible.

Not sure how people are valuing this company? My guess is people are valuing with the ROCE staying near 60% forever and the company will reinvest for growth based on that return which is lethal. operating margins of 42% will start coming down to industry average sooner rather than later and growth will come down to the global economic growth or nominal growth of local ccy within next 5-6 years.All these factored in will result in a much lower value for the stock and if we are true to the value investing principles and our goal is to buy a mispriced assets(with enough MoS ) in realtion to value and sell asset when price exceeds the value then its a no-brainer call. If value investing premise is based on valuing a firm by converging the numbers with the business economics, "hope" investing is valuing the company based on numbers that exist only on your wishful dreams and with little economic sense.

Disclosure:Not invested

Find the monthly chart attached. It has got very good support @ 700. I follow this line for all my LT investments. Price action around this line gives a clue whether to hold or not or book and re enter later.

One way of interpretation is SMART MONEY know better than us and they might have drilled deep instead of wide as they have access to data. We can talk about Wigloo, Gimmel and all that but do we have to data to support that and a draw a meaningful conclusion. NO .It is as simple as that. Dont waver unless there is a drastic change in fundamentals ( we will be the last person to know this) or drastic change in price action.

Please visit Professors site and see the example of WABCO.

Nothing is certain except Death and Taxes.

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Let me try and answer the questions. Most of what you have asked is already covered in the thread.

1. Nisith Arora had already clarified in the earlier call that it will preferably be two or three acquisitions as opposed to one to spread the risks. He clarified on the call yesterday that talks are going on and some of them have fallen through at the valuation stage. To surmise that the money was raised without any acquisition target in mind is a stretch. Price negotiations are the trickiest part of any acquisition and quite a few deals fall through at this stage.
   Another interesting point that he raised in the call yesterday was that the sellers are seeking out MPS to sell their companies. Sounds interesting but will have to wait for some meaningful merger to happen before we can take this at face value.
2. As investors in MPS, we should be clear that the organic growth will at best be between 10-15%. I would personally pencil in 10% for my calculations. Their entire sales strategy is based on farming existing clients as opposed to having more feet on the street and knocking on doors of new clients i.e hunting. This is a strategy that they have consciously adopted to keep the sales cost in check. This is why it is important that they acquire companies which come with a steady revenue source as opposed to say a TSI evolve which had the right people and domain expertise but need to be redeployed on new projects to gain revenue.

The management wants to be a $80 million company in the next 3-4 years and they are working towards it.

Rahul Arora seemed more confident on this call as compared to the one last quarter. However, the management was not convincing on the questions about revenue growth. Not knowing the sales and profit figures of the three small subsidiaries that you have before you come to an investor call was a miss as far as i am concerned.

The slack that the investor community is cutting the MPS management is decreasing with every passing quarter and i hope that the management is aware of that.