Its actually an error in bse india. Check the shareholding pattern released by the company. Pratyush Mittal holds 1.02% stake http://www.bseindia.com/xml-data/corpfiling/AttachHis/02F26CD0_2AEE_4EAD_9552_FB5A8F455873_102515.pdf
Posts in category Value Pickr
GRUH Finance – mini HDFC (02-10-2015)
1) If we are looking specifically at book value to value Gruh, should we not be cognisant of the fact Gruh pays around 30% of its profits as dividend and so the book value is understated by that extent? Also, this is also a reason that RoE remains high. Managing this consistently for long term is a feat.
2) Personally, I will always pay premium to Gruh when compared to its peers as long as the current metrics remain. By how much is the point of contention. When we look at P/E in the above table, it is 20% premium over Repco and it's double when we look at P/B. There is no correct metric here I think but I will go with P/E because of RoE.
3) Gruh will grow at 25% for the next 5-7 years and the probability and predictability of this is very very high. The management itself said this during an interview in money control about 3-4 months back. In fact when asked, by how much would you grow this FY, Sudhin Choksey told, I'm not sure as economy is still recovering but over the next 5-7 he said he is confident of growing at 25% minimum (Yes, he said this) and more if economy prospers.
4) Market opportunity being so huge, the financial metrics will stay inflated for all the companies in this sector and more so for the LEADER.
I hold Gruh.
Ashok Alco-Chem (02-10-2015)
A good analysis of q1 fy16 results by capital cube
http://www.capitalcube.com/blog/index.php/ashok-alco-chem-ltd-earnings-q1-2015/
GRUH Finance – mini HDFC (02-10-2015)
I believe Repco's numbers for ROE, Loan Book Growth and NPAs are very close if not as good as Gruh. (If you want, I'll share the numbers as well) So it, doesn't justify the 2x difference in P/B.
Agree on banks focusing on the HFCs segments in the future, and a comfortable P/B of 7/8 for Gruh.
Don't agree on borrowers getting impatient for lower rates. Half the book is self-employed segment where they don't have much bargaining power due to lack of other alternatives apart from Gruh, Repco, etc.
GRUH Finance – mini HDFC (02-10-2015)
I think high p/b is due to 3 things - its consistently high ROE (30% ) and 25%-28% loan book and no net npas.I think the loan book growth might be under threat if a)banks focus on gruh's segment with lower rates ( this will take time though market will discount this earlier )-I think this will happen and is inevitable but the market size is huge - I also foresee borrowers getting impatient for lower rates since information gets passed on who is charging how much - on npas co is spot clean but recent court case on high ticket LAP to royal raises some concerns as to why lend on LAP segment at such high ticket size .
I will be comfortable at a P/B of around 7-8 on the higher end for gruh.
Alembic & Alembic Pharma (02-10-2015)
Hi Ankit,
I am unable to find the excel sheet you are talking about. Can you please share it again on the thread.
Thanks,
Nikhil
Canfin homes ltd (02-10-2015)
Interesting to note from Motilal's report above that Illango's term has been extended till October 2016, and given that CanFin Homes now has 2400 crore market cap, which is more than 15% of Canara Bank market cap, it is likely that his term will get extended further.
Core banking software has been implemented across branches, significantly expanding branch network and low cost satellite offices across India, reducing interest rates should take care of growth going forward..
CanFin continues to be the fastest growing HFC and is getting well recognized by the market participants though FII/ DII holding still continues to be <1%. With consistent growth and entry of institutional investors, stock could continue to make new highs..
GRUH Finance – mini HDFC (02-10-2015)
I'm invested in Gruh and views are positively biased on the HFC sector. But I can't get my mind around it's valuation of 13x P/B no matter what growth %, NIM, Asset Quality, ROA, etc. numbers you throw at me.
Tried to do a quick valuation analysis of some of the best performing HFCs currently:-
Does the BV/EPS multiple have anything to do with Gruh's exalted valuations?
Alembic & Alembic Pharma (02-10-2015)
Alembic Pharma management had mentioned in Jan14 VP Q&A that setting up front end in US is their next challenge. As per the last concall, typical model with US partners is 50:50 profit share. Thats a huge draw down for the company. Their margins are heavily impacted due to this. They said their front end will be operational in FY17. So till then the performance would not be spectacular.
I want to understand how can Ajanta have so much better margins than Alembic. Any pointers? I dont know whether this has already been discussed. Ajanta always has their own front end, that could be one reason. But apart from that, can one say that their product identification capability is better than Alembic? Or probably the best?
@singhvir...thanks for the calculation. I would assume the "typical 50:50 profit split" as management commented in concall. But even assuming an EPS of 30, it looks cheap on fwd basis.
Atul Auto Limited (02-10-2015)
Maruti was found testing a LCV recently (link below). This should possess some threat to Atul Auto, I guess. Mainly due to the extensive network and reliability the company offers. Also, depends upon the pricing of the model. Though impact to Atul Auto may take time or may not impact it. But looks that LCV is still a hot market.
http://www.team-bhp.com/news/maruti-testing-cng-powered-super-carry-y9t