Sunday, August 20, 2023

Recent IPO Performances


CompanyIPO DateIssue PriceCurrent PriceGain/Loss
Lemon Tree Hotels LimitedApril 20185610283%
IndoStar Capital FinanceMay 2018572182-68%
RITESJuly 2018185452145%
Fine Organic IndustriesJuly 20187834517477%
Varroc EngineeringJuly 2018967379-61%
TCNS ClothingJuly 2018658444-38.08
HDFC AMCAugust 201818152500127%
CreditAccess GraminAugust 20184221369225%
IRCON InternationalSept 201847.5 (475 split 1:5, bonus 1:1)100110%
Aavas FinanciersOct 2018821157191%
Gardenreach ShipbuildersOct 2018118748534%


CompanyIPO DateIssue PriceCurrent PriceGain/Loss
Xelpmoc Design and TecFeb 20196690.237%
Chalet HotelsFeb 201928049075%
MSTC LimitedMarch 2019120387223%
Embassy Office ParksApril 20193003062%
Rail Vikas Nigam LimitedApril 201919123547%
Metropolis HealthApril 2019880133452%
Polycab IndiaApril 20195384774787%
Neogen ChemicalsMay 20192151561626%
IndiaMartJuly 20199733081217%
Affle IndiaAugust 20197451080625%
Spandana SphoortyAugust 2019856805-6%
Sterling & WilsonAugust 2019780372-52%
IRCTCOct 201964 (320 split 1:5)643905%
Vishwaraj SugarOct 201912 (60 spilt 1:5)1635%
CSB BankDec 201919531562%
Ujjivan SmallDec 2019374931%
Prince PipesDec 2019178682283%


CompanyIPO DateIssue PriceCurrent PriceGain/Loss
SBI Cards and PaymentMarch 202075584111.5%
Rosari BiotechJuly 202042581191%
Mindspace Business ParksAugust 202027531012.7%
Happiest MindsSept 2020166891437%
Route MobileSept 20203501534339%
Chemcon SpecialityOct 2020340252-26%
CAMSOct 202012302536106%
Angel OneOct 20203061763476%
UTI AMCOct 202055475236%
Mazagon DockOct 202014518711190%
Lithika InfraOct 2020120274356%
Equitas Small Finance BankNov 20203383151%
Burger KingDec 202060114.892%
Mrs BectorsDec 20202881073273%


