CESC Ventures is a diversified business with interests across 1) a relatively new-born fast-growing FMCG business, 2) IT-BPO services, 3) real estate (predominantly Kolkata Mall) and 4) restaurants. In our investment approach, we tend to find investments that present asymmetric risk/reward proposition i.e. Heads I win, Tails I don’t lose much. CESC Ventures is one such idea. At current valuations, CESC ventures offers robust margin of safety, while providing strong upside potential if its FMCG business fructifies as planned.Read More
Jenburkt Pharma is an INR 240cr branded generic pharma company, with >85% revenues coming from domestic sales. It is effectively a play on domestic pharma, that over the past decade has grown at >10% CAGR and is likely to continue to do so backed by many tailwinds for the industry. With a strong track record of successfully launching new products and brand promotion, Jenburkt has consistently milked its distribution channel well, posting 10-12% revenue CAGR over the past decade. Its measured growth approach funded fully through internal accruals, coupled with 25%+ ROEs enables it to generate strong FCF that has been distributed consistently to shareholders through dividends and buyback. We think it is a hidden gem due to its low liquidity and BSE only listing. Its attractive valuation at 11x TTM PE (adjusted for cash), growth prospects and FCF yield, makes it an ideal candidate for compounding 15-20% IRR over the medium-term to long-term holding period.Read More
A close look at Uniply Industries raises more questions than answers. Its sale of plywood business to an associate company at a potentially discounted valuation raises suspicion. The cash flow movements at Uniply Industries reveal that since the new management took over in 2015, only a part of the investor capital raised has gone into real assets owned by Uniply Industries. Rest of it seems to have been diverted to either promoter’s other business entities, suggesting potential conflicts of interest, or have been consumed for high working capital requirements, suggesting potential weak quality of sales.Read More
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