Saturday, April 27, 2013

ZICOM ELECTRONIC SECURITY SYSTEMS - WATCHING WITH AN EAGLE EYE ?

 

 



















By the above caption I am not referring just the business of this company, but something more.Zicom once recommended here  @ Rs.38 in 2011 ( old posting HERE) which is currently trading around Rs.85.As you are aware this is one of the largest player in electronic security devices market in India with a turnover of Rs.485 Cr and a net profit of Rs.16 Cr in last FY. Company's products includes  fire alarm systems, videophones, electronic burglar alarm systems, access control systems, infra-red sensing and CCTV surveillance..etc.With a sharp rise in crime rates all over India this industry is expected to show robust growth in coming years.Even if there is lot of cheap unbranded  products are importing from China ,quality and servicing is a real problem for such products and because of this reason Indian customers are now preferring the products offered by Indian Companies with large sales and service network.Godrej and Boyce Manufacturing Company,Zicom and Security vision are the three major organised players in this industry.Zicom having many overseas subsidiaries outside India especially in Middle East and company showing very good growth rate for the past many years.Even the industry having bright future and the company showing robust growth rate ,stock market is giving only lower valuation for the stock of Zicom.With an EPS of Rs.15 ( Consolidated) it is still available at a P/E close to just 5. Currently promoters are holding just 22 % stake in this company and this lower promoter stake may be a reason for markets dislike .But if the recent activities of Godrej Group is any indication they are taking this lower promoter stake as an opportunity.Ensemble Holdings & Finance Ltd a Godrej Group company is slowly buying the shares of Zicom from open market in past few quarters.Godrej bought 2.26 % stake in last two quarters .Another investor  one Mr.Venu Raman Kumar holding close to 20% stake in Zicom personally and through his investment arm Aark Singapore.There is even an interesting link between Godrej Group and V R Kumar.As a private investor and  venture capitalist he started his operations in 2000 with an initial funding support of Godrej Group itself.
                                                                        
                                                                                     Godrej group is very successful in spotting opportunities and expanding their business through mergers and acquisitions.They executed many such M&A's for Godrej Consumer Products in past many years in international level.If we trace back the history of Godrej Group they are not taking passive investment's in outside companies otherwise they have some real business interests.Here, Godrej is  the main competitor of Zicom  and they know the business very well .
Now Raman Kumar and Godrej together holding close to 23 % stake and another 10% is held by institutions including General Insurance Corporation. Considering all the factors mainly the history of Godrej Group , I strongly believe - Bird is already in the Cage and the door will shut at appropriate time .

CMP of Zicom is Rs.85/- ,traded both in NSE and BSE.


Link to company website HERE

Disc: I have Vested interest in Zicom

18 comments :

  1. Will there be any review expected on periodic call auction for illiquid scrips by SEBI in near future?

    ReplyDelete
    Replies
    1. If SEBI is really bothered about the retail investors in India.

      Delete
  2. Sir,
    With Granules results out and the interview of their Senior Executive, the fears of expansion and the margins should subside now as the company is expecting to grow 30%. Also the company has declared very good rev and profit of 50% over the last year results.

    Your thoughts?

    ReplyDelete
    Replies
    1. Dear Ramesh

      I have never changed my opinion on Granules ,and no change this time too.

      Delete
  3. This comment has been removed by a blog administrator.

    ReplyDelete
  4. Dear vp sir,

    Thanks a lot for your service, if you find some time please advice me to build a portfolio, at present i hold, granules, va tech wabag, orient bell , mangalam cement & eimco elecon, can you please suggest some more stocks so that my portfolio becomes balanced. if you find time... thanks once again for your service.
    With regards,
    sathish kumar

    ReplyDelete
    Replies
    1. Stocks like Akzo Nobel,Natco Pharma ,L&T Finance Holdings..etc are suitable for a mid cap portfolio.

      Delete
  5. Dear VP Sir,
    pl share your view on Fedders Lloyd corp at cmp
    thanks in anticipation for the same

    ReplyDelete
  6. Dear sir,

    Only Florence invest listed, when will jkagri list, any information pl ?

    Regards
    Kalyani

    ReplyDelete
  7. Dear Sir,

    Today you mentioned following at Moneycontrol
    ----------------
    "CHAYADEEP VENTURES LLP - a company owned by the promoters of Strides Arcolab and the major promoter of Sequent Scientific started buying the shares of Aanjaneya Lifecare from open market .They bought 1,38,949 shares on 25 April through NSE .( Data available in NSE dulk deal details) .Promoters of Strides is well known for takeovers and M&A ."
    ---------------
    Can we buy Aanjaneya Lifecare considering that Strides promoter has seen positive factors in it ?
    And second question, can i continue to buy Sequent in SIP mode ( i have around 1000 shares of it).

    Please advice.

    ReplyDelete
    Replies
    1. They again bought shares yesterday ,but currently their holding is minimum and we are not sure whether they are holding more shares in benami names and what their game plan is .Both Sequent and Aanjaneya are in anti malarial API's and some synergy between their product line . At present it is only for high risk investors .

      Delete
  8. Hello VP, what's happening on Panacea biotec, is there any further development on WHO audit there is no news available as such, can we expect some good quarter results this time, your view pls.

    regards

    ReplyDelete
    Replies
    1. No further details available at this point of time.Expecting it will happen in near future.

      Delete
  9. Dear Valuepick
    R you still positive on Va tech Wabag. It has corrected quite a lot.
    Regards
    Atanu

    ReplyDelete
    Replies
    1. What is the relevance of the word 'STILL' here ? .I am not aware any negative fundamental change in this company post my recommendation.In such a case,any price correction is an opportunity for me .

      Delete
  10. Dear VP Sir,
    Your advice has always been very helful....I am a small time investor who lost quite a lot of money as I have Navin Flourine bought at 350 odd levels..today the results were declared and there was a loss in the 4th Qtr....Can you please guide on what to do now and the future of the company?

    ReplyDelete
    Replies
    1. In earlier comments I clearly mentioned that a major portion of its profit is from sale of Carbon Credit and hence I am not positive on Navin Flourine.

      Delete

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