Ok, let’s agree to the fact that Management is not good, but if business continues to do well for let’s say at-least another year or so, at 25% ebidta on 3000 odd crore sale ( going by mgmt guidance, IF steel cycle continues) we are looking at (2700+7500) : 3400 / 750 or EV/EBIDTA multiple of ~4 by Mar’19. Isn’t this cheap or worth the risk taking?
Two big IF’s -
1.How strong is the steel cycle this time around, how does these cycle play out?? Mgmt seemed confident on business new channel but would be great to know across the board.
- How can we ensure that minority share holder will not be passed over by “questionable” management?
I have not taken into account the plastic division - whose demerger management has again pushed back by 6 months. That itself could again provide more impetus to company.
Not sure about the rights issue, if that goes thru than it will provide a good support of stock at 208 rs.
Seniors please advice and share your perspective.
Disc : Invested from higher level.