i agree with you in both tenor and spirit . i will offer my comments too if i have something value adding to offer in your pf thread. thanks
Posts in category Value Pickr
GRUH Finance – mini HDFC (02-10-2015)
reacher, let's move on friendly as this particular discussion is not very important in the broader sense 
My calculation is only hypothetical as indicated. Also, I said "3 years or so" and did not say "exactly 3 years" - I did not want to do number crunching, make assumptions and find out how many years it will take to reach original RoE etc as this will not lead anywhere nor this is something very important as dilution is NOT happening.
I'm happy to bow my head and move on dear friend. But if it were a significant business changing thing, we would have been happy to discuss this thread bare left and right as per usual VP norms 
GRUH Finance – mini HDFC (02-10-2015)
can you calculate how capital employed (denominator) will look like on the second year from the time gruh (hypothetically ) issues a qip at cmp . I say hypothetical since if the co has not diluted equity in last 10 years i do not assume it happening now they do not need it too .
Even assuming same efficiency levels ROE can not come back to original levels in 3 years since it has to fight a higher denominator .will be happy to be proved wrong with data .
GRUH Finance – mini HDFC (02-10-2015)
If the RoE drops once for all permanently, it probably means business fundamentals have deteriorated and then as you said, PE will drop (not disproportionate, even worse, exponential) , in fact, that stock will be butchered. Not so in this case of Gruh as RoE will move back to originals levels. Anyway, let's move on!
GRUH Finance – mini HDFC (02-10-2015)
not sure about this . my reading is the day the co's ROE slips sub 25 PE will drop disproportionately.
GRUH Finance – mini HDFC (02-10-2015)
the co is staring at a ticking time bomb - which is a high impact highly likely mudra bank type initiative by Modi to provide affordable low ticket housing finance to the self employed (big vote bank of BJP ) - How can profiteering from the helplessness of a segment like the non documented self employed be a sustainable moat if they are privy to more information as to who is charging how much + if they are a big vote bank + in age of aadhar+Mobile+low cost bank a/c ?
GRUH Finance – mini HDFC (02-10-2015)
I wanted to make this point but,
the RoE will come down only in the short term as the funds lie un-utilised and as the business can generate high RoE, Gruh will lend more money with the increased equity base (remember, for finance companies leverage is allowed so GRUH can probably lend 10 times, not sure what's the current leverage of Gruh) and over 3 years or so RoE will go back to previous levels and market knows this so the PE will NOT drop to proportionate levels.
GRUH Finance – mini HDFC (02-10-2015)
Equity dilution will depress ROE - So PE will come down to 20 -
Cupid Ltd – Helping the world play safe! (02-10-2015)
I gather from Abhishek Kulkarni, a young n persevering full time investor, who attended the AGM that it was a well managed event, with elaborate discussions about the business. The Company is doing very well. The Export sales are not hedged n so are benefiting with the falling rupee. Rubber prices have also been falling so the business is currently in a sweet spot. The Co. has also recently won a Govt. contract. All the shareholders were later taken for a factory visit.
My own expectation is that we can expect good numbers from the Co. in the foreseeable future. An interim dividend along with Q2 results is also a possibility.
GRUH Finance – mini HDFC (02-10-2015)
Im feeling bit dumb here. Can you please explain what is logic behind diluting equity by 30% and recalculating book value?