Background: It’s the only listed company in its space and is therefore, peerless. The company is operating in an industry dominated by multi-nationals but is a strong domestic brand in itself.
Gem: What if I tell you that there’s a debt free, cash rich company that is a very good brand in its industry. The company also pays dividend regularly and its payout is increasing year after year. The company has a low capex model and therefore, any incremental increase in revenue generates tremendous amount of cash which the company generously shares with the shareholders in the form of dividends. The company also became a partner of a major internet company recently. promoter holding is very high without any pledge. The promoters by nature are very risk averse and do not believe in debt. So much so that their other listed company which is in an extremely capital intensive industry where a lot of top names are burdened with debt, this other listed company is also debt-free.
Valuations: Whereas unique and peerless businesses normally trade at astronomical high double digits or even triple digit valuations, we have this wonderful high dividend paying cash cow small cap available at extremely cheap valuations.
Technical: The company is trading near its lifetime closing highs. Most importantly, inspite of all the mayhem that we witnessed in the markets, the stock is still in the kissing distance of its highs. The stock is rock solid in adverse conditions primarily because of its debt-free status and high dividend yield.
Note: The company is listed on both the exchanges and was listed a few years back and it did not list through in IPO route.