CompanyIPO DateIssue PriceCurrent PriceGain/Loss
Antony Waste Handling Cell LimitedJan 20213153232%
Indian Railway Finance CorporationJan 2021264781%
Indigo Paints LimitedFeb 2021149014981%
Home First Finance CompanyFeb 202151886367%
Stove KraftFeb 202138553038%
Brookfield IndiaFeb 2021275258-6%
Nureca LimitedFeb 2021400323-20%
Railtel Corporation of IndiaFeb 20219416980%
Heranba IndustriesMarch 2021627341-46%
MTAR TechnologiesMarch 20215752241290%
Easy Trip PlannersMarch 202118737-60%
Anupam RasayanMarch 202155594370%
Craftsman AutoMarch 202114904811223%
Laxmi Organic IndustriesMarch 202113025596%
Kalyan JewellersMarch 202187214147%
Suryoday Small Finance BankMarch 2021305184-40%
Nazara TechnoMarch 20211101695-37%
Barbeque NationApril 202150068838%
Macrotech DevelopersApril 202148669543%
Powergrid IITMay 202110011212%
Shyam Metalics and EnergyJune 202130646352%
Sona BLW PrecisionJune 202129156695%
Dodla DairyJune 202142876278%
Krishna Institute of Medical SciencesJune 20218251930134%
India Pesticides LimitedJuly 2021296212-28%
G R InfraProjectsJuly 2021837122547%
Clean Science & TechJuly 2021900137653%
ZomatoJuly 2021769018%
Tatva Chintan PharmaJuly 20211083171959%
Glenmark Life SciencesAugust 2021720630-12.5%
Rolex RingsAugust 20219002194144%
Exxaro TilesAugust 2021120115-4%
Windlas BiotechAugust 2021460400-13%
Devyani InternationalAugust 202190198120%
Krsnaa DiagnosticsAugust 2021954529-45%
CarTrade TechAugust 20211618495-70%
Nuvoco VistasAugust 2021570330-42%
Aptus Value HousingAugust 2021353271-23%
Chemplast SanmarAugust 2021541453-16%
Ami OrganicsSept 20216101281110%
Vijaya DiagnosticsSept 2021531471-11%
Sansera EngineeringSept 2021744919-24%
Paras Defence and SpaceOct 2021175657276%
Aditya Birla AMCOct 2021712391-45%
FSN E CommerceNov 2021225132-41%
Fino Payments BankNov 2021577357-38%
Sigachi IndustriesNov 2021163375130%
PB FintechNov 2021980727-26%
SJS EnterprisesNov 202154264018%
Sapphire FoodsNov 20211180133013%
One 97 CommunicationsNov 20212150860-60%
Latent View AnalyticsNov 2021197425116%
Tarsons ProductsNov 2021662517-22%
Go FashionNov 2021690124781%
Star HealthDec 2021900621-31%
Tega IndustriesDec 2021453990119%
Anand Rathi WealthDec 20215502590.1371%
RateGain Travel TechDec 202142573071%
Shriram PropertiesDec 20211181224%
CE Info SystemsDec 20211033194588%
Metro BrandsDec 20215001263152%
Medplus Health ServicesDec 2021796751-6%
Data PatternsDec 20215851862219%
HP AdhesivesDec 202154.8 (274 pre 5:1 split)100.1582%
Supriya LifesciencesDec 202127431514.8%
CMS Info SystemsDec 202121638377%


CompanyIPO DateIssue PriceCurrent PriceGain/Loss
AGS Transact TechnologiesJan 202217591-47%
Adani WilmerFeb 202223035554%
Vedant FashionsFeb 2022866126646%
Uma ExportsApril 20226854-21%
Ruchi Soya IndustriesApril 20226501575142%
Vedang LearningApril 2022137287110%
Hariom PipeApril 2022153626309%
Campus ActivewearMay 2022292280-4%
Rainbow Children's MedicareMay 20225421193120%
Life Insurance CorporationMay 2022949833-12
Prudent Corporate AdvisoryMay 2022630120691.5%
DelhiveryMay 2022487389-20%
Venus PipesMay 20223261400330%
Pradeep PhosphatesMay 2022426862%
EthosMay 20228782090138%
eMudhraJune 202225945678%
Ather IndustriesJune 202264288638%
Syrma SGS TechAugust 2022220670205%
Dreamfolks ServicesSept 202232654166%
Tamilnad Mercantile BankSept 2022510504-1%
Harsha EngineersSept 202233039119%
Electronics MartOct 202259204246%
Tracxn TechnologiesOct 20228010936%
DCX SystemsNov 202220734165%
Fusion Micro FinanceNov 202236857657%
Global HealthNov 2022336959186%
Bikaji FoodsNov 202230054682%
Archean ChemicalNov 202240764960%
Five Star BusinessNov 202247473555%
Kaynes Technology IndiaNov 20225872608344%
Inox Green EnergyNov 20226510562%
Keystone RealtorsNov 202254164018.5%
Dharmaj Crop GuardDec 202223726110%
Uniparts IndiaDec 20225775780%
Sula VineyardsDec 202235749940%
Abans HoldingsDec 202227031718%
Landmark CarsDec 202246083565%
KFin TechDec 202236648232%
Elin ElectronicsDec 2022247147-40%


