Hi @sta,
GRP – the co had all the excellent things one looks out for – like – they were and still are leaders in reclaimed rubber industry (India’s biggest player and globally 3rd biggest), the promoters are excellent (highly qualified, passionate and honest), fantastic past track record (since 2000 the co grew consistently @ 25% CAGR with about 18% OPM and 30% ROCE). But several things went wrong and today the company is struggling on the financial performance. I think it didn’t work due to the change in competitive landscape (perhaps the entry barriers were not strong).
Arex – what we find interesting here is the cash earnings generated by the company (they provide a very high depreciation). And when we had bought it was providing a high dividend yield….so there was nothing to loose. The negative is that the business doesn’t seem scalable.
Regards,
Ayush
| Subscribe To Our Free Newsletter |
