Nitco Tiles

Nitco has had some non-operational problems over the last year. They have lost about five months of working. So if you go by the quarterly results when most other ceramic tiles, most tile companies, flooring solutions companies have been reporting better numbers every quarter, you will find a lot of erratic behaviour in Nitco's quarterly performance. I think the problems have been more than resolved. The last quarter, which is January to March 2010, if you see that quarter, it gives you an indication that finally things are back on track. We reported a quarter revenue of somewhere around Rs 120 crore.
 
I have a feeling that this year is going to be better. The company is over with problems. Most reassuringly I think the brand continues to be strong. Again more of a balance sheet side perspective you got a flooring solutions company, you have got a real estate company because they are two in one. They have got very rich holdings or I would say reasonable holdings in Mumbai today. If you combine two, I think it is an extremely compelling package. Market cap is just about Rs 50 crore and you are looking at a company which is number 3 or number 2, number 4 in India in its sector, available at a market cap of about Rs 150 crore with an extremely prominent brands in India.

I would say from a P&L perspective, you can look at a discount of 5-10 for the current year. So what I am saying is I would expect it to report Rs 20-25-30 crore for current financial year. But more compelling is that even if you assume, this your returns of real estate, which I think could be very-very attractive have not been factored into the pricing at all or from a reverse perspective if you see Nitco from a real estate perspective only then the flooring side of the business come absolutely free. I think it is more of a balance sheet perspective today with a gradual unfolding of its P&L potential over the next two-three quarters.