Today, with the benefit of hindsight, we can confidently say that Transport Corp of India (TCI), is/ was a no-brainer stock at the time that Porinju Veliyath recommended it.
Not only is TCI a venerable company with a long track record of consistent growth but it has also won the confidence of Radhakishan Damani and Ramesh Damani. As of 31.03.2015, Radhakishan Damani held 342,656 shares while Ramesh Damani held 575,290 shares. The holding of these veterans as of 30.06.2015 is not known. Among other whiz-kid investors are Gopikishan S Damani, IDFC Mutual Fund and Nirmal Bang.
Porinju’s logic for recommending TCI was childishly simple. The company has a “clean balance sheet”, “hardly any debt” and its valuations at “one time revenue” are cheap, Porinju said.
Well, the price then (25.08.2015) was Rs. 232. Today, the stock surged 20% to breach the upper circuit and rested at Rs. 297, giving fabulous gains of 27% since Porinju’s recommendation a few weeks ago.
The reason for the excitement is the proposal by TCI to demerge the “express distribution business” into TCI Express Distribution and to list that company separately. Each shareholder of TCI will receive shares of the demerged entity.
Vineet Agarwal, TCI’s MD, appeared on CNBC TV18 to explain the rationale behind the demerger proposal. He explained that there is a “huge and fast growing ecommerce sector” and that the “express distribution business has been growing quite rapidly” and that this required “complete focused attention”. He also pointed out that as the demerged company is already a profit making company and has a brand name, it would be able to command a higher P/E multiple than what TCI is trading at presently.
The experts were quick to point out that the proposal would result in “value unlocking”.
Vivek Pandey, a fund manager who had also recommended a buy of TCI a few days ago, was gung ho about the demerger proposal.
TCI's express biz has sales of 800 cr, market cap is 1900 cr
Express biz alone will have valuation of 2000 Cr
Blue Dart trades at 7x sales
— Vivek Pandey (@IVivekPandey) October 9, 2015
(TCI’s express biz has sales of 800 cr, market cap is 1900 cr Express biz alone will have valuation of 2000 Cr Blue Dart trades at 7x sales)
Even if u give 3x sales to TCI's express biz, its valuation comes to 2000 Cr…
Blue Dart trades at 7x sales
So TCI is virtually free…
— Vivek Pandey (@IVivekPandey) October 9, 2015
He later added that “Even if u give 3x sales to TCI’s express biz, its valuation comes to 2000 Cr… Blue Dart trades at 7x sales So TCI is virtually free…”
Varinder Bansal of CNBC TV18 carried out some rough back-of-the-envelope calculations and concluded that it seemed to be a “strong step for value unlocking”.
Some rough calculation on TCI. This seems a strong step for value unlocking. pic.twitter.com/qDMsmGgAWT
— Varinder Bansal (@varinder_bansal) October 9, 2015
Porinju, of course, was in great excitement and was being mobbed by his vast legion of delirious followers.
Meanwhile, people who missed out on buying TCI are feeling remorseful and wondering if they can still board the gravy train. Any ideas?
These stories should be informed to us as and when these wizards get into the stock! Like always, this article has been posted when the stock price has run up by over 27 %. Looks like all articles posted here are traps to lure retail investors like us to invest in these shares allowing the big fish an easy exit!!! This is so not done…
Hi Jose,
please check the facts. There many many stories posted here immediately after disclosure . And lot of them were available at same price or some times even lower price after these wizards were in to the stocks .
Please check Sahyadri industries, Porinju’s pick, posted here and still available at same price . Same with V2 retail of porinju , he entered at around 40 and it was available at less than 60 some time ago .
It all depends on you how you benefit from info here and track the stocks .
Also please check 100 bagger report posted in this blog and you may find something valuable and interesting.
Regards,
Dear panicker
When Porinju recommended TCI at some investor camp it was mentioned here. He had recommended other 4 scrips also. After that when the markets corrected it was available at cheap prices. There was plenty of time to buy it. If you wake up after the stock runs 20-30% its your fault.
TCi was recommended by Ramesh damani in 2006-2007 itself. Guess he is holding from that time. I am holding afew from that time. The previous demerger of TCI developers was not great for the investors. Maybe they got the timing wrong. Ramesh had sm value for the real estate division, but it quoted at ridiculous rates. Am happy holding the share. credits to ramesh damani
Without getting involved in the controversy of buying or not buying expert’s recommendation, it would be more useful if we study these recommdations and try to learn- HOW TO THINK ABOUT INVESTMENT.
Instead of getting involved in the controversy of following expert’s remmendations and real hidden intent of making it public, more useful would be to learn – how he thinks about investment .
I agree Porinju has done it again …with TCI and NIIT, and he has repeatedly advocated them so nobody can complain…sadly I did not buy them but bought Tata Global as I was also looking for degree of safety …well better luck next time
Can’t understand what magic this guy has, within few days of his buying, stock surges 20-30%. Looks like he is expert in predicting the value unlocking dates of any company. Earlier also for other company, within few days of his buying, the news of value unlocking unfolded.
Really? Magic? It’s called “insider info”.
This is a long time recipient of ramesh damask may be more than 5 yrs from 50 to 70 levels. I m holding since then to say this porinji’s reco backed by the damani’s is wrong in many waves. This stock is identified by ramesh damani and backed by radhskishan damani recently (when he bought gati also) porinji’s is trying to make some froth and catch some fish at the end but his reco does help garner some attention which albeit are short term traders looking for quick buck with out understanding the stock which is not healthy to the market place
No one has missed any rocket launch, TCI is listed as far as I know last aprox three decades and is an ordaniry stock.If any body interested to buy ,it will give large no of chances to buy at reasonable price.Buying of its stock by any great gun does not increase any mileage of its fleet.