Just trying give me 2 cents on above topics:
- P/E: In moneycontrol, it lists peer companies like PCBL and Goa carbon which have TTM PE 10 and 4.44 so no where near 34 (till few months ago, MC were including this company in cement sector – where it earns 7% of their revenue). I would not even consider them as their competitors as PCBL is totally different business and Goa Carbon is small compare to Rain capacity but by definition it will have different ROE/ROCE as their plant in 2 different economics so you also need to consider COF (I had write to company about their low ROE and they said it you need to consider us as US/Europe player).
- Pabrai investment: In last year he has increased in holding so I would not say he is frustrated, yes it’s not his best holding (might have even regret not selling in 2018 bull run). though it should not be major reason to buy or sell business based on some famous investor’s decision.
- I personally think though management is top notch but they do not try to anything for market (stock/valuation) so it’s stock price might underperform and they are not ready to sell cement business even at good value otherwise they can get 60-70% of today’s market cap just buy selling cement business (i think this is being first business is very close to their heart – it is like Berkshire hathway in Warren Buffett case).
- Debt: Major debt obligation will come in 2025 but I think they will refinance this year or next year. If I remember correctly, they can’t pre-pay money before Apr 2023 otherwise they need to penalty but I think after this months it is without penalty.
Thanks!
Disc: Major holding in PF
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