Monopoly stocks

We called them Monopoly stocks, since there was no other listed competitors. Unlike other companies where we could apply "Einstines Relativity", and pick weather the company is better than their competitors or its PE is attractive when compared to its PE, Monopoly stocks donot have an Industry PE and donot have an yard stick to compare. Being the only listed company in their industry, many of them are commanding sky high valuation. Let us take a look at their business and understand if it is worth buying them.

COAL India:

• This is the Only company in India that is allowed to mine and sell coal.
• All other companies like NLC are allowed to mine coal only for their capitive power generation purposes.
• Coal India has got reserve of 67 billion tonne.
• It is the largest coal producing company in the world.
• But coal india constantly misses its Coal Production Mining target, which results Government in forcing coal import in a big way.
• Being one of the biggest imports like oil and gold, many feel that other indian companies also must be allowed to mine and sell.
• But till such time Coal India will be the king.
• The company has got stock balance shee twith low debt and cash book of Rs.58200 crores.
• Coal India has fallen 13% in the past 12 months.
• At Rs.356, it is currently trading @ PE of 14 times, which by global standard is not expensive.

MCX:

• This is the Only listed commodity exchange company in India, which has 49 commodities futures from bullion, metals, energy and agriculture.
• Other unlisted, prominent competitors are : NCDEX, Indian commodity exchange, National spot exchange, ACE derivative and commodity exchange, NMCE, Indian Energy Exchange etc.
• MCX started operations in 2003.
• MCX claims it has the World's highest turnover in Silver in the World, 2nd highest in Gold and 3rd Highest in Curde Oil and Copper.
• The average daily turnover of MCS is close to Rs.51200 Crores.
• Its business generates high amount of cash and it has low capital expenses (capex) and it is debt free.
• Since MCX cannot invest in unrelated business, it could emerge as high dividend paying company.
• Current PE is 18.1 and Price to BV is 5.2 Its Enterprise value is 6.8 times its revenue and 10.7 times its EBIDTA.
• Its valuations are equal to Intercontinental exchange and is at a premium to London stock exchange, but at a discount to Hongkong stock exchange.

Talwalkars Better Value Fitness:

• It is India's only listed health and fitness company.
• The conpany has 128 health clubs across 68 cities, serving 1,25,000 members.
• The company commands 10% of India's 'Organized' health club markets.
• The company faces tough competion from local unorganized GYM's and other organized, but unlisted companies. PE is 16.7

Jubliant Foodworks:

• It is the only listed fast food company in India.
• It is the exclusive franchise for Domino's Pizza and Dunkin Donuts in India.
• It has net work of 465 stores and commands 54% share in organized Pizza market and 70% share in Pizza Home Delivery segment.
• Its revenues have increased 2.5 times in last three fiscal to Rs.1019 crores.
• Net profit tripled to Rs.103 Crores.
• It is planning to open 90 more stores to maintain the sales growth of 18% to 20%.
• Last five years same store growth has been 23%.
• Given the significant youth population, plzza penetration is good.
• But the company faces intense competion from YUM Foods ( distributors for pizza hut and KFC).
• Current PE Ratio is sky high @ 74.4
• Jubliant's growth in future is not likely to be so high.
• It is better to wait for price correction to happen before investing.

VIP Industries:

• It is india's largest moulded luggage manufacturer.
• Annually it sells 5 million pieces of soft and hard luggages.
• It has an array of brands like VIP, Aristocrat, Alfa and Carlton.
• The company has got 10741 retaliers across 1839 towns and cities.
• But bult of its sale happens in Metro's and tier I cities.
• Around 2000 shops contribute 80% of its revenue.
• And 2/3rd of its profit comes from soft luggage.
• The company is heavily dependent on imports ofr raw material.
• With high dollar cost, the operation profit suffered the most.
• The company faces intense competion from Samsonite and American Tourister.
• To retain its market share, the company is spending more on Advertisements.
• Current PE of 16.3 and PBV is 4.2.
• Samsonites PE is 27.2 VIP's valuation may not improve till rupee recovers.

Speciality Restaurant:

• This is a stock which was bought in bulk by Mutual fund companies recently.
• This company one of leading fine-dining restaurant operators.
• The company owns MAINLAND CHINA, which contributes 60% of its revenue.
• The also owns "OH! Calcutta", "Machaan", "Sigree", "Flame & Grill", "Haka" and confectionary brand "Sweet Bengal".
• At present, the company has got 69 restaurants, 20 of them are franchisee owned.
• It is the only listed Pure Dining company.

At current price of 214, PE is 60 and its market cap is Rs.970 Crores.

• Though Speciality is expensive , its very presencein India's consumption theme and low debt would work in the long term.
• The fine dining concept in India has huge acceptance and attracts a huge volume of customers.

Delta Corp:

• It is the only listed company which owns a Casino.
• Casino contributes 25% of its business.
• We would update more information about this company in next article.