Some updates straight from the horse’s mouth (Virat’s management) post Q2 results as updated by a friend who spoke with management:

1. The reason behind sales de-growth is due to 2 months inauspicious period between July mid to September mid which comes once in 12-19 years and with no festivals/marriages etc Ghee off take was low… So sales were lower by 30-35% in Q2. This is both in AP and Orissa which was a double whammy.

2. Pent up demand will be seen in Q3/Q4.

3. Orissa production plant is in progress to start production by Q1 2017. The land is already procured and there is little CAPEX needed. So the incremental RoCE will be very high.

4. Karnataka foray is on track through the already established Crane Betal network and the response is good.

5. Management has started concentrating on Durga brand to make it a well established regional player. All the efforts will pay huge pay offs if story goes as per thesis.

6. The return ratios are improving and are best in the diary sector.

In my opinion, due to better financial metrics and pristine balance sheet, sticky nature of the FMCG product, brand power, high dividend payment the company deserves better valuations.

Disclosure: I hold Virat as indicated earlier. The details are already available publicly in internet.

@hssodhi198 Thank you.

Skipper Ltd Q2 net declines 14% to Rs 30 croreThe Kolkata-based firm had clocked a net profit of Rs 35.29 crore in the year ago period, it said in a BSE filing.
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@ Arun, I’m not too sure I totally agree with prof Bakshi on this. (Goes without saying, I’m an absolute nobody compared to him) but on his argument of functional equivalents.

Berkshire Hathaway, is Ben Graham’s ultimate “frozen corporation” It never has, and has a stated policy of never paying dividends. It is a going concern and does not plan to liquidate either. So was Berkshire a bad investment candidate? (I am NOT even remotely saying that VLS is the same as Berkshire, or it’s promoters are Warren Buffet) but since we were on the subject of functional equivalents, I can’t see a better equivalent to VLS, than Berkshire.

I am not personally invested in the company because here’s my logic. Let’s assume I were the promoter (or you were for that matter in his shoes) what would I / you do? At cmp, I would sell about 1 / 1.5% of my relaxo holding and take VLS private. Therefore all the investments VLS has, in Ceat and in all the other companies now become my private investments. I am really surprised as to why the promoters haven’t taken VLS private yet. If they can control the board of directors, I’m trying ti understand what is stopping them? They will win the vote on this issue, if ever one were to happen.

Cranex is today at a stage where most negatives are in the price.That said one must adhere to allocation rules since in such ultra small caps the unknowns can be debilitating.Which is why i will advise a 1% type of exposure .More than capital erosion risk the risk one must factor in is more of opportunity cost.

Triggers and events to watch out for

Operational Triggers

1. Composition of Services is just 4% of revenue . Improvement here can
   dis-proportionately improve PAT . Typically this must be 60-40

2. We need to see how the Delhi Metro order gets executed.If properly
   executed this can be a game changer for this company

3. At some stage (i believe when promoters have at least 51% or more
   stake ) this co will have to consider paying dividends ( at least
   1-2 years away i think ) which can lead to immediate re-rating.

Non operational Triggers

1. We need to observe how promoters intend to take control of this co
   considering that m’cap is just about 4 crs whereas promoters have
   lent their personal money of under 9 crs that too over 6 years back
   with no interest (This was done to take the co out of BIFR in 2009
   period ).In the past they have considered allotting sweat /
   preferred equity and then dropped that plan.Since creeping
   acquisition has its limits (5% pa cap & difficulty in getting
   delivery as 65% holding with general public ) we have to consider
   probability of preferential equity shares allotment to promoters
   thro’ warrants .