I’m holding on to the share until I get a price too hard to pass which is approximately Rs 1000, and my reasons are simple.
- India has made a huge infrastructure upgrade, especially when it comes to ports, and much of those upgrades have been to containerized ports so the next to benefit would be the shipping companies.
- A significant proportion of India’s trade is with UAE and Singapore and if you observe Shreyas shipping’s routes are along these lines.
- If a manufacturing boom does takes place then all of that has to be moved on container ships and I don’t see another company operating in Indian waters with such capabilities.
- You can buy ships, but operational experience is invaluable so if an Adani or some other large logistics company wants to downward integrate then buying Shreyas is a great place to start.
- Since the promoters hold more than 70% of the stake a hostile takeover is not possible but taking it private indicates to me that they might already have an offer most probably from DP World but by all assumptions it’s more valuable in my opinion than it’s earnings.
- There are already some protectionist measures, but if anything like the Jones act is implemented then a company like SSL will be the biggest benefactor.
- Controlling maritime trade in the Indian ocean will gain more and more interest with current geopolitical tensions and would be of particular interest to India.
If defense stocks got all the attention last year, GE and SSL will get that next year in my opinion. So, I’m bracing for a huge win here.
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