On Buy-Back and Bite-Back

You might have seen following announcement from NHPC...

NHPC Ltd has informed BSE that the Board of Directors of the Company at its meeting held on October 24, 2013, has unanimously approved the buyback of upto 10% of fully paid up Equity Shares of Rs. 10 each at Rs. 19.25 per share payable in cash for an aggregate amount of Rs. 23,67,89,29,832/- (Rupees Two Thousand Three Hundred Sixty Seven Crore Eighty Nine Lacs Twenty Nine Thousand Eight Hundred Thirty Two Only) through tender offer.

I try to briefly give my thought process on this buy-back as follows:

To give you a small background, Government of India holds 86% equity in NHPC. They did an IPO at Rs 36 per share in Aug-2009 and the stock has been downhill ever since. CMP is at Rs 18.40. With investors having consistently lost money here and buy-back price fixed at Rs 19.25, it is highly unlikely that any ordinary shareholder would tender in this buy-back. Only Government of India would tender at this price.

In-principle, Buy back is usually resorted to owing to one or more of following reasons:

 (A) Increase the underlying share value

(B) Support share price during periods of temporary weakness

(C) Return surplus cash to the shareholders

Why is it unfair to ordinary shareholders of NHPC?

1)     In case of NHPC, it’s clear that (A) and (B) are not the underlying reasons. 

2) As regards (C), since the price is unattractive to ordinary post-IPO shareholders, cash return will happen only to “promoters” and not to “all shareholders” as is the underlying objective of buy-back.

3)     Point to note is that same “promoter” already pocketed the premium of Rs 26 per share at the time of IPO in Aug-2009, so now promoter does not mind a lower buy-back price since whatever the buy-back price it anyway stands to gain. But it is the ordinary shareholders that lose as they entered at the time of IPO or post that. The stock has never crossed its IPO price in the last 4 years.

4)     On the contrary, say the buy-back price had been fixed at Rs 30, it would have given a fair chance to all shareholders to tender. But then, it would not have served promoter’s objective of grabbing the cash and still not lowering it’s stake much in the company (assuming 14% of the public shareholders do not tender, promoter’s stake will go down only by 1.5% after all this). I don’t think even LIC that holds 1.84% will tender.

5)    Sometime in future say after 2 years, Government will still have to resort to an FPO or secondary placement if it intends to bring down its holding to 75% level. It is anybody’s guess that such an FPO, as and when that comes, will be at even worse pricing, else who would come forth to invest seeing the spectacular capital markets track record of the company. Oops, I forgot LIC and its charity work…

Why is it unfair to NHPC the company?

1)    Under obligations of buy-back, it cannot issue fresh equity for the next 1 year and lower equity+reserve would also make debt raising more arduous. Can a company in power projects sector be confident that it will not have to raise capital as per its business plan or is the decision just being forced upon them because Government wants to take the cash out to meet its fiscal deficit targets?

2)    Cash of Rs 2,367 crore that is being stripped of NHPC balance sheet could have been used by the company to expand its business or may be enter into some related projects/business. It is not a FMCG or IT type of company where we can say they do not have any real use for cash.

3)   Buy-back price is fundamentally an indicator of intrinsic value that the company gives to the markets and all stakeholders. As things stand, in case of NHPC, it appears the company itself does not consider that it’s worth is more than Rs 19.25 per share. So the question is why should the market give it a better price multiple anytime soon. At the most, market will adjust the price for marginally higher EPS that it will have post-buyback due to reduction in number of outstanding shares.

4)  In other words, company’s stock will be fundamentally de-rated after this buy back is completed. Look at so many of the PSU stocks that are quoting far below their IPO/FPO prices.

Why is it unfair to other PSUs?

Is anybody concerned as to what signal such actions give to other companies belonging to the same promoter and about the fate of ordinary shareholders in those PSUs. Oh, you said they are already quoting dirt cheap, as if they’re going to shut down. So nothing much can happen to those - they have already come a long way from “nav ratna” to “no ratna”. What I meant was some of these companies are cash rich, debt free, free cash flow generators like Coal India, Engineers India, NMDC etc, at least they can be a given a fair chance to command a premium that market would otherwise assign to any respectable owner group.

But that seems like asking for too much at present juncture.

Disclosure: I don’t hold any shares in NHPC, neither held anytime in the past nor holding at present. Reading this, you’d get an idea that I don’t plan to have it in future either.

