Unjustified High 52 Week Prices ?~ Relaxo xb at Rs 550 & Eveready at Rs 360

After a brilliant run up  and now at 52 week highs, both Relaxo Footwears at xb Rs 550 (FV Rs 1) levels & Eveready at Rs 360(FV Rs 2 )levels appear to be at unjustified high relative valuation at PE of over 60 and 50 respectively

Have been just asked for advice

Managed  Run Up !?

I would be wary as I’m not aware of any non linear growth coming up nor of a healthy CAGR on the bottomline in the next three years to justify paying such heavy premium

I don’t have any interest in either of them but happy for those who rode them brilliantly in the year…perhaps they should ask the Insiders rather than me on these!

“Gimme Red”  🙂

Starbucks to serve Beer & Wine too now in USA…India maybe later!?

🙂  Soon Starbucks will be serving Beer & Wine after 4 pm ….in USA

😀 Would that roll out over the years to India too ! giving full meaning to their JV Partners and listed Tata Global Beverages !?

🙄 Mixed Feelings if this really happens !…as I currently sit right above Starbucks’  first outlet in India in South Mumbai near the BSE and this would probably lead to on increase in the frequency of Clients visiting ! and our Entertainment Costs increasing too ! 😉

Visualise this……

Starbucks Cafe & Pub ~”A Glass of Beer,Please” ~”.that will be Rs 750 Sir”~”I don’t want the 👿  Bottle” ~ Sir,the Bottle will be Rs 2500 🙂 ~”Oh!” 😳

😛 Anyone for Tea or Coffee ….or Beer or Wine ? ….or Tata Global Beverages for the Long Term @ Rs 141 ?

HUL Price crosses Rs 700 !~Shareholders who Tender exited at Rs 600 were Foolish ~ and now Furious !

HUL Price crosses Rs 700 !~Shareholders who Tender exited at Rs 600 were Foolish ~ and now Furious ! and they have a full right to cry Foul here !

HUL is dealing with a Hot Potato here !

Early in May 2013 I had warned on my company website’s Scrip Standpoint Module that Shareholders should not participate in the Unilever Open Tender Offer giving a detailed reasoning  for this advice

Unilever to try increasing Stake in HUL to 75% ~ Why? and should Shareholders support the Open Offer at Rs 600?~ 08-May-2013

Now inside a fortnight and in the same month of July 2013 that the Open Tender Offer at Rs 600  by Unilever closed having attracted @ 32 cr shares and allowing Unilever to raise it’s Equity Stake in HUL from 52.48% to 62.26%,the Share Price of HUL has crossed Rs 700 this morning !

This morning have posted this on my company website:

Hindustan Unilever crosses Rs 700 ! inside a fortnight of Closing of Share Tender Offer of Rs 600! ~ Shareholders who exited in the tender were foolish but now they must cry Foul ! ~ 18-Jul-2013

This would mean that the foolish shareholders who fully or partially exited HUL in the tender by offering @ 32 cr shares now have notionally lost an incremental Rs 3200 crs !

They have a right to be furious as the HUL Price has risen because HUL has raised the price of some of it’s products by upto 15% inside 15 days after Share Tender Offer closing !

HUL Management could not have planned this price rise overnight and coming inside a fortnight of the Share Tender closing earlier  in the month is clearly suspect ! Why could they have not announced this rise in May or June 2013 before the Share Tender !? ~ The answer is obvious ! ~ They would not have got the response they did in the Unilever Open Offer with @ 32 cr shares being tendered at Rs 600 or they may have had to increase the Offer Price ! 

Shareholders that exited  in the Tender at Rs 600 probably because many ‘top’ advisors advised them to have every reason to feel furious and fouled !

The effect on Profits is stunning.These healthcare products are nearly 30% of the Sales.FY Sales were Rs @ 26000 crs and thus a 10% to 15% rise in the product prices would increase profitability by a @ Rs 1000 crs giving an incremental effect of Rs 5 on the EPS and at a PE Multiple of 30 that translates into a Share Price rise of Rs 150 !  

