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Annual Report Review: Indian Hotels

In continuation of this series on reviewing annual reports, here is my review of the FY15 report of India’s largest hotel company, Indian Hotels.

Click here to download the PDF review (11 MB file), or read it in the panel below.

Please note that this review is just to help you dig deeper, in case you are interested to read and understand more of the reviewed company. Don’t treat this as an end to your quest for learning more about businesses and industries, and how to analyze them.

In fact, this is just the beginning. 🙂

Let me know your thoughts on this review in the Comments section of this post…and also share any suggestion(s) you may have to make future reviews better and easier for your understanding.

Statutory Warning: This is NOT an investment advice to buy or sell shares. Please make your own decision, as blindly acting on anyone else’s research and opinions can be injurious to your wealth. I do not own the stock, but despite this, my analysis may be biased, and wrong. I have been wrong many times in the past. I am a registered Research Analyst as per SEBI (Research Analyst) Regulations, 2014 (Registration No. INH000000578).

Annual Report Review: Exide Industries

It’s annual report reading season…and a constant inflow of new reports is keeping me busy.

I have a habit of making hand-written notes on the annual reports I read (if they are soft copies, I print the important pages). This time, however, I thought of sharing these notes with you…just as an experiment. Maybe, this would nudge you closer to reading annual reports on your own, if you don’t read them.

Anyways, I start this review series with Exide Industries, India’s leading storage battery manufacturer.

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Value Investing Contest Winning Entry #6: Swaraj Engines

This report was prepared by Nishanth Muralidhar, as part of the Safal Niveshak Value Investing Contest. None of the facts herein have been validated by Safal Niveshak. Also, please DO NOT treat this report as a “recommendation” from either the author or Safal Niveshak. Do your own homework.



About the Business
The Indian tractor industry has 13 national and a few regional participants. The market share is, however, concentrated amongst the top-five manufacturers, who account for over 90% of total volumes.

India’s current tractor penetration is estimated at 20 tractors per 1,000 hectares of agricultural land. While this is close to the averages in some countries, the statistic belies the fact most of the land holdings in India are smaller than those in foreign countries. Also penetration numbers vary widely across states, with states like Punjab, Haryana or Western UP enjoying significantly higher penetration compared to the rest of the country. Some regions like Eastern Uttar Pradesh, West Bengal, Orissa, Madhya Pradesh, Karnataka and Andhra Pradesh have relatively low penetration levels.

Also, there exists headroom for growth of smaller horsepower tractors among small and marginal farmers. Further, even if tractor density was to remain constant, demand in the industry is expected to remain sound on account of shortening tractor replacement cycle.

Industry growth drivers are scarcity of farm labour, strong replacement demand, government support, increasing mechanization and exports (From ICRA 2012 Report).

Mahindra and Mahindra Tractors (M&M) is the market leader, having a share of 40% and has only one supplier for its ‘Swaraj’ brand of tractors – Swaraj Engines Ltd. (SEL).

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Value Investing Contest Winning Entry #5: Tree House Education

This report was prepared by Maheswar Reddy, as part of the Safal Niveshak Value Investing Contest. None of the facts herein have been validated by Safal Niveshak. Also, please DO NOT treat this report as a “recommendation” from either the author or Safal Niveshak. Do your own homework.



Tree House Education & Accessories Ltd. (Tree House) is the largest self-operated preschool education provider in India. After establishing itself as one of the top brands in pre-school education, Tree House has also entered the K-12 school segment.

Rapid growth – From one center in 2003 to more than 400 in 2014:

  • 2003 – Incorporated first Tree House pre-school in Mumbai
  • 2006 – Established 6 more pre-schools
  • 2007 – Converted to private limited company and launched first franchise
  • 2008 – INR 35 crores investment from Matrix Partners India
  • 2009 – Entered K-12 and day care segments
  • 2010 – INR 15 crores investment from Matrix Partners India
  • 2011 – Converted to public limited company; Successfully completed IPO of INR 112 crores; INR 9 crores investment from Matrix Partners; INR 31crores investment from FC VI India Venture
  • 2012 – Acquired pre-school business “Global Champs”; INR 41 crores investment from ON Mauritius & Aditya Birla Company
  • 2013 – Acquired pre-school business “Brainworks”

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Value Investing Contest Winning Entry #4: Gabriel India Ltd.

