MEDIUM TERM BUY - HINDUJA VENTURES

Hinduja Ventures

BSE: 500189  NSE: HINDUJAVEN  CMP : 349.00
Hinduja Ventures is a holding company for Real Estate,
Cable TV and Media businesses. Also, the company plans to incubate new
businesses which might lead to higher profitability in future. The
Company intends to foray into Power and Health Care. The Company has a
market cap of Rs 700 cr with a net worth of Rs 645 cr and cash &
investments of Rs. 305 cr. It has a strong treasury business with BV
of investments of Rs320cr whose current value is Rs450cr.

Robust media business: The company is one of the top 3 MSO in the
country with presence in 26 cities in India and having a rev of
Rs400cr with Rs121cr of EBITDA. The growth rate in this segment is
likely to be strong with increased digitization in the country. Any
increase in FII cap to 74% will be a positive trigger. Also the
company aim to list its media company in FY12 which might unlock
significant value.

Incubating new business: The company plans to become a holding company
for various new businesses being identified by the group. In FY11, it
invested in real estate, NBFC and power which aims to grow
significantly over a long run. Any upside from this investment will
unlock value in long run.

Treasury business:  In FY11, the market value of its treasury
portfolio increased significantly from Rs230cr to Rs450cr. The company
books some profit and utilize to grow its other businesses.

Valuations: At the current market price of Rs 345, the stock is
trading at roughly 8 times F.Y.11 and provides for significant upside.