FY 13 bottomline was Rs 3800 crs .This year it should cross Rs 5000 crs

Read more thoughts and implications about this in the link provided above to my company website read more

Interesting that HUL closed over Rs 600 on the last day of Open Tender at Rs 600 by Parent Unliever

Interesting that HUL closed over Rs 600 on the last day of Open Tender at Rs 600 by Parent Unliever

Had opined two months ago on May 8, 2013 on a detailed post on my company website that Shareholders should not tender at Rs 600 in the Offer by Parent Unilever

Unilever to try increasing Stake in HUL to 75% ~ Why? and should Shareholders support the Open Offer at Rs 600?~ 08-May-2013

Let’s see if HUL price will fall back below Rs 500 from where it shot up after the Open Offer was announced by Unilever a few months ago 

My long term sense is that HUL will ultimately climb towards Rs 1000 inside  four years on purely on Valuation ~ check out the above link on my website which spells out why we advised HUL Shareholders not to sell therir Shares to Unilever at Rs 600 

Not a Fully Successful Open Offer

The Parent, Unilever Plc, together with direct & indirect subsidiaries holds 52.47% of the Equity of HUL,precisiely 1,134,849,460 ~ Therefore Non Promoters hold 47.53% or precisely 1,025,150,540 shares ~ LIC holds 3.22%,Oppenheimer Developing Markets Fund holds 1.76% and Virtus Emerging Markets Opportunities Fund holds 1.44%)

The Open Offer was for a maximum of 487,004,772 shares of the Non Promoter Holding of 1,025,150,540 shares => 47.51%

If it had been  fully successful this would take  the parent Unilever stake in HUL from 52.47% to 74.99%

Therefore if all Non Promoter Shares had tendered for the Open Offer the Acceptance Ratio would have been  only 47.51 % or near to One for every Two Shares tendered as all shares would not have been accepted

The Acceptance ratio obviously would have gone  up if the Shares Tendered for the Open Offer were  less than 1,025,150,540 that could have been tendered

However all Shares tendered will be accepted as First and Early Reports after July 4,2013 Closing yesterday is that the Open Tender has not even attracted the 487,004,772 Shares sought ~ only 2/3rds of @ 33 cr shares have been offered by non promoter shareholders.This would mean Unilever would be able to raise stake to only @ 67 %  instead of the 75% they had wanted to ~ The Tender Size therefore drops to @ US $ 3.2  billion Deal  from @ US $ 4.9 b at Rs 60 to the US $ 

Union Budget 2013 ~ India is a BLESsed Economy…Felt like a stand up comedian as had the house of 400 well informed investors in splits !

Union Budget 2013 ~ India is a BLESsed Economy

Felt like a stand up comedian as had the house of 400 well informed investors in splits !  when I address and interacted with them on Budget Day Feb 28 evening itself at a Budget Review Event jointly hosted by AIVF,JITO and the BSE Brokers Forum at KC College Auditorium

Gaurav Parikh on Dias before his Humorous Address to 400 in the audience On Budget Day Feb 28,2013

Covered this on our Company website as below :

SCRIP STANDPOINT ~ A View

Slide Share ~ The Presentation at the Event to support the Address & Interaction

Union Budget 2013 ~ India is a BLESSsed Economy…Addressed an audience of 400 on Budget Day

Union Budget 2013 ~ India is a BLESSsed Economy…

Enjoyed on the Budget Day Evening itself Feb 28,2013 addressing and interacting with a well informed audience of 400 on the Union Budget 2013 ~ on how the Government plans to make Money to tackle deficits and how we can ! ~ plan to host a few thoughts of my presentation on the company website www.jsalphaa.com and on this blog ~ covered how FM has cleverly and conveniently balanced the budget ~ also covered  the Forward Trends in Equities &  Indices & Gold & Exchange Rate & how Debts & Deficits are forcing Disinvestments & how the malaise continues on our exchanges and it will be some time before the retail investor comes back,if at all ~ spoke on Liquidity,Sentiment,Momentum and Valuation

🙂 Felt more like a Stand Up Comedian as the audience were in splits on some of the budget and stock market situations I presented…

Union Budget 2013 Review Event
 Cheers !