I think Ajay Piramal might be aiming to be the Warren buffett of India. Looking at his moves so far, he might be investing in businesses which might generate a good amount of cash a few years down the line. And PHL might be heading the Berkshire way. It remains to be seen how the Indian stock markets treats an investment company and continues to apply how much discount to its NAV.
Buffetâs Berkshire was lucky to have someone of the calibre of Buffet and Charlie Munger running the show. Without them Berkshire would not have been anything. There are many investment companies in the US who do not get any premium at all (sometimes they are available at a discount). So, if the bet is on Ajay Piramal, the stockpicker, then I am not sure I am willing to bet!! I would rather fancy my chances 
@Hitesh patel
I dont think ajay piramal wants to emulate buffett model. Because buffett and munger mainly invested in good business and allocated capital very efficiently among them. They never involved in running the business and left that part with respective managers.
In piramalâs case he wants to build two greenfield business from scratch (one is financial sector and other one still in discussion stage) using his experience in building formulations business. He wants to take use of wide array of opportunities thrown by emerging economy like us.
Regards
Jagadees
hi jagadees,
If you look at the IndiaREIT and the finance company he has put the management in the hands of the professionals. I guess since he is well versed with setting up or acquiring pharma capacities he himself might remain at the helm of the pharma company.
What I think he plans to do is something similar to Buffett wherein most of his businesses tend to generate a lot of cash after a few years and he will always be sitting on money waiting for the opportune time to buy good businesses at distressed valuations.
If the current market uncertainty is to persist for longer time I think he would be very well placed especially to acquire good pharma companies/facilities which suit his purpose in growing the existing pharma divisions.
regards
hitesh.
Has anyone had a look at this development where the promoterâs holding company is being merged into Piramal Enterprises?
I feel that InGovern is right in asking that shareholders vote against this in the EGM. The intention of the promoters is unclear. Why canât they just do an inter-se transfer instead of doing a merger between the holding company and the listed Piramal Enterprises.
Something stinks.
The notice to shareholders does not even disclose the financials of the holding company. You will need to go their office to check them out. We donât know what assets and liabilities are coming into the listed entity as a result.
Anyone who has studied this?? Thanks.
Hi Kunal
I agree that this transaction could have been more transparent or could have been avoided. I am not a tax expert but feel that this transaction is done the way it is done to avoid capital gains gains at promoter or promoter entity level. Because there could not be any other advantage of this transaction. I derive comfort from following disclosures in court convened meeting docs:
- All costs, charges, taxes including duties, levies and all other expenses, if any, arising out of or incurred in connection with and implementing this Scheme and matters incidental thereto shall be borne by PHPL and / or its shareholders. No cost, charges, taxes pertaining to the scheme shall be borne by PEL [Piramal Enterprises ltd] Also, there would be no impact on the financials of PEL and the asset and liability position of PEL will remain unchanged
Further, the Scheme also provides that the shareholders of PHPL [the company which is being merged with PEL] shall indemnify PEL and keep PEL indemnified for liability, claim, demand, if any, discharged by PEL and not recorded in the books of account of PHPL or any other liability, claim, demand, suit or proceedings made, lodged or filed by any third party(ies) including Governmental authorities and which may devolve on PEL on account of this amalgamation.
And lastly as per the link you have posted on the merger date PHPL will not have any debt in its books.
Disc: I have position in PEL, so my opinion can be biased.
i dont understand if 2 companies are merged how is it possible that assets and liabilities of PEL will not get affected.
2). The expenses will be borne by PHPL , good. But what will be the share swap ratio ? it will most likely be biased towards phpl. So PEL shareholders will be affected. When Piramal life main business was merged with PEL , Piramal life got a favorable term as promoter holding was higher in piramal life.
PHPL holds investments in real estate n infra which are in depressed condition but promoters are unlikely to undervalue their own assets.
Why havent they disclosed much about PHPL.
I am surprised that the stock of PEL is rising ?
may be i am missing something. but all this doesnt look good.
first of all why did promoters have a separate company viz PHPL , they could bave invested thru Piramal healthcare . OK, they decided to have separate company for some reasons ( different business etc) BUT then why do they want to merge it now, esp when the real estate / infra business is running thru tough times.
