The Sai Service management has proposed delisting of shares from BSE. Any boarders invested in the company may find the below note helpful in arriving at a decision: 

Sai Service Station Ltd is currently in its 24th year of operation. It is one of the largest Automobile (2/3/4 wheelers) dealers in India and is promoted by the Kalmadi family from Pune. The company is a very good play on the huge retail auto sales & service opportunity.

Financial Highlights:

Equity (Face Value per share of Rs.10): Rs.4.07 crores

Market Cap:  Rs.65.93 crores (as per price of Rs.162 on July 25, 2008)

Promoter Holding: 69.06%

Year ended March 31^st, 2008:

Revenue: Rs.901.48 crores

Net Profit: Rs.11.18 crores (including extraordinary income of Rs.0.41 crores) items]

EPS: Rs.27.46

Dividend per share: Rs.10

1^st quarter ended June 30, 2008:

Revenue: Rs.233.69 crores (29 % growth over same period last year)

Net profit: Rs.3.15 crores (99% growth over same period last year)

Key Business Highlights:

 1] The primary business of Sai Service is Auto Dealership. It is the largest Maruti dealer in India and also holds dealership for Bajaj Auto. It also holds dealership for Mahindra.

 2] Sai Service is a professionally managed multi-product, multi-locational company with ISO 9002 certification. It has also set up service stations equipped with most modern computerized equipment and manned by experienced and qualified automobile engineers. The sales showrooms and service stations are located in Mumbai, Pune, Goa, Kolhapur and Kochi.

3] Sai Service has lots of valuable land holdings in and around Pune and also holds valuable real estate in Goa and Mumbai. There is a strong possibility that idle Pune land may be monetized.

4] The company has a subsidiary called Sai Service Sales & Accessories Ltd which as the name indicates, is in the business of sales & accessories.

5] It must be noted that though the company has around Rs.70 crores of debt, out of the total debt on the books, nearly 90% is in the form of cash credit/inventory funding and not long term in nature.

Future prospects:

1] Car penetration in India is just 7 cars per thousand persons indicating a large growth scope.

2] The ongoing road development program will improve connectivity to cities, villages & ports through a network of highways & interconnecting roads over the next 3-4 years leading to increase in demand for cars.

Valuation:

For the current year, although overall Auto demand has been sluggish due to the prevailing high interest rates, I expect Sai Service to report a net profit of around Rs.12.50-13 crores and an EPS of Rs.31 to 32.At the current price of Rs.162, the stock is under priced on the basis of its fundamentals, which are supplemented by the land monetization opportunity; leaving a very good scope for appreciation