Sahyadri Industries

My view on the company-One of the reasons for the improvement in the operational performance of the company, is they inducted a professional CEO in January-20 , Mr Maheshwari who has relevant industry experience , who has managed to increase the sales of the company in a short span , which in turn lead to better capacity utilization as a consequence of which all the ratios have started improving. Also they have appointed 2 additional external directors in Oct-20 to strengthen the board, which is also an improvement for better corporate governance going forward as traditionally the mgmt and the board was more family driven.This shows the change in the mindset of the owners of the company , who are willing to change with time and take professional help to run the company and the benefits are seem in terms of all round improvements in the performance of the company.

It is a matter of time, before the company will get re-rated, as the company prefers to maintain a low profile.

Also unlike its peers, it is strictly in roofing products, unlike HIL which has managed to increase its product base in lat 5 yrs , with the result that roofing contributes to less than 40 % of its sales. In roofing business, Sahyadri have performed much better than market leaders like HIL , Visaka and Everest in this financial year. Going by the investor concall of both HIL and Visaka post the latest quarterly results, the roofing business is doing good and considering that Jan-June is traditionally the best period for this industry and with the good growth in rural India, Sahyadri is set to deliver very good numbers going forward, and going by the trend of last 2 quarters , likely to outperform both HIL and Visaka in terms of sales growth and profitability.

Probably they need do a few investor calls going forward for the stock to get re-rated.
Disc- Existing shareholder.

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