Walchand Peoplefirst Ltd Dale Carnegie master franchisee

Stock Opportunities Untested - but worth a good look
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Walchand Peoplefirst Ltd is listed on BSE (BSE Code 501370). They have a market cap of Rs.64 crores. CMP Rs.221.

Their website is https://www.walchandpeoplefirst.com/.

Walchand Peoplefirst is a corporate training company. They are master franchisees of Dale Carnegie Institute. They recruit other franchisees in tier 2 and tier 3 cities. Dale Carnegie was the author of ‘How to win friends and influence people’, a bestselling book which has a cult following. In 2022 they became master franchisees of Dale Carnegie Institute and will now be recruiting franchisees themselves. As per the 2023 AR, they have taken Rs.10 lakhs as franchise fee.

They opened a Franchise in Pune recently:

They are expanding.

I found a video about them. Start watching from 3:05 because till then they are talking of Dale Carnegie and not Dale Carnegie India.

On their website they claim to have ‘8,500 + clients including top Government, Corporate, Education and Social sectors.’ and claim thave trained over
650,000 people.

They teach soft skills, which I think are going to be in demand even after a lot of other areas are automated by AI.

They have two independent directors who have a good profile - H. N Shrinivas and Jehangir Ardeshir. Both have worked with the Tata Group in senior positions.

Their sales have been stagnant for the last decade. From Rs.17.18 crores in FY13 to Rs.17.81 crores in 2023. In FY21, they reported losses.This seems to have been because of Covid and the lock down. Their training was mainly in person. Now their training is also online and they are profitable.

They own a building on Ballard Pier, South Mumbai named Construction House. The parent company is Walchand & Co Pvt Ltd. The land (806 square metres) on which the building is built is leased from Mumbai Port Trust is in the name of the listed company.

Mumbai Port Trust:

See serial no 516. Land admeasuring 806.86 square metres in name of Walchand Capital Ltd (old name of Walchand Peoplefirst Ltd).
This company was incorporated on 1920-07-06.

This is the building, specs and picture:
https://property.jll.co.in/office-lease/mumbai/ballard-estate/construction-house-ind-p-001akg

As of March 31, 2023, they had cash and investments of over Rs.25 crores and debt of less than Rs.6 crores. So net Rs.19 crores cash. Their net profit so far this year has been Rs.2.4 crores. I do not know their current cash position.

The concerns:

Their company secretary quit recently.

Management remuneration has been higher in recent years. The two main directors themselves take about Rs.3 crores as their salary.

They spent on buying an expensive car in FY23.

In recent years, even in FY23, a lot of their profit is from ‘other income’. Without this, they would be in losses.

What is the value of their land and building at Ballard Pier? Can they monetize this?

When will they become profitable?

Why are they into losses despite being the master franchise of a world known brand and being a service company?

Disclosure: I have invested in the stock of this company. This is not a recommendation.

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The problem is the title/lease given by the MBPT to the tenants, its a complex issue and there are many court cases pending relating to the same for various property provided on lease by MBPT. MBPT has also came out with retrospective rent hike from 2012 which is being challenged by many tenants and pending before the bombay high court. Because of this giving a fair value to the land and monetizing it is really very difficult as the intent and policy of MBPT is not rational and has many hurdles. The company has also made disclosure in the financial statement under contingent liability.

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The court cases you are referring to are rent disputes, eviction after the lease has expired and other matters.

In case of Walchand Peoplefirst, this plot of land was leased from Mumbai Port Trust in 1936. It is for a period of 99 years. So the lease is valid up to the year 2035.

Many companies which have leased land from Mumbai Port Authority continue to occupy the land despite the lease having expired. The lease which Walchand Peoplefirst has is still current. There is certain rent due which is disputed and shown as a contingent liability in the AR FY23. This amount disputed is shown as a contingent liability of Rs.2.23 crores. This is a small amount given the cash position of the company. It relates to the period 1st Jan 1999 to 31st March 2020. (See pg 42 of the FY23 AR).

There are many precedents of ports having monetized their land. There have been proposals of this sort for Mumbai Port Authority but nothing concrete has materialized.

Some proposals of the past:

Demand to stop eviction and reduce rents (March 2024):

Redevelopment possibility:

[2019]

Whether the proposal which gets finalized benefits the tenants or goes against them is something to be seen.

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Walchand PeopleFirst (WPFL), has appointed a new franchisee for Dale Carnegie Training in Hyderabad, Telangana.
https://bwpeople.businessworld.in/article/Walchand-PeopleFirst-Expands-Footprint-In-Telangana/17-04-2024-517394/

Hyderabad is a good market for soft skill training. Many large corporations have a presence there.

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Here’s a recruitment ad posted by Walchand Peoplefirst.

They seem to be looking for someone for the post of ‘Business Consultant - Corporate Sales’

They require the ability to ‘Build and manage an active sales funnel with at least 50 accounts at various stages’ and to ‘develop and close single opportunities of INR 50 lacs and above - large account selling’

Can someone do a scuttlebutt here? Maybe we an find out what is the quality of the training they impart and how likely these companies are to repeat Walchand Peoplefirst. Also, who are their competitors and how they are seen with respect to them. Maybe the HR of one of these companies would be able to give an opinion.

There’s a large list of customer names mentioned, most are prominent global companies including Google, Reliance Industries, Mahindra & Mahindra, State Bank of India, Apple, EY, Flipkart, Citibank, Microsoft, McDonalds, HSBC, Standard Chartered, Lupin, Oracle, Wipro, McKinsey, PWC, Genpact, Deloitte, Walmart, Novartis, Samsung, PepsiCo, Maersk.

We can find out if these companies really get a lot of personnel trained by Walchand Peoplefirst or this is just a name dropping exercise. If so many major companies are customers, why is their turnover barely 20 crores. It is potentially a huge market. Doesn’t add up.

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