Acid in Kolhapur
4 stars based on
Their USP is vertical dherya inc trading options - they are the only player who manufacture silica from sand and then turn it to optical fibres. They have facilities in China and Brazil as well. One of the biggest beneficiaries of data explosion and digitization. To give you some context here - India today has around mkm fibres laid out Vs close to a dherya inc trading options km laid out by China and mkm by South Korea.
The current airwave mode of data transfer in India is not sufficient for 4G roll out and they require optical fibre. Reliance Gio, Vodafone and Airtel have huge capex planned for 4G which will require overhaul of existing towers as well as new towers with optical fibre connectivity Government has huge plans for fiberization.
The company today has 2 businesses - Telecom and Power. By end of fy16, the telecom dherya inc trading options will be demerged and the power business will be taken private.
Total company today is valued at around Cr mcap and the unlisted business will be worth Cr. If you wish to exit the power business, you will get around 22 Rs preference share within 30 days of demerger. Read the demerger details here. Valuation of telecom business: They have already done Cr in H1 Fy Total debt transferred to telecom division is around Cr and the interest outgo will be Cr. So, I think it is a good buy. Management reported that they plan to take their revenues from around Cr today to around Cr in the next 5 years.
End to end solutions provider: They plan to grow this business going forward. The revenue impact of the order starts from Q2 onwards…In FY15 company had just recognised 68 crores of this revenue. This makes the power segment numbers look bad enabling the company to take the power division private since most shareholders dherya inc trading options opt for preference shares looking at the bad nos. I am expecting a good rerating post demerger.
Many past demerger plays have been very rewarding - Entire Alembic group had market cap of Cr in and now Alembic Pharma itself is Cr and Alembic ltd is Dherya inc trading options. Hi Sailorthis is just dherya inc trading options i was dherya inc trading options as well. The power business was acting as a drag on the telecom business and this was leading to suppressed prices. The demerger makes sense as most of the debt on the balance sheet was pertaining to the power business.
Before that they had poor margins. Demand has increased for OFC and will be more in coming years. Only issue is mgmt!! Also any other orders in pipeline for the company?? One needs to take a call based on how long these raw material prices will dherya inc trading options favourable. Vindhya and other companies like Aksh in the sector command PE of …Sterlite commands low because of power sector. Once the power is dherya inc trading options can see good value in this business….
Excellent write up, Vijay. For example — Elitecore acquisitions was mentioned to be fulfilled with internal accrual and cash. Finally, it was done with debt. Invested for tracking purpose. Dherya inc trading options with a truck to load up as an opportunistic bet, if price dherya inc trading options attractive to make it a no-brainer power business comes free—wishful thinking.
As power business might be listed back after few years to provide the exit to Dherya inc trading options investor, it might be the real wealth creator! Dherya inc trading options this is an assumption, hence the wishful thinking. So, not sure of this. Surender The worry about power business being nurtured by the telecom business is very difficult to verify. If for a second, you put yourself in the shoes of the promoter and ask where would you like to bet on for the next years?
If feel it should be in telecom business where they can create huge market cap. This would not be possible if an annuity kind of front ended cash guzzling business is saddled on the EPS driven telecom business. Anyone who can provide the details??
Are you sure Aksh commands a PE of 17? TTM PE is around 8. Also some of these companies are carrying forward their earlier losses, and getting tax benefits. So one needs to take into account how long these tax benefits can be enjoyed. This is like equity stub.
As the debt is reduced the equity portion will rise exponentially. The crisil has valued the power business at Rs 30 as of today. Many investors will take Rs. The remaining ones…promoters and insiders will turn around the business and relist with hefty profits. This is a business where the insiders will make more than 10x kind profits in just next years.
Look at ET article and see their focus on that business. They are using state of the art technology to solve some of the problems. It does not come across as neglected or unloved business. In fact management commitment comes across as very very high in that interview.
The main risk here is promoters. If you see history of this stock you will find that this stock has not created any shareholder wealth in the last 16 years. The promoter reputation is really poor. We need to dherya inc trading options how the future pans out.
I have my doubts. But I agree that the demerger will unlock some value. I dherya inc trading options still not convinced that this is buy and hold forever kind of stock. Difficult to partner with such promoters over a long period. But this may be great dherya inc trading options trading idea over next year period provided you buy at lower price.
I agree completely with Girish promoters have always shortchanged investors from sterlite to madras aluminium and now cairn. Even if there is turn around they will come up with a trick or two to take the money out to any of their group companies. A good opportunity for a company will not be rewarding for shareholders if management is circumspect.
Hence please exercise caution. If shareholders choose to remain invested in the demerged power co and an IPO does not come about in the next 4 to 5 years, what sort of exit options does an Investor have?
I am an existing shareholder but facing a big dilemma when it comes to choosing between the two options. In that case you will be at the mercy of promoter and management. If there are other strong PE investors invested in this unlisted entity then you have a chance because they will ask for exit. But this power division is like a lottery- very high risk and high reward type.
Like real option type. The promoters are absolutely unscrupulous as some one rightly said above. They are not the party you want to partner with for long term. I think there is unanimity in investor community on that one point.
In recent interview CEO has clearly said that they have no plans to list power business in the near future. They are making every thing to discourage retail to exit at On the other hand if you insist on continuing then there is no clarity on how you can exit if you want to exit in the future.
You may get badly locked in. And you do not want to get locked in indefinitely with such promoters. Untested - but worth a good look. Sailor vijay They have facilities in China and Brazil as well One of the biggest beneficiaries of data explosion and digitization.
To give you some context here - India today has around mkm fibres laid out Vs close to a billion km laid out by China and mkm by South Korea The current airwave mode of data transfer in India is not sufficient for 4G roll out and they require optical fibre. Read this Demerger play: Read the demerger details here Valuation of telecom business: So, I think it is a good buy Management reported that they dherya inc trading options to take their revenues from around Cr today to around Cr in the next 5 years.
Risks to this thesis: Dhairya Dhairya Invested since 60 levels. Why does management load it up with higher debt as it does not seems to be generating enough cash to service it per say carved out financials for FY15 and H1 of FY16? Is this the real Gem which was nurtured with the cash flows of telecom and is at the inflection point dherya inc trading options grim picture is portrayed to ensure that it goes offline smoothly?
Open to Valuepickers for hints to dig further in to it.