Investment Idea : Tree House Education & Accessories Ltd

Founded in 2003, Tree House offers pre-school and K-12 education to children. Company currently operates pre-schools in owned as well as franchise formats and also has management contracts for 12 K-12 schools nationally. The company is committed to a high standard of quality, applying innovative teaching methods, hiring and training qualified teachers, using a standardized curriculum, and maintaining quality standards across its entire network of schools. Company come out with IPO in 2011.

Company has 309 preschools including self operated preschool 243 as on Sep-12. Company has purchased ‘MT Educare Limited Pre - School division' comprising of six company-operated centers located at Mumbai and Pune.

Yearly financials (Rs in Crore)

Quarterly financials (Rs in Crore)

Invest for long term.

Disclaimer: Any purchase/sale of a stock involves a high degree of investment risk. Caution all investors that they may lose some or all of their investment if they decide to purchase any stock listed here.

Update Cox & Kings

We have covered Cox & Kings in Mar-12 with note “We are not recommending buy at current valuation. But any further decline in future will be tempting opportunity.”

Subsequently stock has come down to 119 and has been trading around 140. Result for FY 2012-13 Q1 & Q2 has been good.  In Aug-12 City Venture Capital International agreed to invest USD 137.75 millions in Cox & Kings Ltd's UK Subsidiary. This investment was intended to retire part of debt taken by subsidiary to acquire HolidayBreak Plc.

Despite of this good news stock has not moved up substantially. We recommend to avoid stock at this moment.

Disclaimer: Any purchase/sale of a stock involves a high degree of investment risk. Caution all investors that they may lose some or all of their investment if they decide to purchase any stock listed here.

Investment Idea : Cairn India Ltd

Cairn India is engaged in the business of oil and gas exploration and production

The Company has a world-class resource base, with interest in eight blocks in India, one in Sri Lanka and one  in South Africa. Cairn India’s resource base is  located in four strategically focused areas namely one block in Rajasthan, two on the west coast of India, six on the east coast of India (including one in Sri Lanka) and one in South Africa.

The blocks are located in the Barmer Basin, KrishnaGodavari Basin, the Palar-Pennar Basin, the Cambay Basin, the Mumbai Offshore Basin, Mannar Basin and Orange Basin.

The Mangala discovery in Rajasthan in 2004 was the largest onshore discovery in the country in the past two decades. 

Vedanta Group has acquired a 58.5 per cent stake in Cairn India for $8.67 billion,

Recently government has allowed Cairn India to further explore its prolific Rajasthan oilfields, which can raise the block’s output to 300,000 barrels per day from current 175,000 bpd.

Invest for long term.

Consolidated financials (Rs in Crore)

Disclaimer: Any purchase/sale of a stock involves a high degree of investment risk. Caution all investors that they may lose some or all of their investment if they decide to purchase any stock listed here.

Update : Arshiya International Ltd

News update

“ Ajay Mittal, Group Chairman and Managing Director, Arshiya International, in an interview to ET Now clarified that the company is right-sizing and plans to lay off 200 employees out of which 99 employees have been asked to leave.

On financial irregularities in company, Mittal said that allegations are false and baseless.

Mittal said that the company has gone through an audit process and NBFCs who are funding company are confident and not concerned. Financial institutions invested in the company are not worried. It is business as usual and there is no financial problem.

There have been some delays in salary payments and the company will be clearing all salary dues for employees today.

To allay the investors concerns, the company is planning to pump in additional Rs 42 crore in the company”

Quarterly company comes out with nice presentation - “Investor Updates” Company could have updated with comprehensive presentation at this junction.

Company deny "financial irregularities" Promoters are investing 42 crore. As per consolidated financial Fy 2011-12 company has borrowing close to 2095 crore & current liability of 494 crore.

Today’s clarification confirms 200 people fired & delay in payment of salary. To an extent this is conflicting with yesterdays stock exchange update “(company) continue to remain operationally strong.”

Delay in payment of salary indicates strain on working capital. Lay off & delay in salary may lead to low moral to employee. If salaries are getting delayed, there may be instances of delayed payment to creditors too.

Clarification does not states to what extent there is strain on working capital, cause of strain & future action plan to pacify. Clarification is short to clear the ambiguity on current state of affair of company. We recommend to exit / book loss.

Disclaimer: Any purchase/sale of a stock involves a high degree of investment risk. Caution all investors that they may lose some or all of their investment if they decide to purchase any stock listed here.

Update : Arshiya International Ltd

I) 

DNA reporting today about Arshiya International comprising

1.   Number of people fired

2.   Non payment of salary

3.   Financial irregularities

4.   Financial crunch

In response management updated  "There have been some news items in some sections of the Press on January 09, 2013, regarding operations and affairs of the Company which is misleading and not true. Further, the Company has clarify, Arshiya International Ltd has taken a call on rationalizing its employee costs / removing non-performers in the overall interest of the Company. Arshiya International Ltd has real assets that it has created in the West and North of India, including Pan-India Rail assets. All of these assets created by the Company are operational and continue to remain operationally strong."

We expected management reply with more detail to include facts & figure. It would have been helped to understand state of affairs clearly.  

Not only shareholder but various stakeholders including customers, employees, suppliers, lenders, regulators would have concern & would like to know more information.

We recommended buy Arshiya in Oct-12 along with red bold note “Company has high operating & financial leverage.” We advice to keep hold on stock & expect more clarity from management.

II)

Events like this impose importance of basic principle “Don't put all your eggs in one basket. Diversification protects your investment portfolio.” Investing in say 30-35 companies as well as buying at different level based on technical analysis can considerably reduce impact of such hiccup.

Disclaimer: Any purchase/sale of a stock involves a high degree of investment risk. Caution all investors that they may lose some or all of their investment if they decide to purchase any stock listed here.