Company Website: Revathi Equipment Ltd.
Company Details: Kotak Securities
Revathi Equipment Ltd. is a part of Mr. Abhishek Dalmia's Renaissance Group. Revathi are manufacturers of drilling equipments and accessories for Mining, Construction and Water Well / Exploration Drilling applications.
Revathi Equipment Ltd came into our radar some time September or October 2006. We thought the company is overpriced. But we loved Mr. Dalmia's letters to his shareholders and with our investment, we just wanted to be among the legitimate recipient of his letters.
As Ben said, price changes everything, the price had to be correct. The price was hovering between 600 and 700. It was still out of our comfort zone. But one fine day the company started share buy back. The company was buying it's shares for prices between 600 - 700 with some shares being bought for 699 as well.
We thought we would follow smart money and put our money and faith with Mr. Dalmia. Though our reasons for buying were very rudimentary (no valuations, no price decline, not sure about 52 week lows) but we bought some shares. We just wanted to be with someone who is so much like WEB in his writing and most probably in his thinking.
Talking about the letters, Mr. Abhishek Dalmia issues Letters to the shareholders (FY0304, FY0405, FY0506) annually. These are must read for anyone looking out for words of wisdom. Similarities between Warren Buffet's Letters to shareholders of Berkshire Hathaway can be easily observed.
These letters tell a lot about intent and motivation of the Chairman and the probable direction the company would go in.
Parting Notes
We dont have access to annual reports for Revathi. If someones got a copy, please drop in a line.
P.S.: We own Revathi. Even if we try real hard, out views would be biased. Satisficing .... ?
Thursday, 5 April 2007
Revathi Equipment Ltd
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4 comments:
Hi folks,
Thank you very much for bringing Revathy and Mr. Abhishek to my attention.
If there were a race for India's future Buffett (Kaun Banega Indian Buffett?), Mr. Abhishek will win it hands down.
The only thing that prevents me from jumping with both feet is the business of Revathy - it does not seem to have any moat. And as WEB himself has put it:
'When a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact.’
Still, the price looks exciting enough. Management is as shareholder friendly as one can hope for. I will definitely keep an eye on how this story evolves.
Thanks again!
Well well well, where was Mr. Dalmia hiding so far? I luv such managements, he is contemporary but clear. Its a rare quality. I will be watching the story.. the business suffers from a high dependance on Coal India and the current focus of the team seems to be diversification.. Lets see what traction they bring to the table
oops seems like i posted a wrong link to my blog.. here is the correct one.. :-)
hi
i have analysed the company in detail and was very impressed with abhishek. he clearly follows buffett and is very share holder friendly.
he is the only manager i have read (and i have read quite a few) who goes into detail in explaining his business with all the negatives, risk and problems around it.
he seems to be a very rational allocator of capital.
you can find the AR on icici direct.com.
i too have found the price outside my comfort zone and would like to wait for it to fall within my target zone
rohit
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