Growing things 1
The current thrust of the Indian government on infrastructure along with booming manufacturing and construction sectors is expected to have a trickle down effect on wires and cables sector in the country.
Among these companies, Paramount Communications is depicting faster growth. The company may repeat its last year’s double jump in sales and profits in 06-07 as well. It has undertaken capacity expansions and is having strong presence in the railways and power sector. Moreover, the company’s P/E is just below 9.5. This is quite a conservative valuation when compared to other wires and cables companies. If we consider a two-fold jump in PAT for 06-07, then at the current P/E, the stock of the co can earn over 40% returns by the end of FY07. Further, possibility of improved valuations (i.e. higher P/E) can not be neglected. This may add further zing to the story.
One issue of concern: the company has a substantially higher net working capital cycle compared to its peers. This is due to higher cash collection period. Thus, the company’s cash flow from operations is negative and is funded by borrowings.
Disclaimer: As of 18 December 2006, neither I nor my immediate family owns shares in Paramount Communications.
Labels: Money matters
Air of hope
Legal eagles spread wings in India "Cop to hang for custody death", reads the headline of today's Times of India. A retired senior police officer from Delhi, India's capital, was convicted of custodial death. RP Tyagi, retired as an assistant commissioner of Police (ACP) was accused of torturing and subsequently killing Mahendra Kumar in the police lock-up on 16 August 1987.
Custodial death is not a new issue in India. Human rights organisations have always reprimanded the police authorities for excessive torture of the accused. But, this was perhaps the first instance that a senior official of police was convicted of such a charge. Again, the court identified Mr. Tyagi's act as an 'extremity of outrageousness' and concluded that such a crime deserves capital punishment.
For the general public in India, the decision of the court in this case comes as a worthy surprise. Of late, legal authorities in India are offering the common mass with such surprises. A few days ago, Shibu Soren, erstwhile minister of mine and minerals and member of parliament was sentenced for life under the charges of killing his secretary more than a decade ago. Further, Navjotsingh Sidhu, a famous cricketer turned acclaimed commentator and now a politician got three years rigorous imprisonment for killing a person after a feud on car parking space in 1987.
All these three cases have a strange common link. In all the cases, justice has taken a long time to come on the anvil. Cases remain pending and the accused generally live a normal civilian life unaffected by such accusations. In fact, this is the biggest resentment of common man in India. By the time the case stands for a hearing in the court (this may take even decades), chances are that the accused may have influenced the evidence in his favour or may have eliminated the evidence for that matter.
No doubt, the legal procedure takes a lot of time but justice seems to be happening at last...
Labels: Society