CompanyIPO DateIssue PriceCurrent PriceGain/Loss
Radiant Cash ManagementJan 20239489-5%
Sah PolymersJan 20236512796%
Divgi TorqtransferJan 202359097966%
Global SurfacesMarch 202314018029%
Udayshivkumar InfraApril 2023353910%
Avalon TechnologiesApril 202343655226.6%
Mankind PharmaMay 20231080198384%
Nexus Select TrustMay 202310013636%
IKIO LightingJune 202328531912%
HMA Agro IndustriesJuly 202358.5 (split 10:1)8444%
Ideaforge TechnologyJuly 202367283124%
Cyient DLMJuly 2023265675155%
Senco GoldJuly 2023317696120%
Utkarsh Small Finance BankJuly 20232554116%
Netweb Technologies IndiaJuly 20235001187138%
Yatharth HospitalAugust 202330037726%
SBFC FinanceAugust 2023579057%
Concord BiotechAugust 2023741147098%
TVS Supply ChainAugust 20231971981%
Pyramid TechnoplastAugust 202316619216%
Aeroflex IndustriesAugust 202310815543%
Vishun PrakashSept 202399216118%
Rishabh InstrumentsSept 202344158332%
Ratnaveer PrecisionSept 20239811618%
Jupiter LifelineSept 2023735109148%
RR KabelSept 20231035157352%
EMS LimitedSept 2023280425101%
Zaggle PrepaidSept 202316422336%
SAMHI HotelsSept 202312616732%
SignatureGlobalSept 2023385877128%
Sai SilksSept 202322227524%
Yatra OnlineSept 20231421452%
JSW InfraOct 202311920875%
Manoj VaibhavOct 202321531848%
Updater ServicesOct 202330033612%
Valiant LabOct 202314017324%
Plaza WiresOct 20235410086%
IRM EnergyOct 20235055386%
Blue Jet HealthcareNov 20233463686%
Cello WorldNov 202364878722%
Honasa ConsumerNov 202332444036%
ESAF Small Finance BankNov 2023606915%
Protean eGovNov 2023792120051%
ASK AutomotiveNov 20232822913%
IREDANov 202332103221%
Fedbank FinancialNov 2023140136-3%
Tata TechnologiesNov 20235001180136%
Gandhar OilNov 202316927261%
Flair WritingDec 202330434915%
India Shelter FinanceDec 202349357015%
DOMS IndustriesDec 2023790125158%
Inox IndiaDec 202366088434%
Suraj Estate DevelopersDec 2023360330-8%
Muthoot MicrofinDec 2023291251-14%
Motisons JewellersDec 2023559674%
RBZ JewellersDec 202310011616%
Credo Brands MarketingDec 20232802924%
Happy ForgingsDec 2023850102921%
Azad EngineeringDec 202352469232%
Innova CaptabDec 202344854522%
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Saturday, October 27, 2018

Akshay Kumar doesn't guarantee a company or brand's success

A long time back (almost 4 years back in 2014), I had prayed to God to save the Indian banking sector in Beware of Frauds post. Now that the banking sector is being saved by RBI and Indian Government, another thing that I want to highlight is the mention of a company named "Kwality" in the same post. I had mentioned that my mother-in-law called me to check if she can buy the shares of "Kwality". The price at that time was hovering around INR 50. I pleaded my mother-in-law to not invest blindly.

I also looked at the company's brand at the website. This is the same company that had ice-cream brand "Kwality Walls" which was acquired by Hindustan Unilever in 1994.

The company then signed up Akshay Kumar as brand ambassador in 2015 and renewed him again in 2017. The advertisement also show an actress Asimah Mirza whose instagram account you can see here. Due to good revenue growth and profits, the share price went up from 50 to INR 160 in March 2017 and I was depressed that I gave wrong advice to my mother-in-law. By March 2018, the price came down to INR 80 and I was thinking that I may have been wrong but not completely wrong.

