I think RPG Life fits well in classic "cigar-butt investing" of Ben Graham. Here is a company with market cap of Rs 300 Crore having land value of Rs. 200 Crores and annual sales of 300 Crores. New CEO bringing in focus on asset utilization and better profitability with possibility of upside due to US FDA approval makes it really "heads I win. tails I don't so much" type of deal.

Having said that, their past gives very less confidence as they were mediocre company for most of its existence with lack of focus and forming small part of large group with focus on tyres, power transmission and software. Since this is relatively small standalone business in large group of companies, turning around this company and selling out to other pharma biggie could be option explored by the group.

Disc : I am invested in this company from lower levels so my views could be biased

Ajay Piramal is shrewd businessman who knows how to buy out-of-fashion business cheaply and how to sell them high after turning them around. He has done that with pharmaceuticals and now he is trying his hand at Financials.

Due to his interests in pharma, financials and IT, analysts have always struggled to value his company. Since research firms have analysts dedicated to one area, they need to put 3 analysts to track Piramal Enterprise. . Also you would not see AP or his deputies coming on air and explaining their numbers or proving guidance on future plans. Hence IMHO Piramal would never be a stock market darling.

I came across interesting article in Mint on AP's and hence felt like sharing with fellow Valuepickr's

http://www.livemint.com/Companies/zaxsHqI6ZgzzvglZINuxhM/Can-Ajay-Piramal-reinvent-himself-again.html

Disc - invested for last one year so my views could be biased

Britannia is great story of what good management can do to a relatively mediocre company. Till 2012-13, this company and its stock was considered average. Promoters (Nusli Wadia from Bomaby Dyeing) were more busy in fighting their JV partner Danone and company was lacking focus in the market. It was "also ran" company in the area dominated by ITC, Nestle, Parle etc. Varun Berry's (ex Pesico, Unilever) arrival on the scene changed things a lot. He started de-cluttering the product portfolio and brought in concept of "Power Brands" which increased focus on key brands. They strengthened supply chain, appointed more dealers, added more points of sale and used operating leverage of the company. Their operating leverage (read - better asset utilization) is the reason they are able to generate higher profit growth.

Going forward, it would be interesting to see how much more market share they can gain as competition is getting fierce and operating leverage gains would have limited upside. Further growth would come from capex which could put bit of pressure on bottom line in the short run.

Disc : invested so my views could be biased.

Hi Vivek,

Point noted. Esp reg the risk of acquiring other PSU debt-laden companies.

W.r.t NMDC / PSU's, I am hopeful the management quality will improve in the next few years. (gathered from the news)
1. This govt will increase management quality (selection transparency, better renumeration etc.)
2. More disinvestment.
3. Non interference. (like e.g in Axis bank.)

Regards,
S