Virinchi... A bet not to be missed


(rishabh) #45

exactly why hospital which is totally unrelated business.

why high levels of debt out of total cost, promoter contribution is very low.


(J2EE Professional) #46

did anyone get reply on the employee cost related query?


(Ajith) #48

I did not get any response from investor connections. Perhaps can try to get him on mobile.


(Vivek Mashrani, CFA) #49

You can call Ravindranath Tagore from IR >> +91-9866612417


(Alphin) #50

Vivek did you visit the hospital or talk to management? If so pls share the details.

If not we can collate various queries and then someone can ask during concall or visit.

My queries are.

1 What is the lease amount and debt amount to be paid for the hospital?

2 Employee salaries for hospital and it dept.

3 Future plans for hospital beds expansion and how funding will be done for same.


(Vivek Mashrani, CFA) #51

I have not visited nor talked with management. As per my knowledge there is no concall happening for this company. I think given the size of company only AGM that happens in August/September could provide good platform to interact with management.


(J2EE Professional) #53

Virinchi awarded as ‘The Best Indian IT SME for the year 2015-16’ by HYSEA.

On a separate note, the stock has gone to past its previous all time highs of 100rs.


(Rejinoldo) #54

The owners were into health care business right from early 2000. i dont think this is a case of diworsification. Free cash flow generation is a concern.


(Alphin) #55

Promoters stake up 41.7% by way of allotment of shares as part of Bristlecone hospital acquisition.


#56

A detailed presentation on the company http://www.virinchi.com/pdf/Virinchi_Investor_Presentation_14122016.pdf


(Vivek Mashrani, CFA) #57

Its 51% as per my knowledge. Thx


(sachit) #58

Maybe the employee count is for standalone only? The 92 crore figure is consol I think


(Alphin) #59

http://www.bseindia.com/corporates/shpSecurities.aspx?scripcd=532372&qtrid=93.00

Promoter holding is now 50.44 % as of march end…


(Alphin) #60

Good results by Virinchi… However EPS is flat due to issue of shares for the Bristlecone acquisition. The Hospital buisness is broken even and profitable for last 2 quarters and the situation can improve significantly as the occupancy rates improve.

The Stock is just slightly undervalued, however there is a lot of scope for revenue and profit growth in the long term. Also the downsides are limited, The market is still valuing on par with IT stocks while the underlying buisness growth is being led by the hospital buisness which has a good chance of being rerated by the market.

disc; Invested.


(Vijayk) #61

Huge increase in debt. Leading to increase in enterprise value. Yoy EPS has gone down, but Stock price is up 2.5x. Hospital business is usually a slow business and takes time to ramp up. Till then debt interest will screw the profits. Sold all position today.


(Alphin) #62

Thanks for pointing it out, Due to oversight I referred the standalone balance sheet. As per the consolidated BS, I agree that there is significant debt which has increased the Enterprise value and the stock is fairly valued ( There is no margin of safety at present ) as per my calculations.

However I still do believe that the stock has a good runway for growth and improvement.


(J2EE Professional) #64

as per the management’s earlier interview, the debt will keep on increasing over the next two years.if i remember correctly, he was saying something like x for this year, 2x for next yr and 4x for third year taking total debt to around 100cr for the hospital business in next 3 yrs.


(Alphin) #65

You might be referring to the part where he mentioned debt repayment is scheduled in balloned manner, Which probably means that all debt is already taken but repayment amounts will keep increasing as the hospital buisness gains momentum.


(J2EE Professional) #66

yes right. something like that. Dont remember exactly.


(J2EE Professional) #67

a small summary uploaded by company on BSE just now.