Have also gone through their financials, and it seems a business with moderate margins and facing strong competition as highlighted in the ICRA’s credit rating report.
The Current Market Cap is 1840 crores.
The amount of Cash Equivalents on the books is 744 crores.(mainly from giving off of Human Pharma Division)
The amount of current investments on the books is 208 crores (as of 30th September 2022)
The Non-current investments include 177600 equity shares of TTK Prestige and 1000 shares of Apollo Hospitals. The combined market value of these investments as of date is 13 Crores.
So Market Cap Excluding the cash and investments is actually Rs. 876 crores.
Actual capital employed – Value of Investments and Cash:
Short-term borrowings are 24 crores. Annual Interest expenditure will be around 10% i.e 2.4 crores.
TTM Sales is 704 crores and operating margins are only 3%.
Net profit from operations (21.12 crores- 2.4 crores interest)-tax@25.17% comes out to around 14 crores only.
So, the question is if the delisting offer fails, what will I get If I Buy the whole business at the current market Cap?
As mentioned above ex-cash and investments I’ll have to pay 876 crores and in turn, I’ll be getting 14 crores only.
Am I missing something? Let’s discuss this.
Right now this doesn’t look worthy to take bet as their is thin margin of safety at current prices.
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