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    This document analyzes several large Indian companies and compares their actual business activities to their perceived activities based on their names. It finds that for many companies, a large portion of their capital expenditures and revenues come from non-core businesses not suggested by their names. For example, EID Parry derives 66.2% of its capex from non-sugar businesses and Kesoram Industries gets 68.9% of its capex from non-tyre operations. The document also notes that some companies trade at lower price-to-earnings multiples than their peers due in part to confusion over their actual businesses.

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    This document analyzes several large Indian companies and compares their actual business activities to their perceived activities based on their names. It finds that for many companies, a large portion of their capital expenditures and revenues come from non-core businesses not suggested by their names. For example, EID Parry derives 66.2% of its capex from non-sugar businesses and Kesoram Industries gets 68.9% of its capex from non-tyre operations. The document also notes that some companies trade at lower price-to-earnings multiples than their peers due in part to confusion over their actual businesses.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
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    Download as xls, pdf, or txt
    7 views2 pages

    Core Op

    Uploaded by

    satyap15
    This document analyzes several large Indian companies and compares their actual business activities to their perceived activities based on their names. It finds that for many companies, a large portion of their capital expenditures and revenues come from non-core businesses not suggested by their names. For example, EID Parry derives 66.2% of its capex from non-sugar businesses and Kesoram Industries gets 68.9% of its capex from non-tyre operations. The document also notes that some companies trade at lower price-to-earnings multiples than their peers due in part to confusion over their actual businesses.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    of 2

    What is there in a Name?

    Company
    EID Parry Century Textiles Orient Paper Kesoram Inds Chambal Fert Bombay Dyeing Dalmia Cement Mahindra Holidays

    Perceived Activity
    Sugar Textiles Paper Tyres Fertilizer Textiles Cement Hospitality

    Other Large Business


    Fertilisers Cement Cement Cement Shipping and Textile Real Estate Sugar and Power Operates like NBFC

    Noncore Capex
    3551.70 638.30 2507.60 1539.80 1657.20 720.00 825.70 NA

    Share of Non-core Capex


    66.20% 15.50% 68.90% 34.30% 44.30% 41.60% 31.90% NA

    Notes 1. Data as on December 2009 2. P/E of peers for the non-core/actual activities

    Name?
    NonNon-Core core Revenue PBIT
    84.00% 83.00% 60.00% 112.00% 56.00% 94.00% 40.00% 82.00% 16.00% 19.00% 34.00% 134.00% 31.00% 22.00% NA NA

    P/E
    8.40 10.80 5.60 5.00 9.00 NA 10.40 NA

    Peer P/E*
    25.00 12.00 9.00 10 to 15 7 to 10 NA 11 to 17 NA

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