Monday, February 13, 2006

Infomedia India

Here are the stats:
CMP = 196.00
P/BV = 3
PE = 9
Dividend Yield = 4%
Almost no debt.

Was a TATA company till it was taken over by ICICI Ventures which is the VC arm of the ICICI bank.

Why buy?

Good "moat". The company is in the printing and publishing space with very good titles like "overdrive" the auto magazine, "CHIP" the computer magazine and has introdcuced "Better Interiors" an interior design magazine and other magazines like "AV MAX" , "Better Photography" and "Circinfo magazine" .

Infomedia is also the media partner of many industry associations like CII, Society of Indian AUtomobile Manufacturrers (SIAM) etc.

Infomedia is the leading publisher of Yellow pages and business directories in most of the major cities in India.


Has decided to get into publishing outsourcing area and have recently taken over 2 U.K based companies. Also has a "publising BPO" in Bangalore.

The company has divested it's non-core business like film production to concentrate on its core business.

Infomedia has announced a share buyback plan at Rs 245 per share.

4 comments:

Shankar said...

Hi Prasanth,

Just one correction - Q4 of FY2004-05 had an extraordinary item of 49.4 crs which boosted the PAT for that year. If you chk the PAT this year, the PAT will come to less than 8 crs.... at a P/E of 50 plus.

The buy back is also very interesting move. Why would you announce a buy back at 245 rupees, when you can buy from the market at 196 rupees. Some people may think this is a clear profit-strategy. ... there have been many cases of companies bringing down the buy-back offer and jacking up prices to "displace" minority investors.

See Madura Coats news stories between March 2001 to September 2001.

It's a NO-BUY from my end, Prasanth. Not comfortable.

Rgds,
Shankar

Prasanth said...

Hi Shankar,

I did see the extra-ordinary item which boosted the EPS. As to the PE being 50 without that, well, lesson learned :(

Giridharan said...

Shankar,

The buy back is just a choice given to the investors, it is only to increase the value for the existing shareholders.

My idea with this stock is just to buy 50 shares from the market and surrender all of it in the buy back program. We will get a cool 10% returns within 2 months.

(http://content.icicidirect.com/mailimages/InfomediaArbitrage.htm)

- Giri

sidd said...

Hi,
Im originally from madras but live in Toronto where i work for a value investment counsel firm as an analyst covering India and Asia. Glad to see that value investing is being practiced in India.
Sidd