Cash Bargains

Hi All,

I have listed a few companies which seem to be a cash bargain. Your insights and views are invited. This post has already been posted on my blog

Alright â even in this market (with Nifty P/E above 20, well above its historical average of 17.5), there are some cash bargains. What are cash bargains? Prof. Sanjay Bakshi defines them as âA cash bargain arises when the market value of a company goes below the amount of cash and other liquid assets in its possession, net of all current liabilitiesand debt

I found some companies satisfying this criteria and I have listed them below.

Company Cashper Share Debt per Share Cash-Debt Current Price Discount
Aftek 28 9.73 18.27 13.11 39.36%
Amrapali Industries 19.81 0 19.81 6.9 187.10%
Eldeco Housing 187.97 31.75 156.22 138 13.20%
MPIL Corp 93 5 88 63.5 38.58%
Rajesh Exports 250 78 172 131.8 30.50%
Teesta Agro 63.37 3.58 59.79 10.75 456.19%

I have excluded companies which are burning cash. For example, âPunjab Communicationsâ was one such stock which was on my radar for a cash bargain, but I realised that they were having negative Operating cash flows (and Operating margins) for the past 5 years. Any cash on the balance sheet would soon be burnt. Hence, I have excluded such companies.

I have also excluded companies like MTNL which satisfied Cash Bargains criteria, but is a value trap (as Neeraj puts it very elegantlyhereandhere).

I have also excluded companies with very high debt like JVL Agro (in this rising interest rate environment, its very dangerous to bet on any company with high debt!)

All the 6 companies in the list have low margins, low operating profit and may not have any competitive advantages at all (there are some reasons why these companies have been beaten down by the market). But they have been beaten down so much so that they are quoting below cash

I have not researched extensively on any of these companies except for the fact that each of these company financials are in decent order (i.e., they are not burning cash, and have most of the time generating positive operating cash flow). (I doubt though, that something is seriously wrong with âTeesta Agroâ and/or âAmrapali Industriesâ (mgmt problems?), else why would they be quoting as such a tremendous cash discount?). (Aftek, I think is one of K-10 stocks, and hence quoting at a discount?)

Do any of you have any idea why these companies are quoting at cash discounts? Do you have a position in any of these companies?

As usual, the disclaimer applies. Please do your due diligence before you invest.

Disclosure:I have starter positions in Eldeco Housing and Rajesh Exports.

HI Kiran,

I am surprised you missed Prof Bakshi’s article some 1-1.5 years back in Outlook Profit where he listed some value traps(cash bargains particularly) . Aftek & Rajesh Exports where right in the list…check the annual report, these 2 companies have the cash stashed in Foreign Accounts, seems highly suspect, i would avoid them.

You can have a look at nuclues software which has high amount of cash and business of the company is also such that it will generate cash going forward.

Indeed Siddharth! I did miss reading this article by Prof. Bakshi. Thanks man!

I had to scour the internet, but here’s the link to the article (for others who are interested) which Siddharth mentions.

Other companies other than Aftek and Rajesh Exports which may have dubious balances are/were HTMT Global, Mah. Seamless (I had heard from someone that this was a value stock a while ago) and GTL infrastructure.

Good advice (as always) in there! Worth a read.

I couldn’t find anything wrong with Maharashtra seamless… ( though its a WIP) … any particular reason you mentioned its name ??

Nuclues is very good stock. As per my informationmanagementis very good.

Good business model in banking sector.

In last few days stock moved up nicely from 66 to 82.

Company istargetedby some bigforeigncompanies in same sector.

I am holding this stock in my LT portfolio picked at 63/68 levels.


Medi-caps, IndoAsian Fuse Gear, Cheviot are the other companies

add swelect energy (earlier numeric power) to the list.


IMHO, for the ‘value’ to be discovered in such stocks, there has to be a trigger or catalyst. If one cannot foresee any such catalyst happening, then these stocks will just languish as cash bargains for extended periods of time. Catalysts could be special dividend/bonus debentures, buyback, acquisition etc… FYI.

Hello Sir,

I tried the link, but it says the page does not exist anymore. Could you pls send the PDF to

Thanks. Link:

can we list examples of companies excluding conglomerate and holding companies with cash equivalents far in excess of market capitalization for this list?

have been witnessing this trend in recent corporate restructurings( especially small cap spinoffs ) as well as investment banks(and stock broking co.s)