@iamabhi_2015 wrote:
Hi all…just wanted to start a value discussion on sil investments ltd…i have certain remnants/ rationale that makes it interesting…
I will refer to some notes that made my conviction even stronger along with my own experience in agri-tech india ltd.
- I would start with agri-tech ltd where the stock rose from rs 7 to rs 183 in 2 years time…
My experience for sil investments comes from agri tech ltd where the company held 19.73 lac shares of nath bio genes when it( nath bio genes ltd) was trading at rs 130. It sold its investments in 2nd and 3rd quarter of fy 17-18 where the stock rose from rs 40 to rs 183( 52 weeks high)
The stock posted an eps of rs 6 in q3 of fy 18. Sill it moved from rs 60 to rs 180.Dear investors, a similar story has panned out in Sil investments where the company has sold its investments in group companies( zuari global and zuari agro) and the eps rose drastically from rs 17 to rs 127.70 YoY( fy 18 vs fy 17)
The stock hit a high of rs 580 on 7th December, 2017 and now it is trading at rs 370.
Now sil investments is a debt- free company…it repaid loan of rs 72 crores and has made its enterprise value shot up like anything…
This is true that in india, holding companies do not get good valuation and they trade at a discount of 60-70% to their Net Asset Value(NAV). I was asked not to invest in holding companies by many investors but what my experience teaches me is that when holding companies start to book profit from the sale of its investments, there is a huge value unlocking that happens. The PE theory is irrelevant for Sil. even comparison with peers is irrelevant somewhat due to the exceptional event of selling of long term investments and consequent booking of gains. the selling of investments is a non-event as it is only bringing the Book Value per share closer to the NAV per share by regognition of the gains inside the Balance Sheet which till now were outside the Balance Sheet…So with 330 crores cash reserve and with debt free balance sheet, market should reward this sooner.
This is true that no script moves without operators blessing! It is just a speculative assumption that the operators want to revise the circuit filter from current 10% to 20% which is due in the first week of june 2018. So i have a target of rs 1000 in 6 months from now…
Disclaimer- I have substantial investment in this company… My views might be biased…i am not a sebi registered analyst…Please do proper research before investing…happy investing!
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