Is There a Price Bubble Building in Consumer Stocks?

All the time, I get the question consumer stocks are trading at such rich valuations and is there a bubble building up there? I did a post on same topic in 2011 here.

“Stay away” from these is the advice from some of the analysts. Graham worshippers and “Value investors” say these stocks are absolute no-no, and cannot be justified anyway you look at them.

There can be no two opinions about ultra-expensive valuations of consumer plays. At the same time, it can be intriguing to see every other investor taking shelter in these names despite such pricey tags. 

I, however, think it is important to appreciate the overall landscape in which consumer facing stocks are being evaluated by the markets:

1. Infra companies pack has been a disaster in their capital allocations and many of their acquisition and other decisions haven’t been financially prudent. Government alone cannot be blamed for policy paralysis and their sorry state.
2. Cash flows in power and capital goods companies are unreliable, or missing in some cases. Well established names of yesteryear are languishing at lows. A recent article on BHEL gave insight into the real situation, so much for a Navratna enterprise.
3. PSU stocks have not come out of overhang of OFS and dilutions, the woes of fundamentally strong companies like Coal India, NMDC and MOIL etc in mining sector are well known. Oil & Gas sector has some minor positive with reduction in diesel subsidy but it will take long before that makes any real impression on the stock prices.
4. Auto majors like Maruti have to stop production for a couple of days every now and then to cool off the supply mismatch. Entry of one Honda has changed the 2-Wheeler market dynamics for our Bajaj auto and Hero.
5. Pharma is a mixed bag. For an ace like Sun Pharma, we also have to live with a Ranbaxy that acts as dampener. Still, market is giving high multiples to well performing Pharma guys so long as they are performing.
6. Banks are somewhat of a divided house where many PSU banks are saddled with asset quality issues and trading well below book. Private peers are already priced in overvaluation zone in excess of 2-3 times book.
7. IT with some exceptions (HCL Tech, TCS, Mindtree) have failed to live upto promise of  volume growth. The stock uptick seem to be on account of currency moves rather than real operating performance.
8. No point discussing about real estate and the likes.

All the above tentativeness in market leaves us with consumer facing businesses in FMCG and Consumer durables. Yes, we are talking about the likes of Nestle, HUL, ITC, Colgate, Britannia, Bata, Asian Paints, Berger Paints, Pidilite, Dabur, Emami, Bajaj Corp, GSK Consumer, Tata Global, Godrej Consumer, Marico, TTK Prestige, Hawkins, P&G, Gillette and so on.

Now, question is what is distinguishing these from the rest:

a.  Consistent cash flows, debt free (most of them), incremental capex is funded internally, no dilution,  high capital return ratios and decent pay-outs.

b.     Market very well knows that Nestle cannot grow at 30%+ anytime in near future but still gives it PE of 40. Such companies are like oasis in desert where “Predictability of Earnings” is the real PE decider not just the earnings growth.

c.   Domestic consumption stories are here to stay. A large middle class and growing number of consumers add to it. They can reduce some discretionary spend in inflationary times, ultimately that has to be realized in the market. After all, Chinese folks may not succeed selling hair oil and toothpaste in India.

d. Established consumer companies have strong brand power, distribution network and geographical penetration. Most of this is irreplaceable moat.

e.   Gestures from the parent shareholders to hike their stakes even at current levels like in GSK Consumer and HUL boosts market sentiment for investors (why will promoters not raise their positions when they have business growth compared to home turf, they take away high royalty payments of 1-3% and of course the dividends).

f.     In this kind of scenario, where do you think an emerging market fund looking to put money to work in India will invest, if not in these consumer stories?

In short, these consumer stories may have their ups and down and occasional performance blips. Broadly, this theme will continue to deliver earnings and premium multiples accorded by the market may not significantly shrink going forward. These are uncertain times and the way macro-economic scene is panning out, there may be bouts of sustained selling. That will again make participants look for defensives. 

No wonder, consumer facing businesses will keep the markets interested!

Which stocks should you pick in current fall?

We have witnessed midcap carnage in last one month or so, with concerns looming over some companies having pledged shareholding and margin calls getting triggered. A non-event making Union budget and FIIs having concerns over TRC issue did not help the sentiment, and we may lose further stream on the way down. Rather than dwelling over the macro direction, it’s better to focus on the actionable for an individual investor in any given situation. Most midcaps and small caps are beginning to look attractive. Decision point for an individual investor therefore is what to buy, if at all.

