Wealth Creators - Episode 4

A IT company, A Paint Company, A Bank and what now? Look around your house, You will find one. Above the Air conditioner that conditions the temperature of your room, near that LED TV, may be next to the refrigerator... That Saucer plate like thing gadget that guards your electrical appliances from the shocks by stabilizing the power supply.. 

 Please guess what I am talking about! Okay, Here is another clue - 
Oh yeah! The Stabilizer and today's Wealth Creator is V-Guard Industries. I myself did not know so much about this company until my Ex-Manager popped up this name. This is his Ex-company. Ex-Manager's Ex-Company, Weird ?!? Aaargh! 

  A Look into the history of V-Guard - 

  • Started in 1977, when Kochouseph Chittilappilly set out to build a brand in the Indian electric and electronic goods industry
  • Started with a small manufacturing unit for voltage stabilizers, a capital of Rs.100,000 and two employees
  • the company now has over 500 distributors, 30,000 retailers, and branches across India
  • Got listed in 2008 (Available for public investments)
  • Company had a sales of Rs 200 Crores in 2008 and since then has shown solid growth.
  • In 2017-2018, V-Guard has revenue of Rs 2,300 Crores earning a net profit of Rs 133 Crores. 
  • It also Owns Wonderla, the amusement park
  • It employs 2,096 FTE. 
The Journey of the Share Price  - 

When the Company got listed, Each share was available for measly sum of Rs ~4. Over the years, the Price has grown tremendously and today is quoting @ Rs 214 and absolute profit of Rs 210 per share in just about 10 Years. 

Lets assume that somebody applied for the shares during the IPO and held on to it since then... 
A Investment of 100,000 would have become - 


Yes, It would have grown into 53 lacs. The rate at which the company share price has grown is 48% and most importantly look at this 



It is the dividends the company has paid since 2012. Sum it up, It comes to Rs 24 approximately.
So you see only the dividends are enough to beat the FD returns handsomely. Basically all it means for us is that we have got our 1 lac investment back and the 50 lacs worth of shares we have is free.. May be, it seems, there is a thing called "Free Lunch" after all.


We really hope you understand that investing in FD/Gold is not all a wise choice when you have better avenues to invest in. 

Choose Wise.


Comments

Post a Comment

Popular posts from this blog

Why Investing is Easy - Chapter#1

Image
 We have been planning to write a piece with this title for sometime now. It so happened that last week I was speaking to a good friend from Investing community and he shared a experiance with me. He chanced upon a Doctor and learnt that there are from the same place. So the conversation boiled down to - "What puts food on the plate question". So One was a doctor and another was a full time investor/advisor. The Doctor was quick to point out that - Being Investor is such a easy profession unlike others, One can easily make 30-50% returns every year. My investor friend would only laugh since he knows that he is the not 1st and he will not be last to "think" that investing is Easy.  But of course, Investing is easy. Let me put the facts out here.. Lets say this is Jan 2019 and you started simply started SIP of 10K in a Mutual Fund that invests only in Top 100 stocks or lets say just did a one time purchase of about 1 lac. Here is how the results will look today -  In
Read more

Interim Budget - 2024

Image
 We promised to bring you the Chapter#2 of the Why Investing is easy but in the interim, Government published the Interim Budget and I think its reasonable that our readers expect us to write about it and we write about it. So Chapter#2 can wait... Here's the News from the Interim Budget. “ If it ain't broke, don't fix it.” The Government has not done much mumbo-jumbo in the budget and there is hardly anything for middle class as such. Things look far better now than they were in the past and good thing is Government not trying to tinker things, that are working fine, just for the sake for some "Budget-drama".  Where does that leave us? If you have been reading our budget blogs , you will appreciate the fact that we always want to give a personal touch to what the take aways from the Budget!                                    Take Away# 1 Fix it if its Broken This is so much in contrary to what the Government has done with the Budget but gives a very important cu
Read more

Happy New Year 2024

Image
                      Happy New Year! This is the 7th New Year for Droplet Wealth and each year, we share the rules of personal finance but this year we wanted it to be a bit different. So we will tell you a real story about how one gentlemen turned 29 Crores into 5000 Crores and the financial lessons we can learn from it. The Story -   The Gentleman we are talking about was a Managing Director in a Luggage brand company and the bosses at the company moved on, gave the control to the second generation. The second generation was not keen to work with our MD. Our MD realized this soon and resigned from the company, purchased a 56% stake in its competitor for 29 Crores. Mind you, He had that much money to invest! Now he was his own boss and working in his own company, though his company had limited market share and was much smaller than his previous company. The slog went on for 12 years and today, his company has overtaken the company where is worked as MD and is valued at 10,000 Crore.
Read more