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Last Updated : Jan 27, 2015 09:53 AM IST | Source: CNBC-TV18

Prakash Diwan bullish on Indian Hume Pipe Company

Prakash Diwan of Altamount Capital Management is bullish on Indian Hume Pipe Company.


Prakash Diwan of Altamount Capital Management told CNBC-TV18, "Indian Hume Pipe Company is an old company, been around for a long time but unlike what the name suggests it is no more into pipe manufacturing business. The manufacturing part is just about 20 percent of the company’s business, the rest is into services where they do a lot of water treatment business. It is very similar to VA Tech Wabag but people don’t know much about it because it has been fairly silent about it. It is in a segment that people don’t get used to getting familiar with. However, what is interesting is that the company started bagging a lot of bigger orders as compared to what traditionally it has been doing. So, that has helped the topline grow significantly. I am very sure that the margin improvement will also happen as we go along with their AMC part getting much longer into 7-9 years kind of contracts; that is a lot of money."

"Once you set up the plant, you give it to the government they actually don’t have the expertise to manage it and monitor and maintain it. So, that is additional revenue that comes in the form of an annuity which is very visible. So, we are quite bullish, the management is quite bullish. They are kind of been conservative all this while, they have retired some decent quantum of debt, so all the right things in the right environment and I think the company should get re-rated. It is not even valued very steeply at this point in time," he said.



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First Published on Jan 27, 2015 09:32 am
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