Tag: subsidiary

IST Ltd

IST Ltd is little known and highly undervalued real estate story.

The company has 28.41 acres of land at Dundehra (Udyog Vihar), Gurgaon, at a distance of 5 Kms from New Delhi International Airport.

The company had tied up with Unitech Developers & Projects Ltd (‘UDPL’) to develop an IT SEZ. The project is designed to have total leasable area of approx 3.75 million sq ft. As per the arrangement, UDPL will develop and market the property and incur all the costs while IST will get 28% of the total rentals.

The highlights of the project are:

  • It is one of the first IT SEZ in Gurgaon
  • The location is good and the early occupants are Amdocs, Bank of America etc.
  • 12-15% of the project is already leased out and the next phase of construction has started.
  • The funding is already in place, so execution is not an issue. IST is also a debt free company.
  • As the project is a SEZ, the incomes are tax free.
  • For details visit : http://www.unitechgroup.com/commercial/infospace-sector21-gurgaon/index.asp

Project Progress and plan ahead:

ist

Risks:

  • The SEZ project is being executed through the co’s wholly owned subsidiary Gurgaon Infospace Ltd.
  • The stock is highly illiquid.

Current Valuations:

As the company has already leased out 4.64 Lac sq ft, IST has been already receiving close to 10 Cr as annual rental income. Co is in process of constructing another 12 Lac sq ft by mid of next year. If things go as per plans, IST would be earning a rental income of 35-40 Cr in next 1-2 yr.

At CMP of 100, the company is available at an M Cap of less than 60 Cr. Even on conservative valuations, the company has potential to earn 60-75 Cr of Net Profit every year once the project is totally leased out. So if things play out as per plans, this company has all the potential to be a multibagger in 3-5 years.

Siemens Healthcare

siemens (1)

I came across this very interesting stock idea and I think we all should dig into it more and accumulate on declines.

Background:

The company was earlier known as Bayer Diagnostics. Siemens group took over this company last year.

Positives:

  1. Tiny Equity capital of just 1.57 Cr hence at CMP of 1100 – Mcap of 165-170 Cr is not much considering it to be part of the huge Siemens group.
  2. The company is into healthcare sector which is bound to grow rapidly over next few years. Cos like Siemens are market leaders in this sector and can exploit the maximum potential.
  3. The turnover has already started increasing. Co has reported 75% growth till June 09 (first 9 months) and 92% growth in March Qtr (45.38 Cr vs 23.61 Cr)
  4. The profitability part is not clear due to several adjustments and may be balance sheet clean up after the takeover. But I expect the OPMs to be easily 20%+ if the Siemens group is bringing it’s expertise in this co. We should get a clearer picture in next qtr nos and annual report.

The opportunity I’m seeing is – For a group like Siemens, current size of operations & Mcap are peanuts. They can definitely scale-up big time here and create multibagger returns for shareholders.

Please dig in more and contribute with your industry knowledge on this company.