Some new Ideas to explore

Given that we at valuepickr seem to post on the same group of companies usually, I thought we could broaden our horizon and look at a few new ideas that I’m exploring.

Most of these are finding ‘moats’ without paying exorbitant prices.

  1. Star Ferro and alloys, they are demerging the Cement and Ferro alloys in Q1FY16. The cement business is very profitable, and on an EV/Tonne basis more so than Shree Cement.

It is located in the north east, where a lot of cement gets ‘imported’ from other regions. They have a market share of 24%, being the largest player with Dalmia. However, the interesting part is that their plants give them a solid competitive advantage - they are located near the cities and have access to limestone. This plus, they have captive power.

I forecast some solid earnings growth, along with ROE around 20% by FY17. Also did I say they make 1.9x what other cement cos make per tonne.
So they have a massive low cost advantage over other players. Also NO capex needed in the short term as utilisation levels are around 70%

2)Manapuram Finance

Now this has a ‘moat’, but I don’t rate the management much. I believe this is a Graham cigar butt. It trades at 0.97 BV of FY15. And management has said they will bring ROAs to 3% - which is exceptional for an NBFC.

  1. Vaibhav Global,

All of you’ll have seen this for sure, but I want to bring another view point.
Lets treat this as a mature co for a second, one that will grow its earnings at maybe 4% from this year (seems VERY conservative).

What happens though?
They have paid back 54CR of debt this year making them debt free, so we can add that to their PAT (subtract Taxes though)

More interestingly, however they have EXPENSED their content and broadcasting costs which was around 215 crores last year. So with business growth as this cost slows, Vaibhav shall make a lot more money

  1. TV Today - they own Aaj Tak mainly and a slew of other channels. Let’s face is Aaj Tak is the number 1 Hindi news channel.
    They do ROCEs of around 22% and with a TV channel the operating leverage they have is just massive. Honestly, I’ve not studied this that much in depth but I’m going to because almost any revenue growth is going to be massive earnings growth for them.

  2. Techno-electric Engineering
    I invite you all to look into this, I just came across this a few hours back so haven’t studied in depth. However, what I do know is that they have a few divisions and have said that their unprofitable wind division is on sale. The EPC division is growing and does ROCEs of around 80%!

6)Hawkins Cookers, I’m trying to look into this, but I’m hoping someone can direct to some information. I know virtually nothing about this.

I don’t know if you have noticed but I prefer securities with no institutional coverage. However, one thing almost as good as this is one that the investment community does not like at all.

  1. ITC - 15% cagr on duty probaby not going to happen next 4 years again. With urbanization and beedi conversion I think they can grow their earnings by 10ish% for a long, long time. And apparently their FMCG portfolio is coming of age. Btw, they own India’s second biggest noodle brand after Maggi.

  2. Torrent Pharma - I have no idea of anything in the pharma industry. But their EPS is depressed due to amortizing the Elder Pharma buy (10%) and they have the highest % of branded generics at 54%. So I would love to be educated on this.

Disclosures: I only own one of the above scripts, and most probably will only buy 1 more of these. The key to being good at this game is learning to say NO. So this isn’t a recommendation, and please give me reasons not to buy the above. So please do your own research, this is just for educational purposes.


Just curious about your quote on the Manappuram Finance mgmt part.
Why do you not rate them?
On the contrary, i have heard good things about them.For ex: during Feb -Mar 2012, when MFL was having issues in returning money to depositors( in a subsidary), the promoter promptly sold around 5% of his stake to return money in a month.

  1.        Court Convened Meeting:

1.1 The Hon’ble High Court of Meghalaya at Shillong by an order dated 25th October, 2016 has directed that a meeting of the Equity Shareholders of

Star Ferro and Cement Limited

(“the Transferor Company”) be held at the registered office of the Transferor Company at Village: Lumshnong, Post Office: Khaliehriat, District: East Jaintia Hills, Meghalaya 793 210 on Monday, 5th December, 2016 at 11:00 A.M. (“Court Convened Meeting”) for the purpose of the said shareholders considering and if though fit, approving, the proposed Scheme of Amalgamation of the Transferor Company with Star Cement Limited (“the Transferee Company”).

1.2 The Court Convened Meeting will be held accordingly. The Notice of the Court Convened Meeting along with the said Scheme of Amalgamation (“Scheme”); the Statement under Section 393 of the Companies Act, 1956; observation letters of stock exchanges; complaints’ report; a form of Proxy and Attendance Slip are attached. The notice of the Meeting along with the said documents are also available on the Company’s website at