Essentially my takeaway was this – The future guidance for upto FY 19 is around a 20% CAGR on top lines and a 24 – 25% CAGR on Net Margins. This for a company trading at a multiple of 35. PEG is 1.4. Keep in mind this guidance is from a management which is historically aggressive on guidances, more so for the mid and long term which it corrects downwards as it comes closer to actual delivery date, so to speak. Over and above this is the overhang from listing and merging KCL. It is not so clear to me that there is such a clear client segregation between KCL and KGL. Am I wrong in saying this ? How then will business be separated. The answer again was extremely unclear, evasive and had a waffle like quality to it. At best , I now classify Kitex as an overpriced compounder with Corp Governance issues. I will be looking to reduce my position in line with what I allocate to compounders in my portfolio.
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