What is the situation now? The price is hovering at INR 7 and hitting lower circuit of 5% daily. The latest news says that the company has defaulted on its 1200 crore loan and is going to go to NCLT (National Company Law Tribunal).

Strange are the markets!
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Saturday, August 4, 2018

Sector in Decline - Newspaper Publishing and Media

Lately, you all might have seen that I am buying some publishing businesses such as Jagran Prakashan, Just Dial while I was already holding Hindustan Media Ventures. The valuation of these companies are given below in the table

CompanyMarket CapOperating Cash Flow(3 year average)P/ENet Current Assets
Jagran Prakashan380044512.25575
DB Corp432937013.9675
Hindustan Media Ventures12461509.151330
Just Dial376515526.231000

If you check the history of many of the companies, Jagran Prakashan (who owns Dainik Jagran) did a buyback at INR 195 for 292.5 Crore and share price is now at INR 125. On the day of buyback validity, the share price was at INR 160. Jagran also owns another listed company Music Broadcast which owns 91.1 FM - Radio City. Surprisingly, Music Broadcast is also doing buyback. DB Corp (who owns Dainik Bhaskar) announced a buyback at INR 340 for 312.5 Crore while the current price is INR 237. Just Dial is an internet based business for finding local businesses (Yelp of India). It also has approved buy-back at INR 800 for 220 Crore. I am not sure why at one side market is evaluating cash-rich companies like these generating decent cash flow at ridiculously low valuations while some others are trading at 75-100 times cash flow such as Dabur, Honeywell, Berger Paints, Page Industries, Jubilant Food and many others. Time will tell whether I am right or the market.
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Sunday, July 8, 2018

Recently Listed Good Quality Companies

Since the last 5 years, a lot of IPOs have come out and when I recently looked at the list, it seemed many good quality companies have got listed and I missed catching them. Here are a few:

NameBrand/UseIPO PriceCurrent Price
Sheela FoamSleepwell6801500
Music BroadcastRadioCity333312
Matrimony.comBharat Matrimony985745
Quick HealAntivirus321275
Mahanagar GasPiped Gas421809
Just DialLocal Business483570
ThyrocarePathology Lab446570

Many of these companies are having a great brand and use and all of them are from different sectors of the economy. Even the business is generating pretty good ROCE and having a reasonable valuation. Make sure you keep an eye.
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Monday, April 30, 2018

Recent IPO Performances

There has been flurry of activity on the IPO front recently and in my last post I already covered that there has been mixed results from two companies in auto ancillary sectors. I want to extend it to now cover all the IPOs between 2013-2018 and show where they stack. Here is the result:

