Very Nice presentation
Attached is my presentation on HIL- Presented in Valupickr Forum Bengaluru Chapter on 19th May 2019.
Disclosure: Vested interest and biased viewsHIL-Presentation-WithoutVideos.pptx (1.5 MB)
@atulastra Normally, i worry when company do foreign acquisition (big size) and increase debt. There are many examples where such attempt failed and company gone in trouble.
Hence, i will wait and watch to stabilise the new acquisition done by HIL.
Posted results are not so great as interest is eating in to low margin business. let’s see if the bet pays off. I invest for minimum 5 years. Thats the time company with strong base normally shows good returns. Happy investing
Disclosure: Vested interest and biased views
I was a bit more taken aback by the Parador acquisition. A quick back of the envelope calculation suggested that the business was loss making and that was what was pulling down the margins.
Maybe I’m a pessimist, but I fail to see how buying Parador outright is going to benefit the company without some major restructuring. It is irritating how the MD is quick to point out the revenue potential in interviews and presentations, but goes silent when it comes to the margins.
Hi Atul, Thanks for your ppt on HIL.
The Parador acquisition as few ppl above have also pointed to be costly.
I wanted to bring this to the discussion:
acquisition cost of Eur 82.8M, however only 32M was raised in Euros with interest cost of 1.6% while >60% was raised in India at 8.6% interest rate.
Do you think the Euroean banks may not have agreed to pay more loan for this asset. and if true, does it mean a costly acquisition from HIL perspective.
Very interesting to see the margins as one cannot earn from a business having 4-5% margin but paying interst at 9%.
On contrary if you see it as complete solution under oneroof for the customers it becomes a different story altogether, as a whole they can extract more money from every single customer. They don’t have high margin business and cost needs to be watched closely.
Annual report post acquisition is not available. I will be able to make more comments post going through the annual report of the company. The stock to me seems to be a safe bet with atleast 3 years of investment view. The bet is on sector revivial with PM promising to double farm income by 2022. Volumes will bring in the profits not margins.
Hope I could answer some part of your question.
Disclosure: Vested interest biased views