Hi Jigar,

If you can fix a meeting with the mgt., I 'll be happy to come from Mumbai for the same, but I suspect the mgt. may not oblige. Mgt. credibility is amongst the negatives in my view.

How much of the debt amount is finally settled for is not known. The earlier CDR failed to materialize as the revenues from the IT project did not come through. The mgt. & the developers may well be hand in glove. I won't be surprised if the mgt. goes for a share buy back when they feel that they are in a position to settle with the banks. I feel confident that there is enough juice in the project because the mgt. willingly paid 50 crores to the banks towards debt repayment a couple of years ago.

The key here is to follow the development of the real estate project. The gains will come from there.

Hi Rajeevji,
There seems to be a rift between the management and the real estate developer, RPS. They have also approached courts for the same. Management, as mentioned in their latest AR, is looking forward to resolve the disputes. Can we have an update on the same?
Also, how much revenue can we project for STL from the IT building project? This is to ascertain the net inflow when comparing O/s debt to be repaid and remaining to be distributed among shareholders. I think we need to have some clarity on these fronts. Shall we try fixing a call with the management? Let me know. Thanks

Hey Raja, my assumption of PE re-rating is mainly because the financial metrics for Virat are second to none and are superlative (though on a small base, so it remains to be seen if this can be maintained). Also, I have reported issues with the story in my earlier posts in this thread.

1. RoE and RoCE of 30% and 50% thereabouts for FY15. (there are intangible assets of 10 crore which you need to adjust while calculating equity as this came as good will from Durga Diary acquisition). That's how I calculated.
2. Net Fixed Asset turn over of more than 25 (62.98 crore revenue/2 crore net fixed assets). Not capex intensive.
3. Dividend pay out of 40% in FY 15 and more than 50% for 2 years before that. The 50% dividend is on a much smaller base, so let's not give that much importance to that.
4. Inventories as a %ge of revenues for FY15 is only 6.5%.
5. Negligible debt.

**

Disclaimer

My holding bias may be the reason behind my positive rant, so please do due diligence before any buy.

Anyway, I should stop here as too much positive bias may lead to members getting positively influenced whereas they should take decision starting from neutral view point and drill down based on facts.

There are many forms of faking something Let me explain,
1. There could be some, who probably make duplicate copies of Durga packaging and sell god knows what in that package there by damaging the original brand. VICL can act against them as they have genuine case.

1. However another form is, seeing the success of Durga packaged ghee, there are competitors who have launched packaged ghee with similar sounding names. Like "Devi Durga" ghee here. The adv. features one of Odia film super hit heronie from past.
   https://www.youtube.com/watch?v=xpFdKs0ncdo
   In such cases, it probably takes offer of higher incentive to channels to stock it. Which maybe relates to your second point about dealer network not stocking Durga ghee.
   For customers, maybe the durga brand recall isn't strong enough to postpone purchase or go looking for it to other stores when it's not available in one store.
   This form of competition is hard for Durga to do anything about except spending on A&P which we can expect to be matched by the competitor.
   Overall, it's probably a decent business not a superlative one
   Yaar, why only compare PE's between higher ranked players and expect/hope the smaller players to catch up. We need to put other things like comparative Returns on Equity, Asset Turnover, Working capital management, payout ratio in the perspective as well ?

Regards
Raja