Saturday, 8 September 2012

Stock Update: Cera Sanitaryware

With the untimely death of Mr. Vidush Somany, the MD of Cera, there are a lot of questions in the mind of investors. Here are possibilities:-

1) There will not be any significant long term impact to the performance to the company. Mr. Vikram Somany, the founder and CMD of the company will continue to drive the company.

2) If there are no natural successors, then Mr. Vikram Somany may decide to sell out to another company at a later point in time.

3) If there are other potential natural successors, then Mr. Vikram Somany may continue at the helm or hand over to a professional CEO, till the successor is groomed.

Whichever scenario plays out, the business may see short-to-medium term weakness as it adjusts itself on the loss of its prime mover. The valuation is also not cheap.

Recommendation: Adventurous investors can continue to hold with a stop loss around 320-325 levels. I would suggest gradual profit booking of atleast 50% of your positions and then waiting to see how the business actually pans out. At this moment the risk-reward is NOT in favour of the long term investor.

Disclosure: I am invested in Cera Sanitrayware and HSIL and my views are likely to be biased. Please do your own due diligence before investing.

2 comments:

  1. Indian banks' refinancing with RBI rises at 72.45 billion rupees. Indian banks' cash balances with RBI rise to 3.41 trillion rupees. stocks to buy today

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