Saturday, May 28, 2016

KSE - Value buy?

The company Kerala Solvent Extraction (now KSE) was established in the year 1963 and entered into cattle feed industry in the year 1976. The company later also entered into the business of milk procurement, processing and creating dairy products like ice-cream, ghee and packaged milk.

The average ROCE of the company over the last ten years is 30% while it is higher at 45% in the last three years. The company's net current assets at the end of FY2016 was 45 Cr. The operating cash flow of the company over the last ten years was average 12.11 Cr while higher at 15.78 Cr in last five years.

The promoter shareholding came down from more than 32% in FY2013 to less than 27% now. But that might be due to sharp increase in share price of the company. The same promoters increased their holding between FY2010 - FY2013.

At the current market price of INR 550, the company has a market cap of INR 180 Cr. The share price was trading around INR 250 between 2005-2013. During this time the book value of the company increased from INR 80 to INR 240 now. The company is not very cheap but not very expensive either. It might become attractive if price corrects by half.
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KKR said...

What is your view on Tainwala?

Tainwala chemical is receiving around 20 cr of dividends from their investments in mutual funds and other unlisted entity. Promoter holding 67 % of the company, Book value of the company around 47 with EPS of 4.4. Debit free company with 35 cr free reserve and 280 cr value in investments ,stock trading just 50 cr market cap is very interesting !!!!. Unlock value of company is very huge,

mayur said...

You seems to be more bullish on JMA...which has lower volumes..but undiscovered gem..i too bought it...for long term. Cheers for recognizing value picks.

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