Saturday, October 2, 2010



Reading the stories of companies came back to glory  from the brisk of collapse is always interesting ,encouraging and thrilling. Other investors can learn many lessons from such stories. But in many such cases ,promoters of such companies are unwilling to share their experience in bad days with media or even to the minority share holders. We can find many such companies in listed space like Jain Irrigation, Orchid Chemicals, Diamond power infrastructure..etc. Recently I came across an article about a company which is going through rough weather for past many years, in a financial journal. I am unable to predict whether this company will come back to black in near future or not,but I consider the willingness of the MD to face the media after a long gap is an indication of some favorable developments in the company. Don’t consider it is a recommendation to BUY the stock of this company ,but ,just take it only as a sharing of  information to those who could not read the article. I know ,many of you will stop  reading  this post ,just after hearing the name of the company .Anyway it is INDAGE RESTAURANT AND LEISURE LTD.


Most of the investors are aware that the happenings in debt ridden  Indage Group – mainly Indage Vintners Ltd-which is now  fighting for survival. Indage Vintners  is managed by Renjith Chougule  sibling of  Vickrant Chougule the MD of Indage restaurant and Leisure Ltd . No doubt, both are running independently .Indage Restaurant and Leisure is running restaurants in five genre viz, Quick Service Restaurants(QSR),Casual dining, Wine Cafes and Bistros, Fine Dining and Pubs, and Resorts and Hotels.Under QRS it is operating Gracia’s Pizza Chain with 20 outlets (Remember ,the market leader Jubilant Foodworks having 300 +) .In casual dining ,it has a master franchise agreement with South African dining chain  NANDO’S  and running three  restaurants in this brand name. under ‘ Wine Cafes and Bistros’ it is running ‘IVY’- in  Seven different locations. Under ‘Fine Dining and Clubs’,company running  Japanese restaurant ‘Tetsuma’ and ‘Athena’ and ‘Prive’ clubs in Mumbai and ‘Zaha’in Pune.Under ‘Resorts and Hotel’ segment ,company running ‘Hotel Shalini Palace in Kolhapur(only palace resort in Maharastra) and ‘Tiger Hill’ resort in Nasik. Positioning in these different segments clearly indicating that the company operating in almost all levels of hospitality industry.

Then what is wrong with ?

In FY 2008 ,company posted a turnover of Rs.24.6 Cr and a net profit Rs.3.1 Cr. Thereafter company’s operations de railed , and it could not service its debt of close to  Rs.30 Cr. Reduction in  spending of people due to the fear of  recession in that period added fuel to the fire. Even if it is working as a separate entity ,the bad image of Group mainly due to the problems of Indage Vintners adversely affect companies business plans and further expansion. In FY 2009 ,company posted a turnover of Rs.25.3 Cr and a net loss of Rs.12.35 Cr.

Current Situation

As mentioned in the beginning ,there was no information about the company’s financial plans or results in public domain after the declaration of December 2009 results. In the above mentioned article ,the author indicates that the company posted a loss of Rs.8 Cr in March 2010 full year which is a reduction from the loss of Rs.12.35 Cr in FY 2009.Now company is trying for a  debt restructuring and induction of a strategic partner. It also changing its business model  and trying to expend through franchise route pan India. Company is also  going to start two Nando’s outlets one each in Bangalore and
Chandigarh  in November 2010. Management expecting a turnover of  Rs.40 Cr in this FY and back to black in FY 12 provided the debt restructuring is cleared .
My opinion

1)      Company have lot of problems and the opportunities are equally big
2)      MD of the company is young (38 years) and enough time to learn from the mistakes and prove himself.
3)      The Industry in which company is operating have huge potential in India and companies from such a sector may get premium valuations in stock market going forward.(After the publication of the mentioned report itself share price rallied from Rs.8/- to Rs.14/-)
4)      Managements willingness to share information with the public after a long gap  is really a positive sign
5)      The franchise model business development in food chain business have great potential in a country like India
6)      If the company is not able to restructure its debt in reasonable time ,its net worth may be in a pathetic situation going forward.
7)      It is not easy to find out a good partner before the image of the group improves(after emerging a clear picture about Indage Vintners)
8)      MD’s five is target is a sale of Rs.200 Cr and a net profit of Rs 55-60 Cr is really ambitious and no chance to materialize.
9)      At present management has  reached a stage where they can at least imagine and dream something about future -is really positive.
10)   Non filing of information like financial result  to stock exchange may invite penal action


I personally believe that , if setbacks in business happened even after the hard work of management and only because of some reasons beyond the control of  management ,god will give atleast one chance to come back, provided such a collapse is not  purposefully created by the management to cheat other investors or related parties.



Once again  I would like to indicate that this is not a recommendation to BUY or NOT TO BUY ,Study yourself  and take a decision .CMP is Rs.14/-



  1. Would you please pen down name of a few stocks 1. worth holding for 5 years
    2. with big price target (not 20-30%)
    3. having a bright business prospect
    4. having minimum down side posibility

    N.B.: As there are so many stocks covered by you, it is reallly tough for a layman to spot the best few for long term ( which do not require day to day monitoring). As such, the list, if you provide as per my request, will help the small investor to reap the benefit of long term investment. The list, as small as possible, may also be kept in the home page of your blog.
    I beg your pardon, if I have irritated you through posting this comment.
    Thanks in advance.

  2. what are your views on shardul securities

  3. Hello Valuepick

    Whats your take on mahindra satyam for 1 year?


  4. dear valuepick, i also will appreciate you if you can able to list out just few stocks, with your good amount of experience in the stock market, for holding longterm (5-7 years).
    thanking you sir

  5. sir
    would like to know about three stocks which u recommeded
    EPC, DFM FOODS and SUPERhouse
    kindly advice is it still a buy,

    is there any chance of jk agri and orchid kind of development with these stocks



  6. Friends,

    As I have mentioned earlier in my blog,each and every investor have their own preferences in investing like price range ,sector,business group,holding period ..etc.So I am trying to present companies from different sectors and with different possibilities.Purpose of my blog is only to invite the attention of retailers to certain companies and, I believe that it is the duty of each investors to do a deep study and select from this pool as per their preferences.Blindly following me or anyone is not a good tendency.A scrip which is best for me may not best for you.It depends on everyone's expectation,holding period risk taking capacity ..etc.
    I don't think any person can blindly say a scrip is good for a very long term as many of the readers mentioned for 5 years or so.Each scrip should be properly monitored periodically.A good scrip today we bought for five years may not worth after one year ,if there is a change in technology,government policy...etc.So buying today and forget for five year is not an apt method .And I also think ,higher profit is always associated only with higher risk and it is not easy to find scrips with multibagger chances with only minimum risk.I am updating if anything special happened to an already mentioned scrip.Without happened anything which can affect the financial's of companies or any big price change itself ,there is nothing to update on a daily basis for each and every company.

  7. VP sir,

    i really learnt a lot, i never loook for your stock but look for content how you analyse.

    please share others topic despite stock picking like this one :)

    Thank you

  8. Hi Valuepick,

    I too agree with Mahesh on this VP sir.


  9. Could've been a good comeback story but sad ending.



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