We discussed about this company and its special situation in March 2010.( Old Posting HERE) . As per the terms of settlement of legal dispute between NILE LTD and GMM Pfaudler , Court allowed 48 months from March 2009 to dispose the shares of NILE held by GMM in open market .( Details HERE) .Till the end of latest December quarter GMM and its associates held 58000 shares in this company .Considering the volume traded post December and the expiry of permitted time period,let us assume that the completion of exit may happen at any time from now.After my last posting ,promoters increased their stake from 47.79 % to 49.01 % and also sold its Glass Lined Equipment Division.Now company is operating only in one segment ,ie, secondary manufacturing of Lead and Lead Alloys .NILE reported a turnover of Rs.62 Cr and a net profit of Rs.2.19 Cr in latest December quarter .On a small equity of Rs.3 Cr quarterly EPS was Rs.7 .It is a dividend paying company and declared a dividend of 20 % in last year .Battery manufacturers are the major customers of company's product and NILE having an exclusive marketing relationship with Amara Raja Batteries.Due to lower sales of Automobiles ,offtake of batteries by OEM's may be slow but power shortage in southern states offering another opportunity for battery makers in the form of inverters and solar energy storage.Two main negative points are - being a commodity type business ,price of lead showing cyclical trends and the another one is the power shortage issue in AP where company's two plants are located.Even considering all these factors, I believe limited exposure @ CMP of Rs.89 is suitable for long term investors with some risk appetite.
Link to Company website HERE
Link to latest AR.HERE
Link to Company website HERE
Link to latest AR.HERE
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