PE is dependent on the business model. Cigarette is health hazardous but still ITC trades at 25PE consolidated (incl Hotels, Paper which is low PE game) so along with health one has to see the model and in that context Visaka is not a good business so should be valued at less then 10 times earnings.
Could you please explain why do you think visaka/hyderabad isnt good business model?
Joined: 20/Oct/2008
Location: India
Online Status: Offline
Posts: 1997
Posted: 06/Mar/2011 at 5:09pm
Cement sheet companies has no pricing power due to customer being rural folks.
Its rather a volume game, in order to increase the volume realization these companies always spends for enhancing the capacities but keeps price as dictated by market as well as competitors. So best to look for RoCE figure to value such companies if one is interested. As long as investec capital yields good return YoY, company should do well.
Here Hydarabad Ind seems to be the best play. Better RoCE, better spread to multiple states and tempting dividend at current level.
Such stocks are like 3 year FD where dividends comes QoQ and on maturity it pays much much higher interest rates of return.
The former MD ( promoter ) has joined politics and has made his wife as new MD ?????.
The company has recently made an investment in Singapore based some sports company.?????
I found lack of clarity on power business - if i remember correctly it is not 100 % owned by visaka.
there is competition from galvanized sheets. At roadside DHABAS i have noticed that they generally use galvanized sheets. However, asbestos sheets are better for house use as they have better insulation.
Long term thinking improves short term decision making - Brian Tracy
Joined: 15/Sep/2008
Location: India
Online Status: Offline
Posts: 779
Posted: 07/Mar/2011 at 4:51pm
seems to be a case of Politics being more profitable than business.
Originally posted by manishwithted
I was impressed by the AR of the company.
The former MD ( promoter ) has joined politics and has made his wife as new MD ?????.
The company has recently made an investment in Singapore based some sports company.?????
I found lack of clarity on power business - if i remember correctly it is not 100 % owned by visaka.
there is competition from galvanized sheets. At roadside DHABAS i have noticed that they generally use galvanized sheets. However, asbestos sheets are better for house use as they have better insulation.
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