I would divide the stock universe at present juncture into three categories:

1.      Quality stuff– Most blue chip stocks with formidable market position have not seen much price action. Their financials and business dynamics are what they were. To give you a flavor I’m referring to strong companies across market caps like ITC, Nestle, HDFC twins, Pidilite, Colgate, Asian Paints, Titan Industries etc. which have remained relatively stable. Argument for buying these stocks as a portfolio choice at this stage can turn out to be a good decision, in case indices drop another 10% from here, these stocks are not likely to suffer as much. The counter-argument for these stocks being a bad decision is that they are already quoting at very high valuations and upside here will not be much when market rebounds.

2.      Beaten down – Here I’m referring to stocks that are damaged price-wise in the last few weeks. There may be concerns over pledged shareholding of these stocks and sometimes of margin calls over these holdings. In few of them there could be issues of corporate governance and suspicion over some of the actions or transactions. As an indicator of this category, we have names like Arshiya International, Opto Circuits, Core Education, Alok Industries, ABG Shipyard, Zylog Systems, Onmobile Global, PC Jewellers, IRB Infra, GMR Infra etc. Market does not give benefit of doubt in many cases and price action has been pretty severe.

3.      Down but not out – These are stocks where price decline in the last few weeks has been significant but the fundamental strength and standing of the businesses are intact. In other words, these companies stocks have also fallen but more in solidarity with the markets and their midcap peers, rather than any specific negatives on part of their business, promoters or management. One of the beneficiary themes could be exporters who are benefited by a weakening rupee. Domestic consumption themes with strong earnings visibility and robust cash flows are the others that look attractive.

If you have been following posts on this forum for sometime, you would be able to make out stocks in which one of the above three categories I’m going to recommend to buy at the moment.  Yes, it’s the third “Down but not out” since I believe the positive surprise would be the maximum in this category over the next 1-2 quarters. There is a good likelihood that Q4 results would be favourable for companies where business quality has not deteriorated and bounce-back could be swift. It is this category that can beat the consensus estimates in a decisive manner, if not in the next few months certainly over the next few quarters. This is a good time to invest in equities, let’s not miss out on the opportunity.

Continuing Customer Businesses and Stock-picking

We discussed product characteristics of a consumer business, consumption pattern and what role it can play in stock investing in the last post. Taking the theme forward, this time we look at continuing customer businesses and their role in stock-picking. You must have observed that there are many businesses that do not toil that hard to get a large chunk of their customers, those customers are already there, and it’s only for the net incremental customers they focus their energies. Are you wondering what do I mean?

Let’s look at this dimension of assessing business advantage a little more closely.

1.      Housing Finance Companies – These are businesses where customers are continuing y-o-y and generate revenues for the company for a long time. Take example of a Gruh Finance. It gives loans for 10 years or longer. Once a customer is acquired, he/she is a source of income for Gruh for the next decade or so. No more investments needed in retaining this customer, except of course the right customer service & home loan rates. Isn’t it a great business to be in? Theoretically speaking, one can move his loan from one HFC to another, but that number is not so large. Compare this with a Videocon manufacturing TV sets or a Whirlpool doing refrigerators that has to toil hard, against all competitors, to acquire every single customer every year.

2.     OEM suppliers – In businesses like auto ancillaries and other OEM suppliers, we have companies with an assured customer and offtake. Take example of Motherson Sumi, Amtek Auto, Suprajit Engineering etc. In that sense, they have customer continuity with large auto companies or  industrial giant supply chains. The downside is however in their bargaining power. Supplier companies are the price-takers and at times, struggle to protect their margins. Having said that, there can be quite a few that enjoy premium positioning in their supplies, quality control and delivery schedules.

3.      Rating agencies – Here is a business where the companies stick with a particular rating agency (CRISIL, ICRA, CARE, Fitch), and then you have annual surveillance to get the rating refreshed. There are numerous instances when after many years of rating association, a particular rating agency “stopped” understanding their business model in a favourable light and the company goes for a new rating agency. Still, it’s a fairly stable business insofar as continuing customers are concerned with little investment involved in customer retention.

