Earning per share for June 2009 quarter= 41.92 Best in many years...Wanted to not buy, but numbers are extremely tempting... am thinking stock will get re-rated, once they give similar numbers for some quarters more.

Originally posted by vishmitt I have been holding Visaka for more than a year @45, and don't go by CNBC!   IMO, Visaka is far better than Hyd or other companies in the industry. - It used to be smallest of the 4 main listed companies 4 year ago, and now is No 2, and can be ahead of Hyd in 2 years time. - Its ROE is less than Hyd right now, but with increasing cash flow, and paring down of debt, I expect this to improve. - Capital allocation wise too, I find it better than Hyd and Ramco. - Looking at the dividend history, details in annual report, and my interaction with the mgmt, I find Visaka to be investor friendly. - Generally, I would avoid C K Birla companies from competence point of view.   Also, the valuation in terms of P/B - Visaka is 1, Hyd is 1.7. Div Yield - Visaka 3.2, Hyd 2.4.   Visaka also has a small textile business, which is also doing very well.

Sanjoy Bhattacharya  had written about Hyd Inds in the Forbes India a couple of weeks back

Originally posted by Hitesh Shah Originally posted by smartcat The really long term business prospects of Hyd Ind and Visaka is suspect - because of the usage of asbestos.   Asbestos usage is banned in most developed countries because of health risks. .... I remember asking about this elsewhere. Of course, we Indians are "different" and so asbestos is still popular. Just wait till some phirang decides to sue. Strangely, Greenpyss is silent on this matter. Maybe, they're more occupied with opposing GM brinjal currently.

I think there is too much of negative publicity against the word "asbestos", that it just envokes negative emotions inside our brains. As I understand, there are different forms of asbestos - and the "dangerous ones" are not used here in india for roofing. The annual report of visaka mentions the technical details of different types.

In Brazil - one of the largest miner of asbestos - government finds that AC roofing provides shelter to lot of poor people.  So its a question of low-cost housing to poor VS negative publicity against all forms of material. Same is the case with india - esp in rural areas, where such low-cost-shelter helps a poor guy shifts from mud/thatched roof to something better. Many of us too use AC roofs at the top of our houses for roofing even in cities.

I dont feel that historically markets had been worried about "asbestos"/ Had markets been too much worried about negative emotions attached with Asbestos - these companies wouldnt have acheived good valuations which they did in 2005 or 2006. Most of these companies were valued at 2-3x book & 12-15 pe during that period...........were the markets crazy then or is it now??....... Only in 2007, the industry faced problem due to overcapacity, which was subsequently rectified by growing demands in cy2008 and cy2009.

Its not that these cos are not producing profits - they have done well over years. Hyderabad IND is there for more than 40-50yrs - Visaka is there for 20-25yrs, Same with Ramco.. ... and the promotors are doing capex to increase the capacity even today. So why the fear of threat to the business?? 
And they have paid consistent dividend, even in bad yr of 2007.

Hyderabad's book per share fy10 should be 330-340 by yr end. VISAKA should be 150-160 - selling for less than book ... Their PE is less than 5  ..  I think even today, they arnt even yet fetching fraction of 2005 value, when it wasnt even bull market.


Edited by value - 19/Oct/2009 at 1:13pm