CompanyIPO DateIssue PriceCurrent PriceGain/LossPrice 27 Oct
Repco HomeApril 2013172598247.7%331
Just DialJune 2013483448-7.5%437
WonderlaMay 2014125365192%267
Snowman LogisticsSept 20144749.455.2%34
Sharda CropchemSept 2014156406.7160.7%330
Shemaroo EntertainmentOct 2014170479181.76%446
Monte CarloDec 2014645532-17.5%347
Ortel CommunicationMarch 201518121.75-88%7
Adlabs EntertainmentApril 201518050.35-72%11
Inox WindApril 2015325108.7-66.55%78
VRL LogisticsApril 2015205424.3106.7%255
MEP InfraMay 2015638331.75%42
UFO MoviezMay 2015625394.7-36.85%313
PNC Infratech26 May 2015378 (Pre split 5:1)166.8120.6%127
Manpasand BeveragesJuly 2015320 (Pre bonus 1:1)395.4147.1%83
Syngene InternationalAugust 2015250615.6146.25%570
Power Mech ProjectsAugust 20156401028.9560.75820
Navkar CorpSeptember 2015155179.5515.8%67
Pennar EngSeptember 201517883.95-52.85%52
Shree Pushkar ChemSeptember 201565219.45237.6%180
Sadbhav InfraSeptember 2015103134.4530.5%101
Prabhat DairySeptember 2015115179.9556.25%100
Coffee DayNovember 2015328332.91.5%260
Interglobe AviationNovember 20157651407.884%870
S H KelkarNovember 2015180240.6533.7%172
Dr Lal Path LabDecember 2015550847.754.1%893
Alkem LabDecember 20151050196987.5%1940
Narayana HrudayalayJanuary 2016250274.510%220
Precision CamshaftFebruary 2016186101-45.7%60
Teamlease ServicesFebruary 20168502647.9211.5%2514
Quick HealFebruary 2016321333.24%185
Bharat Wire RopeApril 201645124.75177.25%72
Equitas HoldingsApril 201611015641.8%99
ThyrocareMay 2016446668.7550%560
Ujjivan FinancialMay 2016210405.3593%181
Parag Milk FoodsMay 2016215314.4546.25%251
Mahanagar GasJuly 2016421894.8112.5%814
Quess CorpJuly 20163171162.7266.8%686
L&T InfotechJuly 20167101592.9124.35%1656
Advanced EnzymeAugust 2016896 (Pre split 5:1)254.642%177
Dilip BuildconAugust 20162191163431%382
S P ApparelsAugust 2016268369.737.95%275
RBL BankAugust 2016225537.65138.95%500
L&T TechnologySept 20168601337.0555.5%1560
GNA AxlesSept 2016207555.15168.2%353
ICICI PrudentialSept 2016334433.229.7%325
HPL ElectricOct 2016202114.45-43.35%56
Endurance TechnoOct 20164721285.95172.45%1104
PNB Housing FinNov 20167751364.776.1%700
Varun BeveragesNov 2016445645.0544.95%760
Sheela FoamDec 20167301517.55107.9%1500
Laurus LabsDec 201642850818.7%340
BSE LimitedFeb 2017806812.051%596
Music BroadcastMar 2017333387.816.45%329
Avenue SupermartsMar 20172991483396%1227
CL EducateMar 2017500211.55-57.7%113
Shankara BuildingApril 20174601948.4323.5%1086
S Chand and CoMay 2017670401.6-40%194
HUDCOMay 20175865.9513.740
PSP ProjectsMay 2017210574.75173.7370
Tejas NetworksJune 2017257336.3530.9%237
Eris LifeJune 2017603765.3526.9%684
CDSLJune 2017149293.8597.2%239
GTPL HathwayJuly 2017170152.75-10.15%85
AU Small Finance BankJuly 2017358731.65104.4%523
Salasar TechnoJuly 2017108388.55259.77%210
Security & IntelligenceAugust 20178151180.6544.9%835
Cochin ShipyardAugust 2017432530.9522.9%379
Apex Frozen FoodsSept 2017175646.7269.55%340
Bharat Road NetworkSept 2017205179.75-12.3%116
Dixon TechnologiesSept 201717663463.296.1%2084
Matrimony.comSept 2017985836.65-15%480
Capacite InfraSept 2017250361.3544.55%180
ICICI LombardSept 2017661752.9513.9%800
SBI Life InsuranceOct 2017700758.858.4%570
Pratap SnacksOct 20179381359.845%1004
Godrej AgrovetOct 2017460703.2552.9%512
Indian Energy ExchangeOct 201716501631.95-1.1%1600 (after split 160)
General InsuranceOct 2017912711.9-22%634 (after split 317)
Reliance NipponNov 2017252252.950%160
Mahindra LogisticsNov 2017429487.213.5%550
Khadim IndiaNov 2017750776.53.5%594
HDFC Standard LifeNov 2017290519.1579%360
ShalbyDec 2017248217.55-12.3%149
Future Supply ChainDec 2017664700.155.5%649
Astron PaperDec 201750137.85175.7%110
Apollo Micro SystemsJan 2018275232.3-15.5%116
Newgen SoftwareJan 2018245239.3-2.3%232
Amber EnterprisesJan 20188591073.5525%837
Galaxy SurfactantsJan 201814801446-2.3%1260
Aster DM HealthFeb 2018190170.95-10%159
HG Infra EngMar 2018270336.3524.6%173
Bharat DynamicsMar 2018428405-5.4%283
Bandhan BankMar 2018375506.4535%380
Hindustan AeronauticsMar 201812151125.8-7.35%746
Mishra Dhatu NigamApr 201890146.4562.7%108
ICICI SecuritiesApr 2018520422.75-18.7%239

