TILAKNAGAR INDUSTRIES

The stock price of the company soared on the day the Q1FY14 numbers were declared. But it had less to do with the numbers and more to do with corporate grapevine. There is news that the company is in talks with other liquor giants like Suntory Holdings and Pernod Ricard, who have evinced interest to buy 15-20% stake in the company. The company, sitting on debt to the tune of Rs.600 crore is reported to be looking out for raising money to pare debt. Names of PE fund, Bearn Global is also doing the rounds for acquiring stake. The company is yet to announce any clarification.

The company, maker of the world's second largest selling brandy label -- Mansion House, on face value seems to have declared a good set of numbers for the first quarter, with a 54% (YoY) rise in net profit at Rs.17 crore. But this is only on face value, thanks to Rs.13 crore coming in as tax refund. But for this, net profit would have actually come much lower. The company has a huge interest outgo per quarter in the range of Rs.14-15 crore and unless it pares its debt, earnings could remain under pressure.