Tuesday, April 5, 2011


SML ISUZU catching the attention not only because of its improving financials but on account of the possible change in its patronage too. SML ISUZU (Formerly Swaraj Mazda )manufactures and sells light commercial vehicles for goods and passenger applications . Its products include ambulances,buses, dual cabs, and trucks.Currently majority of the stake is held by Japanese  giant Sumitomo corporation (54.9% ) .Isuzu own ( 4% ) and P/E player Actis holds 5.6% . For Sumitomo, auto sector is not their  core competency so they are willing to sell their stake if they fetch good value for the investment .Actis is also ready to exit and they already made some discussions but could not conclude the deal mainly due to differences over valuation.On the other side Isuzu is very much interested to increase their current stake and take the control of the company.Isuzu is  the world's largest manufacturer of medium to heavy duty trucks and Swaraj Mazda is a perfect fit for their Indian dreams.Various reports indicating that Isuzu is ready to pay Rs.400/- share to Actis to buy out their 5.6 % stake in the company .Since the last open offer by Actis was at Rs.400/-and performance of the company improved thereafter a deal at Rs.400/- is only a distant possibility.Some other reports saying that Isuzu is ready to pay Rs.600/-per share to Sumitomo for a controlling stake. Interest of Tata motors is also a possibility even if they deny it earlier.Isuzu's entry into the driving seat may bring many new models to SML 's table.Any way ,some changes in the share holding pattern is expected in this financial year itself and most probably at a price substantially higher than the current market value.On the other side ,company is improving its financials.For the December qtr Sales rose 17.83% to Rs 220.70 crore as against Rs 187.30 crore and Net profit zoomed 64.41% to Rs 9.70 crore  as against Rs 5.90 crore.Company really deserves a serious look which is currently trading around Rs.335/- 


  1. Dear VP,

    I had bought 300 shares of BS transcomm @ 176 after checking your post...but from that day it is only falling and i have already lost more than 50% amount..please suggest what to do? i follow mostly all your posts..this one turned to be disaster..please suggest i can hold this for long term too..


  2. Dear Jitesh
    Yes It was a disaster ,I accept it. But I think still there is nothing wrong with its business .

  3. Hi Valuepick,

    Can you put some light on Empire Industries?
    I tried my level best to find information about this company, but could get only little information.But one thing i found out that this company has huge amount of land bank at prime locations in mumbai.Looking at the land bank this stock could turn out to be a multibagger in near term.Can you please look at this scrip.


  4. hi value pick

    do you think suraj diamonds is a buy at this price ?

    they are incresing their retail presence and have become the sponsors of lakme miss india contest

    any thoughts on why it is still at a pe of 4 whilst rajesh diamonds gitanjali gems and titan have much higer pes

    is there any copr governance issue u chjhould throw some light on?

  5. Dear Friend

    I am no tracking Suraj Diamond. The entire sector is under performing currently .Difficult to compare Titan with all these diamond cos.Expected to improve the situation with a revival in western economies and a favorable change in exchange rate.

  6. hi value pick regarding sml if u expect that deal will happen where in isuzu will buy 5.6% from actis what and how will it benefit the minority share holders. As i guess it won't result into open offer. So basically i want to know apart from fundamentals what other triggers u expect? any thing in terms of open offer or nething else?

  7. Dear Parikh

    Actis stake buy alone will not trigger an open offer. But the interest of Isuzu will surely improve.I thimk eventually Isuzu will acquire the controlling stake from Sumitomo which will end in open offer and the performance of company will substantially improve thereafter.

  8. hi value pick if u can update with the result reviews on the stock. I suggest you to do this for any of the stock u recommend. And that too in a day or two after the result is declared.




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