The table clearly shows that it has been a mixed bag for investors. Especially after October 2017, there has been 13 listings in green and 10 in red so 40% of the total IPO are in negative since last 6 months. This clearly tells that there is a froth in the primary market offerings.

The one that are in negative or very small gain but looks attractive from investment perspective to me are following:
  • Just Dial
  • Monte Carlo
  • UFO Moviez
  • Pennar Engineered Building Systems
  • Precision Camshaft
  • Quick Heal
  • Advanced Enzyme
  • BSE
  • Music Broadcast
  • GTPL Hathway
There has been listings of many insurance companies including ICICI Lombard, Reliance Nippon, HDFC Standard Life, SBI Life Insurance and I see very high valuations for them currently except for General Insurance.

There has been some good listings such as Sharda Crop Chem, Mahanagar Gas, Manpasand Beverages, CDSL which happened at slight gains to the issue price and then based on performance, stock price ran away. In Warren Buffett's  language, I was thumb-sucking at that time and lost these opportunities. I did buy some like L&T Infotech at around 650, which is below IPO issue price, and now I am handsomely rewarded as the stock price is hovering around 1600.

Among all the companies, the most stellar of them is Avenue Supermart (DMart) which came with issue price of 299, listed at 590 and now trading at 1500. Some of the good returns has happened due to heavy overvaluation such as that in Dilip Buildcon, Teamlease Services, Quess Corp, PSP Projects, Shankara Building Products, Apex Frozen Foods, Astron Paper and many others from the above list including Avenue Supermart too. Many are trading at stratospheric valuation and would give big heartache to investors when the tide turns.

Updated on 27 Oct 2018: I have updated the list with latest price as of today since a lot of action has taken place in two months. I had already mentioned some names which looked overvalued at that time out of which only Astron Paper and Teamlease have not corrected much otherwise Dilip Buildcon has gone down by 70%, Quess by 40%, Apex Frozen by 50%, Shankar Building by 45% and even Avenue Supermart has corrected by 17.5%. Even the one that I found interesting such as Pennar, Quick Heal, Matrimony have gone down by 30% or more. The one which has withstood the carnage have been shown with green color and some of them were already in my portfolio such as Larsen & Toubro Infotech. Some I added in the correction such as Sharda Crop Chem, Precision Camshafts, Bharat Dynamics etc...

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Sunday, April 22, 2018

Tale of two IPOs

I typically avoid looking at IPOs but I do visit the companies which come out with IPOs after few years to see what they have done and how the stock prices have reacted. In this post, I will analyze Precision Camshaft and GNA Axles. Precision Camshafts came out with IPO in January 2016 while GNA Axles came out with IPO in September 2016. Following table summarizes the IPO details:

GNA AxlesPrecision Camshafts
Issue Price207186
P/E @Listing17.122.3
Current Price550103
P/E Now29.124
Average Operating Cash
Flow in 3 Years
37 Crore83 Crore
Enterprise Value
(Market Cap + Debt)
(1180 + 117)
(980 + 110)
P/B Now3.571.75

The above table shows that in one company, investors have gained 165% in around 1.5 years and in the other, investors have lost 45% in around 2.25 years. The reason for more enthusiasm in GNA Axles is growth in recent times while flat revenue growth for Precision Camshafts since last two years. In 4 years between 2012 and 2016, Precision Camshafts average revenue (average of 3 years) grew from 260 Crore to 471.5 Crore while that of GNA Axles revenue grew from 349 Crore to 482.6 Crore. The only problem is that GNA this year has increased revenue as well as profits while Precision's revenue topped in 2015 and is decreasing since last 3 years now.

