Value unlocking only driver for Godrej Industries

Over the years, Godrej Industries, a listed diversified company, has restructured the business. Going forward, restructuring remains a key prospect for unlocking value. Shareholders can look forward to the company developing the mammoth Mumbai real estate in Vikhroli over the next few years. The Vikhroli property in Mumbai, estimated to be around 3,500 acres, remains a key value unlocking factor. It is housed in Godrej Properties, a 75% listed subsidiary of the company.

 Value unlocking only driver for Godrej Industries

Godrej Industries Ltd. chairman Adi Godrej is restructuring his firm. Danish Siddiqui/Reuters

Over the past one year, Godrej Industries shares rose 26%. The company lists consumer, chemicals, real estate and agriculture as core focus areas. In a detailed presentation to investors on Tuesday, the company positions itself as a diversified investment opportunity.

There is very little analyst coverage of Godrej Industries. Not many institutional investors are shareholders in the company. Even if they own anything, it would be less than 1% and is not captured by the stock market data. Around 79% of the company is owned by the Godrej Boyce and family members.

Investor and analyst meet

The value of Godrej Industries investment in Godrej Consumer is around Rs 2,800 crore. Its 71% stake in Godrej Properties is worth Rs 3,300 crore. Godrej Industries market cap is Rs 6,256 crore. The company hopes to unlock value out of other businesses like animal feed with revenue of over Rs 1,200 crore. The company owns a 75.2% stake and had invested Rs 163 crore.

If you are share holder tracking this company, take a look at the following:

• EPS shot up by 44.4% to Rs9.24 per share at the end of March 2011 from Rs.6.4 earlier

• The company is planning to enter into the seed sector and drip irrigation business

• Plans to develop 2.8 million sq feet of property in Mumbai

• Plans to invest Rs230 crore in setting up a chemicals facility at Ambernath

• The firm is a market leader in the candy segment with a 20% market share

    PE players/bankers/investment consultants could be interested in:

    • Value unlocking potential lies in company's different business

    • Real estate funds could be interested in contacting the company

    • Bankers could suggest ways to boost sales of Nature Basket

    • Cash on hand is Rs275 crore

      Updated Date: Dec 20, 2014 03:55:05 IST