4.     Cable & Telecom operators – In theory, you are a fairly stable revenue generator for your cable TV operator (Dish TV, Tata sky, Sun TV, Hathway or whoever you’re with) or your telecom operator (Airtel, RCom, Idea etc) over a period of time. In reality, however, there is fair bit of switching occurring in these segments due to consumer preferences, cost considerations, service standards, package offerings and so on.

5.     Tollway companies – These sound great from continuing customer perspective. Daily commuters have to pay to cross that road or bridge. It’s a different matter that in Indian markets, two of the better known names in this business are having a rough weather – Noida Tollbridge for uncertainty over its concession agreement terms, PILs filed against toll hike and IRB Infra over corporate governance issues.

6.     Habit forming businesses – I could have done without including these businesses here. The category title I have given is also not very accurate. But customers keep coming back to cigarettes, tobacco & liquor companies, however bad their products may be from health point of view.

There can be many more ideas where customer continuity is far more assured than normal businesses. Obviously, this cannot be the sole criterion of stock-picking. A good combo of business & financial factors coupled with this aspect of investing can make a lot of sense and create enormous shareholder value over a period of time. Do share your stock ideas and themes that look attractive from customer continuity perspective.

Consumer Stocks – Do Product characteristics of business matter?

There is a lot spoken about the boom in consumer stocks, the hyper valuations these consumer stocks are quoting at in the markets, demographics of Indian economy, ever growing middle class, etc.  In all this noise, one aspect that I find generally ignored is that there is very little discussion on the product characteristics of business or consumption patterns from the investing standpoint.

I mean all “consumer facing” businesses cannot be clubbed into one large basket with skyhigh price multiples assigned. After all, they are different breeds and animals which will find their own paths over a longer period of time. Let us analyze this little deeper from view of consumption pattern:

1. Consumables vs Durables – The most obvious distinction to be made when discussing consumer businesses is consumer goods in contrast with consumer durables.  While both the segments are witnessing growth, it’s the consumer goods (FMCG) theme that keeps adding new product categories that were not present before. For instance, we see in the marketplace a host of anti-ageing creams, beauty products, differentiated food supplements, health drinks with a thrust on premiumisation not seen before. FMCG industry in India is projected to become Rs 4 lakh crore industry by the year 2020.
2. Brand stickiness – With rising per capita income and growing rural prosperity (relatively speaking), there is a structural shift in consumer demand towards brands and organized products. Brand play is more evident in consumer products that any other product category one can think of. The chances of your changing your toothpaste or soap brand every single time one purchases is very less. Generally, consumer tend to stick with their brands as they get conscious of the segments and lifestyles.
3. Repeat purchase – To put it simply, the consumables vanish after one use, necessitating repeat purchase. You need a toothpaste, soap, detergent, hair oil (ok, till you have hair on your head) pack after pack all your life. That sounds simplistic, isn’t it? But that’s a fact and the business opportunity these guys are looking at. On the other hand, in durables segment with longer shelf life there is an onslaught from the Koreans & Chinese making life difficult and margins thinner.
4. Fashion & technology trends – Consumer preferences change with the times and need for innovation is a constant. Growing youth population is very conscious of what they consume.  At the minimum, re-packaging in different SKUs and appealing advertising is a must. We have seen even some of the giant companies of yesteryears (like Kodak) getting marginalized due to not keeping pace with ever-changing technology.
5. Target User group – I include it here from the viewpoint of total addressable market and the ultimate growth. If you’re talking about shaving blade & products, half of the population (female folks) is straightaway not the market. Of the remaining, you have below 16s who don’t need to and beard-sporting who don’t prefer to shave. Come to think of it, a toothpaste or soap company has no such limitation on its addressable market – entire country is its market. So the point is, other things being equal, would you like to give a PE multiple to a razor company as high as to a toothpaste company.
6. Staple vs Discretionary – Another important distinction to be made is consumer staples vs consumer discretionary products. Demand for consumer staples doesn’t decline appreciably with seasons and cycles. With increase in inflation and pressure on disposable incomes, discretionary spends are the first to be curtailed by consumers. Jewellery is one such discretionary spend, except for marriage type of purposes. Of course, the recent spurt in jewellery stocks doesn’t seem to support my view, and these are rocketing like no tomorrow.
7. Market positioning – Leadership in market position backed by brand power ensures steady growth. The market leaders have generally the first-mover advantage in introducing new products and break-through technological processes given their superior product portfolios. It imposes high entry barriers for new players.  With competitive intensity in consumer space, market leader companies are constantly looking for volume growth, maintaining their market position and guarding that distance from their next competitor (in market share).
8. Pricing Power – Strong consumer companies are in dominant position in their respective categories and command significant pricing power. For example, tobacco & IMFL (I personally avoid both segments for reasons of socially responsible investing) companies demonstrate that kind of pricing power since their consumers are habit forming and keep coming back. Similarly, baby food is a near monopoly for Nestle that gives them pricing power.