I personally feel that some premium for GNA Axles is justified but such large variation of valuation just due to growth in recent years seems far fetched. If you have to invest right now, I would go with Precision Camshafts.

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Sunday, February 25, 2018

Two out of favour sectors - Pharmaceuticals and Banks

People reading this blog must be able to see my recent investment activities and find that I have been selectively investing in two out of favour sectors in the last few months or more than a year I would say. The sectors are

  • Pharmaceuticals
  • Banks
In Pharmaceuticals, there is a clear harakiri where many company saw their share price going down by more than half including Lupin (2100 in Oct 2015 to 800 now), Sun Pharmaceuticals (1150 in April 2015 to 570 now), Dr Reddy's (4250 in August 2015 to 2170 now), Glenmark (1200 in August 2015 to 535 now).

I myself started investing in some of the well run companies such as Divi's Laboratories at 1000+ in 2015 and saw its price going down to 550. Luckily, I had some courage to keep buying at lower prices and average down so my average buying price kept getting lower and settling at 670 when I last bought some shares at 550. Today since the price is again at 1050+, I am having a decent profit.

Recently, I am still investing in some of the well known names such as Abbott, Sanofi, Suven Life Sciences etc... I am not buying them at bargain prices but they are fairly valued or sometimes 20-30% more than fairly valued but I don't think they are as bublicious as their counterparts in consumer space such as Hindustan Unilever or Britannia or Pidilite or Asian Paints.

In Banks, I did buy J&K Bank at 100 and had to sell at 80 to book losses. Today it is trading at 66. But I think I was early and now with NPA numbers of all the banks clearly available, the separation of wheat from the chaff has happened. The clear winners are only few such as HDFC Bank, Kotak Mahindra and Indusind Bank but there are second tier private banks which have got my attention including Karur Vysya Bank, Karnataka Bank, Federal Bank and South Indian Bank. NPAs of these banks are not as high as 10-20% similar to public sector banks but they are not as low as 1-3% which is the case for top run private banks that I mentioned above. There is some valuation measure available from the deal that happened in 2015 when Kotak acquired ING Vysya Bank at around 15K crore. After three years, similarly sized banks like Karur Vysya available at 8K crore, Karnataka available at 4K Crore and Federal Bank at twice the size available at 18K crore does look promising. These are all long term plays on the Indian economy. I hope they turn out to be good bets.

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Thursday, June 15, 2017

IST Ltd - Value Buy?

IST Ltd is an automotive parts supplier started in 1977. It supplies parts to many companies in and outside of India. Company also has a subsidiary Gurgaon Infospace which has set up an IT SEZ and most of the revenue of the company comes from the subsidiary.

The average ROCE of the company over the last 10 years is 23% while it is at 31% for the last 3 years. The company's main business of auto parts is not making any money. The biggest income is rent received from IT companies in their SEZ. Based on the latest financial results, the company has non-current assets worth INR 354 Crore, the net current assets are around INR 33 Crore and fixed assets are worth INR 139 Crore. So the company can be easily liquidated for INR 500 Crore+.

The biggest revenue source of the company is rent(lease) from SEZ to the tune of INR 75 Crore while the expenses are nil so all of this goes to the bottom line of the company. The company is getting some tax benefits so not paying full 35%+ taxes.

The promoters hold 74.99% in the company but not paying any dividends.

At the current market price of INR 1105, the company's total valuation is INR 650 Crore. The book value of the company is around INR 762 and the EPS is INR 140 so P/E is less than 8. Except for the lack of dividend, the company doesn't look very expensive.

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