Small is beautiful

GUEST COLUMN

Low profile, Hyderabad company; low profile for its installed capacity of less than a million tonnes per annum (mtpa) (which is really small change in today's mega melee); low profile because when was the last time you saw Sreekanth Reddy's mug on CNBC; low profile because the big story in the company is still some months into the future.

So, just why has Sagar Cements relatively defied the equity meltdown? Just why is the stock quoting for a market capitalisation in excess of Rs 500 crore when its net profit for 2007-08 may not be anything more than Rs 34 crore? Just why has the stock rebounded from a post-crash low of Rs 292 on 31 January 2008 to Rs 384-odd in late March 2008, well ahead of the market turnaround? Just why would the Blackstone pay Rs 190 a share with a market price of Rs 70 to buy into a dream when it could buy reality considerably cheaper in other cement cousins?

Questions, questions. After weeks of scrutiny, I am tempted to bring it down to just one word. Knowledge.

Clich