Hidden Gems - KESORAM INDUSTRIES

Part of the BK Birla, Kesoram Industries was initially a cotton textile and rayon manufacturer and subsequently diversified into heavy chemicals, spun pipes and transparent paper. However, currently tyres and cement account for over 95% of the company's revenue. In the past few years, the company has aggressively expanded its tyre division and it now accounts for 60% of revenue. At its current pace of expansion, Kesoram is likely to emerge as one the top three tyre makers in the country. The stock price, however, doesn't fully reflect this and the company market capitalisation is like that of a mid-cap cement maker. The stock is currently trading at 4.7 times its trailing earnings. In comparison similar sized cement and tyre makers, such as JK Cement, Binani Cement and JK Tyre, are currently trading in at around 5.5x.