There are a lot many factors however, in financial and management terms, and some of the determinants of PE we discussed in a previous post here and here.

In conclusion, I’d say it’s important for a retail investor to be mindful of the product characteristics of the business and consumption patterns while analyzing a business : the addressable market, the seasonality & cyclicality attached to the products, strong brand or absence of it, market positioning & pricing power, any moat that protects the premium positioning.

The Edge of Small Investors

The title of the post might raise a few frowns among equity investors. “How can a small investor have any edge?” is a natural question that comes to mind. A small investor is generally the last one to get a piece of any actionable information. You must be thinking what way a small investor is better placed over big institutional guys who are armed with all their degrees, research teams, models and analytical tools. Let’s look at the issue in a bit more detail and how a small investor has some advantages:

1. Small investors do not have any rules or binding criteria imposed on stock selection, like stock should be above a particular market cap, so much maximum to a particular sector, not to exceed 5%-7% to a particular stock etc. She is free to pick a stock that suits her the best, no artificial rules to play on.
2. Let me give a small example how this rule criteria works against an investor. I study a micro-cap with market capitalization of Rs 100 crore and am reasonably sure of its business prospects and future growth, so I Invest in it. Normally a mutual fund will not invest in companies with such a small market capitalization. Same stock grows manifold in a couple of years. Now, having grown 8 times when the same stock is not such a compelling buy, it will come on the radar of mutual funds and institutions.
3. A small investor can make all her equity allocation to just 2 of her highest conviction stocks and construct a portfolio. Can an institutional fund manager do so? I am not suggesting strategy of having a 2-stock portfolio even for a moment, but putting a point in favour of a really concentrated portfolio in case investor is really sure of the bets.
4. Returns are often made when good stocks are held for long time, notwithstanding temporary blips and periods of underperformance. Formal fund managers have to mostly mimic or outperform their benchmark index or peers quarter on quarter, and year on year. If there are long periods of underperformance against benchmarks and peers, fund manager’s bonus and incentives shall suffer and the job can be on the line. Small investors do not have any such compulsions and can decide to hold or sell as and when they please depending on their own review and conviction.
5. Size of the portfolio need not be a handicap for small investor. It is easier to find stock ideas with smaller sums of money of say half a million than say when you have a billion to invest. Generating double digit returns on such large portfolio sums is a daunting task for institutional managers.
6. It’s not just performance pressure on formal fund managers that can be a drag. There are also issues of redemption pressures just when the fund manager does not want it, that is bear phase of the markets. Many subscribers get scared of equities at the wrong time (read bear markets) and start making redemption requests when they should actually be buying. But those are the classical investing mistakes on which a fund manager has no control and the Fund has to simply redeem. On the other hand, a rational small investor can avoid such mistakes. She can add to her position at such depressed times.
7. Lastly, small investors do not have any committee to report to while making buy-sell-hold decisions. You are your own boss!

For an advantage to work in your favour, it is however, important for small investors to stay rational, control emotions and do your home-work well before making equity investments.

Happy investing!

Ramco Industries Ltd

Business

1. Ramco Industries Ltd is engaged in building products like Fibre Cement (FC) Roofing sheets, Calcium Silicate Boards (CSB), Fibre Cement Pressure Pipes and Cement Clinker Grinding (CCG).
2. Sales of FC Sheets which is the mainstay of the company increased to 5,50,026 MT in FY 2012 recording a growth of 15% over previous year. In monetary terms, turnover was higher at Rs. 492.70 crore in FY 2012 compared to Rs. 381.85 crore in previous year.
3. CSB sales turnover for FY 2012 was Rs 30.01 crore. It was marginally lower compared to previous year. Company is also in process of setting up a modern plant for manufacture of Calcium Silicate Boards with an annual capacity of 48,000 M.T. at Kotputli, Rajasthan.
4. Company also has business interests in Cotton yarn.  During FY 2012, the division produced 24.65 lakh kgs of Cotton Yarn compared to 31.12 lakh kgs produced in the previous year.
5. Windmill capacity installed by the company is 16.40 MW. During FY 2012, they generated 302 lakh units of electricity.
6. The Company also has a foreign subsidiary in Sri Lanka. Performance of the FC Sheet Plant of the subsidiary improved and it produced 1,11,888 MT during FY 2012 as against 1,06,801 MT during previous year. Net Sales were SLR 32,839 lakhs (Rs 139.90 crore) in FY 2012 as against SLR.25,492 Lakhs (Rs 103.65 crore) during the previous year.

