Dilip Buildcon - The best-in-class execution!


(DaNjY) #140

In which part did you find corporate governance issue in DBL like financial,result ,order book , working model etc. Can you please share with us so it will other to understand better.


(himanjim) #141

https://www.equitybulls.com/admin/news2006/news_det.asp?id=236837

COMPANY TO START NEW BUSINESS ACTIVITY (they say DBL will not run this as a business activity and will only act as a service provider?? What that mean??)

  • To carry on the business of purchase and sale of petroleum and petroleum products
  • To act as dealers in and distributors for petroleum companies
  • To run service station for repair and servicing of automobiles and to manufacture or deal in fuel oils, cutting oils and greases

Discl-Invested


(paraa) #142

I believe Rohan Suryavamshi had mentioned in the recent interview that this agreement with IOCL was an one off thing.
The agreement though gives an impression that they are venturing into this business.
I don’t see any issue with it as companies do tend to do these kind of one off works to customers with whom they have long relationship with.


(Rohit) #143

Stock is down 15% today. Is their any news ?


(paraa) #144

You can only sepculate on the price action when the market keeps discounting good news like new order wins and early completion bonuses.
I believe market feels the liquidity squeeze in the system will affect the construction sector and projects will get stuck.
Also the market is severely punishing any stock which has uncertainty attached to it.

From valuation perspective,this stock is at attractive levels.However this is proper bear market for midcaps and smallcaps now,where no price is low price.


(abhishkjain2626) #145

not sure if this has been discussed before, but can someone please explain the reason behind supernormal ROEs for Dilip? a few months ago remember a news regarding CBI raiding premises of the promoter. There are such huge corp. governance/political favor linked risks lurking in DBL and more so in many infra stocks…

another past article from 2012:


(atul1082) #146

The above news article is of 2012.


(paraa) #147

The above incident is the reason the market believes if BJP loses Madhya Pradesh elections,it will be trouble for Dilip Buildcon as its said to be close to MP CM.

The company has been questioned on this numerous times in the investor meets and their refutal has been that they are present and operate Pan India even in non BJP states and only 5% of the revenue comes from Madhya Pradesh and more than 90% of their order book is from Central govt.

Unfortunately in India ,there is always a political risk associated with road construction projects and may be L&T is the only exception.

Bet on Dilip Buildcon is on their execution capabilities based on the track record and comparitively decent balance sheet.

The stock is quoting at 10 times trailing earnings and 7 times forward earnings.

One has to look at it objectively and think whether the current price has accomodated the political risks(which is diffuclt to quantify).

In these times of fear,we also need to consider the opportunity size.India needs big infrastructure development in the coming years and the number of players who can execute these road construction projects are a few.


(sushilkc) #148

Additionally other thing is that company getting into unnecessary controversies… 2 Qtr back it was delay in publishing the Quarterly results which lead to rumor on auditor resigning and now it is changing the MoA for petroleum products which I do not find convincing at all. All these things dent the confidence in the company at a time when people want to be safe than sorry. With 75% promoter holding it is really hard to digest these actions as the drop in Mcap would be hurting them the most.


(Pod85) #149

DBL’s HAM projects are not achieving financial closure via conventional PSU/Pvt Banks. The company has got financial closure letters from NBFCs at high teen rates. This will hurt them and their deal with SREM group.


(Lalit Kumar) #150

Can you please provide the source for this information ?


(Pod85) #151

Ask them during the q2 results concall see what they have to say. You will get the source depending on the answer. Being an investment banker I can’t say more than that.


(Sarabjeet Singh) #152

I was looking at the shareholding data for last and current quarter. I dont see major diff between MF holding , FPIs or for HNIs holding in excess of 2 lakh equity capital. Then whose selling triggered such a major correction in last quarter ?

EDIT : Comparing last 3 quarters too dont tell much

Disc : Not invested but tracking this scrip as I have other Infra sector investments