HIL Limited presents an investment opportunity driven by dual recovery factors: increased rural infrastructure spending in India and the revival of European markets through its Parador flooring business.
Nicely written. In my humble opinion it is Parador that will eventually move the needle in this becoming a multi baggar (5-7x) vs. 2x from here in the next cycle (if Parador remains a drag). Parador is where segmental ROCE is -18% and Parador will be 40-50% business revenue in mgmt. guidance for $1B (and where mgmt.'s majority focus is).
Also when i went through the concalls/annual report it jived with what I liked with Eureka forbes (they are sacrificing near term margins and investing in people, product and process). Akshat has been with the company for only 15 months (he is with the birla group for a decade) but his articulation of issues with the company and the steps they are taking and his articulation of his vision impresses me. There are multiple challenges as well but the current valuation gives enough margin of safety.
I actually did 35% of my total allocation this week sub 1700 INR. Like you said this is valued as a commodity non growing company (for obvious reasons) but I think there is enough margin of safety to start staggered deployment here. I also go 30% of my targeted allocation in eureka Forbes last week of Feb at around 475.. I really my pota and finally finding some comfort in entry valuations there.
First of all thanks for your detailed write up fantastic work done congratulations on this
What is your view after Quarterly results & conference call, one of the participants raised Qn on company sales strategy wrt pipes that you are gaining market share bcos other players are avoiding sales at a loss, how do you look this & secondly they are also changing brand names so definitely it will again deplete cash and cash profits will reduce if this resolution gets passed
Regarding first point - Watching subsequent quarters are important. Management has hinted that margin gap between co and other pipe players will narrow in the coming quarters. If that doesnt play out then may be co may be engaging in predatory pricing
Second point - Yes may happen
I guess overall there is a lot more pain left in the stock. The co is available at 1400 cr right now. Right now its purely being valued as a non growing commodity co by the market.
I am on wait and watch mode in this right now but yes definitely tracking it very closely
Hi Divyanshu , Havent been able to go through the results and call yet due to being occupied on some personal fronts. Once I go through these will share my views on this . May be by the coming week
Nicely written. In my humble opinion it is Parador that will eventually move the needle in this becoming a multi baggar (5-7x) vs. 2x from here in the next cycle (if Parador remains a drag). Parador is where segmental ROCE is -18% and Parador will be 40-50% business revenue in mgmt. guidance for $1B (and where mgmt.'s majority focus is).
Also when i went through the concalls/annual report it jived with what I liked with Eureka forbes (they are sacrificing near term margins and investing in people, product and process). Akshat has been with the company for only 15 months (he is with the birla group for a decade) but his articulation of issues with the company and the steps they are taking and his articulation of his vision impresses me. There are multiple challenges as well but the current valuation gives enough margin of safety.
I actually did 35% of my total allocation this week sub 1700 INR. Like you said this is valued as a commodity non growing company (for obvious reasons) but I think there is enough margin of safety to start staggered deployment here. I also go 30% of my targeted allocation in eureka Forbes last week of Feb at around 475.. I really my pota and finally finding some comfort in entry valuations there.
Hello Deepak
First of all thanks for your detailed write up fantastic work done congratulations on this
What is your view after Quarterly results & conference call, one of the participants raised Qn on company sales strategy wrt pipes that you are gaining market share bcos other players are avoiding sales at a loss, how do you look this & secondly they are also changing brand names so definitely it will again deplete cash and cash profits will reduce if this resolution gets passed
Thanks
Divyansu K Taneja
Hi Divyanshu ,
Regarding first point - Watching subsequent quarters are important. Management has hinted that margin gap between co and other pipe players will narrow in the coming quarters. If that doesnt play out then may be co may be engaging in predatory pricing
Second point - Yes may happen
I guess overall there is a lot more pain left in the stock. The co is available at 1400 cr right now. Right now its purely being valued as a non growing commodity co by the market.
I am on wait and watch mode in this right now but yes definitely tracking it very closely
Hi Divyanshu , Havent been able to go through the results and call yet due to being occupied on some personal fronts. Once I go through these will share my views on this . May be by the coming week