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Posted: 13/Feb/2007 at 2:23pm
I was informed by my cousin that these guys take all decisions at the top and there is nothing delegated. The middle level people had to call up the management each time they wanted to take a decision etc etc.Staff members are not allowed to access the internet from office and he had a big problem since he could not google on any information etc etc.Only selective executives had access to the net and if someone wanted any information he had to go across to their rooms to search/mail etc.This is what I heard from someone who was working there and he was frustated and finally left the company.
But let us not base our stock purchase decision only on this feedback since investing is more then one individual at any point in time.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
I was informed by my cousin that these guys take all decisions at the top and there is nothing delegated. The middle level people had to call up the management each time they wanted to take a decision etc etc.Staff members are not allowed to access the internet from office and he had a big problem since he could not google on any information etc etc.Only selective executives had access to the net and if someone wanted any information he had to go across to their rooms to search/mail etc.This is what I heard from someone who was working there and he was frustated and finally left the company.
But let us not base our stock purchase decision only on this feedback since investing is more then one individual at any point in time.
I am not sure how many will agree but 90% of Indian listed Co. Management run business like their household affair.
Though this seems like a level 2 analysis to you here r my initial findings:
EPS growth of about 30% in the past 2 yrs gross NPA less than 2% Net NPA almost zero On P/ABV basis the stock trades at 1.0x Debt to Equity Ratio is 4.0 Year to Date PAT increase 47% FY06 PAT increase 71%
Annual loan disbursements have grown from Rs. 9,156 mn in FY03 to Rs. 11,895 mn in FY05, which translates into a CAGR of 14%. The disbursement growth rate has picked up substantially in FY05 to 50.0% and 70.0% in Q3FY06.
Reports (though i don't give much importance to these kind of reports they do explain the current state of the company)
Emkay expects SREI`s net revenues (NII plus other income) and net
profit to grow at CAGR of 44% and 44.8% to Rs 3.7 billion and Rs 1.6
billion respectively over FY2006-09E.
Joined: 01/Jan/2006
Location: India
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Posted: 13/Feb/2007 at 4:07pm
Originally posted by psimajin
Originally posted by basant
I was informed by my cousin that these guys take all decisions at the top and there is nothing delegated. The middle level people had to call up the management each time they wanted to take a decision etc etc.Staff members are not allowed to access the internet from office and he had a big problem since he could not google on any information etc etc.Only selective executives had access to the net and if someone wanted any information he had to go across to their rooms to search/mail etc.This is what I heard from someone who was working there and he was frustated and finally left the company.
But let us not base our stock purchase decision only on this feedback since investing is more then one individual at any point in time.
I not sure how many will agree but 90% of Indian listed Co. Management run business like their household affair.
Absolutely but that is why we should invest in only 10% of the companies. I place the greatest amount of stress on professional managment irrespective of who the owner is. Companies that try and develop that creamy managment structure always outperform in the longer term. We could have an odd Narayan Murthy or a Sanjiv Bajaj but these are also professionals but when Sanjiv Goenka tries to get over his professional team I an worried. Try and talk to someone who is either a dealer or works with any of the Birla/Bangur group companies and you would know what the style of management is. They are completely unperturbed by what the company is doing but are interested in how much they can extract for themselves. No wonder Hindustan Motors is still available at amarket cap of US $ 70 million while that is what Maruti (inspite of being a Govt. company for a long time) would have in its Bank account.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
Basantji, I think with the evolving india the family controlled 90% businesses shall also evolve to be more professional and result oriented. Investors would love every promoter to be like Mr. Biyani or Bahl but unfortunately that wouldn't be the case in practicality.
Also I would love seniors like you and vipul to give some inputs on how to judge a quality management... I initially invested in Biocon thinking and personally knowing Kiran Muzumdar as a gem in the bio-pharma sector, but then has ever Biocon delivered??
I have atleast 3-4 people known to me who immensely value and respect Mrs Muzumdar and also the value biocon has built for its employees. None of them ever crib about anything going wrong at all. But for the investors - Biocon has been a nightmare since its IPO ... and I lost all faith on judging managements !
Joined: 01/Jan/2006
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Posted: 13/Feb/2007 at 4:44pm
Originally posted by tushar
Basantji, I think with the evolving india the family controlled 90% businesses shall also evolve to be more professional and result oriented. Investors would love every promoter to be like Mr. Biyani or Bahl but unfortunately that wouldn't be the case in practicality.
Also I would love seniors like you and vipul to give some inputs on how to judge a quality management... I initially invested in Biocon thinking and personally knowing Kiran Muzumdar as a gem in the bio-pharma sector, but then has ever Biocon delivered??
I have atleast 3-4 people known to me who immensely value and respect Mrs Muzumdar and also the value biocon has built for its employees. None of them ever crib about anything going wrong at all. But for the investors - Biocon has been a nightmare since its IPO ... and I lost all faith on judging managements !
There is no definete measure to know about the credibility of the management but there are secret sensors to decide on it. You may look at this:
Finally a good managment cannot necessarily increase the stock price because that is just one facet of investing. We need to see how cheaply Biocon was valued at the time of IPO and whether there was anything in terms of value/growth for the investor. I have never researched Biocon but from what I remember that company had nothing on the table for the retail investor.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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