There are NOT a lot of positive catalyst going for MSTC in short term from my perspective right now but can list many on the negative side.
- E-commerce: Management has failed to articulate where the growth will come from given the headwinds of Coal India business going away, private sector revenue growth will take time, gestation of new initiatives will take time (e.g. recycling of other electronic items, etc)
- Vehicle scrappage – market was pricing this to happen much sooner than even management was expecting. Mgmt kept on reiterating that this will take time given infrastructure is not set up. Even when it kicks off, this space will be highly competitve both from JV with Mahindra as well as listing of scappage vehicles is concerned
- High growth from the divested FSNL business kept MSTC’s numbers look attractive on a consolidated basis than they were in the last 2 earnings updates.
- You now had a business trading at mid 20s PE, with almost no growth in the near term and no great articulation from management from a vision perspective.
I have attached my write-up from early this year incase helpful
MSTC Limited _Ex…pdf (245.9 KB)
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