This report was prepared by Venkat Sivagnanam, as part of the Safal Niveshak Value Investing Contest. None of the facts herein have been validated by Safal Niveshak. Also, please DO NOT treat this report as a “recommendation” from either the author or Safal Niveshak. Do your own homework.


I started to screen for a quality business which I understand and has long-term competitive advantages and potential to generate free cash flows for at least the next 20 years to come.

With this in my mind, I decided to focus on automotive industry in India as it is going through a domestic slump and has been in the news for bad reasons (high-interest rates, inflation, low sales etc.). It is not unusual to find an under-valued and reasonably strong business in a sector that is undergoing a temporary slump or recession.

I restricted my screening to automobile sector. Further, within the automobile sector, I decided to focus or limit my screening to the automotive components/products suppliers, rather than vehicle manufacturers/OEMs.

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Value Investing Contest Winning Entry #3: Munjal Auto

This report was prepared by Sudhanshu Jain, as part of the Safal Niveshak Value Investing Contest. None of the facts herein have been validated by Safal Niveshak. Also, please DO NOT treat this report as a “recommendation” from either the author or Safal Niveshak. Do your own homework.


Business Description and History
Munjal Auto Industries Limited (Munjal) operates as an auto component manufacturing company in India. The company provides exhaust systems, steel wheel rims, and spoke wheel rims for two-three wheelers; and fuel tank assemblies, seat structure systems, and side step assemblies for four-wheelers.

It also offers assemblies, including BIW parts, pillars, cross bars, control arms, tie end bars, accelerators, and brake and clutch pedal assemblies; and sheet metal components comprising mild steel parts, stainless steel parts, welded components, tri-nickel chrome plated components, liquid painted oven baked parts, heat resistant painted parts, tubular components, and roll formed parts.

The company was incorporated in 1985 and is based in Gurgaon, India. The company is a subsidiary of Thakurdevi Investments Pvt. Ltd. It is part of the Munjal group of companies. Its manufacturing plants are located in Gujarat, Haryana and Uttarakhand.

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Value Investing Contest Winning Entry #2: V-Mart Retail

This report was prepared by JK, as part of the Safal Niveshak Value Investing Contest. None of the facts herein have been validated by Safal Niveshak. Also, please DO NOT treat this report as a “recommendation” from either the author or Safal Niveshak. Do your own homework.


The Big Picture
Understanding the big picture, foreseeing the structural trends and sector tailwinds play a critical role in identifying and developing conviction on ideas that go on to become multi-baggers creating huge wealth for investors in the long run.

So what are the current structural trends going on in the Indian economy?

I can clearly identify two –

1. Switch from Unorganized players to Organized players: Organized players are gaining market share from the unorganized players. This structural shift is happening in every consumer facing sector, be it jewellery, bathroom solutions, plumbing solutions, kitchen appliances, shoes, apparels and inner-wears, restaurants, or retail.

Why this switch? Because of rising income levels, customers’ aspirations are increasing and organized players are considered to be providing higher quality products.

Social proof, advertisements, Pavlovian association (to associate ‘I have heard of this product’ to ‘I like this product’) are the psychological reasons which are making sure that this switch is here to stay.

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Value Investing Contest Winning Entry #1: Balkrishna Industries Ltd.

This report was prepared by Ankit K, as part of the Safal Niveshak Value Investing Contest. None of the facts herein have been validated by Safal Niveshak. Also, please DO NOT treat this report as a “recommendation” from either the author or Safal Niveshak. Do your own homework.


Company History and Business
BIL is a Siyaram Group Company with its history dated back to 1962. From setting up its first manufacturing unit in 1988, it has come a long way in becoming India’s leading exporter of “Off-Highway Tires”. It is an export oriented company with 90% of sales moving to different countries worldwide.

Highlights of the company’s business and financial strength are as follows:

  • Widest and comprehensive product portfolio of over 2,000 SKUs and develop 100 to 120 incrementally per year.
  • Current achievable production capacity is 166,000 MTPA (metric tonne per annum). It is to be enhanced to 276,000 MT by FY15.
  • Market presence in more than 120 countries all over the world.
  • Manufacturing facility at: Aurangabad, Maharashtra; Bhiwandi, Rajasthan; Chopanki, Rajasthan; Bhuj, Gujarat; Dombivali, Maharashtra
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