Disclosure: No investments. I consider myself a novice, when it comes to investing.
I also came across this company, mainly because the investments on the balance sheet is more than the market cap. I have been trying to make sense of this.
It’s been a year since the original post. The stock didn’t go anywhere (CMP ₹237). That in itself is not a negative.
However, looking at the erratic profitability over the years of this company, and large stock portfolio as part of investments, I wonder if this is mainly a company trading in securities. Of course, with some diversification thrown in with other businesses being attached to it. Screener.in mentions that about 45% of the revenue is from trading. Is this trading of products or securities?
I couldn’t shake off the feeling that buying shares of this company is similar to buying units of a mutual fund, and the earnings are strongly tied to vagaries of the stock market. Thus, the earnings will continue to be erratic.
I don’t know if that is how investing in a holding company typically feels like, as a holding company just holds shares of the subsidiaries. But this company mainly holds a stock portfolio which constitutes companies unrelated to its business.
It would be great if experienced ValuePickrs throw some light on this.
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