Value Industries (Videocon Appliances) - Long Term Buy

Electronics durables company Value Industries (Videocon Appliances) is planning to be among the top 3 global consumer durables brands worldwide. LG fame KR Kim was appointed as the CEO to transform the company. They are aggressively planning to integrate their brands and cutting costs by merging factories. All these activities may take 1-2 years to take full shape. Value Industries will face no problems in expanding their operations as it has the support of $2 billion Videocon group. Videocon Appliances changed its name to Value Industries from April 3rd onwards. Brands under Value industries: Videocon, Sansui, Akai, Kenstar and Toshiba.

Value industries stock price (BSE):

CMP: 25.15
P/E: 6.22
Book value: 112.8
EPS: 4.
1 year high-low: 54.5-19.

Why I am recommending Value Industries? 1. As in its name, it is a great value pick. There is so much embedded value in this scrip. Wonderful manager like Kim will unlock true value in this company.
2. Value Industries may finally merge with parent company Videocon Industries. High Book value will play crucial role in this merger.
3. It appointed Kim of LG electronics as new vice chairman who is a master in changing the fortunes of the consumer durables companies.
4. Videocon is planning to merge some of its factories to improve efficiencies and reduce costs.
5. Kim is planning to merge various brands of Value Industries under single umbrella to improve focus.
6. Videocon is planning to be among the top 3 global brands in consumer electronics space. Huge ambition. It is planning to double its global sales in three years ($600 million).
7. It is pumping huge money to acquire global brands to acquire technology.
8. Videocon is planning to build high margin LCD panels.
9. They will acquire Motorola’s mobile handset business.
10. It plans to acquire GE appliances.

Verdict: Value Industries (Videocon Appliances) will become a “Multibagger” if you can hold it for 15-18 months. You need to give sufficient time for the management under Kim to turnaround this underachiever by streamlining operations and integrating brands. Dhoots are planning to spend huge amounts to turn Value Industries into a global major in consumer electronics. I believe in them especially in the capability of KR Kim. Best stock for long term investors who have patience