GANDHIMATHI APPLIANCES LTD - RESULT UPDATE

This stock recommended @ Rs.73 which is currently trading around Rs.370

For old posting click HERE

Company reported more than 300 % increase in net profit for the latest March quarter and declared a dividend of 25 %

GANDHIMATHI APPLIANCES - HOLD

More than once I have recommended this scrip from Rs.73 /- level onwards .Currently it is trading around Rs.320/- which is close to its all time high. High risk takers can still hold it and low to medium risk takers may book partial profit at current level.

Old Reports can be accessed HERE and HERE

GANDHIMATHI APPLIANCES - REPEAT

I have recommended GANDHIMATHI APPLIANCES  for high risk takers @ Rs.73 on 28th August 2010.( Read it HERE) .In my old post ,I clearly mentioned that the main concern about this company is the attitude of its promoters and not its business prospects. Gandhimathi has posted two quarterly results thereafter.Now I feels that the management is  realizing  the importance of a fair corporate governance,transparent accounting ,concentration in business- to create wealth.In recent numbers ,company has shown excellent growth  .( I still feels they hide something in their old results.) .It is known that company is also launching more products and expanding its reach. The brand value of their brand 'Butterfly ' is immense ( at least in South India) and the opportunities are unlimited for their products in a country like India with huge population. Company is going to declare  its March quarter  result on 12th May  , which is  expected to be a  continuation of the strong growth shown in last two quarters.Even after more than 150% rise over the previously recommended price , still there is scope for multibagger  kind appreciation from current level of Rs. 194/-

GANDHIMATHI APPLIANCES - OPPORTUNITIES UNLIMITED , BUT ......

There is number of examples in Indian

stock market for promoters inability/laziness

or their negative attitude towards other share

holders wasting chances of immense wealth

creation. Gandhimathi Appliances is such a story.

Gandhimathi is making household appliances

like LPG Stove, Pressure cooker, Mixer

Grinder ..etc in the brand name 'BUTTERFLY'.

This is the No.1 brand in case of LPG Stove in

South India and also have a good

market share in other products. But the

financial side of this company is not a

robust one. We can’t blame anyone who

suspect that the promoters are siphoning 

of  funds generated in this company and

divert the same to companies privately

owned by the same/related parties. Presence

of other companies of promoters in the same

line of business is a real misfortune  to the

minority share holders of Gandhimathi

Appliances.Any way , earlier this company

went for BIFR and later as per a scheme the

promoters bring more funds to the company

to revive it. Now ,company is going

to merge another group company

Gangadharam Appliances with itself

and  final decision regarding merger

ratio ..etc are expecting soon. It is expected

that after the merger is completed company

will sell its surplus land and pay back dues

to strengthen its balance sheet. Some of the

recent indications from the management

giving some hopes about the change in the

attitude of management. I suspect ,

the huge wealth created by peers like TTK

Prestige and Hawkins

Cookers in recent past may also be a  reason

for  a second thought for the management of

Gandhimathi. If the management is really

willing to change its attitude and ready to

consolidate its operations in the listed company

and show good corporate governance 

the scope is very vast and this may be a

multi bagger even from current level. Since

its future is depends on many ‘IF’s  only high

risk takers can consider this .Now it is

trading around Rs.73/-

* Earlier discussed in MMB around Rs.55/-

* with inputs from friends