Is this company more dead than alive?
Hero Majestic Company Profile
The Company is engaged in the manufacturing of Mufflers, Fine Blanking Components, Electricals, Spokes, and Two Wheelers Spare Parts.
Basically a commodity manufacturer for Hero Motors. It trades at a PE of 6 and has a marketcap of 51 crores. Annual sales for 2012 was 165 crores and a profit of 20 crores. Debt to equity ratio of 1.2. 75% owned by promoters. None of these are eye popping numbers except for something on the balance sheet that caught my eye. It trades at 0.7 times book and here is the key --- there is a 7.3 crore investments on the balance sheets. These are held at cost. The market value of these investments are Rs. 324 crores. Six times the marketcap and five times the book value.
Without a management shake up, no dividend and a shareholder friendly management, this is a value trap. This is company is worth more dead than alive. The liquidation value far exceeds the value as a going concern.
For other companies like this, please look at Kalyani investments.
Hero Majestic Company Profile
The Company is engaged in the manufacturing of Mufflers, Fine Blanking Components, Electricals, Spokes, and Two Wheelers Spare Parts.
Basically a commodity manufacturer for Hero Motors. It trades at a PE of 6 and has a marketcap of 51 crores. Annual sales for 2012 was 165 crores and a profit of 20 crores. Debt to equity ratio of 1.2. 75% owned by promoters. None of these are eye popping numbers except for something on the balance sheet that caught my eye. It trades at 0.7 times book and here is the key --- there is a 7.3 crore investments on the balance sheets. These are held at cost. The market value of these investments are Rs. 324 crores. Six times the marketcap and five times the book value.
Without a management shake up, no dividend and a shareholder friendly management, this is a value trap. This is company is worth more dead than alive. The liquidation value far exceeds the value as a going concern.
For other companies like this, please look at Kalyani investments.
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