Himalaya Granites Ltd. Detail
Himalaya Granites Ltd. is in portfolio of Subramanian P. He is one of the top investors in India. As the name suggests it is in Granite sector. Note Subramanian P has few Granite sector companies in his portfolio.
As per the Company website it was engaged in business of manufacturing, producing and marketing of granites and monuments having a sole manufacturing facility in Tindivanam, Tamilnadu.
The stiff competition from various domestic and international players especially from China posing a serious threat to the business sustainability of the Company, the situation was further aggravated by the strike of workers followed by a lock-out at the plant in 2008.
Though the management have been able to execute a memorandum of settlement with workers, the global economic recession made the turnaround impossible compelling the sale of the plant and machinery and other fixed assets (excluding land and building) of the Company to avoid their further deterioration and obsolescence.
The management has been striving to chalk out a new sustainable venture, meanwhile the company continues to let out part of its factory shades and office space to generate revenue to the possible extent and to abate the loss.
Now lets look at performance of this company over the years.As per Dow theory of technical analysis price performance over a period of time reflects Company state.
Himalaya Granites Ltd. Stock Performance
The Company was trading near 17 INR and now it is trading close to 56 levels. So in this 16 year period it has given 3 times return to investors. Note above we said that Company locked down in 2008 during Global Crisis and competition from China.
The returns does not make any sense as Company is selling the assets to make up for the loss.
Himalaya Granites Ltd. My Opinion
People investing in this counter believe in turn around stories. The stock will turn around and in the turn around time they will make money. I personally avoid these types of stocks.
There is no need to believe in fairy tale turn around stories. You need to focus on buying growth and stable business. There are thousands of Companies listed on stock exchanges why select a company where management is selling the stuffs.
I would go for established or functional companies in this sector rather than a struggling company. Marbles and Granites is a growth sector due to huge demand internally and outside India as well. But that does not mean you need to invest in risky company.
Retail investors have less money to invest so careful selection of stocks is important before making a decision about investing.
In case you are interested then you can track the company by adding it to your stock watch list. That way you can keep close eye on the Company.