[quote="koduriappa, post:68, topic:522501656"]
Elnet Technologies Limited provides infrastructure services to software and business process outsourcing industries in India. It manages a software technology park, located in a 3.16 acres plot in Taramani, Chennai. The company was incorporated in 1990 and is based in Chennai, India.
It has of just Rs4 crore that is supported by reserves of around Rs28.98 crore, which is 7.49 times It has a share book value of Rs82.46. The promoters hold 52.48% while the investing public holds 47.52% stake in the company. Promoter has increased their stake by 1% between July-September 2012.
Its Net profit zoomed to Rs1.44 crore for Q3FY13 against profit of Rs1.24 crore in Q3FY12. The Q3FY13 crore as against Rs4.25 crore in Q3FY12. For the first nine months of FY13, net profit zoomed crore as against a profit of Rs3.25 crore during year. Total turnover for 9MFY13 was Rs15.79 crore as against Rs12.54 crore in 9MFY12. It reported an EPS of Rs3.60 for the Q2FY13 while for the first nine months of FY13, it reported an EPS of Rs10.35. following table shows the company's the last four
10.53
2012-13 (E)
|
14
The company has paid regular dividends since many years. It paid 12% dividend for FY11 and FY12.
The company may declare a record net profit of around Rs5.60 crore and an EPS of Rs14 for FY13. current market price, the share price discounts less than 3 times its FY13 (E) EPS of Rs14. The stock appears undervalued and is likely to attract value buying at this level.technically, the stock has made a strong base around Rs33 a close above 200 days EMA which is an encouraging can buy this stock with a stop loss of Rs34 on a closing basis. On the upper side, it will zoom to Rs47-50 level in the short term and easily kiss Rs70+ level in 12 to 18 months at a P/E ratio of 5. Its all time high rate is Rs176.25.
**
[/quote]
Financial Performance turnoverwasRs5.45 27.38%toRs4.14 thecorresponding period of theprevious
The performancein
Out-of-topic spamming,
Administratorji,
Please have a look at this.
-Subash
About the Company ElnetSoftwareCity, anequity Link: http://www.valuenotes.com/market-action/market/market-action.php base itsequity Link: http://www.valuenotes.com/market-action/market/market-action.php .Financial Performance turnoverwasRs5.45 27.38%toRs4.14 thecorresponding period of theprevious
The performancein
|
Year |
Net Sales |
Net Profit |
EPS |
|
2008-09 |
19.02 |
3.95 |
9.87 |
|
2009-10 |
16.44 |
3.75 |
9.38 |
|
2010-11 |
16.07 |
3.65 |
9.12 |
2011-12 |
16.88 |
4.21 |
21.25 |
5.6 | Atits
Piramal Enterprises has invested 1000+ Cr in Infra- Specifically roads and renewable energy.
Updates on Piramalâs OTC business.
Few important points,
1). According to senior officials, the OTC division of Piramal Healthcare aims at touching the Rs 1,000 crore mark in the next three-four years from the current revenue of Rs 240 crore.
2.Since its set-up in 2007, the OTC business has grown at a compound annual growth rate of 33 per cent and has jumped ranks from 40th in 2007 to 9th in 2012.
3.i-pill has an annual sales revenue of Rs 80 crore.
Result highlites
Revenue for FY13 grew to Rs. 3,544.3 Cr.; a growth of 50.7% over FY12
Q4FY13 Revenue was at Rs. 938.6 Cr.; a growth of 36.4% over Q4 FY12
Healthcare Businesses:
Revenue for FY13 grew to Rs. 2,440.6 Cr.; growth of 22.8% over FY12
Q4FY13 Revenue was at Rs. 643.5 Cr.; a growth of 12.1% over Q4 FY12
Financial Services :
Revenue (incl. invt. income) in FY13 grew to Rs. 393.2 Cr.; growth of 44.2% over FY12
â Loan book managed by PHL Finance stands at Rs. 1,591 Cr. as on Mar 31, 2013
â Funds raised by INDIAREIT - Rs. 4,257 Cr. as on Mar 31, 2013 compared to Rs. 3,857 Cr. on Mar 31, 2012
â PEL made two Structured Investments totaling Rs. 925 Cr. (of this, Rs. 500 Cr. was made in April 2013)
Information Management â DRG :
Revenue of Rs. 649.6 Cr. delivered in FY2013 since the acquisition in June 2012
Q4FY13 Revenue was at Rs. 154.4 Cr.
