Some good news

http://www.moneycontrol.com/news/buzzing-stocks/duke-offshore-spikes-20contractdefence-ministry_4642701.html

“Duke has secured a contract to provide 10 high speed boats and been appointed as official vendor for same by ministry of defence for Indian Navy’s International Feet Review,” the company says in its filing to exchange.”

A huge achievement I feel.

More good news should follow soon I feel. As per Management all the things are on track

@veerbhartiya93

As an outsider, it is very difficult to make guesses as to why DB gave a pass to UP market. However, we may look at the decisions along with industry dynamics/characteristics and their company’s own peculiar circumstances

• DB Corp from 2003 onwards have launched it’s edition in Gujarat, Rajasthan, Punjab, Jharkhand, Maharashtra and Bihar. If we carefully look at it in most of the markets ( except Bihar) they have chosen where the competition is prima-facie local or regional. Be it Gujarat Samachar in Gujarat, Rajasthan Partika in Rajasthan, Punjab Kesari in Punjab, Lokmat in Maharashtra or hindustan/Prabhat Khabar in Jharkahnd. They have refrained from or have not agressively entered the markets where much larger players such as Dainik Jagran is leading the market. It may be a coincidence or a calibrated strategy

• Another interesting thing is that DB Corp has first focused on markets that are relatively well urbanized (Gujarat/Maharashtra/Punjab/Rajasthan) and have higher prosperity and hence are large ad markets. This is a very smart strategy. In fact, DB Corp always position itself as first choice of urban readers/ SECA/SEC B category of readers.

• Now considering this strategy to focus on more urbanized markets and the typical break even time of 5 years for a news paper business, DB corp had hardly any room to look at any other market till 2010/11.

• However, after capitalizing on the Urban market, it has in last 4 years started to focus on more Rurban/rural focused markets like Jharkhand/Bihar. However, by 2010/11, HMVL had entered UP/UT markets and hence they may have decided against entering that market as typically it is difficult to sustain more than 3 players in a market and new entrants always face tough time.

• Only lately, in last 5-7 years, advertisers have woken up to the aspiring market of rural/rurban area and increasing their ad spend. While this happened, DB Corp, due to its strategic priority may have missed the UP market.

Again, this is nothing more than best guess and as I said earlier, it is very difficult to pin point exact reason for not entering UP earlier.

• On your question of entry of DB in UP: I feel it may not happen for 3-4 years at least. Reason is simple. Their Maharashtra business has only recently come out of investment mode while Bihar business will bleed for 2-3 more years. Also, the will first want to consolidate their position in Bihar. Frankly, Jharkhand would have been the most disappointing entry for DB as they haven’t been able to make much headway there. So, logically, they may want to wait and watch how they are able to fare in Bihar to gauge whether their entry in rural/rurban market can be as successfull as it has been in urban markets.

In 3-4 years, at the pace at which HMVL is moving, it will consolidate it’s position in UP well and entry of DB Corp may have less pronounced impact.

Again, all this is intelligent guesses and logical reasoning and reality may pan out very differently than what we anticipate.

Hope this helps

one more point i like to add to Dhwanil that it is not easy to get volumes right away because it is winner takes all kind of model , traders will trade where volumes are high and contracts are more liquid. e.g. BSE never recovered in F&O segment once NSE had some momentum(BSE tried market maker and small lot ).

disc: No holding. like business, but it is surely not win win so socialist in me gave pass.

SUMMIT SECURITIES

CEAT, ZENSAR, KEC, RPGLIFE’S holding company Summit Securities trading at 90% Discount.

RPG – Harsh Goenka group is fast growing business group in India. its presence in Tyres ( CEAT), Information Technology ( ZENSAR), Power & Transmission (KEC) , Pharma ( RPG Lifesciencea), Hospitality ( Spencer international hotels) doing very well in all sectors from couple of years.

About Summit Securities :

Summit securities is a holding company of RPG –Harsh goenka Group. It created in 2009 by amalgamation of group various investment companies CHI Investments, Summit Sec, Octave Investments, Brabourne Ent with RPG Itochu Finance

At that time CHI investments. Summit securities,octav investments,Brabourne Ent are pure quoted holding companies of group shres with market cap around 600 cr merged with un quoted company of RPG Itachu Finance which holds 50% stake in spencer international hotels.( Spencer Hotels has three five star hotel properties in Chennai, Bangalore and Ooty. All of them are managed by the Indian Hotels Co. Ltd, a Tata group firm, which runs hotels under the Taj brand. ) valued 600cr . The valuations were carried out by auditing firm Grant Thornton.

Later company name changed from RPG Itachu Finance to Summit securities and it have below quoted holdings along with its 100% subsidiary Instant Holdings.

Holdings of Summit Securities as on 17/12/15

Company name Qty mkt price Value (in Cr)
CEAT 12469937 1038 1294
ZENSAR TECH 8192495 1092 895
KEC INTL 44307003 150 666
RPG LIFE 4501767 300 135
HARRISON MAL. 2353350 60 15
STEL 2353350 36 9
SAREGAMA 253444 342 9
Total Value 3023 Crores

     Today quoted holdings value 3000+ crore and un quoted hotels property value 500cr  total 3500 crore liquid asset company available at market cap of 350cr ( cmp 326 * 1.09 cr total shares) means 90% discount to actual value and 88% discount to its quoted holdings.

Pros : > Market value of quoted investments 3023 Cr is morethan its market cap. of 350 cr. trading at 88% discount to quoted holdings
 Company is virtually debit free
 Trading at 0.7 times to its book value
 Company has good profit growth of 49% in last 5 yrs
 Company increased its stake in CEAT,ZENSAR,KEC with dividend income of group companies in last 5 years.
 Promoter holding 73% with out any pledge.

Cons : Though company not paying dividend

Compare with other Reputed Leading holding companies :

Quoted Holdings Valuations of Leading companies as on 18/12/2015 in Cr

Company Group CMP holdings value market cap debit discount

JSW holdings JINDAL 980 1820 1093 0 40%
Bajaj Holdings BAJAJ 1714 41980 19080 0 55%
Bengal & Assam JK 535 1780 464 409 66%
Pilani Investments BIRLA 1350 4900 1070 0 78%
Kalyani Investments KALYANI 1560 3196 681 0 79%
Summit Securities RPG 329 3043 358 0 88%

Conclusion : Summit securities available at attractive valuations compare to other reputed holding companies trading between 40 – 80% discount to its quoted holdings valuations .
if u take least of 78% discount also summit market price comes to 600.
Or if u take average of other 5 companies of 63% discount summit market price should be 1040