ValuePickr Forum

Majestic Auto - An Undiscovered Real estate/Facility Mgmt Stock

  1. i agree , once honda seperated , hero moto hasnt got back its mojo yet.
    Yes being totally debt free by selling its hero holding would have been superb.

  2. no dividend i can understand because company has been reducing debt from 329 crores in 2016 to 170 crores in 2020.

will they share gains with minority shareholders is something i havent figured out yet.
but yes due to 75% shareholding and no pledging promotors will gain the most if the stock is rerated

Disclosure :
i am invested in majestic auto . my opinions may be biased. i am not a sebi registered investment advisor. this is not investment advice .Please do your due diligence before investing

I did not find such data in AR-2019. Pls let me know where this data is available.

If promoter has lend at 10%, then 3.73 L for 6 months leads to 7.46 L p.a. Hence loan principal should be 75 Cr. No such borrowing is reported. If this is true that they have promoter have lend 75 Cr, its a huge negative.

i found all borrowings from major banks.(207 Cr from HDFC bank and 8 Cr from PNBHFL). These interest rates are quite high @ 8.65-10.65%. Post-COVID rates should be utilized to switch loans.

heres the data majauto.pdf (235.6 KB)

it was in a related party disclosure to bse on 5.12.19

https://www.bseindia.com/stock-share-price/majestic-auto-ltd/majesaut/500267/corp-announements/

the interest paid is in lacs not crores
its 3.73 lacs for 6 months

Yes, sorry, I did not pay attention to the clearly formatted post of @sambandham82.
Majority asset is land and buildings, so yes it is more a real-estate play like NESCO somewhat.

You guys also have the reasons for valuation figured out perfectly, root-question is with 75% holdings with promoters, will they share with minority?

yes its a mini nesco somewhat . regarding sharing with minority i have no opinion on mgmt intent. One thing i know for sure is mgmt stands to gain the most because of 75% holding and no pledging.

hero motocorp stock seems to be showing strength.

Noted Investors

ANIL KUMAR GOEL 200000 1.92% stake

DIPAK KANAYALAL SHAH 158000 1.52% stake
NISHITH RAMESH PARIKH 1,61,230 1.55% stake
VARSHA RAMESH PARIKH 1,28,717 1.24% stake

Anil kumar Goel stake remains the same in june quarter as compared to march quarter this year.

Dipak Kanyalal Shah has increased his stake

to 1.52% by buying 2800 more shares in this quarter.

Nishit ramesh Parekh has increased his stake to 1.55% by buying 11187 shares this quarter.

Varsha ramesh Parekh has increased her stake to 1,24% by buying 8172 shares this quarter.

https://www.bseindia.com/corporates/anndet_new.aspx?newsid=5b3cb980-1828-44ea-8ea6-d7c8ab1758a8

278469ff-8969-49ab-b05c-62b87a4384ab.pdf (1.3 MB)

Results are out and seem decent considering the pandemic.

Consolidated revenue is down 13.5 % at 16.02 crore as compared to 18.53 crore last year
in that other income has increased from 17 lac to 98 lac . this is mostly interest income showing a good increase.

loan interest cost has reduced 17% to 4.32 crore from 5.22 crore last year

tax paid is 1.22 crore resulting in a tax rate of 25%.
No exceptional taxes this time.

pbt down 10% at 4.91 crores from 5.4 crore last year
pat is down 23 % at 3.68 crores but income tax paid is almost double of last year

In the other comprehensive income section this time theres a massive profit as compared to a massive loss last quarter

theres a other comprehensive income before tax of 87.6 crores
income tax paid on this other comprehensive income is 14.63 crores
and after tax this income is 73 crores

total comprehensive income this quarter comes to 76.72 crore
i dont know the nature of this comprehensive income because nothing is mentioned in the notes to accounts.
seems like land sale income to me but i may be wrong

Overall barely any pandemic impact in terms of income from real estate ( biggest client is tech mahindra and the it majors are doing well)
Debt is reducing.

another huge positive is value of its ownership of 921000 shares of hero moto has increased to 281 crores (hero price of rs 3059.3). from 221 crores in june .two wheeler companies seem to be doing better.

Stock has been showing some strength in the past 10 days and heightened volumes as well.
current market cap is 110 crores . Let us see if the huge discount to its intrinsic value(around 350 - 400 crore mcap according to me ) reduces in the coming months.

Disclaimer : This is not investment advice and should in now way be construed as one .I am invested in majestic auto .I am not a registered sebi investment advisor. Please do your due diligence before investing.

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NAV is around 350 Cr (after giving 30% discount to sale of assets like Heromoto, land and Emirates building and deducting all liabilities). But still we cannot expect management to share this value with minorities totally. Hence 50% discount to this NAV is mandatory. so minority shareholder’s NAV is 175 Cr.

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