When I began investing, I had read a report on Tata Investment Corporation. Investments in such companies are to be treated as investments in mutual funds. The only triggers for re-rating of such stocks is if the underlying companies get re-rated. The "holding company" discount is also quite huge and normally more than 50%. This has been my observation too.
Posts tagged Value Pickr
REPCO home finance – another Gruh in the making? (08-09-2015)
Real Estate investments are not happening in Ahmedabad, Mumbai and Pune of late - especially in the 25 to 70 lac segment. While Gruh works in a different segment, the impact of slowdown in RE in these regions should be felt there too.
Having said that, the Seventh Pay commission and OROP could help infuse some money in the economy.
Accelya Kale Solutions-Niche & Sticky Business (08-09-2015)
@Mahesh @varadharajanr @mikaarun
Hi Guys,
I am doing a deep dive into the company after I read the comment that Prof Bakshi's fund is invested in the company.This is a business very much similar to MPS (great ROCE, high div. yield, ethical management, turnaround after change in ownership, long lasting customer relationships leading to stickiness i.e. the moat, complete end to end product solutions, global outsourcing opportunity, long past experience of 25 years resulting in expertise in niche area). One thing that is better in this case is that end market growth is expected to be 6-7% vs. 2% for publishing industry, and with more outsourcing, cross selling etc. the co. is expected to grow higher than the end market. Now the only issue is the slowdown in growth in FY15 because of loss of one big customer (which in my view is the biggest risk for the co. as I read somewhere that top 10 customers account for 60-70% of the revenues). I have few questions for the people who have a deeper understanding of the business:
1) Near term growth prospects (2-3 years): What are your views on the near term growth prospects i.e. in what range the co. can grow (is it 10% or 10-15% or 15%+) and what will be the growth drivers. Has the management indicated any growth outlook in the AGM or any interview?
2) Long term growth prospects (3+ years): What is the long term growth outlook for the co. and the industry as a whole?
3) Margins: This is clearly an OPEX story where once the growth resumes the margins will expand but are there any chances/drivers for margin to contract if the growth doesn't happen, resulting in profits degrowth?
4) Risk of big customer loss: I think this is the biggest risk. It can happen that a big customer decides to bring the system in-house and hence not renew the contract with AKS w/o any of their fault. Last year they lost a big customer. Were there instances in the past also where they lost any of the big customers or last year was a rare one-off?
5) Industry Consolidation: As mentioned in the thread above, there are around 11 players (big ones, some in-house) in the industry so are there any chances of consolidation? Has the co. shown interest in growing inorganically (like MPS)? Or any of the competitors has shown interest in consolidation?
I would request all seniors to take sometime out and reply to the above queries.
Thanks
My Portfolio – Need Suggations from Value Members (08-09-2015)
Taken position in Borosil today at CMP - 17% of portfolio. Price/Book ~1 with strong business quarter lined up also other merit with are already under discussion on PV in separate thread.
Thanks
Borosil (08-09-2015)
Retailers are blocking means they are buying or asking company to block if they get stock on consignment or equivalent to liquidate the stock during peak season sales (Read Diwali)
Thanks
Byke hospitality – Truly asset light? (08-09-2015)
make my trip does not buy inventory of hotels.it is just a booking platform,receiving commissions for the booking.margin is less.byke buys inventory in bulk in off season and sells them in peak season through its agents.also it is to be understood that hotels and customers for make my trip and byke are different.small town people still prefer to go through a local agent their own rasik bhai or amit bhai.byke is still to get into properties which attracts the savvy internet customer.they are in lower segement.its like relaxo vs nike
Byke hospitality – Truly asset light? (08-09-2015)
make my trip does not buy inventory of hotels.it is just a booking platform,receiving commissions for the booking.margin is less.byke buys inventory in bulk in off season and sells them in peak season through its agents.also it is to be understood that hotels and customers for make my trip and byke are different.small town people still prefer to go through a local agent their own rasik bhai or amit bhai.byke is still to get into properties which attracts the savvy internet customer.they are in lower segement.its like relaxo vs nike
REPCO home finance – another Gruh in the making? (08-09-2015)
I don't see any substantial impact apart from lowering costs of credit appraisal slightly and future litigation costs. Process remains same but may be speed of approvals will improve.
Borosil (08-09-2015)
Return ratios are subdued because the company sold a large parcel of land and the cash is lying in the books. Also, compared to its size, the company has significant investments in Gujarat Borosil which has just turned the corner and should do well from here on.
The company has 2 main divisions. Based on March 2015 results, annual EBITDA/Capital employed for both of them are as follows
Scienteficware : 76%
Consumerware : 27%
Out of total capital employed of 697 cr , Borosil has made investments of 637cr ( out of which 485cr is cash or cash equivalent ). Net of these , the return ratios are through the roof.
The management seems to be aware of the investing communities fascination with return ratios, hence they are meeting to announce a buyback on 11th Sept 2015. If the buyback price is reasonably good, we should see shrinking of the balance sheet and all return ratios will climb.
disl : invested at cmp
mcap when posted : 727cr