Board has recommended a dividend of Rs. 17.5 per share (i.e. 875%) of Rs. 2 each.
Regards,
Shanid V H
Few days back my 2 yr old kid, got a âperfumeâ in a Birthday return gift hamper !!! and i found that the perfume is from PiramalâsâŚ
http://www.piramalenterprises.com/otc/product/jungle-magic.html
Then i read this article today,
Some key points from the articleâŚ
1). TheIndian Fragrance Industry, which is growing at a compounded annual growth rate (CAGR) of 40 per cent, is likely to reach a figure of Rs 10000 crore by the year 2015.
2). the perfume market is growing at about 30 per cent and is currently poised at about Rs 1,500 crore.
3.âRising demand for fragrances from tier II and III markets is the real growth driver of this industry as a result companies are gradually shifting their focus from metros and exploring other markets and gearing to launch a range of affordable deodorants, perfumes and colognes during summers,â said the ASSOCHAM study.
4.Teenagers are a significant segment in both male and female categories as an average teenager at an urban centre tends to spend anywhere between Rs 500 and Rs 2,000 only on fragrance including - deodorants, roll-ons and perfumes.
5.Besides, perfumes are a significant gift option and as per an estimate over half of perfume sales account for gift buying. Thus, companies in the sector are putting additional focus on packaging and constantly keep re-inventing themselves to lure consumers and push sales.
Piramalâs are planning for :
Jungle Magic to be a Rs 100 crore brand over the next 5 to 7 years.
Nothing significant given their scale, but the growth rate of the business is definitely worth taking note of.
Anybody following piramal? How do you find a range of good valuation for such companies? Past and future are not comparable at all. Though individul segment s are growing though and with such capable management, it may be good compounder. But wht would be good price to pay for this?
This is a very interesting & intriguing piece of news for Piramal Enterprise & Vodafone.
Of course , not everything is clear. Vodafone India is being valued at almost 50% less than last year by Vodafone UK (parent) and yet Piramalâs saying they are getting their desired/promised return of say 18-22%.
Every thing depends on the fine print in the agreement between AP and Vodafone. I donât think Ajay Piramal will settle for anything less than 20 per cent CAGR on his investment. Maybe Vodafone will give a huge dividend to its share-holders or use its cash hoard to buy out its Indian affiliates.
A lot an also change by next year when Piramal offloads it stake:
Piramal got decent return from the vodafone sale. Looks like Piramal is walking the talk. To me it looks like more like mutual fund with good FM at its chairâŚ
It is very difficult to analyze and take call on PEL by any of the conventional valuation measures primarily because
)- PEL is in capital deployment phase and it will take some time before it starts yielding results
)- AP almost always does things which are unconventional and beneficial in the long term even if it means sacrificing short term gains. This runs contrary to the expectations of the majority of market.
)- Thirdly, AP has consistently used leverage to its advantage and it is no different this time as well. Inspite of having so much of cash with him, he has still used leverage to deploy capital in new businesses.
Thus, just looking at net profits and earnings will not give true picture! It may be more sensible to look at EBIDTA level and balance sheet rather than bottom line levels!
Dhwanil,
You are right on all counts. I still find it extremely hard to value, since the business consists of several divisions and itâs not at all clear which segment is in which stage of the investment life-cycle.
How would you value PEL?
Thanks,
-Prasanna
We may be close to some headway in the new drug discovery in the Pharma business 
I agree its difficult to analyze and thus we dont see Buy calls from analysts as they dont know what to make out of this scenario. My question is - does not this create oppurtunity to buy well diversified business, with excellent CEO who is also excellent investor and honest, and with no market rush to buy this, we will be getting this company relatively cheap? I know this has been talked many times but looking at things he has done after sale to abott, I dont see much reasons to complain.
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Almost all businesses are growing
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Cash has been deployed sensibily with good return
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Acquisitions of good businesses -
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Drug discovery is going to be launch new drug globally - almost alien to indian pharma.
What is to compain and how much is downside? Even if you cannot value exactly, how much downside you see at the CMP?