About The Company
As the name suggest the company is engaged in distilleries business.The promoters may not seem unreliable though they may be incapable. The present market of the company is close to Rs.135 crores and even after considering debt of close to Rs.50 crores, it works out to less than Rs.200 crores. Considering the presence of company in Tamil Nadu and Kerala for its breweries business as also expansion in Karnataka and Andhra Pradesh, share price seems to be ruling way below its fundamentals and intrinsic worth.
About The Results
The Company has posted somewhat better results for first quarter ending 30-09-08 with an EPS of Rs.3.01. For nine months ending 30-06-08 the EPS of the company was placed at Rs.5.94, with total income at Rs.564 crores and net profit of Rs.11.30 crores. For Sept. 08 quarter, the total income is at Rs.246 crores with net profit after tax of Rs.5.72 crores.
The company is expected to have a net profit of close to Rs.450 crores from its realty division by FY 10, but the same is not visible in the performance, as the company had already presented accounts for 15 months, post public issue.
About The Stock
This is one of those issue which present a false picture in front of the public with sole motive to get there business financed by public money and take home there investment. This is possible only during a stro0ng bull market when sentiment of public is high and they overlook the prospectus of the company , which is designed by the experts. If the company has the potential then why no IPO's are offered in this market and why all proposed IPO's are canceled ?. These sort of company get delist with no ISIN umber once the market moves under bear market , you wouldn't find there existence in next bull run. The expected annualized EPS for FY 09, of Rs.12 is discounted by about 6 times. This is probably the lowest PE multiple given to the company in its segment, considering its mid cap size.This is due to betrayal of investors confidence in the company and its promoters for the promises made by them, post public issue, which were not achieved by them. Also, hefty issue price of Rs.400 per share added woes to the wounds.Share is now ruling at Rs.70 against its all time low of Rs.64 and issue price of Rs.400 per share. I strongly recommend never to invest in such companies.
Disclaimer : I do not have any personal holding in this stock.