 Management

Ramco Industries Ltd belongs to the Ramco Group. Promoter Directors are Mr P.R. Ramasubrahmaneya Rajha, Chairman and Mr P.R. Venketrama Raja, Vice-Chairman & M.D.

The promoters have bought 144221 shares from market during Q1-FY2013. Their stake has increased to 53.92% at end of June 2012 (compared to 53.75% in Mar 2012). No pledged holdings from promoters.

Factories for building products are located at Arakkonam & Gangaikonda in Tamil Nadu, Bihiya in Bihar, Karur in Karnataka, Kharagpur in West Bengal, Maksi in Madhya Pradesh, Sinugra in Gujarat, Silvassa, Union Territory of Dadra & Nagar Haveli and Vijayawada in Andhra Pradesh. Cotton yarn facility is at Rajapalayam, Tamil Nadu.

Financials

1. As per consolidated financials, total sales for FY 2012 was Rs 798 crore as compared to Rs 672 crore in previous year. There is improvement both in volumes and realizations in building products.
2. Raw material is their biggest operating expense constituting around 55-60% of sales. Chrysotile fibre and cement are the main raw materials.
3. Consolidated PAT for FY 2012 was Rs 76.88 crore as compared to Rs 60.67 crore in previous year.
4. Net cash flow from operations for FY 2012 was at Rs 50.70 crore compared to Rs 138.71 crore for previous year.  Ramco acquired fixed assets to the tune of Rs 97 crore in FY 2012 (both by way of building and plant & machinery. It therefore did not yield free cash flow.
5. Ramco’s paid up share capital is just Rs 8.68 crore and networth of Rs 446 crore as at 31-03-2012. Debt marginally increased to Rs 248 crore as at end of FY 2012 compared to last year.
6. ROE improved to around 16% level as at end of FY 2012. Operating margin at around 17% and net margin at 9.5% level.
7. Ramco’s activity can be said to have element of seasonality with Q1 and Q4 as comparatively stronger quarters. Q2 is generally a weak quarter due to monsoon effect.
8. Coming to Q1-FY 2013, company posted strong results with sales at Rs 268 crore recording growth of 45% y-o-y and 41% q-o-q.  PAT was at level of Rs 22 crore. Net Margins were down 150 bps y-o-y and 490 bps q-o-q that is attributable to decline in operating margins and higher tax rate.

Risks & Concerns

1. Profitability of the cotton yarn division is a major concern due to power cuts and related problems.
2. Seasonality of building products industry with weakness in Q2 and Q3.
3. Restrictions on chrysotile sheets in some countries due to health hazards.

Investment Thesis

Ramco is a well managed company expanding well over the years, with subsidiaries contributing to growth. We have included it here for another reason, and that is its investments in listed companies including its group companies – Madras Cements Limited , Ramco Systems Limited and Rajapalyam Mills Limited. They also have some investments in HDFC Limited, HDFC Bank, Indian Bank etc. Total market value of all these listed investments is in excess of Rs 1,000 crore and on cost basis at Rs.197.42 crore.

Company’s Market Cap is Rs 491 crore. After accounting for debt and cash, Enterprise value is at about Rs 700 crore.  EPS for FY 2012 is at Rs 8.87 and estimate for FY 2013E estimates are indicative of Rs 10.

BV for FY 2012 stood at Rs 48.

There was some market buzz that it may be looking at offloading some stake in Madras Cements to one of the international cement players. Haven’t seen any firm report though.

At CMP of Rs 56, the stock quotes at 5.5x FY 2013 and this looks promising offering good upside potential both by way of a decent core operating business and value of investments.

PS- Please do your own due diligence before any investment decisions.