Monday, August 15, 2011


CMP .Rs.114/-

Healthcare is considered as one of the sectors India having huge potential in coming years..Hospital services is a major part of this industry.But the number of listed players in this sector is limited.Kovai Medical Centre and Hospital (KMCH) is one of the good listed companies from this space.This Coimbatore based 800 bed multispeciality  hospital having all most modern facilities including Open heart surgeries ,Kidney transplants, Knee replacements, Hip replacements , Complex Neuro surgeries Angiograms, Angioplasties, Stenting ,fallopian tube recanalisation, Chemotherapy, Blood component therapy, Arthroscopic surgeries, Laparoscopic and Thorocoscopic surgeries,Emergency-Trauma Care Center... etc  KMCH is located in a 20 acre facility close to coimbatore airport and also having three satellite hospitals - two at Erode and one at Ram nagar.KMCH recently started the facility of E-Bus (Endo Bronchial Ultra Sound) which is very effective for identifying lung cancer in an early stage. It is one of the very few hospitals in this region with this facility. KMCH is now expanding its service to pediatric , and eye segment and this facilities will commence operations in few months. In  recent times KMCH is very aggressive  in bringing new technologies ,most modern facilities and new departments to its fold. Company is spending an amount of Rs.200 Cr for this expansion programme.Growth for KMCH will come in two ways .One through the addition of  more facilities and departments  at the existing hospitals and the other is through the starting of new satellite centers in other places.For the quarter ended June 2011  ,KMCH posted a turnover of Rs.51 Cr v/s Rs.31 Cr and a net profit of Rs.2.43 Cr v/s Rs.81 Lacs. As an indication  of the confidence of promoters, they are steadily hiking their stake in last few quarters through open market purchases.At CMP of Rs.114/- , it is a good long term bet for a healthy portfolio.


  1. HI!VP,

  2. HI ValuePick,
    Looking into the balance sheet, Kovai has too much of debt. Networth is 50.75 cr (reserve of 39.81 cr) whereas it has debt of 192.25 cr.

    Even though its expanding its business, high interest outgo will eat up the bottom line. This is already visible in FY10 and FY11 comparison wherein topline grew from 130.41 cr to 174.96cr, but bottomline remain stagnant from 11.59 cr to 12.10 cr because of interest payment of 11.11 cr in FY11.

    Do u still find value in KMCH which is highly leveraged ??

  3. VPJi,
    It is disheartening to seee the results of Tasty Bite VPJi. Waht is your current stand on this pic after theresults and US market slowdown which will affect the Tasty Bite Sales?


  4. Dear VP,
    Can we have a result Analysis of our reccomendations. Like Vesaveus, Tasty Bites, Selan, DCB, Indag Rubber, Camline Fine, etc. These are now at lower prices

  5. Dear value

    rajvir industries has declared disastorous result.only thing to be noted,caveat is the increase in goods inventory

    with the dollar likely to go down,and export worries,i shall be thinking of exiting in this comming rally,your advice,will help

  6. Hi valuepick,

    I am regular reader of your awesome blog since long time. What is your view on IT sector for next 1-2 years on back of US & Europe crises are getting deeper. I am not asking this question for investing in IT stocks,but I am looking for the job in IT sector for next 1-2 years.So what's your view on IT sector in india by next 1-2 years.

    Thanks & Regards,


  7. Dear Sivakumar

    Stock market is always valuing a company not only based on what it is or what it was but mainly on what it will be.So , considering the chances of some slowdown in capital goods industry and order booking , coming quarters may not robust .But if we get stocks at a price even after discounting these situations ,that should be a BUY.

  8. Dear VPji

    Kindly guide us on
    ADF Foods
    Technofab Eng
    your advise is highly appreciable

    With regards Vakharia M J

  9. Dear Nabendu

    Generally , In any business at the time of building infrastructure there will be some debt.Whether the company can service the debt using the future cash flow or not is the main point to note.I think they can manage it

  10. Dear Rangnath

    Result of Tasty bite was bit disappointing.But I don't think US slowdown is a major problem.Company posted its highest profit at the time of the recent biggest recession in US ,ie,in 2009-10 period.More than this, price rise of vegetables ,shipment cost and exchange ratio fluctuations are the major problems .Now company already doubled its RTS capacity and doubling the FFP capacity which will completed by the year end and meant for the local market . Even if there may be some pain left in short - medium term , long term investors with some risk appetite may hold it.Company is now paying much attention in local market too through FFP.

  11. Dear sushma

    May be tough times ahead for mid and small IT companies without any niche.

  12. dear value

    i think Rel infra (old BSES) is very very good buy at current level. it is a debt free and trade below its BV. it has a huge orderbook and bacward integration. what do u think?


  13. Hi Valuepick,

    Whats your take on Vivimed labs Q1 results? Result appears to be very good, but the only concern would be equity dilution. Do you recommend accumulate at the current market price?


  14. Dear VP
    your recommendations have been always useful.Here is this stock, relaxo footwear, do you think in this situation, this consumer stock is good bet to buy?will it be like bata in long term?

  15. *********behalf of all readers***************
    dear value,
    stock prices are hammered. no direction. no clarity on economy of eurozone and usa. on clarity on growth, fiscal policy, reforms, demand-supply.
    total gloomy picture.

    plz. suggest bunch of some good value as well as growth picks.


  16. Dear VPji,

    Can v do an analysis of the present market scenario. R v going to repeat the 2008. I am fully subscribed. Do u suggest to sell some of my holding with loss & be on cash & buy at lower levels.



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